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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 September 30, 2004

Commission file number 000-24272

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.)

1979 Marcus Avenue, Suite E140, Lake Success, New York 11042
(Address of principal executive offices)

(718) 961-5400
(Registrant's telephone number, including area code)

144-51 Northern Boulevard Flushing, New York 11354
(Former address if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: Common Stock $0.01 par value (and
                                                                                                    associated Preferred Stock Purchase Rights).

           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 is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    X   Yes          No

           The number of shares of the registrant's Common Stock outstanding as of October 29, 2004 was 19,186,859.

TABLE OF CONTENTS

PAGE
PART I - FINANCIAL INFORMATION    
ITEM 1. Financial Statements    
     Consolidated Statements of Financial Condition   1
     Consolidated Statements of Income and Comprehensive Income   2
     Consolidated Statements of Cash Flows   3
     Consolidated Statements of Changes in Stockholders' Equity   4
     Notes to Consolidated Statements   5
ITEM 2. Management's Discussion and Analysis of Financial
     Condition and Results of Operations		   9
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk   23
ITEM 4. Controls and Procedures   23
PART II - OTHER INFORMATION    
ITEM 1. Legal proceedings   23
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds   23
ITEM 3. Defaults Upon Senior Securities   23
ITEM 4. Submission of Matters to a Vote of Security Holders   24
ITEM 5. Other Information   24
ITEM 6. Exhibits   25
SIGNATURES   26

i

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Financial Condition

(Dollars in thousands, except share data)
 September 30, 2004
 December 31, 2003
(Unaudited)
ASSETS
            
Cash and due from banks   $ 14,096   $ 20,300  
Federal funds sold    13,000    —  
Securities available for sale:  
    Mortgage-backed securities    421,005    479,393  
    Other securities    41,406    56,316  
Loans:  
    Multi-family residential    618,019    541,837  
    Commercial real estate    329,026    290,332  
    One-to-four family - mixed-use property    308,871    226,225  
    One-to-four family - residential    160,609    178,474  
    Co-operative apartment    3,203    3,729  
    Construction    29,754    23,622  
    Small Business Administration    5,121    4,931  
    Commercial business and other    8,480    4,894  
    Unearned loan fees and deferred costs, net    4,173    2,030  
    Allowance for loan losses    (6,546 )  (6,553 )
         Net loans    1,460,710    1,269,521  
Interest and dividends receivable    8,991    8,647  
Real estate owned, net    —    —  
Bank premises and equipment, net    7,186    6,380  
Federal Home Loan Bank of New York stock    21,761    24,462  
Goodwill    3,905    3,905  
Other assets    45,916    41,827  
          Total assets   $ 2,037,976   $ 1,910,751  
LIABILITIES  
Due to depositors:  
    Non-interest bearing   $ 48,979   $ 41,397  
    Interest-bearing:  
       Certificate of deposit accounts    691,602    593,760  
       Passbook savings accounts    216,420    216,988  
       Money market accounts    263,852    263,621  
       NOW accounts    45,030    42,809  
          Total interest-bearing deposits    1,216,904    1,117,178  
Mortgagors' escrow deposits    20,772    11,334  
Borrowed funds    574,743    578,142  
Other liabilities    20,130    15,938  
          Total liabilities    1,881,528    1,763,989  
STOCKHOLDERS' EQUITY  
Preferred stock ($0.01 par value; 5,000,000
    shares authorized)		    —    —  
Common stock ($0.01 par value; 40,000,000
    shares authorized; 19,456,696 shares issued
     and 19,183,119 shares outstanding at
     September 30, 2004, 19,290,601 shares issued
     and outstanding at December 31, 2003)		    195    193  
Additional paid-in capital    36,069    32,783  
Treasury stock, at average cost (273,577
    shares and none at September 30, 2004
    and December 31, 2003, respectively)		    (4,503 )  —  
Unearned compensation    (5,001 )  (7,373 )
Retained earnings    130,711    120,683  
Accumulated other comprehensive income
    (loss), net of taxes		    (1,023 )  476  
          Total stockholders' equity    156,448    146,762  
          Total liabilities and stockholders' equity   $ 2,037,976   $ 1,910,751  

The accompanying notes are an integral part of these consolidated financial statements.
-1-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Income and Comprehensive Income

For the three months For the nine months
ended September 30,
 ended September 30,
(In thousands, except per share data)
 2004
 2003
 2004
 2003
(Unaudited)
Interest and dividend income                    

Interest and fees on loans		   $25,077   $23,460   $72,923   $69,687  
Interest and dividends
  on securities:		  
    Interest    4,800    4,552    15,385    13,255  
    Dividends    84    79    256    169  
Other interest income    61    34    124    151  
          Total interest and
             dividend income		    30,022    28,125    88,688    83,262  
Interest expense  
Deposits    7,247    6,694    21,194    20,703  
Other interest expense    5,903    6,233    17,350    18,727  
          Total interest expense    13,150    12,927    38,544    39,430  
Net interest income    16,872    15,198    50,144    43,832  
Provision for loan losses    --    --    --    --  
Net interest income after
  provision for loan losses		    16,872    15,198    50,144    43,832  
Non-interest income  
Other fee income    911    871    2,753    2,498  
Net gain on sale of loans held for sale    47    76    227    246  
Net gain (loss) on sales of securities    5    25    (11 )  6  
Other income    565    690    1,650    2,165  
          Total non-interest income    1,528    1,662    4,619    4,915  
Non-interest expense  
Salaries and employee benefits    4,114    4,017    13,620    11,949  
Occupancy and equipment    931    799    2,575    2,205  
Professional services    791    758    2,491    2,134  
Data processing    465    530    1,468    1,350  
Depreciation and amortization    371    322    1,096    872  
Other operating expenses    1,470    1,496    4,690    4,551  
          Total non-interest expense    8,142    7,922    25,940    23,061  
Income before income taxes    10,258    8,938    28,823    25,686  
Provision for income taxes  
Federal    2,969    2,620    8,580    7,637  
State and local    1,032    801    2,661    2,188  
          Total taxes    4,001    3,421    11,241    9,825  
Net income   $ 6,257   $5,517   $17,582   $15,861  
Other comprehensive income
  (loss), net of tax		  
Unrealized gains (losses)
  on securities:		  
   Unrealized holding gains
     (losses) arising during period		   $3,613   $(2,855 ) $(1,505 ) $(3,151 )
   Reclassification adjustments
     for (gains) losses included
     in income		    (3 )  (13 )  6    (3 )
          Net unrealized holding
            gains (losses )		    3,610    (2,868 )  (1,499 )  (3,154 )
Comprehensive net income   $9,867   $2,649   $16,083   $12,707  

Basic earnings per share		   $0.36   $0.32   $ 1.01   $ 0.93  
Diluted earnings per share   $0.35   $0.31   $ 0.97   $ 0.90  
Dividends per share   $0.09   $0.073   $ 0.26   $ 0.207  

The accompanying notes are an integral part of these consolidated financial statements.
-2-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Cash Flows

For the nine months ended
September 30,
(In thousands)
 2004
 2003
(Unaudited)
OPERATING ACTIVITIES            
Net income   $ 17,582   $ 15,861  
Adjustments to reconcile net income to net cash provided
  by operating activities:		  
     Depreciation and amortization of
       bank premises and equipment		    1,096    872  
     Net loss (gain) on sales of securities    11    (6 )
     Net gain on sales of loans    (227 )  (246 )
     Amortization of unearned premium,
       net of accretion of unearned discount		    1,610    2,702  
     Deferred income tax (benefit) provision    (189 )  1,753  
     Deferred compensation    1,138    542  
Origination of loans held for sale    (4,962 )  (9,078 )
Proceeds from sale of loans originated for sale    4,962    9,078  
Net decrease in other assets and liabilities    (773 )  (1,836 )
Unearned compensation    2,396    1,148  
          Net cash provided by operating activities    22,644    20,790  
INVESTING ACTIVITIES  
Purchases of bank premises and equipment    (1,902 )  (1,664 )
Redemptions (purchases) of Federal Home Loan Bank shares    2,701    (3,000 )
Purchases of securities available for sale    (102,186 )  (366,481 )
Proceeds from sales and calls of securities available for sale    78,822    62,391  
Proceeds from maturities and prepayments of securities
  available for sale		    95,794    155,324  
Proceeds from sale of non-performing loans    1,980    3,502  
Net originations and repayment of loans    (193,355 )  (64,982 )
Purchases of loans    --    (789 )
          Net cash used by investing activities    (118,146 )  (215,699 )
FINANCING ACTIVITIES  
Net increase in non-interest bearing deposits    7,582    3,109  
Net increase in interest-bearing deposits    99,726    113,860  
Net increase in mortgagors' escrow deposits    9,438    4,345  
Net decrease in short-term borrowed funds    (25,000 )  --  
Proceeds from long-term borrowed funds    110,000    130,000  
Repayment of long-term borrowed funds    (89,018 )  (70,017 )
Purchases of treasury stock    (8,360 )  (7,069 )
Proceeds from issuance of common stock
  upon exercise of stock options		    2,484    3,425  
Cash dividends paid    (4,554 )  (3,573 )
          Net cash provided by financing activities    102,298    174,080  
Net increase (decrease) in cash and cash equivalents    6,796    (20,829 )
Cash and cash equivalents, beginning of period    20,300    47,619  
         Cash and cash equivalents, end of period   $ 27,096   $ 26,790  
SUPPLEMENTAL CASH FLOW DISCLOSURE  
Interest paid   $ 38,417   $ 39,428  
Income taxes paid    8,835    6,611  

Non-cash activities:		  
   Securities purchased not yet settled    2,800    9,851  

The accompanying notes are an integral part of these consolidated financial statements.
-3-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)

For the nine months ended
(In thousands, except share data)
 September 30, 2004
Common Stock            
Balance, beginning of period   $    193  
Issuance upon the exercise of stock options
  (166,095 common shares)		         2  
         Balance, end of period   $    195  
Additional Paid-In Capital  
Balance, beginning of period   $    32,783  
Award of shares released from Employee
  Benefit Trust (3,931 common shares)		         57  
Surrender of restricted stock awards (124,650
  common shares) which were replaced with
  restricted stock units		         (227 )
Options exercised (166,095 common shares)         858  
Tax benefit from compensation expense in
  excess of that recognized for financial
  reporting purposes		         2,598  
         Balance, end of period   $    36,069  
Treasury Stock  
Balance, beginning of period   $     --  
Purchases of common shares outstanding
  (453,679 common shares)		         (8,023 )
Surrender of restricted stock awards (124,650
  common shares) which were replaced with
  restricted stock units		         (1,177 )
Repurchase of restricted stock awards (25,066
  common shares) to satisfy tax obligations		         (433 )
Shares issued upon vesting of restricted stock
  unit awards (42,390 common shares)		         579  
Forfeiture of restricted stock awards
  (1,050 common shares)		         (13 )
Issuance for Options exercised
  (288,478 common shares)		         4,564  
         Balance, end of period   $    (4,503 )
Unearned Compensation  
Balance, beginning of period   $    (7,373 )
Restricted stock award expense         1,333  
Surrender of restricted stock awards (124,650
  common shares) which were replaced with
  restricted stock units		         564  
Forfeiture of restricted stock awards
  (1,050 common shares)		         13  
Release of shares from Employee Benefit Trust
  (135,698 common shares)		         462  
         Balance, end of period   $    (5,001 )
Retained Earnings  
Balance, beginning of period   $    120,683  
Net income         17,582  
Options exercised (288,478 common shares)         (2,844 )
Shares issued upon vesting of restricted stock units
  (42,390 common shares)		         (156 )
Cash dividends declared and paid         (4,554 )
         Balance, end of period   $    130,711  
Accumulated Other Comprehensive Income (Loss)  
Balance, beginning of period   $    476  
Change in net unrealized gain (loss),
  net of taxes of approximately $1,200 on
  securities available for sale		        (1,505 )
Less: Reclassification adjustment for losses included
  in net income, net of taxes
  of approximately $(5)		        6  
      Balance, end of period   $    (1,023 )

The accompanying notes are an integral part of these consolidated financial statements.
-4-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements

1.      Basis of Presentation

The primary business of Flushing Financial Corporation (the "Holding Company") is the operation of its wholly-owned subsidiary, Flushing Savings Bank, FSB (the "Bank"). The consolidated financial statements presented in this Form 10-Q include the collective results of the Holding Company and the Bank, but reflect principally the Bank's activities.

The information furnished in these interim statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for such periods of Flushing Financial Corporation and Subsidiaries (the "Company"). Such adjustments are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q. The results of operations in the interim statements are not necessarily indicative of the results that may be expected for the full year.

Certain information and note disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The interim financial information should be read in conjunction with the Company's 2003 Annual Report on Form 10-K.

2.       Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

3.      Earnings Per Share

Basic earnings per share for the three and nine month periods ended September 30, 2004 and 2003 was computed by dividing net income by the total weighted average number of common shares outstanding, including only the vested portion of restricted stock and restricted stock unit awards. Diluted earnings per share includes the additional dilutive effect of stock options outstanding and the unvested portion of restricted stock and restricted stock unit awards during the period. Earnings per share has been computed based on the following:

Three months ended Nine months ended
September 30,
 September 30,
(Amounts in thousands, except per share data)
 2004
 2003
 2004
 2003
Net income     $ 6,257   $ 5,517   $ 17,582   $ 15,861  
Divided by:  
      Weighted average common
        shares outstanding		    17,458    17,104    17,424    16,985  
      Weighted average common stock
        equivalents		    593    711    673    713  
Total weighted average common shares &   common stock equivalents    18,051    17,815    18,097    17,698  
 Basic earnings per share   $ 0.36   $ 0.32   $ 1.01   $ 0.93  
 Diluted earnings per share   $ 0.35   $ 0.31   $ 0.97   $ 0.90  
 Dividends per share   $ 0.09   $ 0.073   $ 0.26   $ 0.207  
 Dividend payout ratio    25.00 %  22.92 %  25.74 %  22.14 %

Common stock equivalents that are antidilutive are not included in the computation of diluted earnings per share. There were no common stock equivalents that were considered antidilutive for the three- and nine-month periods ended September 30, 2004. Options to purchase 900 shares, at an average exercise price of $14.70, and unvested restricted stock awards of 450 shares, at an average market price on date of grant of $14.70, were not included in the computation of diluted earnings per share for the three months ended September 30, 2003. Options to purchase 268,050 shares, at an average exercise price of $13.55, and unvested restricted stock awards of 81,787 shares, at an average market price on date of grant of $13.51, were not included in the computation of diluted earnings per share for the nine months ended September 30, 2003.

-5-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements

4.      Stock Option Plans

As permitted by SFAS No. 123, "Accounting for Stock-Based Compensation", the Company has chosen to apply APB Opinion No. 25, "Accounting for Stock Issued to Employees" and related Interpretations in accounting for its Stock Option Plan. Accordingly, no compensation expense has been recognized for options granted under the Stock Option Plan. Compensation expense is recognized in the financial statements for restricted stock and restricted stock unit awards. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to all stock-based compensation. However, the present impact of SFAS No. 123 may not be representative of the effect on income in future periods because the options vest over several years and additional option grants may be made each year.

Three months ended Nine months ended
September 30,
 September 30,
(Dollars in thousands, except per share data)
 2004
 2003
 2004
 2003
Net income, as reported     $ 6,257   $ 5,517   $ 17,582   $ 15,861  
Add: Stock-based compensation
  expense included in reported
  net income, net of related
  tax effects		    139    170    1,158    513  
Deduct: Total stock-based compensation
  expense determined under fair
  value based method for all awards,
  net of related tax effects		    (306 )  (365 )  (2,798 )  (1,043 )
Pro forma net income   $ 6,090   $ 5,322   $ 15,942   $ 15,331  
Basic earnings per share:  
     As reported   $ 0.36   $ 0.32   $ 1.01   $ 0.93  
     Pro forma   $ 0.35   $ 0.31   $ 0.91   $ 0.90  
Diluted earnings per share:  
     As reported   $ 0.35   $ 0.31   $ 0.97   $ 0.90  
     Pro forma   $ 0.34   $ 0.30   $ 0.88   $ 0.87  

There were no grants of stock options, restricted stock awards, or restricted stock unit awards in the three-month period ended September 30, 2004. There were stock option grants of 900 shares of common stock, at an average exercise price of $14.70, and restricted stock awards of 450 shares of common stock, at an average market price on date of grant of $14.70, in the three-month period ended September 30, 2003.

There were stock option grants of 201,700 shares of common stock, at an average exercise price of $17.36, and 268,050 shares of common stock, at an average exercise price of $13.55, in the nine-month periods ended September 30, 2004 and 2003, respectively. There were restricted stock and restricted stock unit awards of 73,783 shares of common stock, at an average market price on date of grant of $16.95, and 81,783 shares of common stock, at an average market price on date of grant of $13.51, in the nine-month periods ended September 30, 2004 and 2003, respectively.

The nine-month period ended September 30, 2004 includes a charge to earnings, on an after-tax basis, of $0.2 million or $0.01 per diluted share, recorded in the second quarter of 2004, related to certain restricted stock unit awards in June 2004. In addition to the previously mentioned charge, the nine-month period ended September 30, 2004 includes a charge to earnings (recorded during the three months ended March 31, 2004), on an after-tax basis, of $0.5 million or $0.03 per diluted share, related to an adjustment of compensation expense for certain restricted stock awards made in prior periods. These charges reflect that certain participants under these plans have reached, or are close to reaching, retirement eligibility, at which time such awards will be fully vested. These amounts are included above in stock-based compensation expense.

In addition, the nine-month period ended September 30, 2004 includes, in the deduction for stock-based compensation determined under fair value method, a net after tax charge of $0.4 million or $0.02 per diluted share, related to certain stock option grants awarded in June 2004. In addition to the previously mentioned deduction, the nine-month period ended September 30, 2004 includes, in the deduction for stock-based compensation determined under the fair value method, a net after tax deduction of $0.8 million or $0.04 per diluted share, related to an adjustment of compensation expense using the fair value method for stock option grants awarded during prior periods. These deductions reflect that certain participants under these plans have reached, or are close to reaching, retirement eligibility, at which time such awards will be fully vested.

-6-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements

5.      Recent Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), which established guidance for determining when an entity should consolidate another entity that meets the definition of a variable interest entity ("VIE"). A VIE exists either when the entity does not have sufficient equity at risk or lacks any one of three characteristics normally associated with a controlling financial interest. If an entity is considered a VIE, judgment and quantitative analysis typically is required to assess whether the company should consolidate the entity as the primary beneficiary. The company is considered the primary beneficiary when it has a variable interest that will absorb a majority of an entity's expected losses, receive a majority of an entity's expected residual returns, or both. In December 2003, the FASB issued a revision to FIN 46, FIN 46R, to address various technical corrections and implementation issues that have arisen since its issuance. The provisions of FIN 46R were effective beginning in the first quarter of 2004.

The Holding Company owns Flushing Financial Capital Trust I (the "Trust"), a special purpose business trust formed to issue capital securities, which is subject to FIN 46 and FIN 46R. Prior to 2004, the Trust was consolidated. Since the Holding Company does not have sufficient equity at risk, as defined in FIN 46R, the Trust was deconsolidated, effective with the first quarter of 2004. Deconsolidation of the Trust has not had a material impact on the Company's financial statements.

6.      Stock Split

On November 18, 2003, the Board of Directors of the Holding Company declared a three-for-two split of the Holding Company's common stock to be paid in the form of a 50% stock dividend, payable on December 15, 2003. Each stockholder received one additional share for every two shares of the Holding Company's common stock held at the record date, December 1, 2003. All historical share and per share amounts reported in this Form 10-Q have been restated to reflect the three-for-two stock split paid in the form of a stock dividend on December 15, 2003.

-7-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements

7.      Pension and Other Postretirement Benefit Plans

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

Three months ended Nine months ended
September 30,
 September 30,
 2004
 2003
 2004
 2003
(In thousands)
Employee Pension Plan:                    
     Service cost   $ 156   $ 139   $ 466   $ 416  
     Interest cost    197    188    591    565  
     Amortization of unrecognized loss    20    4    61    13  
     Amortization of past service liability    (4 )  (6 )  (10 )  (18 )
     Expected return on plan assets    (292 )  (271 )  (875 )  (815 )
          Net employee pension expense   $ 77   $ 54   $ 233   $ 161  
Outside Director Pension Plan:  
     Service cost   $ 19   $ 10   $ 56   $ 30  
     Interest cost    12    5    37    15  
     Amortization of unrecognized loss    4    4    11    11  
     Amortization of past service liability    35    29    106    89  
          Net outside director pension expense   $ 70   $ 48   $ 210   $ 145  
Other Postretirement Benefit Plans:  
     Service cost   $ 41   $ 38   $ 124   $ 114  
     Interest cost    54    54    164    163  
     Amortization of unrecognized loss    13    15    38    46  
     Amortization of past service liability    (33 )  (32 )  (98 )  (98 )
          Net other postretirement
            benefit expense		   $ 75   $ 75   $ 228   $ 225  

The Company previously disclosed in its consolidated financial statements for the year ended December 31, 2003 that it expects to contribute $0.9 million, $0.1 million and $0.1 million to the Employee Pension Plan, Outside Director Pension Plan and Other Post Retirement Benefit Plans, respectively, during the year ended December 31, 2004. As of September 30, 2004, the Company has contributed $859,000 to the Employee Pension Plan, $75,000 to the Outside Director Plan, and $70,000 to the Other Postretirement Benefit Plans. As of September 30, 2004, the Company has not revised its expected contributions for the year ending December 31, 2004 for any of these plans.

-8-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

GENERAL

Flushing Financial Corporation, a Delaware corporation (the "Holding Company"), was organized in May 1994 to serve as the holding company for Flushing Savings Bank, FSB (the "Bank"), a federally chartered, FDIC insured savings institution, originally organized in 1929. The Bank is a consumer-oriented savings institution and conducts its business through eleven banking offices located in Queens, Brooklyn, Manhattan, Bronx and Nassau County. The Bank has taken steps to close the banking office located in the Bronx during the fourth quarter of 2004. Upon completion, this closing will reduce the number of branches to ten, and the deposits held at this location will be transferred to the main branch in Flushing, Queens. The Holding Company does not anticipate that the closing of this branch will have a material effect on its financial condition or results of operations. Flushing Financial Corporation's common stock is publicly traded on the Nasdaq National Market under the symbol "FFIC". The following discussion of financial condition and results of operations includes the collective results of the Holding Company and the Bank (collectively, the "Company"), but reflects principally the Bank's activities.

The Company's principal business is attracting retail deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, primarily in (1) origination and purchases of one-to-four family (focusing on mixed-use properties - properties that contain both residential dwelling units and commercial units), multi-family residential and commercial real estate mortgage loans; (2) mortgage loan surrogates such as mortgage-backed securities; and (3) U.S. government and federal agency securities, corporate fixed-income securities and other marketable securities. To a lesser extent, the Company originates certain other loans, including construction loans, Small Business Administration loans and other small business and consumer loans.

The Company's results of operations depend primarily on net interest income, which is the difference between the income earned on its interest-earning assets and the cost of its interest-bearing liabilities. Net interest income is the result of the Company's 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. The Company also generates non-interest income from loan fees, service charges on deposit accounts and other fees, income earned on Bank Owned Life Insurance, dividends on Federal Home Loan Bank of NY ("FHLB-NY") stock and net gains and losses on sales of securities and loans. The Company's operating expenses consist principally of employee compensation and benefits, occupancy and equipment costs, other general and administrative expenses and income tax expense. The Company's results of operations also can be significantly affected by its periodic provision for loan losses and specific provision for losses on real estate owned. However, the Company has not recorded a provision for possible loan losses since 1999. Such results also are significantly affected by general economic and competitive conditions, including changes in market interest rates, the strength of the local economy, government policies and actions of regulatory authorities.

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, the factors set forth in the preceding paragraph and elsewhere in this Quarterly Report, and in other documents filed by the Company with the Securities and Exchange Commission from time to time, including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2003. Forward-looking statements may be identified by terms such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "forecasts", "potential" or "continue" or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.

-9-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

General. Diluted earnings per share increased $0.04, or 12.9%, to $0.35 for the three months ended September 30, 2004 from $0.31 for the three months ended September 30, 2003. Net income increased $0.7 million, or 13.4%, to $6.3 million for the three months ended September 30, 2004 from $5.5 million for the three months ended September 30, 2003. The return on average assets for the three months ended September 30, 2004 increased to 1.25% compared to 1.20% for the three months ended September 30, 2003, while the return on average equity for the three months ended September 30, 2004 increased to 16.57% from 16.28% for the three months ended September 30, 2003.

Interest Income. Total interest and dividend income increased $1.9 million, or 6.7%, to $30.0 million for the three months ended September 30, 2004 from $28.1 million for the three months ended September 30, 2003. This increase was primarily the result of a $181.3 million increase in the average balance of interest-earning assets for the three months ended September 30, 2004 as compared to the three months ended September 30, 2003. The average balance of higher-yielding mortgage loans, net increased $194.0 million while the average balance of lower-yielding mortgage-backed securities and other securities decreased $18.8 million and $2.8 million, respectively, for the three months ended September 30, 2004 as compared to the three months ended September 30, 2003. The yield on interest-earning assets declined 22 basis points to 6.27% for the three months ended September 30, 2004 from 6.49% for the three months ended September 30, 2003. This decrease is primarily due to the declining interest rate environment experienced during the past three years, the effect of which further lowered the yield on assets during the third quarter of 2004. However, short-term rates have now increased approximately 75 basis points since the first quarter of 2004. Long-term rates, after rising briefly, have returned to their levels at the beginning of the year. We continued our focus on the origination of higher yielding multi-family residential and commercial real estate mortgage loans, along with the origination of one-to-four family mixed-use property mortgage loans, which allowed us to maintain a higher yield on our loan portfolio than we would have otherwise experienced. The yield on mortgage loans reflects the high refinancing activity that has taken place during the current quarter and preceding two years. The Bank's existing borrowers have been refinancing their higher costing mortgage loans at lower rates, which have resulted in a reduction on the yield of the mortgage portfolio. However, this decrease has been partially offset by prepayment penalties that have been collected. In addition, the Bank's current strategy includes moving funds from the lower-yielding mortgage-backed securities and other securities portfolios into the higher-yielding mortgage loan portfolio.

Interest Expense. Interest expense increased $0.2 million, or 1.7%, to $13.2 million for the three months ended September 30, 2004 from $12.9 million for the three months ended September 30, 2003, primarily due to a $153.2 million increase in the average balance of interest-bearing liabilities. This was partially offset by a 22 basis point decline in the cost of interest-bearing liabilities to 2.94% in the three months ended September 30, 2004 from 3.16% in the three months ended September 30, 2003. The decrease in the cost of funds is primarily due to the declining interest rate environment experienced during the past three years, the effect of which further lowered the cost of funds in the third quarter of 2004.

Net Interest Income. For the three months ended September 30, 2004, net interest income increased $1.7 million, or 11.0%, to $16.9 million from $15.2 million in the three months ended September 30, 2003. This increase in net interest income is primarily due to a $181.3 million increase in the average balance of interest-earning assets, as the net interest spread was 3.33% for the three months ended September 30, 2004, the same as that for the three months ended September 30, 2003. The net interest margin increased 2 basis points to 3.53% for the three months ended September 30, 2004 from 3.51% for the three months ended September 30, 2003, due an increase of $28.1 million in the amount by which average interest-earning assets exceeds average interest-bearing liabilities. However, the net interest margin of 3.53% for the three months ended September 30, 2004 remained the same as that for the three months ended June 30, 2004.

> -10-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

Provision for Loan Losses. There was no provision for loan losses for the three-month periods ended September 30, 2004 and 2003. In assessing the adequacy of the Company's allowance for loan losses, management considers the Company's historical loss experience, recent trends in losses, collection policies and collection experience, trends in the volume of non-performing loans, changes in the composition and volume of the gross loan portfolio, and local and national economic conditions. Based on these reviews, no provision for loan losses was deemed necessary for either of the three-month periods ended September 30, 2004 and 2003.

Non-Interest Income. Non-interest income was $1.5 million for the three months ended September 30, 2004, a decrease of $0.1 million from the $1.7 million for the three months ended September 30, 2003. This decrease is attributable to the reduction in dividends on Federal Home Loan Bank of New York ("FHLB-NY") stock, which decreased $0.2 million for the three months ended September 30, 2004 from the three months ended September 30, 2003.

Non-Interest Expense. Non-interest expense was $8.1 million for the three months ended September 30, 2004, an increase of $0.2 million, or 2.8%, from $7.9 million for the three months ended September 30, 2003. The increase from the prior year period is primarily attributable to the Bank's continued focus on expanding its current product offerings to enhance its ability to serve its customers, including increases in personnel to provide these services, and, in the fourth quarter of 2003, the opening of a new branch in Astoria, Queens. Management continues to monitor expenditures resulting in efficiency ratios of 44.3% and 47.1% for the three months ended September 30, 2004 and 2003, respectively.

Income before Income Taxes. Income before the provision for income taxes increased $1.3 million, or 14.8%, to $10.3 million for the three months ended September 30, 2004 as compared to $8.9 million for the three months ended September 30, 2003, for the reasons discussed above.

Provision For Income Taxes. Income tax expense was $4.0 million for the three months ended September 30, 2004 compared to $3.4 million for the three months ended September 30, 2003. This increase is primarily due to the $1.3 million increase in income before income taxes, combined with a slight increase in the effective tax rate. The effective tax rate was 39.00% for the three months ended September 30, 2004 compared to 38.27% for the three months ended September 30, 2003.

COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

General. Diluted earnings per share increased 7.8% to $0.97 for the nine months ended September 30, 2004 from $0.90 for the nine months ended September 30, 2003. Net income for the nine months ended September 30, 2004 increased $1.7 million, or 10.9%, to $17.6 million from the $15.9 million reported for the nine months ended September 30, 2003. The return on average assets for the nine months ended September 30, 2004 was 1.18% compared to 1.19% for the nine months ended September 30, 2003, while the return on average equity for the nine months ended September 30, 2004 was 15.67% compared to 15.70% for the nine months ended September 30, 2003.

The nine-month period ended September 30, 2004 includes a charge to earnings of $1.1 million, $0.7 million on an after-tax basis or $0.04 per diluted share, relating to an adjustment of compensation expense for certain of the Company's restricted stock awards and supplemental retirement benefits to reflect that certain participants under these plans have reached, or are close to reaching, retirement eligibility, at which time such awards will be fully vested. This charge was recorded in the first quarter of 2004. Although this adjustment relates to prior periods, the amount of the charge attributable to any prior year would not have been material to the Company's financial condition or results of operations as reported for that year.

-11-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

Interest Income. Total interest and dividend income increased $5.4 million, or 6.5%, to $88.7 million for the nine months ended September 30, 2004 from $83.3 million for the nine months ended September 30, 2003. This increase was primarily the result of a $231.6 million increase in the average balance of interest-earning assets for the nine months ended September 30, 2004 as compared to the nine months ended September 30, 2003. The average balance of total loans, net, mortgage-backed securities and other securities increased $163.5 million, $63.2 million and $7.4 million, respectively, for the nine months ended September 30, 2004 as compared to the nine months ended September 30, 2003. These increases were partially offset by a $2.6 million decrease in the average balance of interest-earning deposits and federal funds sold for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003. The yield on interest-earning assets declined 43 basis points to 6.25% for the nine months ended September 30, 2004 from 6.68% for the nine months ended September 30, 2003. This decrease is primarily due to the declining interest rate environment experienced during the past three years, the effect of which further lowered the yield on assets during the first nine months of 2004. However, short-term rates have now increased approximately 75 basis points since the first quarter of 2004. Long-term rates, after rising briefly, have returned to their levels at the beginning of the year. Our focus on the origination of higher yielding multi-family residential and commercial real estate mortgage loans, along with the origination of one-to-four family mixed-use property mortgage loans, allowed us to maintain a higher yield on our loan portfolio than we would have otherwise experienced. The yield on mortgage loans reflects the high refinancing activity that has taken place during the nine month period ended September 30, 2004 and the preceding two years. The Bank's existing borrowers have been refinancing their higher costing mortgage loans at lower rates, which have resulted in a reduction on the yield of the mortgage portfolio. However, this decrease has been partially offset by prepayment penalties that have been collected. In addition, the increase in the average balance of the securities portfolio, while increasing interest income, reduced the yield on total interest-earning assets. The Bank's current strategy includes reducing the lower-yielding mortgage-backed securities portfolio and shifting these funds to the higher-yielding mortgage loan portfolio.

Interest Expense. Interest expense decreased $0.9 million, or 2.2%, to $38.5 million for the nine months ended September 30, 2004 from $39.4 million for the nine months ended September 30, 2003, primarily due to a 46 basis point decline in the cost of interest-bearing liabilities to 2.89% in the nine months ended September 30, 2004 from 3.35% in the nine months ended September 30, 2003. This decrease was partially offset by a $206.7 million increase in the average balance of interest-bearing liabilities. The decrease in the cost of funds is primarily due to the declining interest rate environment experienced during the past three years, the effect of which further lowered the cost of funds during the first nine months of 2004. This was coupled with an increase in the average balance of lower costing core deposits.

Net Interest Income. For the nine months ended September 30, 2004, net interest income increased $6.3 million, or 14.4%, to $50.1 million from $43.8 million in the nine months ended September 30, 2003. This increase in net interest income is primarily due to a $231.6 million increase in the average balance of interest-earning assets, combined with a three basis point improvement in the net interest spread and an increase of $24.9 million in the amount by which average interest-earning assets exceed average interest-bearing liabilities. The net interest margin increased one basis point to 3.53% for the nine months ended September 30, 2004 from 3.52% for the nine months ended September 30, 2003, due to the increase in the net interest spread and the increase in the amount by which average interest-earning assets exceeds average interest-bearing liabilities, partially offset by the increase in the average balance of interest-earning assets.

Provision for Loan Losses. There was no provision for loan losses for the nine-month periods ended September 30, 2004 and 2003. In assessing the adequacy of the Company's allowance for loan losses, management considers the Company's historical loss experience, recent trends in losses, collection policies and collection experience, trends in the volume of non-performing loans, changes in the composition and volume of the gross loan portfolio, and local and national economic conditions. Based on these reviews, no provision for loan losses was deemed necessary for either of the nine-month periods ended September 30, 2004 and 2003.

Non-Interest Income. Non-interest income decreased $0.3 million, or 6.0%, to $4.6 million for the nine months ended September 30, 2004 from $4.9 million for the nine months ended September 30, 2003. Loan fees and banking services fees increased $0.3 million for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003. This was more than offset by the reduction in dividends on Federal Home Loan Bank of New York ("FHLB-NY") stock, which decreased $0.6 million for the nine months ended September 30, 2004 from the nine months ended September 30, 2003.

-12-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

Non-Interest Expense. Non-interest expense was $25.9 million for the nine months ended September 30, 2004, an increase of $2.9 million, or 12.5%, from $23.1 million for the nine months ended September 30, 2003. Salaries and employee benefits and other operating expenses increased $0.9 million and $0.2 million, respectively, as a result of the adjustment to amortization of compensation expense for certain of the Company's restricted stock awards and supplemental retirement benefits during the first quarter of 2004, and the expensing of certain restricted stock unit awards at the time of grant during the second quarter of 2004 to reflect that certain participants under these plans have reached, or are close to reaching, retirement eligibility, at which time such awards will be fully vested. The nine months ended September 30, 2004 also includes increased professional service fees due to costs incurred to comply with the Sarbanes-Oxley Act. The remaining increase from the prior year period is primarily attributable to the Bank's continued focus on expanding its current product offerings to enhance its ability to serve its customers, including increases in personnel to provide these services, and, in the fourth quarter of 2003, the opening of a new branch in Astoria, Queens. Management continues to monitor expenditures resulting in an efficiency ratio of 47.4% and 47.3% for the nine-month periods ended September 30, 2004 and 2003, respectively.

Income before Income Taxes. Income before the provision for income taxes increased $3.1 million, or 12.2%, to $28.8 million for the nine months ended September 30, 2004 as compared to $25.7 million for the nine months ended September 30, 2003, for the reasons discussed above.

Provision For Income Taxes. Income tax expense was $11.2 million for the nine months ended September 30, 2004 an increase of $1.4 million, or 14.4%, compared to $9.8 million for the nine months ended September 30, 2003. This increase is primarily due to the $3.1 million increase in income before income taxes, combined with a slight increase in the effective tax rate. The effective tax rate was 39.00% for the nine months ended September 30, 2004 compared to 38.25% for the nine months ended September 30, 2003.

-13-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

FINANCIAL CONDITION

Assets. Total assets at September 30, 2004 were $2,038.0 million, a $127.2 million increase from December 31, 2003. Total loans, net increased $191.2 million during the nine months ended September 30, 2004 to $1,460.7 million from $1,269.5 million at December 31, 2003.

The following table shows loan originations and purchases for the period indicated.

For the three months For the nine months
ended September 30,
 ended September 30,
2004
 2003
 2004
 2003
(in thousands)

Multi-family residential		     $ 58,053   $ 39,120   $ 158,058   $ 124,435  
Commercial real estate    22,436    28,613    71,384    72,254  
One-to-four family - mixed-use property    36,454    22,855    104,186    58,382  
One-to-four family - residential    6,501    3,511    14,743    15,166  
Construction    8,846    3,304    19,163    12,792  
Co-operative apartment    75    --    302    35  
Commercial business and other loans    3,894    2,004    11,916    7,656  
Total   $ 136,259   $ 99,407   $ 379,752   $ 290,720  

As the Company continues to increase its loan portfolio, management continues to adhere to the Bank's strict underwriting standards. As a result, the Company has been able to minimize charge-offs of losses from impaired loans and maintain asset quality. Non-performing assets were $4.5 million at September 30, 2004 compared to $0.7 million at December 31, 2003 and $1.7 million at September 30, 2003. The increase in non-performing assets at September 30, 2004 is attributed to two mortgages secured by commercial properties. The borrower is negotiating the sale of these properties. The Company believes it has a secure position in these two loans, and does not anticipate a significant loss, if any, will be incurred. Total non-performing assets as a percentage of total assets were 0.22% at September 30, 2004, 0.04% at December 31, 2003, and 0.09% at September 30, 2003. The ratio of allowance for loan losses to total non-performing loans was 146% at September 30, 2004 compared to 961% at December 31, 2003 and 387% at September 30, 2003.

During the first nine months of 2004, mortgage-backed securities decreased $58.4 million to $421.0 million while other securities decreased $14.9 million to $41.4 million. The funds obtained from the repayment and sale of mortgage-backed securities and other securities have been used to originate higher yielding mortgage loans. Other securities primarily consists of securities issued by government agencies and mutual or bond funds that invest in government and government agency securities. At September 30, 2004, loans in process totaled $174.1 million.

Liabilities. Total liabilities increased $117.5 million to $1,881.5 million at September 30, 2004 from $1,764.0 million at December 31, 2003. Due to depositors increased $107.3 million as certificate of deposit accounts increased $97.8 million while lower costing core deposits increased $9.5 million. Borrowed funds decreased $3.4 million during the nine months ended September 30, 2004, as asset growth was funded by deposit growth.

-14-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

Equity. Total stockholders' equity increased $9.7 million to $156.4 million at September 30, 2004 from $146.8 million at December 31, 2003. Net income of $17.6 million for the nine months ended September 30, 2004 was partially offset by $7.9 million in treasury shares purchased through the Company's stock repurchase programs, a net after-tax decrease of $1.5 million in the market value of securities available for sale, and $4.6 million in cash dividends paid during the nine month period. In addition, the exercise of stock options increased stockholders' equity by $5.1 million, including the income tax benefit realized by the Company upon the exercise of stock options. Book value per share was $8.16 at September 30, 2004 compared to $7.61 per share at December 31, 2003 and $7.34 per share at September 30, 2003.

Under its stock repurchase programs, the Company repurchased 448,600 shares during the nine months ended September 30, 2004, at a total cost of $7.9 million, or an average of $17.67 per share. During the third quarter of 2004, the Company completed its eleventh stock repurchase program and announced the approval of a new stock repurchase program authorizing the purchase of an additional 1,000,000 shares. At September 30, 2004, 991,350 shares remain to be repurchased under the current stock repurchase program. Through September 30, 2004, the Company had repurchased approximately 46% of the common shares issued in connection with the Company's initial public offering at a cost of $107.8 million.

Cash flow. During the nine months ended September 30, 2004, funds provided by the Company's operating activities amounted to $22.6 million. These funds, together with $102.3 million provided by financing activities and funds available at the beginning of the year, were utilized to fund net investing activities of $118.1 million. The Company's primary business objective is the origination and purchase of one-to-four family (primarily mixed-use properties), multi-family and commercial real estate loans. During the nine months ended September 30, 2004, the net total of loan originations less loan repayments was $193.4 million. The Company also invests in other securities including mortgage loan surrogates such as mortgage-backed securities. During the nine months ended September 30, 2004, the Company purchased a total of $102.2 million in securities available for sale. Funds for investment were also provided by $174.6 million in maturities, prepayments, calls and sales of securities available for sale. Additional funds of $2.5 million were provided through the exercise of stock options. The Company also used funds of $8.4 million for treasury stock purchases and $4.6 million in dividend payments during the nine months ended September 30, 2004.

-15-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

INTEREST RATE RISK

The consolidated statements of financial condition have been prepared in conformity with generally accepted accounting principles in the United States of America, which require the measurement of financial condition 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 operation 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.

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 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 or down (shocked) 300 basis points, 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 September 30, 2004. Various estimates regarding prepayment assumptions are made at each level of rate shock. Actual results could differ significantly from these estimates. The Company is within the guidelines set forth by the Board of Directors for each interest rate level.

Projected Percentage Change In
Net Interest Net Portfolio
Change in Interest Rate
 Income
 Net Portfolio Value
 Value Ratio
-300 Basis points      -24.53 %  -29.17 %  7.32 %
-200 Basis points    -9.41    -12.84    9.05  
-100 Basis points    -2.74    -2.76    10.20  
Base interest rate    --    --    10.66  
+100 Basis points    -2.31    -5.90    10.27  
+200 Basis points    -5.90    -15.21    9.51  
+300 Basis points    -10.96    -25.65    8.57  

-16-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

REGULATORY CAPITAL POSITION

Under Office of Thrift Supervision ("OTS") capital regulations, the Bank is required to comply with each of three separate capital adequacy standards. At September 30, 2004, the Bank exceeded each of the three OTS capital requirements and is categorized as "well-capitalized" by the OTS under the prompt corrective action regulations. Set forth below is a summary of the Bank's compliance with OTS capital standards as of September 30, 2004.

(Dollars in thousands)
 Amount
 Percent of Assets
Tangible Capital:            
     Capital level   $ 155,258    7.67 %
     Requirement    30,355    1.50  
     Excess    124,903    6.17  

Leverage and Core Capital:		  
     Capital level   $ 155,258    7.67 %
     Requirement    60,711    3.00  
     Excess    94,547    4.67  

Risk-Based Capital:		  
     Capital level   $ 161,804    13.87 %
     Requirement    93,345    8.00  
     Excess    68,459    5.87  

-17-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion 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 table sets forth certain information relating to the Company's consolidated statements of financial condition and consolidated statements of operations for the three-month periods ended September 30, 2004 and 2003, 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 September 30,
2004
 2003
Average Average Average Average
(Dollars in thousands)
 Balance
Interest
 Yield/Cost
 Balance
 Interest
 Yield/Cost
Assets                                        
Interest-earning assets:  
    Mortgage loans, net (1)   $ 1,402,672   $24,868    7.09 % $1,208,638   $23,328    7.72 %
    Other loans, net (1)    14,225    209    5.88    9,361    132    5.64  
       Total loans, net    1,416,897    25,077    7.08    1,217,999    23,460    7.70  
    Mortgage-backed securities    432,856    4,507    4.16    451,649    4,242    3.76  
    Other securities    44,390    377    3.40    47,188    389    3.30  
       Total securities    477,246    4,884    4.09    498,837    4,631    3.71  
    Interest-earning deposits and  
      federal funds sold    20,179    61    1.21    16,148    34    0.84  
          Total interest-earning
             assets		    1,914,322    30,022    6.27    1,732,984    28,125    6.49  
Other assets    93,082              110,183            
Total assets   $2,007,404             $1,843,167            
Liabilities and Equity  
Interest-bearing liabilities:  
       Passbook accounts   $ 219,083    275    0.50   $ 220,425    310    0.56  
       NOW accounts    43,839    54    0.49    40,995    57    0.56  
       Money market accounts    262,651    1,093    1.66    238,919    1,135    1.90  
       Certificate of deposit
          accounts		    662,088    5,812    3.51    573,865    5,179    3.61  
          Total due to depositors    1,187,661    7,234    2.44    1,074,204    6,681    2.49  
       Mortgagors' escrow
          deposits		    18,062    13    0.29    11,921    13    0.44  
          Total deposits    1,205,723    7,247    2.40    1,086,125    6,694    2.47  
       Borrowed funds    585,560    5,903    4.03    551,954    6,233    4.52  
          Total interest-bearing  
               liabilities    1,791,283    13,150    2.94    1,638,079    12,927    3.16  
Non-interest bearing deposits    46,616              37,048            
Other liabilities    18,484              32,521            
          Total liabilities    1,856,383              1,707,648            
Equity    151,021              135,519            
          Total liabilities
             and equity		   $2,007,404             $1,843,167            
Net interest income
   /net interest spread		        $16,872    3.33 %      $15,198    3.33 %
Net interest-earning assets /  
    Net interest margin   $123,039         3.53 % $94,905         3.51 %
Ratio of interest-earning
   assets to
   interest-bearing liabilities		              1.07 x            1.06 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 $1.6 million and $1.4 million for the three-month periods ended September 30, 2004 and 2003, respectively.

-18-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

AVERAGE BALANCES (continued)

The following table sets forth certain information relating to the Company's consolidated statements of financial condition and consolidated statements of operations for the nine-month periods ended September 30, 2004 and 2003, 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 nine months ended September 30,
2004
 2003
Average Average Average Average
(Dollars in thousands)
 Balance
Interest
 Yield/Cost
 Balance
 Interest
 Yield/Cost
Assets                                        
Interest-earning assets:  
    Mortgage loans, net (1)   $ 1,347,379   $72,401    7.16 % $1,186,687   $69,276    7.78 %
    Other loans, net (1)    11,436    522    6.09    8,678    411    6.31  
       Total loans, net    1,358,815    72,923    7.16    1,195,365    69,687    7.77  
    Mortgage-backed securities    459,637    14,210    4.12    396,402    12,179    4.10  
    Other securities    56,755    1,431    3.36    49,307    1,245    3.37  
       Total securities    516,392    15,641    4.04    445,709    13,424    4.02  
    Interest-earning deposits and  
      federal funds sold    17,092    124    0.97    19,666    151    1.02  
          Total interest-earning
             assets		    1,892,299    88,688    6.25    1,660,740    83,262    6.68  
Other assets    95,605              110,519            
Total assets   $1,987,904             $1,771,259            
Liabilities and Equity  
Interest-bearing liabilities:  
       Passbook accounts   $ 218,828    819    0.50   $ 217,407    1,339    0.82  
       NOW accounts    43,340    162    0.50    39,754    203    0.68  
       Money market accounts    283,922    3,869    1.82    218,534    3,448    2.10  
       Certificate of deposit
          accounts		    625,219    16,307    3.48    564,317    15,664    3.70  
          Total due to depositors    1,171,309    21,157    2.41    1,040,012    20,654    2.65  
       Mortgagors' escrow
          deposits		    19,494    37    0.25    14,243    49    0.46  
          Total deposits    1,190,803    21,194    2.37    1,054,255    20,703    2.62  
       Borrowed funds    584,833    17,350    3.96    514,672    18,727    4.85  
          Total interest-bearing  
               liabilities    1,775,636    38,544    2.89    1,568,927    39,430    3.35  
Non-interest bearing deposits    44,317              35,503            
Other liabilities    18,372              32,121            
          Total liabilities    1,838,325              1,636,551            
Equity    149,579              134,708            
          Total liabilities
             and equity		   $1,987,904             $1,771,259            
Net interest income
   /net interest spread		        $50,144    3.36 %      $43,832    3.33 %
Net interest-earning assets /  
    Net interest margin   $116,663         3.53 % $91,813         3.52 %
Ratio of interest-earning
   assets to
   interest-bearing liabilities		              1.07 x            1.06 x

(2)    Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $3.8 million and $3.1 million for the nine-month periods ended September 30, 2004 and 2003, respectively.

-19-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion 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.

Nine months ended
(In thousands)
 September 30, 2004
 September 30, 2003
Mortgage Loans            
At beginning of period   $ 1,264,219   $ 1,166,192  

Mortgage loans originated:		  
    Multi-family residential    158,058    124,435  
    Commercial real estate    71,384    72,254  
    One-to-four family - mixed-use property    104,186    58,192  
    One-to-four family - residential    14,743    14,574  
    Construction    19,163    12,792  
    Co-operative apartment    302    35  
          Total mortgage loans originated    367,836    282,282  
Mortgage loans purchased:  
    One-to-four family - residential    --    592  
    One-to-four family - mixed-use property    --    190  
    Commercial real estate    --    --  
          Total acquired loans    --    782  
Less:  
    Principal and other reductions    177,149    210,897  
    Sales    5,424    9,501  
    Mortgage loan foreclosures    --    --  
At end of period   $ 1,449,482   $ 1,228,858  

Other Loans		  
At beginning of period   $ 9,825   $ 8,486  

Other loans originated:		  
    Small Business Administration    2,788    3,728  
    Small business    7,313    1,484  
    Other    1,815    2,444  
           Total other loans originated    11,916    7,656  
Less:  
    Sales    1,518    3,079  
    Principal and other reductions    6,622    4,985  
At end of period   $ 13,601   $ 8,078  

-20-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

NON-PERFORMING ASSETS

The Company reviews loans in its portfolio on a monthly basis to determine whether any problem loans require classification in accordance with internal policies and applicable regulatory guidelines. The following table sets forth information regarding all non-accrual loans, loans which are 90 days or more delinquent, and real estate owned at the dates indicated.

(Dollars in thousands)
 September 30, 2004
 December 31, 2003

Non-accrual mortgage loans		     $ 4,273   $ 525  
Other non-accrual loans    218    157  
          Total non-accrual loans    4,491    682  

Mortgage loans 90 days or more delinquent
     and still accruing		    --    --  
Other loans 90 days or more delinquent
     and still accruing		    --    --  
          Total non-performing loans    4,491    682  

Real estate owned (foreclosed real estate)		    --    --  

Investment securities		    --    --  
          Total non-performing assets   $ 4,491   $ 682  
Non-performing loans to gross loans    0.31 %  0.05 %
Non-performing assets to total assets    0.22 %  0.04 %

-21-

PART I - FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

ALLOWANCE FOR LOAN LOSSES

The Company has established and maintains on its books an allowance for loan losses that is designed to provide a reserve against estimated losses inherent in the Company's overall loan portfolio. The allowance is established through a provision for loan losses based on management's evaluation of the risk inherent in the various components of its loan portfolio and other factors, including historical loan loss experience, changes in the composition and volume of the portfolio, collection policies and experience, trends in the volume of non-accrual loans and regional and national economic conditions. The determination of the amount of the allowance for loan losses includes estimates that are susceptible to significant changes due to changes in appraisal values of collateral, national and regional economic conditions and other factors. In connection with the determination of the allowance, the market value of collateral ordinarily is evaluated by the Company's staff appraiser; however, the Company may from time to time obtain independent appraisals for significant properties. Current year charge-offs, charge-off trends, new loan production and current balance by particular loan categories are also taken into account in determining the appropriate amount of allowance. The Board of Directors reviews and approves the adequacy of the loan loss reserves on a quarterly basis.

The following table sets forth the activity in the Bank's allowance for loan losses for the periods indicated.

Nine months ended
(Dollars in thousands)
 September 30, 2004
 September 30, 2003

Balance at beginning of period		     $ 6,553   $ 6,581  
Provision for loan losses    --    --  
Loans charged-off:  
    One-to-four family residential real estate    --    --  
    Co-operative apartment    --    --  
    Multi-family residential    --    --  
    Commercial real estate    --    --  
    Construction    --    --  
    Commercial business and other    (9 )  (153 )
          Total loans charged-off    (9 )  (153 )
Recoveries:  
    Mortgage loans    2    124  
    Commercial business and other    --    2  
          Total recoveries    2    126  
Net charge-offs    (7 )  (27 )
Balance at end of period   $ 6,546   $ 6,554  
Ratio of net charge-offs during the period
    to average loans outstanding
    during the period		    0.00 %  0.00 %
Ratio of allowance for loan losses
    to loans at end of period		    0.45 %  0.53 %
Ratio of allowance for loan losses
    to non-performing assets at end of period		    145.76 %  386.99 %
Ratio of allowance for loan losses
    to non-performing loans at end of period		    145.76 %  386.99 %

-22-

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 September 30, 2004, 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.

PART II - OTHER INFORMATION

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 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 quarter ended September 30, 2004.

Maximum
Total Number of Number of
Shares Purchased as Shares that May
Total Number Part of Publicly Yet Be Purchased
of Shares Average Price Announced Plans or Under the Plans
Period
 Purchased
 Paid per Share
 Programs
or Program
July 1 to
July 31, 2004		      11,412    17.35    9,500    214,250  

August 1 to
August 31, 2004		    182,900    17.58    182,900    1,031,350  

September 1 to
September 30, 2004		    40,000    18.55    40,000    991,350  

Total		    234,312    17.74    232,400    991,350  

The above table includes 1,912 common shares the Company withheld from employees, valued at an average price per share of $17.25, to satisfy tax withholding obligations due upon vesting of restricted stock awards.

The current common stock repurchase program was approved by the Company's Board of Directors on August 17, 2004. This repurchase program authorized the repurchase of 1,000,000 common shares. The repurchase program does not have an expiration date or a maximum dollar amount that may be paid to repurchase the common shares. Stock repurchases under this program will be made from time to time, on the open market or in privately negotiated transactions, at the discretion of the management of the Company.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

-23-

PART II - OTHER INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 5.    OTHER INFORMATION.

Not applicable.

-24-

PART II - OTHER INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

ITEM 6.    EXHIBITS.

Exhibit 3.1 Certificate of Incorporation of Flushing Financial Corporation (1)
Exhibit 3.2 Certificate of Amendment of Certificate of Incorporation of Flushing Financial Corporation (3)
Exhibit 3.3 Certificate of Designations of Series A Junior Participating Preferred Stock of Flushing Financial Corporation (4)
Exhibit 3.4 By-Laws of Flushing Financial Corporation (1)
Exhibit 4.1 Rights Agreement, dated as of September 17, 1996, between Flushing Financial Corporation and State Street Bank and Trust Company, as Rights Agent (2)
Exhibit 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
Exhibit 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
Exhibit 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
Exhibit 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


(1) Incorporated by reference to Exhibits filed with the Registration Statement on Form S-1, Registration NO.33-96488.
(2) Incorporated by reference to Exhibits filed with Form 8-K filed September 30, 1996.
(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.

-25-

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: November 4, 2004		 By: /s/Michael J. Hegarty
  Michael J. Hegarty
  President and Chief Executive Officer

Dated: November 4, 2004		 By: /s/David W. Fry
  David W. Fry
  Senior Vice President, Treasurer and
  Chief Financial Officer

-26-

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
EXHIBIT INDEX

Exhibit No. Description
3.1  Certificate of Incorporation of Flushing Financial Corporation (1)
3.2  Certificate of Amendment of Certificate of Incorporation of Flushing Financial Corporation (3)
3.3  Certificate of Designations of Series A Junior Participating Preferred Stock of Flushing Financial Corporation(4)
3.4  By-Laws of Flushing Financial Corporation (1)
4.1  Rights Agreement, dated as of September 17, 1996, between Flushing Financial Corporation and State Street Bank and Trust Company, as Rights Agent (2)
31.1  Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
31.2  Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
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.
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.


(1) Incorporated by reference to Exhibits filed with the Registration Statement on Form S-1, Registration No. 33-96488.
(2) Incorporated by reference to Exhibits filed with Form 8-K filed September 30, 1996.
(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.

-27-