Executive Summary

Q3 2025 delivered sequential NIM expansion (GAAP NIM FTE 2.64%, +10 bps QoQ; Core NIM FTE 2.62%, +10 bps QoQ) and stable credit, with GAAP EPS $0.30 and Core EPS $0.35 .
Street comparison: Core EPS beat the S&P Global Primary EPS consensus ($0.35 vs $0.303*) while revenue missed ($57.0M vs $58.7M*)—a positive EPS surprise despite softer top-line* [GetEstimates].
Deposit mix improved: average noninterest-bearing deposits rose 5.7% YoY and 2.1% QoQ to 12.2% of total; the company cut rates 20–25 bps on ~$1.8B deposits late September, with full benefit expected in Q4 .
Management reiterated 2025 expense and tax guidance, emphasized embedded NII tailwinds from ~$2.0B of loan repricings through 2027, and highlighted minimal office exposure (0.48% of gross loans), sustaining conservative credit posture .
Near-term catalysts: further deposit cost relief (CD maturities ~~$770M at 3.98%), back-to-back swap loan pipeline (~~$59M) and BOLI income ($2M/quarter) supporting noninterest income; activist/buyback debate surfaced but capital prioritized for dividend and growth .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded on both GAAP and core bases (+10 bps QoQ), aided by asset repricing and improving deposit mix; “turning point” in results per CEO commentary .
Credit stability: NPAs fell to 70 bps of assets (from 75 bps in Q2); net charge-offs declined to 7 bps; allowance/loans at 0.63%—consistent with conservative underwriting .
Management highlighted embedded earnings power: “approximately $2 billion” of loans scheduled to reprice through 2027; retained ~80% of repricing loans at +222 bps higher rates, confirming franchise stickiness .

Quotes:

“These quarterly results marked a turning point for the Company… successful execution of our strategic priorities” — John R. Buran, CEO .
“Core net interest income increased by $8.6 million, or a little over 19% year over year… loan pricing should drive NIM expansion” — Susan K. Cullen, CFO .

What Went Wrong

Noninterest income declined QoQ (to $4.7M) driven by negative fair value adjustments (–$1.8M) and lower net gains vs Q2; core noninterest income dipped 1.9% QoQ .
GAAP noninterest expense rose QoQ (+7.5%) to $43.4M, including ~+$1.05M of non-recurring professional expenses tied to strategic planning, with “more to follow” in Q4 .
Revenue (net interest + noninterest) tracked below S&P consensus*, producing a mixed headline—EPS beat but revenue miss* [GetEstimates].

Analyst concerns:

NIM reliance on “episodic items” (9 bps in Q3 vs 6 bps in Q2); CFO cautioned these could normalize lower next quarter .
Buyback hesitancy despite valuation discount; management prioritizes dividend and growth vs repurchases, prompting questions about near-term ROTCE improvement and activist risk .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Net Interest Income ($USD Millions)	$45.603	$51.235	$52.989	$53.209	$53.828
Provision for Credit Losses ($USD Millions)	$1.727	$6.440	$4.318	$4.194	$1.531
Noninterest Income ($USD Millions)	$6.277	$(71.022)	$5.074	$10.277	$4.746
Noninterest Expense ($USD Millions)	$38.696	$45.630	$59.676	$40.356	$43.365
Income Before Taxes ($USD Millions)	$11.457	$(71.857)	$(5.931)	$18.936	$13.678
Net Income ($USD Millions)	$8.906	$(49.245)	$(9.796)	$14.203	$10.447
Diluted EPS (GAAP, $)	$0.30	$(1.64)	$(0.29)	$0.41	$0.30
Core Net Income ($USD Millions)	$7.723	$4.209	$7.931	$11.162	$11.957
Core EPS ($)	$0.26	$0.14	$0.23	$0.32	$0.35

Margins and Efficiency	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
NIM FTE (%)	2.10	2.39	2.51	2.54	2.64
Core NIM FTE (%)	2.07	2.25	2.49	2.52	2.62
Yield on Interest-Earning Assets (%)	5.63	5.60	5.51	5.59	5.70
Cost of Average Interest-Bearing Liabilities (%)	4.10	3.75	3.50	3.58	3.62
Efficiency Ratio (Core, %)	77.20	79.01	72.21	67.69	71.03

Credit & Capital KPIs	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
NPAs / Assets (%)	0.59	0.57	0.71	0.75	0.70
NCOs / Avg Loans (%)	0.18	0.28	0.27	0.15	0.07
ACL / Loans (%)	0.59	0.60	0.59	0.62	0.63
TCE / TA (%)	7.00	7.82	7.79	8.04	8.01
Leverage Ratio (%)	7.91	8.04	8.12	8.31	8.64

Deposits & Loans	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Avg Deposits ($USD Billions)	$7.5	$7.4	$7.6	$7.6	$7.3
Avg Noninterest-Bearing Deposits (% of Total)	11.3%	—	—	11.5%	12.2%
Avg Loans ($USD Billions)	$6.7	$6.8	$6.7	$6.7	$6.6
CDs ($USD Billions, Avg)	$2.88	$2.68	$2.59	$2.48	$2.42
Dividend per Share ($)	$0.22	$0.22	$0.22	$0.22	$0.22

Loan Composition (Period-End, $USD Millions)	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Multifamily Residential	$2,638.9	$2,527.2	$2,531.6	$2,487.6	$2,442.6
Commercial Real Estate	$1,929.1	$1,973.1	$1,953.7	$1,987.5	$1,960.0
1–4 Family Mixed Use	$515.5	$511.2	$501.6	$493.8	$482.9
1–4 Family Residential	$252.3	$244.3	$269.5	$258.6	$335.6
Construction	$63.7	$60.4	$63.5	$46.8	$51.6
Commercial Business & Other	$1,388.0	$1,401.6	$1,396.6	$1,407.8	$1,372.6
Gross Loans	$6,806.8	$6,737.8	$6,731.2	$6,697.7	$6,656.8

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core Noninterest Expense Growth	FY 2025 vs 2024 base	4.5%–5.5% (Q2 call)	4.5%–5.5% (Q3 call)	Maintained
Effective Tax Rate	Remainder of 2025	24.5%–26.5% (Q2 call)	24.5%–26.5% (Q3 call)	Maintained
BOLI Income	Quarterly run-rate	—	~$2.0M/quarter (Q3 call)	Newly specified
CD Maturities	Q4 2025	~$391M at 3.93% (Q3 maturity cited in Q2)	~$770M retail CDs at 3.98% to mature in Q4	Increased upcoming maturities
Deposit Rate Actions	Q4 2025 starting point	—	20–25 bps rate cuts on ~$1.8B deposits in late Sept; full benefit in Q4	New action
Dividend	Ongoing	$0.22/share paid in Q2	$0.22/share paid in Q3	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
NIM & Asset Repricing	NIM expansion back to ~2.50% (Q1); +3 bps QoQ (Q2). Repricing tailwinds: $373M 2H’25 at +136 bps; $2.1B through 2027 .	GAAP/Core NIM +10 bps QoQ; ~$175M repricing in Q4 (+128 bps); ~$2B through 2027; NIM exit Sep ~2.68% .	Improving, visible multi-year tailwinds.
Deposits & Funding Costs	Cost of deposits up to ~3.1% in Q2; CD retention ~80% with lower rates; NIB initiatives began .	NIB deposits +5.7% YoY and +2.1% QoQ; late-September rate cuts 20–25 bps on ~$1.8B deposits; CDs $2.4B; Q4 maturities ~$770M @3.98% .	Mix improving; cost moderation into Q4.
Credit Quality	Multifamily NPLs halved in Q2; investor CRE issues concentrated in office; stress metrics robust .	NPAs 70 bps; NCOs 7 bps; investor CRE NPLs 111 bps; multifamily NPLs 53 bps; LTVs <35% .	Stable to improving; conservative posture.
Asian Community Strategy	Deposits $1.3–$1.4B; de novo branch plans (Jackson Heights, Chinatown) .	Deposits $1.4B; 11.3% CAGR since Q3’22; ~1/3 branches in Asian communities .	Ongoing targeted growth.
Capital Allocation & Buybacks	Building capital; cautious on repurchases despite discount (Q2) .	Prioritizing dividend and growth; buyback skepticism; activist risk acknowledged; double-digit ROTCE by late 2027 targeted .	Focus on organic earnings, ROTCE improvement.
Macro/Yield Curve Sensitivity	NIM benefits from positive slope; liability sensitivity noted; tariffs/regulatory watch (Q1/Q2) .	Slight liability sensitivity; deposit beta to mirror Fed path; curve slope still key .	Cautious; curve-dependent.

Management Commentary

CEO: “These quarterly results marked a turning point… successful execution of our strategic priorities… tangible common equity ratio of 8.01%… strong loan pipeline of $345.6 million and substantial liquidity position of $3.9 billion” .
CFO: “Core net interest income increased by $8.6 million, or a little over 19% year over year… long term, loan pricing should drive NIM expansion” .
CFO: “In late September, we reduced the rate on approximately $1.8 billion of deposits 20 to 25 basis points, with the full benefit expected to be recognized in the fourth quarter” .
CEO: “Our Manhattan office buildings exposure is minimal at 0.48% of gross loans” .

Q&A Highlights

NIM outlook: episodic items were elevated (9 bps vs 6 bps); CFO expects some normalization; September exit NIM at ~2.68% .
Deposit beta: Non-maturity deposit betas expected to track Fed moves; recent rate cuts on $1.8B deposits not fully captured in Q3 average NIM .
Buybacks vs capital: Management prefers maintaining dividend and growth optionality over buybacks despite valuation discount; activist risk acknowledged, ROTCE double-digit goal by late 2027 .
Swaps: ~$480M swaps with maturities beginning next year; partial repurchases and ~$180M forwards to mitigate roll-off; margin impact modest in context of balance sheet .
Securities/loans dynamics: CLO calls and pre-funding; loan closings/pipeline up, with investment book relief as loan growth resumes .

Estimates Context

Metric	S&P Global Consensus*	Actual	Surprise
Primary EPS (Q3 2025)	$0.303*	$0.35 (Core EPS)	+$0.047 (Beat)
Revenue (Q3 2025)	$58.74M*	$57.04M	–$1.70M (Miss)
Primary EPS – # of Estimates	3*	—	—
Revenue – # of Estimates	2*	—	—

Notes: S&P “Primary EPS actual” appears to reflect Core EPS ($0.35) vs GAAP EPS ($0.30), given FFIC’s non-GAAP adjustments disclosed in the release . Values retrieved from S&P Global.*

Key Takeaways for Investors

Core earnings quality: EPS beat vs consensus despite revenue miss—driven by NIM expansion and lower provision; watch sustainability as episodic NIM items normalize* .
Near-term NIM support: Q4 benefits from deposit rate cuts (20–25 bps on ~$1.8B) and ~$770M CDs maturing at 3.98%, plus ~$175M loans repricing +128 bps—likely incremental margin tailwind .
Credit resilience: Low NCOs (7 bps), stable NPAs (70 bps), and minimal office exposure support downside protection as repricing proceeds .
Capital & payout: Dividend maintained ($0.22/share) with leverage ratio 8.64% and TCE/TA ~8.01%; buyback unlikely near term as management prioritizes growth and ROTCE trajectory .
Medium-term thesis: ~$2B of repricing through 2027 and Asian community growth ($1.4B deposits, 11.3% CAGR since Q3’22) underpin earnings power expansion .
Trading implications: Positive EPS surprise and margin expansion are supportive; monitor Q4 for deposit cost capture and noninterest income from swap loan closings (~$59M pipeline) .
Risk watch: Curve slope and deposit betas, fair value marks in noninterest income, and execution on repricing retention rates; activism pressure possible if ROTCE progress stalls .

References: Q3 2025 8-K/press release and statistical tables ; Q3 2025 earnings call transcript – –; Q2/Q1 2025 calls – –. Values retrieved from S&P Global for estimates.*

FLUSHING FINANCIAL CORP (FFIC)·Q3 2025 Earnings Summary