Flushing Financial : 3Q2023 Earnings Conference Call Presentation

3Q23 Earnings Conference Call

November 1, 2023

Safe Harbor Statement

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Presentation relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "forecasts", "goals", "potential" or "continue" or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.

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Executing On Our Action Plan

	Initiative		Actions/Results
1)	Move towards a more interest rate	• Added $100 million of interest rate hedges during 3Q23
•	Approximately 60% of the loan pipeline are floating rate loans at September 30, 2023
	neutral position
	•	The Company has a goal of reaching a more neutral interest rate risk position
2)	Enhance focus on risk adjusted	• Relationships will face greater scrutiny to achieve risk adjusted returns
•	Loan pipeline decreased 12.6% QoQ with a 54 bps increase in yields
	returns and profitability
	•	Yields on 3Q23 closings were 7.48%, an increase of 288 bps YoY and 34 bps QoQ
3)	Emphasizing our brand of customer	•	Net loans increased $63MM or 0.9% QoQ
	service and deepening relationships	•	Checking account openings decreased 5.0% YoY
	to expand customer base and drive	•	Noninterest bearing deposits increased by $46.6MM QoQ or 5.6%
	loyalty	•	CDs increased $88.7MM or 4.0% during 3Q23
4)	Review new and existing lending	• Manhattan office buildings are approximately 0.6% of net loans
•	Debt service coverage ratio of 1.8x for multifamily and investor commercial real estate loans
	relationships to prepare for the next
		that reprice through 2025; with our stress testing (+200 bps in rates and 10% rise in operating
	credit cycle
		expenses) indicating a resilient borrower base
		• Liquidity is strong at $3.7 billion at September 30, 2023, or approximately 43% of total assets
5)	Preserve strong liquidity and capital	•	Average total deposits increased 8.6% YoY, but declined 1.2% QoQ
		• TCE declined to 7.59% at September 30, 2023, compared to 7.71% at June 30, 2023
6)	Tighten expense controls	• Greater scrutiny placed on discretionary expenses
•	GAAP and Core noninterest expense down 3.4% YoY and 2.4% QoQ

Executing on Our Action Plan to Improve Future Profitability

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Areas of Focus for Long-term Success

		Areas of Focus
Interest	• Continuing to take actions to position the Company's balance sheet more towards interest rate risk neutral
•	During 3Q23, the Company added $100 million of interest rate hedges
Rate Risk	• Approximately 60% of the loan pipeline consists of floating rate loans including back-to-back loan swaps
•	Rate sensitivity to a +100 bps shock has been reduced by 66% over the past year.
	• Increased noninterest bearing deposits by $46.6 million QoQ
Credit	• Manhattan office buildings are approximately 0.6% of net loans
•	Over 88% of the loan portfolio is collateralized by real estate with an average loan to value that approximates
Quality		36%
•	Debt service coverage ratio of 1.8x for multifamily and investor commercial real estate loans that reprice
		through 2025
	• The Company continues to have ample liquidity with $3.7 billion of undrawn lines and resources
Liquidity	• Uninsured and uncollateralized deposits were 16% of total deposits
•	Total deposits increased 9.1% YoY; 3Q23 balances were impacted by seasonality and pricing decisions
	• Checking account openings declined 5% YoY in 3Q23
Customer	• Approximately 33% of our branches are in Asian markets; a key focus of our business
•	Bensonhurst, our 27th branch, opened on September 29, 2023 and expanded our Asian branch presence
Experience	• Digital banking usage continues to increase with double digit growth in both monthly mobile deposit active
	users and digital banking enrollment in September 2023 versus a year ago

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Loans Secured by Real Estate Have an Average LTV of ~36%

			1%
		1%	1%	1%
	2%	2%
	3%
	3%
	5%
		$6.8B	38%
6%
8%	Total Portfolio

8%

10%	11%

88% Real Estate Based

Multifamily: 38.0% Non Real Estate: 11.0% Owner Occupied CRE: 10.0% One-to-four family - Mixed Use: 8.0% General Commercial: 8.0% CRE - Strip Mall: 6.0% CRE - Shopping Center: 5.0% One-to-four family - Residential: 3.0% CRE - Single Tenant: 3.0% Industrial: 2.0% Office - Multi Tenant: 2.0% Health Care/Medical Use: 1.0% Commercial Special Use: 1.0% Construction: 1.0% Office - Single Tenant: 1.0%

Manhattan Office Buildings are Approximately 0.6% of Net Loans

Data as of September 30, 2023	5

Multifamily Lending -Conservative Lending Standards; Minimal Losses

Our Lending Looks More Like This

Generally, Not Like This

• Average loan size is only $1.2 million
• Strong sponsorship with weighted average equity of 56%
• Weighted average debt service coverage ratio is 1.8x
• The average monthly rent in our portfolio is approximately $1,650 compared to over $3,000 for market rents
• ~65% of the Multifamily Loans Portfolio Contains Rent Regulated Units1

1 As of June 30, 2023	6

Office CRE - Most of the Loans Are Outside of Manhattan

Our Lending Looks More Like This

Not Like This

50 Hudson Years, Photo by Michael Young

• Average loan size is $3.2 million
• Weighted average LTV of 50% and a weighted average debt service coverage ratio of 1.8x
• No office loans are nonaccrual and about 26% of the portfolio will have upward rate adjustments through 2024 given today's interest rates
• Minimal exposure to Manhattan office buildings; over one third is medical

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Retail CRE: Essential to Local Communities

Our Lending Looks More Like This

Generally, Not Like This

• $0.9B portfolio with 42% located in Queens, Brooklyn, and the Bronx
• We tend to lend to shopping centers and strip mails versus larger malls
• Our average retail CRE loan is $2.4MM with average seasoning over 6 years
• Weighted average LTV1 of 53% with one loan of $0.9MM having an LTV over 75%
• Weighted average debt service coverage ratio is ~1.86x2
• No delinquent loans and only 1% of this portfolio is on the watchlist
• Approximately 6% of this portfolio has rate adjustments in 2023 and 13% in 2024

1 LTVs are based on value at origination	Data as of June 30, 2023	8
2 Based on most recent Annual Loan Review

Strong Asian Banking Market Focus

Asian Communities - Total Loans $766MM

and Deposits $1.2B

Multilingual Branch Staff Serves Diverse Customer Base in NYC Metro Area

Growth Aided by the Asian Advisory Board

Sponsorships of Cultural Activities Support New and Existing

Opportunities

Bensonhurst (Brooklyn) branch opened on September 29, 2023

19%

of Total Deposits

$41B

Deposit Market Potential

(~3% Market Share1)

9.8%

FFIC 5 Year Asian Market

CAGR vs 3.3%1 for the

Comparable Asian

Markets

1 As of June 30, 2023; Latest FDIC Data

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Digital Banking Usage Continues to Increase

21%

Increase in Monthly Mobile

Deposit Active Users

Sept. 2023 YoY

Internet Banks

iGObanking and BankPurely national deposit gathering platforms

~3% of Average Deposits in Sept. 2023

~35,000	13%
Users with Active Online	Digital Banking
Banking Status	Enrollment
33%	Sept. 2023 YoY Growth
Sept. 2023 YoY Growth

Numerated	~9,000
Small Business Lending	Zelle® Transactions
Platform	~$3.2MM
$15.9MM of Commitments
Zelle Dollar Transactions
in 2023
	in Sept. 2023

Technology Enhancements Remain a Priority to Grow Customer Base and Increase Engagement

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