FLUSHING FINANCIAL CORP

Flushing Financial Corporation operates as a community-oriented commercial bank through its wholly owned subsidiary, Flushing Bank, which was organized in 1929 as a New York State-chartered mutual savings bank and today 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. The Bank is a member of the Federal Home Loan Bank system. The Company's 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 originations and purchases of multi-family residential properties loans, commercial business loans, commercial real estate mortgage loans and, to a lesser extent, one-to-four family loans focusing on mixed-use properties, construction loans, equipment financing loans, Small Business Administration loans, mortgage loan surrogates such as mortgage-backed securities, and U.S. government securities, corporate fixed-income securities and other marketable securities. The Bank also operates an internet branch under the brands of iGObanking.com and BankPurely. At December 31, 2025, the Company had total assets of $8.7 billion ¹, deposits of $7.3 billion ² and stockholders' equity of $0.7 billion ³. The vast majority of all mortgage loans are secured by properties located in the New York City metropolitan area. The market area has a high density of financial institutions, and the Company faces intense competition both in making loans and in attracting deposits, competing with 104 banks and thrifts in the counties in which it has branch locations. As of June 30, 2025, the Company's market share of deposits in these counties was 0.35% ⁴ of the total deposits of FDIC insured competing financial institutions, and it is the 23rd largest financial institution ⁵.

The Company faces intense competition from a high density of financial institutions in its market area, many of which have greater financial resources, name recognition and market presence. As of June 30, 2025, the Company's market share of deposits in the counties in which it has branch locations was 0.35% ⁶ of the total deposits of FDIC insured competing financial institutions, and it is the 23rd largest financial institution ⁷. The Company competes with 104 banks and thrifts in these counties, as well as with credit unions, the stock market and mutual funds for customers' funds. Competition for deposits is primarily based on the types of deposits offered and rate paid on the deposits. In lending activities, the Company competes against mortgage banks and insurance companies located both within its market and available on the internet. The Company's strategy for attracting deposits includes using various marketing techniques, delivering enhanced technology and customer friendly banking services, and focusing on the unique personal and small business banking needs of the multi-ethnic communities it serves. The strategy for attracting new loans is primarily dependent on providing timely response to applicants and maintaining a network of quality brokers and other business sources.

The Company's core business model is operating as a community bank, generating revenue principally from interest on loans, its mortgage-backed securities portfolio, and interest and dividends on other investments in its securities portfolio. The primary sources of funds are deposits, Federal Home Loan Bank of New York borrowings, principal and interest payments on loans, mortgage-backed and other securities, and to a lesser extent proceeds from sales of securities and loans. Management views the Company as operating a single unit — a community bank. The Company's revenues are derived principally from interest on loans, its mortgage-backed securities portfolio, and interest and dividends on other investments in its securities portfolio.

The loan portfolio consists primarily of mortgage loans secured by multi-family residential, commercial real estate, one-to-four family mixed-use property, one-to-four family residential property, and commercial business loans. At December 31, 2025, gross loans outstanding were $6,639.8 million ⁸, with gross mortgage loans totaling $5,226.4 million ⁹, or 78.7% ¹⁰ of gross loans, and commercial business loans totaling $1,413.4 million ¹¹, or 21.3% ¹² of gross loans. Mortgage loans are primarily multi-family, commercial and one-to-four family mixed-use properties, which represent 73.1% ¹³ of gross loans. Multi-family residential loans were $2,382.8 million ¹⁴, or 35.88% ¹⁵ of gross loans, with an average principal balance of $1.1 million ¹⁶ and a weighted average loan to value ratio of approximately 28.1% ¹⁷ based on the most recent appraisal. Commercial real estate loans were $1,993.0 million ¹⁸, or 30.02% ¹⁹ of gross loans, with an average principal balance of $2.7 million ²⁰ and a weighted average loan to value ratio of approximately 43.1% ²¹. One-to-four family mixed-use property loans were $476.4 million ²², or 7.18% ²³ of gross loans. One-to-four family residential loans were $319.4 million ²⁴, or 4.81% ²⁵ of gross loans. Construction loans totaled $54.8 million ²⁶, or 0.83% ²⁷ of gross loans. SBA loans totaled $17.5 million ²⁸, representing 0.26% ²⁹ of gross loans. Commercial business and other loans totaled $1,395.9 million ³⁰, or 21.02% ³¹ of gross loans. The securities portfolio includes available for sale securities of $1,389.9 million ³² and held-to-maturity securities of $50.2 million ³³, together representing 16.57% ³⁴ of total assets.

The Company also offers certain other consumer loans including overdraft lines of credit. The investment portfolio primarily consists of mortgage-backed securities, securities issued by mutual or bond funds that invest in government and government agency securities, municipal bonds, corporate bonds and collateralized loan obligations. At December 31, 2025, the Company had $1,389.9 million ³⁵ of available for sale securities and $50.2 million ³⁶ in held-to-maturity securities. The Company carries investments under the fair value option totaling $14.4 million ³⁷ at December 31, 2025. The Company had an allowance for credit losses for held-to-maturity securities totaling $0.3 million ³⁸ at December 31, 2025. The Company also services $95.9 million ³⁹ of loans for others at December 31, 2025.

On December 29, 2025, the Company entered into an Agreement and Plan of Merger with OceanFirst Financial Corp. and Apollo Merger Sub Corp., a wholly-owned subsidiary of OceanFirst, pursuant to which the Company and OceanFirst agreed to combine their respective businesses through a series of mergers. In the first merger, the Company's stockholders will be entitled to receive 0.85 ⁴⁰ of a share of OceanFirst common stock for each share of Company common stock they own. Concurrently, OceanFirst entered into an investment agreement with affiliates of funds managed by Warburg Pincus LLC pursuant to which a $225 million ⁴¹ cash investment will be made into the combined entity. During the year ended December 31, 2025, the Company sold the guarantee portion of SBA loans totaling $8.0 million ⁴². The Company also sold delinquent and non-performing loans during the year ended December 31, 2025, with proceeds of $23.8 million ⁴³ and net charge-offs of $1.7 million ⁴⁴.

For the year ended December 31, 2025, the Company recorded a provision for credit losses on loans totaling $12.5 million ⁴⁵, compared to $7.7 million ⁴⁶ in 2024 and $10.5 million ⁴⁷ in 2023. Net charge-offs totaled $9.8 million ⁴⁸ for 2025, compared to $7.7 million ⁴⁹ in 2024 and $10.8 million ⁵⁰ in 2023. The allowance for credit losses on loans was $42.8 million ⁵¹ at December 31, 2025, representing 0.64% ⁵² of gross loans and 103.0% ⁵³ of non-performing loans. Non-performing loans totaled $41.6 million ⁵⁴ at December 31, 2025, compared to $33.3 million ⁵⁵ at December 31, 2024. Total non-performing assets were $58.8 million ⁵⁶ at December 31, 2025, compared to $51.3 million ⁵⁷ at December 31, 2024. Criticized and Classified Assets totaled $101.0 million ⁵⁸ at December 31, 2025, an increase of $9.1 million ⁵⁹ from $91.9 million ⁶⁰ at December 31, 2024.

A primary growth vector is the proposed merger with OceanFirst Financial Corp., which is expected to combine the businesses of the two companies through a series of mergers. In the first merger, the Company's stockholders will be entitled to receive 0.85 ⁶¹ of a share of OceanFirst common stock for each share of Company common stock they own. Concurrently, OceanFirst entered into an investment agreement with affiliates of funds managed by Warburg Pincus LLC pursuant to which a $225 million ⁶² cash investment will be made into the combined entity. The Company's strategy for attracting deposits includes using various marketing techniques, delivering enhanced technology and customer friendly banking services, and focusing on the unique personal and small business banking needs of the multi-ethnic communities it serves. The strategy for attracting new loans is primarily dependent on providing timely response to applicants and maintaining a network of quality brokers and other business sources.

The Company's strategy for attracting deposits includes using various marketing techniques, delivering enhanced technology and customer friendly banking services, and focusing on the unique personal and small business banking needs of the multi-ethnic communities it serves. The strategy for attracting new loans is primarily dependent on providing timely response to applicants and maintaining a network of quality brokers and other business sources. The Company expects to continue its emphasis on multi-family residential mortgage loans, commercial real estate and commercial business loans with full banking relationships through marketing and by maintaining competitive interest rates and origination fees.The filing does not contain specific operational outlook details regarding supply chain posture, manufacturing capacity, technology infrastructure investments, or headcount strategy.

The filing does not contain specific figures for R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy for the upcoming period.

The Company faces intense competition in its market area, which has a high density of financial institutions, many of which have greater financial resources, name recognition and market presence. The Company competes with 104 banks and thrifts in the counties in which it has branch locations. The Company's market share of deposits, as of June 30, 2025, in these counties was 0.35% ⁶³ of the total deposits of FDIC insured competing financial institutions. The Company also competes with credit unions, the stock market and mutual funds for customers' funds. Competition for loans is primarily based on the types of loans offered and the related terms, including fixed-rate versus adjustable-rate loans and the interest rate on the loan.

The Company's lending activities are subject to federal and state laws and regulations. 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. The Company's future earnings prospects will be affected by its ability to compete effectively with other financial institutions and to implement its business strategies.

The Company faces intense competition in its market area, which has a high density of financial institutions, many of which have greater financial resources, name recognition and market presence. The Company competes with 104 banks and thrifts in the counties in which it has branch locations, and its market share of deposits as of June 30, 2025, was 0.35% ⁶⁴ of the total deposits of FDIC insured competing financial institutions. The loan portfolio is concentrated in multi-family residential, commercial real estate, and commercial business loans secured by properties in the New York City metropolitan area, which exposes the Company to risks from local economic conditions. Multi-family residential, commercial real estate and one-to-four family mixed-use property mortgage loans generally involve higher principal amounts and may expose the lender to a greater risk of credit loss than one-to-four family residential property mortgage loans. Commercial business loans, while providing a higher rate of return, also present a higher level of risk. The Company's allowance for credit losses on loans was $42.8 million ⁶⁵ at December 31, 2025, representing 0.64% ⁶⁶ of gross loans, and non-performing loans totaled $41.6 million ⁶⁷. The proposed merger with OceanFirst Financial Corp. is subject to various conditions and approvals, and there can be no assurance that the merger will be completed on the terms described or at all.

The overall tone of management's message, as reflected in the filing, is focused on the proposed merger with OceanFirst Financial Corp. as a transformative event. On December 29, 2025, the Company entered into an Agreement and Plan of Merger with OceanFirst, pursuant to which the Company's stockholders will be entitled to receive 0.85 ⁶⁸ of a share of OceanFirst common stock for each share of Company common stock they own. Concurrently, OceanFirst entered into an investment agreement with affiliates of funds managed by Warburg Pincus LLC pursuant to which a $225 million ⁶⁹ cash investment will be made into the combined entity. The filing emphasizes the Company's strategy as a community oriented commercial bank offering a wide variety of financial services, with a focus on attracting retail deposits and investing in multi-family residential properties loans, commercial business loans, and commercial real estate mortgage loans. Management's strategic priorities include implementing business strategies to compete effectively, focusing on the multi-ethnic communities served, and maintaining a network of quality brokers and other business sources for loan origination.