FFIC's Q3 Net Income Rises, But Goodwill Impairment Hits YTD

TL;DR

**FFIC's Q3 looks better, but the $17.6M goodwill hit year-to-date and rising credit loss provisions are red flags for long-term value.**

AI Summary

FLUSHING FINANCIAL CORP (FFIC) reported a net income of $10.447 million for the three months ended September 30, 2025, an increase from $8.906 million in the prior-year quarter. However, net income for the nine months ended September 30, 2025, decreased to $14.854 million from $17.912 million in the same period of 2024. Total assets declined to $8.871 billion as of September 30, 2025, from $9.038 billion at December 31, 2024. The company experienced a significant impairment of goodwill totaling $17.636 million for the nine months ended September 30, 2025, which was not present in the prior year. Net interest income after provision for credit losses increased to $52.297 million for the three months ended September 30, 2025, up from $43.876 million in the comparable 2024 period. The provision for credit losses also increased substantially to $10.043 million for the nine months ended September 30, 2025, compared to $3.128 million in 2024. Total borrowed funds decreased significantly to $492.457 million from $916.054 million, primarily due to a $425.000 million net repayment of short-term borrowed funds. Diluted earnings per common share remained flat at $0.30 for the three-month period but decreased to $0.43 for the nine-month period from $0.60 in 2024.

Why It Matters

FFIC's mixed results, with a quarterly net income increase but a year-to-date decline driven by a substantial goodwill impairment, signal potential underlying challenges for investors. The significant reduction in borrowed funds could indicate a deleveraging strategy or reduced demand for capital, impacting future growth prospects. For employees, the increased salaries and employee benefits expense suggests continued investment in human capital, but the overall financial performance will dictate long-term stability. Customers might see changes in lending rates or services as the bank navigates its financial position. In a competitive banking landscape, FFIC's ability to manage credit losses and generate consistent net interest income will be crucial for maintaining market share and investor confidence.

Risk Assessment

Risk Level: medium — The company reported a significant impairment of goodwill of $17.636 million for the nine months ended September 30, 2025, which directly impacted net income. Additionally, the provision for credit losses surged to $10.043 million for the nine months ended September 30, 2025, a substantial increase from $3.128 million in the prior year, indicating potential deterioration in asset quality.

Analyst Insight

Investors should scrutinize the goodwill impairment and the rising provision for credit losses, as these suggest potential asset quality issues or overvalued acquisitions. Consider holding or reducing exposure until management provides a clear strategy for mitigating these risks and demonstrating sustainable earnings growth beyond the quarterly net income bump.

Financial Highlights

debt To Equity

0.69

revenue

$370.523M

operating Margin

N/A

total Assets

$8.871B

total Debt

$492.457M

net Income

$14.854M

eps

$0.43

gross Margin

N/A

cash Position

$142.929M

revenue Growth

+1.5%

Revenue Breakdown

Key Numbers

• $10.447M — Net Income (Q3 2025) (Increased from $8.906M in Q3 2024)
• $14.854M — Net Income (YTD Sep 2025) (Decreased from $17.912M in YTD Sep 2024)
• $17.636M — Goodwill Impairment (YTD Sep 2025) (Significant non-cash charge, zero in prior year)
• $10.043M — Provision for Credit Losses (YTD Sep 2025) (Increased significantly from $3.128M in YTD Sep 2024)
• $8.871B — Total Assets (Sep 30, 2025) (Decreased from $9.038B at Dec 31, 2024)
• $492.457M — Total Borrowed Funds (Sep 30, 2025) (Decreased from $916.054M at Dec 31, 2024)
• $0.30 — Diluted EPS (Q3 2025) (Flat compared to Q3 2024)
• $0.43 — Diluted EPS (YTD Sep 2025) (Decreased from $0.60 in YTD Sep 2024)
• 73.3% — Dividend Payout Ratio (Q3 2025) (Consistent with Q3 2024)
• 153.5% — Dividend Payout Ratio (YTD Sep 2025) (Increased from 110.0% in YTD Sep 2024, indicating higher payout relative to earnings)

Key Players & Entities

• FLUSHING FINANCIAL CORP (company) — registrant
• Flushing Bank (company) — wholly owned subsidiary
• SEC (regulator) — Securities and Exchange Commission
• $10.447 million (dollar_amount) — net income for Q3 2025
• $8.906 million (dollar_amount) — net income for Q3 2024
• $14.854 million (dollar_amount) — net income for nine months ended Sep 30, 2025
• $17.912 million (dollar_amount) — net income for nine months ended Sep 30, 2024
• $17.636 million (dollar_amount) — impairment of goodwill for nine months ended Sep 30, 2025
• $10.043 million (dollar_amount) — provision for credit losses for nine months ended Sep 30, 2025
• $3.128 million (dollar_amount) — provision for credit losses for nine months ended Sep 30, 2024

FAQ

Risk Factors

• Credit Risk and Loan Portfolio Quality [high — financial]: The company's net loans held for investment decreased to $6.628 billion as of September 30, 2025, from $6.706 billion at December 31, 2024. The provision for credit losses increased substantially to $10.043 million for the nine months ended September 30, 2025, compared to $3.128 million in the same period of 2024, indicating potential deterioration in loan quality or increased economic uncertainty.
• Goodwill Impairment [medium — financial]: A significant non-cash charge of $17.636 million for goodwill impairment was recorded for the nine months ended September 30, 2025, which was not present in the prior year. This indicates a substantial write-down in the value of acquired assets, potentially stemming from a reassessment of future earnings potential of acquired businesses.
• Interest Rate Sensitivity [medium — financial]: Net interest income decreased in the three-month period (from $45.603M to $53.828M) but increased significantly in the nine-month period (from $130.776M to $160.026M). Fluctuations in interest income and expense, particularly on deposits and securities, expose the company to interest rate risk.
• Liquidity and Borrowing Costs [medium — financial]: Total borrowed funds decreased significantly to $492.457 million from $916.054 million, primarily due to a $425.000 million net repayment of short-term borrowed funds. While this reduces leverage, it may also indicate a strategic shift or a response to changing market conditions for borrowing.
• Regulatory Environment [medium — regulatory]: As a financial institution, FFIC is subject to extensive regulation by federal and state authorities. Changes in regulations, capital requirements, or compliance standards could impact operations and profitability. The FDIC deposit insurance expense was $4.590 million for the nine months ended September 30, 2025.
• Economic Downturn [high — market]: A general economic slowdown or recession could negatively impact loan demand, increase credit losses, and reduce the value of collateral. The increased provision for credit losses suggests the company is anticipating or responding to such pressures.
• Operational Risks [medium — operational]: The company relies on technology and data processing systems. Disruptions, cyber-attacks, or system failures could lead to financial losses and reputational damage. Non-interest expenses related to data processing were $5.505 million for the nine months ended September 30, 2025.

Industry Context

Flushing Financial Corporation operates in the highly competitive banking sector, primarily serving the New York metropolitan area. The industry is characterized by evolving interest rate environments, increasing regulatory scrutiny, and a growing demand for digital banking services. Banks are facing pressure to maintain net interest margins while managing credit risk and investing in technology.

Regulatory Implications

As a federally insured depository institution, FFIC is subject to stringent capital adequacy requirements, liquidity rules, and consumer protection regulations. The recent increase in the provision for credit losses may signal a proactive response to potential regulatory concerns regarding asset quality in the current economic climate.

What Investors Should Do

1. Monitor credit quality trends closely.
2. Analyze the sustainability of net interest income growth.
3. Evaluate the impact of non-recurring charges.
4. Assess the company's capital and liquidity position.

Key Dates

• 2025-09-30: End of Q3 2025 / Nine-Month Period — Reporting period for the 10-Q, showing a mixed financial performance with increased quarterly net income but decreased year-to-date net income, significant goodwill impairment, and increased provision for credit losses.
• 2025-12-31: End of Fiscal Year 2024 — Prior period balance sheet comparison point, showing total assets of $9.038 billion and total borrowed funds of $916.054 million.
• 2024-09-30: End of Q3 2024 / Nine-Month Period — Prior year comparable period, used to assess year-over-year performance changes, highlighting a decrease in net income and EPS for the nine-month period.

Glossary

Provision for credit losses

An expense set aside by a financial institution to cover potential losses from loans that may not be repaid. It reflects the estimated uncollectible portion of the loan portfolio. (The significant increase in this provision ($10.043M in YTD Sep 2025 vs $3.128M in YTD Sep 2024) is a key indicator of potential credit quality deterioration or increased economic risk.)

Goodwill Impairment

A non-cash accounting charge that occurs when the fair value of an acquired company or asset falls below its carrying value on the balance sheet. It signifies a permanent reduction in the asset's value. (The $17.636 million impairment charge in YTD Sep 2025 is a substantial one-time expense that negatively impacted net income for the period.)

Net interest income

The difference between the interest income a financial institution generates from its lending activities and the interest it pays out on deposits and borrowings. (This is a core revenue driver for banks. FFIC saw an increase in net interest income after provision for credit losses, indicating improved core profitability from lending operations.)

Securities available for sale

Investments in debt or equity securities that are not classified as held-to-maturity or trading securities. Their unrealized gains or losses are reported in other comprehensive income. (Changes in the fair value of these securities, as reflected in 'Other comprehensive income', can significantly impact total equity and comprehensive income.)

Diluted earnings per common share (EPS)

A measure of a company's profitability that accounts for all potential dilutive common shares, such as stock options and convertible securities. (FFIC's diluted EPS decreased to $0.43 for the nine months ended September 30, 2025, from $0.60 in the prior year, reflecting lower overall profitability.)

Borrowed funds

Money borrowed by the company from external sources, such as FHLB advances or subordinated debt, to fund its operations and investments. (The significant reduction in total borrowed funds ($492.457M from $916.054M) indicates a deleveraging strategy or a change in funding needs.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Flushing Financial Corporation (FFIC) reported a decrease in net income from $17.912 million to $14.854 million, and diluted EPS fell from $0.60 to $0.43. This decline was significantly influenced by a substantial $17.636 million goodwill impairment charge and a more than threefold increase in the provision for credit losses to $10.043 million. While total assets and total borrowed funds have decreased, indicating a more conservative balance sheet, the company managed to increase net interest income after provision for credit losses in both the quarterly and year-to-date periods.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value FFIC The Nasdaq Stock Mar

Filing Documents

• ffic-20250930x10q.htm (10-Q) — 7521KB
• ffic-20250930xex31d1.htm (EX-31.1) — 10KB
• ffic-20250930xex31d2.htm (EX-31.2) — 10KB
• ffic-20250930xex32d1.htm (EX-32.1) — 6KB
• ffic-20250930xex32d2.htm (EX-32.2) — 8KB
• 0001104659-25-106961.txt ( ) — 32596KB
• ffic-20250930.xsd (EX-101.SCH) — 85KB
• ffic-20250930_cal.xml (EX-101.CAL) — 110KB
• ffic-20250930_def.xml (EX-101.DEF) — 438KB
• ffic-20250930_lab.xml (EX-101.LAB) — 784KB
• ffic-20250930_pre.xml (EX-101.PRE) — 670KB
• ffic-20250930x10q_htm.xml (XML) — 10456KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements - (Unaudited)

ITEM 1. Financial Statements - (Unaudited) Consolidated Statements of Financial Condition 1 Consolidated Statements of Operations 2 Consolidated Statements of Comprehensive Income 3 Consolidated Statements of Changes in Stockholders' Equity 4 Consolidated Statements of Cash Flow s 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 46

Quantitative and Qualitative Disclosures About Market Risk

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 64

Controls and Procedures

ITEM 4. Controls and Procedures 64

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

ITEM 1. Legal Proceedings 65

Risk Factors

ITEM 1A. Risk Factors 65

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 65

Defaults Upon Senior Securities

ITEM 3. Defaults Upon Senior Securities 65

Mine Safety Disclosures

ITEM 4. Mine Safety Disclosures 65

Other Information

ITEM 5. Other Information 65

Exhibits

ITEM 6. Exhibits 66

SIGNATURES

SIGNATURES 68 i Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES Consolidated Statements of Financial Condition (Unaudited)

Financial Statements

Item 1. Financial Statements September 30, December 31, 2025 2024 (Dollars in thousands, except per share data) Assets Cash and due from banks (restricted cash of $ 17,315 and $ 43,165 , respectively) $ 142,929 $ 152,574 Securities held-to-maturity, net of allowance of $ 351 and $ 353 , respectively (assets pledged of $ 4,680 and $ 4,494 , respectively; fair value of $ 46,384 and $ 44,718 , respectively) 50,509 51,485 Securities available for sale, at fair value (amortized cost of $ 1,541,505 and $ 1,506,798 , respectively; net of an allowance of $ 2,921 and $ 2,627 , respectively; assets pledged of $ 134,968 and $ 49,914 , respectively; $ 14,210 and $ 13,591 at fair value pursuant to the fair value option, respectively) 1,541,423 1,497,905 Loans held for sale, at fair value — 70,098 Loans held for investment, net of fees and costs 6,670,333 6,745,848 Less: Allowance for credit losses ( 41,837 ) ( 40,152 ) Net loans held of investment 6,628,496 6,705,696 Interest and dividends receivable 60,044 62,036 Bank premises and equipment, net 17,073 17,852 Federal Home Loan Bank of New York stock, at cost 18,909 38,096 Bank owned life insurance 224,902 218,174 Goodwill — 17,636 Core deposit intangibles 854 1,123 Right-of-use assets 47,761 45,800 Other assets 139,091 160,497 Total assets $ 8,871,991 $ 9,038,972 Liabilities Due to depositors: Non-interest bearing $ 964,767 $ 836,545 Interest-bearing 6,368,064 6,289,306 Total Due to depositors 7,332,831 7,125,851 Mortgagors' escrow deposits 82,697 53,082 Borrowed funds: Federal Home Loan Bank advances and other borrowings 253,934 678,933 Subordinated debentures 188,870 188,326 Junior subordinated debentures, at fair value 49,653 48,795 Total borrowed funds 492,457 916,054 Operating lease liability 48,253 46,443 Other liabilities 204,527 173,003 Total liabilities 8,160,765 8,314,4

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES Consolidated Statements of Operations (Unaudited) For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (In thousands, except per share data) Interest and dividend income Interest and fees on loans $ 94,970 $ 95,780 $ 283,007 $ 281,467 Interest and dividends on securities: Interest 19,785 24,215 61,384 54,965 Dividends 29 33 85 99 Other interest income 1,685 2,565 5,931 8,791 Total interest and dividend income 116,469 122,593 350,407 345,322 Interest expense Deposits 57,137 66,150 173,348 184,908 Other interest expense 5,504 10,840 17,033 29,638 Total interest expense 62,641 76,990 190,381 214,546 Net interest income (loss) 53,828 45,603 160,026 130,776 Provision (benefit) for credit losses 1,531 1,727 10,043 3,128 Net interest income after provision (benefit) for credit losses 52,297 43,876 149,983 127,648 Non-interest income (loss) Banking services fee income 2,000 1,790 5,469 4,767 Net gain (loss) on sale of loans 318 137 3,705 273 Net gain (loss) on sale of securities 661 — 661 — Net gain (loss) from fair value adjustments ( 1,831 ) 974 ( 327 ) 197 Federal Home Loan Bank of New York stock dividends 369 624 1,494 2,036 Life insurance proceeds — 1 — 1 Bank owned life insurance 2,319 1,260 6,728 3,683 Other income 910 1,491 2,367 2,620 Total non-interest income (loss) 4,746 6,277 20,097 13,577 Non-interest expense Salaries and employee benefits 24,685 22,216 70,229 66,052 Occupancy and equipment 4,189 3,745 12,286 11,237 Professional services 3,999 2,752 10,336 8,330 FDIC deposit insurance 1,373 1,318 4,590 4,292 Data processing 1,831 1,681 5,505 5,193 Depreciation and amortization o

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES Consolidated Statements of Comprehensive Income (Unaudited) For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (In thousands) Net income (loss) $ 10,447 $ 8,906 $ 14,854 $ 17,912 Other comprehensive income (loss), net of tax: Amortization of actuarial (gains) losses, net of taxes of $ 24 , and $ 28 , respectively, and of $ 70 and $ 86 , respectively. ( 49 ) ( 64 ) ( 149 ) ( 190 ) Change in net unrealized gains (losses) on securities available for sale, net of taxes of ($ 1,690 ), and ($ 5,886 ), respectively, and of ($ 3,017 ) and ($ 4,909 ), respectively. 3,773 13,062 6,749 10,896 Reclassification adjustment for net (gains) losses included in net income, net of taxes of $ 204 and $ 204 , respectively. ( 457 ) — ( 457 ) — Net unrealized (losses) gains on cashflow hedges, net of taxes of $ 913 and $ 6,542 , respectively, and of $ 5,916 and $ 5,779 , respectively. ( 2,037 ) ( 14,518 ) ( 13,236 ) ( 12,825 ) Change in fair value of liabilities related to instrument-specific credit risk, net of taxes of ($ 33 ), and ($ 17 ), respectively, and of ($ 2 ) and $ 12 , respectively. 76 37 2 ( 29 ) Other comprehensive income (loss), net of tax: 1,306 ( 1,483 ) ( 7,091 ) ( 2,148 ) Comprehensive net income (loss) $ 11,753 $ 7,423 $ 7,763 $ 15,764 The accompanying notes are an integral part of these consolidated financial statements. -3- Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES Consolidated Statement of Changes in Stockholders' Equity (Unaudited) Additional Accumulated Other Shares Common Paid-in Treasury Retained Comprehensive (Dollars in thousands, except per share data) Outstanding Stock Capital Stock Earnings Income (Loss) Total Balance at December 31, 2024 33,659,067 $ 387 $ 326,671 $ ( 101,655 ) $ 492,003 $ 7,133 $ 724,539 Net income (loss) — — — — ( 9,796 ) — ( 9,796 ) Vesting of restricted stock unit awards 166,543 — ( 3,156 ) 3,368 ( 212 ) — — Stock-based compensation expense — — 775 — — — 775 Repurchase of shares to satisfy tax obligation ( 48,922 ) — — ( 706 ) — — ( 706 ) Dividends on common stock ($ 0.22 per share) — — — — ( 7,523 ) — ( 7,523 ) Other comprehensive income (loss) — — — — — ( 4,438 ) ( 4,438 ) Balance at March 31, 2025 33,776,688 $ 387 $ 324,290 $ ( 98,993 ) $ 474,472 $ 2,695 $ 702,851 Net income (loss) — — — — 14,203 — 14,203 Vesting of restricted stock unit awards 500 — ( 6 ) 10 ( 4 ) — — Stock-based compensation expense — — 878 — — — 878 Repurchase of shares to satisfy tax obligation ( 180 ) — — ( 2 ) — — ( 2 ) Dividends on common stock ($ 0.22 per share) — — — — ( 7,594 ) — ( 7,594 ) Other comprehensive income (loss) — — — — — ( 3,959 ) ( 3,959 ) Balance at June 30, 2025 33,777,008 $ 387 $ 325,162 $ ( 98,985 ) $ 481,077 $ ( 1,264 ) $ 706,377 Net income (loss) — — — — 10,447 — 10,447 Vesting of restricted stock unit awards 2,440 — ( 48 ) 50 ( 2 ) — — Stock-based compensation expense — — 695 — — — 695 Repurchase of shares to satisfy tax obligation ( 1,010 ) — — ( 13 ) — — ( 13 ) Dividends on common stock ($ 0.22 per share) — — — — ( 7,586 ) — ( 7,586 ) Other comprehensive income (loss) — — — —

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) For the nine months ended September 30, 2025 2024 (In thousands) Operating Activities Net income (loss) $ 14,854 $ 17,912 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Provision (benefit) for credit losses 10,043 3,128 Depreciation and amortization of premises and equipment 4,056 4,318 Net (loss) gain on sales of loans ( 3,705 ) ( 273 ) Net amortization (accretion) of premiums and discounts 1,940 2,797 Net (gain) loss on sales of OREO — ( 174 ) Impairment of goodwill 17,636 — Deferred income tax provision (benefit) 8,934 1,969 Net loss (gain) from fair value adjustments 327 ( 197 ) Gain from life insurance proceeds — ( 1 ) Income from Bank owned life insurance ( 6,728 ) ( 3,683 ) Stock-based compensation expense 2,348 2,556 Deferred compensation ( 1,678 ) ( 1,872 ) Amortization of core deposit intangibles 269 317 Decrease (increase) in other assets 5,105 ( 16,035 ) (Decrease) increase in other liabilities ( 1,211 ) ( 2,018 ) Net cash provided by (used in) operating activities 52,190 8,744 Investing Activities Purchases of premises and equipment ( 3,277 ) ( 1,620 ) Purchases of Federal Home Loan Bank New York stock ( 8,028 ) ( 32,012 ) Redemptions of Federal Home Loan Bank New York stock 27,215 30,333 Proceeds from prepayments of securities held-to-maturity 972 1,219 Purchases of securities available for sale ( 340,423 ) ( 934,881 ) Proceeds from sales and calls of securities available for sale 212,830 83,669 Proceeds from maturities and prepayments of securities available for sale 138,653 129,724 Proceeds from sale of real estate owned — 839 Proceeds from bank owned life insurance 1,633 14 Change in cash collateral ( 25,850 ) ( 25,130 ) Net repayments (ori

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES Consolidated Statements of Cash Flows (Contd.) (Unaudited) For the nine months ended September 30, 2025 2024 (In thousands) Financing Activities Net increase (decrease) in noninterest-bearing deposits $ 128,222 $ 13,514 Net increase (decrease) in interest-bearing deposits 78,074 719,930 Net increase (decrease) in mortgagors' escrow deposits 29,615 22,990 Net (repayments) proceeds from short-term borrowed funds ( 425,000 ) ( 95,750 ) Proceeds from long-term borrowing — 300,000 Repayment of long-term borrowings — ( 200,000 ) Repurchase of shares to satisfy tax obligations ( 721 ) ( 1,684 ) Cash dividends paid ( 22,703 ) ( 19,582 ) Net cash provided by (used in) financing activities ( 212,513 ) 739,418 Net (decrease) increase in cash and cash equivalents, and restricted cash ( 9,645 ) 95,486 Cash, cash equivalents, and restricted cash, beginning of period 152,574 172,157 Cash, cash equivalents, and restricted cash, end of period $ 142,929 $ 267,643 Supplemental disclosure of cash flow information: Cash payments for: Interest paid $ 193,650 $ 203,257 Income taxes paid, net of refunds 338 6,178 Supplemental disclosure of non- cash flow investing activities: Transfer of loans held for investment to other real estate owned — 665 Transfer of loans held for investment to loans held for sale 24,067 18,148 Transfer of loans held for sale to loans held for investment 58,781 — Securities purchased not yet settled 70,020 — The accompanying notes are an integral part of these consolidated financial statements. -6- Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The primary business of Flushing Financial Corporation (the "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 Company and its direct and indirect wholly owned subsidiaries, including the Bank, Flushing Service Corporation and FSB Properties Inc., which are collectively herein referred to as "we," "us," "our" and the "Company." The 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 periods presented 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, ce

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 3. Earnings Per Share Earnings per common share have been computed based on the following: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (In thousands, except per share data) Net income (loss), as reported $ 10,447 $ 8,906 $ 14,854 $ 17,912 Less: Dividends paid and earnings allocated to participating securities ( 167 ) ( 126 ) ( 381 ) ( 296 ) Income (loss) attributable to common stock $ 10,280 $ 8,780 $ 14,473 $ 17,616 Divided by: Weighted average common shares and participating securities outstanding 34,497 29,742 34,495 29,758 Less: Weighted average participating securities ( 558 ) ( 423 ) ( 561 ) ( 443 ) Total weighted average common shares outstanding 33,939 29,319 33,934 29,315 Basic earnings (loss) per common share $ 0.30 $ 0.30 $ 0.43 $ 0.60 Diluted earnings (loss) per common share (1) $ 0.30 $ 0.30 $ 0.43 $ 0.60 Dividend Payout ratio 73.3 % 73.3 % 153.5 % 110.0 % (1) There were no common stock equivalents outstanding during the periods presented. 4. Securities The following tables summarize the Company's portfolio of securities held-to-maturity at: Allowance Net Gross Gross Amortized for Carrying Unrecognized Unrecognized September 30, 2025 Cost Credit Losses Amount Gains Losses Fair Value (In thousands) Municipals $ 43,039 $ ( 351 ) $ 42,688 $ — $ ( 3,492 ) $ 39,196 FNMA 7,821 — 7,821 — ( 633 ) 7,188 Total $ 50,860 $ ( 351 ) $ 50,509 $ — $ ( 4,125 ) $ 46,384 Allowance Net Gross Gross Amortized for Carrying Unrecognized Unrecognized December 31, 2024 Cost Credit Losses Amount Gains Losses Fair Value (In thousands) Municipals $ 44,002 $ ( 353 ) $ 43,649 $ — $ ( 5,834 ) $ 37,815 FNMA 7,836 — 7,836 — ( 933 ) 6,903 Total $ 51,838

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) The following tables summarize the Company's portfolio of securities available for sale on: Allowance Gross Gross Amortized for Unrealized Unrealized September 30, 2025 Cost Credit Losses Gains Losses Fair Value (In thousands) U.S. government agencies $ 6,836 $ — $ 24 $ ( 43 ) $ 6,817 Municipals 20,627 ( 2,921 ) — ( 428 ) 17,278 Corporate 201,329 — 2,381 ( 3,580 ) 200,130 Mutual funds 12,502 — — — 12,502 Collateralized loan obligations 398,210 — 246 ( 1,521 ) 396,935 Other 1,491 — — — 1,491 Total other securities 640,995 ( 2,921 ) 2,651 ( 5,572 ) 635,153 REMIC and CMO 698,119 — 4,140 ( 326 ) 701,933 GNMA 42,678 — 215 ( 20 ) 42,873 FNMA 70,873 — 490 ( 7 ) 71,356 FHLMC 88,840 — 1,268 — 90,108 Total mortgage-backed securities 900,510 — 6,113 ( 353 ) 906,270 Total Securities available for sale $ 1,541,505 $ ( 2,921 ) $ 8,764 $ ( 5,925 ) $ 1,541,423 Allowance Gross Gross Amortized for Unrealized Unrealized December 31, 2024 Cost Credit Losses Gains Losses Fair Value (In thousands) U.S. government agencies $ 8,804 $ — $ 77 $ ( 33 ) $ 8,848 Municipals 20,627 ( 2,627 ) — — 18,000 Corporate 130,882 — 735 ( 6,368 ) 125,249 Mutual funds 11,890 — — — 11,890 Collateralized loan obligations 420,260 — 1,126 ( 569 ) 420,817 Other 1,465 — — — 1,465 Total other securities 593,928 ( 2,627 ) 1,938 ( 6,970 ) 586,269 REMIC and CMO 707,540 — 1,107 ( 1,067 ) 707,580 GNMA 30,099 — — ( 154 ) 29,945 FNMA 99,183 — 11 ( 1,048 ) 98,146 FHLMC 76,048 — 13 ( 96 ) 75,965 Total mortgage-backed securities 912,870 — 1,131 ( 2,365 ) 911,636 Total securities available for sale $ 1,506,798 $ ( 2,627 ) $ 3,069 $ ( 9,335 ) $ 1,497,905 Corporate securities held by the Company a

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Amortized Securities held-to-maturity: Cost Fair Value (In thousands) Due after ten years $ 43,039 $ 39,196 Total other securities 43,039 39,196 Mortgage-backed securities 7,821 7,188 Total securities held-to-maturity $ 50,860 $ 46,384 Amortized Securities available for sale: Cost Fair Value (In thousands) Due after one year through five years $ 70,359 $ 69,312 Due after five years through ten years 191,469 191,305 Due after ten years 366,665 362,034 Total other securities 628,493 622,651 Mutual funds 12,502 12,502 Mortgage-backed securities 900,510 906,270 Total securities available for sale $ 1,541,505 $ 1,541,423 The following tables show the Company's securities without an allowance for credit losses 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 September 30, 2025 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) Held-to-maturity securities FNMA 1 7,188 ( 633 ) — — 7,188 ( 633 ) Total mortgage-backed securities 1 7,188 ( 633 ) — — 7,188 ( 633 ) Total 1 $ 7,188 $ ( 633 ) $ — $ — $ 7,188 $ ( 633 ) Available for sale securities U.S. government agencies 3 $ 4,096 $ ( 43 ) $ 1,198 $ ( 11 ) $ 2,898 $ ( 32 ) Corporate 13 96,871 ( 3,580 ) 6,234 ( 11 ) 90,637 ( 3,569 ) Collateralized loan obligations 19 227,226 ( 1,521 ) 99,785 ( 331 ) 127,441 ( 1,190 ) Total other securities 35 328,193 ( 5,144 ) 107,217 ( 353 ) 220,976 ( 4,791 ) REMIC and CMO 10 86,741 ( 326 ) 39,701 ( 119 ) 47,040 ( 207 ) GNMA 1 15,027 ( 20 ) 15,027 ( 20 ) — — FNMA 1 14,

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