8-K
FLUSHING FINANCIAL CORP (FFIC)
8-K
2024-07-29
For: 2024-07-29
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April 09, 2026
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): July 29, 2024
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 July 29, 2024 Flushing Financial Corp. (the “Company”) made available to investors, and to post on this website, the earnings presentation for the 2024 second quarter earnings, the presentation attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
| Exhibit 99.1. Presentation dated July 29, 2024. |
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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 | |
| | | |
| | | |
| Date: July 29, 2024 | By: | /s/ SUSAN K. CULLEN |
| | | Susan K. Cullen |
| | | Senior Executive Vice President, Chief Financial Officer and Treasurer |
| | | |
Exhibit 99.1
| 2Q24 Earnings Conference Call<br>July 29, 2024 |
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| Safe Harbor Statement<br>2<br>“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements<br>in this Presentation relating to plans, strategies, economic performance and trends, projections<br>of results of specific activities or investments and other statements that are not descriptions of<br>historical facts may be forward-looking statements within the meaning of the Private Securities<br>Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the<br>Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and<br>uncertainties, and actual results could differ materially from those currently anticipated due to a<br>number of factors, which include, but are not limited to, risk factors discussed in the Company’s<br>Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in other<br>documents filed by the Company with the Securities and Exchange Commission from time to<br>time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”,<br>“could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”,<br>“goals”, “potential” or “continue” or similar terms or the negative of these terms. Although we<br>believe that the expectations reflected in the forward-looking statements are reasonable, we<br>cannot guarantee future results, levels of activity, performance or achievements. The Company<br>has no obligation to update these forward-looking statements. |
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| ▪ Net Interest Margin primarily<br>impacted by balance sheet mix,<br>loan repricing and increase in cost<br>of funds<br>▪ Episodic items2<br>totaled $0.7 million<br>in 2Q24, $1 million in 1Q24, and<br>$0.5 million in 2Q23<br>▪ Noninterest income includes back<br>to back swap fee income of $0.3<br>million in 2Q24, $0.2 million in<br>1Q24 and $0.1 million in 2Q23<br>▪ Noninterest expense increased<br>11.2% YoY but decreased 2.1%<br>QoQ<br>▪ Credit quality remains solid<br>3<br>2Q24 Financial Highlights<br>1 See Reconciliation of GAAP Earnings to Core Earnings - Quarters<br>2 Episodic items include prepayment penalty income, customer swap termination fees, net reversals and recoveries of interest from nonaccrual loans, net gains and losses from fair value<br>adjustments on qualifying hedges, and purchase accounting accretion<br>($ in 000s, except for EPS)<br>2Q24 1Q24 2Q23<br>Net Interest Income $42,776 $42,397 $43,378<br>Provision for Credit Losses 809 592 1,416<br>Noninterest Income 4,216 3,084 5,020<br>Noninterest Expense 39,047 39,892 35,110<br>Income Before Income Taxes 7,136 4,997 11,872<br>Provision for Income Taxes 1,814 1,313 3,186<br>Net Income $5,322 $3,684 $8,686<br>GAAP EPS $0.18 $0.12 $0.29<br>Core EPS1<br>$0.18 $0.14 $0.26<br>GAAP NIM FTE 2.05 % 2.06 % 2.18 %<br>Core NIM FTE1<br> 2.03 2.06 % 2.17<br>NCOs/Average Loans (0.01) % - % 0.09 %<br>NPAs/Assets 0.61 0.53 0.47<br>Criticized and Classified Loan/Loans 1.13 0.87 0.71<br>30-89 Day Past Due/Total Loans 0.35 0.25 0.16 |
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| 0.00%<br>1.00%<br>2.00%<br>3.00%<br>4.00%<br>5.00%<br>6.00%<br>0.00%<br>20.00%<br>40.00%<br>60.00%<br>80.00%<br>100. 0%<br>120. 0%<br>2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 1H24<br>FFIC Industry<br>▪ Over two decades and multiple credit cycles, Flushing<br>Financial has a history of better than industry credit quality<br>▪ Average LTVs on the Real Estate portfolio is less than 36%4<br>– Only $35.0 million of real estate loans (0.5% of gross loans) with an<br>LTV of 75% or more4<br>; $9.2 million have mortgage insurance<br>Net Charge-offs Significantly Better Than the Industry; Strong DCR<br>NCOs / Average Loans1<br>1<br>“Industry” includes FDIC insured institutions from “FDIC Statistics At A Glance”<br>through March 31, 2024<br>2 Based on most recent Annual Loan Review<br>3 Based upon a sample size of 74% of multifamily and investor real estate loans as of December 31, 2023<br>4 Based on appraised value at origination 4<br>Noncurrent Loans / Loans<br>-0.50%<br>0.00%<br>0.50%<br>1.00%<br>1.50%<br>2.00%<br>2.50%<br>3.00%<br>2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 1H24<br>FFIC Industry<br>Weighted average debt coverage ratios (DCR) for<br>Multifamily and Investor CRE portfolios at ~1.82x2<br>- 200 bps shock increase in rates produces a weighted average DCR of ~1.46x3<br>- 10% increase in operating expense yields a weighted average DCR of ~1.74x3<br>- 200 bps shock increase in rates and 10% increase in operating expenses results in a<br>weighted average DCR ~1.313<br>- In all scenarios, weighted average LTV is less than 50%3,4 |
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| 0.47% 0.45%<br>0.54% 0.53%<br>0.61%<br>0.34%<br>0.40% 0.39% 0.42%<br>0.00%<br>0.10%<br>0.20%<br>0.30%<br>0.40%<br>0.50%<br>0.60%<br>0.70%<br>0.80%<br>0.90%<br>1.00%<br>2Q23 3Q23 4Q23 1Q24 2Q24<br>FFIC Peer Median*<br>5<br>Low Risk Credit Profile Results<br>NPAs / Assets Criticized and Classified Loans / Gross Loans<br>30-89 Day Past Due /Total Loans ACL by Loan Segment (2Q24)<br>$2,632<br>$1,895<br>$519<br>$262 $65 $14<br>$1,390<br>0.41% 0.48% 0.30% 0.30% 1.18%<br>8.07%<br>1.26%<br>-7 0. 00%<br>-6 0. 00%<br>-5 0. 00%<br>-4 0. 00%<br>-3 0. 00%<br>-2 0. 00%<br>-1 0. 00%<br>0. 00 %<br>10 .0 0%<br>Multifamily<br>Residential<br>Commercial Real<br>Estate<br>1-4 Family - Mixed<br>Use<br>1-4 Family -<br>Residential<br>Construction Small Business<br>Administration<br>Commercial<br>Business and<br>Other Loan Balance ($MM) ACLs / Loans<br>44.1% LTV on 2Q24 NPAs<br>Peer data through 1Q24; Peers include: BKU, DCOM, FLIC, HNVR, KRNY, NFBK, NYCB, PFS, and VLY 0.71%<br>1.08% 1.11% 0.87% 1.13%<br>1.60%<br>1.72%<br>2.28%<br>2.14%<br>0.00%<br>0.50%<br>1.00%<br>1.50%<br>2.00%<br>2.50%<br>3.00%<br>3.50%<br>4.00%<br>4.50%<br>5.00%<br>2Q23 3Q23 4Q23 1Q24 2Q24<br>FFIC Peer Median*<br>0.16%<br>0.13%<br>0.21%<br>0.25%<br>0.35%<br>0.17%<br>0.26% 0.26%<br>0.31%<br>0.00%<br>0.05%<br>0.10%<br>0.15%<br>0.20%<br>0.25%<br>0.30%<br>0.35%<br>0.40%<br>2Q23 3Q23 4Q23 1Q24 2Q24<br>30-89 Day Past Due/Total Loans Peer Median* |
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| 6<br>Strong Credit Quality In Key Portfolios<br>Portfolio Data Points Multifamily Investor CRE Office<br>NPLs/Loans 52 bps 0 bp 0 bp<br>Criticized and Classified<br>Loans/Loans 67 bps 36 bps 2.7%<br>Weighted Average DCR1<br>: 1.8x 1.8x 1.9x<br>Portfolio Size: $2.6 billion $1.9 billion $253 million<br>Average Loan Size: $1.2 million $2.5 million $3.0 million<br>1 Based on most recent Annual Loan Review |
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| 7<br>Low Risk Multifamily Loan Portfolio<br>• We employ a quantitative model to determine<br>loan risk ratings for real estate loans<br>• The model consists of four factors: property<br>condition, current DCR, current LTV, and loan<br>payment history with DCR and LTV combining<br>for 70% of the weight<br>• The model output cannot be manually<br>overridden to improve the risk rating, but can be<br>downgraded<br>75%<br>7% 6% 0%<br>125%<br>51%<br>173%<br>10%<br>149%<br>4%<br>FFIC Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9<br>Multifamily Allowance for Credit Losses /<br>Criticized and Classified Multifamily Loans<br>4th<br>Highest<br>1 Chart data as of March 31, 2024; Peers include: BKU, DCOM, FLIC, HNVR, KRNY, NFBK, NYCB, PFS, and VLY<br>2 As of June 30, 2024<br>Loan Rating Criteria<br>• 30-89 days past due are 0.21% of total<br>multifamily loans<br>• NPL loans are 0.52% of total multifamily loans<br>• Criticized and Classified loans to multifamily<br>loans are 0.67%<br>• LLRs to multifamily criticized and classified<br>loans are 61%<br>Multifamily Credit Quality Statistics2<br>Multifamily Ratios vs Peer Banks1<br>0.54%<br>14.72%<br>4.46%<br>0.00% 0.60% 1.78%<br>0.34%<br>12.62%<br>0.55%<br>22.45%<br>FFIC Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9<br>Criticized and Classified Multifamily Loans /<br>Total Multifamily Loans<br>3rd<br>Lowest |
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| 12.3% 12.5% 12.7% 11.8% 11.4%<br>29.4% 28.0% 26.8% 27.3% 28.0%<br>1.8% 1.7% 1.6% 1.5% 1.4%<br>25.4% 23.2% 23.6% 24.4% 23.8%<br>29.7%<br>33.6% 34.0%<br>34.0% 33.9%<br>1.4% 1.0% 1.3% 1.0% 1.3% $6,900 $6,819 $6,884 $7,081 $7,196<br>0<br>100 0<br>200 0<br>300 0<br>400 0<br>500 0<br>600 0<br>700 0<br>800 0<br>2Q23 3Q23 4Q23 1Q24 2Q24<br>Noninterest Bearing NOW Accounts Savings<br>Money Market CDs Mortgage Escrow<br>Average Total Deposits Expand YoY and QoQ<br>8<br>Total Average Deposits<br>($ Millions)<br>▪ Average total deposits increased 4.3% YoY and<br>1.6% QoQ with QoQ growth in NOW, money<br>market, and CDs<br>▪ Average noninterest bearing deposits are<br>11.4% of average total deposits, down from<br>12.3% a year ago<br>▪ Average brokered CDs were $932.4 million in<br>2Q24 compared to $759.4 million in 2Q23 and<br>$874.4 million in 1Q24; brokered deposits help<br>offset the normal flows of the government<br>banking portfolio<br>Average Noninterest Bearing Deposits<br>($ Millions)<br>Deposit Costs<br>2.68% 2.94% 3.10% 3.27% 3.38% $849.7 $851.7 $873.3 $834.2 $822.9<br>-100<br>10<br>30<br>50<br>70<br>90<br>1100<br>1300<br>2Q23 3Q23 4Q23 1Q24 2Q24 |
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| GAAP and Core NIM Near Stabilization<br>9<br>GAAP NIM FTE<br>2.18% 2.22% 2.29% 2.06% 2.05%<br>See Appendix for definitions of Core NII FTE, Core NIM, and Core Loan Yields<br>Net Interest Income and NIM<br>($ Millions)<br>$43.3 $42.8<br>$46.6<br>$42.4 $42.5<br>2.17% 2.13% 2.31% 2.06% 2.03%<br>4.99% 5.26%<br>5.59% 5.45% 5.47%<br>2.68% 2.94% 3.10% 3.27% 3.39%<br>0.00%<br>1.00%<br>2.00%<br>3.00%<br>4.00%<br>5.00%<br>6.00%<br>7.00%<br>8.00%<br>9.00%<br>10.00%<br>$10. 0<br>$15. 0<br>$20. 0<br>$25. 0<br>$30. 0<br>$35. 0<br>$40. 0<br>$45. 0<br>$50. 0<br>2Q23 3Q23 4Q23 1Q24 2Q24<br>Core NII FTE Core NIM FTE Core Loan Yields Core Deposit Yield<br>▪ Absent rate changes, NIM is expected to be<br>near a bottom but is largely dependent on loan<br>closings and funding mix (deposit seasonality<br>on certain products)<br>▪ If the inversion in the yield curve (primarily<br>Overnight/1- month SOFR relative to the 5- year<br>FHLB-NY Advance rate) lessens, this should<br>improve spreads on the real estate portfolio<br>over time<br>▪ Using a static balance sheet and a parallel shift<br>in the yield curve (currently inverted), net<br>interest income would benefit by approximately<br>1% over the first year<br>▪ A steepening of the yield curve (reduction of<br>the short end by 100 bps and no change in the<br>long end) should benefit net interest income by<br>greater than $15 million over time, all else equal |
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| 10<br>CDs Continue to Reprice<br>▪ CDs have a weighted average rate of<br>4.69%1 as of June 30, 2024<br>▪ Current CD rates are approximately<br>4.85-5.40%<br>▪ Approximately 86%1 of the CD portfolio<br>will mature within one year<br>– $587.5 million in 3Q24 at 4.89%1<br>– $510.5 million in 4Q24 at 4.96%<br>– $304.7 million in 1Q25 at 4.64%<br>▪ Historically, we retain a high percentage<br>of maturing CDs<br>Total CDs of $2.4 Billion;<br>Repricing Dates with Weighted Average Rate1<br>1 Excludes $775.8MM of CDs with interest rate hedges<br>4.89%<br>4.96%<br>4.64%<br>3.92%<br>3Q24 4Q24 1Q25 Later |
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| ▪ Floating rate loans include any loans (including back-to-back swaps) tied to an index that reprices within 90 days;<br>Including interest rate hedges of $500 million, $1.7 billion or ~26% of the loan portfolio is effectively floating rate<br>▪ Through 2026, loans to reprice ~226-242 bps higher assuming index values as of June 30, 2024<br>▪ ~18% of loans reprice (~26% including all loan portfolio hedges) with every Fed move and an additional 11-15% reprice<br>annually<br>$1,238<br>$383<br>$765 $740<br>7.41%<br>4.46%<br>4.37% 4.35%<br>7.48%<br>6.88% 6.63% 6.66%<br> -<br> 200<br> 400<br> 600<br> 800<br> 1,0 00<br> 1,2 00<br> 1,4 00<br>Floating Remainder of 2024 2025 2026<br>Adjustable Loan Repricing Maturing Fixed Rate Total Loan Repricing Current Rate Repricing Rate<br>Effective Floating Rate Loans Rise are ~26% of the Loan Portfolio;<br>Significant Repricing to Occur Through 2026<br>11<br>Loan Repricing<br>($ Millions)<br>+242 bps +226 bps +231 bps |
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| 12<br>Interest Rate Hedges Provide Income and Reduce Rate Sensitivity<br>Swap<br>Type<br>Notional<br>($ Million)<br>1H24<br>Avg Bal<br>($ Million)<br>1Q24<br>Yield with<br>Swaps<br>1Q24<br>Yield Without<br>Swaps<br>Net<br>Benefit<br>Investments $200.0 $1,270.2 4.88% 4.56% +0.32%<br>Loans1 $699.1 $6,776.1 5.48% 5.25% +0.23%<br>Funding $775.8 $7,906.0 3.48% 3.82% +0.34%<br>▪ The $1.7 billion of total interest rate hedges has annualized net interest income of<br>$42.8 million as of June 30, 2024<br>▪ The net benefit will expand if the Fed raises rates or compress if the Fed cuts<br>rates<br>▪ Approximately 22% of the interest rate hedges will mature in 2025<br>1 Does not include $786.3 million of customer back-to-back loan swaps |
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| $22.47 $22.39 $22.54 $22.39 $22.24<br>7.70% 7.56% 7.64% 7.40% 7.12%<br>0.00%<br>2.00%<br>4.00%<br>6.00%<br>8.00%<br>10.00%<br>12.00%<br>14.00%<br>16.00%<br>18.00%<br>20.00%<br> $17. 00<br> $18. 00<br> $19. 00<br> $20. 00<br> $21. 00<br> $22. 00<br> $23. 00<br> $24. 00<br>2Q23 3Q23 4Q23 1Q24 2Q24<br>Tangible Book Value Per Share<br>Tangible Common Equity/Tangible Assets<br>$23.14 $23.06 $23.21 $23.04 $22.89<br>10.36% 10.14% 10.25% 10.32% 10.22%<br>8.54% 8.51% 8.47% 8.32% 8.18%<br>0.00%<br>5.00%<br>10.00%<br>15.00%<br>20.00%<br>25.00%<br>30.00%<br> $17. 00<br> $18. 00<br> $19. 00<br> $20. 00<br> $21. 00<br> $22. 00<br> $23. 00<br> $24. 00<br>2Q23 3Q23 4Q23 1Q24 2Q24<br>Book Value Per Share CET1 Ratio Leverage Ratio<br>Slight Compression in Book Value and Tangible Book Value Per Share<br>13<br>1% YoY Book Value Per Share Decline 1% YoY Decrease in Tangible Book Value Per Share |
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| Strong Asian Banking Market Focus<br>18%<br>of Total Deposits<br>$41B<br>Deposit Market Potential<br>(~3% Market Share1<br>)<br>9.8%<br>FFIC 5 Year Asian Market<br>CAGR vs 3.3%1<br>for the<br>Comparable Asian<br>Markets<br>Asian Communities – Total Loans $745.5 million<br>and Deposits $1.3 billion<br>Multilingual Branch Staff Serves Diverse Customer Base in NYC<br>Metro Area<br>Growth Aided by the Asian Advisory Board<br>Sponsorships of Cultural Activities Support New and Existing<br>Opportunities<br>1 As of June 30, 2023; Latest FDIC Data<br>One Third of Branches are in Asian markets<br>14 |
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| ▪ CPC Chinese-American Planning Council Asian<br>American and Pacific Island Heritage Month<br>▪ Gujarati Samaj of NY<br>15<br>Key Community Events During 2Q24 |
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| ▪ Balance Sheet<br>– Expect stable loans<br>– Focused on improving funding mix; expect normal historical funding patterns<br>▪ Net Interest Income<br>– Expect NIM is close to a bottom (assuming stable Fed rates)<br>• Will depend primarily on the loan closings and funding mix<br>• $1.4 billion of retail CDs to mature over the next year at a weighted average rate of 4.81%; closer to market rates<br>– $383 million of loans scheduled to reprice upwards 242 bps in the second half of 2024 and $765 million up<br>226 bps in 2025 (based on June 30, 2024 index values)<br>▪ Noninterest Income<br>– Approximately $30.2 million of back-to-back swaps in the loan pipeline; banking services fee income to benefit<br>in the quarter as these loans close<br>▪ Noninterest Expense<br>– 2024 core noninterest expense expected to rise mid single digits from the 2023 base of $151.4 million as we<br>continue to make investments in the business to improve long term profitability<br>▪ Effective Tax Rate<br>– Expecting mid 20%s for 2024<br>16<br>Outlook |
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| 17<br>▪ Areas of Focus<br>– Increase NIM and Reduce Volatility<br>• Loan and CD repricing<br>• Focusing on noninterest bearing deposits<br>– Maintain Credit Discipline<br>• Low risk profile<br>• Conservative loan underwriting<br>• History of low credit losses<br>• Minimal exposure to Manhattan office buildings<br>– Preserve Strong Liquidity and Capital<br>• Low uninsured and uncollateralized deposits with high available liquidity<br>• Favorable capital ratios<br>– Bend the Expense Curve<br>• Keep expense growth in line with historical norms as we continue to make investments to improve long term profitability<br>▪ Environment Remains a Challenge<br>• Uncertain interest rate outlook<br>• Weak loan demand at reasonable spreads that fit our underwriting standards<br>Key Takeaways – Staying Disciplined in a Challenging Environment |
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| Appendix<br>18 |
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| Digital Banking Usage Continues to Increase<br>19<br>Technology Enhancements Remain a Priority to Grow Customer Base and Increase Engagement<br>18%<br>Increase in Monthly Mobile<br>Deposit Active Users<br>June 2024 YoY<br>~31,100<br>Users with Active Online<br>Banking Status<br>June 2024<br>18%<br>Digital Banking<br>Enrollment<br>June 2024 YoY Growth<br>Numerated<br>Small Business Lending<br>Platform<br>$5.5MM of Commitments<br>in 1HQ24<br>Internet Banks<br>iGObanking and BankPurely<br>national deposit gathering<br>platforms<br>~2% of Average Deposits<br>in June 2024<br>~12,600<br>Zelle® Transactions<br>~$4.1MM<br>Zelle Dollar Transactions<br>in June 2024 |
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| Reported Results<br>EPS $0.96 $2.50 $2.59 $1.18 $1.44 $1.92<br>ROAA 0.34 % 0.93 % 1.00 % 0.48 % 0.59 % 0.85 %<br>ROAE 4.25 11.44 12.60 5.98 7.35 10.30<br>NIM FTE 2.24 3.11 3.24 2.85 2.47 2.70<br>Core1<br> Results<br>EPS $0.83 $2.49 $2.81 $1.70 $1.65 $1.94<br>ROAA 0.29 % 0.92 % 1.09 % 0.68 % 0.68 % 0.85 %<br>ROAE 3.69 11.42 13.68 8.58 8.42 10.39<br>NIM FTE 2.21 3.07 3.17 2.87 2.49 2.72<br>Credit Quality<br>NPAs/Loans & REO 0.67 % 0.77 % 0.23 % 0.31 % 0.24 % 0.29 %<br>LLRs/Loans 0.58 0.58 0.56 0.67 0.38 0.38<br>LLR/NPLs 159.55 124.89 248.66 214.27 164.05 128.87<br>NCOs/Average Loans 0.16 0.02 0.05 0.06 0.04 -<br>Criticized & Classifieds/Loans 1.11 0.98 0.87 1.07 0.66 0.96<br>Capital Ratios<br>CET1 10.25 % 10.52 % 10.86 % 9.88 % 10.95 % 10.98 %<br>Tier 1 10.93 11.25 11.75 10.54 11.77 11.79<br>Total Risk-based Capital 14.33 14.69 14.32 12.63 13.62 13.72<br>Leverage Ratio 8.47 8.61 8.98 8.38 8.73 8.74<br>TCE/TA 7.64 7.82 8.22 7.52 8.05 7.83<br>Balance Sheet<br>Book Value/Share $23.21 $22.97 $22.26 $20.11 $20.59 $19.64<br>Tangible Book Value/Share 22.54 22.31 21.61 19.45 20.02 19.07<br>Dividends/Share 0.88 0.88 0.84 0.84 0.84 0.80<br>Average Assets ($B) 8.5 8.3 8.1 7.3 6.9 6.5<br>Average Loans ($B) 6.8 6.7 6.6 6.0 5.6 5.3<br>Average Deposits ($B) 6.9 6.5 6.4 5.2 5.0 4.7<br>2023 2022 2021 2020 2019 2018<br>20<br>Annual Financial Highlights<br>1 See Reconciliation of GAAP Earnings and Core Earnings in Appendix |
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| Over a 28 Year Track Record of Steady Growth<br>Core EPS ($) Dividends per Share ($) 2 Tangible Book Value per Share ($)<br>Assets ($B) Total Gross Loans ($B) Total Deposits ($B)<br>$-<br>$0.88<br>1995 2000 2005 2010 2015 2020 2023 2Q24<br>$-<br>$0.33<br>1995 2000 2005 2010 2015 2020 2023 2Q24<br>$0.6<br>$6.9<br>1995 2000 2005 2010 2015 2020 2023 2Q24<br>$0.3<br>$6.8<br>1995 2000 2005 2010 2015 2020 2023 2Q24<br>$0.7<br>$9.1<br>1995 2000 2005 2010 2015 2020 2023 2Q24<br>9% CAGR 12% CAGR 9% CAGR<br>4% CAGR1 14% CAGR1<br>$4.86<br>$22.24<br>1995 2000 2005 2010 2015 2020 2023 2Q24<br>6% CAGR<br>Note: Acquisition of Empire Bancorp in 2020 (loans and deposits acquired of $685MM and $854MM, respectively; assets acquired of $982MM) 21<br>1 Calculated from 1996-2023<br>2 Annualized |
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| Approach to Real Estate Lending: Low Leverage & Shared Philosophy<br>22<br>Our Conservative Lending Profile Has Served Us Well Over Many Cycles<br>▪ Since 1929, we have a long history of lending in metro New York City<br>– Historically, credit quality has outperformed the industry and peers<br>• From 2001-2023, median NCOs to average loans has been 4 bps compared to 52 bps for the<br>industry<br>• Median noncurrent loans to total loans has been 37 bps compared to 130 bps for the industry<br>over the same period<br>▪ The key to our success is shared client philosophy<br>– Our clients tend to have low leverage (average LTV is <36%) and strong cash flows (DCR is 1.8x<br>for multifamily and CRE1<br>)<br>– Multigenerational– our clients tend to build portfolio of properties; generally, buy and hold<br>– Borrowers are not transaction oriented – average real estate loan seasoning is over 8 years,<br>which is generally passed the 5-year reset for multifamily and investor CRE loans<br>– We do not attract clients who are short term borrowers, who want funds on future cash flows, or<br>who are aggressively trying to convert rent regulated units into market rents<br>1 Based on annual loan reviews |
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| Loans Secured by Real Estate Have an Average LTV of ~36%<br>Manhattan Office Buildings are Approximately 0.5% of Gross Loans and All Are Performing<br>Data as of June 30, 2024<br>39%<br>10% 11%<br>7 %<br>6 %<br>5 %<br>4 %<br>4 %<br>4 %<br>2 %2 % 2 % 1 %<br>1 %<br>1 %1 % Multifamily: 39.0%<br>Owner Occupied CRE: 11.0%<br>Non Real Estate: 10.0%<br>One-to-four family - Mixed Use: 7.0%<br>General Commercial: 6.0%<br>CRE - Shopping Center: 5.0%<br>CRE - Strip Mall: 4.0%<br>One-to-four family - Residential: 4.0%<br>Commercial Mixed Use: 4.0%<br>CRE - Single Tenant: 2.0%<br>Industrial: 2.0%<br>Office - Multi & SingleTenant: 2.0%<br>Health Care/Medical Use: 1.0%<br>Commercial Special Use: 1.0%<br>Construction: 1.0%<br>Office Condo & Co-Op: 1.0%<br>$6.8B<br>Total Portfolio<br>90% Real Estate Based<br>23 |
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| ▪ All loans underwritten with a 250-300 bps<br>increase in rates at origination; especially when<br>rates were low<br>▪ Debt coverage ratios (DCR) based on current<br>rents; not projected cash flows<br>▪ Underwritten Net Operating Income (NOI) at<br>origination includes forecasted increases in<br>expenses and potential increase interest rates,<br>which limits overall leverage<br>▪ Cap rates were underwritten to 5%+ when rates<br>were low<br>▪ Annual loan reviews performed; cash flows<br>updated annually and a trend analysis on the<br>portfolio is performed<br>▪ 30-year amortization<br>▪ Loans generally reset every 5 years (FHLB<br>Advance rate + 225 bps)<br>24<br>Multifamily: Conservative Underwriting Standards<br>Portfolio Data Points<br>Portfolio Size: $2.6 billion<br>Average Loan Size: $1.2 million<br>Current Weighted Average Coupon: 4.92%<br>Weighted Average LTV: 44%<br>% of Loans with LTV >75% 0%<br>Weighted Average DCR: 1.8x<br>NPLs/Loans 0.52%<br>30-89 Days Past Due/Loans 0.21%<br>Criticized and Classified Loans/Loans 67 bps<br>Underwriting Standards at Origination |
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| Actual Repricing<br>25<br>Multifamily: Manageable Repricing Risk<br>▪ During 2023, $296 million of loans<br>repriced ~196 bps higher to 6.61%; all<br>loans repriced to contractual rate<br>▪ For the remained of 2024, $173.6 million<br>of loans are forecasted to reprice 275<br>bps higher to a weighted average rate of<br>6.90%1<br>▪ Example of a typical 2023 loan<br>repricing:<br>– Income and expense increased at an<br>approximate 4% CAGR<br>– Rate resets to FHLB 5-yr advance + 225<br>bps<br>– NOI sensitivity provided for illustrative<br>purposes only; actual expense CAGR<br>has been 4%<br>1 Based on underlying index value on June 30, 2024<br>Key Data Points<br>At Origination At Reprice Date<br>($000s) 2019 Stressed CAGR 2023<br>Purchase Price: $7,500 $7,500<br>Loan Amount: $4,250 $3,824 $3,824<br>LTV: 56.7% 51.0%<br>Rate: 3.75% 5.75% 6.45%<br>Annual Payment: $159 $301 $324<br>Income: 725 848 4% 848<br>Expense: 362 423 4% 423<br>NOI: $363 $425 $425<br>DCR: 2.28 1.41 1.31<br>NOI Sensitivity<br>CAGR 2023 CAGR 2023<br>Loan Balance: $3,824 $3,824<br>Repricing Rate: 6.45% 6.45%<br>Annual Payment: $324 $324<br>Income: 4% 848 4% 848<br>Expense: 6% 458 8% 492<br>NOI: $390 $356<br>DCR: 1.20 1.10 |
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| Debt Coverage Ratio Details1<br>Multifamily weighted<br>average DCR 1.8x2<br>Amount of loans with<br>a DCR of 1.0-1.2x $141.1 million3<br>LTV of loans with a<br>DCR of 1.0-1.2x 48%<br>Amount of loans with<br>a DCR <1.0x $28.5 million3<br>LTV of loans with a<br>DCR <1.0x 33%<br>Of the loans with a<br>DCR <1.2x:<br>• None have an LTV >70%<br>• $16.2 million have an LTV<br>>60%<br>• $1.4 million are 90+ days<br>past due; $2.4 million<br>criticized or classified (with<br>WA LTV of 49.8%)<br>26<br>Multifamily: DCR Risks Are Well Contained<br>1 Data as of June 30, 2024<br>2 Based on annual loan reviews<br>3 Excludes co-ops<br>▪ Underwriting assumes higher rates at<br>origination leading to strong DCRs<br>▪ Low amount of loans with DCRs less than<br>1.2x and minimal amount below 1.0x<br>▪ Borrowers have significant equity positions<br>in these loans, especially for those with<br>DCRs less than 1.0x<br>▪ Credit performance is favorable for DCRs<br>of 1.2x or less:<br>– $1.4 million 90+ days past due<br>– Only $2.4 million of criticized or classified<br>loans with a weighted average LTV of<br>49.8%<br>Key Data Points1 |
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| 27<br>Multifamily: Minimal Interest Only; High Quality Performance<br>1 As of December 31, 2023<br>2 Excludes co-ops<br>▪ Interest only loans are typically only<br>offered to relationship customers who<br>have a prior history with the Bank<br>▪ A client requests an interest only loan<br>when cash flows early in the project are<br>low and will increase after improvements<br>occur<br>▪ Significant equity or multiple properties<br>are offsetting factors<br>▪ Loans are generally interest only for 1-3<br>years and then become fully amortizing<br>▪ Underwritten on a fully amortizing basis<br>▪ Credit performance is stellar with no<br>delinquencies greater than 30 days, no<br>criticized, and no classified loans<br>Interest Only Loan Details Key Data Points 1<br>Total interest only loans $262.8 million<br>Weighted average LTV 49%<br>Weighted average DCR 2.6x<br>Amount of loans with a<br>DCR <1.2x $02<br>30-89 Days Past<br>Due/Loans $0<br>Criticized and Classified<br>Loans/Loans $0<br>Amount of loans to<br>become fully amortizing in<br>2024<br>• $137.2 million<br>• DCR of 3.5x current and<br>~2.2x when fully<br>amortized |
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| Key Data Points<br>28<br>Multifamily: Rent Regulated Portfolio – Granular and Low Risk<br>Portfolio Data Points1<br>Portfolio Size: $1.6 billion<br>Average Loan Size: $1.3 million<br>Current Weighted Average Coupon: 4.75%<br>Weighted Average LTV: 48%<br>% of Loans with LTV >75% 0%<br>Weighted Average DCR: 1.8x2<br>Average Seasoning: 7.2 years<br>30-89 Days Past Due $3.4 million<br>Criticized and Classified Loans $3.2 million<br>Buildings that are 100% rent regulated $787 million<br>Buildings that are 50-99% rent regulated $527 million<br>Buildings that are <50% rent regulated $306 million<br>▪ New York City area has a shortage of<br>affordable housing creating the need for rent<br>regulated units; annual the Rent Guidelines<br>Board establishes rental increases for these<br>units<br>▪ Loans that contain rent regulated properties<br>are about two thirds of the multifamily<br>portfolio<br>▪ This portfolio is very granular with about half<br>the portfolio in buildings that are 100% rent<br>regulated and half with a mix of market rents<br>▪ Borrowers have over 50% equity in these<br>properties<br>▪ With average seasoning over 7 years, these<br>borrowers have experienced rate resets<br>▪ Credit performance is solid with low levels of<br>delinquencies, criticized, and classified loans<br>1 Data as of December 31, 2023<br>2 Based on annual loan reviews |
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| ▪ All loans underwritten with a 250-300 bps<br>increase in rates at origination; especially when<br>rates were low<br>▪ Debt coverage ratios (DCR) based on current<br>rents; not projected cash flows<br>▪ Underwritten Net Operating Income (NOI) at<br>origination includes forecasted increases in<br>expenses and potential increase interest rates,<br>which limits overall leverage<br>▪ Cap rates were underwritten to 5%+ when rates<br>were low<br>▪ Annual loan reviews performed; cash flows<br>updated annually and a trend analysis on the<br>portfolio is performed<br>▪ 30-year amortization<br>▪ Loans generally reset every 5 years (FHLB<br>Advance rate + 225 bps)<br>29<br>Investor CRE: Conservative Underwriting Standards<br>Portfolio Data Points<br>Portfolio Size: $1.9 billion<br>Average Loan Size: $2.5 million<br>Current Weighted Average Coupon: 5.09%<br>Weighted Average LTV: 50%<br>% of Loans with LTV >75% 0%<br>Weighted Average DCR: 1.8x<br>NPLs/Loans 0%<br>30-89 Days Past Due/Loans 0.37%<br>Criticized and Classified Loans/Loans 36 bp<br>Underwriting Standards at Origination |
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| 16%<br>29%<br>21%<br>18%<br>16%<br>Bronx Kings Manhattan<br>Queens Other<br>9%<br>19%<br>17%<br>18%<br>5%<br>6%<br>9%<br>4%<br>13%<br>Bronx Kings Manhattan<br>Queens Other NY Nassau<br>Suffolk NJ CT/Other<br>Multifamily Geography<br>Geographically Diverse Multifamily and CRE Portfolios<br>30<br>Underwrite Real Estate Loans with a Cap Rates over 6% in 1H24 (5%+ Historically) and Stress Test Each Loan<br>$2.6B<br>Portfolio<br>Non-Owner Occupied CRE Geography<br>$1.9B<br>Portfolio |
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| 31<br>Well-Diversified Commercial Business Portfolio<br>Commercial Business<br>▪ Primarily in market lending<br>▪ Annual sales up to $250 million<br>▪ Lines of credit and term loans, including owner<br>occupied mortgages<br>▪ Loans secured by business assets, including<br>account receivables, inventory, equipment, and<br>real estate<br>▪ Personal guarantees are generally required<br>▪ Originations are generally $100,000 to $10<br>million<br>▪ Adjustable rate loans with adjustment periods<br>of five years for owner-occupied mortgages<br>and for lines of credit the adjustment period is<br>generally monthly<br>▪ Generally not subject to limitations on interest<br>rate increases but have interest rate floors<br>Average loan size of $1.4 million<br>Data as of June 30, 2024<br>11.1%<br>10.9%<br>10.6%<br>9.7%<br>7.3% 8.2%<br>6.1%<br>5.7%<br>5.7%<br>3.8%<br>3.5%<br>2.7%<br>2.4%<br>2.2%<br>2.1%1.8% 1.7%<br>1.6%<br>1.5%<br>1.4%<br>Wholesalers: 11.1% Other: 10.9%<br>Trucking/ Vehicle Transport: 10.6% Financing Company: 9.7%<br>Construction/Contractors: 8.2% Professional Services (Excluding Medical): 7.3%<br>Medical Professionals: 6.1% Hotels: 5.7%<br>Manufacturer: 5.7% Automobile Related: 3.8%<br>Apparel: 3.5% Electrical Equipment: 2.7%<br>Restaurants: 2.4% Theaters: 2.2%<br>Civic and Social Organizations: 2.1% Food Service: 1.8%<br>Retailer: 1.7% Airlines: 1.6%<br>Schools/Daycare Centers: 1.5% Fitness and Recreational Sports Centers: 1.4%<br>$1.4B<br>Total Portfolio<br>Real Estate<br>Collateral<br>$713MM |
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| Reconciliation of GAAP Earnings and Core Earnings<br>32<br>Non-cash Fair Value Adjustments to GAAP Earnings<br>The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value<br>adjustments. These fair value adjustments relate primarily to borrowings carried at fair value under the fair value option.<br>Core Net Income, Core Diluted EPS, Core ROAE, Core ROAA, Pre-provision, Pre-tax Net Revenue, Core Net Interest Income<br>FTE, Core Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Core Noninterest Income, Core Noninterest<br>Expense and Tangible Book Value per common share are each non-GAAP measures used in this presentation. A reconciliation<br>to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these<br>measures are useful for both investors and management to understand the effects of certain interest and noninterest items and<br>provide an alternative view of the Company's performance over time and in comparison, to the Company's competitors. These<br>measures should not be viewed as a substitute for net income. The Company believes that tangible book value per common<br>share is useful for both investors and management as this measure is commonly used by financial institutions, regulators and<br>investors to measure the capital adequacy of financial institutions. The Company believes this measure facilitates comparison of<br>the quality and composition of the Company's capital over time and in comparison, to its competitors. This measure should not<br>be viewed as a substitute for total shareholders' equity.<br>These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should<br>not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may<br>not be comparable to similarly titled measures reported by other companies. |
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| 33<br>1 Core diluted earnings per common share may not foot due to rounding<br>2 Ratios are calculated on an annualized basis<br>Reconciliation of GAAP to CORE Earnings - Quarters<br>(Dollars in thousands,<br>except per share data)<br>GAAP income before income taxes $ 7,136 $ 4,997 $ 11,754 $ 10,752 $ 11,872 $ 12,133 $ 17,327<br>Net (gain) loss from fair value adjustments<br>(Noninterest income (loss)) (57) 834 (906) 1,246 (294) 777 (2,913)<br>Life insurance proceeds (Noninterest income (loss)) — — (697) (23) (561) — (561)<br>Net (gain) loss from fair value adjustments on<br>qualifying hedges (Net interest income) (177) 187 872 (1,348) 205 1 0 105<br>Net amortization of purchase accounting adjustments<br>and intangibles (Various) (85) (169) (355) (237) (227) (254) (415)<br>Miscellaneous expense (Professional services) 494 — 526 — — 494 —<br>Core income before taxes 7,311 5,849 11,194 10,390 10,995 13,160 13,543<br>Provision for core income taxes 1,855 1,537 3,648 2,819 3,083 3,392 3,742<br>Core net income $ 5,456 $ 4,312 $ 7,546 $ 7,571 $ 7,912 $ 9,768 $ 9,801<br>GAAP diluted earnings per common share $ 0.18 $ 0.12 $ 0.27 $ 0.26 $ 0.29 $ 0.30 $ 0.42<br>Net (gain) loss from fair value adjustments, net of tax (0.01) 0.02 (0.02) 0.03 (0.01) 0.02 (0.07)<br>Life insurance proceeds — — (0.02) — (0.02) — (0.02)<br>Net (gain) loss from fair value adjustments on<br>qualifying hedges, net of tax — — 0.02 (0.03) — — —<br>Net amortization of purchase accounting adjustments,<br>net of tax — — (0.01) (0.01) (0.01) (0.01) —<br>Miscellaneous expense, net of tax 0.01 — 0.01 — — 0.01 —<br>Core diluted earnings per common share(1) $ 0.18 $ 0.14 $ 0.25 $ 0.25 $ 0.26 $ 0.33 $ 0.32<br>Core net income, as calculated above $ 5,456 $ 4,312 $ 7,546 $ 7,571 $ 7,912 $ 9,768 $ 9,801<br>Average assets 8,830,665 8,707,505 8,569,002 8,505,346 8,462,442 8,769,085 8,465,363<br>Average equity 667,557 669,185 669,819 675,041 672,835 668,371 677,917<br>Core return on average assets(2)<br> 0.25 % 0.20 % 0.35 % 0.36 % 0.37 % 0.22 % 0.23 %<br>Core return on average equity(2)<br> 3.27 % 2.58 % 4.51 % 4.49 % 4.70 % 2.92 % 2.89 %<br>For the three months ended For the six months ended<br>June 30,<br>2024 2023<br>December 31, September 30, June 30,<br>2023 2023<br>June 30,<br>2024<br>June 30, March 31,<br>2024 2023 |
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| 34<br>Reconciliation of GAAP Revenue and<br>Pre-provision Pre-tax Net Revenue - Quarters<br>Efficiency ratio, a non-GAAP measure, was calculated by dividing core noninterest expense (excluding OREO expense and the net gain/loss from the sale of OREO) by the total of core net<br>interest income and core noninterest income.<br><br><br>(Dollars in thousands)<br>GAAP Net interest income $ 42,776 $ 42,397 $ 46,085 $ 44,427 $ 43,378 $ 85,173 $ 88,640<br>Net (gain) loss from fair value<br>adjustments on qualifying hedges (177) 187 872 (1,348) 205 1 0 105<br>Net amortization of purchase<br>accounting adjustments (182) (271) (461) (347) (340) (453) (646)<br>Core Net interest income $ 42,417 $ 42,313 $ 46,496 $ 42,732 $ 43,243 $ 84,730 $ 88,099<br>GAAP Noninterest income $ 4,216 $ 3,084 $ 7,402 $ 3,309 $ 5,020 $ 7,300 $ 11,877<br>Net (gain) loss from fair value<br>adjustments (57) 834 (906) 1,246 (294) 777 (2,913)<br>Life insurance proceeds — — (697) (23) (561) — (561)<br>Core Noninterest income $ 4,159 $ 3,918 $ 5,799 $ 4,532 $ 4,165 $ 8,077 $ 8,403<br>GAAP Noninterest expense $ 39,047 $ 39,892 $ 40,735 $ 36,388 $ 35,110 $ 78,939 $ 74,266<br>Net amortization of purchase<br>accounting adjustments (97) (102) (106) (110) (113) (199) (231)<br>Miscellaneous expense (494) — (526) — — (494) —<br>Core Noninterest expense $ 38,456 $ 39,790 $ 40,103 $ 36,278 $ 34,997 $ 78,246 $ 74,035<br>Net interest income $ 42,776 $ 42,397 $ 46,085 $ 44,427 $ 43,378 $ 85,173 $ 88,640<br>Noninterest income 4,216 3,084 7,402 3,309 5,020 7,300 11,877<br>Noninterest expense (39,047) (39,892) (40,735) (36,388) (35,110) (78,939) (74,266)<br>Pre-provision pre-tax net revenue $ 7,945 $ 5,589 $ 12,752 $ 11,348 $ 13,288 $ 13,534 $ 26,251<br>Core:<br>Net interest income $ 42,417 $ 42,313 $ 46,496 $ 42,732 $ 43,243 $ 84,730 $ 88,099<br>Noninterest income 4,159 3,918 5,799 4,532 4,165 8,077 8,403<br>Noninterest expense (38,456) (39,790) (40,103) (36,278) (34,997) (78,246) (74,035)<br>Pre-provision pre-tax net revenue $ 8,120 $ 6,441 $ 12,192 $ 10,986 $ 12,411 $ 14,561 $ 22,467<br>Efficiency Ratio 82.6 % 86.1 % 76.7 % 76.8 % 73.8 % 84.3 % 76.7 %<br>For the six months ended<br>June 30,<br>2024 2023<br>September 30, June 30,<br>2023<br>June 30,<br>2023<br>For the three months ended<br>June 30,<br>2024<br>March 31,<br>2024<br>December 31,<br>2023 |
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| 35<br>1 Excludes purchase accounting average balances for all periods presented<br>Reconciliation of GAAP to Core Net Interest Income and NIM - Quarters<br><br>(Dollars in thousands)<br>GAAP net interest income $ 42,776 $ 42,397 $ 46,085 $ 44,427 $ 43,378 $ 85,173 $ 88,640<br>Net (gain) loss from fair value adjustments<br>on qualifying hedges (177) 187 872 (1,348) 205 1 0 105<br>Net amortization of purchase accounting<br>adjustments (182) (271) (461) (347) (340) (453) (646)<br>Tax equivalent adjustment 9 8 100 101 102 101 198 201<br>Core net interest income FTE $ 42,515 $ 42,413 $ 46,597 $ 42,834 $ 43,344 $ 84,928 $ 88,300<br>Prepayment penalties received on loans and<br>securities, net of reversals and recoveries of<br>interest from nonaccrual loans (369) (928) (3,416) (857) (315) (1,297) (995)<br>Net interest income FTE excluding episodic<br>items $ 42,146 $ 41,485 $ 43,181 $ 41,977 $ 43,029 $ 83,631 $ 87,305<br>Total average interest-earning assets (1) $ 8,358,006 $ 8,238,395 $ 8,080,550 $ 8,027,201 $ 7,996,067 $ 8,298,199 $ 8,001,489<br>Core net interest margin FTE 2.03 % 2.06 % 2.31 % 2.13 % 2.17 % 2.05 % 2.21 %<br>Net interest margin FTE excluding episodic<br>items 2.02 % 2.01 % 2.14 % 2.09 % 2.15 % 2.02 % 2.18 %<br>GAAP interest income on total loans, net $ 92,728 $ 92,959 $ 95,616 $ 91,466 $ 85,377 $ 185,687 $ 168,266<br>Net (gain) loss from fair value adjustments<br>on qualifying hedges - loans (137) 123 978 (1,379) 157 (14) 5 6<br>Net amortization of purchase accounting<br>adjustments (198) (295) (484) (358) (345) (493) (661)<br>Core interest income on total loans, net $ 92,393 $ 92,787 $ 96,110 $ 89,729 $ 85,189 $ 185,180 $ 167,661<br>Average total loans, net (1) $ 6,751,715 $ 6,807,944 $ 6,872,115 $ 6,817,642 $ 6,834,644 $ 6,779,829 $ 6,855,454<br>Core yield on total loans 5.47 % 5.45 % 5.59 % 5.26 % 4.99 % 5.46 % 4.89 %<br>For the six months ended<br>June 30, June 30,<br>2024 2024 2023 2023 2023 2024 2023<br>For the three months ended<br>June 30, March 31, December 31, September 30, June 30, |
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| 36<br>Calculation of Tangible Stockholders’ Common Equity to<br>Tangible Assets - Quarters<br><br>(Dollars in thousands)<br>Total Equity $ 665,322 $ 669,827 $ 669,837 $ 666,521 $ 670,247<br>Less:<br>Goodwill (17,636) (17,636) (17,636) (17,636) (17,636)<br>Core deposit intangibles (1,322) (1,428) (1,537) (1,651) (1,769)<br>Tangible Stockholders' Common<br>Equity $ 646,364 $ 650,763 $ 650,664 $ 647,234 $ 650,842<br>Total Assets $ 9,097,240 $ 8,807,325 $ 8,537,236 $ 8,579,375 $ 8,474,852<br>Less:<br>Goodwill (17,636) (17,636) (17,636) (17,636) (17,636)<br>Core deposit intangibles (1,322) (1,428) (1,537) (1,651) (1,769)<br>Tangible Assets $ 9,078,282 $ 8,788,261 $ 8,518,063 $ 8,560,088 $ 8,455,447<br>Tangible Stockholders' Common Equity to<br>Tangible Assets 7.12 % 7.40 % 7.64 % 7.56 % 7.70 %<br>2024<br>March 31,<br>2024<br>June 30,<br>2023<br>September 30, June 30,<br>2023<br>December 31,<br>2023 |
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| 37<br>Reconciliation of GAAP Earnings and Core Earnings - Years<br>1 Core diluted earnings per common share may not foot due to rounding<br>2 Ratios are calculated on an annualized basis<br> December 31, December 31, December 31, December 31,<br>(Dollars In thousands, except per share data) 2021 2020 2019 2018<br>GAAP income (loss) before income taxes $ 39,833 $ 104,852 $ 109,278 $ 45,182 $ 53,331 $ 65,485<br>Day 1, Provision for Credit Losses - Empire transaction — — — 1,818 — —<br>Net (gain) loss from fair value adjustments (2,573) (5,728) 12,995 2,142 5,353 4,122<br>Net (gain) loss on sale of securities — 10,948 (113) 701 15 1,920<br>Life insurance proceeds (1,281) (1,822) — (659) (462) (2,998)<br>Net gain on sale or disposition of assets — (104) (621) — (770) (1,141)<br>Net (gain) loss from fair value adjustments on qualifying hedges (371) (775) (2,079) 1,185 1,678 —<br>Accelerated employee benefits upon Officer's death — — — — 455 149<br>Prepayment penalty on borrowings — — — 7,834 — —<br>Net amortization of purchase accounting adjustments (1,007) (2,030) (2,489) 80 — —<br>Miscellaneous/Merger expense 526 — 2,562 6,894 1,590 —<br>Core income before taxes 35,127 105,341 119,533 65,177 61,190 67,537<br>Provision for core income taxes 10,209 28,502 30,769 15,428 13,957 11,960<br>Core net income $ 24,918 $ 76,839 $ 88,764 $ 49,749 $ 47,233 $ 55,577<br>GAAP diluted earnings (loss) per common share $ 0.96 $ 2.50 $ 2.59 $ 1.18 $ 1.44 $ 1.92<br>Day 1, Provision for Credit Losses - Empire transaction, net of tax — — — 0.05 — —<br>Net (gain) loss from fair value adjustments, net of tax (0.06) (0.14) 0.31 0.06 0.14 0.10<br>Net (gain) loss on sale of securities, net of tax — 0.26 — 0.02 — 0.05<br>Life insurance proceeds (0.04) (0.06) — (0.02) (0.02) (0.10)<br>Net gain on sale or disposition of assets, net of tax — — (0.01) — (0.02) (0.03)<br>Net (gain) loss from fair value adjustments on qualifying hedges, net of tax (0.01) (0.02) (0.05) 0.03 0.05 —<br>Accelerated employee benefits upon Officer's death, net of tax — — — — 0.01 —<br>Prepayment penalty on borrowings, net of tax — — — 0.20 — —<br>Net amortization of purchase accounting adjustments, net of tax (0.02) (0.05) (0.06) — — —<br>Miscellaneous/Merger expense, net of tax 0.01 — 0.06 0.18 0.04 —<br>NYS tax change — — (0.02) — — —<br>Core diluted earnings per common share(1) $ 0.83 $ 2.49 $ 2.81 $ 1.70 $ 1.65 $ 1.94<br>Core net income, as calculated above $ 24,918 $ 76,839 $ 88,764 $ 49,749 $ 47,233 $ 55,577<br>Average assets 8,501,564 8,307,137 8,143,372 7,276,022 6,947,881 6,504,598<br>Average equity 675,151 672,742 648,946 580,067 561,289 534,735<br>Core return on average assets(2)<br> 0.29 % 0.92 % 1.09 % 0.68 % 0.68 % 0.85 %<br>Core return on average equity(2)<br> 3.69 % 11.42 % 13.68 % 8.58 % 8.42 % 10.39 %<br>December 31,<br>2023<br>December 31,<br>2022<br>Years Ended |
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| 38<br>Reconciliation of GAAP Revenue and<br>Pre-Provision Pre-Tax Net Revenue - Years<br>Efficiency ratio, a non-GAAP measure, was calculated by dividing core noninterest expense (excluding OREO expense and the net gain/loss from the sale of OREO) by the total of core net<br>interest income and core noninterest income.<br><br>(Dollars In thousands)<br>GAAP Net interest income $ 179,152 $ 243,616 $ 247,969 $ 195,199 $ 161,940 $ 167,406<br>Net (gain) loss from fair value<br>adjustments on qualifying hedges (371) (775) (2,079) 1,185 1,678 —<br>Net amortization of purchase<br>accounting adjustments (1,454) (2,542) (3,049) (11) — —<br>Core Net interest income $ 177,327 $ 240,299 $ 242,841 $ 196,373 $ 163,618 $ 167,406<br>GAAP Noninterest income Net (gain) loss from fair value $ 22,588 $ 10,009 $ 3,687 $ 11,043 $ 9,471 $ 10,337<br>adjustments (2,573) (5,728) 12,995 2,142 5,353 4,122<br>Net (gain) loss on sale of securities — 10,948 (113) 701 1 5 1,920<br>Life insurance proceeds (1,281) (1,822) — (659) (462) (2,998)<br>Net gain on disposition of assets — (104) (621) — (770) (1,141)<br>Core Noninterest income $ 18,734 $ 13,303 $ 15,948 $ 13,227 $ 13,607 $ 12,240<br>GAAP Noninterest expense $ 151,389 $ 143,692 $ 147,322 $ 137,931 $ 115,269 $ 111,683<br>Prepayment penalty on borrowings — — — (7,834) — —<br>Accelerated employee benefits upon<br>Officer's death — — — — (455) (149)<br>Net amortization of purchase<br>accounting adjustments (447) (512) (560) (91) — —<br>Miscellaneous/Merger expense (526) — (2,562) (6,894) (1,590) —<br>Core Noninterest expense $ 150,416 $ 143,180 $ 144,200 $ 123,112 $ 113,224 $ 111,534<br>GAAP:<br>Net interest income $ 179,152 $ 243,616 $ 247,969 $ 195,199 $ 161,940 $ 167,406<br>Noninterest income 22,588 10,009 3,687 11,043 9,471 10,337<br>Noninterest expense (151,389) (143,692) (147,322) (137,931) (115,269) (111,683)<br>Pre-provision pre-tax net revenue $ 50,351 $ 109,933 $ 104,334 $ 68,311 $ 56,142 $ 66,060<br>Core:<br>Net interest income $ 177,327 $ 240,299 $ 242,841 $ 196,373 $ 163,618 $ 167,406<br>Noninterest income 18,734 13,303 15,948 13,227 13,607 12,240<br>Noninterest expense (150,416) (143,180) (144,200) (123,112) (113,224) (111,534)<br>Pre-provision pre-tax net revenue $ 45,645 $ 110,422 $ 114,589 $ 86,488 $ 64,001 $ 68,112<br>Efficiency Ratio 76.7 % 56.5 % 55.7 % 58.7 % 63.9 % 62.1 %<br>December 31,<br>2019<br>December 31,<br>2018<br>Years Ended<br>December 31,<br>2020<br>December 31,<br>2023<br>December 31,<br>2022<br>December 31,<br>2021 |
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| 39<br>Reconciliation of GAAP and Core Net Interest Income and NIM - Years<br>1 Excludes purchase accounting average balances for the years ended 2023, 2022, 2021, and 2020<br>(Dollars In thousands)<br>GAAP net interest income $ 179,152 $ 243,616 $ 247,969 $ 195,199 $ 161,940 $ 167,406<br>Net (gain) loss from fair value adjustments<br>on qualifying hedges (371) (775) (2,079) 1,185 1,678 —<br>Net amortization of purchase accounting<br>adjustments (1,454) (2,542) (3,049) (11) — —<br>Tax equivalent adjustment 404 461 450 508 542 895<br>Core net interest income FTE $ 177,731 $ 240,760 $ 243,291 $ 196,881 $ 164,160 $ 168,301<br>Prepayment penalties received on loans and<br>securities, net of reversals and recoveries of<br>interest from nonaccrual loans Net interest income FTE excluding episodic (6,497) (6,627) (4,576) (6,501) (7,058) (7,050)<br>items $ 171,234 $ 234,133 $ 238,715 $ 190,380 $ 157,102 $ 161,251<br>Total average interest-earning assets (1) $ 8,027,898 $ 7,841,407 $ 7,681,441 $ 6,863,219 $ 6,582,473 $ 6,194,248<br>Core net interest margin FTE Net interest margin FTE excluding episodic 2.21 % 3.07 % 3.17 % 2.87 % 2.49 % 2.72 %<br>items 2.13 % 2.99 % 3.11 % 2.77 % 2.39 % 2.60 %<br>GAAP interest income on total loans, net $ 355,348 $ 293,287 $ 274,331 $ 248,153 $ 251,744 $ 232,719<br>Net (gain) loss from fair value adjustments<br>on qualifying hedges (345) (775) (2,079) 1,185 1,678 —<br>Net amortization of purchase accounting<br>adjustments (1,503) (2,628) (3,013) (356) — —<br>Core interest income on total loans, net $ 353,500 $ 289,884 $ 269,239 $ 248,982 $ 253,422 $ 232,719<br>Average total loans, net (1) $ 6,850,124 $ 6,748,165 $ 6,653,980 $ 6,006,931 $ 5,621,033 $ 5,316,968<br>Core yield on total loans 5.16 % 4.30 % 4.05 % 4.14 % 4.51 % 4.38 %<br>Years Ended<br>December 31,<br>2020<br>December 31,<br>2023<br>December 31,<br>2022<br>December 31,<br>2021<br>December 31,<br>2019 2018<br>December 31, |
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| 40<br>Calculation of Tangible Stockholders’ Common Equity to<br>Tangible Assets - Years<br><br>(Dollars in thousands)<br>Total Equity $ 669,837 $ 677,157 $ 679,628 $ 618,997 $ 579,672 $ 549,464<br>Less:<br>Goodwill (17,636) (17,636) (17,636) (17,636) (16,127) (16,127)<br>Core deposit intangibles (1,537) (2,017) (2,562) (3,172) — —<br>Intangible deferred tax liabilities — — 328 287 292 290<br>Tangible Stockholders' Common Equity $ 650,664 $ 657,504 $ 659,758 $ 598,476 $ 563,837 $ 533,627<br>Total Assets $ 8,537,236 $ 8,422,946 $ 8,045,911 $ 7,976,394 $ 7,017,776 $ 6,834,176<br>Less:<br>Goodwill (17,636) (17,636) (17,636) (17,636) (16,127) (16,127)<br>Core deposit intangibles (1,537) (2,017) (2,562) (3,172) — —<br>Intangible deferred tax liabilities — — 328 287 292 290<br>Tangible Assets $ 8,518,063 $ 8,403,293 $ 8,026,041 $ 7,955,873 $ 7,001,941 $ 6,818,339<br>Tangible Stockholders' Common Equity to<br>Tangible Assets 7.64 % 7.82 % 8.22 % 7.52 % 8.05 % 7.83 %<br>December 31,<br>2023<br>December 31,<br>2022<br>December 31, December 31, December 31, December 31,<br>2021 2020 2019 2018 |
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| 41<br>Contact Details<br>Susan K. Cullen<br>SEVP, CFO & Treasurer<br>Phone: (718) 961-5400<br>Email: scullen@flushingbank.com<br>Al Savastano, CFA<br>Director of Investor Relations<br>Phone: (516) 820-1146<br>Email: asavastano@flushingbank.com |
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