ex99_1.htm

Exhibit 99.1

CONTACT:

David W. Fry

Executive Vice President, Treasurer and Chief Financial Officer

Flushing Financial Corporation

(718) 961-5400

FOR IMMEDIATE RELEASE

Flushing Financial Corporation Reports Increased 2010 Third Quarter GAAP Income Due to Legislative Tax Change

LAKE SUCCESS, NY – November 3, 2010 - Flushing Financial Corporation (the “Company”) (Nasdaq-GS: FFIC), the parent holding company for Flushing Savings Bank, FSB (the “Bank”), today announced it has revised its net income upward from its previous press release for the three and nine months ended September 30, 2010 due to a change in the New York State and City tax bad debt deduction. The Form 10-Q for such periods will be filed on time and reflect this revision.

The following amounts and ratios have increased:

Net income under accounting principles generally accepted in the United States (“GAAP”) increases to $14.6 million and $30.3 million for the three and nine months ended September 30, 2010, respectively, from $9.1 million and $24.8 million, respectively.

Diluted earnings per common share under GAAP increases to $0.48 and $1.00 for the three and nine months ended September 30, 2010, respectively, from $0.30 and $0.82, respectively.

Book value per common share increases to $12.60 at September 30, 2010 from $12.42.

Tangible book value per common share increases to $12.07 at September 30, 2010 from $11.89.

Tangible common equity to tangible assets increases to 8.91% at September 30, 2010 from 8.79%.

The Bank continues to be well-capitalized under regulatory requirements, as tangible and risk-weighted capital ratios increased to 9.26% and 14.22%, respectively, at September 30, 2010, from 9.14% and 14.06%, respectively.

Core net income and core diluted earnings per common share for the three and nine months ended September 30, 2010 were unchanged.

The New York State legislature passed a rather significant change to New York State and City tax law for thrifts, such as the Bank, by eliminating the long-standing "percentage of taxable income" as a method for determining bad debt deductions. The change in the tax law also eliminated the requirement to recapture tax bad debt reserves if a thrift failed to meet the definition of a thrift institution under New York State and City tax law.

The Bank has historically reported in its New York State and City income tax returns a deduction for bad debts based on the amount allowed under the percentage of taxable income method. This amount has historically exceeded actual bad debts incurred by the Bank. Since the Bank has consistently stated its intention to convert to a more “commercial like” bank, which would have previously required the Bank to recapture this excess bad debt reserve if it failed to meet the definition of a thrift under the New York State and City tax law, the Bank had been recording the tax liability related to the possible recapture of the excess tax bad debt reserve. As a result of the legislation passed by the New York State legislature, this tax liability will no longer be required to be recaptured. Therefore, the Bank has reversed approximately $5.5 million of net tax liabilities through income, effective September 30, 2010. This change in tax legislation has no affect on the Company’s effective tax rate.

About Flushing Financial Corporation

Flushing Financial Corporation is the parent holding company for Flushing Savings Bank, FSB, a federally chartered stock savings bank insured by the FDIC. The Bank serves consumers and businesses by offering a full complement of deposit, loan, and cash management services through its fifteen banking offices located in Queens, Brooklyn, Manhattan, and Nassau County. The Bank also operates an online banking division, iGObanking.com®, which enables the Bank to expand outside of its current geographic footprint. In 2007, the Bank established Flushing Commercial Bank, a wholly-owned subsidiary, to provide banking services to public entities including counties, towns, villages, school districts, libraries, fire districts and the various courts throughout the metropolitan area.

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

“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 for the fiscal year ended December 31, 2009 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.

- Revised Financial Statements and Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands Except Per Share Data)

(Unaudited)

	September 30,			December 31,
	2010			2009
ASSETS
Cash and due from banks	$	26,567		$	28,426
Securities available for sale:
Mortgage-backed securities		703,903			648,443
Other securities		34,976			35,361
Loans:
Multi-family residential		1,230,692			1,158,700
Commercial real estate		677,315			686,210
One-to-four family ― mixed-use property		731,053			744,560
One-to-four family ― residential		249,042			249,920
Co-operative apartments		6,427			6,553
Construction		80,364			97,270
Small Business Administration		18,746			17,496
Taxi medallion		89,605			61,424
Commercial business and other		184,667			181,240
Net unamortized premiums and unearned loan fees		16,799			17,110
Allowance for loan losses		(27,402	)		(20,324	)
Net loans		3,257,308			3,200,159
Interest and dividends receivable		19,529			19,116
Bank premises and equipment, net		22,118			22,830
Federal Home Loan Bank of New York stock		39,616			45,968
Bank owned life insurance		71,271			69,231
Goodwill		16,127			16,127
Core deposit intangible		1,522			1,874
Other assets		53,792			55,711
Total assets	$	4,246,729		$	4,143,246

LIABILITIES
Due to depositors:
Non-interest bearing	$	89,564		$	91,376
Interest-bearing:
Certificate of deposit accounts		1,261,182			1,230,511
Savings accounts		425,698			426,821
Money market accounts		382,062			414,457
NOW accounts		744,530			503,159
Total interest-bearing deposits		2,813,472			2,574,948
Mortgagors' escrow deposits		33,129			26,791
Borrowed funds		886,076			1,060,245
Other liabilities		30,995			29,742
Total liabilities		3,853,236			3,783,102

STOCKHOLDERS' EQUITY
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued)		-			-
Common stock ($0.01 par value; 100,000,000 shares authorized; 31,237,874 shares and 31,131,059 shares issued at September 30, 2010 and December 31, 2009, respectively; 31,237,874 shares and 31,127,664 shares outstanding at September 30, 2010 and December 31, 2009, respectively)		312			311
Additional paid-in capital		188,673			185,842
Treasury stock, at average cost (None and 3,395 at September 30, 2010 and December 31, 2009, respectively)		-			(36	)
Unearned compensation		(84	)		(575	)
Retained earnings		199,527			181,181
Accumulated other comprehensive income (loss), net of taxes		5,065			(6,579	)
Total stockholders' equity		393,493			360,144
Total liabilities and stockholders' equity	$	4,246,729		$	4,143,246

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands Except Per Share Data)

(Unaudited)

	For the three months ended September 30,					For the nine months ended September 30,
	2010			2009		2010			2009

Interest and dividend income
Interest and fees on loans	$	50,098		$	48,518	$	148,775		$	144,745
Interest and dividends on securities:
Interest		7,955			8,365		23,600			26,674
Dividends		207			326		610			1,104
Other interest income		11			14		33			71
Total interest and dividend income		58,271			57,223		173,018			172,594

Interest expense
Deposits		13,315			16,024		40,641			51,780
Other interest expense		9,095			12,127		29,571			36,765
Total interest expense		22,410			28,151		70,212			88,545

Net interest income		35,861			29,072		102,806			84,049
Provision for loan losses		5,000			5,000		15,000			14,500
Net interest income after provision for loan losses		30,861			24,072		87,806			69,549

Non-interest income
Other-than-temporary impairment ("OTTI") charge		(3,319	)		-		(6,136	)		(9,637	)
Less: Non-credit portion of OTTI charge recorded in Other Comprehensive Income, before taxes		2,769			-		4,598			8,497
Net OTTI charge recognized in earnings		(550	)		-		(1,538	)		(1,140	)
Loan fee income		433			403		1,283			1,333
Banking services fee income		437			459		1,350			1,326
Net (loss) gain on sale of loans		(6	)		-		17			-
Net gain from sale of securities		39			1,051		62			1,074
Net gain (loss) from fair value adjustments		(20	)		950		(154	)		4,002
Federal Home Loan Bank of New York stock dividends		444			644		1,508			1,600
Bank owned life insurance		702			659		2,040			1,862
Other income		470			391		1,676			1,541
Total non-interest income		1,949			4,557		6,244			11,598

Non-interest expense
Salaries and employee benefits		8,754			7,159		26,126			22,026
Occupancy and equipment		1,850			1,669		5,315			5,067
Professional services		1,535			1,283		5,059			4,485
FDIC deposit insurance		1,200			1,186		3,723			5,383
Data processing		1,106			1,086		3,274			3,258
Depreciation and amortization		692			675		2,094			1,979
Other operating expenses		2,519			2,275		7,611			6,849
Total non-interest expense		17,656			15,333		53,202			49,047

Income before income taxes		15,154			13,296		40,848			32,100

Provision (benefit) for income taxes
Federal		7,489			4,400		15,189			8,698
State and local		(6,963	)		786		(4,627	)		3,821
Total taxes		526			5,186		10,562			12,519

Net income	$	14,628		$	8,110	$	30,286		$	19,581

Preferred dividends and amortization of issuance costs	$	-		$	951	$	-		$	2,854
Net income available to common shareholders	$	14,628		$	7,159	$	30,286		$	16,727

Basic earnings per common share	$	0.48		$	0.33	$	1.00		$	0.80
Diluted earnings per common share	$	0.48		$	0.33	$	1.00		$	0.80
Dividends per common share	$	0.13		$	0.13	$	0.39		$	0.39

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands Except Share Data)

	At or for the three months ended September 30,						At or for the nine months ended September 30,
	2010			2009			2010			2009
Per Share Data
Basic earnings per common share	$	0.48		$	0.33		$	1.00		$	0.80
Diluted earnings per common share	$	0.48		$	0.33		$	1.00		$	0.80
Average number of shares outstanding for:
Basic earnings per common share computation		30,359,226			21,518,559			30,323,223			20,945,586
Diluted earnings per common share computation		30,377,761			21,533,686			30,352,123			20,954,055
Book value per common share (1)	$	12.60		$	11.51		$	12.60		$	11.51
Tangible book value per common share(2)	$	12.07		$	10.95		$	12.07		$	10.95

Average Balances
Total loans, net	$	3,257,821		$	3,120,549		$	3,234,948		$	3,053,244
Total interest-earning assets		4,029,012			3,881,981			3,986,560			3,867,164
Total assets		4,243,428			4,067,829			4,202,472			4,051,030
Total due to depositors		2,899,226			2,560,778			2,782,479			2,526,049
Total interest-bearing liabilities		3,748,814			3,635,219			3,718,554			3,639,582
Stockholders' equity		380,211			322,298			370,738			310,610
Common stockholders' equity		380,211			252,298			370,738			240,610

Performance Ratios (3)
Return on average assets		1.38	%		0.80	%		0.96	%		0.64	%
Return on average equity		15.39			10.07			10.89			8.41
Yield on average interest-earning assets		5.78			5.90			5.79			5.95
Cost of average interest-bearing liabilities		2.39			3.10			2.52			3.24
Interest rate spread during period		3.39			2.80			3.27			2.71
Net interest margin		3.56			3.00			3.44			2.90
Non-interest expense to average assets		1.66			1.51			1.69			1.61
Efficiency ratio (4)		46.00			48.45			47.99			53.43
Average interest-earning assets to average interest-bearing liabilities		1.07	X		1.07	X		1.07	X		1.06	X

(1)

Calculated by dividing common stockholders’ equity of $393.5 million and $346.7 million at September 30, 2010 and 2009, respectively, by 31,237,874 and 30,114,154 shares outstanding at September 30, 2010 and 2009, respectively. Common stockholders’ equity is total stockholders’ equity less the liquidation preference value of any preferred shares outstanding.

(2)

Calculated by dividing tangible common stockholders’ equity of $376.9 million and $329.9 million at September 30, 2010 and 2009, respectively, by 31,237,874 and 30,114,154 shares outstanding at September 30, 2010 and 2009, respectively. Tangible common stockholders’ equity is total stockholders’ equity less the liquidation preference value of any preferred shares outstanding and intangible assets (goodwill and core deposit intangible, net of deferred taxes).

(3)	Ratios for the three and nine months ended September 30, 2010 and 2009 are presented on an annualized basis.

(4)	Calculated by dividing non-interest expense (excluding REO expense) by the total of net interest income and non-interest income (excluding net gain/loss from fair value adjustments, OTTI charges, net gains on the sale of securities and certain non-recurring items).

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands)

(Unaudited)

	At or for the nine months ended September 30, 2010			At or for the year ended December 31, 2009

Selected Financial Ratios and Other Data

Regulatory capital ratios (for Flushing Savings Bank only):
Tangible capital (minimum requirement = 1.5%)		9.26	%		8.84	%
Leverage and core capital (minimum requirement = 4%)		9.26			8.84
Total risk-based capital (minimum requirement = 8%)		14.22			13.49

Capital ratios:
Average equity to average assets		8.82	%		8.06	%
Equity to total assets		9.27			8.69
Tangible common equity to tangible assets		8.91			8.32

Asset quality:
Non-accrual loans	$	102,519		$	80,117
Non-performing loans		119,393			85,866
Non-performing assets		125,008			93,262
Net charge-offs		7,922			10,204

Asset quality ratios:
Non-performing loans to gross loans		3.65	%		2.68	%
Non-performing assets to total assets		2.94			2.25
Allowance for loan losses to gross loans		0.84			0.63
Allowance for loan losses to non-performing assets		21.92			21.79
Allowance for loan losses to non-performing loans		22.95			23.67

Full-service customer facilities		15			15

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