EXHIBIT 99.1

Flushing Financial Corporation Reports First Quarter 2020 Results

FIRST QUARTER 20201 HIGHLIGHTS

· GAAP diluted EPS was ($0.05), compared to $0.45 in 4Q19 and $0.25 in 1Q19

· Core diluted EPS was $0.19, compared to $0.41 in 4Q19 and $0.33 in 1Q19

· Net interest margin was 2.44%, down 4bps QoQ and 13bps YoY

· Core net interest margin was 2.49%, up 16bps QoQ and down 3bps YoY

· GAAP net interest income of $40.8 million, down 0.9% QoQ and 2.3% YoY

· Core net interest income of $42.9 million, up 7.0% QoQ and 1.1% YoY

· GAAP and core ROAE (1.0)% and 3.8%, respectively, compared with 9.1% and 8.4%, respectively in 4Q19

· GAAP and core ROAA were (0.1)% and 0.3%, respectively, compared with 0.7% and 0.7%, respectively in 4Q19

· Loan pipeline remains strong at $324.4 million

· Provision for credit losses of $7.2 million, $0.18 after-tax per diluted common share, driven mainly by economic conditions arising from COVID-19 pandemic

· Net charge-offs were $1.1 million, compare to net recoveries of $34,000 in 4Q19 and net charge-offs of $0.9 million in 1Q19

UNIONDALE, N.Y., April 28, 2020 (GLOBE NEWSWIRE) -- Flushing Financial Corporation (the “Company”) (Nasdaq-GS: FFIC), the parent holding company for Flushing Bank (the “Bank”), today announced its financial results for the first quarter ended March 31, 2020.

John R. Buran, President and Chief Executive Officer stated, “Our thoughts go out to those most affected by COVID-19, especially those on the front lines. The health and welfare of our employees and customers remains our top priority as we navigate through the COVID-19 pandemic.”

“We were quick to respond to the pandemic with new health and safety measures, including social distancing, appointment banking and expansion of our remote capabilities. Our staff responded to these changes in a superb fashion and continue to provide our customers with excellent service. Today we have the capability of having our entire staff work remotely. On any given day, as many as 85% of staff work from home.”

“Our GAAP earnings for the quarter were affected by two COVID-19 related non-cash charges totaling $0.38 per share, after-tax, that caused the Company to record a loss of $0.05 per diluted share for the quarter. The Federal Reserve’s dramatic 150 basis point drop in rates provided the country with much needed liquidity to counteract the negative economic effects of the COVID-19 pandemic. As a result, we recorded mark to market adjustments on items carried at fair value under the fair value option and on our derivative portfolio totaling $0.20 per share, after-tax.”

“Given the negative economic environment at the end of the quarter caused by the COVID-19 pandemic, we adjusted our economic forecast in our current expected credit loss (“CECL”) modeling resulting in a $7.2 million charge, or $0.18 per share, after-tax to earnings for the quarter. When the Company adopted CECL on January 1, 2020, in the then favorable economic environment resulted in a $1.3 million increase in the allowance. As a result of CECL, our overall allowance for credit losses increased by approximately 30%.”

“Core earnings for the quarter were $5.5 million, or $0.19 per diluted share. Core earnings were driven by 3% (not annualized) loan growth for the quarter and a 16 basis point improvement in core net interest margin. Our core revenue before provision for credit losses and taxes totaled $46.1 million, an increase of $2.1 million quarter over quarter.” 

“Our non-performing assets at the end of the quarter were 23 basis points of total assets. Today, 87% of our portfolio is real estate based with an average loan to value of less than 40% and an average debt coverage ratio of 1.83.”

“As a result of the pandemic, almost all industries have experienced adverse impact, including those represented in our loan portfolio. At March 31, 2020, we had approximately $1.5 billion in loans to industries severely impacted by COVID-19.”

“During these tumultuous times, we are actively assisting our customers by providing short-term forbearances in the form of deferrals of interest, principal and/or escrow for terms ranging from one to six months. Through April 17th, we have approved forbearances for loans with an aggregate outstanding loan balance of approximately $839 million of which $673 million is in our real estate portfolio and $166 million is in our business banking portfolio. Given the pandemic and current economic environment, we continue to see the need for our customers to modify loans. We actively participated in the SBA Paycheck Protection Program, gaining approval to fund up to $64 million of these loans.  We also expect to participate in the Main Street Lending Program in order to assist our customers.”

Mr. Buran concluded, “When the restrictive economic environment begins to lift, we expect to be the beneficiaries of a workforce that is more flexible and dynamic as a result of this experience coupled with a customer base that is highly attuned to our online and mobile banking capabilities, which we have very recently expanded.  We remain committed to helping our communities and customers get through this difficult time.”

Summary of Strategic Objectives

· Manage cost of funds and continue to improve funding mix

· Increase interest income by leveraging loan pricing opportunities and portfolio mix

· Enhance core earnings power by improving scalability and efficiency

· Manage credit risk

· Remain well capitalized under all stress test scenarios

Earnings Summary:

Net Interest Income

Net interest income for 1Q20 was $40.8 million, a decrease of $1.0 million, or 2.3% YoY (1Q20 compared to 1Q19) and $0.4 million, or 0.9% QoQ (1Q20 compared to 4Q19).

· Net interest margin of 2.44%, decreased 13bps YoY and 4bps QoQ

· Net interest spread of 2.24%, decreased 12bps YoY and 1bps QoQ

· Yield on average interest-earning assets of 3.98%, decreased 31bps YoY and 23bp QoQ

· Cost of average interest-bearing liabilities of 1.74%, decreased 19bps YoY and 22bps QoQ

· Cost of funds of 1.61%, decreased 19bps YoY and 22bps QoQ

· Average balance of total interest-earning assets of $6,719.9 million, increased $198.7 million, or 3.0%, YoY and $42.5 million, or 0.6%, QoQ

· Net interest income includes prepayment penalty income from loans totaling $0.8 million in 1Q20, $0.9 million in 4Q19 and $0.8 million in 1Q19; recovered interest from delinquent loans of $0.4 million, each in 1Q20 and 4Q19 and $0.7 million in 1Q19; net losses from fair value adjustments on qualifying hedges totaling $2.1 million in 1Q20 and $0.6 million in 1Q19 and net gain from fair value adjustments on qualifying hedges totaling $1.0 million in 4Q19

· Absent all above items noted in the preceding bullet, the yield on interest-earning assets was 4.03% in 1Q20, a decrease of 4bps from 4Q19 and 21bps from 1Q19 and the net interest margin was 2.49% in 1Q20, 2.33% in 4Q19 and 2.52% in 1Q19

Provision for credit losses

The Company recorded a provision for credit losses of $7.2 million in 1Q20 compared to a benefit of $0.3 million in 4Q19 and a provision of $1.0 million in 1Q19.

· 1Q20 provision for credit losses was primarily driven by deteriorating economic conditions resulting from the impact of COVID-19

· The effect of the deteriorating economic conditions resulted in $4.9 million of provision

· Net charge-offs (recoveries) of $1.1 million in 1Q20, ($34,000) in 4Q19 and $0.9 million in 1Q19

· Provision expense of approximately $1.2 million was recognized due to growth in the loan portfolio

· The adoption of CECL has increased the current allowance and may introduce volatility in future provisions due to the assumptions used for the macroeconomic variables, loan composition and product mix, as they are all subject to change

Non-interest Income (Loss)

Non-interest loss for 1Q20 was $2.9 million, a decrease of $3.8 million YoY, and $7.9 million QoQ

· Non-interest income included net losses from fair value adjustments of $6.0 million in 1Q20 and net gains from fair value adjustments of $0.8 million in 4Q19 and net losses from fair value of $2.1 million in 1Q19

· Additionally, non-interest income included net gains on sale of loans of $42,000 in 1Q20, $0.5 million in 4Q19 and $0.1 million in 1Q19; and life insurance proceeds of $0.4 million in 4Q19 and $43,000 in 1Q19

· Absent all above items, non-interest income was $3.1 million in 1Q20, an increase of $0.2 million, or 5.8% YoY, but a decrease of $0.2 million, or 7.1% QoQ

Non-interest Expense

Non-interest expense for 1Q20 was $32.4 million, an increase of $2.7 million, or 9.2 % QoQ, and remained unchanged YoY

· The first quarter of each year includes the impact of annual grants of employee and directors restricted stock awards; restricted stock expense totaling $3.4 million in 1Q20, $1.1 million in 4Q19 and $3.9 million in 1Q19

· Additionally, non-interest expense included merger expenses totaling $0.9 million in 1Q20 and $1.1 million in 4Q19;

· Absent all above items, non-interest expense was $28.1 million in 1Q20, a decrease of $0.5 million, or 1.6% YoY, but an increase of $0.6 million, or 2.2% QoQ

· The ratio of non-interest expense to average assets was to 1.82% in 1Q20 compared to 1.68% in 4Q19 and 1.89% in 1Q19; absent all above items non-interest expense to average assets was 1.58% in 1Q20 compared to 1.55% in 4Q19 and 1.66% in 1Q19

· The efficiency ratio was 68.2% in 1Q20 compared to 65.0% in 4Q19 and 70.4% in 1Q19

Provision (benefit) for Income Taxes

The benefit for income taxes in 1Q20 was $0.2 million, compared to tax expense of $2.3 million in 1Q19 and $4.0 million in 4Q19.

· Pre-tax income decreased by $11.0 million, or 117.1% YoY, and $18.5 million, or 109.5% QoQ

· The effective tax rates were 12.9% in 1Q20, 23.4% in 4Q19 and 24.4% in 1Q19

· Both 1Q20 and 1Q19 reflects the vesting of restricted stock awards, which are treated as discrete items for tax purposes

· Absent the above item, the effective tax rates were 23.7% in 1Q20, 23.4% in 4Q19 and 23.8% in 1Q19

Financial Condition Summary:

Loans:

· Net loans held for investment were $5,904.0 million reflecting an increase of 2.7% from December 31, 2019, as we continue to focus on the origination of full banking relationship loans through C&I loans, multi-family loans and commercial real estate

· Loan closings of commercial business loans, multi-family loans and commercial real estate totaled $269.3 million for 1Q20, or 90.2% of loan production

· Loan pipeline was $324.4 million at March 31, 2020, compared to $324.5 million at December 31, 2019

The following table shows the weighted average rate received from loan closings for the periods indicated:

	For the three months ended
	March 31,		December 31,		March 31,
Loan type	2020		2019		2019
Mortgage loans	3.93	%	3.97	%	5.14	%
Non-mortgage loans	4.23	%	4.68	%	4.96	%
Total loans	4.03	%	4.19	%	5.02	%

Credit Quality:

· Non-performing loans totaled $16.8 million, an increase of $3.5 million, or 26.4%, from $13.3 million at December 31, 2019

· Non-performing assets totaled $17.0 million, an increase of $3.5 million, or 25.6%, from $13.5 million at December 31, 2019

· Classified assets totaled $27.3 million, an increase of $2.7 million, or 11.0%, from $24.6 million at December 31, 2019

· Loans classified as troubled debt restructured (TDR) totaled $6.3 million, a decrease of $0.2 million, or 2.6%, from $6.5 million at December 31, 2019

· Upon adoption of CECL, we increased the allowance for credit losses by $1.3 million, including $0.6 million for off-balance sheet exposures

· 552 COVID-19 forbearances approved through April 17th totaling $838.7 million 

· Over 87% of our gross loans are collateralized by real estate

· The loan-to-value ratio on our portfolio of real estate dependent loans as of March 31, 2020 totaled 38.2%

· Our largest exposures to industries severely impacted by COVID-19 are as follows:

o Retail – 11.89% of gross loans, with 93.9% of exposure secured by real estate

o Hotels – 4.05% of gross loans, with 95.5% of exposure secured by real estate

o Travel and Leisure – 3.10% of gross loans, with 31.0% of exposure secured by real estate

o Contractors – 3.08% of gross loans, with 66.3% of exposure secured by real estate

o Transportation – 1.75% of gross loans, with 27.4% of exposure secured by real estate

o Restaurants and Catering Halls – 1.22% of gross loans, with 81.5% of exposure secured by real estate

o Schools and Day Care – 0.68% of gross loans, with 78.7% of exposure secured by real estate

· Net charge-offs totaled $1.1 million

Capital Management:

· The Company and Bank, at March 31, 2020, were both well capitalized under all applicable regulatory requirements

· Through 1Q20, stockholders’ equity decreased $30.0 million, or 5.2%, to $549.7 million primarily due to unrealized losses in the fair value of securities and interest rate swaps, coupled with the declaration and payment of dividends on the Company’s common stock

· During 1Q20, the Company repurchase 142,405 shares at an average cost of $16.45 per share; as of March 31, 2020, up to 284,806 shares remained subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit

· Book value per common share decreased to $19.48 at March 31, 2020, from $20.59 at December 31, 2019 and tangible book value per common share, a non-GAAP measure, decreased to $18.92 at March 31, 2020, from $20.02 at December 31, 2019

Conference Call Information:

· John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer, will host a conference call on Wednesday, April 29, 2020 at 9:30 AM (ET) to discuss the Company’s strategy and results for the fourth quarter

· Dial-in for Live Call: 1-877-509-5836

· Webcast: https://services.choruscall.com/links/ffic200429.html

· Dial-in for Replay: 1-877-344-7529

· Replay Access Code: 10138497

· The conference call will be simultaneously webcast and archived through April 29, 2021

About Flushing Financial Corporation

Flushing Financial Corporation (Nasdaq: FFIC) is the holding company for Flushing Bank®, a New York State-chartered commercial bank insured by the Federal Deposit Insurance Corporation. The Bank serves consumers, businesses, professionals, corporate clients, and public entities by offering a full complement of deposit, loan, equipment finance, and cash management services through its banking offices located in Queens, Brooklyn, Manhattan, and on Long Island. As a leader in real estate lending, the Bank’s experienced lending team creates mortgage solutions for real estate owners and property managers both within and outside the New York City metropolitan area. Flushing Bank is an Equal Housing Lender. The Bank also operates an online banking division consisting of iGObanking.com®, which offers competitively priced deposit products to consumers nationwide, and BankPurely®, an eco-friendly, healthier lifestyle community brand.

Additional information on Flushing Bank and 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, 2019 and in other documents filed by the Company with the Securities and Exchange Commission from time to time.  Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “goals”, “potential” or “continue” or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.

- Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	For the three months ended
	March 31,		December 31,		March 31,
	2020		2019		2019
Interest and Dividend Income
Interest and fees on loans	$	61,109	$	64,316	$	62,330
Interest and dividends on securities:
Interest		5,256		5,528		6,909
Dividends		15		17		19
Other interest income		290		318		555
Total interest and dividend income		66,670		70,179		69,813
Interest Expense
Deposits		18,778		21,517		21,469
Other interest expense		7,066		7,483		6,541
Total interest expense		25,844		29,000		28,010
Net Interest Income		40,826		41,179		41,803
Provision (benefit) for credit losses		7,178		(318)		972
Net Interest Income After Provision (Benefit) for Credit Losses		33,648		41,497		40,831
Non-interest Income
Banking services fee income		798		844		973
Net loss on sale of securities		(37)		—		—
Net gain on sale of loans		42		489		63
Net gain (loss) from fair value adjustments		(5,993)		807		(2,080)
Federal Home Loan Bank of New York stock dividends		964		1,026		903
Life insurance proceeds		—		419		43
Bank owned life insurance		943		984		740
Other income		419		469		301
Total non-interest income (loss)		(2,864)		5,038		943
Non-interest Expense
Salaries and employee benefits		18,620		17,470		19,166
Occupancy and equipment		2,840		2,950		2,789
Professional services		2,862		2,120		2,265
FDIC deposit insurance		650		306		485
Data processing		1,694		1,476		1,492
Depreciation and amortization		1,536		1,476		1,518
Other real estate owned/foreclosure expense (benefit)		(164)		59		77
Net loss from sales of real estate owned		31		—		—
Other operating expenses		4,311		3,790		4,627
Total non-interest expense		32,380		29,647		32,419
Income (Loss) Before Income Taxes		(1,596)		16,888		9,355
Provision (Benefit) for Income Taxes
Federal		989		3,058		1,943
State and local		(1,195)		899		344
Total taxes		(206)		3,957		2,287
Net Income (Loss)	$	(1,390)	$	12,931	$	7,068
Basic earnings (loss) per common share	$	(0.05)	$	0.45	$	0.25
Diluted earnings (loss) per common share	$	(0.05)	$	0.45	$	0.25
Dividends per common share	$	0.21	$	0.21	$	0.21

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per share data)

(Unaudited)

	March 31,		December 31,		March 31,
	2020		2019		2019
ASSETS
Cash and due from banks	$	157,184	$	49,787	$	58,677
Securities held-to-maturity:
Mortgage-backed securities		7,929		7,934		7,949
Other securities		50,225		50,954		22,532
Securities available for sale:
Mortgage-backed securities		489,556		523,849		579,185
Other securities		225,856		248,651		266,839
Loans:
Multi-family residential		2,272,343		2,238,591		2,256,447
Commercial real estate		1,664,934		1,582,008		1,529,001
One-to-four family ― mixed-use property		592,109		592,471		582,049
One-to-four family ― residential		189,774		188,216		188,615
Co-operative apartments		8,493		8,663		7,903
Construction		66,727		67,754		54,933
Small Business Administration		14,076		14,445		15,188
Taxi medallion		3,281		3,309		3,891
Commercial business and other		1,104,967		1,061,478		935,297
Net unamortized premiums and unearned loan fees		15,384		15,271		15,422
Allowance for loan losses		(28,098)		(21,751)		(21,015)
Net loans		5,903,990		5,750,455		5,567,731
Interest and dividends receivable		25,526		25,722		27,226
Bank premises and equipment, net		27,899		28,676		29,798
Federal Home Loan Bank of New York stock		74,000		56,921		51,182
Bank owned life insurance		158,655		157,713		131,794
Goodwill		16,127		16,127		16,127
Other real estate owned, net		208		239		—
Right of use asset		39,729		41,254		44,033
Other assets		68,526		59,494		64,377
Total assets	$	7,245,410	$	7,017,776	$	6,867,450
LIABILITIES
Due to depositors:
Non-interest bearing	$	489,198	$	435,072	$	401,064
Certificate of deposit accounts		1,172,381		1,437,890		1,511,770
Savings accounts		192,192		191,485		201,811
Money market accounts		1,597,109		1,592,011		1,352,843
NOW accounts		1,377,555		1,365,591		1,542,606
Total deposits		4,828,435		5,022,049		5,010,094
Mortgagors' escrow deposits		73,051		44,375		70,115
Borrowed funds		1,617,582		1,237,231		1,116,416
Operating lease liability		47,726		49,367		52,510
Other liabilities		128,933		85,082		58,756
Total liabilities		6,695,727		6,438,104		6,307,891
STOCKHOLDERS' EQUITY
Preferred stock (5,000,000 shares authorized; none issued)		—		—		—
Common stock ($0.01 par value; 100,000,000 shares authorized; 31,530,595 shares issued at March 31, 2020, December 31, 2019 and March 31, 2019; 28,213,602 shares, 28,157,206 shares and 28,187,184 shares outstanding at March 31, 2020, December 31, 2019 and March 31, 2019, respectively)		315		315		315
Additional paid-in capital		225,893		226,691		222,859
Treasury stock (3,316,993 shares, 3,373,389 shares and 3,343,411 shares at March 31, 2020, December 31, 2019 and March 31, 2019, respectively)		(69,540)		(71,487)		(70,929)
Retained earnings		425,455		433,960		417,856
Accumulated other comprehensive loss, net of taxes		(32,440)		(9,807)		(10,542)
Total stockholders' equity		549,683		579,672		559,559
Total liabilities and stockholders' equity	$	7,245,410	$	7,017,776	$	6,867,450

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share data)

(Unaudited)

	At or for the three months ended
	March 31,			December 31,			March 31,
	2020			2019			2019
Per Share Data
Basic earnings (loss) per share	$	(0.05)		$	0.45		$	0.25
Diluted earnings (loss) per share	$	(0.05)		$	0.45		$	0.25
Average number of shares outstanding for:
Basic earnings per common share computation		28,852,819			28,723,077			28,621,018
Diluted earnings per common share computation		28,852,819			28,723,077			28,621,030
Shares outstanding		28,213,602			28,157,206			28,187,184
Book value per common share (1)	$	19.48		$	20.59		$	19.85
Tangible book value per common share (2)	$	18.92		$	20.02		$	19.29
Stockholders' Equity
Stockholders' equity	$	549,683		$	579,672		$	559,559
Tangible stockholders' equity		533,848			563,837			543,722
Average Balances
Total loans, net	$	5,794,866		$	5,726,635		$	5,544,667
Total interest-earning assets		6,719,857			6,677,325			6,521,142
Total assets		7,106,998			7,057,094			6,868,140
Total due to depositors		4,578,793			4,527,645			4,598,305
Total interest-bearing liabilities		5,951,925			5,912,284			5,811,263
Stockholders' equity		576,597			567,461			552,621
Performance Ratios (3)
Return on average assets		(0.08)	%		0.73	%		0.41	%
Return on average equity		(0.96)			9.11			5.12
Yield on average interest-earning assets (4)		3.98			4.21			4.29
Cost of average interest-bearing liabilities		1.74			1.96			1.93
Cost of funds		1.61			1.83			1.80
Net interest rate spread during period (4)		2.24			2.25			2.36
Net interest margin (4)		2.44			2.48			2.57
Non-interest expense to average assets		1.82			1.68			1.89
Efficiency ratio (5)		68.21			65.00			70.37
Average interest-earning assets to average interest-bearing liabilities		1.13	X		1.13	X		1.12	X

(1) Calculated by dividing stockholders’ equity by shares outstanding.

(2) Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less intangible assets (goodwill, net of deferred taxes). See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.

(3) Ratios are presented on an annualized basis, where appropriate.

(4) Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.

(5) Efficiency ratio, a non-GAAP measure, was calculated by dividing non-interest expense (excluding accelerated employee benefits upon officer’s death, merger expense, OREO expense and the net gain/loss from the sale of OREO) by the total of net interest income (excluding net gains and losses from fair value adjustments on qualifying hedges) and non-interest income (excluding life insurance proceeds, net gains and losses from the sale of securities and fair value adjustments).

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands)

(Unaudited)

	At or for the three			At or for the year			At or for the three
	months ended			ended			months ended
	March 31, 2020			December 31, 2019			March 31, 2019
Selected Financial Ratios and Other Data
Regulatory capital ratios (for Flushing Financial Corporation):
Tier 1 capital	$	610,898		$	615,500		$	594,196
Common equity Tier 1 capital		567,306			572,651			552,793
Total risk-based capital		712,761			712,251			690,211
Tier 1 leverage capital (well capitalized = 5%)		8.59	%		8.73	%		8.63	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)		10.47			10.95			10.90
Tier 1 risk-based capital (well capitalized = 8.0%)		11.28			11.77			11.72
Total risk-based capital (well capitalized = 10.0%)		13.16			13.62			13.61
Regulatory capital ratios (for Flushing Bank only):
Tier 1 capital	$	676,267		$	680,749		$	663,467
Common equity Tier 1 capital		676,267			680,749			663,467
Total risk-based capital		703,130			702,500			684,482
Tier 1 leverage capital (well capitalized = 5%)		9.51	%		9.65	%		9.64	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)		12.48			13.02			13.08
Tier 1 risk-based capital (well capitalized = 8.0%)		12.48			13.02			13.08
Total risk-based capital (well capitalized = 10.0%)		12.98			13.43			13.49
Capital ratios:
Average equity to average assets		8.11	%		8.08	%		8.05	%
Equity to total assets		7.59			8.26			8.15
Tangible common equity to tangible assets (1)		7.38			8.05			7.94
Asset quality:
Non-accrual loans (2)	$	16,752		$	12,813		$	15,735
Non-performing loans		16,752			13,258			15,735
Non-performing assets		16,995			13,532			15,770
Net charge-offs		1,149			2,005			902
Asset quality ratios:
Non-performing loans to gross loans		0.28	%		0.23	%		0.28	%
Non-performing assets to total assets		0.23			0.19			0.23
Allowance for loan losses to gross loans		0.47			0.38			0.38
Allowance for loan losses to non-performing assets		165.32			160.73			133.26
Allowance for loan losses to non-performing loans		167.73			164.05			133.55
Full-service customer facilities		20			20			19

(1) See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.

(2) Excludes performing non-accrual TDR loans.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

NET INTEREST MARGIN

(Dollars in thousands)

(Unaudited)

	For the three months ended
	March 31, 2020						December 31, 2019						March 31, 2019
	Average				Yield/		Average				Yield/		Average				Yield/
	Balance		Interest		Cost		Balance		Interest		Cost		Balance		Interest		Cost
Interest-earning Assets:
Mortgage loans, net	$	4,697,531	$	49,412	4.21	%	$	4,628,854	$	51,927	4.49	%	$	4,619,587	$	50,845	4.40	%
Other loans, net		1,097,335		11,697	4.26			1,097,781		12,389	4.51			925,080		11,485	4.97
Total loans, net (1) (2)		5,794,866		61,109	4.22			5,726,635		64,316	4.49			5,544,667		62,330	4.50
Taxable securities:
Mortgage-backed securities		507,912		3,040	2.39			555,023		3,230	2.33			573,397		4,248	2.96
Other securities		243,726		1,697	2.79			244,075		1,774	2.91			241,863		2,211	3.66
Total taxable securities		751,638		4,737	2.52			799,098		5,004	2.50			815,260		6,459	3.17
Tax-exempt securities: (3)
Other securities		63,535		676	4.26			63,825		685	4.29			58,173		594	4.08
Total tax-exempt securities		63,535		676	4.26			63,825		685	4.29			58,173		594	4.08
Interest-earning deposits and federal funds sold		109,818		290	1.06			87,767		318	1.45			103,042		555	2.15
Total interest-earning assets		6,719,857		66,812	3.98			6,677,325		70,323	4.21			6,521,142		69,938	4.29
Other assets		387,141						379,769						346,998
Total assets	$	7,106,998					$	7,057,094					$	6,868,140
Interest-bearing Liabilities:
Deposits:
Savings accounts	$	194,026		281	0.58		$	192,818		325	0.67		$	205,775		361	0.70
NOW accounts		1,419,739		4,648	1.31			1,362,151		5,227	1.53			1,488,859		6,031	1.62
Money market accounts		1,697,783		7,042	1.66			1,456,676		7,165	1.97			1,380,172		6,821	1.98
Certificate of deposit accounts		1,267,245		6,767	2.14			1,516,000		8,752	2.31			1,523,499		8,203	2.15
Total due to depositors		4,578,793		18,738	1.64			4,527,645		21,469	1.90			4,598,305		21,416	1.86
Mortgagors' escrow accounts		65,503		40	0.24			74,751		48	0.26			62,174		53	0.34
Total interest-bearing deposits		4,644,296		18,778	1.62			4,602,396		21,517	1.87			4,660,479		21,469	1.84
Borrowings		1,307,629		7,066	2.16			1,309,888		7,483	2.29			1,150,784		6,541	2.27
Total interest-bearing liabilities		5,951,925		25,844	1.74			5,912,284		29,000	1.96			5,811,263		28,010	1.93
Non interest-bearing demand deposits		449,761						435,241						398,829
Other liabilities		128,715						142,108						105,427
Total liabilities		6,530,401						6,489,633						6,315,519
Equity		576,597						567,461						552,621
Total liabilities and equity	$	7,106,998					$	7,057,094					$	6,868,140
Net interest income / net interest rate spread (tax equivalent) (3)			$	40,968	2.24	%			$	41,323	2.25	%			$	41,928	2.36	%
Net interest-earning assets / net interest margin (tax equivalent)	$	767,932			2.44	%	$	765,041			2.48	%	$	709,879			2.57	%
Ratio of interest-earning assets to interest-bearing liabilities					1.13	X					1.13	X					1.12	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 $0.2 million, $0.3 million and $0.5 million for the three months ended March 31, 2020,  December 31, 2019 and March 31, 2019, respectively.

(2) Loan interest income includes net losses from fair value adjustments on qualifying hedges of $2.1 million and $0.6 million for the three months ended March 31, 2020 and 2019, respectively; net gains from fair value adjustments on qualifying hedges of  $1.0 million for the three months ended December 31, 2019.

(3) Interest and yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented totaling $0.1 million in each, period.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

DEPOSIT COMPOSITION

(Unaudited)

									March 2020 vs.				March 2020 vs.
	March 31,		December 31,		September 30,		June 30,		December 2019		March 31,		March 2019
(Dollars in thousands)	2020		2019		2019		2019		% Change		2019		% Change
Deposits
Non-interest bearing	$	489,198	$	435,072	$	421,786	$	413,813	12.4	%	$	401,064	22.0	%
Interest bearing:
Certificate of deposit accounts		1,172,381		1,437,890		1,506,376		1,544,117	(18.5)	%		1,511,770	(22.4)	%
Savings accounts		192,192		191,485		193,497		196,820	0.4	%		201,811	(4.8)	%
Money market accounts		1,597,109		1,592,011		1,329,156		1,302,153	0.3	%		1,352,843	18.1	%
NOW accounts		1,377,555		1,365,591		1,461,694		1,368,813	0.9	%		1,542,606	(10.7)	%
Total interest-bearing deposits		4,339,237		4,586,977		4,490,723		4,411,903	(5.4)	%		4,609,030	(5.9)	%
Total deposits	$	4,828,435	$	5,022,049	$	4,912,509	$	4,825,716	(3.9)	%	$	5,010,094	(3.6)	%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

LOANS

(Unaudited)

Loan Closings

	For the three months ended
		March 31,	December 31,			March 31,
(In thousands)	2020		2019		2019
Multi-family residential	$	67,318	$	104,310	$	27,214
Commercial real estate		99,571		55,047		13,941
One-to-four family – mixed-use property		13,455		18,653		16,423
One-to-four family – residential		8,413		5,833		3,886
Co-operative apartments		704		—		—
Construction		6,749		3,542		5,901
Small Business Administration		57		721		329
Commercial business and other		102,448		81,630		130,330
Total	$	298,715	$	269,736	$	198,024

Loan Composition

									March 2020 vs.				March 2020 vs.
	March 31,		December 31,		September 30,		June 30,		December 2019			March 31,	March 2019
(Dollars in thousands)	2020		2019		2019		2019		% Change		2019		% Change
Loans held for investment:
Multi-family residential	$	2,272,343	$	2,238,591	$	2,232,305	$	2,263,875	1.5	%	$	2,256,447	0.7	%
Commercial real estate		1,664,934		1,582,008		1,559,581		1,524,693	5.2	%		1,529,001	8.9	%
One-to-four family ― mixed-use property		592,109		592,471		587,100		582,264	(0.1)	%		582,049	1.7	%
One-to-four family ― residential		189,774		188,216		184,432		184,024	0.8	%		188,615	0.6	%
Co-operative apartments		8,493		8,663		9,089		8,137	(2.0)	%		7,903	7.5	%
Construction		66,727		67,754		64,234		58,503	(1.5)	%		54,933	21.5	%
Small Business Administration		14,076		14,445		13,982		14,511	(2.6)	%		15,188	(7.3)	%
Taxi medallion		3,281		3,309		3,513		3,555	(0.8)	%		3,891	(15.7)	%
Commercial business and other		1,104,967		1,061,478		1,096,164		983,573	4.1	%		935,297	18.1	%
Net unamortized premiums and unearned loan fees		15,384		15,271		15,363		15,278	0.7	%		15,422	(0.2)	%
Allowance for loan losses		(28,098)		(21,751)		(22,035)		(21,510)	29.2	%		(21,015)	33.7	%
Net loans	$	5,903,990	$	5,750,455	$	5,743,728	$	5,616,903	2.7	%	$	5,567,731	6.0	%

Net Loans Activity

	Three Months Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
(In thousands)	2020		2019		2019		2019		2019
Loans originated and purchased	$	298,715	$	269,736	$	398,143	$	296,397	$	198,024
Principal reductions		(137,189)		(255,977)		(266,894)		(243,263)		(158,815)
Loans sold		(498)		(7,129)		(3,553)		(1,970)		(1,043)
Loan charge-offs		(1,259)		(95)		(431)		(1,114)		(1,138)
Foreclosures		—		—		—		(239)		—
Net change in deferred fees and costs		113		(92)		85		(144)		234
Net change in the allowance for loan losses		(6,347)		284		(525)		(495)		(70)
Total loan activity	$	153,535	$	6,727	$	126,825	$	49,172	$	37,192

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

NON-PERFORMING ASSETS and NET CHARGE-OFFS

(Unaudited)

	March 31,			December 31,			September 30,			June 30,			March 31,
(Dollars in thousands)	2020			2019			2019			2019			2019
Loans 90 Days Or More Past Due and Still Accruing:
Multi-family residential	$	—		$	445		$	445		$	—		$	—
Total		—			445			445			—			—
Non-accrual Loans:
Multi-family residential		2,741			2,296			3,132			2,008			2,009
Commercial real estate		8			367			872			1,488			1,050
One-to-four family - mixed-use property		607			274			683			1,752			1,305
One-to-four family - residential		5,158			5,139			5,050			5,411			5,708
Construction		—			—			—			—			950
Small Business Administration		1,518			1,151			1,151			1,224			1,227
Taxi medallion(1)		1,761			1,641			1,352			1,361			1,372
Commercial business and other(1)		4,959			1,945			2,020			2,458			2,114
Total		16,752			12,813			14,260			15,702			15,735
Total Non-performing Loans		16,752			13,258			14,705			15,702			15,735
Other Non-performing Assets:
Real estate acquired through foreclosure		208			239			239			239			—
Other asset acquired through foreclosure		35			35			35			35			35
Total		243			274			274			274			35
Total Non-performing Assets	$	16,995		$	13,532		$	14,979		$	15,976		$	15,770
Non-performing Assets to Total Assets		0.23	%		0.19	%		0.21	%		0.23	%		0.23	%
Allowance For Loan Losses to Non-performing Loans		167.7	%		164.1	%		149.8	%		137.0	%		133.6	%

(1) Not included in the above analysis are non-accrual performing TDR taxi medallion loans totaling $1.5 million in 1Q20, $1.7 million in 4Q19,  $2.2 million in 3Q19, $2.2 million in 2Q19, and $2.5 million in 1Q19 and non-accrual performing TDR commercial business loans totaling  $1.0 million in 1Q20, $0.9 million in 4Q19 and $1.0 million in 3Q19.

Net Charge-Offs (Recoveries)

	Three Months Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
(In thousands)	2020		2019		2019		2019		2019
Multi-family residential	$	(6)	$	(14)	$	183	$	(10)	$	(13)
Commercial real estate		—		(30)		—		(7)		—
One-to-four family – mixed-use property		(78)		119		(140)		(2)		(85)
One-to-four family – residential		(5)		(3)		(3)		110		(4)
Small Business Administration		(7)		(8)		(32)		(16)		(4)
Taxi medallion		—		—		—		(50)		(84)
Commercial business and other		1,245		(98)		150		954		1,092
Total net loan charge-offs (recoveries)	$	1,149	$	(34)	$	158	$	979	$	902

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS

Non-cash Fair Value Adjustments to GAAP Earnings

During 2020 and 2019, core earnings were higher than GAAP earnings primarily due to the impact of non-cash net losses from fair value adjustments. These fair value adjustments relate primarily to swaps designated to protect against rising rates. As the swaps get closer to maturity, the volatility in fair value adjustments will dissipate. In a declining interest rate environment, the movement in the curve exaggerates our mark-to-market loss position. In a rising interest rate environment or a steepening of the yield curve the loss position would experience an improvement.

Core Diluted EPS, Core ROAE, Core ROAA, Core Revenue before Provision for Credit Losses and Income Taxes, Core Net Interest Income, Core Yield on Total Loans, Core Net Interest Margin and tangible book value per common share are each non-GAAP measures used in this release. A reconciliation to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these measures are useful for both investors and management to understand the effects of certain interest and non-interest items and provide an alternative view of the Company's performance over time and in comparison to the Company's competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value per common share is useful for both investors and management as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company's capital over time and in comparison to its competitors. These measures should not be viewed as a substitute for total shareholders' equity.

These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	March 31,			December 31,			March 31,
	2020			2019			2019
GAAP income (loss) before income taxes	$	(1,596)		$	16,888		$	9,355
Net (gain) loss from fair value adjustments		5,993			(807)			2,080
Net loss on sale of securities		37			—			—
Life insurance proceeds		—			(419)			(43)
Net (gain) loss from fair value adjustments on qualifying hedges		2,073			(1,039)			637
Accelerated employee benefits upon Officer's death		—			—			455
Merger expense		929			1,080			—
Core income before taxes		7,436			15,703			12,484
Provision for income taxes for core income		1,936			3,841			3,033
Core net income	$	5,500		$	11,862		$	9,451
GAAP diluted earnings (loss) per common share	$	(0.05)		$	0.45		$	0.25
Net (gain) loss from fair value adjustments, net of tax		0.15			(0.02)			0.05
Net loss on sale of securities, net of tax		—			—			—
Life insurance proceeds		—			(0.01)			—
Net (gain) loss from fair value adjustments on qualifying hedges, net of tax		0.05			(0.03)			0.02
Accelerated employee benefits upon Officer's death, net of tax		—			—			0.01
Merger expense, net of tax		0.02			0.03			—
Core diluted earnings per common share(1)	$	0.19		$	0.41		$	0.33
Core net income, as calculated above	$	5,500		$	11,862		$	9,451
Average assets		7,106,998			7,057,094			6,868,140
Average equity		576,597			567,461			552,621
Core return on average assets(2)		0.31	%		0.67	%		0.55	%
Core return on average equity(2)		3.82	%		8.36	%		6.84	%

(1) Core diluted earnings per common share may not foot due to rounding.

(2) Ratios are calculated on an annualized basis.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

RECONCILIATION OF GAAP REVENUE and CORE REVENUE

BEFORE PROVISION FOR CREDIT LOSSES and INCOME TAXES

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	March 31,		December 31,		March 31,
	2020		2019		2019
GAAP net interest income	$	40,826	$	41,179	$	41,803
GAAP non-interest income (loss)		(2,864)		5,038		943
Net (gain) loss from fair value adjustments		5,993		(807)		2,080
Net loss on sale of securities		37		—		—
Life insurance proceeds		—		(419)		(43)
Net (gain) loss from fair value adjustments on qualifying hedges		2,073		(1,039)		637
Core revenue before the provision for credit losses and taxes	$	46,065	$	43,952	$	45,420

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

RECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGIN

To CORE NET INTEREST INCOME and NET INTEREST MARGIN

(Dollars in thousands)

(Unaudited)

	Three Months Ended
	March 31,			December 31,			March 31,
	2020			2019			2019
GAAP net interest income	$	40,826		$	41,179		$	41,803
Net (gain) loss from fair value adjustments on qualifying hedges		2,073			(1,039)			637
Core net interest income	$	42,899		$	40,140		$	42,440
GAAP interest income on total loans, net	$	61,109		$	64,316		$	62,330
Net (gain) loss from fair value adjustments on qualifying hedges		2,073			(1,039)			637
Prepayment penalties received on loans		(753)			(926)			(805)
Net recoveries of interest from non-accrual loans		(436)			(428)			(714)
Core interest income on total loans, net	$	61,993		$	61,923		$	61,448
Average total loans, net	$	5,794,866		$	5,726,635		$	5,544,667
Core yield on total loans		4.28	%		4.33	%		4.43	%
Net interest income tax equivalent	$	40,968		$	41,323		$	41,928
Net (gain) loss from fair value adjustments on qualifying hedges		2,073			(1,039)			637
Prepayment penalties received on loans and securities		(753)			(926)			(805)
Net recoveries of interest from non-accrual loans		(436)			(428)			(714)
Net interest income used in calculation of Core net interest margin	$	41,852		$	38,930		$	41,046
Total average interest-earning assets	$	6,719,857		$	6,677,325		$	6,521,142
Core net interest margin		2.49	%		2.33	%		2.52	%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CALCULATION OF TANGIBLE STOCKHOLDERS’

COMMON EQUITY to TANGIBLE ASSETS

(Unaudited)

	March 31,			December 31,			March 31,
(Dollars in thousands)	2020			2019			2019
Total Equity	$	549,683		$	579,672		$	559,559
Less:
Goodwill		(16,127)			(16,127)			(16,127)
Intangible deferred tax liabilities		292			292			290
Tangible Stockholders' Common Equity	$	533,848		$	563,837		$	543,722
Total Assets	$	7,245,410		$	7,017,776		$	6,867,450
Less:
Goodwill		(16,127)			(16,127)			(16,127)
Intangible deferred tax liabilities		292			292			290
Tangible Assets	$	7,229,575		$	7,001,941		$	6,851,613
Tangible Stockholders' Common Equity to Tangible Assets		7.38	%		8.05	%		7.94	%

__________________________________

1 See the tables entitled “Reconciliation of GAAP Earnings and Core Earnings” and “Reconciliation of GAAP Net Interest Income and Net Interest Margin to Core Net Interest Income and Net Interest Margin.”

Susan K. Cullen

Senior Executive Vice President, Treasurer and Chief Financial Officer

Flushing Financial Corporation

(718) 961-5400