8-K
FLUSHING FINANCIAL CORP (FFIC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2022
FLUSHING FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
001-33013
(Commission File Number)
Delaware
(State or Other Jurisdiction of Incorporation)
11-3209278
(I.R.S. Employer Identification No.)
220 RXR Plaza , Uniondale , NY **** 11556
(Address of principal executive offices)
( 718 ) 961-5400
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value | FFIC | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01. Regulation FD Disclosure.
On November 2, 2022, Flushing Financial Corp. (the “Company”) made available to investors, and to post on its website, the presentation attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
| Exhibit 99.1. Presentation dated November 2, 2022. |
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| 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| us | | |
|---|---|---|
| | FLUSHING FINANCIAL CORPORATION | |
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| Date: November 2, 2022 | By: | /s/ SUSAN K. CULLEN |
| | | Susan K. Cullen |
| | | Senior Executive Vice President, Chief Financial Officer |
| | | and Treasurer |
Exhibit 99.1
| Investor Meetings<br>November 2022 |
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| Safe Harbor Statement<br>2<br>“Safe<br>Harbor”<br>Statement<br>under<br>the<br>Private<br>Securities<br>Litigation<br>Reform<br>Act<br>of<br>1995<br>:<br>Statements<br>in<br>this<br>Presentation<br>relating<br>to<br>plans,<br>strategies,<br>economic<br>performance<br>and<br>trends,<br>projections<br>of<br>results<br>of<br>specific<br>activities<br>or<br>investments<br>and<br>other<br>statements<br>that<br>are<br>not<br>descriptions<br>of<br>historical<br>facts<br>may<br>be<br>forward<br>-<br>looking<br>statements<br>within<br>the<br>meaning<br>of<br>the<br>Private<br>Securities<br>Litigation<br>Reform<br>Act<br>of<br>1995<br>,<br>Section<br>27<br>A<br>of<br>the<br>Securities<br>Act<br>of<br>1933<br>and<br>Section<br>21<br>E<br>of<br>the<br>Securities<br>Exchange<br>Act<br>of<br>1934<br>..<br>Forward<br>-<br>looking<br>information<br>is<br>inherently<br>subject<br>to<br>risks<br>and<br>uncertainties,<br>and<br>actual<br>results<br>could<br>differ<br>materially<br>from<br>those<br>currently<br>anticipated<br>due<br>to<br>a<br>number<br>of<br>factors,<br>which<br>include,<br>but<br>are<br>not<br>limited<br>to,<br>risk<br>factors<br>discussed<br>in<br>the<br>Company’s<br>Annual<br>Report<br>on<br>Form<br>10<br>-<br>K<br>for<br>the<br>fiscal<br>year<br>ended<br>December<br>31<br>,<br>2021<br>and<br>in<br>other<br>documents<br>filed<br>by<br>the<br>Company<br>with<br>the<br>Securities<br>and<br>Exchange<br>Commission<br>from<br>time<br>to<br>time<br>..<br>Forward<br>-<br>looking<br>statements<br>may<br>be<br>identified<br>by<br>terms<br>such<br>as<br>“may”,<br>“will”,<br>“should”,<br>“could”,<br>“expects”,<br>“plans”,<br>“intends”,<br>“anticipates”,<br>“believes”,<br>“estimates”,<br>“predicts”,<br>“forecasts”,<br>“goals”,<br>“potential”<br>or<br>“continue”<br>or<br>similar<br>terms<br>or<br>the<br>negative<br>of<br>these<br>terms<br>..<br>Although<br>we<br>believe<br>that<br>the<br>expectations<br>reflected<br>in<br>the<br>forward<br>-<br>looking<br>statements<br>are<br>reasonable,<br>we<br>cannot<br>guarantee<br>future<br>results,<br>levels<br>of<br>activity,<br>performance<br>or<br>achievements<br>..<br>The<br>Company<br>has<br>no<br>obligation<br>to<br>update<br>these<br>forward<br>-<br>looking<br>statements<br>.. |
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| Flushing Savings 90+ Year History<br>Celebrating 20 years as Public Company in 2015<br>Flushing Savings Bank Opened on June 1, 1929<br>3 |
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| 4<br>26 Year Track Record of Steady Growth<br>Core EPS<br>($)<br>Dividends per Share<br>($)<br>Tangible Book Value per Share<br>($)<br>Assets<br>($B)<br>Total Gross Loans<br>($B)<br>Total Deposits<br>($B)<br>1<br>$<br>-<br>$0.84<br>$0.88<br>1995<br>2000<br>2005<br>2010<br>2015<br>2020<br>2021<br>9M22<br>$<br>-<br>$2.81<br>$1.92<br>1995<br>2000<br>2005<br>2010<br>2015<br>2020<br>2021<br>9M22<br>$0.6<br>$6.1<br>1995<br>2000<br>2005<br>2010<br>2015<br>2020<br>2021<br>3Q22<br>$0.3<br>$7.0<br>1995<br>2000<br>2005<br>2010<br>2015<br>2020<br>2021<br>3Q22<br>$0.7<br>$8.6<br>1995<br>2000<br>2005<br>2010<br>2015<br>2020<br>2021<br>3Q22<br>10% CAGR<br>9% CAGR<br>13% CAGR<br>10% CAGR<br>2<br>15% CAGR<br>2<br>$4.86<br>$21.81<br>1995<br>2000<br>2005<br>2010<br>2015<br>2020<br>2021<br>3Q22<br>6% CAGR<br>Note: Acquisition of Empire Bancorp in<br>2020<br>(loans and deposits acquired of $685MM and $854MM, respectively; assets acquired of $982MM)<br>1<br>Includes mortgagors’ escrow deposits<br>2<br>Calculated from 1996<br>-<br>2021,<br>9M22<br>annualized |
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| 5<br>Flushing Financial Snapshot (NASDAQ: FFIC)<br>Key Messages<br>Balance Sheet<br>Assets<br>$<br>8.6B<br>Loans, net<br>$<br>6.9B<br>Deposits<br>$<br>6.1B<br>1<br>Equity<br>$<br>0.7B<br>Performance<br>GAAP/Core ROAA<br>1.11%/0.90%<br>2<br>GAAP/Core ROAE<br>13.91%/11.24%<br>2<br>GAAP/Core<br>Exp/Avg Assets<br>1.69%/1.68%<br>2<br>Tangible Book Value<br>$<br>21.81<br>Dividend Yield<br>4.3%<br>3<br>3<br>Q22<br>Key Statistics<br>Footprint<br>Deposits<br>primarily from 25 branches<br>in multicultural neighborhoods and our online division,<br>consisting of iGObanking<br>®<br>and BankPurely<br>®<br>•<br>Leading Community Bank in the Attractive<br>Greater NYC Area<br>•<br>Well Diversified and Low Risk Loan Portfolio<br>•<br>History of Sound Credit Quality<br>•<br>Asian Banking Niche<br>•<br>Well Positioned to Capture Market Share<br>Through In<br>-<br>Market Merger Disruption<br>1<br>Includes mortgagors’ escrow deposits<br>2<br>See Reconciliation of GAAP Revenue & Pre<br>-<br>Provision Pre<br>-<br>Tax Net Revenue<br>and Reconciliation of GAAP Revenue and Pre<br>-<br>Provision Pre<br>-<br>Tax Net Revenue for<br>calculation<br>3<br>Calculated<br>using<br>10/21/22<br>closing price of $<br>20.25<br>Brand Promise<br>Nurturing Relationships and Rewarding<br>Customers, Employees, and Shareholders |
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| 6<br>Experienced Executive Leadership Team<br>Executive Compensation and Insider Stock Ownership (6.1%<br>2<br>) Aligned with Shareholder Interests<br>John Buran<br>President<br>and CEO<br>Maria Grasso<br>SEVP, COO,<br>Corporate Secretary<br>Susan Cullen<br>SEVP, CFO,<br>Treasurer<br>Francis Korzekwinski<br>SEVP, Chief of<br>Real Estate<br>Michael Bingold<br>SEVP, Chief Retail and<br>Client<br>Development Officer<br>Douglas McClintock<br>SEVP, General Counsel<br>FFIC:<br>22 years<br>Industry:<br>45<br>years<br>16<br>years<br>36<br>years<br>7<br>years<br>32<br>years<br>29<br>years<br>33<br>years<br>9<br>years<br>39<br>years<br><1 year<br>46 years<br>Allen Brewer<br>SEVP, Chief Information Officer<br>Tom Buonaiuto<br>SEVP, Chief of Staff, Deposit<br>Channel Executive<br>Vincent Giovinco<br>EVP, Commercial Real Estate<br>Lending<br>Jeoung Jin<br>EVP, Residential<br>and Mixed Use<br>Theresa Kelly<br>EVP, Business<br>Banking<br>Patricia Mezeul<br>EVP, Director of Government<br>Banking<br>14<br>years<br>48<br>years<br>15<br>years<br>1<br>30 years<br>3<br>years<br>24<br>years<br>24<br>years<br>29<br>years<br>16<br>years<br>38<br>years<br>15<br>years<br>42<br>years<br>1<br>Previously President and COO of Empire Bancorp and Empire National Bank from its inception in February 2008 until the sale to<br>Fl<br>ushing Financial in October 2020<br>2<br>Directors and executive officers as of<br>September 30<br>, 2022 |
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| Delivering Rewarding Relationships<br>7<br>Building Relationships Across All Stakeholders |
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| Long<br>-<br>standing History of Giving Back to the Communities<br>Our Asian Bank Supports Business Growth<br>8 |
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| 9<br>Strong Asian Banking Market Focus<br>16%<br>of Total Deposits<br>1<br>$<br>36B<br>Deposit Market Potential<br>(~3% Market<br>Share<br>2<br>)<br>7.6%<br>FFIC 5 Year Asian Market<br>CAGR vs 3.7%<br>2<br>for the<br>Comparable Asian<br>Markets<br>Asian Communities<br>–<br>Total Loans<br>$802MM<br>and Deposits<br>$1B<br>Multilingual Branch Staff<br>Serves Diverse Customer Base in NYC<br>Metro Area<br>Growth Aided by the<br>Asian Advisory Board<br>Sponsorships of Cultural Activities<br>Support New and Existing<br>Opportunities<br>1<br>Includes mortgagors’ escrow deposits<br>2<br>as of June 30,<br>2022;<br>Latest FDIC<br>Data<br>Expansion into<br>Elmhurst<br>(Queens)<br>on<br>June 6, 2022 |
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| 10<br>Well<br>-<br>positioned to Benefit from Industry Merger Disruption<br>•<br>10 bank mergers<br>have been announced or closed involving Long Island area banks<br>2<br>•<br>Out of the $<br>363B<br>of total industry deposits<br>in Nassau, Queens, Kings, and Suffolk Counties, $<br>85B<br>or<br>23%<br>involve a merger participant<br>3<br>•<br>93% of FFIC’s deposits<br>are in the Long Island market, including Brooklyn and Queens<br>Flushing Financial (FFIC)<br>1<br>M&T Bank (MTB)/ People’s United Financial<br>(PBCT)<br>(Closed April 1, 2022)<br>Webster Financial (WBS)/ Sterling Bancorp<br>(STL)<br>(Closed Feb 1, 2022)<br>Citizens Financial Group (CFG)/<br>HSBC<br>(Closed Feb 18, 2022)<br>/<br>Investors Bancorp (ISBC)<br>(Closed April 6, 2022)<br>New York Community Bancorp (NYCB)/<br>Flagstar Bancorp (FBC)<br>(Pending)<br>Valley National Bancorp (VLY)/<br>The Westchester Bank<br>(Closed Dec 1, 2021)<br>/<br>Bank Leumi USA<br>(Closed April 1, 2022)<br>Dime Community Bancshares (DCOM)<br>(Closed Feb 1, 2021)<br>TD Bank (TD)/First Horizon (FHN)<br>(Pending)<br>OceanFirst (OCFC)/Partners (PTRS)<br>(Pending)<br>Current Pro Forma U.S. Branches<br>1<br>24 FFIC branches shown, for illustrative purposes only; Shirley, NY location not pictured<br>2<br>Includes MTB/PBCT, WBS/STL, CFG/ISBC/HSBC, NYCB/FBC, VLY/The Westchester Bank/Bank Leumi USA, DCOM, TD/FHN, and OCFC/PTRS<br>3<br>Based on most recent (June 30,<br>2022)<br>S&P Global data<br>46<br>people recruited<br>(20<br>Revenue<br>Producers) from<br>Merged Institutions<br>Since March 31,<br>2021 |
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| Multifamily Lending<br>–<br>Rent Stabilized, Niche Player<br>Our Conservative Lending Standards Lead to Minimal Losses<br>Generally Not Like This<br>Our Lending Looks More Like This<br>11 |
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| Examples of Multifamily Buildings in the Portfolio<br>12<br>Low Risk and Well Secured<br>Brooklyn NY Elevator Apartment Building<br>Brooklyn NY Elevator Apartment Building |
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| Non<br>-<br>Owner Occupied Commercial Real Estate<br>–<br>Strong Equity on Local Properties<br>Community Properties with an Average Loan Size of $2.1MM<br>13 |
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| Commercial Real Estate Portfolio Examples<br>14<br>Local Community Centers That Are Internet Resistant<br>Food Anchored Shopping Center<br>Retail Power Center |
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| Residential Mixed Use<br>–<br>Higher Yields, Less Exposed to Internet<br>Disruption<br>These Businesses are Vital to the Community<br>Typical Building<br>Not Typical<br>15 |
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| Business Banking<br>–<br>Supporting<br>Customers<br>Well Diversified Business Portfolio<br>16 |
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| Our Branches Have Evolved and Expanded with the Community<br>25<br>Branches In Our<br>Footprint Plus 2 In Process<br>17 |
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| Digital Banking<br>Usage Continues to Increase<br>18<br>Technology Enhancements Remain a Priority<br>25%<br>Increase in Monthly<br>Mobile<br>Active Users<br>Sept 2022 YoY<br>~<br>26,500<br>Users with Active Status<br>22%<br>Sept 2022 YoY<br>Growth<br>11%<br>Digital Banking<br>Enrollment<br>Sept 2022 YoY<br>Growth |
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| <br>Over two decades and multiple credit cycles, Flushing Financial has a history of better than industry credit quality<br><br>Average LTVs on the Real Estate portfolio is <<br>37%<br>4<br>–<br>Only<br>$23.1MM<br>of real estate loans (<br>0.33%<br>of gross loans) with an LTV of 75% or more<br>4<br>Net Charge<br>-<br>offs Significantly Better Than the Industry; Strong DSR<br>19<br>NCOs / Average Loans<br>0.01%<br>0.25%<br>-0.2%<br>0.3%<br>0.8%<br>1.3%<br>1.8%<br>2.3%<br>2.8%<br>3.3%<br>2001<br>2003<br>2005<br>2007<br>2009<br>2011<br>2013<br>2015<br>2017<br>2019<br>2021<br>FFIC<br>Industry<br>2 basis<br>points of<br>Net<br>Charge<br>-<br>offs<br>to<br>Average Loans<br>in<br>3Q22<br>9M22<br>Weighted average debt service ratios (DSR) for Multifamily and<br>NOO CRE portfolios at<br>~1.8x<br>1<br>-<br>200 bps shock increase in rates produces a weighted average DSR of >1.25x<br>2<br>-<br>10% increase in operating expense yields a weighted average DSR of >1.50x<br>2<br>-<br>200 bps shock increase in rates and 10% increase in operating expenses<br>results in a weighted average DSR >1.15<br>2<br>3<br>1<br>Based on most recent Annual Loan Review<br>2<br>Based on a sample of<br>loans<br>comprising 89% of loans adjusting from (2022<br>-<br>2024) with no increase in<br>rents or total income<br>3<br>“Industry” includes FDIC insured institutions from “FDIC Statistics At A Glance”<br>through<br>December 31, 2021<br>4<br>Based on appraised value at origination |
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| 20<br><br>Managing through rate increases<br>–<br>Controlling deposit rate increases is key for the net<br>interest income outlook<br>–<br>Net interest income generally rises closer to the<br>base case by Year 3 as cumulative loan repricing<br>exceeds deposits costs<br><br>Opportunistic capital return with strong<br>dividend yield of 4.4%<br>1<br>–<br>Repurchased 131,174 shares in 3Q22 at an average<br>price of $20.47<br>–<br>Balancing additional share repurchases with 8%<br>TCE target<br><br>Maintaining through<br>-<br>the<br>-<br>cycle goals of<br>ROAA ≥1% and ROAE ≥10%<br>–<br>On a core basis, ROAA of 0.90% and ROAE of<br>11.24% in 3Q22<br><br>Benefiting from merger disruption<br>–<br>Since March 31, 2021, added<br>46<br>people from<br>announced/recently closed mergers;<br>20<br>are revenue<br>producing<br><br>Remaining selective with loans<br>–<br>Selective on rates and property type<br>–<br>Expect higher rates to impact closings<br>–<br>Expect prepayment speeds to decline over<br>time<br>–<br>Overall loan growth to be muted<br><br>Well prepared if credit markets weaken<br>–<br>Loan losses consistently below industry levels<br>–<br>Average real estate LTVs <37%<br>–<br>Over 88% of the loan portfolio is real estate secured<br>–<br>Weighted average Debt Service Coverage Ratio of 1.8x for<br>multifamily and NOO CRE<br>Key Messages<br>1<br>Calculated using<br>10/20/22<br>closing price of<br>$19.79 |
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| Takeaways<br>Conservative Underwriting with History of Solid Value Creation<br>►<br>Leading Community Bank<br>in the Greater NYC Area<br>►<br>Experienced<br>Management Team<br>►<br>Serving All Communities; Including<br>Asian Banking Niche<br>►<br>Well Positioned to Capture Market Share<br>Through In<br>-<br>Market Merger Disruption<br>►<br>Well<br>Diversified and Low Risk<br>Loan Portfolio<br>►<br>Embracing and Expanding<br>Digital and Mobile Capabilities<br>►<br>History of Sound Credit Quality<br>since IPO in 1995<br>►<br>4.3%<br>1<br>Dividend Yield<br>1<br>Based on<br>10<br>/21/22<br>closing price of $<br>20.25<br>21 |
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| Appendix<br>22 |
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| Strong and Growing Capital Base<br>23<br>60%<br>of<br>Earnings<br>Returned Through the First 9 Months of<br>2022; 45% in 2021<br>Book<br>Value Per<br>Share 5 Year CAGR of 4%<br>Tangible<br>Book Value Per<br>Share 5 Year CAGR of 4%<br>$19.64<br>$20.59<br>$20.11<br>$22.26<br>$22.47<br>10.98%<br>10.95%<br>9.88%<br>10.86%<br>10.49%<br>8.74%<br>8.73%<br>8.38%<br>8.98%<br>8.74%<br>0.00%<br>5.00%<br>10.00%<br>15.00%<br>20.00%<br>25.00%<br>30.00%<br>35.00%<br>40.00%<br> $15.00<br> $16.00<br> $17.00<br> $18.00<br> $19.00<br> $20.00<br> $21.00<br> $22.00<br> $23.00<br>2018<br>2019<br>2020<br>2021<br>3Q22<br>Book Value Per Share<br>CET1 Ratio<br>Leverage Ratio<br>$19.07<br>$20.02<br>$19.45<br>$21.61<br>$21.81<br>7.83%<br>8.05%<br>7.52%<br>8.22%<br>7.62%<br>5.00%<br>6.00%<br>7.00%<br>8.00%<br>9.00%<br>10.00%<br>11.00%<br>12.00%<br>13.00%<br>14.00%<br>15.00%<br> $10.00<br> $12.00<br> $14.00<br> $16.00<br> $18.00<br> $20.00<br> $22.00<br>2018<br>2019<br>2020<br>2021<br>3Q22<br>Tangible Book Value Per Share<br>Tangible Common Equity/Tangible Assets<br>Empire<br>Closed |
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| Reconciliation of GAAP Earnings and Core Earnings<br>24<br>Non<br>-<br>cash Fair Value Adjustments to GAAP Earnings<br>The<br>variance<br>in<br>GAAP<br>and<br>core<br>earnings<br>is<br>partly<br>driven<br>by<br>the<br>impact<br>of<br>non<br>-<br>cash<br>net<br>gains<br>and<br>losses<br>from<br>fair<br>value<br>adjustments<br>..<br>These<br>fair<br>value<br>adjustments<br>relate<br>primarily<br>to<br>borrowing<br>carried<br>at<br>fair<br>value<br>under<br>the<br>fair<br>value<br>option<br>a<br>nd<br>swaps<br>designated<br>to<br>protect<br>against<br>rising<br>rates<br>..<br>As<br>the<br>swaps<br>get<br>closer<br>to<br>maturity,<br>the<br>volatility<br>in<br>fair<br>value<br>adjustments<br>will<br>dissipate<br>..<br>In<br>a<br>rising<br>interest<br>rate<br>environment<br>or<br>a<br>steepening<br>of<br>the<br>yield<br>curve,<br>the<br>loss<br>position<br>would<br>experience<br>an<br>improvement<br>..<br>In<br>a<br>declining<br>interest<br>rate<br>environment,<br>the<br>movement<br>in<br>the<br>curve<br>exaggerates<br>our<br>mark<br>-<br>to<br>-<br>market<br>loss<br>position<br>..<br>Core<br>Net<br>Income,<br>Core<br>Diluted<br>EPS,<br>Core<br>ROAE,<br>Core<br>ROAA,<br>Pre<br>-<br>provision,<br>Pre<br>-<br>tax<br>Net<br>Revenue,<br>Core<br>Net<br>Interest<br>Income<br>FTE,<br>Core<br>Net<br>Interest<br>Margin<br>FTE<br>,<br>Core<br>Interest<br>Income<br>and<br>Yield<br>on<br>Total<br>Loans<br>,<br>Core<br>Noninterest<br>Income,<br>Core<br>Noninterest<br>Expense<br>and<br>Tangible<br>Book<br>Value<br>per<br>common<br>share<br>are<br>each<br>non<br>-<br>GAAP<br>measures<br>used<br>in<br>this<br>presentation<br>..<br>A<br>reconciliation<br>to<br>the<br>most<br>directly<br>comparable<br>GAAP<br>financial<br>measures<br>appears<br>below<br>in<br>tabular<br>form<br>..<br>The<br>Company<br>believes<br>that<br>these<br>measures<br>are<br>useful<br>for<br>both<br>investors<br>and<br>management<br>to<br>understand<br>the<br>effects<br>of<br>certain<br>interest<br>and<br>noninterest<br>items<br>and<br>provide<br>an<br>alternative<br>view<br>of<br>the<br>Company's<br>performance<br>over<br>time<br>and<br>in<br>comparison<br>to<br>the<br>Company's<br>competitors<br>..<br>These<br>measures<br>should<br>not<br>be<br>viewed<br>as<br>a<br>substitute<br>for<br>net<br>income<br>..<br>The<br>Company<br>believes<br>that<br>tangible<br>book<br>value<br>per<br>common<br>share<br>is<br>useful<br>for<br>both<br>investors<br>and<br>management<br>as<br>these<br>are<br>measures<br>commonly<br>used<br>by<br>financial<br>institutions,<br>regulators<br>and<br>investors<br>to<br>measure<br>the<br>capital<br>adequacy<br>of<br>financial<br>institutions<br>..<br>The<br>Company<br>believes<br>these<br>measures<br>facilitate<br>comparison<br>of<br>the<br>quality<br>and<br>composition<br>of<br>the<br>Company's<br>capital<br>over<br>time<br>and<br>in<br>comparison<br>to<br>its<br>competitors<br>..<br>These<br>measures<br>should<br>not<br>be<br>viewed<br>as<br>a<br>substitute<br>for<br>total<br>shareholders'<br>equity<br>..<br>These<br>non<br>-<br>GAAP<br>measures<br>have<br>inherent<br>limitations,<br>are<br>not<br>required<br>to<br>be<br>uniformly<br>applied<br>and<br>are<br>not<br>audited<br>..<br>They<br>should<br>not<br>be<br>considered<br>in<br>isolation<br>or<br>as<br>a<br>substitute<br>for<br>analysis<br>of<br>results<br>reported<br>under<br>GAAP<br>..<br>These<br>non<br>-<br>GAAP<br>measures<br>may<br>not<br>be<br>comparable<br>to<br>similarly<br>titled<br>measures<br>reported<br>by<br>other<br>companies<br>.. |
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| 25<br>Reconciliation of GAAP Earnings and Core Earnings<br>1<br>Core diluted earnings per common share may not foot due to rounding<br>2<br>Ratios are calculated on an annualized basis<br><br>(Dollars In thousands, except per share data)<br>GAAP income (loss) before income taxes<br>$<br>109,278<br><br><br>$<br>45,182<br><br><br>$<br>53,331<br><br><br>$<br>65,485<br><br><br>$<br>66,134<br><br><br>$<br>92,033<br><br><br>$<br>86,452<br><br><br>Day 1, Provision for Credit Losses - Empire<br>transaction<br>—<br><br><br>1,818<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Net (gain) loss from fair value adjustments<br><br>12,995<br><br><br><br>2,142<br><br><br><br>5,353<br><br><br><br>4,122<br><br><br><br>3,465<br><br><br><br>(6,350)<br><br><br><br>7,855<br><br><br>Net (gain) loss on sale of securities<br><br>(113)<br><br><br><br>701<br><br><br><br>15<br><br><br><br>1,920<br><br><br><br>186<br><br><br><br>—<br><br><br><br>(113)<br><br><br>Life insurance proceeds<br><br>—<br><br><br><br>(659)<br><br><br><br>(462)<br><br><br><br>(2,998)<br><br><br><br>(1,405)<br><br><br><br>(1,536)<br><br><br><br>—<br><br><br>Net gain on sale or disposition of assets<br><br>(621)<br><br><br><br>—<br><br><br><br>(770)<br><br><br><br>(1,141)<br><br><br><br>—<br><br><br><br>—<br><br><br><br>(621)<br><br><br>Net (gain) loss from fair value adjustments on<br>qualifying hedges<br><br>(2,079)<br><br><br><br>1,185<br><br><br><br>1,678<br><br><br><br>—<br><br><br><br>—<br><br><br><br>161<br><br><br>(957)<br><br><br>Accelerated employee benefits upon Officer's death<br><br>—<br><br><br><br>—<br><br><br><br>455<br><br><br><br>149<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br>Prepayment penalty on borrowings<br>—<br><br><br>7,834<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Net amortization of purchase accounting adjustments<br>(2,489)<br><br><br>80<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>(1,811)<br><br><br>(2,165)<br><br><br>Merger expense<br><br>2,562<br><br><br><br>6,894<br><br><br><br>1,590<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br><br>2,579<br><br><br>Core income before taxes<br><br>119,533<br><br><br><br>65,177<br><br><br><br>61,190<br><br><br><br>67,537<br><br><br><br>68,380<br><br><br><br>82,497<br><br><br><br>93,030<br><br><br>Provision for income taxes for core income<br><br>30,769<br><br><br><br>15,428<br><br><br><br>13,957<br><br><br><br>11,960<br><br><br><br>22,613<br><br><br><br>23,057<br><br><br>25,234<br><br><br>Core net income<br>$<br>88,764<br><br><br>$<br>49,749<br><br><br>$<br>47,233<br><br><br>$<br>55,577<br><br><br>$<br>45,767<br><br><br>$<br>59,440<br><br><br>$<br>67,796<br><br><br>GAAP diluted earnings (loss) per common share<br>$<br>2.59<br><br><br>$<br>1.18<br><br><br>$<br>1.44<br><br><br>$<br>1.92<br><br><br>$<br>1.41<br><br><br>$<br>2.15<br><br><br>$<br>2.02<br><br><br>Day 1, Provision for Credit Losses - Empire<br>transaction, net of tax<br>—<br><br><br>0.05<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Net (gain) loss from fair value adjustments, net of tax<br><br>0.31<br><br><br><br>0.06<br><br><br><br>0.14<br><br><br><br>0.10<br><br><br><br>0.07<br><br><br><br>(0.15)<br><br><br>0.18<br><br><br>Net (gain) loss on sale of securities, net of tax<br><br>—<br><br><br><br>0.02<br><br><br><br>—<br><br><br><br>0.05<br><br><br><br>—<br><br><br><br>—<br><br><br>—<br><br><br>Life insurance proceeds<br><br>—<br><br><br><br>(0.02)<br><br><br><br>(0.02)<br><br><br><br>(0.10)<br><br><br><br>(0.05)<br><br><br><br>(0.05)<br><br><br>—<br><br><br>Net gain on sale or disposition of assets, net of tax<br><br>(0.01)<br><br><br><br>—<br><br><br><br>(0.02)<br><br><br><br>(0.03)<br><br><br><br>—<br><br><br><br>—<br><br><br>(0.01)<br><br><br>Net (gain) loss from fair value adjustments on<br>qualifying hedges, net of tax<br><br>(0.05)<br><br><br><br>0.03<br><br><br><br>0.05<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br>(0.02)<br><br><br>Accelerated employee benefits upon Officer's death,<br>net of tax<br><br>—<br><br><br><br>—<br><br><br><br>0.01<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br>—<br><br><br>Federal tax reform 2017<br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>0.13<br><br><br>—<br><br><br>—<br><br><br>Prepayment penalty on borrowings, net of tax<br>—<br><br><br>0.20<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Net amortization of purchase accounting adjustments,<br>net of tax<br>(0.06)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>(0.04)<br><br><br>(0.05)<br><br><br>Merger expense, net of tax<br><br>0.06<br><br><br><br>0.18<br><br><br><br>0.04<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br>0.06<br><br><br>NYS tax change<br><br>(0.02)<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br><br>—<br><br><br>(0.02)<br><br><br>Core diluted earnings per common share<br>(1)<br>$<br>2.81<br><br><br>$<br>1.70<br><br><br>$<br>1.65<br><br><br>$<br>1.94<br><br><br>$<br>1.57<br><br><br>$<br>1.92<br><br><br>$<br>2.14<br><br><br>Core net income, as calculated above<br>$<br>88,764<br><br><br>$<br>49,749<br><br><br>$<br>47,233<br><br><br>$<br>55,577<br><br><br>$<br>45,767<br><br><br>$<br>59,440<br><br><br>$<br>67,796<br><br><br>Average assets<br><br>8,143,372<br><br><br>7,276,022<br><br><br>6,947,881<br><br><br>6,504,598<br><br><br>6,217,746<br><br><br>8,236,070<br><br><br>8,161,121<br><br>Average equity<br><br>648,946<br><br><br><br>580,067<br><br><br><br>561,289<br><br><br><br>534,735<br><br><br><br>530,300<br><br><br><br>671,588<br><br><br><br>641,354<br><br><br>Core return on average assets<br>(2)<br><br>1.09<br><br><br>%<br><br>0.68<br><br><br>%<br><br>0.68<br><br><br>%<br><br>0.85<br><br><br>%<br><br>0.74<br><br><br>%<br><br>0.96<br><br><br>%<br><br>1.11<br><br><br>%<br>Core return on average equity<br>(2)<br><br>13.68<br><br><br>%<br><br>8.58<br><br><br>%<br><br>8.42<br><br><br>%<br><br>10.39<br><br><br>%<br><br>8.63<br><br><br>%<br><br>11.80<br><br><br>%<br><br>14.09<br><br><br>%<br>December 31,<br>2018<br>Years Ended<br>December 31,<br>2021<br>December 31,<br>2020<br>December 31,<br>2019<br>2017<br>2021<br>2022<br>Nine Months Ended<br>December 31,<br>September 30,<br>September 30, |
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| 26<br>Reconciliation of GAAP Revenue & Pre<br>-<br>Provision Pre<br>-<br>Tax Net Revenue<br>Efficiency ratio, a non<br>-<br>GAAP measure, was calculated by dividing noninterest expenses (excluding merger expenses, OREO expense,<br>prepayment penalty on borrowings, the net gain/loss from<br>the sale of OREO and net amortization of purchase accounting adjustment) by the total of net interest income (excluding net g<br>ain<br>s and loses from fair value adjustments on qualifying hedges and<br>net amortization of purchase accounting adjustments) and noninterest income (excluding life insurance proceeds, net gains and<br>lo<br>sses from the sale or disposition of securities, assets and fair<br>value adjustments)<br><br>(Dollars In thousands)<br><br><br><br><br><br><br><br><br>GAAP Net interest income<br>$<br>247,969<br><br><br>$<br>195,199<br><br><br>$<br>161,940<br><br><br>$<br>167,406<br><br><br>$<br>173,107<br><br><br>$<br>189,415<br><br><br>$<br>185,295<br><br><br>Net (gain) loss from fair value<br>adjustments on qualifying hedges<br>(2,079)<br><br><br>1,185<br><br><br>1,678<br><br><br>—<br><br><br>—<br><br><br>161<br><br><br>(957)<br><br><br>Net amortization of purchase<br>accounting adjustments<br>(3,049)<br><br><br>(11)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>(2,200)<br><br><br>(2,587)<br><br><br>Core Net interest income<br>$<br>242,841<br><br><br>$<br>196,373<br><br><br>$<br>163,618<br><br><br>$<br>167,406<br><br><br>$<br>173,107<br><br><br>$<br>187,376<br><br><br>$<br>181,751<br><br><br>GAAP Noninterest income<br>$<br>3,687<br><br><br>$<br>11,043<br><br><br>$<br>9,471<br><br><br>$<br>10,337<br><br><br>$<br>10,362<br><br><br>$<br>17,661<br><br><br>$<br>3,967<br><br><br>Net (gain) loss from fair value<br>adjustments<br>12,995<br><br><br>2,142<br><br><br>5,353<br><br><br>4,122<br><br><br>3,465<br><br><br>(6,350)<br><br><br>7,855<br><br><br>Net (gain) loss on sale of securities<br>(113)<br><br><br>701<br><br><br>15<br><br><br>1,920<br><br><br>186<br><br><br>—<br><br><br>(113)<br><br><br>Life insurance proceeds<br>—<br><br><br>(659)<br><br><br>(462)<br><br><br>(2,998)<br><br><br>(1,405)<br><br><br>(1,536)<br><br><br>—<br><br><br>Net gain on disposition of assets<br>(621)<br><br><br>—<br><br><br>(770)<br><br><br>(1,141)<br><br><br>—<br><br><br>—<br><br><br>(621)<br><br><br>Core Noninterest income<br>$<br>15,948<br><br><br>$<br>13,227<br><br><br>$<br>13,607<br><br><br>$<br>12,240<br><br><br>$<br>12,608<br><br><br>$<br>9,775<br><br><br>$<br>11,088<br><br><br>GAAP Noninterest expense<br>$<br>147,322<br><br><br>$<br>137,931<br><br><br>$<br>115,269<br><br><br>$<br>111,683<br><br><br>$<br>107,474<br><br><br>$<br>109,950<br><br><br>$<br>108,515<br><br><br>Prepayment penalty on borrowings<br>—<br><br><br>(7,834)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Accelerated employee benefits upon<br>Officer's death<br>—<br><br><br>—<br><br><br>(455)<br><br><br>(149)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Net amortization of purchase<br>accounting adjustments<br>(560)<br><br><br>(91)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>(389)<br><br><br>(422)<br><br><br>Merger expense<br>(2,562)<br><br><br>(6,894)<br><br><br>(1,590)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>(2,579)<br><br><br>Core Noninterest expense<br>$<br>144,200<br><br><br>$<br>123,112<br><br><br>$<br>113,224<br><br><br>$<br>111,534<br><br><br>$<br>107,474<br><br><br>$<br>109,561<br><br><br>$<br>105,514<br><br><br>GAAP:<br>Net interest income<br>$<br>247,969<br><br><br>$<br>195,199<br><br><br>$<br>161,940<br><br><br>$<br>167,406<br><br><br>$<br>173,107<br><br><br>$<br>189,415<br><br><br>$<br>185,295<br><br><br>Noninterest income<br>3,687<br><br><br>11,043<br><br><br>9,471<br><br><br>10,337<br><br><br>10,362<br><br><br>17,661<br><br><br>3,967<br><br><br>Noninterest expense<br>(147,322)<br><br><br>(137,931)<br><br><br>(115,269)<br><br><br>(111,683)<br><br><br>(107,474)<br><br><br>(109,950)<br><br><br>(108,515)<br><br><br>Pre-provision pre-tax net revenue<br>$<br>104,334<br><br><br>$<br>68,311<br><br><br>$<br>56,142<br><br><br>$<br>66,060<br><br><br>$<br>75,995<br><br><br>$<br>97,126<br><br><br>$<br>80,747<br><br><br>Core:<br>Net interest income<br>$<br>242,841<br><br><br>$<br>196,373<br><br><br>$<br>163,618<br><br><br>$<br>167,406<br><br><br>$<br>173,107<br><br><br>$<br>187,376<br><br><br>$<br>181,751<br><br><br>Noninterest income<br>15,948<br><br><br>13,227<br><br><br>13,607<br><br><br>12,240<br><br><br>12,608<br><br><br>9,775<br><br><br>11,088<br><br><br>Noninterest expense<br>(144,200)<br><br><br>(123,112)<br><br><br>(113,224)<br><br><br>(111,534)<br><br><br>(107,474)<br><br><br>(109,561)<br><br><br>(105,514)<br><br><br>Pre-provision pre-tax net revenue<br>$<br>114,589<br><br><br>$<br>86,488<br><br><br>$<br>64,001<br><br><br>$<br>68,112<br><br><br>$<br>78,241<br><br><br>$<br>87,590<br><br><br>$<br>87,325<br><br><br>Efficiency Ratio<br>55.7<br><br><br>%<br>58.7<br><br><br>%<br>63.9<br><br><br>%<br>62.1<br><br><br>%<br>57.9<br><br><br>%<br>55.6<br><br><br>%<br>54.7<br><br><br>%<br>September 30,<br>2021<br>September 30,<br>2022<br>Nine Months Ended<br>December 31,<br>2018<br>Years Ended<br>December 31,<br>2021<br>December 31,<br>2020<br>December 31,<br>2019<br>December 31,<br>2017 |
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| 27<br>Reconciliation of<br>GAAP and Core Net Interest Income and NIM<br>1<br>Excludes purchase accounting average balances for the<br>years ended 2021 and 2020 and for the nine months ended September 30, 2022 and 2021<br>(Dollars In thousands)<br>GAAP net interest income<br>$<br>247,969<br><br><br>$<br>195,199<br><br><br>$<br>161,940<br><br><br>$<br>167,406<br><br><br>$<br>173,107<br><br><br>$<br>189,415<br><br><br>$<br>185,295<br><br><br>Net (gain) loss from fair value adjustments<br>on qualifying hedges<br><br>(2,079)<br><br><br><br>1,185<br><br><br><br>1,678<br><br><br><br>—<br><br><br><br>—<br><br><br><br>161<br><br><br><br>(957)<br><br><br>Net amortization of purchase accounting<br>adjustments<br><br>(3,049)<br><br><br><br>(11)<br><br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>(2,200)<br><br><br>(2,587)<br><br><br>Tax equivalent adjustment<br>450<br><br><br>508<br><br><br>542<br><br><br>895<br><br><br>—<br><br><br>359<br><br><br>337<br><br><br>Core net interest income FTE<br>$<br>243,291<br><br><br>$<br>196,881<br><br><br>$<br>164,160<br><br><br>$<br>168,301<br><br><br>$<br>173,107<br><br><br>$<br>187,735<br><br><br>$<br>182,088<br><br><br>Total average interest-earning assets<br>(1)<br>$<br>7,681,441<br><br>$<br>6,863,219<br><br>$<br>6,582,473<br><br>$<br>6,194,248<br><br>$<br>5,916,073<br><br>$<br>7,770,910<br><br>$<br>7,697,229<br><br>Core net interest margin FTE<br><br>3.17<br><br><br>%<br><br>2.87<br><br><br>%<br><br>2.49<br><br><br>%<br><br>2.72<br><br><br>%<br><br>2.93<br><br><br>%<br><br>3.22<br><br><br>%<br><br>3.15<br><br><br>%<br>GAAP interest income on total loans, net<br>$<br>274,331<br><br><br>$<br>248,153<br><br><br>$<br>251,744<br><br><br>$<br>232,719<br><br><br>$<br>209,283<br><br><br>$<br>212,254<br><br><br>$<br>206,218<br><br><br>Net (gain) loss from fair value adjustments<br>on qualifying hedges<br><br>(2,079)<br><br><br><br>1,185<br><br><br><br>1,678<br><br><br><br>—<br><br><br><br>—<br><br><br><br>161<br><br><br><br>(957)<br><br><br>Net amortization of purchase accounting<br>adjustments<br>(3,013)<br><br><br>(356)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>(2,256)<br><br><br>(2,478)<br><br><br>Core interest income on total loans, net<br>$<br>269,239<br><br><br>$<br>248,982<br><br><br>$<br>253,422<br><br><br>$<br>232,719<br><br><br>$<br>209,283<br><br><br>$<br>210,159<br><br><br>$<br>202,783<br><br><br>Average total loans, net<br>(1)<br>$<br>6,653,980<br><br>$<br>6,006,931<br><br>$<br>5,621,033<br><br>$<br>5,316,968<br><br>$<br>4,988,613<br><br>$<br>6,701,413<br><br>$<br>6,683,412<br><br>Core yield on total loans<br><br>4.05<br><br><br>%<br><br>4.14<br><br><br>%<br><br>4.51<br><br><br>%<br><br>4.38<br><br><br>%<br><br>4.20<br><br><br>%<br><br>4.18<br><br><br>%<br><br>4.05<br><br><br>%<br>September 30,<br>2021<br>Nine Months Ended<br>2017<br>September 30,<br>2022<br>December 31,<br>December 31,<br>2018<br>Years Ended<br>December 31,<br>2021<br>December 31,<br>2020<br>December 31,<br>2019 |
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| 28<br>Calculation of Tangible Stockholders’ Common Equity to Tangible Assets<br><br><br><br><br><br><br>(Dollars in thousands)<br>Total Equity<br>$<br>670,719<br><br><br>$<br>679,628<br><br><br>$<br>618,997<br><br><br>$<br>579,672<br><br><br>$<br>549,464<br><br><br>$<br>532,608<br><br><br>Less:<br><br><br><br><br><br><br><br><br><br><br>Goodwill<br><br>(17,636)<br><br><br><br>(17,636)<br><br><br><br>(17,636)<br><br><br><br>(16,127)<br><br><br><br>(16,127)<br><br><br><br>(16,127)<br><br><br>Core deposit Intangibles<br>(2,147)<br><br><br>(2,562)<br><br><br>(3,172)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Intangible deferred tax liabilities<br><br>—<br><br><br><br>328<br><br><br><br>287<br><br><br><br>292<br><br><br><br>290<br><br><br><br>291<br><br><br>Tangible Stockholders' Common Equity<br>$<br>650,936<br><br><br>$<br>659,758<br><br><br>$<br>598,476<br><br><br>$<br>563,837<br><br><br>$<br>533,627<br><br><br>$<br>516,772<br><br><br>Total Assets<br>$<br>8,557,419<br><br><br>$<br>8,045,911<br><br><br>$<br>7,976,394<br><br><br>$<br>7,017,776<br><br><br>$<br>6,834,176<br><br><br>$<br>6,299,274<br><br><br>Less:<br><br><br><br><br><br><br><br><br><br><br><br><br>Goodwill<br><br>(17,636)<br><br><br><br>(17,636)<br><br><br><br>(17,636)<br><br><br><br>(16,127)<br><br><br><br>(16,127)<br><br><br><br>(16,127)<br><br><br>Core deposit Intangibles<br>(2,147)<br><br><br>(2,562)<br><br><br>(3,172)<br><br><br>—<br><br><br>—<br><br><br>—<br><br><br>Intangible deferred tax liabilities<br><br>—<br><br><br><br>328<br><br><br><br>287<br><br><br><br>292<br><br><br><br>290<br><br><br><br>291<br><br><br>Tangible Assets<br>$<br>8,537,636<br><br><br>$<br>8,026,041<br><br><br>$<br>7,955,873<br><br><br>$<br>7,001,941<br><br><br>$<br>6,818,339<br><br><br>$<br>6,283,438<br><br><br>Tangible Stockholders' Common Equity to<br>Tangible Assets<br><br>7.62<br><br><br>%<br><br>8.22<br><br><br>%<br><br>7.52<br><br><br>%<br><br>8.05<br><br><br>%<br><br>7.83<br><br><br>%<br><br>8.22<br><br><br>%<br>September 30,<br>2022<br>December 31,<br>2021<br>December 31,<br>December 31,<br>December 31,<br>December 31,<br>2017<br>2018<br>2019<br>2020 |
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| Contact Details<br>Susan K. Cullen<br>SEVP, CFO & Treasurer<br>Phone: (718) 961<br>-<br>5400<br>Email: scullen@flushingbank.com<br>Al Savastano, CFA<br>Director of Investor Relations<br>Phone: (516) 820<br>-<br>1146<br>Email: asavastano@flushingbank.com<br>29 |
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