0000923139--12-31 2021 Q2 Flushing Financial Corporation P1M P7Y8M12D 300000 false 0000923139 ffic:PerformingAccordingToRestructuredTermsMember 2021-01-01 2021-06-30 0000923139 us-gaap:CommonStockMember 2021-04-01 2021-06-30 0000923139 us-gaap:CommonStockMember 2021-01-01 2021-06-30 0000923139 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0000923139 us-gaap:CommonStockMember 2020-01-01 2020-06-30 0000923139 us-gaap:TreasuryStockMember 2021-06-30 0000923139 us-gaap:RetainedEarningsMember 2021-06-30 0000923139 us-gaap:CommonStockMember 2021-06-30 0000923139 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-06-30 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-06-30 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2021-06-30 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-06-30 0000923139 us-gaap:TreasuryStockMember 2021-03-31 0000923139 us-gaap:RetainedEarningsMember 2021-03-31 0000923139 us-gaap:CommonStockMember 2021-03-31 0000923139 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-31 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-03-31 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-03-31 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2021-03-31 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-03-31 0000923139 us-gaap:TreasuryStockMember 2020-12-31 0000923139 us-gaap:RetainedEarningsMember 2020-12-31 0000923139 us-gaap:CommonStockMember 2020-12-31 0000923139 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-12-31 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-12-31 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2020-12-31 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-12-31 0000923139 us-gaap:TreasuryStockMember 2020-06-30 0000923139 us-gaap:RetainedEarningsMember 2020-06-30 0000923139 us-gaap:CommonStockMember 2020-06-30 0000923139 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-06-30 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-06-30 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2020-06-30 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-06-30 0000923139 us-gaap:TreasuryStockMember 2020-03-31 0000923139 us-gaap:RetainedEarningsMember 2020-03-31 0000923139 us-gaap:CommonStockMember 2020-03-31 0000923139 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-03-31 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-03-31 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2020-03-31 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-03-31 0000923139 us-gaap:TreasuryStockMember 2019-12-31 0000923139 us-gaap:RetainedEarningsMember 2019-12-31 0000923139 us-gaap:CommonStockMember 2019-12-31 0000923139 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-12-31 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-12-31 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2019-12-31 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-12-31 0000923139 ffic:ProfessionalServicesMember 2021-04-01 2021-06-30 0000923139 ffic:ProfessionalServicesMember 2021-01-01 2021-06-30 0000923139 ffic:ProfessionalServicesMember 2020-04-01 2020-06-30 0000923139 ffic:ProfessionalServicesMember 2020-01-01 2020-06-30 0000923139 us-gaap:TreasuryStockMember 2021-01-01 2021-06-30 0000923139 us-gaap:TreasuryStockMember 2020-01-01 2020-06-30 0000923139 ffic:OmnibusPlan2014Member 2021-06-30 0000923139 ffic:OmnibusPlan2014Member 2021-05-18 2021-05-18 0000923139 us-gaap:RestrictedStockUnitsRSUMember ffic:OmnibusPlan2014Member 2021-04-01 2021-06-30 0000923139 us-gaap:RestrictedStockUnitsRSUMember ffic:OmnibusPlan2014Member 2020-04-01 2020-06-30 0000923139 us-gaap:RestrictedStockUnitsRSUMember ffic:OmnibusPlan2014Member 2020-01-01 2020-06-30 0000923139 us-gaap:RestrictedStockUnitsRSUMember 2020-12-31 0000923139 ffic:PerformanceBasedRestrictedStockUnitsMember 2020-12-31 0000923139 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-06-30 0000923139 ffic:PerformanceBasedRestrictedStockUnitsMember 2020-01-01 2020-06-30 0000923139 us-gaap:RestrictedStockUnitsRSUMember 2021-01-01 2021-06-30 0000923139 ffic:PerformanceBasedRestrictedStockUnitsMember 2021-01-01 2021-06-30 0000923139 ffic:TwoThousandAndNineteenLongTermIncentiveCompensationProgramMember 2019-01-31 2019-01-31 0000923139 us-gaap:PhantomShareUnitsPSUsMember 2021-01-01 2021-06-30 0000923139 ffic:HoldingCompanyMember 2021-01-01 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-04-01 2020-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember 2020-04-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2021-04-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2021-04-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2021-01-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2021-01-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2020-04-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2020-04-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2020-01-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2020-01-01 2020-06-30 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-03-31 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-01-01 2020-06-30 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-04-01 2021-06-30 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-04-01 2021-06-30 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-04-01 2021-06-30 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2021-04-01 2021-06-30 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-04-01 2021-06-30 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-06-30 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-01-01 2021-06-30 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-01-01 2021-06-30 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2021-01-01 2021-06-30 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-04-01 2020-06-30 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-04-01 2020-06-30 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2020-04-01 2020-06-30 0000923139 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-04-01 2020-06-30 0000923139 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-06-30 0000923139 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-01-01 2020-06-30 0000923139 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-01-01 2020-06-30 0000923139 us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember 2020-01-01 2020-06-30 0000923139 us-gaap:ConsumerPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:ConsumerPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:RealEstateMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-06-30 0000923139 us-gaap:RealEstateMember ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:RealEstateMember ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:RealEstateMember ffic:MultiFamilyResidentialPortfolioSegmentMember 2021-06-30 0000923139 ffic:BusinessAssetsMember ffic:SmallBusinessAdministrationPortfolioSegmentMember 2021-06-30 0000923139 ffic:BusinessAssetsMember ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:RealEstateMember 2021-06-30 0000923139 ffic:BusinessAssetsMember 2021-06-30 0000923139 us-gaap:RealEstateMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-12-31 0000923139 us-gaap:RealEstateMember ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:RealEstateMember ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:RealEstateMember ffic:MultiFamilyResidentialPortfolioSegmentMember 2020-12-31 0000923139 ffic:BusinessAssetsMember ffic:TaxiMedallionPortfolioSegmentMember 2020-12-31 0000923139 ffic:BusinessAssetsMember ffic:SmallBusinessAdministrationPortfolioSegmentMember 2020-12-31 0000923139 ffic:BusinessAssetsMember ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:RealEstateMember 2020-12-31 0000923139 ffic:BusinessAssetsMember 2020-12-31 0000923139 ffic:SmallBusinessAdministrationMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsedPropertyMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialMember 2021-06-30 0000923139 ffic:CooperativeApartmentsMember 2021-06-30 0000923139 ffic:CommercialRealEstateLoansMember 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherMember 2021-06-30 0000923139 ffic:TaxiMedallionMember 2020-12-31 0000923139 ffic:SmallBusinessAdministrationMember 2020-12-31 0000923139 ffic:OneToFourFamilyResidentialMember 2020-12-31 0000923139 ffic:OneToFourFamilyMixedUsedPropertyMember 2020-12-31 0000923139 ffic:MultiFamilyResidentialMember 2020-12-31 0000923139 ffic:CooperativeApartmentsMember 2020-12-31 0000923139 ffic:CommercialRealEstateLoansMember 2020-12-31 0000923139 ffic:CommercialBusinessAndOtherMember 2020-12-31 0000923139 srt:MinimumMember 2021-06-30 0000923139 srt:MaximumMember 2021-06-30 0000923139 us-gaap:LoansReceivableMember 2021-06-30 0000923139 us-gaap:LoansReceivableMember 2020-12-31 0000923139 ffic:CustomerMember 2021-06-30 0000923139 ffic:CustomerAndBankMember 2021-06-30 0000923139 ffic:BankMember 2021-06-30 0000923139 ffic:CustomerMember 2020-12-31 0000923139 ffic:CustomerAndBankMember 2020-12-31 0000923139 ffic:BankMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-04-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-01-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-01-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-04-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2021-01-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-04-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-01-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-04-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-04-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-01-01 2020-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 ffic:TaxiMedallionPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 ffic:TaxiMedallionPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 ffic:TaxiMedallionPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2021-06-30 0000923139 us-gaap:FinancingReceivables60To89DaysPastDueMember 2021-06-30 0000923139 us-gaap:FinancingReceivables30To59DaysPastDueMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 ffic:TaxiMedallionPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 ffic:TaxiMedallionPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 ffic:TaxiMedallionPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-12-31 0000923139 us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-12-31 0000923139 us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-12-31 0000923139 ffic:TaxiMedallionPortfolioSegmentMember 2021-06-30 0000923139 ffic:CommercialBusinessSecuredByPortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:CommercialBusinessPortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:SubstandardMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:SubstandardMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:OtherPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:SubstandardMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:SpecialMentionMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:SubstandardMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:CommercialBusinessSecuredByPortfolioSegmentMember us-gaap:SubstandardMember 2021-06-30 0000923139 ffic:CommercialBusinessSecuredByPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:CommercialBusinessSecuredByPortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:CommercialBusinessPortfolioSegmentMember us-gaap:SubstandardMember 2021-06-30 0000923139 ffic:CommercialBusinessPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:CommercialBusinessPortfolioSegmentMember us-gaap:DoubtfulMember 2021-06-30 0000923139 ffic:CommercialBusinessPortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:OtherPortfolioSegmentMember 2021-06-30 0000923139 ffic:CommercialBusinessSecuredByPortfolioSegmentMember 2021-06-30 0000923139 ffic:CommercialBusinessPortfolioSegmentMember 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-01-01 2020-12-31 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:TaxiMedallionPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:TaxiMedallionPortfolioSegmentMember 2020-01-01 2020-12-31 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-01-01 2020-12-31 0000923139 us-gaap:NonperformingFinancingReceivableMember 2020-01-01 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyResidentialMember 2021-01-01 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsedPropertyMember 2021-01-01 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:MultiFamilyResidentialMember 2021-01-01 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:CommercialBusinessAndOtherMember 2021-01-01 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember 2021-01-01 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherMember 2021-01-01 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-01-01 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:TaxiMedallionPortfolioSegmentMember 2020-01-01 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyResidentialMember 2020-01-01 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsedPropertyMember 2020-01-01 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:MultiFamilyResidentialMember 2020-01-01 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:CommercialBusinessAndOtherMember 2020-01-01 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember 2020-01-01 2020-12-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-04-01 2020-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-04-01 2020-06-30 0000923139 ffic:TaxiMedallionPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 ffic:TaxiMedallionPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2020-04-01 2020-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2020-04-01 2020-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2020-04-01 2020-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-03-31 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2021-03-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2021-03-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-03-31 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2021-03-31 0000923139 ffic:ConstructionPortfolioSegmentMember 2021-03-31 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2021-03-31 0000923139 ffic:ConstructionPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2020-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2020-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2020-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember 2020-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-03-31 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2020-03-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2020-03-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-03-31 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2020-03-31 0000923139 ffic:ConstructionPortfolioSegmentMember 2020-03-31 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-03-31 0000923139 ffic:ConstructionPortfolioSegmentMember 2019-12-31 0000923139 us-gaap:MortgageBackedSecuritiesMember 2021-04-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember 2021-04-01 2021-06-30 0000923139 ffic:OtherSecuritiesMember 2021-04-01 2021-06-30 0000923139 ffic:JuniorSubordinatedDebenturesMember 2021-04-01 2021-06-30 0000923139 ffic:FinancialAssetsAndLiabilitiesExcludingInterestRateCapsSwapsMember 2021-04-01 2021-06-30 0000923139 us-gaap:MortgageBackedSecuritiesMember 2021-01-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember 2021-01-01 2021-06-30 0000923139 ffic:OtherSecuritiesMember 2021-01-01 2021-06-30 0000923139 ffic:JuniorSubordinatedDebenturesMember 2021-01-01 2021-06-30 0000923139 ffic:FinancialAssetsAndLiabilitiesExcludingInterestRateCapsSwapsMember 2021-01-01 2021-06-30 0000923139 us-gaap:MortgageBackedSecuritiesMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember 2020-04-01 2020-06-30 0000923139 ffic:OtherSecuritiesMember 2020-04-01 2020-06-30 0000923139 ffic:JuniorSubordinatedDebenturesMember 2020-04-01 2020-06-30 0000923139 ffic:FinancialAssetsAndLiabilitiesExcludingInterestRateCapsSwapsMember 2020-04-01 2020-06-30 0000923139 us-gaap:MortgageBackedSecuritiesMember 2020-01-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember 2020-01-01 2020-06-30 0000923139 ffic:OtherSecuritiesMember 2020-01-01 2020-06-30 0000923139 ffic:JuniorSubordinatedDebenturesMember 2020-01-01 2020-06-30 0000923139 ffic:FinancialAssetsAndLiabilitiesExcludingInterestRateCapsSwapsMember 2020-01-01 2020-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2021-03-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2021-03-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2020-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2020-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2020-03-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2020-03-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2019-12-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2019-12-31 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2021-04-01 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2021-01-01 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2020-04-01 2020-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:TrustPreferredSecuritiesMember 2020-01-01 2020-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2021-04-01 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2021-01-01 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2020-04-01 2020-06-30 0000923139 us-gaap:FairValueInputsLevel3Member ffic:JuniorSubordinatedDebenturesMember 2020-01-01 2020-06-30 0000923139 us-gaap:FairValueMeasurementsRecurringMember 2021-01-01 2021-06-30 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember 2021-01-01 2021-06-30 0000923139 us-gaap:RestrictedStockUnitsRSUMember ffic:OmnibusPlan2014Member 2021-01-01 2021-06-30 0000923139 us-gaap:RestrictedStockUnitsRSUMember ffic:OmnibusPlan2014Member 2021-06-30 0000923139 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0000923139 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0000923139 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:InterestAndFeesOnLoansMember 2021-04-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:OtherInterestExpenseMember 2021-04-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:OtherInterestExpenseMember 2021-04-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:NetLossFromFairValueAdjustmentMember 2021-04-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2021-04-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:InterestAndFeesOnLoansMember 2021-01-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:OtherInterestExpenseMember 2021-01-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:OtherInterestExpenseMember 2021-01-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:NetLossFromFairValueAdjustmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2021-01-01 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:InterestAndFeesOnLoansMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:OtherInterestExpenseMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:OtherInterestExpenseMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:NetLossFromFairValueAdjustmentMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2020-04-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:InterestAndFeesOnLoansMember 2020-01-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember ffic:OtherInterestExpenseMember 2020-01-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:OtherInterestExpenseMember 2020-01-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember ffic:NetLossFromFairValueAdjustmentMember 2020-01-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2020-01-01 2020-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2021-06-30 0000923139 ffic:InterestRateSwaps2Member us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2021-06-30 0000923139 ffic:InterestRateSwaps1Member us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2021-06-30 0000923139 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2021-06-30 0000923139 ffic:InterestRateSwaps1Member us-gaap:NondesignatedMember 2021-06-30 0000923139 us-gaap:NondesignatedMember 2021-06-30 0000923139 us-gaap:DesignatedAsHedgingInstrumentMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-12-31 0000923139 ffic:InterestRateSwaps2Member us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember us-gaap:NondesignatedMember 2020-12-31 0000923139 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-12-31 0000923139 ffic:InterestRateSwaps1Member us-gaap:NondesignatedMember 2020-12-31 0000923139 us-gaap:NondesignatedMember 2020-12-31 0000923139 us-gaap:DesignatedAsHedgingInstrumentMember 2020-12-31 0000923139 us-gaap:InterestRateSwapMember 2021-06-30 0000923139 us-gaap:InterestRateSwapMember 2020-12-31 0000923139 ffic:FloatingRateJuniorSubordinatedDebenturesMember 2021-06-30 0000923139 ffic:FloatingRateJuniorSubordinatedDebenturesMember 2020-12-31 0000923139 ffic:SavingsBankMember ffic:RetirementPlanMember 2021-06-30 0000923139 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2020-12-31 0000923139 ffic:DirectorsPlanMember 2020-12-31 0000923139 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2021-01-01 2021-06-30 0000923139 ffic:DirectorsPlanMember 2021-01-01 2021-06-30 0000923139 ffic:OtherPostRetirementBenefitPlanDefinedBenefitMember 2020-04-01 2020-06-30 0000923139 ffic:OtherPostRetirementBenefitPlanDefinedBenefitMember 2020-01-01 2020-06-30 0000923139 ffic:OtherPostRetirementBenefitPlanDefinedBenefitMember 2021-04-01 2021-06-30 0000923139 ffic:EmployeePensionPlanMember 2021-04-01 2021-06-30 0000923139 ffic:DirectorsPlanMember 2021-04-01 2021-06-30 0000923139 ffic:OtherPostRetirementBenefitPlanDefinedBenefitMember 2021-01-01 2021-06-30 0000923139 ffic:EmployeePensionPlanMember 2021-01-01 2021-06-30 0000923139 ffic:DirectorsPlanMember 2021-01-01 2021-06-30 0000923139 ffic:EmployeePensionPlanMember 2020-04-01 2020-06-30 0000923139 ffic:DirectorsPlanMember 2020-04-01 2020-06-30 0000923139 ffic:EmployeePensionPlanMember 2020-01-01 2020-06-30 0000923139 ffic:DirectorsPlanMember 2020-01-01 2020-06-30 0000923139 2021-03-31 0000923139 2020-03-31 0000923139 srt:WeightedAverageMember ffic:TrustPreferredSecuritiesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:WeightedAverageMember ffic:TrustPreferredSecuritiesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 us-gaap:CollateralizedLoanObligationsMember 2021-06-30 0000923139 us-gaap:CollateralizedLoanObligationsMember 2020-12-31 0000923139 srt:WeightedAverageMember ffic:JuniorSubordinatedDebenturesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:WeightedAverageMember ffic:JuniorSubordinatedDebenturesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2021-06-30 0000923139 ffic:JuniorSubordinatedDebenturesMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsRecurringMember ffic:JuniorSubordinatedDebenturesMember 2020-12-31 0000923139 ffic:JuniorSubordinatedDebenturesMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-04-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-01-01 2021-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-04-01 2020-06-30 0000923139 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-01-01 2020-06-30 0000923139 2020-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2021-06-30 0000923139 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 ffic:TrustPreferredSecuritiesMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsRecurringMember ffic:OtherSecuritiesMember 2020-12-31 0000923139 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:OtherDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 ffic:TrustPreferredSecuritiesMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:CorporateDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:CollateralizedDebtObligationsMember 2021-06-30 0000923139 ffic:REMICAndCMOMember 2021-06-30 0000923139 ffic:MutualFundDebtSecuritiesMember 2021-06-30 0000923139 ffic:GNMAMember 2021-06-30 0000923139 ffic:FHLMCMember 2021-06-30 0000923139 ffic:AvailableForSaleSecuritiesExcludingMortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:CorporateDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:CollateralizedDebtObligationsMember 2020-12-31 0000923139 ffic:REMICAndCMOMember 2020-12-31 0000923139 ffic:MutualFundDebtSecuritiesMember 2020-12-31 0000923139 ffic:GNMAMember 2020-12-31 0000923139 ffic:FHLMCMember 2020-12-31 0000923139 ffic:AvailableForSaleSecuritiesExcludingMortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000923139 us-gaap:EmployeeStockOptionMember 2021-04-01 2021-06-30 0000923139 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-06-30 0000923139 us-gaap:EmployeeStockOptionMember 2020-04-01 2020-06-30 0000923139 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0000923139 us-gaap:PhantomShareUnitsPSUsMember ffic:PhantomStockPlanMember 2021-04-01 2021-06-30 0000923139 us-gaap:PhantomShareUnitsPSUsMember ffic:PhantomStockPlanMember 2020-04-01 2020-06-30 0000923139 us-gaap:PhantomShareUnitsPSUsMember ffic:PhantomStockPlanMember 2020-01-01 2020-06-30 0000923139 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0000923139 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0000923139 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0000923139 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000923139 us-gaap:TreasuryStockMember 2021-04-01 2021-06-30 0000923139 us-gaap:TreasuryStockMember 2021-01-01 2021-03-31 0000923139 2021-01-01 2021-03-31 0000923139 us-gaap:TreasuryStockMember 2020-04-01 2020-06-30 0000923139 us-gaap:TreasuryStockMember 2020-01-01 2020-03-31 0000923139 us-gaap:PhantomShareUnitsPSUsMember ffic:PhantomStockPlanMember 2021-06-30 0000923139 us-gaap:PhantomShareUnitsPSUsMember ffic:PhantomStockPlanMember 2020-12-31 0000923139 us-gaap:PhantomShareUnitsPSUsMember ffic:PhantomStockPlanMember 2021-01-01 2021-06-30 0000923139 us-gaap:RestrictedStockUnitsRSUMember 2021-06-30 0000923139 ffic:PerformanceBasedRestrictedStockUnitsMember 2021-06-30 0000923139 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000923139 2020-01-01 2020-03-31 0000923139 ffic:CollateralizedMortgageObligationsByCommercialRealEstateMember 2021-06-30 0000923139 ffic:CollateralizedMortgageObligationsByCommercialRealEstateMember 2020-12-31 0000923139 us-gaap:VehiclesMember 2021-06-30 0000923139 us-gaap:EquipmentMember 2021-06-30 0000923139 ffic:BranchesAndOfficeSpaceMember 2021-06-30 0000923139 srt:MinimumMember ffic:SmallBusinessAdministrationPortfolioSegmentMember ffic:PaycheckProtectionProgramMember 2021-01-01 2021-06-30 0000923139 srt:MaximumMember ffic:SmallBusinessAdministrationPortfolioSegmentMember ffic:PaycheckProtectionProgramMember 2021-01-01 2021-06-30 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2021-06-30 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputComparabilityAdjustmentMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputCapRateMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 srt:MinimumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:MinimumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2021-06-30 0000923139 srt:MinimumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:MinimumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputComparabilityAdjustmentMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 srt:MaximumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:MaximumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2021-06-30 0000923139 srt:MaximumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 srt:MaximumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputComparabilityAdjustmentMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputCapRateMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2020-12-31 0000923139 srt:WeightedAverageMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 srt:MinimumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 srt:MinimumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2020-12-31 0000923139 srt:MinimumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 srt:MaximumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 srt:MaximumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2020-12-31 0000923139 srt:MaximumMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputComparabilityAdjustmentMember ffic:BlendedIncomeAndSalesApproachMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsNonrecurringMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsNonrecurringMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember 2021-06-30 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputLossSeverityMember us-gaap:MarketApproachValuationTechniqueMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsNonrecurringMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsNonrecurringMember 2020-12-31 0000923139 us-gaap:FairValueMeasurementsNonrecurringMember 2020-12-31 0000923139 us-gaap:HeldtomaturitySecuritiesMember us-gaap:FederalNationalMortgageAssociationCertificatesAndObligationsFNMAMember 2021-06-30 0000923139 us-gaap:HeldtomaturitySecuritiesMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-06-30 0000923139 us-gaap:USStatesAndPoliticalSubdivisionsMember 2021-06-30 0000923139 ffic:TotalOtherSecuritiesMember 2021-06-30 0000923139 ffic:FNMAMember 2021-06-30 0000923139 us-gaap:USStatesAndPoliticalSubdivisionsMember 2020-12-31 0000923139 ffic:FNMAMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyResidentialMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsedPropertyMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:MultiFamilyResidentialMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:CommercialBusinessAndOtherMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember 2021-06-30 0000923139 us-gaap:PerformingFinancingReceivableMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:TaxiMedallionPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyResidentialMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsedPropertyMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:MultiFamilyResidentialMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember ffic:CommercialBusinessAndOtherMember 2020-12-31 0000923139 us-gaap:PerformingFinancingReceivableMember 2020-12-31 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2021-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2021-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-12-31 0000923139 ffic:TaxiMedallionPortfolioSegmentMember 2020-12-31 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2020-12-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2020-12-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-12-31 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2020-12-31 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-12-31 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2019-12-31 0000923139 ffic:TaxiMedallionPortfolioSegmentMember 2019-12-31 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2019-12-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2019-12-31 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2019-12-31 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2019-12-31 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2019-12-31 0000923139 2019-12-31 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:SubstandardMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember us-gaap:PassMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember ffic:WatchMember 2021-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2021-06-30 0000923139 us-gaap:CommercialRealEstatePortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 ffic:OneToFourFamilyResidentialPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 ffic:MultiFamilyResidentialPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 ffic:ConstructionPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 ffic:CommercialBusinessAndOtherPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember ffic:PaycheckProtectionProgramMember 2021-06-30 0000923139 ffic:SmallBusinessAdministrationPortfolioSegmentMember ffic:PaycheckProtectionProgramMember 2020-12-31 0000923139 2020-01-01 2020-12-31 0000923139 ffic:OtherSecuritiesMember 2021-06-30 0000923139 ffic:JuniorSubordinatedDebenturesMember 2021-06-30 0000923139 ffic:OtherSecuritiesMember 2020-12-31 0000923139 ffic:JuniorSubordinatedDebenturesMember 2020-12-31 0000923139 2021-04-01 2021-06-30 0000923139 2020-04-01 2020-06-30 0000923139 2020-01-01 2020-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember 2020-04-01 2020-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:MultiFamilyResidentialPortfolioSegmentMember 2020-01-01 2020-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember 2020-01-01 2020-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:MultiFamilyResidentialPortfolioSegmentMember 2021-04-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember 2021-04-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:OneToFourFamilyMixedUsePropertyPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember ffic:MultiFamilyResidentialPortfolioSegmentMember 2021-01-01 2021-06-30 0000923139 us-gaap:NonperformingFinancingReceivableMember 2021-01-01 2021-06-30 0000923139 us-gaap:HeldtomaturitySecuritiesMember 2021-06-30 0000923139 us-gaap:HeldtomaturitySecuritiesMember 2020-12-31 0000923139 2021-06-30 0000923139 2020-12-31 0000923139 ffic:ExtensionOfCreditMember 2021-06-30 0000923139 ffic:ExtensionOfCreditMember 2020-12-31 0000923139 ffic:AppraisedValueOfPropertyMember 2021-06-30 0000923139 ffic:SavingsBankMember 2021-06-30 0000923139 ffic:HoldingCompanyMember 2021-06-30 0000923139 ffic:SavingsBankMember 2020-12-31 0000923139 ffic:HoldingCompanyMember 2020-12-31 0000923139 us-gaap:OtherDebtSecuritiesMember 2021-06-30 0000923139 us-gaap:MortgageBackedSecuritiesMember 2021-06-30 0000923139 us-gaap:OtherDebtSecuritiesMember 2020-12-31 0000923139 us-gaap:MortgageBackedSecuritiesMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2021-06-30 0000923139 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000923139 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-12-31 0000923139 2021-07-31 0000923139 2021-01-01 2021-06-30 xbrli:shares iso4217:USD xbrli:pure ffic:loan ffic:item ffic:lease iso4217:USD xbrli:shares ffic:contract

Table of Contents

​

​

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

​

FORM 10-Q

​

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

THE SECURITIES EXCHANGE ACT OF 1934

​

For the quarterly period ended June 30, 2021

​

Commission file number 001-33013

​

FLUSHING FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

​

Delaware

(State or other jurisdiction of incorporation or organization)

​

11-3209278

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

​

220 RXR Plaza, Uniondale, New York 11556

(Address of principal executive offices)

​

(718) 961-5400

(Registrant’s telephone number, including area code)

​

Securities registered pursuant to Section 12(b) of the Act:

​

​ | ​ | ​
Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Stock, $0.01 par value | FFIC | The Nasdaq Stock Market LLC

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes __No

​

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). X Yes __No

​

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

​

​ | ​
Large accelerated filer __ | Accelerated filer X
Non-accelerated filer __ | Smaller reporting company __
Emerging growth company __ | ​

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange act.__

​

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ___Yes X No

​

The number of shares of the registrant’s Common Stock outstanding as of July 31, 2021 was 30,936,504.

​

​

​

​

​

Table of Contents

​

​

TABLE OF CONTENTS

​

​ | PAGE
PART I — FINANCIAL INFORMATION | ​
ITEM 1. Financial Statements - (Unaudited) | ​
Consolidated Statements of Financial Condition | 1
Consolidated Statements of Income | 2
Consolidated Statements of Comprehensive Income | 3
Consolidated Statements of Cash Flows | 4
Consolidated Statements of Changes in Stockholders’ Equity | 6
Notes to Consolidated Financial Statements | 7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 45
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk | 60
ITEM 4. Controls and Procedures | 60
PART II — OTHER INFORMATION | ​
ITEM 1. Legal Proceedings | 61
ITEM 1A. Risk Factors | 61
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds | 61
ITEM 3. Defaults Upon Senior Securities | 61
ITEM 4. Mine Safety Disclosures | 61
ITEM 5. Other Information | 61
ITEM 6. Exhibits | 62
SIGNATURES | 64

​

​

​

i

Table of Contents

​

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Financial Condition

(Unaudited)

Item 1. Financial Statements

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | December 31,
​ |  | 2021 |  | 2020
​ | ​ | (Dollars in thousands, except per share data)
Assets |  | ​ |  |  | ​ |
Cash and due from banks | ​ | $ | 145,971 | ​ | $ | 157,388
Securities held-to-maturity: | ​ |  |  | ​ |  | ​
Mortgage-backed securities (including assets pledged of $5,760 and $5,853 at June 30, 2021 and December 31, 2020, respectively; fair value of $8,848 and $8,991 at June 30, 2021 and December 31, 2020, respectively) | ​ |  | 7,904 | ​ |  | 7,914
Other securities, net of allowance for credit losses of $844 and $907 at June 30, 2021 and December 31, 2020, respectively, (none pledged; fair value of $53,598 and $54,538 at June 30, 2021 and December 31, 2020, respectively) | ​ |  | 49,986 | ​ |  | 49,918
Securities available for sale, at fair value: | ​ |  |  | ​ |  | ​
Mortgage-backed securities (including assets pledged of $287,288 and $264,968 at June 30, 2021 and December 31, 2020, respectively; $441 and $505 at fair value pursuant to the fair value option at June 30, 2021 and December 31, 2020, respectively) | ​ |  | 596,661 | ​ |  | 404,460
Other securities (including asset pledged of $6,000 and $6,453 at June 30, 2021 and December 31, 2020, respectively; $14,080 and $13,998 at fair value pursuant to the fair value option at June 30, 2021 and December 31, 2020, respectively) | ​ |  | 224,784 | ​ |  | 243,514
Loans: | ​ |  | ​ | ​ |  | ​
Multi-family residential | ​ | ​ | 2,542,010 | ​ | ​ | 2,533,952
Commercial real estate | ​ | ​ | 1,726,895 | ​ | ​ | 1,754,754
One-to-four family - mixed-use property | ​ | ​ | 582,211 | ​ | ​ | 602,981
One-to-four family - residential | ​ | ​ | 288,652 | ​ | ​ | 245,211
Co-operative apartments | ​ | ​ | 7,883 | ​ | ​ | 8,051
Construction | ​ | ​ | 62,802 | ​ | ​ | 83,322
Small Business Administration | ​ | ​ | 215,158 | ​ | ​ | 167,376
Taxi medallion | ​ | ​ | — | ​ | ​ | 2,757
Commercial business and other | ​ | ​ | 1,291,526 | ​ | ​ | 1,303,225
Net unamortized premiums and unearned loan fees | ​ | ​ | 1,669 | ​ | ​ | 3,045
Allowance for Credit losses - Loans | ​ |  | (42,670) | ​ |  | (45,153)
Net loans | ​ |  | 6,676,136 | ​ |  | 6,659,521
Interest and dividends receivable | ​ |  | 43,803 | ​ |  | 44,041
Bank premises and equipment, net | ​ |  | 26,438 | ​ |  | 28,179
Federal Home Loan Bank of New York stock, at cost | ​ |  | 41,630 | ​ |  | 43,439
Bank owned life insurance | ​ |  | 183,715 | ​ |  | 181,710
Goodwill | ​ |  | 17,636 | ​ |  | 17,636
Core deposit intangibles | ​ | ​ | 2,859 | ​ | ​ | 3,172
Right of Use Asset | ​ | ​ | 51,972 | ​ |  | 50,743
Other assets | ​ |  | 89,850 | ​ |  | 84,759
Total assets | ​ | $ | 8,159,345 | ​ | $ | 7,976,394
​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities | ​ |  |  | ​ |  |
Due to depositors: | ​ |  |  | ​ |  |
Non-interest bearing | ​ | $ | 945,491 | ​ | $ | 778,672
Interest-bearing | ​ |  | 5,353,299 | ​ |  | 5,312,061
Total Deposits | ​ | ​ | 6,298,790 | ​ | ​ | 6,090,733
Mortgagors' escrow deposits | ​ |  | 58,230 | ​ |  | 45,622
Borrowed funds: | ​ |  | ​ | ​ |  | ​
Federal Home Loan Bank advances | ​ |  | 831,932 | ​ |  | 887,579
Subordinated debentures | ​ |  | 90,081 | ​ |  | 90,180
Junior subordinated debentures, at fair value | ​ |  | 49,814 | ​ |  | 43,136
Total borrowed funds | ​ |  | 971,827 | ​ |  | 1,020,895
Operating lease liability | ​ | ​ | 56,151 | ​ | ​ | 59,100
Other liabilities | ​ |  | 119,180 | ​ |  | 141,047
Total liabilities | ​ |  | 7,504,178 | ​ |  | 7,357,397
​ | ​ | ​ | ​ | ​ | ​ | ​
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; 34,087,623 shares issued at June 30, 2021 and December 31, 2020; 30,961,504 shares and 30,775,854 shares outstanding at June 30, 2021 and December 31, 2020, respectively) | ​ |  | 341 | ​ |  | 341
Additional paid-in capital | ​ |  | 260,958 | ​ |  | 261,533
Treasury stock, at average cost (3,126,119 shares and 3,373,389 shares at June 30, 2021 and December 31, 2020, respectively) | ​ |  | (65,335) | ​ |  | (69,400)
Retained earnings | ​ |  | 467,620 | ​ |  | 442,789
Accumulated other comprehensive loss, net of taxes | ​ |  | (8,417) | ​ |  | (16,266)
Total stockholders' equity | ​ |  | 655,167 | ​ |  | 618,997
​ | ​ | ​ | ​ | ​ | ​ | ​
Total liabilities and stockholders' equity | ​ | $ | 8,159,345 | ​ | $ | 7,976,394

​

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

​

-1-

Table of Contents

​

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the six months ended
​ |  | June 30, | ​ | June 30,
(Dollars in thousands, except per share data) |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest and dividend income | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest and fees on loans | ​ | $ | 67,999 | ​ | $ | 60,557 | ​ | $ | 137,020 | ​ | $ | 121,666
Interest and dividends on securities: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Interest | ​ |  | 3,685 | ​ | ​ | 4,182 | ​ |  | 6,757 | ​ | ​ | 9,438
Dividends | ​ |  | 7 | ​ |  | 11 | ​ |  | 15 | ​ |  | 26
Other interest income | ​ | ​ | 51 | ​ |  | 22 | ​ | ​ | 87 | ​ |  | 312
Total interest and dividend income | ​ |  | 71,742 | ​ |  | 64,772 | ​ |  | 143,879 | ​ |  | 131,442
Interest expense | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits | ​ |  | 5,539 | ​ |  | 9,971 | ​ |  | 11,644 | ​ |  | 28,749
Other interest expense | ​ |  | 5,164 | ​ |  | 6,084 | ​ |  | 10,304 | ​ |  | 13,150
Total interest expense | ​ |  | 10,703 | ​ |  | 16,055 | ​ |  | 21,948 | ​ |  | 41,899
Net interest income | ​ |  | 61,039 | ​ |  | 48,717 | ​ |  | 121,931 | ​ |  | 89,543
(Benefit) provision for credit losses | ​ |  | (1,598) | ​ |  | 9,619 | ​ |  | 1,222 | ​ |  | 16,797
Net interest income after (benefit) provision for credit losses | ​ |  | 62,637 | ​ |  | 39,098 | ​ |  | 120,709 | ​ |  | 72,746
Non-interest income | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Banking services fee income | ​ |  | 1,233 | ​ |  | 944 | ​ |  | 3,958 | ​ |  | 1,742
Net gain (loss) on sale of securities | ​ |  | 123 | ​ |  | (54) | ​ |  | 123 | ​ |  | (91)
Net gain on sale of loans | ​ |  | 127 | ​ |  | — | ​ |  | 158 | ​ |  | 42
Net gain on disposition of assets | ​ |  | — | ​ |  | — | ​ |  | 621 | ​ |  | —
Net gain (loss) from fair value adjustments | ​ |  | (6,548) | ​ |  | 10,205 | ​ |  | (5,566) | ​ |  | 4,212
Life insurance proceeds | ​ | ​ | — | ​ | ​ | 659 | ​ | ​ | — | ​ | ​ | 659
Federal Home Loan Bank of New York stock dividends | ​ |  | 500 | ​ |  | 881 | ​ |  | 1,189 | ​ |  | 1,845
Bank owned life insurance | ​ |  | 1,009 | ​ |  | 932 | ​ |  | 2,006 | ​ |  | 1,875
Other income | ​ |  | 346 | ​ |  | 170 | ​ |  | 612 | ​ |  | 589
Total non-interest income (loss) | ​ |  | (3,210) | ​ |  | 13,737 | ​ |  | 3,101 | ​ |  | 10,873
Non-interest expense | ​ |  | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | ​
Salaries and employee benefits | ​ |  | 19,879 | ​ |  | 16,184 | ​ |  | 42,543 | ​ |  | 34,804
Occupancy and equipment | ​ |  | 3,522 | ​ |  | 2,827 | ​ |  | 6,889 | ​ |  | 5,667
Professional services | ​ |  | 1,988 | ​ |  | 1,985 | ​ |  | 4,388 | ​ |  | 4,847
FDIC deposit insurance | ​ |  | 729 | ​ |  | 737 | ​ |  | 1,942 | ​ |  | 1,387
Data processing | ​ |  | 1,419 | ​ |  | 1,813 | ​ |  | 3,528 | ​ |  | 3,507
Depreciation and amortization | ​ |  | 1,638 | ​ |  | 1,555 | ​ |  | 3,277 | ​ |  | 3,091
Other real estate owned/foreclosure expense (recoveries) | ​ |  | 22 | ​ |  | 45 | ​ |  | 12 | ​ |  | (119)
Other operating expenses | ​ |  | 4,814 | ​ |  | 3,609 | ​ |  | 9,591 | ​ |  | 7,951
Total non-interest expense | ​ |  | 34,011 | ​ |  | 28,755 | ​ |  | 72,170 | ​ |  | 61,135
Income before income taxes | ​ |  | 25,416 | ​ |  | 24,080 | ​ |  | 51,640 | ​ |  | 22,484
Provision for income taxes | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ |  | 4,857 | ​ |  | 4,307 | ​ |  | 9,928 | ​ |  | 5,296
State and local | ​ |  | 1,301 | ​ |  | 1,501 | ​ |  | 3,415 | ​ |  | 306
Total taxes | ​ |  | 6,158 | ​ |  | 5,808 | ​ |  | 13,343 | ​ |  | 5,602
Net income | ​ | $ | 19,258 | ​ | $ | 18,272 | ​ | $ | 38,297 | ​ | $ | 16,882
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic earnings per common share | ​ | $ | 0.61 | ​ | $ | 0.63 | ​ | $ | 1.21 | ​ | $ | 0.58
Diluted earnings per common share | ​ | $ | 0.61 | ​ | $ | 0.63 | ​ | $ | 1.21 | ​ | $ | 0.58
Dividends per common share | ​ | $ | 0.21 | ​ | $ | 0.21 | ​ | $ | 0.42 | ​ | $ | 0.42

​

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

​

-2-

Table of Contents

​

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the six months ended | ​
​ | ​ | June 30, | ​ | June 30, | ​
(In thousands) |  | 2021 |  | 2020 |  | 2021 |  | 2020 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 19,258 | ​ | $ | 18,272 | ​ | $ | 38,297 | ​ | ​ | 16,882 | ​
Other comprehensive income (loss), net of tax: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​
Amortization of actuarial losses, net of taxes of ($41) and ($31) for the three months ended June 30, 2021 and 2020, respectively, and of ($77) and ($61) for the six months ended June 30, 2021 and 2020, respectively. | ​ |  | 92 | ​ |  | 67 | ​ |  | 173 | ​ |  | 134 | ​
Amortization of prior service credits, net of taxes of $6 and $8 for the three months ended June 30, 2021 and 2020, respectively, and of $13 and $14 for the six months ended June 30, 2021 and 2020, respectively. | ​ |  | (15) | ​ |  | (15) | ​ |  | (30) | ​ |  | (29) | ​
Net unrealized gains (losses) on securities, net of taxes of ($664) and ($5,193) for the three months ended June 30, 2021 and 2020, respectively, and of $322 and ($551) for the six months ended June 30, 2021 and 2020, respectively. | ​ |  | 1,497 | ​ |  | 11,414 | ​ |  | (720) | ​ |  | 1,212 | ​
Reclassification adjustment for net losses included in income, net of taxes of $38 and ($17) for the three months ended June 30, 2021 and 2020, respectively and of $38 and ($29) for the six months ended June 30, 2021 and 2020, respectively. | ​ |  | (85) | ​ |  | 37 | ​ |  | (85) | ​ |  | 62 | ​
Net unrealized gains (losses) on cash flow hedges, net of taxes of ($120) and $912 for the three months ended June 30, 2021 and 2020 respectively, and of ($3,574) and $7,102 for the six months ended June 30, 2021 and 2020 respectively. | ​ |  | 521 | ​ |  | (2,005) | ​ |  | 8,319 | ​ |  | (15,610) | ​
Change in fair value of liabilities related to instrument-specific credit risk, net of taxes of ($147) and $259 for the three months ended June 30, 2021 and 2020, respectively, and of ($112) and ($230) for the six months ended June 30, 2021 and 2020, respectively. | ​ |  | 276 | ​ |  | (580) | ​ |  | 192 | ​ |  | 516 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total other comprehensive income (loss), net of tax | ​ |  | 2,286 | ​ |  | 8,918 | ​ |  | 7,849 | ​ |  | (13,715) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Comprehensive income | ​ | $ | 21,544 | ​ | $ | 27,190 | ​ | $ | 46,146 | ​ | $ | 3,167 | ​

​

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

​

-3-

Table of Contents

​

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the six months ended June 30,
​ |  | 2021 |  | 2020
​ | ​ | (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 38,297 | ​ | $ | 16,882
Adjustments to reconcile net income to net cash provided by operating activities: | ​ |  | ​ | ​ |  |
Provision for credit losses | ​ |  | 1,222 | ​ |  | 16,797
Depreciation and amortization of bank premises and equipment | ​ |  | 3,277 | ​ |  | 3,091
Amortization of premium, net of accretion of discount | ​ | ​ | (190) | ​ | ​ | 3,235
Net (gain) loss from fair value adjustments | ​ | ​ | 5,566 | ​ | ​ | (4,212)
Net (gain) loss from fair value adjustments on qualifying hedges | ​ | ​ | (763) | ​ | ​ | 2,438
Net gain from sale of loans | ​ |  | (158) | ​ |  | (42)
Net (gain) loss from sale of securities | ​ |  | (123) | ​ |  | 91
Net gain from disposition of asset | ​ |  | (621) | ​ |  | —
Net loss from OREO | ​ |  | — | ​ |  | 31
Income from bank owned life insurance | ​ |  | (2,006) | ​ |  | (1,875)
Life insurance proceeds | ​ | ​ | — | ​ | ​ | (659)
Amortization of core deposit intangibles | ​ |  | 313 | ​ |  | —
Stock-based compensation expense | ​ |  | 4,539 | ​ |  | 4,531
Deferred compensation | ​ |  | (2,057) | ​ |  | (3,060)
Deferred income tax benefit | ​ |  | (762) | ​ |  | (2,546)
Decrease in other liabilities | ​ |  | (5,384) | ​ |  | (1,411)
Increase in other assets | ​ |  | (5,175) | ​ |  | (3,398)
Net cash provided by operating activities | ​ |  | 35,975 | ​ |  | 29,893
CASH FLOWS FROM INVESTING ACTIVITIES | ​ |  |  | ​ |  |
Purchases of bank premises and equipment | ​ |  | (1,536) | ​ |  | (1,433)
Net redemptions of Federal Home Loan Bank of New York shares | ​ |  | 1,809 | ​ |  | 521
Proceeds from maturities and calls of securities held-to-maturity | ​ |  | — | ​ |  | 180
Proceeds from prepayments of securities held-to-maturity | ​ |  | — | ​ |  | 300
Purchases of securities available for sale | ​ |  | (478,155) | ​ |  | (130,344)
Proceeds from sales and calls of securities available for sale | ​ |  | 38,623 | ​ |  | 139,741
Proceeds from maturities and prepayments of securities available for sale | ​ |  | 263,640 | ​ |  | 87,658
Net repayments (originations) of loans | ​ |  | 89,937 | ​ |  | (72,371)
Purchases of loans | ​ |  | (130,706) | ​ |  | (112,245)
Proceeds from sale of loans | ​ |  | 18,584 | ​ |  | 580
Net cash used in investing activities | ​ |  | (197,804) | ​ |  | (87,413)

​

​

​

-4-

Table of Contents

​

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statements of Cash Flows (Contd.)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the six months ended June 30,
​ |  | 2021 |  | 2020
​ | ​ | (In thousands)
CASH FLOWS FROM FINANCING ACTIVITIES | ​ | ​ | ​ | ​ | ​ | ​
Net increase in non-interest bearing deposits | ​ | ​ | 166,819 | ​ | ​ | 146,809
Net increase (decrease) in interest-bearing deposits | ​ |  | 41,312 | ​ |  | (119,076)
Net increase in mortgagors' escrow deposits | ​ |  | 12,608 | ​ |  | 4,150
Net proceeds from short-term borrowed funds | ​ |  | 150,000 | ​ |  | —
Proceeds from long-term borrowings | ​ |  | — | ​ |  | 204,378
Repayment of long-term borrowings | ​ |  | (205,647) | ​ |  | (127,762)
Purchases of treasury stock | ​ |  | (1,375) | ​ |  | (3,865)
Cash dividends paid | ​ |  | (13,305) | ​ |  | (12,147)
Net cash provided by financing activities | ​ |  | 150,412 | ​ |  | 92,487
Net (decrease) increase in cash and cash equivalents | ​ |  | (11,417) | ​ |  | 34,967
Cash and cash equivalents, beginning of period | ​ |  | 157,388 | ​ |  | 49,787
Cash and cash equivalents, end of period | ​ | $ | 145,971 | ​ | $ | 84,754
SUPPLEMENTAL CASH FLOW DISCLOSURE | ​ |  |  | ​ |  |
Interest paid | ​ | $ | 22,217 | ​ | $ | 44,272
Income taxes paid | ​ |  | 10,207 | ​ |  | 4,664
Taxes paid if excess tax benefits on stock-based compensation were not tax deductible | ​ |  | 9,877 | ​ |  | 4,446

​

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

​

-5-

Table of Contents

​

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ |  | Additional |  | ​ |  | ​ | ​ |  | Accumulated Other
​ | ​ | ​ | ​ | ​ | Common | ​ | Paid-in | ​ | Retained | ​ | Treasury | ​ | Comprehensive
(Dollars in thousands, except per share data) | ​ | Total | ​ | Stock | ​ | Capital | ​ | Earnings | ​ | Stock | ​ | Income (Loss)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at December 31, 2020 | ​ | $ | 618,997 | ​ | $ | 341 | ​ | $ | 261,533 | ​ | $ | 442,789 | ​ | $ | (69,400) | ​ | $ | (16,266)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Income | ​ |  | 19,039 | ​ |  | — | ​ |  | — | ​ |  | 19,039 | ​ |  | — | ​ |  | —
Award of common shares released from Employee Benefit Trust (5,682 shares) | ​ |  | 74 | ​ |  | — | ​ |  | 74 | ​ |  | — | ​ |  | — | ​ |  | —
Vesting of restricted stock unit awards (248,896 shares) | ​ |  | — | ​ |  | — | ​ |  | (5,058) | ​ |  | (153) | ​ |  | 5,211 | ​ |  | —
Stock-based compensation expense | ​ |  | 3,470 | ​ |  | — | ​ |  | 3,470 | ​ |  | — | ​ |  | — | ​ |  | —
Repurchase of shares to satisfy tax obligation (70,292 shares) | ​ |  | (1,290) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (1,290) | ​ |  | —
Dividends on common stock ($0.21 per share) | ​ |  | (6,652) | ​ |  | — | ​ |  | — | ​ |  | (6,652) | ​ |  | — | ​ |  | —
Other comprehensive income | ​ |  | 5,563 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 5,563
Balance at March 31, 2021 | ​ |  | 639,201 | ​ |  | 341 | ​ |  | 260,019 | ​ |  | 455,023 | ​ |  | (65,479) | ​ |  | (10,703)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ |  | 19,258 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 19,258 | ​ | ​ | — | ​ | ​ | —
Award of common shares released from Employee Benefit Trust (6,445 shares) | ​ |  | 91 | ​ | ​ | — | ​ | ​ | 91 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Vesting of restricted stock unit awards (10,932 shares) | ​ |  | — | ​ | ​ | — | ​ | ​ | (221) | ​ | ​ | (8) | ​ | ​ | 229 | ​ | ​ | —
Stock-based compensation expense | ​ |  | 1,069 | ​ | ​ | — | ​ | ​ | 1,069 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Repurchase of shares to satisfy tax obligation (3,886 shares) | ​ |  | (85) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (85) | ​ | ​ | —
Dividends on common stock ($0.21 per share) | ​ |  | (6,653) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (6,653) | ​ | ​ | — | ​ | ​ | —
Other comprehensive income | ​ |  | 2,286 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,286
Balance at June 30, 2021 | ​ | $ | 655,167 | ​ | $ | 341 | ​ | $ | 260,958 | ​ | $ | 467,620 | ​ | $ | (65,335) | ​ | $ | (8,417)

​

​

​

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ |  | Additional |  | ​ | ​ |  | ​ | ​ |  | Accumulated Other
​ | ​ | ​ | ​ | ​ | Common | ​ | Paid-in | ​ | Retained | ​ | Treasury | ​ | Comprehensive
(Dollars in thousands, except per share data) | ​ | Total | ​ | Stock | ​ | Capital | ​ | Earnings | ​ | Stock | ​ | Income (Loss)
Balance at December 31, 2019 | ​ | $ | 579,672 | ​ | $ | 315 | ​ | $ | 226,691 | ​ | $ | 433,960 | ​ | $ | (71,487) | ​ | $ | (9,807)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Impact of adoption of ASC 326 - Credit Losses | ​ |  | (875) | ​ |  | — | ​ |  | — | ​ |  | (875) | ​ |  | — | ​ |  | —
Net loss | ​ |  | (1,390) | ​ |  | — | ​ |  | — | ​ |  | (1,390) | ​ |  | — | ​ |  | —
Award of common shares released from Employee Benefit Trust (116,414 shares) | ​ |  | 1,398 | ​ |  | — | ​ |  | 1,398 | ​ |  | — | ​ |  | — | ​ |  | —
Vesting of restricted stock unit awards (272,946 shares) | ​ |  | — | ​ |  | — | ​ |  | (5,626) | ​ |  | (156) | ​ |  | 5,782 | ​ |  | —
Stock-based compensation expense | ​ |  | 3,430 | ​ |  | — | ​ |  | 3,430 | ​ |  | — | ​ |  | — | ​ |  | —
Purchase of treasury shares (142,405 shares) | ​ |  | (2,342) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (2,342) | ​ |  | —
Repurchase of shares to satisfy tax obligation (74,145 shares) | ​ |  | (1,493) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (1,493) | ​ |  | —
Dividends on common stock ($0.21 per share) | ​ | ​ | (6,084) | ​ | ​ | — | ​ |  | — | ​ |  | (6,084) | ​ |  | — | ​ |  | —
Other comprehensive loss | ​ |  | (22,633) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (22,633)
Balance at March 31, 2020 | ​ |  | 549,683 | ​ |  | 315 | ​ |  | 225,893 | ​ |  | 425,455 | ​ |  | (69,540) | ​ |  | (32,440)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ |  | 18,272 | ​ |  | — | ​ | ​ | — | ​ | ​ | 18,272 | ​ | ​ | — | ​ | ​ | —
Award of common shares released from Employee Benefit Trust (10,956 shares) | ​ |  | 40 | ​ |  | — | ​ | ​ | 40 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Vesting of restricted stock unit awards (6,390 shares) | ​ |  | — | ​ |  | — | ​ | ​ | (133) | ​ | ​ | (1) | ​ | ​ | 134 | ​ | ​ | —
Stock-based compensation expense | ​ |  | 1,101 | ​ |  | — | ​ | ​ | 1,101 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Repurchase of shares to satisfy tax obligation (2,558 shares) | ​ |  | (30) | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (30) | ​ | ​ | —
Dividends on common stock ($0.21 per share) | ​ |  | (6,063) | ​ |  | — | ​ | ​ | — | ​ | ​ | (6,063) | ​ | ​ | — | ​ | ​ | —
Other comprehensive income | ​ |  | 8,918 | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 8,918
Balance at June 30, 2020 | ​ | $ | 571,921 | ​ | $ | 315 | ​ | $ | 226,901 | ​ | $ | 437,663 | ​ | $ | (69,436) | ​ | $ | (23,522)

​

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

​

-6-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The primary business of Flushing Financial Corporation (the “Holding Company”), a Delaware corporation, is the operation of its wholly owned subsidiary, Flushing Bank (the “Bank”).

The unaudited consolidated financial statements presented in this Quarterly Report on Form 10-Q (“Quarterly Report”) include the collective results of the Holding Company and its direct and indirect wholly-owned subsidiaries, including the Bank, Flushing Preferred Funding Corporation, which was dissolved as of June 30, 2021. Flushing Service Corporation, and FSB Properties Inc., which are collectively herein referred to as “we,” “us,” “our” and the “Company.”

The Holding Company also owns Flushing Financial Capital Trust II, Flushing Financial Capital Trust III, and Flushing Financial Capital Trust IV (the “Trusts”), which are special purpose business trusts. The Trusts are not included in the Company’s consolidated financial statements, as the Company would not absorb the losses of the Trusts if any losses were to occur.

The accompanying unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. The information furnished in these interim statements reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for such presented periods of the Company. Such adjustments are of a normal recurring nature, unless otherwise disclosed in this Quarterly Report. All inter-company balances and transactions have been eliminated in consolidation. The results of operations in the interim statements are not necessarily indicative of the results that may be expected for the full year.

The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions to Quarterly Report on Form 10-Q and Article 10, Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated interim financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

When necessary, certain reclassifications were made to prior-year amounts to conform to the current-year presentation. Such reclassifications had no effect on prior period net income or shareholders’ equity and were insignificant amounts.

​

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Estimates that are particularly susceptible to change in the near term, including novel Coronavirus Disease 2019 (“COVID-19”) related changes, are used in connection with the determination of the allowance for credit losses, the evaluation of goodwill for impairment, the review of the need for a valuation allowance of the Company’s deferred tax assets and the fair value of financial instruments.

In response to COVID-19, the Company is actively assisting customers by providing modifications in the form of deferrals of interest, principal and/or escrow for terms ranging from one to thirty months. At June 30, 2021, we had 69 active forbearances for loans with an aggregate outstanding loan balance of approximately $245.8 million resulting in total deferment of $16.2 million in principal, interest and escrow, down from 134 active forbearances for loans with an aggregate outstanding loan balance of $364.4 million at December 31, 2020. Given the pandemic and current economic environment, we continue to work with our customers to modify loans although the pace of requests slowed down. The Company actively participated in the Paycheck Protection Program (“PPP”), under the Coronavirus Aid, Relief and Economic

-7-

​

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Security Act (the “CARES Act”), closing $138.7 million of these loans during the three months ended June 30, 2021, with $69.2 million in PPP loans forgiven by the SBA during the same time period. We are also a participant in the Main Street Lending Program in order to assist customers. Pursuant to the CARES Act and later modified by Consolidated Appropriations Act, certain loan modifications are not classified as “troubled debt restructuring” (“TDR”), if the related loans were not more than 30 days past due as of December 31, 2019. The Company has elected that loans temporarily modified for borrowers directly impacted by COVID-19 are not considered TDR, assuming the above criteria is met and as such, these loans are considered current and continue to accrue interest at its original contractual terms until the completion of the deferred period. Once the deferred period is over, the borrower will resume making payment and normal delinquency-based non-accrual policies will apply.

In addition, the economic pressures and uncertainties related to the COVID-19 pandemic have resulted in changes in consumer spending behaviors in the communities we serve, which may negatively impact the demand for loans and other services we offer. However, the Company’s capital and financial resources have not been materially impacted by the pandemic, as our results of operations depend primarily on net interest income, which benefited from the actions taken by the Federal Reserve to counteract the negative economic impact of the pandemic. Future operating results and near-and-long-term financial condition are subject to significant uncertainty. Our funding sources have not changed significantly, and we expect to continue to be able to timely service our debts and its obligations.

​

3. Earnings Per Share

Earnings per common share have been computed based on the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the six months ended | ​
​ | ​ | June 30, | ​ | June 30, | ​
​ |  | 2021 |  | 2020 |  | 2021 |  | 2020 |
​ | ​ | (In thousands, except per share data) | ​
Net income | ​ | $ | 19,258 | ​ | $ | 18,272 | ​ | $ | 38,297 | ​ | $ | 16,882 | ​
Divided by: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
Total weighted average common shares outstanding and common stock equivalents | ​ |  | 31,677 | ​ |  | 28,867 | ​ |  | 31,641 | ​ |  | 28,860 | ​
Basic earnings per common share | ​ | $ | 0.61 | ​ | $ | 0.63 | ​ | $ | 1.21 | ​ | $ | 0.58 | ​
Diluted earnings per common share (1) | ​ | $ | 0.61 | ​ | $ | 0.63 | ​ | $ | 1.21 | ​ | $ | 0.58 | ​
Dividend payout ratio | ​ |  | 34.4 | % |  | 33.3 | % |  | 34.7 | % |  | 72.4 | %

(1) | For the three and six months ended June 30, 2021 and 2020, there were no common stock equivalents and there were no common stock equivalents that were anti-dilutive.

​

​

4. Securities

The Company did not hold any trading securities at June 30, 2021 and December 31, 2020. Securities available for sale are recorded at fair value. Securities held-to-maturity (“HTM”) are recorded at amortized cost.

-8-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Allowance for credit losses

The Company’s estimate of expected credit losses for held-to-maturity debt securities is based on historical information, current conditions and a reasonable and supportable forecast. The Company’s portfolio is made up of three securities totaling $58.7 million (before allowance for credit losses) : the first with an amortized cost of $29.9 million structured similar to a commercial owner occupied loan and modeled for credit losses similar to commercial business loans secured by real estate with a reserve of $0.2 million at June 30, 2021; the second with an amortized cost of $20.0 million that currently is under forbearance with a specific reserve of $0.6 million at June 30, 2021; and the third with an amortized cost of $7.9 million issued and guaranteed by Fannie Mae, which is a government sponsored enterprise that has a credit rating and perceived credit risk comparable to the U.S. government. Accordingly, the Company assumes a zero loss expectation from the portfolio. The security currently in forbearance is considered current and as such, continues to accrue interest at its original contractual terms. Accrued interest receivable on held-to-maturity securities totaled $0.1 million at June 30, 2021 and December 31, 2020 and is excluded from estimates of credit losses.

​

The following table summarizes the Company’s portfolio of securities held-to-maturity at June 30, 2021:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrecognized | ​ | Unrecognized
​ |  | Cost |  | Fair Value |  | Gains |  | Losses
​ | ​ | (In thousands)
Securities held-to-maturity: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Municipals | ​ | $ | 50,830 | ​ | $ | 53,598 | ​ | $ | 2,768 | ​ | $ | —
Total other securities | ​ |  | 50,830 | ​ |  | 53,598 | ​ |  | 2,768 | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
FNMA | ​ |  | 7,904 | ​ |  | 8,848 | ​ |  | 944 | ​ |  | —
Total mortgage-backed securities | ​ |  | 7,904 | ​ |  | 8,848 | ​ |  | 944 | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for Credit Losses | ​ | ​ | (844) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total | ​ | $ | 57,890 | ​ | $ | 62,446 | ​ | $ | 3,712 | ​ | $ | —

​

The following table summarizes the Company’s portfolio of securities held-to-maturity at December 31, 2020:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrecognized | ​ | Unrecognized
​ |  | Cost |  | Fair Value |  | Gains |  | Losses
​ | ​ | (In thousands)
Securities held-to-maturity: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Municipals | ​ | $ | 50,825 | ​ | $ | 54,538 | ​ | $ | 3,713 | ​ | $ | —
Total other securities | ​ |  | 50,825 | ​ |  | 54,538 | ​ |  | 3,713 | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
FNMA | ​ |  | 7,914 | ​ |  | 8,991 | ​ |  | 1,077 | ​ |  | —
Total mortgage-backed securities | ​ |  | 7,914 | ​ |  | 8,991 | ​ |  | 1,077 | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for Credit Losses | ​ | ​ | (907) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total | ​ | $ | 57,832 | ​ | $ | 63,529 | ​ | $ | 4,790 | ​ | $ | —

​

​

-9-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following table summarizes the Company’s portfolio of securities available for sale at June 30, 2021:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized
​ |  | Cost |  | Fair Value |  | Gains |  | Losses
​ | ​ | (In thousands)
Securities available for sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S Government Agencies | ​ | $ | 6,206 | ​ | $ | 6,218 | ​ | $ | 15 | ​ | $ | 3
Corporate | ​ |  | 117,420 | ​ |  | 117,602 | ​ |  | 461 | ​ |  | 279
Mutual funds | ​ |  | 12,585 | ​ |  | 12,585 | ​ |  | — | ​ |  | —
Collateralized loan obligations | ​ |  | 87,148 | ​ |  | 86,884 | ​ |  | 18 | ​ |  | 282
Other | ​ |  | 1,495 | ​ |  | 1,495 | ​ |  | — | ​ |  | —
Total other securities | ​ |  | 224,854 | ​ |  | 224,784 | ​ |  | 494 | ​ |  | 564
REMIC and CMO | ​ |  | 222,748 | ​ |  | 224,065 | ​ |  | 3,042 | ​ |  | 1,725
GNMA | ​ |  | 12,033 | ​ |  | 11,802 | ​ |  | 39 | ​ |  | 270
FNMA | ​ |  | 205,159 | ​ |  | 205,782 | ​ |  | 1,783 | ​ |  | 1,160
FHLMC | ​ |  | 155,944 | ​ |  | 155,012 | ​ |  | 589 | ​ |  | 1,521
Total mortgage-backed securities | ​ |  | 595,884 | ​ |  | 596,661 | ​ |  | 5,453 | ​ |  | 4,676
Total securities available for sale | ​ | $ | 820,738 | ​ | $ | 821,445 | ​ | $ | 5,947 | ​ | $ | 5,240

​

The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2020:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized
​ |  | Cost |  | Fair Value |  | Gains |  | Losses
​ | ​ | (In thousands)
Securities available for sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S Government Agencies | ​ | $ | 6,452 | ​ | $ | 6,453 | ​ | $ | 2 | ​ | $ | 1
Corporate | ​ |  | 130,000 | ​ |  | 123,865 | ​ |  | 131 | ​ |  | 6,266
Mutual funds | ​ |  | 12,703 | ​ |  | 12,703 | ​ |  | — | ​ |  | —
Collateralized loan obligations | ​ |  | 100,561 | ​ |  | 99,198 | ​ |  | — | ​ |  | 1,363
Other | ​ |  | 1,295 | ​ |  | 1,295 | ​ |  | — | ​ |  | —
Total other securities | ​ |  | 251,011 | ​ |  | 243,514 | ​ |  | 133 | ​ |  | 7,630
REMIC and CMO | ​ |  | 175,142 | ​ |  | 180,877 | ​ |  | 5,735 | ​ |  | —
GNMA | ​ |  | 13,009 | ​ |  | 13,053 | ​ |  | 66 | ​ |  | 22
FNMA | ​ |  | 143,154 | ​ |  | 146,169 | ​ |  | 3,046 | ​ |  | 31
FHLMC | ​ |  | 63,796 | ​ |  | 64,361 | ​ |  | 648 | ​ |  | 83
Total mortgage-backed securities | ​ |  | 395,101 | ​ |  | 404,460 | ​ |  | 9,495 | ​ |  | 136
Total securities available for sale | ​ | $ | 646,112 | ​ | $ | 647,974 | ​ | $ | 9,628 | ​ | $ | 7,766

​

We did not hold any private issue CMO’s that are collateralized by commercial real estate mortgages at June 30, 2021 and December 31, 2020.

The corporate securities held by the Company at June 30, 2021 and December 31, 2020 are issued by U.S. banking institutions.

-10-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following tables detail the amortized cost and fair value of the Company’s securities classified as held-to-maturity and available for sale at June 30, 2021, by contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Amortized | ​ | ​ | ​
Securities held-to-maturity: |  | Cost |  | Fair Value
​ |  | (In thousands)
Due after ten years | ​ | $ | 50,830 | ​ | $ | 53,598
Total other securities | ​ | ​ | 50,830 | ​ | ​ | 53,598
Mortgage-backed securities | ​ | ​ | 7,904 | ​ | ​ | 8,848
Total held-to-maturity securities | ​ | ​ | 58,734 | ​ | ​ | 62,446
Allowance for Credit Losses | ​ | ​ | (844) | ​ | ​ | —
Total held-to-maturity securities, net of allowance for credit losses | ​ | $ | 57,890 |  | $ | 62,446

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized | ​ | ​ | ​
Securities available for sale: |  | Cost |  | Fair Value
​ | ​ | (In thousands)
Due after one year through five years | ​ | $ | 30,000 | ​ | $ | 30,242
Due after five years through ten years | ​ |  | 159,551 | ​ |  | 159,243
Due after ten years | ​ | ​ | 22,718 | ​ | ​ | 22,714
Total | ​ |  | 212,269 | ​ |  | 212,199
Mutual funds | ​ |  | 12,585 | ​ |  | 12,585
Total other securities | ​ | ​ | 224,854 | ​ | ​ | 224,784
Mortgage-backed securities | ​ |  | 595,884 | ​ |  | 596,661
Total available for sale securities | ​ | $ | 820,738 | ​ | $ | 821,445

​

​

-11-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following tables show the Company’s securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at the dates indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At June 30, 2021
​ | ​ | Total | ​ | Less than 12 months | ​ | 12 months or more
​ | ​ | ​ | ​ | ​ | ​ | ​ | Unrealized | ​ | ​ | ​ | ​ | Unrealized | ​ | ​ | ​ | ​ | Unrealized
​ |  | Count |  | Fair Value |  | Losses |  | Fair Value |  | Losses |  | Fair Value |  | Losses
​ | ​ | (Dollars in thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available for sale securities |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S Government Agencies |  | 1 | ​ | $ | 4,897 | ​ | $ | 3 | ​ | $ | 4,897 | ​ | $ | 3 | ​ | $ | — | ​ | $ | —
Corporate |  | 7 | ​ |  | 52,141 | ​ |  | 279 | ​ |  | 22,403 | ​ |  | 16 | ​ |  | 29,738 | ​ |  | 263
Collateralized loan obligations |  | 6 | ​ |  | 44,633 | ​ |  | 282 | ​ |  | — | ​ |  | — | ​ |  | 44,633 | ​ |  | 282
Total other securities |  | 14 | ​ |  | 101,671 | ​ |  | 564 | ​ |  | 27,300 | ​ |  | 19 | ​ |  | 74,371 | ​ |  | 545
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
REMIC and CMO |  | 11 | ​ |  | 112,847 | ​ |  | 1,725 | ​ |  | 112,847 | ​ |  | 1,725 | ​ |  | — | ​ |  | —
GNMA |  | 4 | ​ |  | 11,404 | ​ |  | 270 | ​ |  | 11,404 | ​ |  | 270 | ​ |  | — | ​ |  | —
FNMA |  | 16 | ​ |  | 107,883 | ​ |  | 1,160 | ​ |  | 107,883 | ​ |  | 1,160 | ​ |  | — | ​ |  | —
FHLMC |  | 10 | ​ |  | 85,084 | ​ |  | 1,521 | ​ |  | 85,084 | ​ |  | 1,521 | ​ |  | — | ​ |  | —
Total mortgage-backed securities |  | 41 | ​ |  | 317,218 | ​ |  | 4,676 | ​ |  | 317,218 | ​ |  | 4,676 | ​ |  | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total securities available for sale |  | 55 | ​ | $ | 418,889 | ​ | $ | 5,240 | ​ | $ | 344,518 | ​ | $ | 4,695 | ​ | $ | 74,371 | ​ | $ | 545

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At December 31, 2020
​ | ​ | Total | ​ | Less than 12 months | ​ | 12 months or more
​ | ​ | ​ | ​ | ​ | ​ | ​ | Unrealized | ​ | ​ | ​ | ​ | Unrealized | ​ | ​ | ​ | ​ | Unrealized
​ |  | Count |  | Fair Value |  | Losses |  | Fair Value |  | Losses |  | Fair Value |  | Losses
​ | ​ | (Dollars in thousands)
Available for sale securities |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S Government Agencies |  | 1 | ​ | $ | 4,988 | ​ | $ | 1 | ​ | $ | 4,988 | ​ | $ | 1 | ​ | $ | — | ​ | $ | —
Corporate |  | 14 | ​ |  | 113,734 | ​ |  | 6,266 | ​ |  | — | ​ |  | — | ​ |  | 113,734 | ​ |  | 6,266
Collateralized loan obligations |  | 13 | ​ |  | 99,199 | ​ |  | 1,363 | ​ |  | 7,441 | ​ |  | 52 | ​ |  | 91,758 | ​ |  | 1,311
Total other securities |  | 28 | ​ |  | 217,921 | ​ |  | 7,630 | ​ |  | 12,429 | ​ |  | 53 | ​ |  | 205,492 | ​ |  | 7,577
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
GNMA |  | 1 | ​ |  | 10,341 | ​ |  | 22 | ​ |  | 10,341 | ​ |  | 22 | ​ |  | — | ​ |  | —
FNMA |  | 5 | ​ |  | 32,463 | ​ |  | 31 | ​ |  | 23,864 | ​ |  | 28 | ​ |  | 8,599 | ​ |  | 3
FHLMC |  | 3 | ​ |  | 30,095 | ​ |  | 83 | ​ |  | 30,095 | ​ |  | 83 | ​ |  | — | ​ |  | —
Total mortgage-backed securities |  | 9 | ​ |  | 72,899 | ​ |  | 136 | ​ |  | 64,300 | ​ |  | 133 | ​ |  | 8,599 | ​ |  | 3
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total securities available for sale |  | 37 | ​ | $ | 290,820 | ​ | $ | 7,766 | ​ | $ | 76,729 | ​ | $ | 186 | ​ | $ | 214,091 | ​ | $ | 7,580

​

The Company reviewed each available for sale debt security that had an unrealized loss at June 30, 2021 and December 31, 2020. At June 30, 2021 and December 31, 2020, the Company evaluated whether the decline in fair value of a debt security resulted from credit losses or other factors under Accounting Standards Codification (“ASC”) Topic 326, Credit Losses also referred to as Current Expected Credit Losses (“CECL”). The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities’ amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities. All of these securities are rated investment grade or above and have a long history of no credit losses. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment.

-12-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

In determining the risk of loss for available for sale securities, the Company considered that mortgage-backed securities are either fully guaranteed or issued by a government sponsored enterprise, which has a credit rating and perceived credit risk comparable to U.S. government, the issuer of Corporate securities are global systematically important banks, and the tranche of the purchased CLO’s. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. Based on this review, management believes that the unrealized losses have resulted from other factors not deemed credit-related and no allowance for credit loss was recorded.

Accrued interest receivable on available-for-sale debt securities totaled $1.7 million and $1.3 million at June 30, 2021 and December 31, 2020, respectively, and is excluded from the estimate of credit losses.

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Other Securities
​ | ​ | For the three months ended | ​ | For the six months ended
​ | ​ | June 30, | ​ | June 30,
​ |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ | ​ | (In thousands)
Beginning balance | ​ | $ | 915 | ​ | $ | 402 | ​ | $ | 907 | ​ | $ | 340
Provision (benefit) | ​ |  | (71) | ​ |  | — | ​ |  | (63) | ​ |  | 62
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for credit losses | ​ | $ | 844 | ​ | $ | 402 | ​ | $ | 844 | ​ | $ | 402

​

Realized gains and losses on the sales of securities are determined using the specific identification method. The Company sold $25.0 million in corporate securities during the three and six months ended June 30, 2021.The Company sold $66.2 million and $130.8 million in mortgage-backed securities during the three and six months ended June 30, 2020, respectively.

The following table represents the gross gains and gross losses realized from the sale of securities available for sale for the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the six months ended
​ | ​ | June 30, | ​ | June 30,
​ |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ | ​ | (In thousands)
Gross gains from the sale of securities | ​ | $ | 123 | ​ | $ | 763 | ​ | $ | 123 | ​ | $ | 1,476
Gross losses from the sale of securities | ​ |  | — | ​ |  | (817) | ​ |  | — | ​ |  | (1,567)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net gains (losses) from the sale of securities | ​ | $ | 123 | ​ | $ | (54) | ​ | $ | 123 | ​ | $ | (91)

​

​

​

​

​

​

5. Loans

Loans are reported at their outstanding principal balance net of any unearned income, charge-offs, deferred loan fees and costs on originated loans and unamortized premiums or discounts on purchased loans. Loan fees and certain loan origination costs are deferred. Net loan origination costs and premiums or discounts on loans purchased are amortized into interest income over the contractual life of the loans using the level-yield method. Prepayment penalties received on loans which pay in full prior to their scheduled maturity are included in interest income in the period they are collected.

-13-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Interest on loans is recognized on the accrual basis. Accrued interest receivable totaled $40.6 million and $41.5 million at June 30, 2021 and December 31, 2020, respectively, and was reported in “Interest and dividends receivable” on the Consolidated Statements of Financial Condition. The accrual of income on loans is generally discontinued when certain factors, such as contractual delinquency of 90 days or more, indicate reasonable doubt as to the timely collectability of such income. Uncollected interest previously recognized on non-accrual loans is reversed from interest income at the time the loan is placed on non-accrual status. A non-accrual loan can be returned to accrual status when contractual delinquency returns to less than 90 days delinquent. Payments received on non-accrual loans that do not bring the loan to less than 90 days delinquent are recorded on a cash basis. Payments can also be applied first as a reduction of principal until all principal is recovered and then subsequently to interest, if in management’s opinion, it is evident that recovery of all principal due is likely to occur.

Allowance for credit losses

The Allowance for credit losses (“ACL”) is an estimate that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial assets. Loans are charged off against that ACL when management believes that a loan balance is uncollectable based on quarterly analysis of credit risk.

The amount of the ACL is based upon a loss rate model that considers multiple factors which reflects management’s assessment of the credit quality of the loan portfolio. Management estimates the allowance balance using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The factors are both quantitative and qualitative in nature including, but not limited to, historical losses, economic conditions, trends in delinquencies, value and adequacy of underlying collateral, volume and portfolio mix, and internal loan processes.

During the three months ended June 30, 2021, the Company recorded a benefit for credit losses on loans totaling $1.5 million compared to a provision for credit losses on loans of $9.6 million for the three months ending June 30, 2020. The Company recorded a provision for credit losses on loans totaling $1.3 million and $16.7 million for the six months ended June 30, 2021 and 2020, respectively. The benefit recorded during the three months ended June 30, 2021 was driven by the improving economic outlook. During the three months ended June 30, 2021, the Company made an adjustment to decrease the reasonable and supportable forecast period and increase the reversion period to adjust for the model using a more favorable forecast based on national statistics compared to the Bank’s primary market area, the New York Tri-State area, where economic improvements lag behind the nation. This resulted in the ACL - loans totaling $42.7 million at June 30, 2021 compared to $45.2 million at December 31, 2020. At June 30, 2021, the ACL - loans represented 0.64% of gross loans and 242.6% of non-performing loans. At December 31, 2020, the ACL - loans represented 0.61% of gross loans and 181.9% of non-performing loans.

Pursuant to the CARES Act and later modified by Consolidated Appropriations Act, certain loan modifications are not classified as TDR, if the related loans were not more than 30 days past due as of December 31, 2019. The Company has elected that loans temporarily modified for borrowers directly impacted by COVID-19 are not considered TDR, assuming the above criteria is met. As such, these loans are considered current and continue to accrue interest at its original contractual terms until the completion of the deferred period. Once the deferred period is over, the borrower will resume making payment and normal delinquency-based non-accrual policies will apply.

The Company may restructure loans that are not directly impacted by COVID-19 to enable a borrower experiencing financial difficulties to continue making payments when it is deemed to be in the Company’s best long-term interest. This restructure may include reducing the interest rate or amount of the monthly payment for a specified period of time, after which the interest rate and repayment terms revert to the original terms of the loan. We classify these loans as TDR.

The Company believes that restructuring these loans in this manner will allow certain borrowers to become and remain current on their loans. All loans classified as TDR are individually evaluated, however TDR loans which have been current for six consecutive months at the time they are restructured as TDR remain on accrual status and are not included as part of non-performing loans. Loans which were delinquent at the time they are restructured as a TDR are placed on non-

-14-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

accrual status and reported as non-accrual performing TDR loans until they have made timely payments for six consecutive months. These restructurings have not included a reduction of principal balance.

The allocation of a portion of the ACL for a performing TDR loan is based upon the present value of the future expected cash flows discounted at the loan’s original effective rate, or for a non-performing TDR loan which is collateral dependent, the fair value of the collateral. At June 30, 2021, there were no commitments to lend additional funds to borrowers whose loans were modified to a TDR. The modification of loans to a TDR did not have a significant effect on our operating results, nor did it require a significant allocation of the ACL. There were no TDR loan modifications during the three and six months ended June 30, 2020.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three and six months ended | ​
​ | ​ | June 30, 2021 | ​
(Dollars in thousands) |  | Number |  | Balance |  | Modification description |
Commercial business and other |  | 2 | ​ | ​ | 674 |  | Amortization period extended |
Total |  | 2 | ​ | $ | 674 |  |  |

​

The following table shows loans classified as TDR at amortized cost that are performing according to their restructured terms at the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021 | ​ | December 31, 2020
​ | ​ | Number | ​ | Amortized | ​ | Number | ​ | Amortized
(Dollars in thousands) |  | of contracts |  | Cost |  | of contracts |  | Cost
Multi-family residential |  | 6 | ​ | $ | 1,673 |  | 6 | ​ | $ | 1,700
Commercial real estate | ​ | 1 | ​ | ​ | 7,583 | ​ | 1 | ​ |  | 7,702
One-to-four family - mixed-use property (1) |  | 5 | ​ |  | 1,682 |  | 5 | ​ |  | 1,731
One-to-four family - residential |  | 3 | ​ |  | 497 |  | 3 | ​ |  | 507
Taxi medallion (2) | ​ | — | ​ | ​ | — | ​ | 2 | ​ | ​ | 440
Commercial business and other (1) |  | 9 | ​ |  | 4,107 |  | 8 | ​ |  | 3,831
Total performing troubled debt restructured |  | 24 | ​ | $ | 15,542 |  | 25 | ​ | $ | 15,911

| (1) | These loans continue to pay as agreed, however the Company records interest received on a cash basis.

| (2) | These loans were completely charged off during the three months ended March 31, 2021.

​

During the three and six months ended June 30, 2021 there was one commercial business TDR loan totaling $0.3 million that defaulted within 12 months of its modification date. During the three and six months ended June 30, 2020, there were no TDR loans that defaulted within 12 months of their modification date.

​

The following table shows loans classified as TDR at amortized cost that are not performing according to their restructured terms at the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021 | ​ | December 31, 2020
​ | ​ | Number | ​ | Amortized | ​ | Number | ​ | Amortized
(Dollars in thousands) |  | of contracts |  | Cost |  | of contracts |  | Cost
Taxi medallion (1) |  | — | ​ | $ | — |  | 11 | ​ | $ | 1,922
Commercial business and other |  | 2 | ​ |  | 596 |  | 1 | ​ |  | 279
Total troubled debt restructurings that subsequently defaulted |  | 2 | ​ | $ | 596 |  | 12 | ​ | $ | 2,201

​

| (1) | These loans were completely charged off during the three months ended March 31, 2021.

-15-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following table shows our non-accrual loans at amortized cost with no related allowance and interest income recognized for loans ninety days or more past due and still accruing for period shown below:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At or for the six months ended June 30, 2021
(In thousands) | ​ | ​ | Non-Accrual Amortized Cost Beginning of Reporting Period | ​ | ​ | Non-Accrual Amortized Cost Ending of Reporting Period | ​ | ​ | Non-Accrual with no related Allowance | ​ | ​ | Interest Income Recognized | ​ | ​ | Loans ninety days or more past due and still accruing:
Multi-family residential | ​ | $ | 2,576 | ​ | $ | 4,850 | ​ | $ | 4,850 | ​ | $ | 5 | ​ | $ | 201
Commercial real estate | ​ | ​ | 1,766 | ​ | ​ | 35 | ​ | ​ | 35 | ​ | ​ | — | ​ | ​ | —
One-to-four family - mixed-use property (1) | ​ | ​ | 1,706 | ​ | ​ | 2,706 | ​ | ​ | 2,706 | ​ | ​ | 2 | ​ | ​ | —
One-to-four family - residential | ​ | ​ | 5,313 | ​ | ​ | 6,404 | ​ | ​ | 6,404 | ​ | ​ | 1 | ​ | ​ | —
Construction | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Small Business Administration | ​ | ​ | 1,168 | ​ | ​ | 992 | ​ | ​ | 992 | ​ | ​ | — | ​ | ​ | —
Taxi medallion(2) | ​ | ​ | 2,758 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial business and other(1) | ​ | ​ | 5,660 | ​ | ​ | 4,715 | ​ | ​ | 725 | ​ | ​ | 52 | ​ | ​ | —
Total | ​ | $ | 20,947 | ​ | $ | 19,702 | ​ | $ | 15,712 | ​ | $ | 60 | ​ | $ | 201

(1) Included in the above analysis are non-accrual performing TDR one-to-four family – mixed-use property totaling $0.3 million, and non-accrual performing TDR commercial business loans totaling $2.2 million at June 30, 2021.

(2) Taxi medallion loans were completely charged off during the six months ended June 30, 2021.

​

The following table shows our non-accrual loans at amortized cost with no related allowance and interest income recognized for loans ninety days or more past due and still accruing for period shown below:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At or for the twelve months ended December 31, 2020
(In thousands) | ​ | ​ | Non-Accrual Amortized Cost Beginning of Reporting Period | ​ | ​ | Non-Accrual Amortized Cost Ending of Reporting Period | ​ | ​ | Non-Accrual with no related Allowance | ​ | ​ | Interest Income Recognized | ​ | ​ | Loans ninety days or more past due and still accruing:
Multi-family residential | ​ | $ | 2,723 | ​ | $ | 2,576 | ​ | $ | 2,576 | ​ | $ | — | ​ | $ | 201
Commercial real estate | ​ | ​ | 2,714 | ​ | ​ | 1,766 | ​ | ​ | 1,766 | ​ | ​ | — | ​ | ​ | 2,547
One-to-four family - mixed-use property (1) | ​ | ​ | 1,704 | ​ | ​ | 1,706 | ​ | ​ | 1,706 | ​ | ​ | — | ​ | ​ | —
One-to-four family - residential | ​ | ​ | 9,992 | ​ | ​ | 5,313 | ​ | ​ | 5,313 | ​ | ​ | — | ​ | ​ | —
Small Business Administration | ​ | ​ | 1,169 | ​ | ​ | 1,168 | ​ | ​ | 1,168 | ​ | ​ | — | ​ | ​ | —
Taxi medallion(1) | ​ | ​ | 2,318 | ​ | ​ | 2,758 | ​ | ​ | 2,758 | ​ | ​ | — | ​ | ​ | —
Commercial business and other(1) | ​ | ​ | 7,406 | ​ | ​ | 5,660 | ​ | ​ | 1,593 | ​ | ​ | 58 | ​ | ​ | —
Total | ​ | $ | 28,026 | ​ | $ | 20,947 | ​ | $ | 16,880 | ​ | $ | 58 | ​ | $ | 2,748

(1) | Included in the above analysis are non-accrual performing TDR one-to-four family – mixed-use property totaling $0.3 million, non-accrual performing TDR taxi medallion loans totaling $0.4 million and non-accrual performing TDR commercial business loans totaling $2.2 million at December 31, 2020.

​

​

-16-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following is a summary of interest foregone on non-accrual loans and loans classified as TDR for the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the six months ended
​ | ​ | June 30, | ​ | June 30,
​ |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ | ​ | (In thousands)
Interest income that would have been recognized had the loans performed in accordance with their original terms | ​ | $ | 453 | ​ | $ | 430 | ​ | $ | 915 | ​ | $ | 805
Less: Interest income included in the results of operations | ​ |  | 163 | ​ |  | 73 | ​ |  | 323 | ​ |  | 162
Total foregone interest | ​ | $ | 290 | ​ | $ | 357 | ​ | $ | 592 | ​ | $ | 643

​

The following tables show the aging of the amortized cost basis in past-due loans at the period indicated by class of loans:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Greater | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 30 - 59 Days | ​ | 60 - 89 Days | ​ | than | ​ | Total Past | ​ | ​ | ​ | ​ | ​ | ​
(In thousands) |  | Past Due |  | Past Due |  | 90 Days |  | Due |  | Current |  | Total Loans
Multi-family residential | ​ | $ | 14,894 | ​ | $ | 1,259 | ​ | $ | 5,051 | ​ | $ | 21,204 | ​ | $ | 2,522,555 | ​ | $ | 2,543,759
Commercial real estate | ​ |  | 7,213 | ​ |  | — | ​ |  | 35 | ​ |  | 7,248 | ​ |  | 1,722,659 | ​ |  | 1,729,907
One-to-four family - mixed-use property | ​ |  | 787 | ​ |  | 1,089 | ​ |  | 2,439 | ​ |  | 4,315 | ​ |  | 581,434 | ​ |  | 585,749
One-to-four family - residential | ​ |  | 988 | ​ |  | 1,373 | ​ |  | 6,404 | ​ |  | 8,765 | ​ |  | 288,926 | ​ |  | 297,691
Construction | ​ |  | 7,089 | ​ |  | — | ​ |  | — | ​ |  | 7,089 | ​ |  | 55,622 | ​ |  | 62,711
Small Business Administration | ​ |  | 81 | ​ |  | 199 | ​ |  | 992 | ​ |  | 1,272 | ​ |  | 209,246 | ​ |  | 210,518
Taxi medallion | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Commercial business and other | ​ |  | 588 | ​ |  | 64 | ​ |  | 1,942 | ​ |  | 2,594 | ​ |  | 1,285,877 | ​ |  | 1,288,471
Total | ​ | $ | 31,640 | ​ | $ | 3,984 | ​ | $ | 16,863 | ​ | $ | 52,487 | ​ | $ | 6,666,319 | ​ | $ | 6,718,806

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2020
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Greater | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 30 - 59 Days | ​ | 60 - 89 Days | ​ | than | ​ | Total Past | ​ | ​ | ​ | ​ | ​ | ​
(In thousands) |  | Past Due |  | Past Due |  | 90 Days |  | Due |  | Current |  | Total Loans
Multi-family residential | ​ | $ | 7,582 | ​ | $ | 3,186 | ​ | $ | 2,777 | ​ | $ | 13,545 | ​ | $ | 2,522,432 | ​ | $ | 2,535,977
Commercial real estate | ​ |  | 17,903 | ​ |  | 5,123 | ​ |  | 4,313 | ​ |  | 27,339 | ​ |  | 1,731,045 | ​ |  | 1,758,384
One-to-four family - mixed-use property | ​ |  | 5,673 | ​ |  | 1,132 | ​ |  | 1,433 | ​ |  | 8,238 | ​ |  | 598,647 | ​ |  | 606,885
One-to-four family - residential | ​ |  | 3,087 | ​ |  | 805 | ​ |  | 5,313 | ​ |  | 9,205 | ​ |  | 243,486 | ​ |  | 252,691
Construction loans | ​ |  | 750 | ​ |  | — | ​ |  | — | ​ |  | 750 | ​ |  | 82,411 | ​ |  | 83,161
Small Business Administration | ​ |  | 1,823 | ​ |  | — | ​ |  | 1,168 | ​ |  | 2,991 | ​ |  | 162,579 | ​ |  | 165,570
Taxi medallion | ​ |  | — | ​ |  | — | ​ |  | 2,318 | ​ |  | 2,318 | ​ |  | 279 | ​ |  | 2,597
Commercial business and other | ​ |  | 129 | ​ |  | 1,273 | ​ |  | 1,593 | ​ |  | 2,995 | ​ |  | 1,296,414 | ​ |  | 1,299,409
Total | ​ | $ | 36,947 | ​ | $ | 11,519 | ​ | $ | 18,915 | ​ | $ | 67,381 | ​ | $ | 6,637,293 | ​ | $ | 6,704,674

​

​

​

-17-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following tables show the activity in the ACL on loans for the three month periods indicated:

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021
​ |  | ​ | ​ |  | ​ | ​ |  | One-to-four |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | family - | ​ | One-to-four | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Commercial | ​ | ​ | ​
​ | ​ | Multi-family | ​ | Commercial | ​ | mixed-use | ​ | family - | ​ | Construction | ​ | Small Business | ​ | Taxi | ​ | business and | ​ | ​ | ​
(In thousands) | ​ | residential | ​ | real estate | ​ | property | ​ | residential | ​ | loans | ​ | Administration | ​ | medallion | ​ | other | ​ | Total
Allowance for credit losses: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Beginning balance | ​ | $ | 7,144 | ​ | $ | 8,356 | ​ | $ | 1,873 | ​ | $ | 710 | ​ | $ | 750 | ​ | $ | 2,127 | ​ | $ | — | ​ | $ | 24,139 | ​ | $ | 45,099
Charge-offs | ​ |  | — | ​ |  | — | ​ |  | (3) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (1,183) | ​ |  | (1,186)
Recoveries | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 2 | ​ |  | — | ​ |  | 9 | ​ |  | 222 | ​ |  | 51 | ​ |  | 284
Provision (benefit) | ​ |  | (585) | ​ |  | (2,488) | ​ |  | (378) | ​ |  | 4 | ​ |  | (565) | ​ |  | 166 | ​ |  | (222) | ​ |  | 2,541 | ​ |  | (1,527)
Ending balance | ​ | $ | 6,559 | ​ | $ | 5,868 | ​ | $ | 1,492 | ​ | $ | 716 | ​ | $ | 185 | ​ | $ | 2,302 | ​ | $ | — | ​ | $ | 25,548 | ​ | $ | 42,670

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2020
​ |  | ​ | ​ |  | ​ | ​ |  | One-to-four |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | family - | ​ | One-to-four | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Commercial | ​ | ​ | ​
​ | ​ | Multi-family | ​ | Commercial | ​ | mixed-use | ​ | family - | ​ | Construction | ​ | Small Business | ​ | Taxi | ​ | business and | ​ | ​ | ​
(In thousands) | ​ | residential | ​ | real estate | ​ | property | ​ | residential | ​ | loans | ​ | Administration | ​ | medallion | ​ | other | ​ | Total
Allowance for credit losses: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Beginning balance | ​ | $ | 5,895 | ​ | $ | 6,791 | ​ | $ | 2,170 | ​ | $ | 892 | ​ | $ | 185 | ​ | $ | 1,528 | ​ | $ | — | ​ | $ | 10,637 | ​ | $ | 28,098
Charge-offs | ​ |  | — | ​ |  | — | ​ |  | (3) | ​ |  | — | ​ |  | — | ​ |  | (178) | ​ |  | — | ​ |  | (849) | ​ |  | (1,030)
Recoveries | ​ |  | 7 | ​ |  | — | ​ |  | — | ​ |  | 3 | ​ |  | — | ​ |  | 13 | ​ |  | — | ​ |  | — | ​ |  | 23
Provision (benefit) | ​ |  | 3,033 | ​ |  | 180 | ​ |  | 659 | ​ |  | 266 | ​ |  | (2) | ​ |  | 23 | ​ |  | — | ​ |  | 5,460 | ​ |  | 9,619
Ending balance | ​ | $ | 8,935 | ​ | $ | 6,971 | ​ | $ | 2,826 | ​ | $ | 1,161 | ​ | $ | 183 | ​ | $ | 1,386 | ​ | $ | — | ​ | $ | 15,248 | ​ | $ | 36,710

​

​

-18-

​

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following tables show the activity in the ACL on loans for the six month periods indicated:

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | One-to-four | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | family - | ​ | One-to-four | ​ | ​ | ​ | ​ | Small | ​ | ​ | ​ | ​ | Commercial | ​ | ​ | ​
​ | ​ | Multi-family | ​ | Commercial | ​ | mixed-use | ​ | family - | ​ | Construction | ​ | Business | ​ | Taxi | ​ | business and | ​ | ​ | ​
(In thousands) |  | residential |  | real estate |  | property |  | residential |  | loans |  | Administration |  | medallion |  | other |  | Total
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for credit losses: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Beginning balance | ​ | $ | 6,557 | ​ | $ | 8,327 | ​ | $ | 1,986 | ​ | $ | 869 | ​ | $ | 497 | ​ | $ | 2,251 | ​ | $ | — | ​ | $ | 24,666 | ​ | $ | 45,153
Charge-off's | ​ |  | (43) | ​ |  | (64) | ​ |  | (32) | ​ |  | — | ​ | ​ | — | ​ |  | — | ​ |  | (2,758) | ​ |  | (1,211) | ​ |  | (4,108)
Recoveries | ​ |  | 10 | ​ |  | — | ​ |  | 10 | ​ |  | 7 | ​ |  | — | ​ |  | 19 | ​ |  | 222 | ​ |  | 73 | ​ |  | 341
Provision (benefit) | ​ |  | 35 | ​ |  | (2,395) | ​ |  | (472) | ​ |  | (160) | ​ |  | (312) | ​ |  | 32 | ​ |  | 2,536 | ​ |  | 2,020 | ​ |  | 1,284
Ending balance | ​ | $ | 6,559 | ​ | $ | 5,868 | ​ | $ | 1,492 | ​ | $ | 716 | ​ | $ | 185 | ​ | $ | 2,302 | ​ | $ | — | ​ | $ | 25,548 | ​ | $ | 42,670

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2020
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | One-to-four | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | family - | ​ | One-to-four | ​ | ​ | ​ | ​ | Small | ​ | ​ | ​ | ​ | Commercial | ​ | ​ | ​
​ | ​ | Multi-family | ​ | Commercial | ​ | mixed-use | ​ | family - | ​ | Construction | ​ | Business | ​ | Taxi | ​ | business and | ​ | ​ | ​
(In thousands) |  | residential |  | real estate |  | property |  | residential |  | loans |  | Administration |  | medallion |  | other |  | Total
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for credit losses: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Beginning balance | ​ | $ | 5,391 | ​ | $ | 4,429 | ​ | $ | 1,817 | ​ | $ | 756 | ​ | $ | 441 | ​ | $ | 363 | ​ | $ | — | ​ | $ | 8,554 | ​ | $ | 21,751
Impact of CECL Adoption | ​ | ​ | (650) | ​ |  | 1,170 | ​ |  | (55) | ​ |  | (160) | ​ |  | (279) | ​ |  | 1,180 | ​ |  | — | ​ |  | (827) | ​ | ​ | 379
Charge-off's | ​ |  | — | ​ | ​ | — | ​ | ​ | (3) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (178) | ​ | ​ | — | ​ | ​ | (2,108) | ​ |  | (2,289)
Recoveries | ​ |  | 13 | ​ |  | — | ​ |  | 78 | ​ |  | 8 | ​ |  | — | ​ |  | 20 | ​ |  | — | ​ |  | 14 | ​ |  | 133
Provision (benefit) | ​ |  | 4,181 | ​ |  | 1,372 | ​ |  | 989 | ​ |  | 557 | ​ |  | 21 | ​ |  | 1 | ​ |  | — | ​ |  | 9,615 | ​ |  | 16,736
Ending balance | ​ | $ | 8,935 | ​ | $ | 6,971 | ​ | $ | 2,826 | ​ | $ | 1,161 | ​ | $ | 183 | ​ | $ | 1,386 | ​ | $ | — | ​ | $ | 15,248 | ​ | $ | 36,710

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

-19-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

In accordance with our policy and the current regulatory guidelines, we designate loans as “Special Mention,” which are considered “Criticized Loans,” and “Substandard,” “Doubtful,” or “Loss,” which are considered “Classified Loans”. If a loan does not fall within one of the previous mentioned categories and management believes weakness is evident then we designate the loan as “Watch”, all other loans would be considered “Pass.” Loans that are non-accrual are designated as Substandard, Doubtful or Loss. These loan designations are updated quarterly. We designate a loan as Substandard when a well-defined weakness is identified that may jeopardize the orderly liquidation of the debt. We designate a loan Doubtful when it displays the inherent weakness of a Substandard loan with the added provision that collection of the debt in full, on the basis of existing facts, is highly improbable. We designate a loan as Loss if it is deemed the debtor is incapable of repayment. The Company does not hold any loans designated as Loss, as loans that are designated as Loss are charged to the Allowance for Credit Losses. We designate a loan as Special Mention if the asset does not warrant classification within one of the other classifications, but does contain a potential weakness that deserves closer attention. Loans that are in forbearance pursuant to the CARES Act generally continued to be reported in the same category as they were reported immediately prior to modification.

​

​

-20-

​

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

The following table summarizes the risk category of mortgage and non-mortgage loans by loan portfolio segments and class of loans by year of origination at June 30, 2021:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Revolving Loans, | ​ | ​ | Lines of Credit | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Amortized Cost | ​ | ​ | converted to | ​ | ​ | ​
(In thousands) | ​ | ​ | 2021 | ​ | ​ | 2020 | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | Prior | ​ | ​ | Basis | ​ | ​ | term loans | ​ | ​ | Total
1-4 Family Residential | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 57,316 | ​ | $ | 31,897 | ​ | $ | 36,253 | ​ | $ | 32,818 | ​ | $ | 20,935 | ​ | $ | 75,903 | ​ | $ | 10,524 | ​ | $ | 15,288 | ​ | $ | 280,934
Watch | ​ | ​ | — | ​ | ​ | 481 | ​ | ​ | 724 | ​ | ​ | 280 | ​ | ​ | 2,430 | ​ | ​ | 1,541 | ​ | ​ | 190 | ​ | ​ | 2,287 | ​ | ​ | 7,933
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,115 | ​ | ​ | 517 | ​ | ​ | 160 | ​ | ​ | — | ​ | ​ | 1,792
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,836 | ​ | ​ | — | ​ | ​ | 4,167 | ​ | ​ | — | ​ | ​ | 1,029 | ​ | ​ | 7,032
Total 1-4 Family Residential | ​ | $ | 57,316 | ​ | $ | 32,378 | ​ | $ | 36,977 | ​ | $ | 34,934 | ​ | $ | 24,480 | ​ | $ | 82,128 | ​ | $ | 10,874 | ​ | $ | 18,604 | ​ | $ | 297,691
1-4 Family Mixed-Use | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 18,221 | ​ | $ | 35,902 | ​ | $ | 71,259 | ​ | $ | 75,193 | ​ | $ | 54,249 | ​ | $ | 308,869 | ​ | $ | — | ​ | $ | — | ​ | $ | 563,693
Watch | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,092 | ​ | ​ | 6,118 | ​ | ​ | 7,668 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 16,878
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 761 | ​ | ​ | 1,438 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,199
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 501 | ​ | ​ | — | ​ | ​ | 2,478 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,979
Total 1-4 Family Mixed Use | ​ | $ | 18,221 | ​ | $ | 35,902 | ​ | $ | 71,259 | ​ | $ | 78,786 | ​ | $ | 61,128 | ​ | $ | 320,453 | ​ | $ | — | ​ | $ | — | ​ | $ | 585,749
Commercial Real Estate | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 58,238 | ​ | $ | 171,433 | ​ | $ | 256,707 | ​ | $ | 266,369 | ​ | $ | 180,000 | ​ | $ | 680,308 | ​ | $ | — | ​ | $ | — | ​ | $ | 1,613,055
Watch | ​ | ​ | 4,179 | ​ | ​ | 934 | ​ | ​ | 3,433 | ​ | ​ | 5,708 | ​ | ​ | 2,657 | ​ | ​ | 83,926 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 100,837
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,855 | ​ | ​ | — | ​ | ​ | 1,542 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 8,397
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 7,583 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 35 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 7,618
Total Commercial Real Estate | ​ | $ | 62,417 | ​ | $ | 172,367 | ​ | $ | 267,723 | ​ | $ | 278,932 | ​ | $ | 182,657 | ​ | $ | 765,811 | ​ | $ | — | ​ | $ | — | ​ | $ | 1,729,907
Construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 3,079 | ​ | $ | 23,121 | ​ | $ | 14,797 | ​ | $ | 1,960 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 42,957
Watch | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,115 | ​ | ​ | 8,284 | ​ | ​ | 5,904 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 16,303
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 859 | ​ | ​ | 2,592 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,451
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total Construction | ​ | $ | 3,079 | ​ | $ | 23,121 | ​ | $ | 16,912 | ​ | $ | 11,103 | ​ | $ | 8,496 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 62,711
Multifamily | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 168,396 | ​ | $ | 240,612 | ​ | $ | 340,195 | ​ | $ | 449,407 | ​ | $ | 360,108 | ​ | $ | 941,236 | ​ | $ | 6,346 | ​ | $ | — | ​ | $ | 2,506,300
Watch | ​ | ​ | — | ​ | ​ | 2,111 | ​ | ​ | 4,205 | ​ | ​ | 12,605 | ​ | ​ | — | ​ | ​ | 10,834 | ​ | ​ | 398 | ​ | ​ | — | ​ | ​ | 30,153
Special Mention | ​ | ​ | — | ​ | ​ | 792 | ​ | ​ | 468 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,260
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 703 | ​ | ​ | 2,599 | ​ | ​ | 1,803 | ​ | ​ | 740 | ​ | ​ | 201 | ​ | ​ | — | ​ | ​ | 6,046
Total Multifamily | ​ | $ | 168,396 | ​ | $ | 243,515 | ​ | $ | 345,571 | ​ | $ | 464,611 | ​ | $ | 361,911 | ​ | $ | 952,810 | ​ | $ | 6,945 | ​ | $ | — | ​ | $ | 2,543,759
Commercial Business - Secured by RE | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 96,311 | ​ | $ | 93,588 | ​ | $ | 38,733 | ​ | $ | 52,180 | ​ | $ | 28,173 | ​ | $ | 99,637 | ​ | $ | — | ​ | $ | — | ​ | $ | 408,622
Watch | ​ | ​ | — | ​ | ​ | 23,623 | ​ | ​ | 51,501 | ​ | ​ | 18,557 | ​ | ​ | 11,979 | ​ | ​ | 47,442 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 153,102
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 604 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 604
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,228 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,228
Total Commercial Business - Secured by RE | ​ | $ | 96,311 | ​ | $ | 117,211 | ​ | $ | 90,838 | ​ | $ | 70,737 | ​ | $ | 40,152 | ​ | $ | 151,307 | ​ | $ | — | ​ | $ | — | ​ | $ | 566,556
Commercial Business | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 51,015 | ​ | $ | 72,432 | ​ | $ | 90,417 | ​ | $ | 76,675 | ​ | $ | 29,154 | ​ | $ | 73,507 | ​ | $ | 207,786 | ​ | $ | — | ​ | $ | 600,986
Watch | ​ | ​ | 6 | ​ | ​ | 1,683 | ​ | ​ | 22,505 | ​ | ​ | 19,308 | ​ | ​ | 33,143 | ​ | ​ | 43 | ​ | ​ | 22,493 | ​ | ​ | — | ​ | ​ | 99,181
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 45 | ​ | ​ | 2,488 | ​ | ​ | 103 | ​ | ​ | — | ​ | ​ | 3,207 | ​ | ​ | — | ​ | ​ | 5,843
Substandard | ​ | ​ | — | ​ | ​ | 4,900 | ​ | ​ | 535 | ​ | ​ | 320 | ​ | ​ | 4,957 | ​ | ​ | 1,903 | ​ | ​ | 995 | ​ | ​ | — | ​ | ​ | 13,610
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 929 | ​ | ​ | 1,235 | ​ | ​ | — | ​ | ​ | 2,164
Total Commercial Business | ​ | $ | 51,021 | ​ | $ | 79,015 | ​ | $ | 113,502 | ​ | $ | 98,791 | ​ | $ | 67,357 | ​ | $ | 76,382 | ​ | $ | 235,716 | ​ | $ | — | ​ | $ | 721,784
Small Business Administration | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 130,255 | ​ | $ | 67,148 | ​ | $ | 1,292 | ​ | $ | 1,560 | ​ | $ | 654 | ​ | $ | 2,920 | ​ | $ | — | ​ | $ | — | ​ | $ | 203,829
Watch | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 61 | ​ | ​ | 2,588 | ​ | ​ | 1,946 | ​ | ​ | 849 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,444
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 140 | ​ | ​ | 107 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 247
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 992 | ​ | ​ | 6 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 998
Total Small Business Administration | ​ | $ | 130,255 | ​ | $ | 67,148 | ​ | $ | 1,353 | ​ | $ | 4,148 | ​ | $ | 3,732 | ​ | $ | 3,882 | ​ | $ | — | ​ | $ | — | ​ | $ | 210,518
Other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 52 | ​ | $ | 79 | ​ | $ | — | ​ | $ | 131
Total Other | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 52 | ​ | $ | 79 | ​ | $ | — | ​ | $ | 131
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Loans | ​ | $ | 587,016 | ​ | $ | 770,657 | ​ | $ | 944,135 | ​ | $ | 1,042,042 | ​ | $ | 749,913 | ​ | $ | 2,352,825 | ​ | $ | 253,614 | ​ | $ | 18,604 | ​ | $ | 6,718,806

​

-21-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Included within net loans as of June 30, 2021 and December 31, 2020 were $9.3 million and $5.9 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction.

A loan is considered collateral dependent when the borrower is experiencing financial difficulties and repayment is expected to be substantially provided by the operation or sale of the collateral. The following table presents types of collateral-dependent loans by class of loans as of the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Collateral Type
​ | ​ | June 30, 2021 | ​ | December 31, 2020
(In thousands) | ​ | ​ | Real Estate | ​ | ​ | Business Assets | ​ | ​ | Real Estate | ​ | ​ | Business Assets
Multi-family residential | ​ | $ | 4,850 | ​ | $ | — | ​ | $ | 2,576 | ​ | $ | —
Commercial real estate | ​ | ​ | 1,246 | ​ | ​ | — | ​ | ​ | 2,994 | ​ | ​ | —
One-to-four family - mixed-use property | ​ | ​ | 2,706 | ​ | ​ | — | ​ | ​ | 1,706 | ​ | ​ | —
One-to-four family - residential | ​ | ​ | 6,404 | ​ | ​ | — | ​ | ​ | 5,313 | ​ | ​ | —
Small Business Administration | ​ | ​ | — | ​ | ​ | 992 | ​ | ​ | — | ​ | ​ | 1,168
Commercial business and other | ​ | ​ | — | ​ | ​ | 2,556 | ​ | ​ | — | ​ | ​ | 3,482
Taxi Medallion | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,758
Total | ​ | $ | 15,206 | ​ | $ | 3,548 | ​ | $ | 12,589 | ​ | $ | 7,408

​

​

Off-Balance Sheet Credit Losses

​

Also included within scope of the CECL standard are off-balance sheet loan commitments, which includes the unfunded portion of committed lines of credit and commitments “in-process”. Commitments “in‐process” reflect loans not in the Company’s books but rather negotiated loan / line of credit terms and rates that the Company has offered to customers and is committed to honoring. In reference to “in‐process” credits, the Company defines an unfunded commitment as a credit that has been offered to and accepted by a borrower, which has not closed and by which the obligation is not unconditionally cancellable.

Commitments to extend credit (principally real estate mortgage loans) and lines of credit (principally home equity lines of credit and business lines of credit) totaled $499.8 million and $474.0 million at June 30, 2021 and December 31, 2020, respectively.

​

The following table presents the activity in the allowance for off balance sheet credit losses for the three and six months ended June 30, 2021 and 2020.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the six months ended
​ | ​ | June 30, | ​ | June 30,
​ |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ | ​ | (In thousands)
Balance at beginning of period | ​ | $ | 1,304 | ​ | $ | 797 | ​ | $ | 1,815 | ​ | $ | —
Off-Balance Sheet - CECL Adoption | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 553
Off-Balance Sheet- Provision (benefit) | ​ | ​ | 266 | ​ | ​ | 467 | ​ | ​ | (245) | ​ | ​ | 711
Allowance for Off-Balance Sheet - Credit losses (1) | ​ | $ | 1,570 | ​ | $ | 1,264 | ​ | $ | 1,570 | ​ | $ | 1,264

​

| (1) | Included in “Other liabilities” on the Consolidated Statements of Financial Condition.

​

​

​

-22-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

6. Loans held for sale

Loans held for sale are carried at the lower of cost or estimated fair value. At June 30, 2021 and December 31, 2020, the Bank did not have any loans held for sale.

The Company has implemented a strategy of selling certain delinquent and non-performing loans. Once the Company has decided to sell a loan, the sale usually closes in a short period of time, generally within the same quarter. Loans designated held for sale are reclassified from loans held for investment to loans held for sale. Terms of sale include cash due upon the closing of the sale, no contingencies or recourse to the Company and servicing is released to the buyer. Additionally, at times the Company may sell participating interests in performing loans. There were no loans sold for the three months ended June 30, 2020.

The following tables show loans sold during the period indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended June 30, 2021
​ | ​ | ​ | ​ |  | ​ | ​ | Net Recoveries | ​ |  | ​
(Dollars in thousands) |  | Loans sold |  | Proceeds |  | (Charge-offs) |  | Net gain
Delinquent and non-performing loans |  |  |  | ​ |  |  | ​ |  |  | ​ |
Multi-family residential |  | 3 | ​ | $ | 7,846 | ​ | $ | — | ​ | $ | 58
One-to-four family - mixed-use property |  | 4 | ​ |  | 2,488 | ​ |  | — | ​ |  | 69
Total |  | 7 | ​ | $ | 10,334 | ​ | $ | — | ​ | $ | 127
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the six months ended June 30, 2021
​ | ​ | ​ | ​ |  | ​ | ​ | Net Recoveries | ​ |  | ​
(Dollars in thousands) |  | Loans sold |  | Proceeds |  | (Charge-offs) |  | Net gain
Delinquent and non-performing loans |  |  |  | ​ |  |  | ​ |  |  | ​ |
Multi-family residential |  | 8 | ​ | $ | 10,752 | ​ | $ | (43) | ​ | $ | 63
Commercial real estate |  | 3 | ​ |  | 3,036 | ​ |  | (64) | ​ |  | 17
One-to-four family - mixed-use property |  | 10 | ​ |  | 4,796 | ​ |  | (14) | ​ |  | 78
Total |  | 21 | ​ | $ | 18,584 | ​ | $ | (121) | ​ | $ | 158

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the six months ended June 30, 2020
​ | ​ | ​ | ​ | ​ | ​ | ​ | Net Recoveries | ​ | ​ | ​
(Dollars in thousands) |  | Loans sold |  | Proceeds |  | (Charge-offs) |  | Net gain
Delinquent and non-performing loans |  |  |  | ​ |  |  | ​ |  |  | ​ |
Multi-family residential |  | 1 | ​ | $ | 284 | ​ | $ | — | ​ | $ | 42
One-to-four family - mixed-use property | ​ | 1 | ​ | ​ | 296 | ​ | ​ | — | ​ | ​ | —
Total |  | 2 | ​ | $ | 580 | ​ | $ | — | ​ | $ | 42

​

-23-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

7. Leases

The Company has 28 operating leases for branches (including headquarters) and office spaces, nine operating leases for vehicles, and one operating lease for equipment. Our leases have remaining lease terms ranging from four months to approximately 15 years, none of which has a renewal option reasonably certain of exercise, which has been reflected in the Company’s calculation of lease term.

The Company has elected the short-term lease recognition exemption such that the Company will not recognize Right of Use (“ROU”) assets or lease liabilities for leases with a term of less than 12 months from the commencement date. The Company’s operating lease expense totaled $2.2 million and $1.9 million and was recorded in Occupancy and equipment on the Consolidated Statements of Income for the three month periods ended June 30, 2021 and 2020, respectively. The Company’s operating lease expense totaled $4.3 million and $3.8 million and was recorded in Occupancy and equipment on the Consolidated Statements of Income for the six month periods ended June 30, 2021 and 2020, respectively.

​

The Company has one agreement that qualifies as a short-term lease with expense totaling approximately $60,000 and $34,000 for the three month periods ended June 30, 2021 and 2020 and approximately $90,000 and $68,000 for the six month periods ended June 30, 2021 and 2020, included in Professional services on the Consolidated Statements of Income. The Company has $0.3 million in variable lease payments, which include insurance and real estate tax expenses and was recorded in Occupancy and equipment on the Consolidated Statements of Income, for each of the three months ended June 30, 2021 and 2020. The Company has $0.6 million in variable lease payments, which include insurance and real estate tax expenses and was recorded in Occupancy and equipment on the Consolidated Statements of Income, for each of the six months ended June 30, 2021 and 2020. At June 30, 2021, the weighted-average remaining lease term for our operating leases is approximately eight years and the weighted average discount rate is 3.2%. Our lease agreements do not contain any residual value guarantees.

​

Certain leases have escalation clauses for operating expenses and real estate taxes. The Company’s non-cancelable operating lease agreements expire through 2036.

​

Supplemental balance sheet information related to leases was as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ | ​
(Dollars in thousands) | ​ | June 30, 2021 | ​ | December 31, 2020 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease ROU asset | ​ | $ | 51,972 | ​ | $ | 50,743 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease liability | ​ | $ | 56,151 | ​ | $ | 59,100 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average remaining lease term-operating leases | ​ |  | 7.7 years | ​ |  | 8.3 years | ​
Weighted average discount rate-operating leases | ​ |  | 3.2 | % |  | 3.2 | %

​

​

-24-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The components of lease expense and cash flow information related to leases were as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended | ​
(Dollars in thousands) | ​ | June 30, 2021 | ​ | June 30, 2020 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Lease Cost | ​ |  |  | ​ |  |  | ​
Operating lease cost | ​ | $ | 2,244 | ​ | $ | 1,897 | ​
Short-term lease cost | ​ |  | 60 | ​ |  | 34 | ​
Variable lease cost | ​ |  | 298 | ​ |  | 287 | ​
Total lease cost | ​ | $ | 2,602 | ​ | $ | 2,218 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other information | ​ |  |  | ​ |  |  | ​
Cash paid for amounts included in the measurement of lease liabilities | ​ |  |  | ​ |  |  | ​
Operating cash flows from operating leases | ​ | $ | 2,418 | ​ | $ | 2,200 | ​
Right-of-use assets obtained in exchange for new operating lease liabilities | ​ | $ | — | ​ | $ | 27 | ​

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the six months ended
(Dollars in thousands) | ​ | June 30, 2021 | ​ | June 30, 2020
​ | ​ | ​ | ​ | ​ | ​ | ​
Lease Cost | ​ |  |  | ​ |  |
Operating lease cost | ​ | $ | 4,348 | ​ | $ | 3,782
Short-term lease cost | ​ |  | 95 | ​ |  | 68
Variable lease cost | ​ |  | 596 | ​ |  | 552
Total lease cost | ​ | $ | 5,039 | ​ | $ | 4,402
​ | ​ | ​ | ​ | ​ | ​ | ​
Other information | ​ |  |  | ​ |  |
Cash paid for amounts included in the measurement of lease liabilities | ​ |  |  | ​ |  |
Operating cash flows from operating leases | ​ | $ | 8,048 | ​ | $ | 4,182
Right-of-use assets obtained in exchange for new operating lease liabilities | ​ | $ | — | ​ | $ | 50

​

-25-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The Company’s minimum annual rental payments for Bank facilities due under non-cancelable leases are as follows as of June 30, 2021:

​

​ | ​ | ​ | ​
​ | ​ | Minimum Rental
​ | ​ | (In thousands)
Years ended December 31: | ​ | ​ | ​
2021 | ​ | $ | 4,369
2022 | ​ | ​ | 9,149
2023 | ​ | ​ | 9,281
2024 | ​ | ​ | 9,121
2025 | ​ | ​ | 8,479
Thereafter | ​ | ​ | 22,898
Total minimum payments required | ​ | ​ | 63,297
Less: Implied interest | ​ | ​ | 7,146
Total lease obligations | ​ | $ | 56,151

​

The Company’s minimum annual rental payments for Bank facilities due under non-cancelable leases are as follows as of December 31, 2020:

​

​ | ​ | ​ | ​
​ | ​ | Minimum Rental
​ | ​ | (In thousands)
Years ended December 31: | ​ | ​ | ​
2021 | ​ | $ | 8,757
2022 | ​ | ​ | 8,871
2023 | ​ | ​ | 9,006
2024 | ​ | ​ | 8,847
2024 | ​ | ​ | 8,212
Thereafter | ​ | ​ | 23,547
Total minimum payments required | ​ | $ | 67,240
Less: Implied interest | ​ | ​ | 8,140
Total lease obligations | ​ | $ | 59,100
​ | ​ | ​ | ​

​

8. Stock-Based Compensation

The Company has long-term incentive compensation program for certain Company executive officers that includes grants of performance-based restricted stock units (“PRSUs”) in addition to time-based restricted stock units (“RSU”). Under the terms of the PRSU Agreement, the number of PRSUs that may be earned depends on the extent to which performance goals for the award are achieved over a three-year performance period, as determined by the Compensation Committee of the Board. As of June 30, 2021, PRSUs granted in 2021 and 2020 are being accrued at target and PRSUs granted in 2019 are being accrued above target.

On May 18, 2021, stockholders approved an amendment to the 2014 Omnibus Plan (the “Amendment”) authorizing an additional 1,100,000 shares available for future issuance. Including the additional shares authorized from the Amendment, 1,170,408 shares were available for future issuance under the 2014 Omnibus Plan at June 30, 2021.

For the three months ended June 30, 2021 and 2020, the Company’s net income, as reported, included $1.1 million and $0.9 million, respectively, of stock-based compensation costs, including the benefit or expense of phantom stock awards, and $0.3 million and $0.2 million of income tax benefits, respectively, related to the stock-based compensation plans. For the six months ended June 30, 2021 and 2020, the Company’s net income, as reported, included $5.2 million and $3.4

-26-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

million, respectively, of stock-based compensation costs, including the benefit or expense of phantom stock awards, and $1.4 million and $0.8 million of income tax benefits, respectively, related to the stock-based compensation plans.

During the three months ended June 30, 2021 and 2020, the Company did not grant any RSU or PRSU’s. During the six months ended June 30, 2021 and 2020, the Company granted 238,985 and 172,228 RSU, respectively. During the six months ended June 30, 2021 and 2020, the Company granted 62,790 and 72,143 in PRSU awards, respectively.

The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock unit awards. Compensation cost is recognized over the vesting period of the award using the straight-line method.

The following table summarizes the Company’s RSU and PRSU awards at or for the six months ended June 30, 2021:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | RSU Awards |  | PRSU Awards
​ | ​ | ​ |  | Weighted-Average | ​ | ​ |  | Weighted-Average
​ | ​ | ​ |  | Grant-Date | ​ | ​ |  | Grant-Date
​ |  | Shares |  | Fair Value |  | Shares |  | Fair Value
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-vested at December 31, 2020 |  | 336,898 | ​ | $ | 23.48 |  | 66,580 | ​ | $ | 21.26
Granted |  | 238,985 | ​ |  | 18.44 |  | 62,790 | ​ |  | 18.46
Vested |  | (240,176) | ​ |  | 21.22 |  | (35,070) | ​ |  | 18.81
Forfeited |  | (4,662) | ​ |  | 20.61 |  | — | ​ |  | —
Non-vested at June 30, 2021 |  | 331,045 | ​ | $ | 21.51 |  | 94,300 | ​ | $ | 20.31
Vested but unissued at June 30, 2021 |  | 214,829 | ​ | $ | 21.03 |  | 102,185 | ​ | $ | 20.48

​

As of June 30, 2021, there was $6.3 million of total unrecognized compensation cost related to RSU and PRSU awards granted. That cost is expected to be recognized over a weighted-average period of 2.5 years. The total fair value of awards vested for the three months ended June 30, 2021 and 2020 was $0.2 million and $0.1 million, respectively. The total fair value of awards vested for the six months ended June 30, 2021 and 2020 was $5.0 million and $5.1 million, respectively. The vested but unissued RSU and PRSU awards consist of awards made to employees and directors who are eligible for retirement. According to the terms of these awards, which provide for vesting upon retirement, these employees and directors have no risk of forfeiture. These shares will be issued at the original contractual vesting and settlement dates.

Phantom Stock Plan: The Company maintains a non-qualified phantom stock plan as a supplement to its profit sharing plan for officers who have achieved the designated level and completed one year of service. The Company adjusts its liability under this plan to the fair value of the shares at the end of each period.

The following table summarizes the Phantom Stock Plan at or for the six months ended June 30, 2021:

​

​ | ​ | ​ | ​ | ​ | ​
Phantom Stock Plan |  | Shares |  | Fair Value
Outstanding at December 31, 2020 |  | 120,248 | ​ | $ | 16.64
Granted |  | 9,042 | ​ |  | 19.52
Forfeited | ​ | (11) | ​ | ​ | 18.25
Distributions |  | (1,483) | ​ |  | 17.15
Outstanding at June 30, 2021 |  | 127,796 | ​ | $ | 21.43
Vested at June 30, 2021 |  | 127,685 | ​ | $ | 21.43

​

The Company recorded stock-based compensation expense (benefit) for the Phantom Stock Plan of $0.1 million and ($0.2) million for the three months ended June 30, 2021 and 2020, respectively. The total fair value of the distributions from the Phantom Stock Plan was $2,000 and $7,000 for the three months ended June 30, 2021 and 2020, respectively.

-27-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The Company recorded stock-based compensation expense (benefit) for the Phantom Stock Plan of $0.6 million and ($1.1) million for the six months ended June 30, 2021 and 2020, respectively. The total fair value of the distributions from the Phantom Stock Plan was $25,000 and $8,000 for the six months ended June 30, 2021 and 2020, respectively.

9. Pension and Other Postretirement Benefit Plans

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three months ended |  | Six months ended
​ |  | June 30, |  | June 30,
(In thousands) |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Employee Pension Plan: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Interest cost | ​ | $ | 128 | ​ | $ | 163 | ​ | $ | 256 | ​ | $ | 326
Amortization of actuarial loss | ​ |  | 122 | ​ |  | 111 | ​ |  | 244 | ​ |  | 222
Expected return on plan assets | ​ |  | (274) | ​ |  | (257) | ​ |  | (548) | ​ |  | (514)
Net employee pension (benefit) expense | ​ | $ | (24) | ​ | $ | 17 | ​ | $ | (48) | ​ | $ | 34
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outside Director Pension Plan: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Service cost | ​ | $ | 4 | ​ | $ | 3 | ​ | $ | 8 | ​ | $ | 7
Interest cost | ​ |  | 12 | ​ |  | 16 | ​ |  | 24 | ​ |  | 32
Amortization of actuarial gain | ​ |  | (5) | ​ |  | (13) | ​ |  | (10) | ​ |  | (27)
Amortization of past service liability | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Net outside director pension expense | ​ | $ | 11 | ​ | $ | 6 | ​ | $ | 22 | ​ | $ | 12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other Postretirement Benefit Plans: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Service cost | ​ | $ | 73 | ​ | $ | 68 | ​ | $ | 146 | ​ | $ | 137
Interest cost | ​ |  | 58 | ​ |  | 65 | ​ |  | 116 | ​ |  | 130
Amortization of actuarial gain | ​ |  | 16 | ​ |  | — | ​ |  | 16 | ​ |  | —
Amortization of past service credit | ​ |  | (21) | ​ |  | (23) | ​ |  | (43) | ​ |  | (43)
Net other postretirement expense | ​ | $ | 126 | ​ | $ | 110 | ​ | $ | 235 | ​ | $ | 224

​

The Company previously disclosed in its Consolidated Financial Statements for the year ended December 31, 2020 that it expects to contribute $0.3 million to each of the Outside Director Pension Plan (the “Outside Director Pension Plan”) and the other postretirement benefit plans (the “Other Postretirement Benefit Plans”), during the year ending December 31, 2021. The Company does not expect to make a contribution to the Employee Pension Plan (the “Employee Pension Plan”). As of June 30, 2021, the Company had contributed $72,000 to the Outside Director Pension Plan and $70,000 in contributions were made to the Other Postretirement Benefit Plans. As of June 30, 2021, the Company has not revised its expected contributions for the year ending December 31, 2021.

​

​

10. Fair Value of Financial Instruments

The Company carries certain financial assets and financial liabilities at fair value in accordance with GAAP which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP permits entities to choose to measure many financial instruments and certain other items at fair value. At June 30, 2021, the Company carried financial assets and financial liabilities under the fair value option with fair values of $14.5 million and $49.8 million, respectively. At December 31, 2020, the Company carried financial assets and financial liabilities under the fair value option with fair values of $14.5 million and $43.1 million, respectively. The Company did not elect to carry any additional financial assets or financial liabilities under the fair value option during the three and six months ended June 30, 2021 and 2020.

-28-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following table presents the financial assets and financial liabilities reported at fair value under the fair value option, and the changes in fair value included in the Consolidated Statement of Income – Net gain (loss) from fair value adjustments, at or for the periods ended as indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value | ​ | Fair Value | ​ | Changes in Fair Values For Items Measured at Fair Value
​ | ​ | Measurements | ​ | Measurements | ​ | Pursuant to Election of the Fair Value Option
​ |  | at June 30, |  | at December 31, |  | Three Months Ended | ​ | Six Months Ended
(In thousands) |  | 2021 |  | 2020 |  | June 30, 2021 |  | June 30, 2020 |  | June 30, 2021 | ​ | June 30, 2020
​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Mortgage-backed securities | ​ | $ | 441 | ​ | $ | 505 | ​ | $ | (1) | ​ | $ | (1) | ​ | $ | (2) | ​ | $ | 2
Other securities | ​ |  | 14,080 | ​ |  | 13,998 | ​ |  | 176 | ​ |  | (182) | ​ |  | 1 | ​ |  | 37
Borrowed funds | ​ |  | 49,814 | ​ |  | 43,136 | ​ |  | (5,528) | ​ |  | 10,334 | ​ |  | (6,988) | ​ |  | 7,983
Net gain (loss) from fair value adjustments (1)(2) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | (5,353) | ​ | $ | 10,151 | ​ | $ | (6,989) | ​ | $ | 8,022

(1) | The net gain (loss) from fair value adjustments presented in the above table does not include net gains (losses) of ($1.2) million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively, from the change in the fair value of interest rate swaps.

(2) | The net gain (loss) from fair value adjustments presented in the above table does not include net gains (losses) of $1.4 million and ($3.8) million for the six months ended June 30, 2021 and 2020, respectively, from the change in the fair value of interest rate swaps.

Included in the fair value of the financial assets and financial liabilities selected for the fair value option is the accrued interest receivable or payable for the related instrument. The Company reports as interest income or interest expense in the Consolidated Statement of Income, the interest receivable or payable on the financial instruments selected for the fair value option at their respective contractual rates.

The borrowed funds had a contractual principal amount of $61.9 million at both June 30, 2021 and December 31, 2020. The fair value of borrowed funds includes accrued interest payable of $0.1 million each at June 30, 2021 and December 31, 2020.

The Company generally holds its earning assets, other than securities available for sale, to maturity and settles its liabilities at maturity. However, fair value estimates are made at a specific point in time and are based on relevant market information. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular instrument. Accordingly, as assumptions change, such as interest rates and prepayments, fair value estimates change and these amounts may not necessarily be realized in an immediate sale.

Disclosure of fair value does not require fair value information for items that do not meet the definition of a financial instrument or certain other financial instruments specifically excluded from its requirements. These items include core deposit intangibles and other customer relationships, premises and equipment, leases, income taxes and equity.

Further, fair value disclosure does not attempt to value future income or business. These items may be material and accordingly, the fair value information presented does not purport to represent, nor should it be construed to represent, the underlying “market” or franchise value of the Company.

Financial assets and financial liabilities reported at fair value are required to be measured based on either: (1) quoted prices in active markets for identical financial instruments (Level 1); (2) significant other observable inputs (Level 2); or (3) significant unobservable inputs (Level 3).

A description of the methods and significant assumptions utilized in estimating the fair value of the Company’s assets and liabilities that are carried at fair value on a recurring basis are as follows:

Level 1 – when quoted market prices are available in an active market. At June 30, 2021 and December 31, 2020, Level 1 included one mutual fund.

-29-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Level 2 – when quoted market prices are not available, fair value is estimated using quoted market prices for similar financial instruments and adjusted for differences between the quoted instrument and the instrument being valued. Fair value can also be estimated by using pricing models, or discounted cash flows. Pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices and credit spreads. In addition to observable market information, models also incorporate maturity and cash flow assumptions. At June 30, 2021 and December 31, 2020, Level 2 included mortgage-backed securities, CLO’s, corporate debt, municipals and interest rate swaps.

Level 3 – when there is limited activity or less transparency around inputs to the valuation, financial instruments are classified as Level 3. At June 30, 2021 and December 31, 2020, Level 3 included trust preferred securities owned and junior subordinated debentures issued by the Company.

The methods described above may produce fair values that may not be indicative of net realizable value or reflective of future fair values. While the Company believes its valuation methods are appropriate and consistent with those of other market participants, the use of different methodologies, assumptions and models to determine fair value of certain financial instruments could produce different estimates of fair value at the reporting date.

The following table sets forth the Company’s assets and liabilities that are carried at fair value on a recurring basis, including those reported at fair value under the fair value option, and the level that was used to determine their fair value, at June 30, 2021 and December 31, 2020:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Quoted Prices | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | in Active Markets | ​ | Significant Other | ​ | Significant Other | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | for Identical Assets | ​ | Observable Inputs | ​ | Unobservable Inputs | ​ | Total carried at fair value
​ | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | on a recurring basis
​ |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ |  | (In thousands)
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Securities available for sale | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mortgage-backed Securities | ​ | $ | — | ​ | $ | — | ​ | $ | 596,661 | ​ | $ | 404,460 | ​ | $ | — | ​ | $ | — | ​ | $ | 596,661 | ​ | $ | 404,460
Other securities | ​ |  | 12,585 | ​ |  | 12,703 | ​ |  | 210,704 | ​ |  | 229,516 | ​ |  | 1,495 | ​ |  | 1,295 | ​ |  | 224,784 | ​ |  | 243,514
Interest rate swaps | ​ |  | — | ​ |  | — | ​ |  | 6,998 | ​ |  | 1,319 | ​ |  | — | ​ |  | — | ​ |  | 6,998 | ​ |  | 1,319
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total assets | ​ | $ | 12,585 | ​ | $ | 12,703 | ​ | $ | 814,363 | ​ | $ | 635,295 | ​ | $ | 1,495 | ​ | $ | 1,295 | ​ | $ | 828,443 | ​ | $ | 649,293
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Borrowings | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 49,814 | ​ | $ | 43,136 | ​ | $ | 49,814 | ​ | $ | 43,136
Interest rate swaps | ​ |  | — | ​ |  | — | ​ |  | 42,520 | ​ |  | 60,987 | ​ |  | — | ​ |  | — | ​ |  | 42,520 | ​ |  | 60,987
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total liabilities | ​ | $ | — | ​ | $ | — | ​ | $ | 42,520 | ​ | $ | 60,987 | ​ | $ | 49,814 | ​ | $ | 43,136 | ​ | $ | 92,334 | ​ | $ | 104,123

​

-30-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following table sets forth the Company’s assets and liabilities that are carried at fair value on a recurring basis, classified within Level 3 of the valuation hierarchy for the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended
​ | ​ | June 30, 2021 | ​ | June 30, 2020
​ | ​ | Trust preferred | ​ | Junior subordinated | ​ | Trust preferred | ​ | Junior subordinated
​ |  | securities |  | debentures |  | securities |  | debentures
​ |  | (In thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning balance | ​ | $ | 1,342 | ​ | $ | 44,712 | ​ | $ | 1,355 | ​ | $ | 45,126
Net (loss) gain from fair value adjustment of financial assets (1) | ​ |  | 153 | ​ |  | — | ​ |  | (285) | ​ |  | —
Net (gain) loss from fair value adjustment of financial liabilities (1) | ​ |  | — | ​ |  | 5,528 | ​ |  | — | ​ |  | (10,334)
Decrease in accrued interest receivable | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (2) | ​ | ​ | —
Decrease in accrued interest payable | ​ |  | — | ​ |  | (3) | ​ |  | — | ​ |  | (61)
Change in unrealized gains included in other comprehensive income | ​ |  | — | ​ |  | (423) | ​ |  | — | ​ |  | 839
Ending balance | ​ | $ | 1,495 | ​ | $ | 49,814 | ​ | $ | 1,068 | ​ | $ | 35,570
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Changes in unrealized gains held at period end | ​ | $ | — | ​ |  | 2,973 | ​ |  | — | ​ |  | 2,223

(1) | Totals in the table above are presented in the Consolidated Statements of Income under net gain (loss) from fair value adjustments.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the six months ended
​ | ​ | June 30, 2021 | ​ | June 30, 2020
​ | ​ | Trust preferred | ​ | Junior subordinated | ​ | Trust preferred | ​ | Junior subordinated
​ |  | securities |  | debentures |  | securities |  | debentures
​ |  | (In thousands)
Beginning balance | ​ | $ | 1,295 | ​ | $ | 43,136 | ​ | $ | 1,332 | ​ | $ | 44,384
Net gain from fair value adjustment of financial assets (1) | ​ |  | 200 | ​ |  | — | ​ |  | (261) | ​ |  | —
Net loss from fair value adjustment of financial liabilities (1) | ​ |  | — | ​ |  | 6,987 | ​ |  | — | ​ |  | (7,983)
Decrease in accrued interest receivable | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (3) | ​ | ​ | —
Increase (decrease) in accrued interest payable | ​ |  | — | ​ |  | (6) | ​ |  | — | ​ |  | (85)
Change in unrealized gains included in other comprehensive income | ​ |  | — | ​ |  | (303) | ​ |  | — | ​ |  | (746)
Ending balance | ​ | $ | 1,495 | ​ | $ | 49,814 | ​ | $ | 1,068 | ​ | $ | 35,570
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Changes in unrealized gains held at period end | ​ | $ | — | ​ |  | 2,973 | ​ |  | — | ​ |  | 2,223

________________________________________

(1)Totals in the table above are presented in the Consolidated Statements of Income under net gain (loss) from fair value adjustments.

During the three and six months ended June 30, 2021 and 2020, there were no transfers between Levels 1, 2 and 3.

-31-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following tables present the quantitative information about recurring Level 3 fair value of financial instruments and the fair value measurements at the periods indicated:

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021 |
​ |  | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average | ​
​ |  | ​ | (Dollars in thousands) | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Trust preferred securities | ​ | $ | 1,495 |  | Discounted cash flows |  | Discount rate |  | n/a |  | 3.2 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ |  |  |  |  |  |  |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Junior subordinated debentures | ​ | $ | 49,814 |  | Discounted cash flows |  | Discount rate |  | n/a |  | 3.2 | %

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, 2020 |
​ |  | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average |
​ |  | (Dollars in thousands) | ​
Assets: |  | ​ |  |  |  |  |  |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Trust preferred securities | ​ | $ | 1,295 |  | Discounted cash flows |  | Discount rate |  | n/a |  | 4.2 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ |  |  |  |  |  |  |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Junior subordinated debentures | ​ | $ | 43,136 |  | Discounted cash flows |  | Discount rate |  | n/a |  | 4.2 | %

​

The significant unobservable inputs used in the fair value measurement of the Company’s trust preferred securities and junior subordinated debentures valued under Level 3 at June 30, 2021 and December 31, 2020, are the effective yields used in the cash flow models. Significant increases or decreases in the effective yield in isolation would result in a significantly lower or higher fair value measurement.

The following table sets forth the Company’s assets and liabilities that are carried at fair value on a non-recurring basis and the level that was used to determine their fair value at June 30, 2021 and December 31, 2020:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Quoted Prices |  | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | in Active Markets | ​ | Significant Other | ​ | Significant Other | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | for Identical Assets | ​ | Observable Inputs | ​ | Unobservable Inputs | ​ | Total carried at fair value
​ | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | on a non-recurring basis
​ |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020
​ |  | (In thousands)
Assets |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Non-accrual loans | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 10,105 | ​ | $ | 11,980 | ​ | $ | 10,105 | ​ | $ | 11,980
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total assets | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 10,105 | ​ | $ | 11,980 | ​ | $ | 10,105 | ​ | $ | 11,980

​

-32-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following tables present the qualitative information about non-recurring Level 3 fair value of financial instruments and the fair value measurements at the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2021
​ |  | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
​ | ​ | (Dollars in thousands)
Assets: |  | ​ |  |  |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-accrual loans | ​ | $ | 8,865 |  | Sales approach |  | Reduction for planned expedited disposal |  | 8.0% to 15.0% | ​ | 12.0%
​ | ​ |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-accrual loans | ​ | $ | 1,057 |  | Discounted Cashflow |  | Discount Rate |  | 4.3% to 5.5% | ​ | 4.8%
​ | ​ | ​ | ​ | ​ | ​ | ​ | Probability of Default | ​ | 35.0% to 50.0% | ​ | 41.7%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-accrual loans | ​ | $ | 183 |  | Blended Income and Sales Approach |  | Adjustment to sales comparison value to reconcile differences between comparable sales |  | 0.0% to 5.0% | ​ | 2.5%
​ | ​ | ​ | ​ | ​ | ​ | ​ | Capitalization rate | ​ | 8.3% | ​ | 8.3%
​ | ​ | ​ | ​ | ​ | ​ | ​ | Probability of Default | ​ | 15.0% | ​ | 15.0%

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | At December 31, 2020
​ |  | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
​ | ​ | (Dollars in thousands)
Assets: |  | ​ |  |  |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-accrual loans | ​ | $ | 10,690 |  | Sales approach |  | Reduction for planned expedited disposal |  | (100.0%) to 15.0% | ​ | 6.8%
​ | ​ |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-accrual loans | ​ | $ | 1,290 |  | Discounted Cashflow |  | Discount Rate |  | 4.3% to 5.5% | ​ | 4.9%
​ | ​ | ​ | ​ | ​ | ​ | ​ | Probability of Default | ​ | 20.0% to 35.0% | ​ | 27.4%

​

The Company did not have any liabilities that were carried at fair value on a non-recurring basis at June 30, 2021 and December 31, 2020.

The methods and assumptions used to estimate fair value at June 30, 2021 and December 31, 2020 are as follows:

Securities:

The fair values of securities are contained in Note 4 (“Securities”) of the Notes to Consolidated Financial Statements. Fair value is based upon quoted market prices, where available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities and adjusted for differences between the quoted instrument and the instrument being valued. When there is limited activity or less transparency around inputs to the valuation, securities are valued using discounted cash flows.

Non-accrual Loans:

For non-accruing loans, fair value is generally estimated by discounting management’s estimate of future cash flows with a discount rate commensurate with the risk associated with such assets or, for collateral dependent loans, 85% of the appraised or internally estimated value of the property. See Note 5 (“Loans”) of the Notes to the Consolidated Financial Statements.

-33-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Junior Subordinated Debentures:

The fair value of the junior subordinated debentures was developed using a credit spread based on stated spreads for recently issued subordinated debt instruments for issuers of similar asset size and credit quality of the Company and with similar durations adjusting for differences in the junior subordinated debt’s credit rating, liquidity and time to maturity. The unrealized net gain/loss attributable to changes in our own credit risk was determined by adjusting the fair value as determined in the proceeding sentence by the average rate of default on debt instruments with a similar debt rating as our junior subordinated debentures, with the difference from the original calculation and this calculation resulting in the instrument-specific unrealized gain/loss.

Other Real Estate Owned and Other Repossessed Assets:

The fair value for OREO is based on appraised value through a current appraisal, or sometimes through an internal review, additionally adjusted by the estimated costs to sell the property. The fair value for other repossessed assets are based upon the most recently reported arm’s length sales transaction. When there is no recent sale activity, the fair value is calculated using capitalization rates.

Interest Rate Swaps:

The fair value of interest rate swaps is based upon broker quotes.

The following tables set forth the carrying amounts and estimated fair values of selected financial instruments based on the assumptions described above used by the Company in estimating fair value at the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2021
​ | ​ | Carrying | ​ | Fair | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Amount |  | Value |  | Level 1 |  | Level 2 |  | Level 3
​ |  | (In thousands)
Assets: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and due from banks | ​ | $ | 145,971 | ​ | $ | 145,971 | ​ | $ | 145,971 | ​ | $ | — | ​ | $ | —
Securities held-to-maturity | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Mortgage-backed securities | ​ |  | 7,904 | ​ |  | 8,848 | ​ |  | — | ​ |  | 8,848 | ​ |  | —
Other securities | ​ |  | 49,986 | ​ |  | 53,598 | ​ |  | — | ​ |  | — | ​ |  | 53,598
Securities available for sale | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ |  |
Mortgage-backed securities | ​ |  | 596,661 | ​ |  | 596,661 | ​ |  | — | ​ |  | 596,661 | ​ |  | —
Other securities | ​ |  | 224,784 | ​ |  | 224,784 | ​ |  | 12,585 | ​ |  | 210,704 | ​ |  | 1,495
Loans | ​ |  | 6,718,806 | ​ |  | 6,702,618 | ​ |  | — | ​ |  | — | ​ |  | 6,702,618
FHLB-NY stock | ​ |  | 41,630 | ​ |  | 41,630 | ​ |  | — | ​ |  | 41,630 | ​ |  | —
Accrued interest receivable | ​ |  | 43,803 | ​ |  | 43,803 | ​ |  | 2 | ​ |  | 1,705 | ​ |  | 42,096
Interest rate swaps | ​ |  | 6,998 | ​ |  | 6,998 | ​ |  | — | ​ |  | 6,998 | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits | ​ | $ | 6,357,020 | ​ | $ | 6,361,050 | ​ | $ | 5,336,405 | ​ | $ | 1,024,645 | ​ | $ | —
Borrowings | ​ |  | 971,827 | ​ |  | 973,198 | ​ |  | — | ​ |  | 923,384 | ​ |  | 49,814
Accrued interest payable | ​ |  | 4,675 | ​ |  | 4,675 | ​ |  | — | ​ |  | 4,675 | ​ |  | —
Interest rate swaps | ​ |  | 42,520 | ​ |  | 42,520 | ​ |  | — | ​ |  | 42,520 | ​ |  | —

​

-34-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, 2020
​ | ​ | Carrying | ​ | Fair | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Amount |  | Value |  | Level 1 |  | Level 2 |  | Level 3
​ | ​ | (In thousands)
Assets: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and due from banks | ​ | $ | 157,388 | ​ | $ | 157,388 | ​ | $ | 157,388 | ​ | $ | — | ​ | $ | —
Securities held-to-maturity | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Mortgage-backed securities | ​ |  | 7,914 | ​ |  | 8,991 | ​ |  | — | ​ |  | 8,991 | ​ |  | —
Other securities | ​ |  | 49,918 | ​ |  | 54,538 | ​ |  | — | ​ |  | — | ​ |  | 54,538
Securities available for sale | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |
Mortgage-backed securities | ​ |  | 404,460 | ​ |  | 404,460 | ​ |  | — | ​ |  | 404,460 | ​ |  | —
Other securities | ​ |  | 243,514 | ​ |  | 243,514 | ​ |  | 12,703 | ​ |  | 229,516 | ​ |  | 1,295
Loans | ​ |  | 6,704,674 | ​ |  | 6,793,885 | ​ |  | — | ​ |  | — | ​ |  | 6,793,885
FHLB-NY stock | ​ |  | 43,439 | ​ |  | 43,439 | ​ |  | — | ​ |  | 43,439 | ​ |  | —
Accrued interest receivable | ​ |  | 44,041 | ​ |  | 44,041 | ​ |  | 2 | ​ |  | 1,389 | ​ |  | 42,650
Interest rate swaps | ​ |  | 1,319 | ​ |  | 1,319 | ​ |  | — | ​ |  | 1,319 | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits | ​ | $ | 6,136,355 | ​ | $ | 6,141,775 | ​ | $ | 4,997,994 | ​ | $ | 1,143,781 | ​ | $ | —
Borrowings | ​ |  | 1,020,895 | ​ |  | 1,017,573 | ​ |  | — | ​ |  | 974,437 | ​ |  | 43,136
Accrued interest payable | ​ |  | 4,755 | ​ |  | 4,755 | ​ |  | — | ​ |  | 4,755 | ​ |  | —
Interest rate swaps | ​ |  | 60,987 | ​ |  | 60,987 | ​ |  | — | ​ |  | 60,987 | ​ |  | —

​

​

11. Derivative Financial Instruments

At June 30, 2021 and December 31, 2020, the Company’s derivative financial instruments consist of interest rate swaps. The Company’s interest rate swaps are used for four purposes: 1) to mitigate the Company’s exposure to rising interest rates on a portion ($18.0 million) of its floating rate junior subordinated debentures that have a contractual value of $61.9 million, at June 30, 2021 and December 31, 2020; 2) to mitigate the Company’s exposure to rising interest rates on certain fixed rate loans totaling $310.9 million and $316.1 million at June 30, 2021 and December 31, 2020, respectively; 3) to facilitate risk management strategies for our loan customers with $231.4 million of swaps outstanding, which include $115.7 million with customers and $115.7 million with bank counterparties at June 30, 2021 and $125.6 million of swaps outstanding, which include $62.8 million with customers and $62.8 million with bank counterparties at December 31, 2020; and 4) to mitigate exposure to rising interest rates on certain short-term advances totaling $996.5 million and $1,021.5 million at June 30, 2021 and December 31, 2020, respectively.

At June 30, 2021 and December 31, 2020, we held derivatives designated as cash flow hedges, fair value hedges and certain derivatives not designated as hedges.

The Company’s derivative instruments are carried at fair value in the Company’s financial statements as part of Other Assets for derivatives with positive fair values and Other Liabilities for derivatives with negative fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether or not it qualifies and has been designated as a hedge for accounting purposes, and further, by the type of hedging relationship.

At June 30, 2021 and December 31, 2020, derivatives with a combined notional amount of $249.4 million and $143.6 million, respectively, were not designated as hedges. At June 30, 2021 and December 31, 2020, derivatives with a combined notional amount of $310.9 million and $316.1 million, respectively, were designated as fair value hedges. At June 30, 2021 and December 31, 2020, derivatives with a combined notional amount of $996.5 million and $1,021.5 million, respectively, were designated as cash flow hedges.

For cash flow hedges, the changes in the fair value of the derivative is reported in accumulated other comprehensive income (loss), net of tax. Amounts in accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged forecasted transaction effects earnings. During the three months ended June 30, 2021 and 2020, $2.6 million and $0.2 million, respectively, were reclassified from accumulated other comprehensive loss to

-35-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

interest expense. The estimated amount to be reclassified in the next 12 months out of accumulated other comprehensive income (loss) is $10.5 million.

Changes in the fair value of interest rate swaps not designated as hedges are reflected in “Net gain/loss from fair value adjustments” in the Consolidated Statements of Income.

The following table sets forth information regarding the Company’s derivative financial instruments at the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2021 |  | December 31, 2020
​ | ​ | Notional | ​ | Net Carrying | ​ | Notional | ​ | Net Carrying
​ |  | Amount |  | Value (1) |  | Amount |  | Value (1)
​ | ​ | (In thousands)
Interest rate swaps (non-hedge) | ​ | $ | 115,681 | ​ | $ | 3,241 | ​ | $ | 62,779 | ​ | $ | 1,319
Interest rate swaps (cash flow hedge) | ​ | ​ | 355,000 | ​ | ​ | 3,757 | ​ | ​ | — | ​ | ​ | —
Interest rate swaps (fair value hedge) | ​ |  | 310,939 | ​ |  | (17,858) | ​ |  | 316,051 | ​ |  | (28,689)
Interest rate swaps (cash flow hedge) | ​ |  | 641,500 | ​ |  | (17,165) | ​ |  | 1,021,500 | ​ |  | (25,300)
Interest rate swaps (non-hedge) | ​ |  | 133,681 | ​ |  | (7,497) | ​ |  | 80,779 | ​ |  | (6,998)
Total derivatives | ​ | $ | 1,556,801 | ​ | $ | (35,522) | ​ | $ | 1,481,109 | ​ | $ | (59,668)

(1)Derivatives in a positive position are recorded as “Other assets” and derivatives in a negative position are recorded as “Other liabilities” in the Consolidated Statements of Financial Condition.

​

The following table sets forth the effect of derivative instruments on the Consolidated Statements of Income for the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ |  | For the three months ended |  | For the six months ended
​ | ​ | ​ | June 30, | ​ | June 30,
(In thousands) | Affected Line Item in the Statement Where Net income is Presented |  | 2021 |  | 2020 |  | 2021 |  | 2020
Financial Derivatives: | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
​ | Other interest expense | ​ | $ | (138) | ​ | $ | (101) | ​ | $ | (272) | ​ | $ | (166)
​ | Net gain (loss) from fair value adjustments | ​ | ​ | (1,195) | ​ | ​ | 54 | ​ | ​ | 1,423 | ​ | ​ | (3,810)
Interest rate swaps (non-hedge) | ​ | ​ | ​ | (1,333) | ​ | ​ | (47) | ​ | ​ | 1,151 | ​ | ​ | (3,976)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest rate swaps (fair value hedge) | Interest and fees on loans | ​ | ​ | (2,062) | ​ | ​ | (1,456) | ​ | ​ | (2,025) | ​ | ​ | (3,705)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest rate swaps (cash flow hedge) | Other interest expense | ​ |  | (2,619) | ​ |  | (1,156) | ​ |  | (5,205) | ​ | ​ | (1,546)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net loss | ​ | ​ | $ | (6,014) | ​ | $ | (2,659) | ​ | $ | (6,079) | ​ | $ | (9,227)

​

The Company’s interest rate swaps are subject to master netting arrangements between the Company and its three designated counterparties. The Company has not made a policy election to offset its derivative positions.

-36-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

The following tables present the effect of the master netting arrangements on the presentation of the derivative assets and liabilities in the Consolidated Statements of Condition as of the dates indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross Amounts Not Offset in the | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Consolidated Statement of | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Gross Amount Offset in | ​ | Net Amount of Assets | ​ | Condition | ​ | ​ | ​
​ | ​ | Gross Amount of | ​ | the Statement of | ​ | Presented in the Statement of | ​ | Financial | ​ | Cash Collateral | ​ | ​ | ​
(In thousands) |  | Recognized Assets |  | Condition |  | Condition |  | Instruments |  | Received |  | Net Amount
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​
Interest rate swaps | ​ | $ | 6,998 | ​ | $ | — | ​ | $ | 6,998 | ​ | $ | — | ​ | $ | — |  | $ | 6,998
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross Amounts Not Offset in the | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Consolidated Statement of | ​ | ​ | ​
​ | ​ | Gross Amount of | ​ | Gross Amount Offset in | ​ | Net Amount of Liabilities | ​ | Condition | ​ | ​ | ​
​ | ​ | Recognized | ​ | the Statement of | ​ | Presented in the Statement of | ​ | Financial | ​ | Cash Collateral | ​ | ​
(In thousands) |  | Liabilities |  | Condition |  | Condition |  | Instruments |  | Pledged |  | Net Amount
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​
Interest rate swaps | ​ | $ | 42,520 | ​ | $ | — | ​ | $ | 42,520 | ​ | $ | — | ​ | $ | 41,817 |  | $ | 703

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2020
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross Amounts Not Offset in the | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Consolidated Statement of | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Gross Amount Offset in | ​ | Net Amount of Assets | ​ | Condition | ​ | ​ | ​
​ | ​ | Gross Amount of | ​ | the Statement of | ​ | Presented in the Statement of | ​ | Financial | ​ | Cash Collateral | ​ | ​ | ​
(In thousands) |  | Recognized Assets |  | Condition |  | Condition |  | Instruments |  | Received |  | Net Amount
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​
Interest rate swaps | ​ | $ | 1,319 | ​ | $ | — | ​ | $ | 1,319 | ​ | $ | — | ​ | $ | — |  | $ | 1,319
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross Amounts Not Offset in the | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Consolidated Statement of | ​ | ​ | ​
​ | ​ | Gross Amount of | ​ | Gross Amount Offset in | ​ | Net Amount of Liabilities | ​ | Condition | ​ | ​ | ​
​ | ​ | Recognized | ​ | the Statement of | ​ | Presented in the Statement of | ​ | Financial | ​ | Cash Collateral | ​ | ​
(In thousands) |  | Liabilities |  | Condition |  | Condition |  | Instruments |  | Pledged |  | Net Amount
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​
Interest rate swaps | ​ | $ | 60,987 | ​ | $ | — | ​ | $ | 60,987 | ​ | $ | 99 | ​ | $ | 63,517 |  | $ | (2,629)

​

​

​

​

-37-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

12. Accumulated Other Comprehensive Income (Loss):

The following tables set forth the changes in accumulated other comprehensive income (loss) by component for the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended June 30, 2021
​ |  | Unrealized Gains |  | Unrealized Gains | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | (Losses) on |  | (Losses) on | ​ | ​ | ​ |  | Fair Value | ​ | ​ | ​
​ |  | Available for Sale |  | Cash flow |  | Defined Benefit |  | Option Elected | ​ | ​ | ​
​ |  | Securities |  | Hedges |  | Pension Items |  | on Liabilities |  | Total
​ |  | (In thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning balance, net of tax | ​ | $ | (927) | ​ | $ | (9,723) | ​ | $ | (1,818) | ​ | $ | 1,765 | ​ | $ | (10,703)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other comprehensive income before reclassifications, net of tax | ​ |  | 1,497 | ​ |  | (1,267) | ​ |  | — | ​ |  | 276 | ​ |  | 506
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amounts reclassified from accumulated other comprehensive income, net of tax | ​ |  | (85) | ​ |  | 1,788 | ​ |  | 77 | ​ |  | — | ​ |  | 1,780
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net current period other comprehensive income, net of tax | ​ |  | 1,412 | ​ |  | 521 | ​ |  | 77 | ​ |  | 276 | ​ |  | 2,286
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Ending balance, net of tax | ​ | $ | 485 | ​ | $ | (9,202) | ​ | $ | (1,741) | ​ | $ | 2,041 | ​ | $ | (8,417)

-38-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended June 30, 2020
​ |  | Unrealized Gains |  | Unrealized Gains | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | (Losses) on |  | (Losses) on | ​ | ​ | ​ |  | Fair Value | ​ | ​ | ​
​ |  | Available for Sale |  | Cash flow |  | Defined Benefit |  | Option Elected | ​ | ​ | ​
​ |  | Securities |  | Hedges |  | Pension Items |  | on Liabilities |  | Total
​ |  | (In thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning balance, net of tax | ​ | $ | (14,159) | ​ | $ | (19,468) | ​ | $ | (930) | ​ | $ | 2,117 | ​ | $ | (32,440)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other comprehensive income before reclassifications, net of tax | ​ |  | 11,414 | ​ |  | (2,404) | ​ |  | — | ​ |  | (580) | ​ |  | 8,430
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amounts reclassified from accumulated other comprehensive income, net of tax | ​ |  | 37 | ​ |  | 399 | ​ |  | 52 | ​ |  | — | ​ |  | 488
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net current period other comprehensive income (loss), net of tax | ​ |  | 11,451 | ​ |  | (2,005) | ​ |  | 52 | ​ |  | (580) | ​ |  | 8,918
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Ending balance, net of tax | ​ | $ | (2,708) | ​ | $ | (21,473) | ​ | $ | (878) | ​ | $ | 1,537 | ​ | $ | (23,522)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the six months ended June 30, 2021
​ |  | Unrealized Gains |  | Unrealized Gains | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | (Losses) on |  | (Losses) on | ​ | ​ | ​ |  | Fair Value | ​ | ​ | ​
​ |  | Available for Sale |  | Cash flow |  | Defined Benefit |  | Option Elected | ​ | ​ | ​
​ |  | Securities |  | Hedges |  | Pension Items |  | on Liabilities |  | Total
​ |  | (In thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning balance, net of tax | ​ | $ | 1,290 | ​ | $ | (17,521) | ​ | $ | (1,884) | ​ | $ | 1,849 | ​ | $ | (16,266)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other comprehensive income before reclassifications, net of tax | ​ |  | (720) | ​ |  | 4,706 | ​ |  | — | ​ |  | 192 | ​ |  | 4,178
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amounts reclassified from accumulated other comprehensive income, net of tax | ​ |  | (85) | ​ |  | 3,613 | ​ |  | 143 | ​ |  | — | ​ |  | 3,671
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net current period other comprehensive income (loss), net of tax | ​ |  | (805) | ​ |  | 8,319 | ​ |  | 143 | ​ |  | 192 | ​ |  | 7,849
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Ending balance, net of tax | ​ | $ | 485 | ​ | $ | (9,202) | ​ | $ | (1,741) | ​ | $ | 2,041 | ​ | $ | (8,417)

​

-39-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the six months ended June 30, 2020
​ |  | Unrealized Gains |  | Unrealized Gains | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | (Losses) on |  | (Losses) on | ​ | ​ | ​ |  | Fair Value | ​ | ​ | ​
​ |  | Available for Sale |  | Cash flow |  | Defined Benefit |  | Option Elected | ​ | ​ | ​
​ |  | Securities |  | Hedges |  | Pension Items |  | on Liabilities |  | Total
​ |  | (In thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning balance, net of tax | ​ | $ | (3,982) | ​ | $ | (5,863) | ​ | $ | (983) | ​ | $ | 1,021 | ​ | $ | (9,807)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other comprehensive income before reclassifications, net of tax | ​ |  | 1,212 | ​ |  | (16,152) | ​ |  | — | ​ |  | 516 | ​ |  | (14,424)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | ​ |  | 62 | ​ |  | 542 | ​ |  | 105 | ​ |  | — | ​ |  | 709
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net current period other comprehensive income, net of tax | ​ |  | 1,274 | ​ |  | (15,610) | ​ |  | 105 | ​ |  | 516 | ​ |  | (13,715)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Ending balance, net of tax | ​ | $ | (2,708) | ​ | $ | (21,473) | ​ | $ | (878) | ​ | $ | 1,537 | ​ | $ | (23,522)

​

The following tables set forth significant amounts reclassified from accumulated other comprehensive income (loss) by component for the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​
For the three months ended June 30, 2021
​ |  | Amounts Reclassified from | ​ | ​
Details about Accumulated Other |  | Accumulated Other | ​ | Affected Line Item in the Statement
Comprehensive Loss Components |  | Comprehensive Loss |  | Where Net Income is Presented
(In thousands)
Unrealized gains on available for sale securities | ​ | $ | 123 | ​ | Net gains on sale of securities
​ | ​ |  | (38) | ​ | Provision for income taxes
​ | ​ | $ | 85 | ​ | Net of tax
Cash flow hedges: | ​ |  |  | ​ |
Interest rate swaps | ​ | $ | (2,605) | ​ | Other interest expense
​ | ​ |  | 817 | ​ | Provision for income taxes
​ | ​ | $ | (1,788) | ​ | Net of tax
Amortization of defined benefit pension items: | ​ |  |  | ​ |
Actuarial losses | ​ | $ | (133) | (1) | Other operating expense
Prior service credits | ​ |  | 21 | (1) | Other operating expense
​ | ​ |  | (112) | ​ | Total before tax
​ | ​ |  | 35 | ​ | Provision for income taxes
​ | ​ | $ | (77) | ​ | Net of tax

-40-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​
For the three months ended June 30, 2020
​ |  | Amounts Reclassified from | ​ | ​
Details about Accumulated Other |  | Accumulated Other |  | Affected Line Item in the Statement
Comprehensive Loss Components |  | Comprehensive Loss | ​ | Where Net Income is Presented
(In thousands)
​ | ​ | ​ | ​ | ​ | ​
Unrealized losses on available for sale securities | ​ | $ | (54) | ​ | Net loss on sale of securities
​ | ​ |  | 17 | ​ | Provision for income taxes
​ | ​ | $ | (37) | ​ | Net of tax
​ | ​ | ​ | ​ | ​ |
Cash flow hedges: |  | ​ |  | ​ | ​
Interest rate swaps | ​ | $ | (581) | ​ | Other interest expense
​ | ​ |  | 182 | ​ | Provision for income taxes
​ | ​ | $ | (399) | ​ | Net of tax
​ | ​ | ​ | ​ | ​ | ​
Amortization of defined benefit pension items: | ​ |  |  | ​ | ​
Actuarial losses | ​ | $ | (98) | (1) | Other operating expense
Prior service credits | ​ |  | 23 | (1) | Other operating expense
​ | ​ |  | (75) | ​ | Total before tax
​ | ​ |  | 23 | ​ | Provision for income taxes
​ | ​ | $ | (52) | ​ | Net of tax

(1) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 (“Pension and Other Postretirement Benefit Plans”) for additional information.

​

​ | ​ | ​ | ​ | ​ | ​
For the six months ended June 30, 2021
​ |  | Amounts Reclassified from | ​ | ​
Details about Accumulated Other |  | Accumulated Other | ​ | Affected Line Item in the Statement
Comprehensive Loss Components |  | Comprehensive Loss |  | Where Net Income is Presented
(In thousands)
Unrealized gains on available for sale securities | ​ | $ | 123 | ​ | Net gains on sale of securities
​ | ​ |  | (38) | ​ | Provision for income taxes
​ | ​ | $ | 85 | ​ | Net of tax
Cash flow hedges: | ​ |  |  | ​ |
Interest rate swaps | ​ | $ | (5,242) | ​ | Other interest expense
​ | ​ |  | 1,629 | ​ | Tax benefit
​ | ​ | $ | (3,613) | ​ | Net of tax
Amortization of defined benefit pension items: | ​ |  |  | ​ |
Actuarial losses | ​ | $ | (250) | (1) | Other operating expense
Prior service credits | ​ |  | 43 | (1) | Other operating expense
​ | ​ |  | (207) | ​ | Total before tax
​ | ​ |  | 64 | ​ | Provision for income taxes
​ | ​ | $ | (143) | ​ | Net of tax

​

​

-41-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​
For the six months ended June 30, 2020
​ |  | Amounts Reclassified from | ​ | ​
Details about Accumulated Other |  | Accumulated Other |  | Affected Line Item in the Statement
Comprehensive Loss Components |  | Comprehensive Loss | ​ | Where Net Income is Presented
(In thousands)
​ |  | ​ |  | ​ |
Unrealized losses on available for sale securities | ​ | $ | (91) | ​ | Net loss on sale of securities
​ | ​ |  | 29 | ​ | Provision for income taxes
​ | ​ | $ | (62) | ​ | Net of tax
​ | ​ | ​ | ​ | ​ | ​
Cash flow hedges: |  | ​ |  | ​ | ​
Interest rate swaps | ​ | $ | (789) | ​ | Other interest expense
​ | ​ |  | 247 | ​ | Provision for income taxes
​ | ​ | $ | (542) | ​ | Net of tax
​ | ​ | ​ | ​ | ​ | ​
Amortization of defined benefit pension items: | ​ |  |  | ​ | ​
Actuarial losses | ​ | $ | (195) | (1) | Other operating expense
Prior service credits | ​ |  | 43 | (1) | Other operating expense
​ | ​ |  | (152) | ​ | Total before tax
​ | ​ |  | 47 | ​ | Provision for income taxes
​ | ​ | $ | (105) | ​ | Net of tax

​

(1) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 (“Pension and Other Postretirement Benefit Plans”) for additional information.

​

​

​

​

13. Regulatory Capital

Under current capital regulations, the Bank is required to comply with four separate capital adequacy standards and a Capital Conservation Buffer (“CCB”). As of June 30, 2021, the Bank continues to be categorized as “well-capitalized” under the prompt corrective action regulations and continues to exceed all regulatory capital requirements. The CCB for the Bank at June 30, 2021 and December 31, 2020 was 4.88% and 4.30%, respectively.

-42-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Set forth below is a summary of the Bank’s compliance with banking regulatory capital standards.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2021 |  | December 31, 2020 |
​ | ​ | ​ | ​ | ​ | Percent of | ​ | ​ | ​ | ​ | Percent of |
​ |  | Amount |  | Assets |  | Amount |  | Assets |
​ |  | (Dollars in thousands) | ​
Tier I (leverage) capital: |  | ​ |  |  |  |  | ​ |  |  |  | ​
Capital level | ​ | $ | 778,707 |  | 9.49 | % | $ | 733,010 |  | 9.27 | %
Requirement to be well capitalized | ​ |  | 410,271 |  | 5.00 | ​ |  | 395,510 |  | 5.00 | ​
Excess | ​ |  | 368,436 |  | 4.49 | ​ |  | 337,500 |  | 4.27 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Common Equity Tier I risk-based capital: | ​ |  |  |  |  | ​ |  |  |  |  | ​
Capital level | ​ | $ | 778,707 |  | 12.27 | % | $ | 733,010 |  | 11.65 | %
Requirement to be well capitalized | ​ |  | 412,598 |  | 6.50 | ​ |  | 408,929 |  | 6.50 | ​
Excess | ​ |  | 366,109 |  | 5.77 | ​ |  | 324,081 |  | 5.15 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tier 1 risk-based capital: | ​ |  |  |  |  | ​ |  |  |  |  | ​
Capital level | ​ | $ | 778,707 |  | 12.27 | % | $ | 733,010 |  | 11.65 | %
Requirement to be well capitalized | ​ |  | 507,813 |  | 8.00 | ​ |  | 503,297 |  | 8.00 | ​
Excess | ​ |  | 270,894 |  | 4.27 | ​ |  | 229,713 |  | 3.65 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total risk-based capital: | ​ |  |  |  |  | ​ |  |  |  |  | ​
Capital level | ​ | $ | 817,410 |  | 12.88 | % | $ | 773,807 |  | 12.30 | %
Requirement to be well capitalized | ​ |  | 634,767 |  | 10.00 | ​ |  | 629,121 |  | 10.00 | ​
Excess | ​ |  | 182,643 |  | 2.88 | ​ |  | 144,686 |  | 2.30 | ​

​

The Holding Company is subject to the same regulatory capital requirements as the Bank. As of June 30, 2021, the Holding Company continues to be categorized as “well-capitalized” under the prompt corrective action regulations and continues to exceed all regulatory capital requirements. The CCB for the Holding Company at June 30, 2021 and December 31, 2020 was 4.98% and 4.54%, respectively.

Set forth below is a summary of the Holding Company’s compliance with banking regulatory capital standards.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2021 |  | December 31, 2020 |
​ | ​ | ​ | ​ | ​ | Percent of | ​ | ​ | ​ | ​ | Percent of |
​ |  | Amount |  | Assets |  | Amount |  | Assets |
​ | ​ | (Dollars in thousands) |
Tier I (leverage) capital: |  | ​ |  |  |  |  | ​ |  |  |  | ​
Capital level | ​ | $ | 697,591 |  | 8.50 | % | $ | 662,987 |  | 8.38 | %
Requirement to be well capitalized | ​ |  | 410,118 |  | 5.00 | ​ |  | 395,439 |  | 5.00 | ​
Excess | ​ |  | 287,473 |  | 3.50 | ​ |  | 267,548 |  | 3.38 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Common Equity Tier I risk-based capital: | ​ |  |  |  |  | ​ |  |  |  |  | ​
Capital level | ​ | $ | 649,367 |  | 10.24 | % | $ | 621,247 |  | 9.88 | %
Requirement to be well capitalized | ​ |  | 412,365 |  | 6.50 | ​ |  | 408,694 |  | 6.50 | ​
Excess | ​ |  | 237,002 |  | 3.74 | ​ |  | 212,553 |  | 3.38 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tier 1 risk-based capital: | ​ |  |  |  |  | ​ |  |  |  |  | ​
Capital level | ​ | $ | 697,591 |  | 11.00 | % | $ | 662,987 |  | 10.54 | %
Requirement to be well capitalized | ​ |  | 507,526 |  | 8.00 | ​ |  | 503,008 |  | 8.00 | ​
Excess | ​ |  | 190,065 |  | 3.00 | ​ |  | 159,979 |  | 2.54 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total risk-based capital: | ​ |  |  |  |  | ​ |  |  |  |  | ​
Capital level | ​ | $ | 823,494 |  | 12.98 | % | $ | 794,034 |  | 12.63 | %
Requirement to be well capitalized | ​ |  | 634,408 |  | 10.00 | ​ |  | 628,760 |  | 10.00 | ​
Excess | ​ |  | 189,086 |  | 2.98 | ​ |  | 165,274 |  | 2.63 | ​

​

​

-43-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

​

​

14. New Authoritative Accounting Pronouncements

Accounting Standards Pending Adoption:

In January 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-01, “Reference Rate Reform” (Topic 848), which clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by discounting transition. ASU 2021-01 was effective upon issuance and generally can be applied through December 31, 2022.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform” (Topic 848), which provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of reference rate reform and that meet certain scope guidance (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered "minor" so that any existing unamortized origination fees/costs would carry forward and continue to be amortized and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or re-measurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for derivative accounting. ASU 2020-04 is effective March 12, 2020 through December 31, 2022. An entity may elect to apply ASU 2020-04 for contract modifications as of January 1, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic within the Codification, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. We anticipate this ASU will simplify any modifications we execute between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. We are evaluating the impacts of this ASU and have not yet determined whether LIBOR transition and this ASU will have material effects on our business operations and consolidated financial statements. The amendments in this Update apply to contract modifications that replace a reference rate reform and contemporaneous modifications of other terms related to the replacement of the reference rate.

​

​

-44-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report should be read in conjunction with the more detailed and comprehensive disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2020. In addition, please read this section in conjunction with our Consolidated Financial Statements and Notes to Consolidated Financial Statements contained herein.

As used in this Quarterly Report, the words “we,” “us,” “our” and the “Company” are used to refer to Flushing Financial Corporation and its direct and indirect wholly owned subsidiaries, Flushing Bank (the “Bank”), Flushing Preferred Funding Corporation, Flushing Service Corporation, and FSB Properties Inc.

Statements contained in this Quarterly Report relating to plans, strategies, objectives, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed elsewhere in this Quarterly Report and in other documents filed by us with the Securities and Exchange Commission from time to time, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2020. 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. We have no obligation to update these forward-looking statements.

Impact of COVID-19

Update

In response to the novel Coronavirus Disease 2019 (“COVID-19”), the Company is actively assisting customers by providing modifications in the form of deferrals of interest, principal and/or escrow for terms ranging from one to thirty months. At June 30, 2021, we had 69 active forbearances for loans with an aggregate outstanding loan balance of approximately $245.8 million resulting in total deferment of $16.2 million in principal, interest and escrow, down from 134 active forbearances for loans with an aggregate outstanding loan balance of $364.4 million at December 31, 2020. Given the pandemic and current economic environment, we continue to work with our customers to modify loans although the pace of requests slowed down. The Company actively participated in the Paycheck Protection Program (“PPP”), under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), closing $138.7 million of these loans during the three months ended June 30, 2021 , with $69.2 million in PPP loans forgiven by the SBA during the same time period. We are also a participant in the Main Street Lending Program in order to assist customers. Pursuant to the CARES Act and later modified by Consolidated Appropriations Act, certain loan modifications are not classified as “troubled debt restructuring” (“TDR”), if the related loans were not more than 30 days past due as of December 31, 2019. The Company has elected that loans temporarily modified for borrowers directly impacted by COVID-19 are not considered TDR, assuming the above criteria is met and as such, these loans are considered current and continue to accrue interest at its original contractual terms until the completion of the deferred period. Once the deferred period is over, the borrower will resume making payment and normal delinquency-based non-accrual policies will apply.

In addition, the economic pressures and uncertainties related to the COVID-19 pandemic have resulted in changes in consumer spending behaviors in the communities we serve, which may negatively impact the demand for loans and other services we offer. However, the Company’s capital and financial resources have not been materially impacted by the pandemic, as our results of operations depend primarily on net interest income, which benefited from the actions taken by the Federal Reserve to counteract the negative economic impact of the pandemic. Future operating results and near-and-

-45-

​

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

long-term financial condition are subject to significant uncertainty. Our funding sources have not changed significantly and we expect to continue to be able to timely service our debts and its obligations.

Executive Summary

We are a Delaware corporation organized in May 1994. The Bank was organized in 1929 as a New York State-chartered mutual savings bank. Today the Bank operates as a full-service New York State commercial bank. The Bank’s primary regulator is the New York State Department of Financial Services, and its primary federal regulator is the Federal Deposit Insurance Corporation (“FDIC”). Deposits are insured to the maximum allowable amount by the FDIC. Additionally, the Bank is a member of the Federal Home Loan Bank system. The primary business of Flushing Financial Corporation has been the operation of the Bank. The Bank owns three subsidiaries: Flushing Preferred Funding Corporation, Flushing Service Corporation, and FSB Properties Inc. The Bank also operates an internet branch, which operates under the brands of iGObanking.com® and BankPurely® (the “Internet Branch”). The activities of Flushing Financial Corporation are primarily funded by dividends, if any, received from the Bank, issuances of subordinated debt, junior subordinated debt, and issuances of equity securities. Flushing Financial Corporation’s common stock is traded on the NASDAQ Global Select Market under the symbol “FFIC.”

Our principal business is attracting retail deposits from the general public and investing those deposits together with funds generated from ongoing operations and borrowings, primarily in (1) originations and purchases of multi-family residential loans, commercial business loans, commercial real estate mortgage loans and, to a lesser extent, one-to-four family loans (focusing on mixed-use properties, which are properties that contain both residential dwelling units and commercial units); (2) Small Business Administration (“SBA”) loans and other small business loans; (3) construction loans; (4) mortgage loan surrogates such as mortgage-backed securities; and (5) U.S. government securities, corporate fixed-income securities and other marketable securities. We also originate certain other consumer loans including overdraft lines of credit. Our results of operations depend primarily on net interest income, which is the difference between the income earned on our interest-earning assets and the cost of our interest-bearing liabilities. Net interest income is the result of our net interest rate margin, which is the difference between the average yield earned on interest-earning assets and the average cost of interest-bearing liabilities, adjusted for the difference in the average balance of interest-earning assets as compared to the average balance of interest-bearing liabilities. We also generate non-interest income primarily from loan fees, service charges on deposit accounts, mortgage servicing fees, and other fees, income earned on Bank Owned Life Insurance (“BOLI”), dividends on Federal Home Loan Bank of New York (“FHLB-NY”) stock and net gains and losses on sales of securities and loans. Our operating expenses consist principally of employee compensation and benefits, occupancy and equipment costs, other general and administrative expenses and income tax expense. Our results of operations also can be significantly affected by changes in the fair value of financial assets and financial liabilities for which changes in value are recorded through earnings, our periodic provision for credit losses and specific provision for losses on real estate owned.

Our investment policy, which is approved by the Board of Directors, is designed primarily to manage the interest rate sensitivity of our overall assets and liabilities, to generate a favorable return without incurring undue interest rate risk and credit risk, to complement our lending activities and to provide and maintain liquidity. In establishing our investment strategies, we consider our business and growth strategies, the economic environment, our interest rate risk exposure, our interest rate sensitivity “gap” position, the types of securities to be held and other factors. We classify our investment securities as available for sale or held-to-maturity.

We carry a portion of our financial assets and financial liabilities under the fair value option and record changes in their fair value through earnings in non-interest income on our Consolidated Statements of Income and Comprehensive Income. A description of the financial assets and financial liabilities that are carried at fair value through earnings can be found in Note 10 (“Fair Value of Financial Instruments”) of the Notes to the Consolidated Financial Statements.

For the three months ended June 30, 2021, we reported net income of $19.3 million, or $0.61 per diluted common share, an increase of $0.2 million, or $0.01 per diluted common share from March 31, 2021. During the three months ended June

-46-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

30, 2021, we produced record net interest income for the fifth consecutive quarter totaling $61.0 million. The record results were achieved primarily through growth in net-interest earning assets and a reduction in the cost of funds, partially offset by an increase in net losses from qualifying hedges.

During the three months ended June 30, 2021, the yield on interest-earning assets decreased eight basis points, while the cost of interest-bearing liabilities decreased three basis points from the three months ended March 31, 2021, which resulted in a decrease of four basis points in net interest margin to 3.14% from 3.18% for the three months ended March 31, 2021. Excluding net gains/losses from qualifying hedges and purchase accounting adjustments, the net interest margin increased eight basis points to 3.14% for the three months ended June 30, 2021 from 3.06% for the three months ended March 31, 2021.

Our loan portfolio is 85% collateralized by real estate with an average loan to value of less than 40%. We have a long history and foundation built upon disciplined underwriting, good credit quality and a resilient seasoned loan portfolio with strong asset protection. The average loan-to-value on our non-performing real estate loans at June 30, 2021 remained conservative at approximately 30.4%. At June 30 2021, our ACL - loans stands at 64 basis points of gross loans and 243% of non-performing loans. Non-performing assets at the end of the quarter were 22 basis points of total assets.

The Bank and Company remain well capitalized under current capital regulations and are subject to the same regulatory capital requirements. See Note 13 (“Regulatory Capital”) of the Notes to the Consolidated Financial Statements.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2021 AND 2020

General. Net income for the three months ended June 30, 2021 was $19.3 million, an increase of $1.0 million from $18.3 million for the three months ended June 30, 2020. Diluted earnings per common share were $0.61 for the three months ended June 30, 2021, a decrease of $0.02 from $0.63 for the three months ended June 30, 2020.

Return on average equity decreased to 11.95% for the three months ended June 30, 2021 from 13.11% for the three months ended June 30, 2020. Return on average assets decreased to 0.93% for the three months ended June 30, 2021 from 1.01% for the three months ended June 30, 2020.

Interest Income. Interest and dividend income increased $7.0 million, or 10.8%, to $71.7 million for the three months ended June 30, 2021 from $64.8 million for the three months ended June 30, 2020. The increase in interest income was primarily attributable to an increase of $980.3 million in the average balance of interest-earning assets to $7,790.2 million for the three months ended June 30, 2021 from $6,809.8 million for the comparable prior year period, partially offset by a decrease in the yield of average interest earning assets of 12 basis points. The increase in the average balance was primarily driven by the acquisition of Empire Bancorp, Inc. (“Empire”) in the fourth quarter of 2020 coupled with organic growth throughout 2020. The decrease in the yield on interest-earning assets was primarily due to the decrease of 47 basis points in the yield of taxable securities. The decrease in the yield of taxable securities was primarily due to higher yielding securities paying down and being replaced by lower yielding securities. Excluding prepayment penalty income from loans, net recoveries/reversals of interest from non-accrual loans, net gains from fair value adjustments on qualifying hedges, and purchase accounting adjustments, the yield on total loans, net, decreased 11 basis points to 3.94% for the three months ended June 30, 2021 from 4.05% for the three months ended June 30, 2020.

Interest Expense. Interest expense decreased $5.4 million, or 33.3%, to $10.7 million for the three months ended June 30, 2021 from $16.1 million for the three months ended June 30, 2020. The decrease in interest expense was primarily due to a decrease of 43 basis points in the average cost of interest-bearing liabilities to 0.66% for the three months ended June 30, 2021 from 1.09% for the three months ended June 30, 2020, partially offset by an increase of $620.1 million in the average balance of interest-bearing liabilities to $6,532.9 million for the three months ended June 30, 2021 from $5,912.8 million for the comparable prior year period. The decrease in the cost of interest-bearing liabilities was primarily due to the Company’s response to the Federal Reserve lowering rates.

-47-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

Net Interest Income. Net interest income for the three months ended June 30, 2021 was $61.0 million, an increase of $12.3 million, or 25.3%, from $48.7 million for the three months ended June 30, 2020. The increase in net interest income was primarily due to an increase of 27 basis points in the net interest margin to 3.14% for the quarter ended June 30, 2021 compared to 2.87% for the quarter ended June 30, 2020, coupled with net interest-earning assets growing $360.2 million to $1,257.3 million during the same period. Included in net interest income was prepayment penalty income from loans totaling $2.2 million and $0.7 million for the three months ended June 30, 2021 and 2020, respectively, net losses from fair value adjustments on qualifying hedges totaling $0.7 million and $0.4 million for three months ended June 30, 2021 and 2020, respectively, and purchase accounting income adjustments of $0.6 million for the three months ended June 30, 2021. Excluding all of these items and other immaterial items, the net interest margin for the three months ended June 30, 2021 was 3.04%, an increase of 19 basis points, from to 2.85% for the three months ended June 30, 2020.

(Benefit) Provision for Credit Losses. During the three months ended June 30, 2021, a benefit for credit losses was recorded totaling $1.6 million, compared to a provision of $9.6 million for the three months ended June 30, 2020. The benefit recorded during the three months ended June 30, 2021 was driven by the improving conditions of economy. During the six months ended June 30, 2021, non-accrual loans decreased $0.9 million to $17.4 million from $18.3 million at December 31, 2020. The current average loan-to-value ratio for our non-performing loans collateralized by real estate was 30.4% at June 30, 2021. The Bank continues to maintain conservative underwriting standards.

Non-Interest (Loss) Income. Non-interest loss for the three months ended June 30, 2021 was $3.2 million, a decrease of $16.9 million from income of $13.7 million recorded in the prior year comparable period. The decrease was primarily due to a decrease in net gains from fair value adjustments totaling $16.8 million.

Non-Interest Expense. Non-interest expense for the three months ended June 30, 2021 was $34.0 million, an increase of $5.3 million, or 18.3%, from $28.8 million for the three months ended June 30, 2020. The increase in non-interest expense was primarily due to the growth of the Company, which includes the impact of the acquisition of Empire.

Income before Income Taxes. Income before income taxes for the three months ended June 30, 2020 was $25.4 million, an increase of $1.3 million, or 5.5%, from $24.1 million for the three months ended June 30, 2020 for the reasons discussed above.

Provision for Income Taxes. The provision for income taxes was $6.2 million for the three months ended June 30, 2021, an increase of $0.4 million, or 6.0%, from $5.8 million for the three months ended June 30, 2020. The increase was primarily due to an increase in income before income taxes. The effective tax rate for three months ended June 30, 2021 was 24.2% compared to 24.1% for the three months ended June 30, 2020.

COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

General. Net income for the six months ended June 30, 2021 was $38.3 million, an increase of $21.4 million, or 126.9%, from $16.9 million for the six months ended June 30, 2020. Diluted earnings per common share were $1.21 for the six months ended June 30, 2021, an increase of $0.63, or 108.6%, from $0.58 for the six months ended June 30, 2020.

Return on average equity increased to 12.11% for the six months ended June 30, 2021 from 5.95% for the six months ended June 30, 2020. Return on average assets increased to 0.93% for the six months ended June 30, 2021 from 0.47% for the six months ended June 30, 2020.

Interest Income. Interest and dividend income increased $12.4 million, or 9.5%, to $143.9 million for the six months ended June 30, 2021 from $131.4 million for the six months ended June 30, 2020. The increase in interest income was primarily attributable to an increase of $964.2 million in the average balance of interest-earning assets to $7,729.0 million for the six months ended June 30, 2021 from $6,764.8 million for the comparable prior year period, partially offset by a decrease in the yield of average interest earning assets of 16 basis points. The increase in the average balance was primarily driven by the acquisition of Empire in the fourth quarter of 2020 coupled with organic growth through out 2020. The decrease in the yield on interest-earning assets was primarily due to decreases of five basis points and 77 basis points in

-48-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

the yield of total loans and taxable securities, respectively. The decrease in the yield on the total loans, net, was primarily due to loans being both originated and repriced at lower rates. The decrease in the yield of securities was primarily due to higher yielding securities paying down and being replaced by lower yielding securities. Excluding prepayment penalty income from loans, net recoveries/(reversals) of interest from non-accrual loans, net gains (losses) from fair value adjustments on qualifying hedges, and purchase accounting adjustments, the yield on total loans, net, decreased 22 basis points to 3.94% for the six months ended June 30, 2021 from 4.16% for the six months ended June 30, 2020.

Interest Expense. Interest expense decreased $20.0 million, or 47.6%, to $21.9 million for the six months ended June 30, 2021 from $41.9 million for the six months ended June 30, 2020. The decrease in interest expense was primarily due to a decrease of 74 basis points in the average cost of interest-bearing liabilities to 0.67% for the six months ended June 30, 2021 from 1.41% for the six months ended June 30, 2020, partially offset by an increase of $573.2 million in the average balance of interest-bearing liabilities to $6,505.5 million for the six months ended June 30, 2021 from $5,932.4 million for the comparable prior year period. The decrease in the cost of interest-bearing liabilities was primarily due to the Company’s quick response to the Federal Reserve lowering rates.

Net Interest Income. Net interest income for the six months ended June 30, 2021 was $121.9 million, an increase of $32.4 million, or 36.2%, from $89.5 million for the six months ended June 30, 2020. The increase in net interest income was primarily due to an increase of $391.0 million in net interest-earning assets to $1,223.5 million for the six months ended June 30, 2021 from $832.5 million for the comparable prior year period, coupled with a 50 basis point increase in the net interest margin to 3.16% for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. Included in net interest income was prepayment penalty income from loans totaling $3.2 million and $1.5 million for the six months ended June 30, 2021 and 2020, respectively, net (reversals)/ recovered interest from non-accrual loans totaling ($0.2) million and $0.5 million for the six months ended June 30, 2021 and 2020, respectively, net gains (losses) from fair value adjustments on qualifying hedges totaling $0.8 million and ($2.4) million for six months ended June 30, 2021 and 2020, respectively, and purchase accounting income adjustments of $1.5 million for the six months ended June 30, 2021. Excluding all of these items, the net interest margin for the six months ended June 30, 2021 was 3.02%, an increase of 35 basis points, from to 2.67% for the six months ended June 30, 2020.

Provision for Credit Losses. During the six months ended June 30, 2021, a provision for credit losses was recorded totaling $1.2 million, compared to $16.8 million for the six months ended June 30, 2020. The provision recorded during the six months ended June 30, 2021 was driven by the charge-off of the remaining taxi medallion portfolio totaling $2.8 million, partially offset by improving conditions of economy. During the six months ended June 30, 2021, non-accrual loans decreased $0.9 million to $17.4 million from $18.3 million at December 31, 2020. The current average loan-to-value ratio for our non-performing loans collateralized by real estate was 30.4% at June 30, 2021. The Bank continues to maintain conservative underwriting standards.

Non-Interest Income. Non-interest income for the six months ended June 30, 2021 was $3.1 million, a decrease of $7.8 million from the prior year comparable period. The decrease was primarily due to a decrease in net gains from fair value adjustments totaling $9.8 million coupled with $0.7 million in gain from life insurance for the six months ended June 30, 2020, partially offset with $1.7 million in customer loan swap fee income and a $0.6 million net gain from the disposition of assets during the six months ended June 30, 2021.

Non-Interest Expense. Non-interest expense for the six months ended June 30, 2021 was $72.2 million, an increase of $11.0 million, or 18.1%, from $61.1 million for the six months ended June 30, 2020. The increase in non-interest expense was primarily due to the growth of the Company, which includes the impact of the acquisition of Empire.

Income before Income Taxes. Income before income taxes increased $29.2 million, to $51.6 million for the six months ended June 30, 2021 from $22.5 million for the six months ended June 30, 2020 for the reasons discussed above.

Provision for Income Taxes. The provision for income taxes was $13.3 million for the six months ended June 30, 2021, an increase of $7.7 million from $5.6 million for the six months ended June 30, 2020. The increase was primarily due to an increase in income before income taxes. The effective tax rate for six months ended June 30, 2021 was 25.8% compared

-49-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

to 24.9% for the six months ended June 30, 2020. The increase in the effective tax rate for the six months ended June 30, 2021, reflects the discontinuation of New York State and New York City tax benefits provided by the Company’s subsidiary, Flushing Preferred Funding Corporation. Due to regulations, the benefit is not available to banks with average assets of greater than $8.0 billion. Flushing Preferred Funding Corporation was dissolved as of June 30, 2021.

FINANCIAL CONDITION

Assets. Total assets at June 30, 2021 were $8,159.3 million, an increase of $183.0 million, or 2.3%, from $7,976.4 million at December 31, 2020. Total loans, net increased $16.6 million, or 0.2%, during the six months ended June 30, 2021, to $6,676.1 million from $6,659.5 million at December 31, 2020. Loan originations and purchases were $647.3 million for the six months ended June 30, 2021, an increase of $114.8 million, or 21.6%, from $532.5 million for the six months ended June 30, 2020. In order to support our customers during this COVID-19 pandemic, we have originated $138.7 million of PPP loans during the six months ended June 30, 2021. We continue to focus on the origination of multi-family residential, commercial real estate and commercial business loans with a full banking relationship. The loan pipeline was $432.6 million at June 30, 2021, compared to $354.6 million at December 31, 2020.

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

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months |  | For the six months
​ |  | ended June 30, |  | ended June 30,
(In thousands) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Multi-family residential (1) | ​ | $ | 66,913 | ​ | $ | 59,654 |  | $ | 125,466 | ​ | $ | 126,972
Commercial real estate (2) | ​ |  | 37,963 | ​ |  | 8,003 |  | ​ | 55,119 | ​ |  | 107,574
One-to-four family – mixed-use property | ​ |  | 7,135 | ​ |  | 8,117 |  | ​ | 15,847 | ​ |  | 21,572
One-to-four family – residential (3) | ​ |  | 59,494 | ​ |  | 2,674 |  | ​ | 62,625 | ​ |  | 11,087
Co-operative apartments | ​ |  | — | ​ |  | — |  | ​ | — | ​ |  | 704
Construction (4) | ​ |  | 5,281 | ​ |  | 2,821 |  | ​ | 12,404 | ​ |  | 9,570
Small Business Administration (5) | ​ |  | 17,585 | ​ |  | 93,241 |  | ​ | 142,678 | ​ |  | 93,298
Commercial business and other (6) | ​ |  | 130,036 | ​ |  | 59,287 |  | ​ | 233,154 | ​ |  | 161,735
Total | ​ | $ | 324,407 | ​ | $ | 233,797 | ​ | $ | 647,293 | ​ | $ | 532,512

(1) | Includes purchases of $3.1 million for the six months ended June 30, 2020.

(2) | Includes purchases of $30.0 million for the six months ended June 30, 2020.

(3) | Includes purchases of $58.0 million for the three and six months ended June 30, 2021.

(4) | Includes purchases of $3.6 million and $43,000 for the three months ended June 30, 2021 and 2020, respectively. Includes purchases of $6.9 million and $3.4 million for the six months ended June 30, 2021 and 2020, respectively.

(5) | Includes $15.5 million and $93.2 million of SBA PPP loans for the three months ended June 30, 2021 and 2020, respectively. Includes $138.7 million and $93.2 million of SBA PPP loans for the six months ended June 30, 2021 and 2020, respectively.

(6) | Includes purchases of $43.2 million and $35 million for the three months ended June 30, 2021 and 2020, respectively. Includes purchases of $65.8 million and $75.7 million for the six months ended June 30, 2021 and 2020, respectively.

​

The Bank maintains its conservative underwriting standards that include, among other things, a loan-to-value ratio of 75% or less and a debt coverage ratio of at least 125%. Multi-family residential (excluding underlying co-operative mortgages), commercial real estate and one-to-four family mixed-use property mortgage loans originated and purchased during the six months ended June 30, 2021 had an average loan-to-value ratio of 46.7% and an average debt coverage ratio of 175%.

The Bank’s non-performing assets totaled $17.6 million at June 30, 2021, a decrease of $3.5 million, or 16.7%, from $21.1 million at December 31, 2020. Total non-performing assets as a percentage of total assets were 0.22% at June 30, 2021 and 0.26% at December 31, 2020. The ratio of ACL - loans to total non-performing loans was 242.6% at June 30, 2021 and 214.3% at December 31, 2020.

During the six months ended June 30, 2021, mortgage-backed securities increased $192.2 million, or 46.6%, to $604.6 million from $412.4 million at December 31, 2020. The increase in mortgage-backed securities during the six months ended June 30, 2021 was primarily due to the purchase of securities totaling $290.6 million at an average rate of 1.28%,

-50-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

partially offset by maturities and principal repayments of securities totaling $88.4 million, and the decline in the fair value of the securities totaling $8.6 million.

During the six months ended June 30, 2021, other securities, decreased $18.7 million, or 6.4%, to $274.8 million from $293.4 million at December 31, 2020. The decrease in other securities during the six months ended June 30, 2021, was primarily due to maturities, sales and calls totaling $213.5 million, partially offset by purchases of $187.4 million at an average rate of 0.34% and an increase in the fair value of other securities of $7.4 million. At June 30, 2021 other securities primarily consist of securities issued by mutual or bond funds that invest in government and government agency securities, municipal bonds, corporate bonds and CLO’s.

Liabilities. Total liabilities were $7,504.2 million at June 30, 2021, an increase of $146.8 million, or 2.0%, from $7,357.4 million at December 31, 2020. During the six months ended June 30, 2021, due to depositors increased $208.1 million, or 3.4%, to $6,298.8 million due to an increase of $325.8 million in non-maturity deposits, partially offset by a decrease of $117.7 million in certificates of deposit. The decrease in certificates of deposit was due to management’s decision to allow these deposits to mature and replace with lower cost funding. The increase in non-maturity deposits was due to increases of $374.8 million and $166.8 million in money market accounts and demand deposits accounts, respectively, partially offset by a decrease of $200.6 million and $15.3 million in NOW accounts and savings accounts, respectively. Included in deposits were brokered deposits totaling $494.7 million, a decrease of $579.4 million from $1,074.1 million at December 31, 2020. Borrowed funds decreased $49.1 million during the six months ended June 30, 2021.

Equity. Total stockholders’ equity increased $36.2 million, or 5.8%, to $655.2 million at June 30, 2021 from $619.0 million at December 31, 2020. Stockholders’ equity increased due to net income totaling $38.3 million, an increase in accumulated other comprehensive income of $7.8 million and the net impact of vesting and exercising of shares of employee and director stock plans totaling $3.3 million. These increases were partially offset by declaration and payment of dividends on the Company’s common stock of $0.42 per common share totaling $13.3 million. Book value per common share improved to $21.16 at June 30, 2021 compared to $20.11 at December 31, 2020.

Cash flow. During the six months ended June 30, 2021, funds provided by the Company’s operating and financing activities amounted to $36.0 million and $150.4 million, respectively. These funds were utilized to fund $197.8 million used in investing activities. The Company’s primary business objective is the origination and purchase of multi-family residential loans, commercial business loans and commercial real estate mortgage loans and to a lesser extent one-to-four family (including mixed-use properties) and SBA loans. During the six months ended June 30, 2021, the net total of loan purchases less loan repayments and sales was $22.2 million. During the six months ended June 30, 2021, the Company also funded $478.2 million in purchases of securities available for sale. During the six months ended June 30, 2021, funds were provided by sales, calls, prepayments and maturities of available for sale securities totaling $302.3 million. During the six months ended June 30, 2021, funds were provided by increases in deposits and short term borrowings totaling of $370.7 million. The funds were used to repay $205.6 million in long-term borrowings. The Company also used funds of $13.3 million for dividend payments and $1.4 million in purchases of treasury stock during the six months ended June 30, 2021.

INTEREST RATE RISK

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

-51-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

The Company manages the mix of interest-earning assets and interest-bearing liabilities on a continuous basis to maximize return and adjust its exposure to interest rate risk. On a quarterly basis, management prepares the “Earnings and Economic Exposure to Changes in Interest Rate” report for review by the Asset Liability Committee of the Board of Directors, as summarized below. This report quantifies the potential changes in net interest income and net portfolio value should interest rates go up 200 basis points or down 100 basis points (shocked), assuming the yield curves of the rate shocks will be parallel to each other. Net portfolio value is defined as the market value of assets net of the market value of liabilities. The market value of assets and liabilities is determined using a discounted cash flow calculation. The net portfolio value ratio is the ratio of the net portfolio value to the market value of assets. All changes in income and value are measured as percentage changes from the projected net interest income and net portfolio value at the base interest rate scenario. The base interest rate scenario assumes interest rates at June 30, 2021. Various estimates regarding prepayment assumptions are made at each level of rate shock. However, prepayment penalty income is excluded from this analysis. Actual results could differ significantly from these estimates. At June 30, 2021, the Company was within the guidelines set forth by the Board of Directors for each interest rate level.

The following table presents the Company’s interest rate shock as of June 30, 2021:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Projected Percentage Change In | ​
Change in Interest Rate | ​ | Net Interest Income | ​ | Net Portfolio Value | ​ | Net Portfolio Value Ratio | ​
-100 Basis points |  | 2.32 | % | (14.45) | % | 9.20 | %
Base interest rate |  | — |  | — |  | 10.91 |
+100 Basis points |  | (7.02) |  | (3.29) |  | 10.80 |
+200 Basis points |  | (14.08) |  | (7.45) |  | 10.58 |

​

-52-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

AVERAGE BALANCES

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amount of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. The following tables sets forth certain information relating to the Company’s Consolidated Statements of Financial Condition and Consolidated Statements of Income for the three and six months ended June 30, 2021 and 2020, and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown. Average balances are derived from average daily balances. The yields include amortization of fees which are considered adjustments to yields.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended June 30, | ​
​ |  | 2021 |  | 2020 | ​
​ |  | Average | ​ | ​ | ​ |  | Yield/ |  | Average | ​ | ​ |  | Yield/ | ​
​ |  | Balance |  | Interest |  | Cost |  | Balance |  | Interest |  | Cost | ​
Assets |  | (Dollars in thousands) | ​
Interest-earning assets: |  | ​ |  |  | ​ |  |  | ​ |  | ​ |  |  | ​ |  |  | ​ | ​
Mortgage loans, net | ​ | $ | 5,130,400 | ​ | $ | 52,987 |  | 4.13 | % | $ | 4,762,068 | ​ | $ | 49,719 |  | 4.18 | %
Other loans, net | ​ |  | 1,556,488 | ​ |  | 15,012 |  | 3.86 | ​ |  | 1,184,344 | ​ |  | 10,838 |  | 3.66 | ​
Total loans, net (1) (2) | ​ |  | 6,686,888 | ​ | ​ | 67,999 | ​ | 4.07 | ​ |  | 5,946,412 | ​ | ​ | 60,557 | ​ | 4.07 | ​
Taxable securities: | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Mortgage-backed securities | ​ |  | 578,134 | ​ |  | 2,233 |  | 1.54 | ​ |  | 465,365 | ​ |  | 2,327 |  | 2.00 | ​
Other securities | ​ |  | 232,020 | ​ |  | 1,037 |  | 1.79 | ​ |  | 243,867 | ​ |  | 1,358 |  | 2.23 | ​
Total taxable securities | ​ |  | 810,154 | ​ | ​ | 3,270 | ​ | 1.61 | ​ |  | 709,232 | ​ | ​ | 3,685 | ​ | 2.08 | ​
Tax-exempt securities: (3) | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Other securities | ​ |  | 50,830 | ​ |  | 535 |  | 4.21 | ​ |  | 60,280 | ​ |  | 643 |  | 4.27 | ​
Total tax-exempt securities | ​ |  | 50,830 | ​ | ​ | 535 | ​ | 4.21 | ​ |  | 60,280 | ​ | ​ | 643 | ​ | 4.27 | ​
Interest-earning deposits and federal funds sold | ​ |  | 242,302 | ​ |  | 51 |  | 0.08 | ​ |  | 93,911 | ​ |  | 22 |  | 0.09 | ​
Total interest-earning assets | ​ |  | 7,790,174 | ​ | ​ | 71,855 | ​ | 3.69 | ​ |  | 6,809,835 | ​ | ​ | 64,907 | ​ | 3.81 | ​
Other assets | ​ |  | 473,379 | ​ |  | ​ |  | ​ | ​ |  | 396,224 | ​ |  | ​ |  | ​ | ​
Total assets | ​ | $ | 8,263,553 | ​ |  | ​ |  | ​ | ​ | $ | 7,206,059 | ​ |  | ​ |  | ​ | ​
Liabilities and Equity | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Interest-bearing liabilities | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Deposits: | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Savings accounts | ​ | $ | 153,113 | ​ |  | 66 |  | 0.17 | ​ | $ | 188,587 | ​ |  | 74 |  | 0.16 | ​
NOW accounts | ​ |  | 2,255,581 | ​ |  | 1,499 |  | 0.27 | ​ |  | 1,440,147 | ​ |  | 2,099 |  | 0.58 | ​
Money market accounts | ​ |  | 2,043,257 | ​ |  | 2,060 |  | 0.40 | ​ |  | 1,580,652 | ​ |  | 3,208 |  | 0.81 | ​
Certificate of deposit accounts | ​ |  | 1,043,985 | ​ |  | 1,913 |  | 0.73 | ​ |  | 1,185,842 | ​ |  | 4,564 |  | 1.54 | ​
Total due to depositors | ​ |  | 5,495,936 | ​ | ​ | 5,538 | ​ | 0.40 | ​ |  | 4,395,228 | ​ | ​ | 9,945 | ​ | 0.91 | ​
Mortgagors' escrow accounts | ​ |  | 91,545 | ​ |  | 1 |  | — | ​ |  | 87,058 | ​ |  | 26 |  | 0.12 | ​
Total deposits | ​ |  | 5,587,481 | ​ | ​ | 5,539 | ​ | 0.40 | ​ |  | 4,482,286 | ​ | ​ | 9,971 | ​ | 0.89 | ​
Borrowed funds | ​ |  | 945,410 | ​ |  | 5,164 |  | 2.18 | ​ |  | 1,430,488 | ​ |  | 6,084 |  | 1.70 | ​
Total interest-bearing liabilities | ​ |  | 6,532,891 | ​ | ​ | 10,703 | ​ | 0.66 | ​ |  | 5,912,774 | ​ | ​ | 16,055 | ​ | 1.09 | ​
Non-interest-bearing deposits | ​ |  | 923,220 | ​ |  |  |  | ​ | ​ |  | 560,637 | ​ |  |  |  | ​ | ​
Other liabilities | ​ |  | 162,752 | ​ |  |  |  | ​ | ​ |  | 175,234 | ​ |  |  |  | ​ | ​
Total liabilities | ​ |  | 7,618,863 | ​ |  |  |  | ​ | ​ |  | 6,648,645 | ​ |  |  |  | ​ | ​
Equity | ​ |  | 644,690 | ​ |  |  |  | ​ | ​ |  | 557,414 | ​ |  |  |  | ​ | ​
Total liabilities and equity | ​ | $ | 8,263,553 | ​ |  |  |  | ​ | ​ | $ | 7,206,059 | ​ |  |  |  | ​ | ​
Net interest income / net interest rate spread (tax equivalent) (3) | ​ |  |  | ​ | $ | 61,152 |  | 3.03 | % |  |  | ​ | $ | 48,852 |  | 2.72 | %
Net interest-earning assets / net interest margin(tax equivalent) | ​ | $ | 1,257,283 | ​ |  |  |  | 3.14 | % | $ | 897,061 | ​ |  |  |  | 2.87 | %
Ratio of interest-earning assets to interest-bearing liabilities | ​ |  |  | ​ |  |  |  | 1.19 | X |  |  | ​ |  |  |  | 1.15 | 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 $3.2 million and $0.3 million for the three months ended June 30, 2021 and 2020, respectively.

| (2) | Loan interest income includes net losses from fair value adjustments on qualifying hedges of $0.7 million and $0.4 million for the three months ended June 30, 2021 and 2020, respectively.

| (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.

-53-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the six months ended June 30, | ​
​ |  | 2021 |  | 2020 | ​
​ |  | Average | ​ | ​ | ​ |  | Yield/ |  | Average | ​ | ​ |  | Yield/ | ​
​ |  | Balance |  | Interest |  | Cost |  | Balance |  | Interest |  | Cost | ​
Assets |  | (Dollars in thousands) | ​
Interest-earning assets: |  | ​ |  |  | ​ |  |  | ​ |  | ​ |  |  | ​ |  |  | ​ | ​
Mortgage loans, net | ​ | $ | 5,143,117 | ​ | $ | 108,206 |  | 4.21 | % | $ | 4,729,800 | ​ | $ | 99,131 |  | 4.19 | %
Other loans, net | ​ |  | 1,550,527 | ​ |  | 28,814 |  | 3.72 | ​ |  | 1,140,840 | ​ |  | 22,535 |  | 3.95 | ​
Total loans, net (1) (2) | ​ |  | 6,693,644 | ​ | ​ | 137,020 | ​ | 4.09 | ​ |  | 5,870,640 | ​ | ​ | 121,666 | ​ | 4.14 | ​
Taxable securities: | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Mortgage-backed securities | ​ |  | 506,424 | ​ |  | 3,931 |  | 1.55 | ​ |  | 486,638 | ​ |  | 5,367 |  | 2.21 | ​
Other securities | ​ |  | 266,234 | ​ |  | 2,000 |  | 1.50 | ​ |  | 243,796 | ​ |  | 3,055 |  | 2.51 | ​
Total taxable securities | ​ |  | 772,658 | ​ | ​ | 5,931 | ​ | 1.54 | ​ |  | 730,434 | ​ | ​ | 8,422 | ​ | 2.31 | ​
Tax-exempt securities: (3) | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Other securities | ​ |  | 50,829 | ​ |  | 1,065 |  | 4.19 | ​ |  | 61,908 | ​ |  | 1,319 |  | 4.26 | ​
Total tax-exempt securities | ​ |  | 50,829 | ​ | ​ | 1,065 | ​ | 4.19 | ​ |  | 61,908 | ​ | ​ | 1,319 | ​ | 4.26 | ​
Interest-earning deposits and federal funds sold | ​ |  | 211,904 | ​ |  | 87 |  | 0.08 | ​ |  | 101,864 | ​ |  | 312 |  | 0.61 | ​
Total interest-earning assets | ​ |  | 7,729,035 | ​ | ​ | 144,103 | ​ | 3.73 | ​ |  | 6,764,846 | ​ | ​ | 131,719 | ​ | 3.89 | ​
Other assets | ​ |  | 476,919 | ​ |  | ​ |  | ​ | ​ |  | 391,683 | ​ |  | ​ |  | ​ | ​
Total assets | ​ | $ | 8,205,954 | ​ |  | ​ |  | ​ | ​ | $ | 7,156,529 | ​ |  | ​ |  | ​ | ​
Liabilities and Equity | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Interest-bearing liabilities | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Deposits: | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​
Savings accounts | ​ | $ | 161,549 | ​ |  | 141 |  | 0.17 | ​ | $ | 191,307 | ​ |  | 355 |  | 0.37 | ​
NOW accounts | ​ |  | 2,220,677 | ​ |  | 3,205 |  | 0.29 | ​ |  | 1,429,943 | ​ |  | 6,747 |  | 0.94 | ​
Money market accounts | ​ |  | 1,974,781 | ​ |  | 4,160 |  | 0.42 | ​ |  | 1,639,217 | ​ |  | 10,250 |  | 1.25 | ​
Certificate of deposit accounts | ​ |  | 1,073,151 | ​ |  | 4,135 |  | 0.77 | ​ |  | 1,226,544 | ​ |  | 11,331 |  | 1.85 | ​
Total due to depositors | ​ |  | 5,430,158 | ​ | ​ | 11,641 | ​ | 0.43 | ​ |  | 4,487,011 | ​ | ​ | 28,683 | ​ | 1.28 | ​
Mortgagors' escrow accounts | ​ |  | 78,531 | ​ |  | 3 |  | 0.01 | ​ |  | 76,281 | ​ |  | 66 |  | 0.17 | ​
Total deposits | ​ |  | 5,508,689 | ​ | ​ | 11,644 | ​ | 0.42 | ​ |  | 4,563,292 | ​ | ​ | 28,749 | ​ | 1.26 | ​
Borrowed funds | ​ |  | 996,845 | ​ |  | 10,304 |  | 2.07 | ​ |  | 1,369,058 | ​ |  | 13,150 |  | 1.92 | ​
Total interest-bearing liabilities | ​ |  | 6,505,534 | ​ | ​ | 21,948 | ​ | 0.67 | ​ |  | 5,932,350 | ​ | ​ | 41,899 | ​ | 1.41 | ​
Non-interest-bearing deposits | ​ |  | 889,821 | ​ |  |  |  | ​ | ​ |  | 505,199 | ​ |  |  |  | ​ | ​
Other liabilities | ​ |  | 178,361 | ​ |  |  |  | ​ | ​ |  | 151,974 | ​ |  |  |  | ​ | ​
Total liabilities | ​ |  | 7,573,716 | ​ |  |  |  | ​ | ​ |  | 6,589,523 | ​ |  |  |  | ​ | ​
Equity | ​ |  | 632,228 | ​ |  |  |  | ​ | ​ |  | 567,006 | ​ |  |  |  | ​ | ​
Total liabilities and equity | ​ | $ | 8,205,944 | ​ |  |  |  | ​ | ​ | $ | 7,156,529 | ​ |  |  |  | ​ | ​
Net interest income / net interest rate spread (tax equivalent) (3) | ​ |  |  | ​ | $ | 122,155 |  | 3.06 | % |  |  | ​ | $ | 89,820 |  | 2.48 | %
Net interest-earning assets / net interest margin(tax equivalent) | ​ | $ | 1,223,501 | ​ |  |  |  | 3.16 | % | $ | 832,496 | ​ |  |  |  | 2.66 | %
Ratio of interest-earning assets to interest-bearing liabilities | ​ |  |  | ​ |  |  |  | 1.19 | X |  |  | ​ |  |  |  | 1.14 | 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 $4.8 million and $0.5 million for the six months ended June 30, 2021 and 2020, respectively.

| (2) | Loan interest income includes net gains (losses) from fair value adjustments on qualifying hedges of $0.8 million and ($2.4) million for the six months ended June 30, 2021 and 2020, respectively.

| (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 $0.2 million and $0.3 million for the six months ended June 30, 2021 and 2020.

​

-54-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

LOANS

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the six months ended June 30,
(In thousands) |  | 2021 |  | 2020
​ | ​ | ​ | ​ | ​ | ​ | ​
Mortgage Loans |  | ​ |  |  | ​ |
At beginning of period | ​ | $ | 5,228,271 | ​ | $ | 4,677,703
​ | ​ |  |  | ​ |  |
Mortgage loans originated: | ​ |  | ​ | ​ | ​ | ​
Multi-family residential | ​ |  | 125,466 | ​ |  | 123,844
Commercial real estate | ​ |  | 55,119 | ​ |  | 77,569
One-to-four family – mixed-use property | ​ |  | 15,847 | ​ |  | 21,572
One-to-four family – residential | ​ |  | 4,673 | ​ |  | 11,087
Co-operative apartments | ​ |  | — | ​ |  | 704
Construction | ​ |  | 5,468 | ​ |  | 6,132
Total mortgage loans originated | ​ | ​ | 206,573 | ​ | ​ | 240,908
​ | ​ | ​ | ​ | ​ | ​ | ​
Mortgage loans purchased: | ​ |  |  | ​ |  |
Multi-family residential | ​ |  | — | ​ |  | 3,128
Commercial real estate | ​ |  | — | ​ |  | 30,005
One-to-four family - mixed-use property | ​ |  | — | ​ |  | —
One-to-four family - residential | ​ |  | 57,952 | ​ |  | —
Construction | ​ |  | 6,936 | ​ |  | 3,438
Total mortgage loans purchased | ​ |  | 64,888 | ​ |  | 36,571
​ | ​ | ​ | ​ | ​ | ​ | ​
Less: | ​ |  |  | ​ |  |
Principal and other reductions | ​ |  | 271,294 | ​ |  | 169,097
Sales | ​ |  | 17,846 | ​ |  | 498
Charge-offs | ​ |  | 139 | ​ |  | 3
At end of period | ​ | $ | 5,210,453 | ​ | $ | 4,785,584
​ | ​ | ​ | ​ | ​ | ​ | ​
Non-Mortgage Loans | ​ |  |  | ​ |  |
At beginning of period | ​ | $ | 1,473,358 | ​ | $ | 1,079,232
Other loans originated: | ​ |  | ​ | ​ |  | ​
Small Business Administration (1) | ​ |  | 142,678 | ​ |  | 93,298
Commercial business | ​ |  | 164,166 | ​ |  | 83,500
Other | ​ |  | 3,170 | ​ |  | 2,561
Total other loans originated | ​ |  | 310,014 | ​ |  | 179,359
​ | ​ | ​ | ​ | ​ | ​ | ​
Other loans purchased: | ​ |  |  | ​ |  |
Commercial business | ​ |  | 65,818 | ​ |  | 75,674
Total other loans purchased | ​ |  | 65,818 | ​ |  | 75,674
​ | ​ | ​ | ​ | ​ | ​ | ​
Less: | ​ |  |  | ​ |  |
Principal and other reductions | ​ |  | 338,537 | ​ |  | 148,274
Charge-offs | ​ |  | 3,969 | ​ |  | 2,286
At end of period | ​ | $ | 1,506,684 | ​ | $ | 1,183,705

​

(1) | Includes SBA PPP originations totaling $138.7 million and $93.2 million for the six months ended June 30, 2021 and 2020, respectively.

​

-55-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

TROUBLED DEBT RESTRUCTURED (“TDR”) AND NON-PERFORMING ASSETS

​

The following table shows loans classified as TDR at amortized cost that are performing according to their restructured terms at the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | December 31,
(In thousands) |  | 2021 |  | 2020
Accrual Status: |  | ​ |  |  | ​ |
Multi-family residential | ​ | $ | 1,673 | ​ | $ | 1,700
Commercial real estate | ​ |  | 7,583 | ​ |  | 7,702
One-to-four family - mixed-use property | ​ |  | 1,414 | ​ |  | 1,459
One-to-four family - residential | ​ |  | 497 | ​ |  | 507
Commercial business and other | ​ |  | 1,868 | ​ |  | 1,588
Total | ​ |  | 13,035 | ​ |  | 12,956
​ | ​ | ​ | ​ | ​ | ​ | ​
Non-Accrual Status: | ​ |  |  | ​ |  |
One-to-four family - mixed-use property | ​ | ​ | 268 | ​ | ​ | 272
Commercial business and other | ​ |  | 2,239 | ​ |  | 2,243
Taxi medallion | ​ |  | — | ​ |  | 440
Total | ​ |  | 2,507 | ​ |  | 2,955
​ | ​ | ​ | ​ | ​ | ​ | ​
Total performing troubled debt restructured | ​ | $ | 15,542 | ​ | $ | 15,911

​

​

-56-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

The following table shows our non-performing assets at the period indicated:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | December 31, | ​
(In thousands) |  | 2021 | ​ | 2020 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans 90 days or more past due and still accruing: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Multi-family residential | ​ | $ | 201 | ​ | $ | 201 | ​
Commercial real estate | ​ |  | — | ​ |  | 2,547 | ​
Total | ​ |  | 201 | ​ |  | 2,748 | ​
Non-accrual loans: | ​ |  |  | ​ |  |  | ​
Multi-family residential | ​ |  | 4,669 | ​ |  | 2,524 | ​
Commercial real estate | ​ |  | 8 | ​ |  | 1,683 | ​
One-to-four family - mixed-use property (1) | ​ |  | 2,309 | ​ |  | 1,366 | ​
One-to-four family - residential | ​ |  | 6,940 | ​ |  | 5,854 | ​
Small business administration | ​ |  | 976 | ​ |  | 1,151 | ​
Taxi medallion(1) | ​ |  | — | ​ |  | 2,317 | ​
Commercial Business and other (1) | ​ |  | 2,489 | ​ |  | 3,430 | ​
Total | ​ |  | 17,391 | ​ |  | 18,325 | ​
Total non-performing loans | ​ |  | 17,592 | ​ |  | 21,073 | ​
Other non-performing assets: | ​ |  |  | ​ |  |  | ​
Other assets acquired through foreclosure | ​ |  | — | ​ |  | 35 | ​
Total | ​ |  | — | ​ |  | 35 | ​
Total non-performing assets | ​ | $ | 17,592 | ​ | $ | 21,108 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-performing assets to total assets | ​ | ​ | 0.22 | % | ​ | 0.26 | %
ACL - loans to non-performing loans | ​ | ​ | 242.55 | % | ​ | 214.27 | %

(1) Not included in the above analysis are non-accrual performing TDR mixed-use property loans totaling $0.3 million at June 30, 2021 and December 31, 2020; non-accrual performing TDR taxi medallion loans totaling $0.4 million at December 31, 2020 and non-accrual performing TDR commercial business loans totaling $2.2 million at June 30, 2021 and December 31, 2020.

​

CRITICIZED AND CLASSIFIED ASSETS

Our policy is to review our assets, focusing primarily on the loan portfolio, OREO and the investment portfolios, to ensure that credit quality is maintained at the highest levels. See Note 5 (“Loans”) of the Notes to the Consolidated Financial Statements for a description of how loans are determined to be criticized or classified and a table displaying criticized and classified loans at June 30, 2021 and December 31, 2020. The Company did not hold any criticized or classified investment securities at June 30, 2021 and December 31, 2020. Our total Criticized and Classified assets were $68.5 million at June 30, 2021, a decrease of $3.2 million from $71.7 million at December 31, 2020.

Included within net loans as of June 30, 2021 and December 31, 2020 were $9.3 million and $5.9 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction.

​

-57-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

​

ALLOWANCE FOR CREDIT LOSSES

The following table shows allowance for credit losses at the period indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | At or for the six months ended June 30, | ​
(Dollars in thousands) | ​ | 2021 | ​ | ​ | 2020 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at beginning of period | $ | 45,153 | ​ | $ | 21,751 | ​
Loans- CECL Adoption | ​ | — | ​ | ​ | 379 | ​
Loans- Charge-off | ​ | (4,108) | ​ | ​ | (2,289) | ​
Loans- Recovery | ​ | 341 | ​ | ​ | 133 | ​
Loans- Provision | ​ | 1,284 | ​ | ​ | 16,736 | ​
ACL - loans | $ | 42,670 | ​ | $ | 36,710 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at beginning of period | $ | 907 | ​ | $ | — | ​
HTM Securities- CECL Adoption | ​ | — | ​ | ​ | 340 | ​
HTM Securities- Provision (Benefit) | ​ | (63) | ​ | ​ | 62 | ​
ACL - HTM Securities | $ | 844 | ​ | $ | 402 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at beginning of period | $ | 1,815 | ​ | $ | — | ​
Off-Balance Sheet - CECL Adoption | ​ | — | ​ | ​ | 553 | ​
Off-Balance Sheet- Provision (Benefit) | ​ | (245) | ​ | ​ | 711 | ​
ACL - Off-Balance Sheet | $ | 1,570 | ​ | $ | 1,264 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for Credit Losses | $ | 45,084 | ​ | $ | 38,376 | ​

​

​

-58-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Management’s Discussions and Analysis of

Financial Condition and Results of Operations

The following table sets forth the activity in the Company’s ACL - loans for the periods indicated:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At or for the six months ended June 30, |
(Dollars in thousands) |  | 2021 |  | 2020 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at beginning of period | ​ | $ | 45,153 | ​ | $ | 21,751 | ​
CECL Adoption | ​ | ​ | — | ​ | ​ | 379 | ​
Provision for credit losses on loans | ​ |  | 1,284 | ​ |  | 16,736 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans charged-off: | ​ |  |  | ​ |  |  | ​
Multi-family residential | ​ |  | (43) | ​ |  | — | ​
Commercial real estate | ​ |  | (64) | ​ |  | — | ​
One-to-four family - mixed-use property | ​ |  | (32) | ​ |  | (3) | ​
Small Business Administration | ​ | ​ | — | ​ | ​ | (178) | ​
Taxi medallion | ​ |  | (2,758) | ​ |  | — | ​
Commercial business and other | ​ |  | (1,211) | ​ |  | (2,108) | ​
Total loans charged-off | ​ |  | (4,108) | ​ |  | (2,289) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Recoveries: | ​ |  |  | ​ |  |  | ​
Multi-family residential | ​ |  | 10 | ​ |  | 13 | ​
One-to-four family - mixed-use property | ​ | ​ | 10 | ​ | ​ | 78 | ​
One-to-four family - residential | ​ | ​ | 7 | ​ | ​ | 8 | ​
Small Business Administration | ​ | ​ | 19 | ​ | ​ | 20 | ​
Taxi medallion | ​ | ​ | 222 | ​ | ​ | — | ​
Commercial business and other | ​ |  | 73 | ​ |  | 14 | ​
Total recoveries | ​ |  | 341 | ​ |  | 133 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net charge-offs | ​ |  | (3,767) | ​ |  | (2,156) | ​
Balance at end of period | ​ | $ | 42,670 | ​ | $ | 36,710 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Ratio of net charge-offs during the period to average loans outstanding during the period | ​ |  | 0.11 | % |  | 0.07 | %
Ratio of ACL - loans to gross loans at end of period | ​ |  | 0.64 | % |  | 0.61 | %
Ratio of ACL - loans to non-performing assets at end of period | ​ |  | 0.22 | % |  | 179.68 | %
Ratio of ACL - loans to non-performing loans at end of period | ​ |  | 242.55 | % |  | 181.85 | %

​

​

​

-59-

Table of Contents

PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

​

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, the design and operation of these disclosure controls and procedures were effective. During the period covered by this Quarterly Report, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

​

​

-60-

​

Table of Contents

PART II – OTHER INFORMATIOMTION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 1. LEGAL PROCEEDINGS

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

​

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2020.

​

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

The following table sets forth information regarding the shares of common stock repurchased by the Company during the six months ended June 30, 2021:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  |  | ​ | ​ |  |  |  | Maximum
​ | ​ | ​ | ​ | ​ | ​ | ​ | Total Number of | ​ | Number of
​ | ​ | Total | ​ | ​ | ​ | ​ | Shares Purchased | ​ | Shares That May
​ | ​ | Number | ​ | ​ | ​ | ​ | as Part of Publicly | ​ | Yet Be Purchased
​ | ​ | of Shares | ​ | Average Price | ​ | Announced Plans | ​ | Under the Plans
Period | ​ | Purchased | ​ | Paid per Share | ​ | or Programs | ​ | or Programs
April 1 to April 30, 2021 |  | — | ​ | $ | — |  | — |  | 284,806
May 1 to May 31, 2021 |  | — | ​ |  | — |  | — |  | 284,806
June 1 to June 30, 2021 |  | — | ​ |  | — |  | — |  | 284,806
Total |  | — | ​ |  | — |  | — | ​ |

​

During the quarter ended June 30, 2021, the Company did not repurchase any shares of the Company’s common stock. On June 30, 2021, 284,806 shares remained to be repurchased under the currently authorized stock repurchase program. Stock will be purchased under the current stock repurchase programs from time to time, in the open market or through private transactions, subject to market conditions. There is no expiration or maximum dollar amount under these authorizations.

​

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

​

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

​

ITEM 5. OTHER INFORMATION

None.

-61-

​

Table of Contents

PART II – OTHER INFORMATIOMTION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 6. EXHIBITS

​ | ​ | ​
Exhibit No. |  | Description
​ | ​ | ​
3.1 P | ​ | Certificate of Incorporation of Flushing Financial Corporation (1)
3.2 | ​ | Certificate of Amendment to Certificate of Incorporation of Flushing Financial Corporation (3)
3.3 | ​ | Certificate of Amendment to Certificate of Incorporation of Flushing Financial Corporation (5)
3.4 | ​ | Certificate of Designations of Series A Junior Participating Preferred Stock of Flushing Financial Corporation (4)
3.5 | ​ | Certificate of Increase of Shares Designated as Series A Junior Participating Preferred Stock of Flushing Financial Corporation (2)
3.6 | ​ | Amended and Restated By-Laws of Flushing Financial Corporation (6)
4.1 | ​ | Subordinated Indenture, dated as of December 12, 2016, by and between the Company and Wilmington Trust, National Association, as Trustee. (7)
4.2 | ​ | First Supplemental Indenture, dated as of December 12, 2016, by and between the Company and Wilmington Trust, National Association, as Trustee, including the form of the Notes attached as Exhibit A thereto. (7)
4.3 | ​ | Flushing Financial Corporation has outstanding certain long-term debt. None of such debt exceeds ten percent of Flushing Financial Corporation's total assets; therefore, copies of constituent instruments defining the rights of the holders of such debt are not included as exhibits. Copies of instruments with respect to such long-term debt will be furnished to the Securities and Exchange Commission upon request.
10.1 | ​ | Amended Flushing Financial Corporation 2014 Omnibus Plan (filed herewith)
31.1 | ​ | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith)
31.2 | ​ | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith)
32.1 | ​ | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Executive Officer (furnished herewith)
32.2 | ​ | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Financial Officer (furnished herewith)
101.INS | ​ | XBRL Instance Document -the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH | ​ | XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL | ​ | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.DEF | ​ | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.LAB | ​ | XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.PRE | ​ | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
104 | ​ | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

(1) | Incorporated by reference to Exhibits filed with the Registration Statement on Form S-1 filed

September 1, 1995, Registration No. 33-96488. (P: Indicates a filing submitted in paper)

(2) | Incorporated by reference to Exhibit filed with Form 8-K filed September 27, 2006.

(3) | Incorporated by reference to Exhibits filed with Form S-8 filed May 31, 2002.

(4) | Incorporated by reference to Exhibits filed with Form 10-Q for the quarter ended

September 30, 2002.

(5) | Incorporated by reference to Exhibit filed with Form 10-K for the year ended December 31, 2011.

(6) | Incorporated by reference to Exhibit filed with Form 10-Q for the quarter ended June 30, 2014.

(7) | Incorporated by reference to Exhibit filed with Form 8-K filed December 12, 2016.

​

​

-62-

Table of Contents

​

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

EXHIBIT INDEX

​

​ | ​ | ​
Exhibit No. |  | Description
​ | ​ | ​
3.1 P | ​ | Certificate of Incorporation of Flushing Financial Corporation (1)
3.2 | ​ | Certificate of Amendment to Certificate of Incorporation of Flushing Financial Corporation (3)
3.3 | ​ | Certificate of Amendment to Certificate of Incorporation of Flushing Financial Corporation (5)
3.4 | ​ | Certificate of Designations of Series A Junior Participating Preferred Stock of Flushing Financial Corporation (4)
3.5 | ​ | Certificate of Increase of Shares Designated as Series A Junior Participating Preferred Stock of Flushing Financial Corporation (2)
3.6 | ​ | Amended and Restated By-Laws of Flushing Financial Corporation (6)
4.1 | ​ | Subordinated Indenture, dated as of December 12, 2016, by and between the Company and Wilmington Trust, National Association, as Trustee. (7)
4.2 | ​ | First Supplemental Indenture, dated as of December 12, 2016, by and between the Company and Wilmington Trust, National Association, as Trustee, including the form of the Notes attached as Exhibit A thereto. (7)
4.3 | ​ | Flushing Financial Corporation has outstanding certain long-term debt. None of such debt exceeds ten percent of Flushing Financial Corporation's total assets; therefore, copies of constituent instruments defining the rights of the holders of such debt are not included as exhibits. Copies of instruments with respect to such long-term debt will be furnished to the Securities and Exchange Commission upon request.
10.1 | ​ | Amended Flushing Financial Corporation 2014 Omnibus Plan (filed herewith)
31.1 | ​ | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith)
31.2 | ​ | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith)
32.1 | ​ | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Executive Officer (furnished herewith)
32.2 | ​ | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 by the Chief Financial Officer (furnished herewith)
101.INS | ​ | XBRL Instance Document -the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH | ​ | XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL | ​ | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.DEF | ​ | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.LAB | ​ | XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.PRE | ​ | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
104 | ​ | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

(1) | Incorporated by reference to Exhibits filed with the Registration Statement on Form S-1 filed

September 1, 1995, Registration No. 33-96488. (P: Indicates a filing submitted in paper)

(2) | Incorporated by reference to Exhibit filed with Form 8-K filed September 27, 2006.

(3) | Incorporated by reference to Exhibits filed with Form S-8 filed May 31, 2002.

(4) | Incorporated by reference to Exhibits filed with Form 10-Q for the quarter ended

September 30, 2002.

(5) | Incorporated by reference to Exhibit filed with Form 10-K for the year ended December 31, 2011.

(6) | Incorporated by reference to Exhibit filed with Form 10-Q for the quarter ended June 30, 2014.

(7) | Incorporated by reference to Exhibit filed with Form 8-K filed December 12, 2016.

​

​

-63-

Table of Contents

​

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

SIGNATURES

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

​

​ |  | Flushing Financial Corporation,
​ | ​ | ​
​ | ​ | ​
​ | ​ | ​
Dated: | August 4, 2021 | ​ | By: | /s/John R. Buran
​ | ​ | ​ | John R. Buran
​ | ​ | ​ | President and Chief Executive Officer
​ | ​ | ​
​ | ​ | ​
​ | ​ | ​
Dated: | August 4, 2021 | ​ | By: | /s/Susan K. Cullen
​ | ​ | ​ | Susan K. Cullen
​ | ​ | ​ | Senior Executive Vice President, Treasurer and
​ | ​ | ​ | Chief Financial Officer

​

​

​

​

​

​

​

-64-