10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

Commission file number 000-24272

FLUSHING FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

11-3209278

(I.R.S. Employer Identification No.)

1979 Marcus Avenue, Suite E140, Lake Success, New York 11042

(Address of principal executive offices)

(718) 961-5400

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      X  Yes    No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).      X   Yes    No

The number of shares of the registrant’s Common Stock outstanding as of July 31, 2005 was 19,316,243.

TABLE OF CONTENTS

	PAGE
PART I — FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statements of Financial Condition..............................................................	1
Consolidated Statements of Income and Comprehensive Income ..................................	2
Consolidated Statements of Cash Flows ..........................................................................	3
Consolidated Statements of Changes in Stockholders’ Equity ........................................	4
Notes to Consolidated Statements ...................................................................................	5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ..............................................................................................	9
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk........................	22
ITEM 4. Controls and Procedures.....................................................................................	22
PART II — OTHER INFORMATION
ITEM 1. Legal Proceedings.................................................................................................	22
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds..........................	22
ITEM 3. Defaults Upon Senior Securities..........................................................................	23
ITEM 4. Submission of Matters to a Vote of Security Holders.......................................	23
ITEM 5. Other Information...............................................................................................	23
ITEM 6. Exhibits..................................................................................................................	24
SIGNATURES......................................................................................................................	25

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Financial Condition

(Unaudited)

		June 30,		December 31,
(Dollars in thousands, except per share data)		2005		2004
ASSETS
Cash and due from banks	$	14,025	$	14,661
Securities available for sale:
Mortgage-backed securities		351,304		395,629
Other securities		39,069		40,116
Loans:
Multi-family residential		738,702		646,922
Commercial real estate		374,561		334,048
One-to-four family – mixed-use property		405,965		332,805
One-to-four family – residential		146,559		151,737
Co-operative apartments		2,454		3,132
Construction		39,340		31,460
Small Business Administration		8,377		5,633
Commercial business and other		16,897		12,505
Net unamortized premiums and unearned loan fees		6,864		4,798
Allowance for loan losses		(6,535)		(6,533)
Net loans		1,733,184		1,516,507
Interest and dividends receivable		9,956		8,868
Bank premises and equipment, net		7,383		7,558
Federal Home Loan Bank of New York stock		29,160		22,261
Bank owned life insurance		25,963		25,399
Goodwill		3,905		3,905
Other assets		25,038		23,140
Total assets	$	2,238,987	$	2,058,044
LIABILITIES
Due to depositors:
Non-interest bearing	$	58,018	$	49,540
Interest-bearing:
Certificate of deposit accounts		725,860		703,314
Passbook savings accounts		238,692		216,772
Money market accounts		238,932		258,235
NOW accounts		43,316		48,463
Total interest-bearing deposits		1,246,800		1,226,784
Mortgagors' escrow deposits		21,898		16,473
Borrowed funds		722,723		584,736
Other liabilities		20,906		19,858
Total liabilities		2,070,345		1,897,391
STOCKHOLDERS' EQUITY
Preferred stock ($0.01 par value; 5,000,000 shares
authorized; none issued)		-		-
Common stock ($0.01 par value; 40,000,000 shares
authorized; 19,456,696 shares issued at June 30, 2005
and December 31, 2004; 19,275,807 shares and
19,232,248 shares outstanding at June 30,2005
and December 31, 2004, respectively)		195		195
Additional paid-in capital		38,011		37,187
Treasury stock (180,889 shares and 224,448 shares at
June 30, 2005 and December 31, 2004, respectively)		(3,190)		(3,893)
Unearned compensation		(4,641)		(5,117)
Retained earnings		140,062		133,290
Accumulated other comprehensive loss, net of taxes		(1,795)		(1,009)
Total stockholders' equity		168,642		160,653
Total liabilities and stockholders' equity	$	2,238,987	$	2,058,044

The accompanying notes are an integral part of these consolidated financial statements.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income

(Unaudited)

		For the three months				For the six months
		ended June 30,				ended June 30,
(Dollars in thousands, except per share data)		2005		2004		2005		2004
Interest and dividend income
Interest and fees on loans	$	28,236	$	24,291	$	54,501	$	47,846
Interest and dividends on securities:
Interest		4,160		5,162		8,522		10,585
Dividends		81		85		162		172
Other interest income		9		23		17		63
Total interest and dividend income		32,486		29,561		63,202		58,666
Interest expense
Deposits		8,088		6,939		15,771		13,947
Other interest expense		7,236		5,761		13,396		11,447
Total interest expense		15,324		12,700		29,167		25,394
Net interest income		17,162		16,861		34,035		33,272
Provision for loan losses		-		-		-		-
Net interest income after provision for loan losses		17,162		16,861		34,035		33,272
Non-interest income
Loan fee income		607		557		1,137		1,014
Banking services fee income		353		387		736		828
Net gain on loans held for sale		142		88		142		180
Net gain on sale of loans		-		-		19		-
Net loss on sale of securities		-		(16)		-		(16)
Federal Home Loan Bank of New York stock dividends		268		96		432		189
Bank owned life insurance		285		291		564		580
Other income		206		212		346		316
Total non-interest income		1,861		1,615		3,376		3,091
Non-interest expense
Salaries and employee benefits		4,413		4,358		8,691		9,506
Occupancy and equipment		1,011		783		1,974		1,644
Professional services		839		910		1,779		1,700
Data processing		534		474		1,069		1,003
Depreciation and amortization		398		368		801		725
Other operating expenses		2,165		1,616		3,649		3,220
Total non-interest expense		9,360		8,509		17,963		17,798
Income before income taxes		9,663		9,967		19,448		18,565
Provision for income taxes
Federal		2,991		2,919		5,985		5,611
State and local		778		968		1,600		1,629
Total taxes		3,769		3,887		7,585		7,240
Net income	$	5,894	$	6,080	$	11,863	$	11,325
Other comprehensive income, net of tax
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period	$	2,574	$	(7,738)	$	(786)	$	(5,118)
Less: reclassification adjustments for losses included in income		-		9		-		9
Net unrealized holding gains (losses)		2,574		(7,729)		(786)		(5,109)
Comprehensive net income	$	8,468	$	(1,649)	$	11,077	$	6,216
Basic earnings per share	$	0.34	$	0.35	$	0.68	$	0.65
Diluted earnings per share	$	0.33	$	0.34	$	0.66	$	0.62
Dividends per share	$	0.10	$	0.09	$	0.20	$	0.17

The accompanying notes are an integral part of these consolidated financial statements.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

		For the six months
		ended June 30,
(In thousands)		2005		2004
OPERATING ACTIVITIES
Net income	$	11,863	$	11,325
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization of bank premises and equipment		801		725
Net gain on loans held for sale		(142)		(180)
Net gain on sales of loans		(19)		-
Net loss on sale of securities		-		16
Amortization of unearned premium, net of accretion of unearned discount		840		1,180
Deferred income tax expense (benefit)		40		(577)
Deferred compensation		(155)		786
Origination of loans held for sale		(1,837)		(4,385)
Proceeds from sale of loans originated for sale		1,979		4,565
Net (decrease) increase in other assets and liabilities		(436)		1,473
Unearned compensation		502		2,036
Net cash provided by operating activities		13,436		16,964
INVESTING ACTIVITIES
Purchases of bank premises and equipment		(626)		(905)
(Purchases) redemptions of Federal Home Loan Bank of New York shares		(6,899)		700
Purchases of securities available for sale		(326)		(85,855)
Proceeds from sales and calls of securities available for sale		30		22,600
Proceeds from maturities and prepayments of securities available for sale		43,625		68,406
Proceeds from sale of non-performing loans		1,658		1,980
Net originations and repayment of loans		(219,230)		(127,617)
Proceeds from sale of loans		1,030		-
Net cash used by investing activities		(180,738)		(120,691)
FINANCING ACTIVITIES
Net increase in non-interest bearing deposits		8,478		8,701
Net increase in interest-bearing deposits		20,016		52,127
Net increase in mortgagors' escrow deposits		5,425		4,662
Proceeds from short-term borrowed funds		38,000		-
Repayment of short-term borrowed funds		(15,000)		(25,000)
Proceeds from long-term borrowed funds		135,000		100,000
Repayment of long-term borrowed funds		(20,013)		(39,012)
Purchases of treasury stock		(2,829)		(4,153)
Proceeds from issuance of common stock upon exercise of stock options		1,083		1,395
Cash dividends paid		(3,494)		(2,984)
Net cash provided by financing activities		166,666		95,736
Net decrease in cash and cash equivalents		(636)		(7,991)
Cash and cash equivalents, beginning of period		14,661		20,300
Cash and cash equivalents, end of period	$	14,025	$	12,309
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid	$	28,456	$	25,243
Income taxes paid		7,004		5,881
Non-cash activities:
Securities purchased not yet settled		-		9,728
Securities sold not yet settled		-		15,717

The accompanying notes are an integral part of these consolidated financial statements.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

		For the six months ended
(Dollars in thousands, except per share data)		June 30, 2005
Common Stock
Balance, beginning of period	$	195
No activity		-
Balance, end of period	$	195
Additional Paid-In Capital
Balance, beginning of period	$	37,187
Award of shares released from Employee Benefit Trust (2,530 common shares)		36
Forfeiture of restricted stock awards (750 common shares)		(1)
Tax benefit from compensation expense in excess of that recognized for financial
reporting purposes		789
Balance, end of period	$	38,011
Treasury Stock
Balance, beginning of period	$	(3,893)
Purchases of common shares outstanding (133,000 common shares)		(2,384)
Repurchase of restricted stock awards to satisfy tax obligations
(24,806 common shares)		(445)
Forfeiture of restricted stock awards (750 common shares)		(9)
Issuance upon exercise of stock options (138,039 common shares)		2,415
Shares issued upon vesting of restricted stock unit awards (64,076 common shares)		1,126
Balance, end of period	$	(3,190)
Unearned Compensation
Balance, beginning of period	$	(5,117)
Restricted stock award expense		118
Forfeiture of restricted stock awards (750 common shares)		10
Release of shares from Employee Benefit Trust (102,326 common shares)		348
Balance, end of period	$	(4,641)
Retained Earnings
Balance, beginning of period	$	133,290
Net income		11,863
Cash dividends declared and paid		(3,494)
Stock options exercised (138,039 common shares)		(1,332)
Shares issued upon vesting of restricted stock unit awards (64,076 common shares)		(265)
Balance, end of period	$	140,062
Accumulated Other Comprehensive Income
Balance, beginning of period	$	(1,009)
Change in net unrealized loss, net of taxes of approximately $584, on
securities available for sale		(786)
Balance, end of period	$	(1,795)

The accompanying notes are an integral part of these consolidated financial statements.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Basis of Presentation

The primary business of Flushing Financial Corporation (the “Holding Company”) is the operation of its wholly-owned subsidiary, Flushing Savings Bank, FSB (the “Bank”). The consolidated financial statements presented in this Form 10-Q include the collective results of the Holding Company and the Bank, but reflect principally the Bank’s activities.

The information furnished in these interim statements reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for such periods of Flushing Financial Corporation and Subsidiaries (the “Company”). Such adjustments are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q. The results of operations in the interim statements are not necessarily indicative of the results that may be expected for the full year.

Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The interim financial information should be read in conjunction with the Company’s 2004 Annual Report on Form 10-K.

Certain reclassifications have been made to prior year amounts to conform with the current year presentation.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

3. Earnings Per Share

Basic earnings per share for the three and six-month periods ended June 30, 2005 and 2004 was computed by dividing net income by the total weighted average number of common shares outstanding, including only the vested portion of restricted stock awards. Diluted earnings per share includes the additional dilutive effect of stock options outstanding and the unvested portion of restricted stock and restricted stock unit awards during the period. Earnings per share have been computed based on the following:

		Three months ended					Six months ended
		June 30,					June 30,
(In thousands, except per share data)		2005			2004			2005			2004
Net income	$	5,894		$	6,080		$	11,863		$	11,325
Divided by:
Weighted average common shares outstanding		17,487			17,439			17,483			17,408
Weighted average common stock equivalents		450			654			487			713
Total weighted average common shares and
common stock equivalents		17,937			18,093			17,970			18,121
Basic earnings per share	$	0.34		$	0.35		$	0.68		$	0.65
Diluted earnings per share	$	0.33		$	0.34		$	0.66		$	0.62
Dividends per share	$	0.10		$	0.09		$	0.20		$	0.17
Dividend payout ratio		29.41	%		25.71	%		29.41	%		26.15	%

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

Common stock equivalents that are antidilutive are not included in the computation of diluted earnings per share. Options to purchase 169,400 shares at an average exercise price of $18.14 and 133,650 shares at an average exercise price of $17.66, were not included in the computation of diluted earnings per share for the three months ended June 30, 2005 and 2004, respectively. Unvested restricted stock and restricted stock unit awards totaling 18,999 shares at an average market price on date of grant of $19.81, and 1,687 unvested restricted stock unit awards at an average market price on date of grant of $17.66 were not included in the computation of diluted earnings per share for the three months ended June 30, 2005 and 2004, respectively. Options to purchase 35,750 shares at an average exercise price of $19.94 were not included in the computation of diluted earnings per share for the six months ended June 30, 2005. Unvested restricted stock and restricted stock unit awards totaling 17,874 shares at an average market price on date of grant of $19.94 were not included in the computation of diluted earnings per share for the six months ended June 30, 2005. There were no common stock equivalents that were considered antidilutive for the six months ended June 30, 2004.

4. Stock Compensation Plans

As permitted by SFAS No. 123, “Accounting for Stock-Based Compensation”, the Company has chosen to apply APB Opinion No. 25, “Accounting for Stock Issued to Employees” and related Interpretations in accounting for options grants under its 1996 Stock Option Incentive Plan and 2005 Omnibus Incentive Plan. Accordingly, no compensation expense has been recognized for options granted under the Company’s stock option plans. Compensation expense is recognized in the financial statements primarily for restricted stock and restricted stock unit awards. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to all stock-based employee compensation. However, the present impact of SFAS No. 123 may not be representative of the effect on income in future periods because the options generally vest over several years and additional option grants may be made each year. As discussed in Note 5 below, the Company will begin recording an expense in the financial statements in the quarter ending March 31, 2006 for stock options granted.

		Three months ended				Six months ended
		June 30,				June 30,
(Dollars in thousands, except share data)		2005		2004		2005		2004
Net income, as reported	$	5,894	$	6,080	$	11,863	$	11,325
Add: Stock-based employee compensation expense included in
reported net income, net of related tax effects		466		362		535		1,018
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards,
net of related tax effects		(584)		(890)		(735)		(2,491)
Pro forma net income	$	5,776	$	5,552	$	11,663	$	9,852
Basic earnings per share:
As reported	$	0.34	$	0.35	$	0.68	$	0.65
Pro forma	$	0.33	$	0.32	$	0.67	$	0.57
Diluted earnings per share:
As reported	$	0.33	$	0.34	$	0.66	$	0.62
Pro forma	$	0.32	$	0.31	$	0.65	$	0.54

There were stock option grants of 123,725 shares of common stock, at an average exercise price of $17.88, and 201,700 shares of common stock, at an average exercise price of $17.36 granted in the three- and six-month periods ended June 30, 2005 and 2004, respectively. There were restricted stock unit grants of 121,675 shares, at an average market price on date of grant of $17.64, and 73,783 shares, at an average market price on date of grant of $16.95 granted in the three- and six-month periods ended June 30, 2005 and 2004, respectively. All of the above mentioned grants and awards were made in the second quarter of each respective year.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

The 2005 Omnibus Incentive Plan, approved at the annual stockholders’ meeting, increased annual grants to each non-employee director to 3,600 restricted stock units, while eliminating grants of stock options for non-employee directors. Prior to the approval of the 2005 Omnibus Incentive Plan, non-employee directors were annually granted 1,687 restricted stock unit awards and 14,850 stock options. This change is expected to provide an expense benefit in future years when we will be required to expense stock option grants.

The three- and six-month periods ended June 30, 2005 include a charge to earnings on an after-tax basis of $0.3 million or $0.02 per diluted share for restricted stock unit awards granted in June 2005. The three- and six-month periods ended June 30, 2004, include a charge to earnings on an after-tax basis of $0.2 million or $0.01 per diluted share for restricted stock unit awards granted in June 2004. The six-month period ended June 30, 2004 includes, in addition to the previously mentioned charge, a charge to earnings (recorded during the three months ended March 31, 2004), on an after tax basis, of $0.5 million or $0.03 per diluted share, related to an adjustment of compensation expense for certain restricted stock awards made in prior periods. These charges reflect that certain participants under these plans reached, or were close to reaching, retirement eligibility, at which time such awards fully vest. These amounts are included above in stock-based compensation expense.

In addition, the three-month period ended June 30, 2004 includes, in the deduction for stock-based compensation determined under fair value method, a net after tax charge of $0.4 million or $0.02 per diluted share, related to certain stock option grants awarded in June 2004. The six-month period ended June 30, 2004 includes, in the deduction for stock-based compensation determined under the fair value method, in addition to the previously mentioned deduction, a net after tax deduction of $0.8 million or $0.04 per diluted share, related to an adjustment of compensation expense using the fair value method for stock option grants awarded during prior periods. These deductions reflect that certain participants under these plans reached, or were close to reaching, retirement eligibility, at which time such awards fully vest. For each of the three- and six-month period ended June 30, 2005, there was no significant net after tax impact from awards granted in this period.

5. Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment.” This statement revises FASB Statement No. 123, “Accounting for Stock-Based Compensation”, and supersedes APB Opinion No. 25 “Accounting for Stock Issued to Employees” and its related implementation guidance. This statement establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees. It requires that a public entity measure the cost of employee services received in exchange for an award of an equity instrument based on the grant date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the award. The requisite service period is usually the vesting period. The provisions of this statement are effective for the first interim or annual reporting period that begins after June 15, 2005. On April 12, 2005, the U.S. Securities and Exchange Commission issued a release which changed the implementation date to the beginning of the next fiscal year after June 15, 2005. The effect on future earnings as a result of the adoption of this statement will primarily be dependent on the level of future grants of stock options awarded by the Company. While management is unable to determine the actual effect the adoption of this statement will have on its diluted earnings per share, management estimates that the effect on annual diluted earnings per share will be in the range of $0.03 to $0.04 per diluted share.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

6. Pension and Other Postretirement Benefit Plans

The following table sets forth the components of net expense for the pension and other postretirement benefit plans.

		Three months ended				Six months ended
		June 30,				June 30,
(In thousands)		2005		2004		2005		2004
Employee Pension Plan:
Service cost	$	146	$	155	$	292	$	310
Interest cost		211		197		422		394
Amortization of unrecognized loss		40		21		80		41
Amortization of past service liability		-		(3)		-		(6)
Expected return on plan assets		(309)		(291)		(618)		(583)
Net employee pension expense	$	88	$	79	$	176	$	156
Outside Director Pension Plan:
Service cost	$	21	$	18	$	42	$	37
Interest cost		18		13		36		25
Amortization of unrecognized loss		3		3		6		7
Amortization of past service liability		37		36		74		71
Net outside director pension expense	$	79	$	70	$	158	$	140
Other Postretirement Benefit Plans:
Service cost	$	39	$	42	$	78	$	83
Interest cost		62		55		124		110
Amortization of unrecognized loss		16		12		32		25
Amortization of past service liability		(9)		(32)		(18)		(65)
Net other postretirement benefit expense	$	108	$	77	$	216	$	153

The Company previously disclosed in its consolidated financial statements for the year ended December 31, 2004 that it expects to contribute $0.9 million, $0.1 million and $0.2 million to the Employee Pension Plan, Outside Director Pension Plan and Other Post Retirement Benefit Plans, respectively, during the year ended December 31, 2005. As of June 30, 2005, the Company has contributed $73,000 to the Outside Director Pension Plan and $87,000 to the Other Postretirement Benefit Plans. As of June 30, 2005, the Company has not made a contribution to the Employee Pension Plan for the year ending December 31, 2005. As of June 30, 2005, the Company has not revised its expected contributions for the year ending December 31, 2005 for any of these plans.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

GENERAL

Flushing Financial Corporation, a Delaware corporation (the “Holding Company”), was organized in May 1994 to serve as the holding company for Flushing Savings Bank, FSB (the “Bank”), a federally chartered, FDIC insured savings institution, originally organized in 1929. The Bank is a consumer-oriented savings institution and conducts its business through ten banking offices located in Queens, Brooklyn, Manhattan and Nassau County. Flushing Financial Corporation’s common stock is publicly traded on the NASDAQ National Market under the symbol “FFIC”. The following discussion of financial condition and results of operations includes the collective results of the Holding Company and the Bank (collectively, the “Company”), but reflects principally the Bank’s activities.

The Company’s principal business is attracting retail deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, primarily in (1) origination and purchases of one-to-four family (focusing on mixed-use properties - properties that contain both residential dwelling units and commercial units), multi-family residential and commercial real estate mortgage loans; (2) mortgage loan surrogates such as mortgage-backed securities; and (3) U.S. government and federal agency securities, corporate fixed-income securities and other marketable securities. To a lesser extent, the Company originates certain other loans, including construction loans, Small Business Administration loans and other small business and consumer loans.

The Company’s results of operations depend primarily on net interest income, which is the difference between the income earned on its interest-earning assets and the cost of its interest-bearing liabilities. Net interest income is the result of the Company’s interest rate margin, which is the difference between the average yield earned on interest-earning assets and the average cost of interest-bearing liabilities, adjusted for the difference in the average balance of interest-earning assets as compared to the average balance of interest-bearing liabilities. The Company also generates non-interest income from loan fees, service charges on deposit accounts, mortgage servicing fees and other fees, income earned on Bank Owned Life Insurance, dividends on Federal Home Loan Bank of NY (“FHLB-NY”) stock and net gains on sales of securities and loans. The Company’s operating expenses consist principally of employee compensation and benefits, occupancy and equipment costs, other general and administrative expenses and income tax expense. The Company’s results of operations also can be significantly affected by its periodic provision for loan losses and specific provision for losses on real estate owned. However, the Company has not recorded a provision for possible loan losses since 1999. Such results also are significantly affected by general economic and competitive conditions, including changes in market interest rates, the strength of the local economy, government policies and actions of regulatory authorities.

Statements contained in this Quarterly Report relating to plans, strategies, objectives, 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 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, the factors set forth in the preceding paragraph and elsewhere in this Quarterly Report, and in other documents filed by the Company with the Securities and Exchange Commission from time to time, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “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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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED

JUNE 30, 2005 AND 2004

General. Diluted earnings per share decreased $0.01, or 2.9%, to $0.33 for the three months ended June 30, 2005 from $0.34 for the three months ended June 30, 2004. Net income decreased $0.2 million, or 3.1%, to $5.9 million for the three months ended June 30, 2005 from $6.1 million for the three months ended June 30, 2004. The return on average assets was 1.08% for the three months ended June 30, 2005 and 1.22% for the three months ended June 30, 2004, while the return on average equity was 14.54% for the three months ended June 30, 2005 and 16.25% for the three months ended June 30, 2004.

Interest Income. Total interest and dividend income increased $2.9 million, or 9.9%, to $32.5 million for the three months ended June 30, 2005 from $29.6 million for the three months ended June 30, 2004. The increase in interest income is primarily attributed to the growth in the average balance of interest-earning assets, which increased $168.2 million to $2,076.6 million. The yield on interest-earning assets increased six basis points to 6.26% for the three months ended June 30, 2005 from 6.20% in the three months ended June 30, 2004, which is primarily due to the increase of $309.6 million in the average balance of the loan portfolio to $1,669.9 million, combined with a $131.4 million decrease in the average balance of the lower-yielding securities portfolio. However, the yield on the mortgage loan portfolio decreased 38 basis points from the three months ended June 30, 2004 to 6.77% for the three months ended June 30, 2005. This decline reflects the effect of the high refinancing activity that had occurred during the previous three years. The Bank’s existing borrowers had been refinancing their higher costing mortgage loans at the then current lower rates, which has resulted in a decrease in the yield of the mortgage portfolio. This decrease has been partially offset by prepayment penalties that have been collected. There also was a decrease of $10.0 million in the average balance of interest earning-deposits and Federal funds sold for the three months ended June 30, 2005 compared to the three months ended June 30, 2004. In an effort to increase the yield on interest-earning assets, we have shifted funds from the lower-yielding securities portfolio to the higher-yielding mortgage loan portfolio. We continued our focus on the origination of multi-family residential, commercial real estate, and one-to-four family mixed-use property mortgage loans, which allowed us to maintain a higher yield on our loan portfolio than we would have otherwise achieved.

Interest Expense. Interest expense increased $2.6 million, or 20.7%, to $15.3 million for the three months ended June 30, 2005 from $12.7 million for the three months ended June 30, 2004, primarily due to an increase of $153.3 million in the average balance of interest-bearing liabilities. This was combined with a 32 basis point rise in the cost of interest-bearing liabilities to 3.16% for the three months ended June 30, 2005 from 2.84% for the three months ended June 30, 2004. The average balance of certificates of deposit increased by $101.7 million, while borrowed funds average balance increased by $84.3 million. In addition, there was a decline in the combined average balances of lower-costing passbook, money market and NOW accounts totaling $40.6 million. The cost of due to depositors increased by 26 basis points and borrowed funds increased by 39 basis points in the three months ended June 30, 2005 compared to the three months ended June 30, 2004. The increase in the cost of funds is primarily attributed to the increase in the average balances of higher costing certificates of deposit and borrowed funds.

Net Interest Income. For the three months ended June 30, 2005, net interest income increased $0.3 million, or 1.8%, to $17.2 million from $16.9 million for the three months ended June 30, 2004. The increase in net interest income is attributed to the growth in the average balance of interest-earning assets, which increased $168.2 million to $2.08 billion, while the net interest spread declined 26 basis points to 3.10% for the quarter ended June 30, 2005, as compared to 3.36% in the same period in 2004. The net interest margin decreased 22 basis points to 3.31% for the three months ended June 30, 2005 from 3.53% for the three months ended June 30, 2004. Excluding prepayment penalty income, the net interest margin would have been 3.11% and 3.30% for the three month periods ended June 30, 2005 and 2004, respectively.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Provision for Loan Losses. There was no provision for loan losses for either of the three-month periods ended June 30, 2005 and 2004. In assessing the adequacy of the Company's allowance for loan losses, management considers the Company's historical loss experience, recent trends in losses, collection policies and collection experience, trends in the volume of non-performing loans, changes in the composition and volume of the gross loan portfolio, and local and national economic conditions. In recent years, the Bank has seen a significant improvement in its loss experience. By adherence to its strict underwriting standards the Bank has been able to minimize net losses from impaired loans with net recoveries of $2,000 and none for the three months ended June 30, 2005 and 2004, respectively. There has also been an improvement in local economic conditions and real estate values in recent years. As a result of these improvements, and despite the growth in the loan portfolio, primarily in multi-family residential, commercial real estate, and one-to-four family mixed-use property mortgage loans, no provision for loan losses was deemed necessary for either of the three-month periods ended June 30, 2005 and 2004.

Non-Interest Income. Non-interest income increased $0.2 million, or 15.2%, to $1.9 million for the three months ended June 30, 2005 from $1.6 million for the three months ended June 30, 2004. This was primarily attributed to an increase of $0.2 million in dividends on Federal Home Loan Bank of New York (“FHLB-NY”) stock.

Non-Interest Expense. Non-interest expense was $9.4 million for the three months ended June 30, 2005, an increase of $0.9 million, or 10.0%, from $8.5 million for the three months ended June 30, 2004. The increase from the prior year period is primarily attributed to increases of: $0.2 million in occupancy and equipment primarily due to the relocation of the Bank’s headquarters in the third quarter of 2004 and non-recurring maintenance and repairs in the current period; $0.1 million in employee benefit expenses; $0.2 million for the cost of certain restricted stock unit awards granted in the current period as the participants have no risk of forfeiture; $0.1 million in board of director fees due to the increase in the size of the board of directors and the number of meetings; $0.1 million of non-recurring expenditures related to the retirement of the Company’s President. The increased cost of restricted stock units in the current period compared to the prior period is due to the increased level of these awards to non-employee directors. The 2005 Omnibus Incentive Plan, approved at the annual stockholders meeting, increased annual grants to each non-employee director to 3,600 restricted stock units, while eliminating grants of stock options for non-employee directors. Prior to the approval of the 2005 Omnibus Incentive Plan, each non-employee director received an annual grant of 1,687 restricted stock units and 14,850 stock options. This change will provide an expense benefit in future years when we will be required to expense the fair value of stock option grants, as discussed in Note 5, Recent Accounting Pronouncements for FASB Statement No. 123, (revised 2004) “Share-based Payments”. Management continues to monitor expenditures resulting in efficiency ratios of 49.2% and 46.0% for the three-month periods ended June 30, 2005 and 2004, respectively.

Income before Income Taxes. Income before the provision for income taxes decreased $0.3 million, or 3.1%, to $9.7 million for the three months ended June 30, 2005, as compared to $10.0 million for the three months ended June 30, 2004, for the reasons discussed above.

Provision for Income Taxes. Income tax expense decreased $0.1 million to $3.8 million for the three months ended June 30, 2005 compared to $3.9 million for the three months ended June 30, 2004. This decrease was due to lower income for the three months ended June 30, 2005 compared to the three months ended June 30, 2004. The effective tax rate was 39.0% for each of the three-month periods ended June 30, 2005 and 2004.

COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED

JUNE 30, 2005 AND 2004

General. Diluted earnings per share increased 6.5% to $0.66 for the six months ended June 30, 2005 from $0.62 for the six months ended June 30, 2004. Net income for the six months ended June 30, 2005 increased $0.5 million, or 4.8%, to $11.9 million from the $11.3 million reported for the six months ended June 30, 2004. The return on average assets for the six months ended June 30, 2005 was 1.12% compared to 1.15% for the six months ended June 30, 2004, while the return on average equity for the six months ended June 30, 2005 was 14.75% compared to 15.22% for the six months ended June 30, 2004.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

The first half of 2005 saw an increase in net income of $0.5 million to $11.9 million as compared to $11.3 million in the first half of 2004. This is primarily the result of the 2004 adjustment of compensation expense for certain of the Company's restricted stock awards and supplemental retirement benefits. This adjustment, which was related to prior periods, was a charge to earnings in the first quarter of 2004 of $1.1 million, $0.7 million on an after-tax basis or $0.04 per diluted share.

Interest Income. Total interest and dividend income increased $4.5 million, or 7.7%, to $63.2 million for the six months ended June 30, 2005 from $58.7 million for the six months ended June 30, 2004. The increase in interest income is primarily attributed to the growth in the average balance of interest-earning assets, which increased $144.3 million to $2,025.5 million. The yield on interest-earning assets was 6.24% for each of the six-month periods ended June 30, 2005 and 2004. This was due to an increase of $278.4 million in the average balance of the higher-yielding loan portfolio to $1,607.9 million for the six months ended June 30, 2005 from $1,329.5 million for the six months ended June 30, 2004, combined with a decline of $120.2 million in the average balance of the lower-yielding securities portfolio. The yield on the mortgage loan portfolio declined 42 basis points to 6.79% for the six months ended June 30, 2005 from 7.21% for the six months ended June 30, 2004. This decline reflects the effect of the high refinancing activity that had occurred during the previous three years. The Bank’s existing borrowers had been refinancing their higher costing mortgage loans at the current lower rates, which has resulted in a decrease in the yield on the mortgage portfolio. This decrease has been partially offset by prepayment penalties that have been collected. In an effort to increase the yield on interest-earning assets, we have shifted funds from the lower-yielding securities portfolio into the higher-yielding mortgage loan portfolio. There also was a decrease of $14.0 million in the average balance of interest earning-deposits and Federal funds sold for the six months ended June 30, 2005 compared to the six months ended June 30, 2004. We continued our focus on the origination of multi-family residential, commercial real estate, and one-to-four family mixed-use property mortgage loans, which allowed us to maintain a higher yield on our loan portfolio than we would have otherwise achieved.

Interest Expense. Interest expense increased $3.8 million, or 14.9%, to $29.2 million for the six months ended June 30, 2005 from $25.4 million for the six months ended June 30, 2004, primarily due to an increase of $125.7 million in the average balance of interest-bearing liabilities. This was combined with a 21 basis point rise in the cost of interest-bearing liabilities to 3.08% for the six months ended June 30, 2005 from 2.87% for the six months ended June 30, 2004. The average balance of certificates of deposit increased by $105.2 million, while borrowed funds average balance increased by $54.3 million. In addition, there was a decline in the combined average balances of lower-costing passbook, money market and NOW accounts totaling $40.9 million. The cost of due to depositors increased 18 basis points and borrowed funds increased 27 basis points in the six months ended June 30, 2005 compared to the six months ended June 30, 2004. The increase in the cost of funds is primarily attributed to the increase in the average balances of higher costing certificates of deposit and borrowed funds.

Net Interest Income. For the six months ended June 30, 2005, net interest income increased $0.8 million, or 2.3%, to $34.0 million from $33.3 million for the six months ended June 30, 2004. The increase in net interest income is attributed to the growth in the average balance of interest-earning assets which increased $144.3 million to $2.03 billion, while the net interest spread declined 21 basis points to 3.16% for the six months ended June 30, 2005, as compared to 3.37% in the same period in 2004. The net interest margin also decreased 18 basis points to 3.36% for the six months ended June 30, 2005 from 3.54% for the six months ended June 30, 2004. Excluding prepayment penalty income, the net interest margin would have been 3.17% and 3.32% for the six-month periods ended June 30, 2005 and 2004, respectively.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Provision for Loan Losses. There was no provision for loan losses for either of the six-month periods ended June 30, 2005 and 2004. In assessing the adequacy of the Company's allowance for loan losses, management considers the Company's historical loss experience, recent trends in losses, collection policies and collection experience, trends in the volume of non-performing loans, changes in the composition and volume of the gross loan portfolio, and local and national economic conditions. In recent years, the Bank has seen a significant improvement in its loss experience. By adherence to its strict underwriting standards, the Bank has been able to minimize net losses from impaired loans. For the six months ended June 30, 2005, the Bank had net recoveries of $2,000, and for the six months ended June 30, 2004, the Bank had net charge offs of $6,000. There has also been an improvement in local economic conditions and real estate values in recent years. As a result of these improvements, and despite the growth in the loan portfolio, primarily in multi-family residential, commercial, and one-to-four family mixed-use property mortgage loans, no provision for loan losses was deemed necessary for either of the six-month periods ended June 30, 2005 and 2004.

Non-Interest Income. Non-interest income increased by $0.3 million, or 9.2%, to $3.4 million for the six months ended June 30, 2005, as compared to $3.1 million for same period in 2004. This was primarily attributed to an increase of $0.2 million in dividends on FHLB-NY stock.

Non-Interest Expense. Non-interest expense was $18.0 million for the six months ended June 30, 2005, an increase of $0.2 million, or 0.9 %, from $17.8 million for the six months ended June 30, 2004. The increase from the prior year period is attributed to increases of: $0.3 million in occupancy and equipment and $0.1 million in depreciation primarily due to the relocation of the Bank’s headquarters in the third quarter of 2004 and non-recurring maintenance and repairs in the current period; $0.2 million in employee benefit expenses; $0.2 million for the cost of certain restricted stock unit awards granted in the current period as the participants have no risk of forfeiture; $0.1 million in board of director fees due to the increase in the size of the board of directors and the number of meetings; $0.1 million in professional fees related to the initial compliance with the Sarbanes-Oxley Act; and $0.1 million of non-recurring expenditures related to the retirement of the Company’s President. The increased cost of restricted stock units in the current period compared to the prior period is due to the increased level of the awards to non-employee directors.The 2005 Omnibus Incentive Plan, approved at the annual stockholders meeting, increased annual grants to each non-employee director to 3,600 restricted stock units, while eliminating grants of stock options for non-employee directors. Prior to the approval of the 2005 Omnibus Incentive Plan, each non-employee director received an annual grant of 1,687 restricted stock units and 14,850 stock options. This will provide an expense benefit in future years when we will be required to expense the fair value of stock option grants, as discussed in Note 5, Recent Accounting Pronouncements for FASB Statement No. 123, (revised 2004) “Share-Based Payments”. These increases were offset by decreases in salaries and employee benefits and other operating expenses of $0.9 million and $0.2 million, respectively, due to the 2004 adjustment to amortization of compensation expense for certain of the Company’s restricted stock awards and supplemental retirement benefits. Management continues to monitor expenditures resulting in efficiency ratios of 48.0 % and 48.9 % for six-month periods ended June 30, 2005 and 2004, respectively.

Income before Income Taxes. Income before the provision for income taxes increased $0.9 million, or 4.8%, to $19.4 million for the six months ended June 30, 2005 as compared to $18.6 million for the six months ended June 30, 2004, for the reasons discussed above.

Provision For Income Taxes. Income tax expense was $7.6 million for the six months ended June 30, 2005 an increase of $0.3 million, or 4.8%, compared to $7.2 million for the six months ended June 30, 2004. This increase is due to the $0.9 million increase in income before income taxes. The effective tax rate was 39.0% for each of the six- month periods ended June 30, 2005 and 2004.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

FINANCIAL CONDITION

Assets. Total assets at June 30, 2005 were $2.24 billion, a $180.9 million increase from December 31, 2004. Total loans, net increased $216.7 million during the six months ended June 30, 2005 to $1.73 billion from $1.52 billion at December 31, 2004. At June 30, 2005, loans in process totaled $222.5 million.

The following table shows loan originations and purchases for the period indicated.

		For the three months				For the six months
		ended June 30,				ended June 30,
(In thousands)		2005		2004		2005		2004
Multi-family residential	$	62,921	$	53,048	$	136,844	$	100,005
Commercial real estate		32,171		20,661		56,497		48,948
One-to-four family – mixed-use property		56,133		35,287		93,798		67,732
One-to-four family – residential		5,302		6,759		7,424		8,242
Construction		9,369		4,873		16,354		10,317
Co-operative apartments		-		122		-		227
Commercial business and other loans		8,810		5,290		12,716		8,022
Total	$	174,706	$	126,040	$	323,633	$	243,493

As the Company continues to increase its loan portfolio, management continues to adhere to the Bank's strict underwriting standards. As a result, the Company has been able to minimize charge-offs of losses from impaired loans and maintain asset quality. Non-performing assets were $1.6 million at June 30, 2005 compared to $0.9 million at December 31, 2004 and $4.3 million at June 30, 2004. Total non-performing assets as a percentage of total assets were 0.07% at June 30, 2005 compared to 0.04% at December 31, 2004 and 0.21% at June 30, 2004. The ratio of allowance for loan losses to total non-performing loans was 414% at June 30, 2005 compared to 717% at December 31, 2004 and 152% at June 30, 2004.

During the six months ended June 30, 2005, mortgage-backed securities decreased $44.3 million to $351.3 million, while other securities decreased $1.0 million to $39.1 million. As funds became available from principal reductions on the securities portfolio during the first six months of 2005, they have been reinvested in higher yielding loans. Other securities primarily consists of securities issued by government agencies and mutual or bond funds that invest in government and government agency securities.

Liabilities. Total liabilities increased $173.0 million to $2.07 billion at June 30, 2005 from $1.90 billion at December 31, 2004. During the six months ended June 30, 2005, due to depositors increased $28.5 million to $1,304.8 million, primarily as a result of increased marketing to attract deposits in this highly competitive market. Certificate of deposit accounts increased $22.5 million, while lower-costing deposits increased $5.9 million. Borrowed funds increased $138.0 million during the six months ended June 30, 2005 to partially fund the growth in the loan portfolio. Mortgagors’ escrow deposits increased $5.4 million during the six months ended June 30, 2005.

Equity. Total stockholders’ equity increased $8.0 million to $168.6 million at June 30, 2005, from $160.7 million at December 31, 2004. Net income of $11.9 million for the six months ended June 30, 2005 was partially offset by $2.4 million in treasury shares purchased through the Company’s stock repurchase program, a net after tax decrease of $0.8 million on the market value of securities available for sale, and $3.5 million of cash dividends paid. The exercise of stock options increased stockholders’ equity by $1.7 million, including the income tax benefit realized by the Company upon the exercise of the options. Book value per share was $8.75 at June 30, 2005 compared to $8.35 per share at December 31, 2004 and $7.80 per share at June 30, 2004.

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Under its current stock repurchase program, the Company repurchased 133,000 shares during the six months ended June 30, 2005, at a total cost of $2.4 million, or an average of $17.93 per share. At June 30, 2005, 786,350 shares remain to be repurchased under the current stock repurchase program. Through June 30, 2005, the Company had repurchased approximately 47% of the common shares issued in connection with the Company’s initial public offering at a cost of $111.6 million.

Cash flow. During the six months ended June 30, 2005, funds provided by the Company's operating activities amounted to $13.4 million. These funds, together with $166.7 million provided by financing activities, were utilized to fund net investing activities of $180.7 million. The Company's primary business objective is the origination and purchase of one-to-four family (primarily mixed-use properties), multi-family residential and commercial real estate mortgage loans. During the six months ended June 30, 2005, the net total of loan originations less loan repayments was $219.2 million. Net borrowings of $138.0 million and $28.5 million of customer deposits were used to fund this activity. Funds were also provided by $43.6 million in maturities and prepayments of securities available for sale. Additional funds of $1.1 million were provided through the exercise of stock options. The Company also used funds of $2.8 million for treasury stock repurchases and $3.5 million for dividend payments during the six months ended June 30, 2005.

INTEREST RATE RISK

The consolidated statements of financial position have been prepared in accordance with generally accepted accounting principles in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars without considering the changes in fair value of certain investments due to changes in interest rates. Generally, the fair value of financial investments such as loans and securities fluctuates inversely with changes in interest rates. As a result, increases in interest rates could result in decreases in the fair value of the Company's interest-earning assets which could adversely affect the Company's results of operation if such assets were sold, or, in the case of securities classified as available-for-sale, decreases in the Company's stockholders' equity, if such securities were retained.

The Company manages the mix of interest-earning assets and interest-bearing liabilities on a continuous basis to maximize return and adjust its exposure to interest rate risk. On a quarterly basis, management prepares the “Earnings and Economic Exposure to Changes in Interest Rate” report for review by the Board of Directors, as summarized below. This report quantifies the potential changes in net interest income and net portfolio value should interest rates go up or down (shocked) 300 basis points, assuming the yield curves of the rate shocks will be parallel to each other. Net portfolio value is defined as the market value of assets net of the market value of liabilities. The market value of assets and liabilities is determined using a discounted cash flow calculation. The net portfolio value ratio is the ratio of the net portfolio value to the market value of assets. All changes in income and value are measured as percentage changes from the projected net interest income and net portfolio value at the base interest rate scenario. The base interest rate scenario assumes interest rates at June 30, 2005. Various estimates regarding prepayment assumptions are made at each level of rate shock. Actual results could differ significantly from these estimates. The Company is within the guidelines set forth by the Board of Directors for each interest rate level.

	Projected Percentage Change In
	Net Interest		Net Portfolio		Net Portfolio
Change in Interest Rate	Income		Value		Value Ratio
-300 Basis points	5.50	%	12.26	%	10.13	%
-200 Basis points	4.45		7.74		9.91
-100 Basis points	4.07		4.80		9.82
Base interest rate	-		-		9.59
+100 Basis points	(7.27)		(9.79)		8.87
+200 Basis points	(9.52)		(18.28)		8.24
+300 Basis points	(11.33)		(26.09)		7.64

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

REGULATORY CAPITAL POSITION

Under Office of Thrift Supervision ("OTS") capital regulations, the Bank is required to comply with each of three separate capital adequacy standards. At June 30, 2005, the Bank exceeded each of the three OTS capital requirements and is categorized as "well-capitalized" by the OTS under the prompt corrective action regulations. Set forth below is a summary of the Bank's compliance with OTS capital standards as of June 30, 2005.

(Dollars in thousands)		Amount	Percent of Assets
Tangible Capital:
Capital level	$	174,406	7.84	%
Requirement		33,374	1.50
Excess		141,032	6.34
Leverage and Core Capital:
Capital level	$	174,406	7.84	%
Requirement		66,747	3.00
Excess		107,659	4.84
Risk-Based Capital:
Capital level	$	180,942	13.52	%
Requirement		107,028	8.00
Excess		73,914	5.52

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PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

AVERAGE BALANCES

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amount of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. The following table sets forth certain information relating to the Company's consolidated statements of financial condition and consolidated statements of operations for the three month periods ended June 30, 2005 and 2004, and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown. Average balances are derived from average daily balances. The yields include amortization of fees which are considered adjustments to yields.

		For the three months ended June 30,
		2005						2004
		Average			Yield/			Average			Yield/
		Balance		Interest	Cost			Balance		Interest	Cost
Assets		(Dollars in thousands)
Interest-earning assets:
Mortgage loans, net (1)	$	1,647,295	$	27,877	6.77	%	$	1,350,029	$	24,128	7.15	%
Other loans, net (1)		22,628		359	6.35			10,277		163	6.34
Total loans, net		1,669,923		28,236	6.76			1,360,306		24,291	7.14
Mortgage-backed securities		365,713		3,876	4.24			469,289		4,731	4.03
Other securities		39,346		365	3.71			67,186		516	3.07
Total securities		405,059		4,241	4.19			536,475		5,247	3.91
Interest-earning deposits and
federal funds sold		1,605		9	2.24			11,620		23	0.79
Total interest-earning assets		2,076,587		32,486	6.26			1,908,401		29,561	6.20
Other assets		101,707						92,890
Total assets	$	2,178,294					$	2,001,291
Liabilities and Equity
Interest-bearing liabilities:
Deposits:
Passbook accounts	$	223,348		343	0.61		$	220,319		274	0.50
NOW accounts		44,865		55	0.49			44,208		56	0.51
Money market accounts		247,808		1,423	2.30			292,069		1,286	1.76
Certificate of deposit accounts		716,701		6,254	3.49			615,018		5,311	3.45
Total due to depositors		1,232,722		8,075	2.62			1,171,614		6,927	2.36
Mortgagors' escrow accounts		31,324		13	0.17			23,435		12	0.20
Total deposits		1,264,046		8,088	2.56			1,195,049		6,939	2.32
Borrowed funds		678,495		7,236	4.27			594,212		5,761	3.88
Total interest-bearing liabilities		1,942,541		15,324	3.16			1,789,261		12,700	2.84
Non interest-bearing deposits		53,841						45,708
Other liabilities		19,820						16,659
Total liabilities		2,016,202						1,851,628
Equity		162,092						149,663
Total liabilities and equity	$	2,178,294					$	2,001,291
Net interest income /
net interest rate spread			$	17,162	3.10	%			$	16,861	3.36	%
Net interest-earning assets /
net interest margin	$	134,046			3.31	%	$	119,140			3.53	%
Ratio of interest-earning assets to
interest-bearing liabilities					1.07	X					1.07	X

(1) Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $1.0 million and $1.2 million for each of the three-month periods ended June 30, 2005 and 2004, respectively.

-17-

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

AVERAGE BALANCES (continued)

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amount of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. The following table sets forth certain information relating to the Company's consolidated statements of financial condition and consolidated statements of operations for the six month periods ended June 30, 2005 and 2004, and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown. Average balances are derived from average daily balances. The yields include amortization of fees which are considered adjustments to yields.

		For the six months ended June 30,
		2005						2004
		Average			Yield/			Average			Yield/
		Balance		Interest	Cost			Balance		Interest	Cost
Assets		(Dollars in thousands)
Interest-earning assets:
Mortgage loans, net (2)	$	1,587,005	$	53,854	6.79	%	$	1,319,429	$	47,533	7.21	%
Other loans, net (2)		20,875		647	6.20			10,026		313	6.24
Total loans, net		1,607,880		54,501	6.78			1,329,455		47,846	7.20
Mortgage-backed securities		376,484		7,968	4.23			473,175		9,703	4.10
Other securities		39,513		716	3.62			63,005		1,054	3.35
Total securities		415,997		8,684	4.18			536,180		10,757	4.01
Interest-earning deposits and
federal funds sold		1,573		17	2.16			15,531		63	0.81
Total interest-earning assets		2,025,450		63,202	6.24			1,881,166		58,666	6.24
Other assets		99,377						96,881
Total assets	$	2,124,827					$	1,978,047
Liabilities and Equity
Interest-bearing liabilities:
Deposits:
Passbook accounts	$	219,714		610	0.56		$	218,700		544	0.50
NOW accounts		45,510		112	0.49			43,088		108	0.50
Money market accounts		250,380		2,634	2.10			294,675		2,776	1.88
Certificate of deposit accounts		711,764		12,388	3.48			606,581		10,495	3.46
Total due to depositors		1,227,368		15,744	2.57			1,163,044		13,923	2.39
Mortgagors' escrow accounts		27,231		27	0.20			20,218		24	0.24
Total deposits		1,254,599		15,771	2.51			1,183,262		13,947	2.36
Borrowed funds		638,809		13,396	4.19			584,465		11,447	3.92
Total interest-bearing liabilities		1,893,408		29,167	3.08			1,767,727		25,394	2.87
Non interest-bearing deposits		51,103						43,155
Other liabilities		19,419						18,315
Total liabilities		1,963,930						1,829,197
Equity		160,897						148,850
Total liabilities and equity	$	2,124,827					$	1,978,047
Net interest income /
net interest rate spread			$	34,035	3.16	%			$	33,272	3.37	%
Net interest-earning assets /
net interest margin	$	132,042			3.36	%	$	113,439			3.54	%
Ratio of interest-earning assets to
interest-bearing liabilities					1.07	X					1.06	X

(2) Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $1.9 million and $2.2 million for each of the six-month periods ended June 30, 2005 and 2004, respectively.

-18-

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

LOANS

The following table sets forth the Company's loan originations (including the net effect of refinancing) and the changes in the Company's portfolio of loans, including purchases, sales and principal reductions for the periods indicated.

	For the six months ended June 30,
(In thousands)		2005		2004
Mortgage Loans
At beginning of period	$	1,500,104	$	1,264,219
Mortgage loan originated:
Multi-family residential		136,844		100,005
Commercial real estate		56,497		48,948
One-to-four family – mixed-use property		93,798		67,732
One-to-four family – residential		7,424		8,242
Co-operative apartments		-		227
Construction		16,354		10,317
Total mortgage loans originated		310,917		235,471
Less:
Principal and other reductions		100,752		109,107
Sales		2,688		5,424
Mortgage loan foreclosures		-		-
At end of period	$	1,707,581	$	1,385,159
Commercial Business and Other Loans
At beginning of period	$	18,138	$	9,825
Other loans originated:
Small Business Administration		5,459		2,021
Small business		6,587		4,800
Other		670		1,201
Total other loans originated		12,716		8,022
Less:
Principal and other reductions		3,743		3,713
Sales		1,837		941
At end of period	$	25,274	$	13,193

-19-

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

NON-PERFORMING ASSETS

The Company reviews loans in its portfolio on a monthly basis to determine whether any problem loans require classification in accordance with internal policies and applicable regulatory guidelines. The following table sets forth information regarding all non-accrual loans, loans which are 90 days or more delinquent, and real estate owned at the dates indicated.

(Dollars in thousands)				June 30, 2005			December 31, 2004
Non-accrual mortgage loans			$	1,232		$	659
Other non-accrual loans				345			252
		Total non-accrual loans		1,577			911
Mortgage loans 90 days or more delinquent
	and still accruing			-			-
Other loans 90 days or more delinquent
	and still accruing			-			-
		Total non-performing loans		1,577			911
Real estate owned (foreclosed real estate)				-			-
Investment securities				-			-
		Total non-performing assets	$	1,577		$	911
Non-performing loans to gross loans				0.09	%		0.06	%
Non-performing loans to total assets				0.07	%		0.04	%

-20-

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

ALLOWANCE FOR LOAN LOSSES

The Company has established and maintains on its books an allowance for loan losses that is designed to provide a reserve against estimated losses inherent in the Company's overall loan portfolio. The allowance is established through a provision for loan losses based on management's evaluation of the risk inherent in the various components of its loan portfolio and other factors, including historical loan loss experience, changes in the composition and volume of the portfolio, collection policies and experience, trends in the volume of non-accrual loans and regional and national economic conditions. The determination of the amount of the allowance for loan losses includes estimates that are susceptible to significant changes due to changes in appraisal values of collateral, national and regional economic conditions and other factors. In connection with the determination of the allowance, the market value of collateral ordinarily is evaluated by the Company's staff appraiser; however, the Company may from time to time obtain independent appraisals for significant properties. Current year charge-offs, charge-off trends, new loan production and current balance by particular loan categories are also taken into account in determining the appropriate amount of allowance. The Board of Directors reviews and approves the adequacy of the allowance for loan losses on a quarterly basis.

The following table sets forth the activity in the Bank's allowance for loan losses for the periods indicated.

		For the six months ended June 30,
(Dollars in thousands)		2005			2004
Balance at beginning of period	$	6,533		$	6,553
Provision for loan losses		-			-
Loans charged-off:
Multi-family residential		-			-
Commercial real estate		-			-
One-to-four family – mixed-use property		-			-
One-to-four family – residential		-			-
Co-operative apartments		-			-
Construction		-			-
Commercial business and other loans		(1)			(8)
Total loans charged-off		(1)			(8)
Recoveries:
Mortgage loans		3			2
Other loans		-			-
Total recoveries		3			2
Net recoveries (charge-offs)		2			(6)
Balance at end of period	$	6,535		$	6,547
Ratio of net charge-offs during the period to
average loans outstanding during the period		-	%		-	%
Ratio of allowance for loan losses to loans at end of period		0.38	%		0.47	%
Ratio of allowance for loan losses to non-performing
assets at end of period		414.33	%		152.14	%
Ratio of allowance for loan losses to non-performing
loans at end of period		414.33	%		152.14	%

-21-

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of the qualitative and quantitative disclosures about market risk, see the information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk."

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2005, the design and operation of these disclosure controls and procedures were effective. During the period covered by this Quarterly Report, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is a defendant in various lawsuits. Management of the Company, after consultation with outside legal counsel, believes that the resolution of these various matters will not result in any material adverse effect on the Company's consolidated financial condition, results of operations and cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table sets forth information regarding the shares of common stock repurchased by the Company during the quarter ended June 30, 2005.

					Maximum
				Total Number of	Number of
	Total			Shares Purchased	Shares That May
	Number			as Part of Publicly	Yet Be Purchased
	of Shares		Average Price	Announced Plans	Under the Plans
Period	Purchased		Paid per Share	or Programs	or Programs
April 1 to April 30, 2005	-		-	-	786,350
May 1 to May 31, 2005	-		-	-	786,350
June 1 to June 30, 2005	2,744	$	17.52	-	786,350
Total	2,744	$	17.52	-

The current common stock repurchase program was approved by the Company’s Board of Directors on August 17, 2004 and authorized the repurchase of 1,000,000 common shares. The repurchase program does not have an expiration date or a maximum dollar amount that may be paid to repurchase the common shares.

Amounts shown in the above column titled “Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs” do not reflect shares which may be repurchased from employees to satisfy tax withholding obligations under equity compensation plans. During the quarter ended June 30, 2005, the Company purchased 2,744 common shares from employees, at an average cost of $17.52, to satisfy tax obligations due from the employees upon vesting of restricted stock awards.

-22-

PART II – OTHER INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

At the Company’s annual meeting of stockholders held on May 17, 2005, as contemplated by the Company’s definitive proxy material for the meeting, certain matters were submitted to a vote of stockholders. The following table summarizes the results of voting with respect to each matter.

	Number of shares voted
	For	Against/ Withheld	Abstain
Election of Directors (four directors were elected to serve until the 2008 annual meeting of stockholders and until their successors were elected and qualified).
Michael J. Hegarty	16,926,006	969,425	-
John J. McCabe	16,194,023	1,701,408	-
Donna M. O'Brien	16,981,324	914,107	-
Michael J. Russo	16,900,137	995,294	-
Approval of the Company's 2005 Omnibus Incentive Plan	12,079,917	2,013,720	3,801,794
Ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company	17,685,517	177,236	32,678

ITEM 5. OTHER INFORMATION.

Not applicable.

-23-

PART II – OTHER INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 6. EXHIBITS.

a) EXHIBITS.

Exhibit No.		Description
	3.1	Certificate of Incorporation of Flushing Financial Corporation (1)
	3.2	Certificate of Amendment of Certificate of Incorporation of Flushing Financial Corporation (3)
	3.3	Certificate of Designations of Series A Junior Participating Preferred Stock of Flushing Financial Corporation (4)
	3.4	By-Laws of Flushing Financial Corporation (1)
	4.1	Rights Agreement, dated as of September 17, 1996, between Flushing Financial Corporation and State Street Bank and Trust Company, as Rights Agent (2)
	10.6	Amended and Restated Employment Agreement between Flushing Financial Corporation and John R. Buran, dated as of July 1, 2005 (5)
	10.7	Amended and Restated Employment Agreement between Flushing Savings Bank, FSB and John R. Buran, dated as of July 1, 2005 (5)
	10.8	Form of Outside Director Restricted Stock Unit Award Letter
	10.9	Form of Employee Restricted Stock Unit Award Letter
	10.10	Form of Employee Stock Option Award Letter
	10.28	2005 Omnibus Incentive Plan (6)
	31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer
	31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Executive Officer
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Financial Officer
(1) Incorporated by reference to Exhibits filed with the Registration Statement on Form S-1,
	Registration No. 33-96488.
(2) Incorporated by reference to Exhibits filed with Form 8-K filed September 30, 1996.
(3) Incorporated by reference to Exhibits filed with Form S-8 filed May 31, 2002.
(4) Incorporated by reference to Exhibits filed with Form 10-Q for the quarter ended
	September 30, 2002.
(5) Incorporated by reference to Exhibits filed with Form 8-K/A filed July 5, 2005.
(6) Incorporated by reference to Exhibit A to the Company's definitive proxy statement on
	Schedule 14A filed on March 31, 2005 for the Company's annual meeting of stockholders.

-24-

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SIGNATURES

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 thereunto duly authorized.

Flushing Financial Corporation,

Dated: August 4, 2005	By: /s/John R. Buran
	John R. Buran
	President and Chief Executive Officer

Dated: August 4, 2005	By: /s/David W. Fry
	David W. Fry
	Senior Vice President, Treasurer and
	Chief Financial Officer

-25-

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

EXHIBIT INDEX

Exhibit No.		Description
	3.1	Certificate of Incorporation of Flushing Financial Corporation (1)
	3.2	Certificate of Amendment of Certificate of Incorporation of Flushing Financial Corporation (3)
	3.3	Certificate of Designations of Series A Junior Participating Preferred Stock of Flushing Financial Corporation (4)
	3.4	By-Laws of Flushing Financial Corporation (1)
	4.1	Rights Agreement, dated as of September 17, 1996, between Flushing Financial Corporation and State Street Bank and Trust Company, as Rights Agent (2)
	10.6	Amended and Restated Employment Agreement between Flushing Financial Corporation and John R. Buran, dated as of July 1, 2005 (5)
	10.7	Amended and Restated Employment Agreement between Flushing Savings Bank, FSB and John R. Buran, dated as of July 1, 2005 (5)
	10.8	Form of Outside Director Restricted Stock Unit Award Letter
	10.9	Form of Employee Restricted Stock Unit Award Letter
	10.10	Form of Employee Stock Option Award Letter
	10.28	2005 Omnibus Incentive Plan (6)
	31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer
	31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Executive Officer
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Financial Officer
(1) Incorporated by reference to Exhibits filed with the Registration Statement on Form S-1,
	Registration No. 33-96488.
(2) Incorporated by reference to Exhibits filed with Form 8-K filed September 30, 1996.
(3) Incorporated by reference to Exhibits filed with Form S-8 filed May 31, 2002.
(4) Incorporated by reference to Exhibits filed with Form 10-Q for the quarter ended
	September 30, 2002.
(5) Incorporated by reference to Exhibits filed with Form 8-K/A filed July 5, 2005.
(6) Incorporated by reference to Exhibit A to the Company's definitive proxy statement on
	Schedule 14A filed on March 31, 2005 for the Company's annual meeting of stockholders.

-26-

EX-10

Exhibit 10.10 Form of Employee Stock Option Award Letter.

June 21, 2005

[Employee name & address]

Dear [Employee name]:

This award letter sets forth the terms and conditions of the stock option granted to you by Flushing Financial Corporation (the “Company”), in accordance with the provisions of its 2005 Omnibus Incentive Plan (the “Plan”). The Option is subject to the terms and conditions set forth in the Plan, any rules and regulations adopted by the Committee (as defined in the Plan), and this award letter.

1. Grant of Option; Option Price

You have been granted an option (the “Option”) to purchase ______shares of the Company’s Common Stock (“Common Stock”). The Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The price at which you may purchase the shares of Common Stock covered by the Option is $_____ per share, which is the fair market value of a share on the date of grant of your Option.

2. Term of Option

Your Option expires in all events on June 20, 2015. However, your Option may terminate prior to such expiration date as provided in paragraphs 6 and 7 of this award letter upon the occurrence of one of the events described in those paragraphs. Regardless of the provisions of paragraphs 6 and 7, in no event can your Option be exercised after the expiration date set forth in this paragraph 2.

3. Exercisability of Option

(a)	Unless it becomes exercisable on an earlier date as provided in paragraphs 6 and 7 below, no portion of your Option can be exercised before December 21, 2005.
(b)	Unless it becomes exercisable on an earlier date as provided in paragraphs 6 and 7 below, your Option will become exercisable in full on December 21, 2005, provided that you are an employee of the Company or one of its subsidiaries on such date.

2

(c) To the extent your Option has become exercisable, you may exercise the Option to purchase all or any part of such shares at any time on or before the date the Option expires or terminates.

4. Exercise of Option

You may exercise your Option by giving written notice to the Company of the number of shares of Common Stock desired to be purchased. The notice must be hand delivered or mailed to the Company at 1979 Marcus Avenue, Suite E140, Lake Success, New York 11042; Attention: Senior Vice President/Human Resources. The notice must be accompanied by either (i) payment in full of the option price, in cash or Common Stock, as provided in paragraphs 5(a) and 5(b) below, or any combination thereof, or (ii) the documents necessary to arrange for payment of the option price through the “cashless option exercise program,” as described in paragraph 5(c) below, if the Company has such a program in effect at the time of such exercise (and such program is available to executive officers and directors if you are an executive officer or director at the time of such exercise). A copy of the form of notice to be used in exercising your Option (the “Option Exercise Form”) is attached. Your Option will be deemed exercised on the date the Option Exercise Form (and required accompaniments) is hand delivered or, if mailed, postmarked.

5. Satisfaction of Option Price

(a)	Payment of Cash. Your Option may be exercised by payment of the option price in cash (including check, bank draft, money order, or wire transfer to the order of the Company).
(b)	Payment of Common Stock. You may satisfy the option price by tendering shares of Common Stock you have owned for at least six months. The shares of Common Stock so tendered shall be valued at the mean between the highest and lowest quoted selling price, regular way, of the Common Stock on the Nasdaq National Market (or the principal exchange upon which the Common Stock is listed) for the day before the date of exercise or, if no such sale of Common Stock occurs on such date, the mean between the highest and lowest quoted selling price on the nearest trading date before such date. Only shares issued solely in your name may be tendered to exercise your Option. Fractional shares may not be tendered in satisfaction of the option price; any portion of the option price which is in excess of the aggregate fair market value of the number of whole shares tendered must be paid in cash. Any certificate(s) evidencing shares tendered in payment of the option price must be duly endorsed or accompanied by appropriate stock powers. If a certificate tendered in exercise of the Option evidences more shares than are required for satisfaction of the portion of the option price being paid in Common Stock, the excess number of shares will be issued to you.
(c)	Cashless Exercise. If the Company has in effect a cashless option exercise program at the time of your exercise (and such program is available to executive officers and directors if you are an executive officer or director at the time of such

3

exercise) and you elect to exercise your Option under such program, you must comply with the procedures for satisfying the option price under such program as in effect at the time of such exercise. Please contact the Senior Vice President/Human Resources with inquiries about the cashless option exercise program.

6. Termination of Employment

(a)	General. The following special rules apply to your Option in the event of your death, disability, retirement, or other termination of employment.
	(i)	Termination of Employment for Cause. If the Company or a subsidiary terminates your employment for Cause, your Option will terminate on the date of such termination of employment. For purposes of this Agreement, “Cause” means (A) your willful failure to perform the duties of your employment, (B) your intentional engagement in dishonest conduct in connection with the performance of services or (C) your conviction of a felony.
	(ii)	Voluntary Termination of Employment. If you voluntarily terminate your employment with the Company or a subsidiary other than upon Retirement (as defined below), your Option will terminate 60 days after such termination of employment. Following the termination of your employment, no additional portions of your Option will become exercisable, and your Option will be exercisable only with respect to the number of shares which you were entitled to purchase on the date of the termination of your employment.
	(iii)	Termination Without Cause. If the Company or a subsidiary terminates your employment without Cause, your Option will terminate six months after such termination of employment. Following the termination of your employment, no additional portions of your Option will become exercisable, and your Option will be exercisable only with respect to the number of shares which you were entitled to purchase on the date of the termination of your employment.
	(iv)	Death or Disability. If your employment terminates by reason of death or Disability, your Option will become fully exercisable upon such termination of employment and will terminate two years following such termination. For these purposes, “Disability” means that you have been unable to perform the essential functions of your employment due to disability or incapacity for 270 consecutive days or such lesser period as may be determined by the Committee.
	(v)	Retirement. Upon your Retirement from the Company, your Option will become immediately exercisable in full. If you do not serve as a director

4

of the Company, your Option will terminate two years following your Retirement. If you serve as a director of the Company following your Retirement, your Option will terminate two years after the termination of your service as a director. For purposes of this provision, “Retirement” means termination of employment with the Company and its subsidiaries either (i) after your attainment of age 65 with 5 years of service, or (ii) when your termination is preceded by at least 5 continuous years of service and the sum of your age plus years of service equals or exceeds 75 years. For purposes of this definition, “years of service” refers to “vested service” with the Company or its subsidiaries as determined under the Retirement Plan of Flushing Savings Bank, FSB.

(b) Committee Determinations. The Committee shall have absolute discretion to determine the date and circumstances of termination of your employment, and its determination shall be final, conclusive and binding upon you.

7. Change in Control

Your Option will become immediately exercisable in full upon the occurrence of a Change in Control (as defined in the Plan), if you are an employee of the Company or its subsidiaries at the time of such Change in Control. Notwithstanding the provisions of paragraph 6, following a Change in Control your Option will terminate one year after any termination of your employment in the circumstances described in paragraph 6(a)(ii) or 6(a)(iii).

8. Income Tax Withholding

(a)

You must make arrangements satisfactory to the Company to satisfy any applicable federal, state, or local withholding tax liability arising with respect to your Option. If you exercise your Option by payment of cash or Common Stock, you must satisfy the withholding obligation by making a cash payment to the Company of the required amount. If you exercise your Option under the cashless option exercise program, if available, any required withholding taxes will be retained by the Company from the proceeds of the sale of your shares. If you fail to satisfy the withholding obligation in a time and manner satisfactory to the Company, the Company shall have the right to withhold the required amount from your salary or other amounts payable to you.

(b)

The amount of withholding tax retained by the Company or paid by you to the Company will be paid to the appropriate federal, state and local tax authorities in satisfaction of the withholding obligations under the tax laws. The total amount of income you recognize by reason of exercise of the Option will be reported on your Form W-2 in the year in which you recognize income with respect to the exercise. Whether you owe additional tax will depend on your overall taxable income for the applicable year and the total tax remitted for that year through withholding or by estimated payments.

5

9. Administration of the Plan

The Plan is administered by the Committee. The Committee has authority to interpret the Plan and this award letter, to adopt rules for administering the Plan, to decide all questions of fact arising under the Plan, and generally to make all other determinations necessary or advisable for administration of the Plan. All decisions and acts of the Committee with respect to the administration and interpretation of the Plan are final and binding on all affected Plan participants.

10. Non-transferability of Option

You may not sell, transfer, assign or pledge your Option or any rights under this award, with the exception that in the event of your death the Option may be exercised (at any time prior to its expiration or termination as provided in paragraphs 2 and 6) by the legal representative of your estate.

11. Amendment and Adjustments to your Award

The Plan authorizes the Committee to make amendments and adjustments to outstanding awards, including the Option granted by this letter, in specified circumstances. Details are provided in the Plan.

These circumstances include the Committee’s right, in its sole discretion, to amend the Plan and/or outstanding awards, including this Option, without your consent, to the extent the Committee determines that such amendment is necessary or appropriate to comply with Section 409A of the Code (the limitations on deferred compensation added by the American Jobs Creation Act of 2004).

12. Effect on Other Benefits

Income recognized by you as a result of exercise of the Option will not be included in the formula for calculating benefits under the Company’s other benefit plans.

13. Regulatory Compliance

Under the Plan, the Company is not required to deliver Common Stock upon exercise of your Option if such delivery would violate any applicable law or regulation or stock exchange requirement. If required by any federal or state securities law or regulation, the Company may impose restrictions on your ability to transfer shares received under the Plan.

*****

6

Please sign and return the enclosed copy of this letter to the Company’s Senior Vice President/Human Resources to acknowledge your acceptance of this award. This letter contains the formal terms and conditions of your award and accordingly should be retained in your files for future reference.

Very truly yours,

Anna M. Piacentini

Senior Vice President and

Corporate Secretary

ACCEPTED:

___________________________

OPTION EXERCISE FORM

____________________

Date

Flushing Financial Corporation

1979 Marcus Avenue, Suite E140

Lake Success, New York 11042

Attention: Senior Vice President/Human Resources

Ladies and Gentlemen:

I hereby exercise the following stock options granted to me under the Company’s 2005 Omnibus Incentive Plan as indicated below:

Date of Option Grant	No. of Shares	Option Price Per Share	Total Option Price
___________	___________	___________	_________

In satisfaction of the total option price, I hereby elect the following:

___	(1) I enclose cash or check for $__________ payable to Flushing Financial Corporation.
___	(2) I have transferred to the Company’s treasury account, or hereby enclose certificates representing, ___________ shares of Common Stock of Flushing Financial Corporation. I understand that the shares of Common Stock will be valued as described in my option award letter.
___	(3) I authorize payment of the total option price through the sale under the cashless option exercise program (if available to me at the time of exercise) of all the shares subject to my option. Enclosed are the documents required to be executed in respect of such program. I understand that I will receive only the proceeds from the sale of such shares (minus the amount of required tax withholding and the applicable commissions and fees under the cashless option exercise program), and will not receive any shares upon this option exercise.
___	(4) I authorize payment of the total option price through the sale under the cashless option exercise program (if available to me at the time of exercise) of only a sufficient number of shares subject to my option to pay the total option price, the amount of required tax withholding and the applicable commissions and fees under the cashless option exercise program. Enclosed are the documents

2

required to be executed in respect of such program. I understand that I will receive only the remaining shares subject to my option after the sale of the number of shares necessary to make the payments described in the first sentence of this paragraph.

I will, if requested, give the Company such undertakings and agree to the placing of such legends on the stock as may be required by the Company to assure compliance with any federal or state securities law, and pay to the Company the amount of federal, state and local taxes required to be withheld, as determined by the Company.

It is my intention that this letter and my payment of the option price shall constitute an agreement between Flushing Financial Corporation and me for the sale by the Company and the purchase by me of the number of shares stated at the price indicated, and that this agreement shall be binding upon us as of the date this letter is postmarked, or if delivery is by hand, on the date so delivered.

Very truly yours,

Signature

Print or type name

(name to be used for registration of shares)

I hereby request that you electronically transfer any shares issued to me in connection with my exercise of the above stock options to the following financial institution instead of delivering the shares to me.

Name of Institution

Person to Whose Attention Stock

Should be Sent

Street Address

City, State and Zip Code

EX-10

Exhibit 10.9 Form of Employee Restricted Stock Unit Award Letter.

June 21, 2005

[Employee name & address]

Dear [Employee name]:

This award letter sets forth the terms and conditions of the restricted stock units (“RSUs”) which have been granted to you by Flushing Financial Corporation (the “Company”), in accordance with the provisions of its 2005 Omnibus Incentive Plan (the “Plan”). Your award is subject to the terms and conditions set forth in the Plan, any rules and regulations adopted by the Committee (as defined in the Plan), and this award letter.

1. Grant of RSUs

You have been granted ______ RSUs. Each RSU represents the right to receive one share of the Company’s Common Stock (“Common Stock”) on the applicable settlement date for the RSU. You have also been awarded Dividend Equivalents on your RSUs, as described more fully below. You do not need to pay any purchase price to receive the RSUs granted to you by this award letter.

2. Vesting of RSUs

(a) General Vesting Schedule. Unless they vest on an earlier date as provided in sub-paragraph (b), (c) or (d) below, your RSUs will vest in installments as follows, provided that you are an employee of the Company or one of its subsidiaries on each such date:

		Vesting Date	Cumulative Percentage of RSUs Vested
		June 21, 2006	20%
		June 21, 2007	40%
		June 21, 2008	60%
		June 21, 2009	80%
		June 21, 2010	100%
(b)	Death or Disability. If your employment terminates by reason of death or Disability, all of your RSUs will immediately vest upon your termination of employment. For this purpose, “Disability” means that you have been unable to perform the essential functions of your employment due to disability or incapacity

2

for 270 consecutive days or such lesser period as may be determined by the Committee.

(c)	Retirement. If your employment terminates by reason of Retirement, all of your RSUs will immediately vest. For purposes of this provision, “Retirement” means termination of employment with the Company and its subsidiaries either (i) after your attainment of age 65 with 5 years of service, or (ii) when your termination is preceded by at least 5 continuous years of service and the sum of your age plus years of service equals or exceeds 75 years. For purposes of this definition, “years of service” refers to “vested service” with the Company or its subsidiaries as determined under the Retirement Plan of Flushing Savings Bank, FSB.
(d)	Change in Control. All of your RSUs will immediately vest upon the occurrence of a Change in Control (as defined in the Plan), if you are an employee of the Company or its subsidiaries at the time of such Change in Control.
(e)	Forfeiture upon other Termination of Employment. If your employment terminates for any reason other than death, Disability, or Retirement, any of your RSUs which have not vested prior to the termination of your employment will be forfeited.
(f)	Committee Determinations. The Committee shall have absolute discretion to determine the date and circumstances of termination of your employment, and its determination shall be final, conclusive and binding upon you.

3. Grant of Dividend Equivalents

(a)	Award of Dividend Equivalents. You have been awarded Dividend Equivalents with respect to each of your RSUs covered by this award letter.
(b)	Cash Dividends. The Dividend Equivalents that you have been awarded entitle you to receive, at each time cash dividends are paid on the Common Stock, a cash payment for each of your then outstanding RSUs (whether or not vested) equal to the amount of the dividend paid on a share of Common Stock. The Committee may change this provision regarding the payment of Dividend Equivalents to the extent that the Committee determines in its sole discretion that such change is necessary or appropriate to comply with Section 409A of the Internal Revenue Code (the limitations on deferred compensation added by the American Jobs Creation Act of 2004).
(c)	Stock Dividends. In the event the Company pays a dividend in Common Stock or other property, your Dividend Equivalents will entitle you to receive, for each of your then outstanding RSUs (whether or not vested), the amount of Common Stock or other property paid as a dividend on a share of Common Stock. Such Common Stock or other property will be paid to you at the time of settlement of the underlying RSU and will be subject to the same restrictions, risk of forfeiture, and vesting and delivery provisions as the underlying RSU with respect to which it was paid.

3

4. Settlement of RSUs; Delivery of Shares.

Your RSUs that vest under paragraph 2(a), 2(b) or 2(c) above will be settled on, or as soon as practicable after, their vesting dates, or such later date as may be required under Section 409A of the Internal Revenue Code. In particular, settlement in connection with Retirement may be delayed for six months after your Retirement if you are one of the 50 highest paid officers of the Company and its subsidiaries at such time. Your RSUs that vest under paragraph 2(d) above will be settled on (or as soon as practicable after) the Change in Control date if that is a permissible distribution event under Section 409A of the Internal Revenue Code, and otherwise will be settled on (or as soon as practicable after) the earlier to occur of the scheduled vesting date under paragraph 2(a) or the termination of your employment. On or as soon as practicable after the settlement date of an RSU, the Company will deliver to you one share of Common Stock for each of your RSUs being settled on such date. The Common Stock delivered upon the settlement of your RSUs will be fully transferable (subject to any applicable securities law restrictions) and not subject to forfeiture. The shares of Common Stock delivered upon the settlement of your RSUs will have full voting and dividend rights and will entitle the holder to all other rights of a stockholder of the Company.

5. Income Tax Withholding

(a)	You must make arrangements satisfactory to the Company to satisfy any applicable federal, state, or local withholding tax liability arising with respect to your RSUs. You can either make a cash payment to the Company of the required amount or you can elect to satisfy your withholding obligation by having the Company retain Common Stock having a value equal to the amount of your withholding obligation from the shares otherwise deliverable to you upon the vesting of such RSUs. If you fail to satisfy your withholding obligation in a time and manner satisfactory to the Company, the Company shall have the right to withhold the required amount from your salary or other amounts payable to you.
(b)	Any election to have shares withheld must be made on or before the vesting date of your RSUs. A copy of the withholding election form is attached along with instructions.
(c)	All cash payments of Dividend Equivalents will be net of any required withholding.
(d)	The amount of withholding tax retained by the Company or paid by you to the Company will be paid to the appropriate federal, state and local tax authorities in satisfaction of the withholding obligations under the tax laws. The total amount of income you recognize and tax withheld with respect to your RSUs and Dividend Equivalents will be reported on your Form W-2 in the year in which you recognize the income with respect to that portion of the award. Whether you owe additional tax will depend on your overall taxable income for the applicable year and the total tax remitted for that year through withholding or by estimated payments.

4

6. Other Provisions of RSUs

(a)	Voting. You will have no voting rights or other rights as a stockholder with respect to your RSUs.
(b)	Transfer Restrictions. You may not sell, transfer, assign or pledge your RSUs or any rights under this award. Any attempt to do so will be null and void.
(c)	Death. In the event of your death, any shares of Common Stock and other amounts you are entitled to receive under the Plan will instead be delivered to the legal representative of your estate.

7. Administration of the Plan

The Plan is administered by the Committee. The Committee has authority to interpret the Plan and this award letter, to adopt rules for administering the Plan, to decide all questions of fact arising under the Plan, and generally to make all other determinations necessary or advisable for administration of the Plan. All decisions and acts of the Committee with respect to the administration and interpretation of the Plan are final and binding on all affected Plan participants.

8. Amendments and Adjustments to your Award

The Plan authorizes the Committee to make amendments and adjustments to outstanding awards, including the RSUs and Dividend Equivalents granted by this letter, in specified circumstances. Details are provided in the Plan.

These circumstances include the Committee’s right, in its sole discretion, to amend the Plan and/or outstanding awards, including this grant of RSUs and Dividend Equivalents, without your consent, to the extent the Committee determines that such amendment is necessary or appropriate to comply with Section 409A of the Internal Revenue Code.

9. Effect on Other Benefits

Income recognized by you as a result of the grant or vesting of RSUs or the receipt of Dividend Equivalents will not be included in the formula for calculating benefits under the Company’s other benefit plans.

10. Regulatory Compliance

Under the Plan, the Company is not required to deliver Common Stock (including upon the vesting of RSUs) if such delivery would violate any applicable law or regulation or stock exchange requirement. If required by any federal or state securities law or regulation, the Company may impose restrictions on your ability to transfer shares received under the Plan.

*****

5

Please sign and return the enclosed copy of this letter to the Company’s Senior Vice President/Human Resources to acknowledge your acceptance of this award. This letter contains the formal terms and conditions of your award and accordingly should be retained in your files for future reference.

Very truly yours,

Anna M. Piacentini

Senior Vice President and

Corporate Secretary

ACCEPTED:

_______________________________

WITHHOLDING ELECTION

RESTRICTED STOCK UNITS

Instructions

1.	You can use this election form if you would like to have some of the Common Stock issuable upon the vesting of your RSUs retained by the Company when your RSUs vest and used to satisfy the applicable tax withholding obligations.
2.	If you would like to have some of the shares of Common Stock issuable upon the vesting of your RSUs used to satisfy tax withholding obligations with respect to such RSUs, you should file this Withholding Election on or before the date the applicable RSUs vest. If you do not file this election with the Company’s Senior Vice President/Human Resources on or before the date your RSUs vest, you must pay the Company the amount of the federal, state and local tax withholding obligation with respect to the applicable portion of your award by cash or check at the time you recognize income with respect to that portion of the award, or you must make other arrangements with the Company to satisfy this obligation.
3.	You may amend this election at any time by filing a subsequently dated Withholding Election form with the Company’s Senior Vice President/Human Resources. Copies of this form may be obtained from the Human Resources Department.
4.	Please call the Company’s Senior Vice President/Human Resources if you have questions about this Withholding Election form.

WITHHOLDING ELECTION

RESTRICTED STOCK UNITS Granted on June 21, 2005

I hereby elect to have Flushing Financial Corporation retain a number of shares of Common Stock issuable upon the vesting of each tranche of restricted stock units granted to me on June 21, 2005 equal to the number of shares necessary to satisfy the federal, state and local tax withholding obligations with respect to the vesting of such tranche of my restricted stock units.

Signature

Name (Print or Type)

Date

EX-10

Exhibit 10.8 Form of Outside Director Restricted Stock Unit Award Letter.

June 1, 2005

[Director name & address]

Dear [Director]:

This award letter sets forth the terms and conditions of the restricted stock units (“RSUs”) which have been granted to you by Flushing Financial Corporation (the “Company”), in accordance with the provisions of its 2005 Omnibus Incentive Plan (the “Plan”). You have been granted 3600 RSUs. Each RSU represents the right to receive one share of the Company’s Common Stock (“Common Stock”) on the applicable settlement date for the RSU. You have also been awarded Dividend Equivalents on your RSUs, as described more fully below. Your award is subject to the terms and conditions set forth in the Plan, any rules and regulations adopted by the Committee (as defined in the Plan), and this award letter.

1. Grant of RSUs

You do not need to pay any purchase price to receive the RSUs granted to you by this award letter.

2. Vesting of RSUs

(a) General Vesting Schedule. Unless they vest on an earlier date as provided in sub-paragraph (b), (c), or (d) below, your RSUs will vest in installments as follows, provided that you are a director of the Company on each such date:

	Vesting Date	Number RSUs To Vest	Cumulative Number of RSUs Vested
	June 1, 2006	1200	1200
	June 1, 2007	1200	2400
	June 1, 2008	1200	3600
(b)	Death or Disability. If your service as a director terminates by reason of death or Disability, all of your RSUs will immediately vest upon your termination of service. For this purpose, “Disability” means that you are unable to perform your duties as a director due to disability or incapacity, as determined by the Committee.

Page 2

(c)	Retirement. Upon your Retirement from the Board of Directors, all of your RSUs will immediately vest. For purposes of this provision, “Retirement” means termination of your service as a director at a time when you have at least five years of service as a non-employee director and the sum of your age plus years of service as a non-employee director equals or exceeds 55.
(d)	Change in Control. All of your RSUs will immediately vest upon the occurrence of a Change in Control (as defined in the Plan), if you are a director of the Company at the time of such Change in Control.
(e)	Forfeiture upon other Termination of Service. If you cease to be a director of the Company for any reason other than death, Disability, or Retirement, any of your RSUs which have not vested prior to the termination of your service as a director will be forfeited.

3. Grant of Dividend Equivalents

(a)	Award of Dividend Equivalents. You have been awarded Dividend Equivalents with respect to each of your RSUs covered by this award letter.
(b)	Cash Dividends. The Dividend Equivalents that you have been awarded entitle you to receive, at each time cash dividends are paid on the Common Stock, a cash payment for each of your then outstanding RSUs (whether or not vested) equal to the amount of the dividend paid on a share of Common Stock.
(c)	Stock Dividends. In the event the Company pays a dividend in Common Stock or other property, your Dividend Equivalents will entitle you to receive, for each of your then outstanding RSUs (whether or not vested), the amount of Common Stock or other property paid as a dividend on a share of Common Stock. Such Common Stock or other property will be paid to you at the time of settlement of the underlying RSU and will be subject to the same restrictions, risk of forfeiture, and vesting and delivery provisions as the underlying RSU with respect to which it was paid.

4. Other Provisions of RSUs

(a)	Voting. You will have no voting rights or other rights as a stockholder with respect to your RSUs.
(b)	Transfer Restrictions. You may not sell, transfer, assign or pledge your RSUs or any rights under this award. Any attempt to do so will be null and void.
(c)	Settlement of RSUs; Delivery of Shares. Your RSUs that vest under Paragraph 2(a), 2(b) or 2(c) above will be settled on, or as soon as practicable after, their vesting dates. Your RSUs that vest under Paragraph 2(d) above will be settled on (or as soon as practicable after) the Change in Control date if that is a permissible distribution event under Section 409A of the Internal Revenue Code, and otherwise will be settled on (or as soon as practicable after) the earlier to occur of

Page 3

the scheduled vesting date under Paragraph 2(a) or the termination of your service as a director of the Company. On or as soon as practicable after the settlement date of an RSU, the Company will deliver to you one share of Common Stock for each of your RSUs being settled on such date. The Common Stock delivered upon the settlement of your RSUs will be fully transferable (subject to any applicable securities law restrictions) and not subject to forfeiture. The shares of Common Stock delivered upon the settlement of your RSUs will have full voting and dividend rights and will entitle the holder to all other rights of a stockholder of the Company.

(d) Death. In the event of your death, any shares of Common Stock and other amounts you are entitled to receive under the Plan will instead be delivered to the legal representative of your estate.

5. Administration of the Plan

The Plan is administered by the Committee. The Committee has authority to interpret the Plan and this award letter, to adopt rules for administering the Plan, to decide all questions of fact arising under the Plan, and generally to make all other determinations necessary or advisable for administration of the Plan. All decisions and acts of the Committee with respect to the administration and interpretation of the Plan are final and binding on all affected Plan participants.

6. Amendments and Adjustments to your Award

The Plan authorizes the Committee to make amendments and adjustments to outstanding awards, including the RSUs and Dividend Equivalents granted by this letter, in specified circumstances. Details are provided in the Plan.

These circumstances include the Committee’s right, in its sole discretion, to amend the Plan and/or outstanding awards, including this grant of RSUs and Dividend Equivalents, without your consent, to the extent the Committee determines that such amendment is necessary or appropriate to comply with Section 409A of the Internal Revenue Code (the limitations on deferred compensation added by the American Jobs Creation Act of 2004).

*****

Page 4

Please sign and return the enclosed copy of this letter to the Company’s Senior Vice President/Human Resources to acknowledge your acceptance of this award. This letter contains the formal terms and conditions of your award and accordingly should be retained in your files for future reference.

Very truly yours,

Michael J. Hegarty

President and Chief Executive Officer

ACCEPTED:

_______________________________

EX-32

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Flushing Financial Corporation (the “Corporation”) on Form 10-Q for the period ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David W. Fry, Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

By: /s/David W. Fry

David W. Fry

Chief Financial Officer

August 4, 2005

EX-32

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Flushing Financial Corporation (the “Corporation”) on Form 10-Q for the period ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John R. Buran, Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

By: /s/John R. Buran

John R. Buran

Chief Executive Officer

August 4, 2005

EX-31

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Buran, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flushing Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2005	By: /s/John R. Buran
		John R. Buran
		President and Chief Executive Officer

EX-31

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David W. Fry, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flushing Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2005	By: /s/David W. Fry
		David W. Fry
		Senior Vice President, Treasurer and
		Chief Financial Officer