8-K

UNITED STATES
SECURITIES and EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of report (Date of earliest event reported)               January 30, 2007
FLUSHING FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
000-24272
(Commission File Number)
DELAWARE
(State or other jurisdiction of incorporation)
11-3209278
(I.R.S. Employer Identification Number)
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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

( )       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

( )       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

( )       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
            (17 CFR 240.14d-2(b))

( )       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
            (17 CFR 240.13e-4(c))

Item 2.02    Results of Operations and Financial Condition.

      Flushing Financial Corporation (Nasdaq: FFIC), the parent holding company for Flushing Savings Bank, FSB, announced its financial results for the three months and year ended December 31, 2006. Attached as Exhibit 99.1 is the Company's press release dated January 30, 2007.

Item 9.01(c).    Exhibits

99.1.     Press release of Flushing Financial Corporation, dated January 30, 2007.

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		FLUSHING FINANCIAL CORPORATION
Date:   January 31, 2007	By:	/s/ David W. Fry
		David W. Fry
	Title:	Senior Vice President, Treasurer
		and Chief Financial Officer

INDEX TO EXHIBITS

Exhibit
99.1	Press release of Flushing Financial Corporation,
	dated January 30, 2007

EX-99

CONTACT:

David W. Fry Van Negris & Company, Inc. (212) 759-0290

Senior Vice President, Treasurer Van Negris / Lexi Terrero

and Chief Financial Officer

Flushing Financial Corporation Broadgate Consulting (212) 493-6981

(718) 961-5400 Robert Cavosi

FOR IMMEDIATE RELEASE

FLUSHING FINANCIAL CORPORATION REPORTS

2006 FOURTH QUARTER AND FULL YEAR RESULTS

LAKE SUCCESS, NY – January 30, 2007 - Flushing Financial Corporation (the “Company”) (NASDAQ: FFIC), the parent holding company for Flushing Savings Bank, FSB (the “Bank”), today announced its financial results for the three months and year ended December 31, 2006.

Net income for the fourth quarter ended December 31, 2006 was $5.0 million, a decrease of $0.7 million, or 12.2%, from the $5.7 million earned in the fourth quarter ended December 31, 2005. Diluted earnings per share for the fourth quarter was $0.25, a decrease of $0.07, or 21.9%, from the $0.32 earned in the comparable quarter a year ago.

Net income for the year ended December 31, 2006 was $21.6 million, a decrease of $1.9 million, or 8.1%, from the $23.5 million earned in the prior year. Diluted earnings per share for the year ended December 31, 2006 was $1.14, a decrease of $0.17, or 13.0% from the $1.31 earned in the prior year.

John R. Buran, President and Chief Executive Officer, stated: “The challenging interest rate environment we experienced for the past two years continued during the fourth quarter of 2006. The yield curve remained inverted during the fourth quarter, as short term rates remained above the level of longer term rates. As a result, competition for deposits in our market was once again extremely strong, resulting in our having to pay higher rates to obtain deposits.

“During 2006 we initiated several changes in our operating environment that will better prepare us for the evolution of our business environment and increase the long term value of our company.  These included the integration of the branches of  Atlantic Liberty Savings, F.A., the opening of one new branch and the construction of two additional branches, the hiring of a team of commercial bankers and the introduction of a separately branded internet bank—iGObanking.com.

“iGObanking.com went live on November 27, 2006. It is our expectation that our new internet banking division will help to lessen our long-standing dependency on wholesale borrowings, while giving us an excellent platform to establish a solid competitive presence in this new and important market. We are encouraged by the results to date, but note that the start-up phase in the fourth quarter for iGObanking.com necessitated additional costs for staffing and bringing it online.

“We are also excited about the opening on January 16, 2007 of our newest branch on Continental Avenue in Forest Hills, Queens, which will give us a strategic location in one of the more affluent areas of the Queens marketplace. We also will open another new branch in February 2007, on Roosevelt Avenue, Queens, which is the focal point of our expanded initiative to capture more of the Asian market in Flushing. Both branch openings required some early expenses in both the third and fourth quarters, as we finalized the building of the branches and began the hiring process.

“In addition to the expansion of branches and internet banking, expenses grew during the quarter due to several planned initiatives as part of our continuing evolution to a more ‘commercial-like’ institution. The hiring of experienced commercial lenders and operational staff, begun in the third quarter, has already shown palpable results as our commercial loan pipeline is $39 million in the fourth quarter and business banking deposits have also started to come in.

“As we look to control expenses, we froze the defined benefit employee pension plan as of September 30, 2006, replacing it with a defined contribution pension plan. This change in the pension plan is anticipated to reduce annual operating expenses by $0.4 million beginning in 2007.

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Flushing Financial Corporation

January 30, 2007

Page Two

“While we continue to deal with increasing funding costs, the company did achieve some high-water marks during the quarter:

• Loan originations exceeded the prior year’s comparable quarter by $67.7 million, increasing to $180.7 million.

• Our loan pipeline is the highest ever at $291.9 million.

• Yields on newly originated mortgage loans were once again at levels not achieved since the quarter ended December 31, 2002.

• The loan portfolio yield of 6.87% for the fourth quarter is the highest since the quarter ended December 31, 2004.

“Assets grew 20.5% to $2,836.5 million during the year, and we plan continued growth through our strategy of appealing to the multi-ethnic marketplace of businesses and consumers that characterize our markets. As part of this strategy, we have established an Asian Advisory Board, which consists of many prominent leaders from the community, to broaden the Bank’s link to the community, provide guidance on a number of future events, and foster awareness of the Bank’s active role in the Asian community. We continue to be alert to opportunities to repurchase shares, and bought back 374,600 shares during the year, at an average price of $16.68. Our capital position remains strong and affords us the opportunity to continue to grow and repurchase more common shares as opportunities dictate.

“As we approached 2006 we made some very conscious investment decisions that would move us toward our goal of improving long term shareholder value.  These investments brought on additional expense and have not as yet contributed to the bottom line. However, there are already signs of future success:

• Our branch on Bell Boulevard is ahead of target.

• Our commercial lending effort resulted in $17 million in closed loans, a pipeline of $39 million, and a solid beginning toward building a more ‘commercial-like’ bank.

• Our launch of iGObanking.com has already enhanced our deposit gathering process.

While working these initiatives we have not neglected our strong real-estate businesses and our focus on the multicultural markets in our footprint.  We have enjoyed sustained growth in our real estate portfolios and continued strength in ethnic markets.”

Earnings Summary - Three Months Ended December 31, 2006

Net interest income for the three months ended December 31, 2006 was $16.9 million, a decrease of $0.1 million, or 0.8% from $17.0 million for the three months ended December 31, 2005. An increase in the average balance of interest-earning assets of $405.8 million, to $2,619.2 million, was offset by a decrease in the net interest spread of 53 basis points to 2.33% for the quarter ended December 31, 2006 from 2.86% for the comparable period in 2005. The yield on interest-earning assets increased 24 basis points to 6.59% for the three months ended December 31, 2006 from 6.35% in the three months ended December 31, 2005. However, this was more than offset by an increase in the cost of funds of 77 basis points to 4.26% for the three months ended December 31, 2006 from 3.49% for the comparable prior year period.

The increase in the yield of interest-earning assets is primarily due to an increase of $425.0 million in the average balance of the higher-yielding loan portfolio to $2,273.6 million, combined with a $16.3 million decrease in the average balance of the lower-yielding securities portfolios. The yield on the mortgage loan portfolio increased 10 basis points to 6.85% for the three months ended December 31, 2006 from 6.75% for the three months ended December 31, 2005. This increase is due to the average rate on new mortgage loans originated during the year ended December 31, 2006 being above the average rate on both the loan portfolio and loans that were paid-in-full during the period. The average note rate on mortgage loans originated in the current quarter was 7.45%. In an effort to increase the yield on interest-earning assets, we continued to fund a portion of the growth in the higher-yielding mortgage loan portfolio through repayments received from the lower-yielding securities portfolio. The yield on the mortgage loan portfolio, excluding prepayment penalty income, increased 3 basis points for the three months ended December 31, 2006 compared to the three months ended September 30, 2006.

The increase in the cost of interest-bearing liabilities is primarily attributed to the Federal Reserve having raised the overnight interest rate at seventeen consecutive meetings through June 30, 2006. Although the overnight rate remained at 5.25% for both the third and fourth quarters of 2006, the prior increases have resulted in an increase in our cost of funds. Certificate of deposits, savings accounts and money market accounts increased 96 basis points, 24 basis points and 165 basis points, respectively, for the three months ended December 31, 2006 compared to the three months ended December 31, 2005, resulting in an increase in the cost of due to depositors of 103 basis points for the three months ended December 31, 2006 compared to the three months ended December 31, 2005. In addition, the cost of borrowed funds increased 37 basis points to 4.89% for the three months ended December 31, 2006 compared to 4.52% for the three months ended December 31, 2005.

The net interest margin decreased 50 basis points to 2.58% for the three months ended December 31, 2006 from 3.08% for the three months ended December 31, 2005. Excluding prepayment penalty income, the net interest margin would have been 2.46% and 2.89% for the three month periods ended December 31, 2006 and 2005, respectively.

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Flushing Financial Corporation

January 30, 2007

Page Three

Non-interest income increased $1.4 million, or 121.4%, for the three months ended December 31, 2006 to $2.6 million, as compared to $1.2 million for the quarter ended December 31, 2005. This was attributed to increases of: $0.3 million from loan fees, $0.1 million in dividends received on Federal Home Loan Bank of New York (“FHLB-NY”) stock, $0.2 million in BOLI dividends and $0.6 million due to last year’s loss on the sale of securities due to a restructuring of the portfolio.

Non-interest expense was $11.7 million for the three months ended December 31, 2006, an increase of $2.9 million, or 32.5%, from $8.9 million for the three months ended December 31, 2005. The increase from the comparable prior year period is primarily attributed to increases of: $1.5 million in employee salary and benefit expenses related to additional employees for new branches, the business banking initiative and the internet banking division, and the expensing of stock options, $0.4 million in occupancy and equipment costs primarily related to rental expense due to new branch leases (including the new branches scheduled to open in the first quarter of 2007) and $1.0 million in other operating expenses primarily related to the amortization of core deposit intangible and non-compete contracts, and expenditures attributable to the growth of the Bank. The efficiency ratio was 60.2% and 47.0% for three-month periods ended December 31, 2006 and 2005, respectively. The increase in the efficiency ratio in the 2006 period was primarily related to the investments in: the new branches, the startup of iGObanking.com, and the business banking initiative. While we expect each of these to contribute to future revenues, they did not produce revenues sufficient to maintain last year’s efficiency ratio.

Net income for the three months ended December 31, 2006 was $5.0 million, a decrease of $0.7 million or 12.2%, as compared to $5.7 million for the three months ended December 31, 2005. Diluted earnings per share were $0.25 for the three month period ended December 31, 2006 and $0.32 for the comparable 2005 period.

Return on average equity was 9.4% for the three months ended December 31, 2006 compared to 13.4% for the three months ended December 31, 2005. Return on average assets was 0.7% for the three months ended December 31, 2006 compared to 1.0% for the three months ended December 31, 2005.

Earnings Summary - Year Ended December 31, 2006

Net interest income for the year ended December 31, 2006 was $67.7 million, a decrease of $0.5 million, or 0.7% from $68.2 million for the year ended December 31, 2005. An increase in the average balance of interest-earning assets of $330.9 million to $2,437.8 million was offset by a decrease in the net interest spread of 49 basis points to 2.54% for the year ended December 31, 2006 from 3.03% for the year ended December 31, 2005. The yield on interest-earning assets increased 21 basis points to 6.50% for the year ended December 31, 2006 from 6.29% in the year ended December 31, 2005. However, this was more than offset by an increase in the cost of funds of 70 basis points to 3.96% for the year ended December 31, 2006 from 3.26% for the prior year.

The increase in the yield of interest-earning assets is primarily due to an increase of $371.8 million in the average balance of the higher-yielding loan portfolio to $2,082.6 million, combined with a $51.9 million decrease in the average balance of the lower-yielding securities portfolios. The yield on the mortgage loan portfolio increased four basis points to 6.81% for the year ended December 31, 2006 from 6.77% for the year ended December 31, 2005. The yield on the mortgage loan portfolio, excluding prepayment penalty income, increased 10 basis points for the year ended December 31, 2006 compared to the year ended December 31, 2005. This increase is due to the average rate of 7.37% on new mortgage loans originated during the year ended December 31, 2006 being above the average rate on both the loan portfolio and loans that were paid-in-full during the year. In an effort to increase the yield on interest-earning assets, we continued to fund a portion of the growth in the higher-yielding mortgage loan portfolio through repayments received on the lower-yielding securities portfolio.

The increase in the cost of interest-bearing liabilities is primarily attributed to the Federal Reserve having raised the overnight interest rate at seventeen consecutive meetings through June 30, 2006. Although the overnight rate remained at 5.25% for both the third and fourth quarters of 2006, the prior increases have resulted in an increase in our cost of funds. The cost of certificate of deposits, savings accounts and money market accounts increased 77 basis points, 60 basis points and 147 basis points, respectively, for the year ended December 31, 2006 compared to the year ended December 31, 2005, resulting in an increase in the cost of due to depositors of 93 basis points for the year ended December 31, 2006 compared to the year ended December 31, 2005. The cost of borrowed funds also increased 40 basis points to 4.73% for the year ended December 31, 2006 as compared to the year ended December 31, 2005.

The net interest margin decreased 46 basis points to 2.78% for the year ended December 31, 2006 from 3.24% for the year ended December 31, 2005. Excluding prepayment penalty income, the net interest margin would have been 2.63% and 3.04% for the years ended December 31, 2006 and 2005, respectively.

Non-interest income increased $3.1 million, or 47.4%, for the year ended December 31, 2006 to $9.8 million, as compared to $6.6 million for the year ended December 31, 2005. This was attributed to increases of: $0.8 million in loan fees, $0.5 million in dividends received on Federal Home Loan Bank of New York (“FHLB-NY”) stock, $0.4 million in BOLI dividends, $0.4 million in other income and $0.7 million increase due to last year’s loss on sale of securities due to a restructuring of the portfolio.

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Flushing Financial Corporation

January 30, 2007

Page Four

Non-interest expense was $42.7 million for the year ended December 31, 2006, an increase of $6.5 million, or 17.9%, from $36.3 million for the year ended December 31, 2005. The increase from the prior year is primarily attributed to increases of: $3.3 million in employee salary and benefit expenses related to additional employees for new branches, the business banking initiative, and the internet banking division, and the expensing of stock options, $1.4 million in occupancy and equipment costs primarily related to rental expense due to new branch leases (including the new branches scheduled to open in the first quarter of 2007) and $1.8 million in other operating expense primarily related to the amortization of core deposit intangible and non-compete contracts, and expenditures attributable to the growth of the Bank. The efficiency ratio was 55.2% and 48.0% for years ended December 31, 2006 and 2005, respectively. The increase in the efficiency ratio for 2006 was primarily related to the investments in: the new branches, the startup of iGObanking.com, and the business banking initiative. While we expect each of these to contribute to future revenues, they did not produce revenues sufficient to maintain last year’s efficiency ratio.

Net income for the year ended December 31, 2006 was $21.6 million, a decrease of $1.9 million, or 8.1%, as compared to $23.5 million for the year ended December 31, 2005. Diluted earnings per share were $1.14 for the year ended December 31, 2006 and $1.31 for the year ended December 31, 2005.

Return on average equity was 11.1% for the year ended December 31, 2006 compared to 14.3% for the year ended December 31, 2005. Return on average assets was 0.8% for the year ended December 31, 2006 compared to 1.1% for the year ended December 31, 2005.

Balance Sheet Summary

At December 31, 2006, total assets were $2,836.5 million, an increase of $483.3 million, or 20.5%, from $2,353.2 million at December 31, 2005, with $170.9 million of the increase attributed to the Atlantic Liberty acquisition. Total loans, net increased $442.9 million, or 23.5%, during the year ended December 31, 2006 to $2,324.7 million from $1,881.9 million at December 31, 2005, with the acquisition of Atlantic Liberty adding $116.2 million. At December 31, 2006, loans in process totaled $291.9 million, compared to $179.4 million at December 31, 2005.

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

		For the three months				For the year
		ended December 31,				ended December 31,
(In thousands)		2006		2005		2006		2005
Multi-family residential	$	63,925	$	37,047	$	166,744	$	223,074
Commercial real estate		40,522		22,347		153,891		103,090
One-to-four family – mixed-use property		39,845		36,333		154,456		186,700
One-to-four family – residential		5,045		2,453		13,911		13,186
Construction		15,386		11,063		75,087		46,414
Commercial business and other loans		15,973		5,736		71,494		26,196
Total	$	180,696	$	114,979	$	635,583	$	598,660

The above table includes loan purchased, with no loans purchased during the three months ended December 31, 2006 and $5.1 million during the year ended December 31, 2006. There was a loan purchased for $1.0 million during the three months and year ended December 31, 2005.

As the Bank continues to increase its loan portfolio, management continues to adhere to the Bank’s strict underwriting standards. As a result, the Bank has been able to minimize charge-offs of losses from impaired loans and maintain asset quality. Non-performing assets were $3.1 million at December 31, 2006 compared to $2.5 million at December 31, 2005. Total non-performing assets as a percentage of total assets was 0.11% at December 31, 2006 as compared to 0.10% at December 31, 2005 and 0.04% at December 31, 2004. The ratio of allowance for loan losses to total non-performing loans was 226% at December 31, 2006, compared to 260% at December 31, 2005.

During the year ended December 31, 2006, mortgage-backed securities decreased $12.3 million to $288.9 million. This was the result of principal repayments, the sale of mortgage-backed securities of $30.8 million acquired in the Atlantic Liberty acquisition, and the purchase of new investments that better matched our investment objectives. Other securities increased $5.2 million to $41.7 million due to the purchase of a Treasury Bill, with the portfolio consisting of securities issued by government agencies and mutual or bond funds that invest in government and government agency securities.

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Flushing Financial Corporation

January 30, 2007

Page Five

During 2006, the Bank purchased an additional $10.0 million of Bank Owned Life Insurance (“BOLI”). The Bank also acquired $2.4 million of BOLI through the merger. The Bank utilizes BOLI to fund a substantial portion of its employee benefit costs. The tax advantages of BOLI allow a return that is comparable to, or better than, other investments.

Total liabilities were $2,618.1 million at December 31, 2006, an increase of $441.4 million, or 20.3%, from December 31, 2005, with $144.4 million of the increase attributed to the Atlantic Liberty acquisition. During the year ended December 31, 2006, due to depositors increased $296.5 million to $1,744.4 million, with $105.3 million attributed to Atlantic Liberty. The deposit growth is primarily a result of an increase of $204.8 million in certificates of deposit, of which $113.6 million are brokered deposits, while core deposits increased $91.7 million. Borrowed funds increased $142.7 million. In addition, mortgagors’ escrow deposits increased $0.3 million during the year ended December 31, 2006.

Total stockholders’ equity increased $41.9 million, or 23.8%, to $218.4 million at December 31, 2006 from $176.5 million at December 31, 2005. This is primarily due to $26.6 million for the issuance of stock for the acquisition of Atlantic Liberty, net income of $21.6 million for the year ended December 31, 2006 and a $1.4 million cumulative adjustment related to the adoption of SFAS No. 123R, Share-Based Compensation, which were partially offset by $6.2 million in treasury shares purchased through the Company’s stock repurchase program, a $1.2 million adjustment as required by SFAS No.158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans and $8.2 million of cash dividends declared and paid during the year ended December 31, 2006. The exercise of stock options increased stockholders’ equity by $4.4 million, including the income tax benefit realized by the Company upon the exercise of the options. Book value per share was $10.34 at December 31, 2006, compared to $9.07 per share at December 31, 2005 and $8.35 per share at December 31, 2004.

Under its current stock repurchase program, the Company repurchased 374,600 shares during the year ended December 31, 2006, at a total cost of $6.2 million, or an average of $16.68 per share. At December 31, 2006, 400,050 shares remain to be repurchased under the current stock repurchase program. Through December 31, 2006, the Company had repurchased approximately 48.2% of the common shares issued in connection with the Company’s initial public offering at a cost of $118.0 million.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s Annual Report on Form 10-K and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “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.

Flushing Financial Corporation is the holding company for Flushing Savings Bank, FSB, a federally chartered stock savings bank insured by the Federal Deposit Insurance Corporation (FDIC). The Bank conducts its business through thirteen banking offices located in Queens, Brooklyn, Manhattan and Nassau County and its internet banking division, “iGObanking.com”.

Additional information on Flushing Financial Corporation may be obtained by visiting the Company’s web site at http://www.flushingsavings.com.

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Flushing Financial Corporation January 30, 2007 – Page Six

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands Except Per Share Data)

(Unaudited)

				December 31,	December 31,
				2006	2005
ASSETS
Cash and due from banks				$                  29,251	$                 26,754
Securities available for sale:
	Mortgage-backed securities			288,851	301,194
	Other securities			41,736	36,567
Loans:
	Multi-family residential			870,912	788,071
	Commercial real estate			519,552	399,081
	One-to-four family - mixed-use property			588,092	477,775
	One-to-four family - residential			161,889	134,641
	Co-operative apartments			8,059	2,161
	Construction			104,488	49,522
	Small Business Administration			17,521	9,239
	Commercial business and other			50,899	19,362
	Net unamortized premiums and unearned loan fees			10,393	8,409
	Allowance for loan losses			(7,057)	(6,385)
			Net loans	2,324,748	1,881,876
Interest and dividends receivable				13,332	10,554
Bank premises and equipment, net				23,042	7,238
Federal Home Loan Bank of New York stock				36,160	29,622
Bank owned life insurance				40,516	26,526
Goodwill				14,818	3,905
Core deposit intangible				3,279	-
Other assets				20,788	28,972
			Total assets	$              2,836,521	$              2,353,208
LIABILITIES
Due to depositors:
	Non-interest bearing			$                   80,061	$                  58,678
	Interest-bearing:
		Certificate of deposit accounts		1,102,976	898,157
		Savings accounts		262,980	273,753
		Money market accounts		251,197	175,247
		NOW accounts		47,181	42,029
			Total interest-bearing deposits	1,664,334	1,389,186
Mortgagors' escrow deposits				19,755	19,423
Borrowed funds				608,513	510,810
Securities sold under agreements to repurchase				223,900	178,900
Other liabilities				21,543	19,744
			Total liabilities	2,618,106	2,176,741
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; 21,165,052
	shares and 19,466,894 shares issued at December 31, 2006 and 2005,
	respectively; 21,131,274 shares and 19,465,844 shares outstanding at
	December 31, 2006 and 2005, respectively)			212	195
Additional paid-in capital				71,079	39,635
Treasury stock (33,778 shares and 1,050 shares at December 31, 2006
	and 2005, respectively)			(592)	(12)
Unearned compensation				(2,897)	(4,159)
Retained earnings				156,879	146,068
Accumulated other comprehensive loss, net of taxes				(6,266)	(5,260)
			Total stockholders' equity	218,415	176,467
			Total liabilities and stockholders' equity	$              2,836,521	$              2,353,208

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Flushing Financial Corporation January 30, 2007 – Page Seven

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands Except Per Share Data)

(Unaudited)

		For the three months				For the year
		ended December 31,				ended December 31,
		2006		2005		2006		2005
Interest and dividend income
Interest and fees on loans	$	39,053	$	31,247	$	142,090	$	115,850
Interest and dividends on securities:
Interest		3,961		3,688		15,302		16,098
Dividends		83		130		320		374
Other interest income		56		74		672		117
Total interest and dividend income		43,153		35,139		158,384		132,439
Interest expense
Deposits		16,898		10,013		56,857		34,657
Other interest expense		9,351		8,090		33,823		29,572
Total interest expense		26,249		18,103		90,680		64,229
Net interest income		16,904		17,036		67,704		68,210
Provision for loan losses		-		-		-		-
Net interest income after provision for loan losses		16,904		17,036		67,704		68,210
Non-interest income
Loan fee income		793		541		2,938		2,162
Banking services fee income		366		368		1,462		1,454
Net gain on sale of loans held for sale		32		41		550		583
Net gain on sale of loans		82		-		182		19
Net gain (loss) on sale of securities		-		(647)		81		(647)
Federal Home Loan Bank of New York stock dividends		501		395		1,695		1,163
Bank owned life insurance		441		275		1,553		1,127
Other income		402		209		1,334		786
Total non-interest income		2,617		1,182		9,795		6,647
Non-interest expense
Salaries and employee benefits		5,471		4,021		20,356		17,096
Occupancy and equipment		1,592		1,200		5,542		4,170
Professional services		1,271		1,269		4,170		4,489
Data processing		616		658		2,591		2,290
Depreciation and amortization		485		373		1,655		1,553
Other operating expenses		2,312		1,347		8,428		6,666
Total non-interest expense		11,747		8,868		42,742		36,264
Income before income taxes		7,774		9,350		34,757		38,593
Provision for income taxes
Federal		2,351		2,891		10,729		11,896
State and local		413		755		2,389		3,155
Total taxes		2,764		3,646		13,118		15,051
Net income	$	5,010	$	5,704	$	21,639	$	23,542
Basic earnings per share	$	0.26	$	0.32	$	1.16	$	1.34
Diluted earnings per share	$	0.25	$	0.32	$	1.14	$	1.31
Dividends per share	$	0.11	$	0.10	$	0.44	$	0.40

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Flushing Financial Corporation January 30, 2007 – Page Eight

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands Except Share Data)

(Unaudited)

		At or for the three months						At or for the year
		ended December 31,						ended December 31,
		2006			2005			2006			2005
Per Share Data
Basic earnings per share		$0.26			$0.32			$1.16			$1.34
Diluted earnings per share		$0.25			$0.32			$1.14			$1.31
Average number of shares outstanding for:
Basic earnings per share computation		19,499,896			17,672,525			18,639,265			17,555,289
Diluted earnings per share computation		19,783,485			18,030,766			18,932,242			18,001,265
Book value per share (based on 21,131,274
and 19,465,844 shares outstanding at
December 31, 2006 and 2005, respectively)		$10.34			$9.07			$10.34			$9.07
Average Balances
Total loans, net	$	2,273,606		$	1,848,595		$	2,082,645		$	1,710,837
Total interest-earning assets		2,619,214			2,213,385			2,437,818			2,106,936
Total assets		2,767,937			2,315,364			2,563,724			2,207,662
Total due to depositors		1,671,469			1,327,618			1,545,553			1,261,819
Total interest-bearing liabilities		2,466,880			2,073,239			2,290,152			1,972,195
Stockholders' equity		214,175			169,866			194,236			164,951
Performance Ratios (1)
Return on average assets		0.72	%		0.99	%		0.84	%		1.07	%
Return on average equity		9.36			13.43			11.14			14.27
Yield on average interest-earning assets		6.59			6.35			6.50			6.29
Cost of average interest-bearing liabilities		4.26			3.49			3.96			3.26
Interest rate spread during period		2.33			2.86			2.54			3.03
Net interest margin		2.58			3.08			2.78			3.24
Non-interest expense to average assets		1.70			1.53			1.67			1.64
Efficiency ratio		60.18			47.01			55.21			48.03
Average interest-earning assets to average
interest-bearing liabilities		1.06	X		1.07	X		1.06	X		1.07	X

(1) Ratios for the quarters ended December 31, 2006 and 2005 are presented on an annualized basis.

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Flushing Financial Corporation January 30, 2007 – Page Nine

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands)

(Unaudited)

	At or for the		At or for the
	year ended		year ended
	December 31, 2006		December 31, 2005
Selected Financial Ratios and Other Data
Regulatory capital ratios (for Flushing Savings Bank only):
Tangible capital (minimum requirement = 1.5%)	6.91	%	7.14	%
Leverage and core capital (minimum requirement = 3%)	6.91		7.14
Total risk-based capital (minimum requirement = 8%)	10.99		12.12
Capital ratios:
Average equity to average assets	7.58	%	7.47	%
Equity to total assets	7.70		7.50
Asset quality:
Non-performing loans	$3,126		$2,452
Non-performing assets	3,126		2,452
Net charge-offs	81		148
Asset quality ratios:
Non-performing loans to gross loans	0.13	%	0.13	%
Non-performing assets to total assets	0.11		0.10
Allowance for loan losses to gross loans	0.30		0.34
Allowance for loan losses to non-performing assets	225.72		260.39
Allowance for loan losses to non-performing loans	225.72		260.39
Full-service customer facilities	12		9

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Flushing Financial Corporation January 30, 2007– Page Ten

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

NET INTEREST MARGIN

(Dollars in Thousands)

(Unaudited)

		For the three months December 31,
		2006						2005
		Average			Yield/			Average			Yield/
		Balance		Interest	Cost			Balance		Interest	Cost
Assets		(Dollars in thousands)
Interest-earning assets:
Mortgage loans, net (1)	$	2,210,587	$	37,847	6.85	%	$	1,822,156	$	30,764	6.75	%
Other loans, net (1)		63,019		1,206	7.65			26,439		483	7.31
Total loans, net		2,273,606		39,053	6.87			1,848,595		31,247	6.76
Mortgage-backed securities		302,956		3,577	4.72			318,477		3,386	4.25
Other securities		37,786		467	4.94			38,590		432	4.48
Total securities		340,742		4,044	4.75			357,067		3,818	4.28
Interest-earning deposits and
federal funds sold		4,866		56	4.60			7,723		74	3.83
Total interest-earning assets		2,619,214		43,153	6.59			2,213,385		35,139	6.35
Other assets		148,723						101,979
Total assets	$	2,767,937					$	2,315,364
Liabilities and Equity
Interest-bearing liabilities:
Deposits:
Savings accounts	$	263,997		1,067	1.62		$	271,482		938	1.38
NOW accounts		45,550		51	0.45			39,878		51	0.51
Money market accounts		267,179		2,756	4.13			190,357		1,178	2.48
Certificate of deposit accounts		1,094,743		13,006	4.75			825,901		7,831	3.79
Total due to depositors		1,671,469		16,880	4.04			1,327,618		9,998	3.01
Mortgagors' escrow accounts		30,646		18	0.23			29,474		15	0.20
Total interest-bearing deposits		1,702,115		16,898	3.97			1,357,092		10,013	2.95
Borrowed funds		764,765		9,351	4.89			716,147		8,090	4.52
Total interest-bearing liabilities		2,466,880		26,249	4.26			2,073,239		18,103	3.49
Non interest-bearing deposits		65,514						53,335
Other liabilities		21,368						18,924
Total liabilities		2,553,762						2,145,498
Equity		214,175						169,866
Total liabilities and equity	$	2,767,937					$	2,315,364
Net interest income /
net interest rate spread			$	16,904	2.33	%			$	17,036	2.86	%
Net interest-earning assets /
net interest margin	$	152,334			2.58	%	$	140,146			3.08	%
Ratio of interest-earning assets to
interest-bearing liabilities					1.06	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 $0.9 million and $1.1 million for the three-month periods ended December 31, 2006 and 2005, respectively.

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Flushing Financial Corporation January 30, 2007– Page Eleven

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

NET INTEREST MARGIN

(Dollars in Thousands)

(Unaudited)

		For the year ended December 31,
		2006						2005
		Average			Yield/			Average			Yield/
		Balance		Interest	Cost			Balance		Interest	Cost
Assets		(Dollars in thousands)
Interest-earning assets:
Mortgage loans, net (1)	$	2,035,145	$	138,524	6.81	%	$	1,687,701	$	114,319	6.77	%
Other loans, net (1)		47,500		3,566	7.51			23,136		1,531	6.62
Total loans, net		2,082,645		142,090	6.82			1,710,837		115,850	6.77
Mortgage-backed securities		302,527		13,865	4.58			353,364		14,949	4.23
Other securities		38,113		1,757	4.61			39,149		1,523	3.89
Total securities		340,640		15,622	4.59			392,513		16,472	4.20
Interest-earning deposits and
federal funds sold		14,533		672	4.62			3,586		117	3.26
Total interest-earning assets		2,437,818		158,384	6.50			2,106,936		132,439	6.29
Other assets		125,906						100,726
Total assets	$	2,563,724					$	2,207,662
Liabilities and Equity
Interest-bearing liabilities:
Deposits:
Savings accounts	$	265,421		4,031	1.52		$	241,121		2,225	0.92
NOW accounts		43,052		202	0.47			43,133		216	0.50
Money market accounts		235,642		8,804	3.74			228,818		5,199	2.27
Certificate of deposit accounts		1,001,438		43,757	4.37			748,747		26,960	3.60
Total due to depositors		1,545,553		56,794	3.67			1,261,819		34,600	2.74
Mortgagors' escrow accounts		29,275		63	0.22			27,337		57	0.21
Total interest-bearing deposits		1,574,828		56,857	3.61			1,289,156		34,657	2.69
Borrowed funds		715,324		33,823	4.73			683,039		29,572	4.33
Total interest-bearing liabilities		2,290,152		90,680	3.96			1,972,195		64,229	3.26
Non interest-bearing deposits		60,991						52,017
Other liabilities		18,345						18,499
Total liabilities		2,369,488						2,042,711
Equity		194,236						164,951
Total liabilities and equity	$	2,563,724					$	2,207,662
Net interest income /
net interest rate spread			$	67,704	2.54	%			$	68,210	3.03	%
Net interest-earning assets /
net interest margin	$	147,666			2.78	%	$	134,741			3.24	%
Ratio of interest-earning assets to
interest-bearing liabilities					1.06	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 $3.8 million and $4.2 million for the years ended December 31, 2006 and 2005, respectively.

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