U.S. markets closed
  • S&P 500

    3,811.15
    -18.19 (-0.48%)
     
  • Dow 30

    30,932.37
    -469.63 (-1.50%)
     
  • Nasdaq

    13,192.35
    +72.95 (+0.56%)
     
  • Russell 2000

    2,201.05
    +0.88 (+0.04%)
     
  • Crude Oil

    61.66
    +0.16 (+0.26%)
     
  • Gold

    1,733.00
    +4.20 (+0.24%)
     
  • Silver

    26.70
    +0.26 (+0.98%)
     
  • EUR/USD

    1.2076
    -0.0110 (-0.91%)
     
  • 10-Yr Bond

    1.4600
    -0.0580 (-3.82%)
     
  • GBP/USD

    1.3937
    -0.0075 (-0.54%)
     
  • USD/JPY

    106.5500
    +0.3200 (+0.30%)
     
  • BTC-USD

    45,039.33
    -2,402.11 (-5.06%)
     
  • CMC Crypto 200

    912.88
    -20.25 (-2.17%)
     
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • Nikkei 225

    28,966.01
    -1,202.29 (-3.99%)
     

Columbia Financial, Inc. Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2020

  • Oops!
    Something went wrong.
    Please try again later.
Columbia Financial, Inc.
·41 min read
  • Oops!
    Something went wrong.
    Please try again later.

FAIR LAWN, N.J., Jan. 27, 2021 (GLOBE NEWSWIRE) -- Columbia Financial, Inc. (the “Company”) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank (the "Bank"), reported net income of $20.7 million, or $0.19 per basic and diluted share, for the quarter ended December 31, 2020, as compared to net income of $13.5 million, or $0.12 per basic and diluted share, for the quarter ended December 31, 2019. Earnings for the quarter ended December 31, 2020 reflected higher net interest income, non-interest income, and lower provision for loan losses, partially offset by higher non-interest expense and income tax expense. The increase in net interest income for the quarter ended December 31, 2020 was primarily due to a decrease in interest expense of $9.8 million, or 41.4%. During the quarter ended December 31, 2020, the reduction of the cost of funds on deposits coupled with a lower average borrowings balance contributed to the reduction in interest expense. During the quarter ended December 31, 2020, $149.6 million of Federal Home Loan Bank of New York ("FHLB") borrowings which were prepaid, and accounted for as early extinguishments of debt, resulted in a loss of $1.2 million included in non-interest expense.

For the year ended December 31, 2020, the Company reported net income of $57.6 million, or $0.52 per basic and diluted share, as compared to net income of $54.7 million, or $0.49 per basic and diluted share, for the year ended December 31, 2019. Earnings for the year ended December 31, 2020 reflected higher net interest income, partially offset by higher provision for loan losses, lower non-interest income, and higher non-interest expense and higher income tax expense.

The higher provision for losses for the year ended December 31, 2020 was primarily attributable to consideration of the deterioration of economic factors and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors, and to a lesser extent, due to an increase in charge-offs for the year. The Company elected to defer the adoption of the Current Expected Credit Loss ("CECL") methodology until December 31, 2020 as permitted by the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). In late December 2020, the Consolidated Appropriations Act, 2021 was enacted, and extended certain provisions of the CARES Act, which allowed the Company to extend the adoption of CECL until January 1, 2022. The Company expects to extend its adoption of CECL in accordance with the recent legislation.

Mr. Thomas J. Kemly, President and Chief Executive Officer commented: "In 2020, we achieved strong financial results in a year of economic uncertainty and challenges due to the pandemic, and remained committed to supporting our customers, employees and communities. Our favorable earnings reflect the strength of our balance sheet, particularly our credit quality, liquidity and capital levels. During the year, we successfully completed the system conversion related to our acquisition of Stewardship Financial Corporation ("Stewardship") and also completed the acquisition of Roselle Bank ("Roselle"). The Company has fully achieved the cost synergies anticipated by these transactions during the fourth quarter. These acquisitions contributed to a 7% growth in our assets and a 20% growth in our deposits, while we also decreased our reliance on wholesale funding, continued to transform our deposit mix, and prudently deployed excess capital by repurchasing 7.6 million shares of our common stock in 2020. Our accomplishments were achieved in part by significantly lowering our cost of funds, focusing on expense discipline throughout the year and by fast-tracking our technological operating capabilities."

Results of Operations for the Quarters Ended December 31, 2020 and December 31, 2019

Net income of $20.7 million was recorded for the quarter ended December 31, 2020, an increase of $7.1 million, or 52.4%, compared to net income of $13.5 million for the quarter ended December 31, 2019. The increase in net income was primarily attributable to a $11.2 million increase in net interest income, a $1.9 million decrease in provision for loan losses, a $1.3 million increase in non-interest income, a $4.6 million increase in non-interest expense and a $2.7 million increase in income tax expense.

Net interest income was $58.7 million for the quarter ended December 31, 2020, an increase of $11.2 million, or 23.7%, from $47.4 million for the quarter ended December 31, 2019. The increase in net interest income was primarily attributable to a $1.5 million increase in interest income, compounded by a $9.8 million decrease in interest expense. The increase in interest income for the quarter ended December 31, 2020 was largely due to increases in the average balances on loans, securities and other interest-earning assets, which was the result of internal growth and the acquisitions of Stewardship and Roselle, partially offset by decreases in the average yields on these assets. Deferred fee acceleration of $2.9 million was recognized upon the forgiveness of $144.0 million of SBA Paycheck Protection Program ("PPP") loans for the quarter ended December 31, 2020. Prepayment penalties, which are included in interest income on loans, totaled $1.8 million for the quarter ended December 31, 2020, compared to $1.0 million for the quarter ended December 31, 2019.

The average yield on loans for the quarter ended December 31, 2020 decreased 17 basis points to 3.97%, as compared to 4.14% for the quarter ended December 31, 2019, while the average yield on securities for the quarter ended December 31, 2020 decreased 43 basis points to 2.30%, as compared to 2.73% for the quarter ended December 31, 2019. The average yield on other interest-earning assets for the quarter ended December 31, 2020 decreased 419 basis points to 0.68%, as compared to 4.87% for the quarter ended December 31, 2019, as there were substantially higher cash balances in low yielding bank accounts in the 2020 period. Decreases in the average yields on these portfolios for the quarter ended December 31, 2020 were influenced by the lower interest rate environment as the Federal Reserve reduced rates by 75 basis points in the third and fourth quarters of 2019, and in response to COVID-19, reduced rates again by 150 basis points in March 2020.

Total interest expense was $13.8 million for the quarter ended December 31, 2020, a decrease of $9.8 million, or 41.4%, from $23.6 million for the quarter ended December 31, 2019. The decrease in interest expense was primarily attributable to a 70 basis point decrease in the average cost of interest-bearing deposits which was partially offset by the impact from the increase in the average balance of deposits. The decrease in the cost of deposits was driven by both an inflow of lower costing deposits and the repricing of existing deposits at lower interest rates. Interest on borrowings decreased $3.9 million due to a decrease in the average balances of Federal Home Loan Bank advances and subordinated notes, coupled with an 89 basis point decrease in the cost of total borrowings. During the quarter ended December 31, 2020, we prepaid $122.6 million of FHLB borrowings with an average rate of 2.18% and original contractual maturities through July 2021, and $27.0 million of FHLB borrowings acquired in our Roselle acquisition with an average rate of 2.65% and original contractual maturities through November 2023. The prepayments were funded by excess cash liquidity. The transactions were accounted for as early debt extinguishments resulting in a total loss of $1.2 million.

The Company's net interest margin for the quarter ended December 31, 2020 increased 22 basis points to 2.81%, when compared to 2.59% for the quarter ended December 31, 2019. The weighted average yield on interest-earning assets decreased 40 basis points to 3.47% for the quarter ended December 31, 2020 as compared to 3.87% for the quarter ended December 31, 2019. Excluding the impact of the PPP loan deferred fee acceleration for the quarter ended December 31, 2020, the net interest margin would have been 2.67%. The average cost of interest-bearing liabilities decreased 78 basis points to 0.86% for the quarter ended December 31, 2020 as compared to 1.64% for the quarter ended December 31, 2019. The decrease in yields and costs for the quarter ended December 31, 2020 were largely driven by a continued lower rate environment. The net interest margin increased for the quarter as the cost of interest-bearing liabilities continued to reprice lower more rapidly than yields on interest-earning assets.

The provision for loan losses was $627,000 for the quarter ended December 31, 2020, a decrease of $1.9 million, from $2.5 million for the quarter ended December 31, 2019. The decrease was primarily attributable to a decrease in loan balances and net charge-offs for the quarter ended December 31, 2020. Net charge-offs decreased to $2.1 million for the quarter ended December 31, 2020, as compared to $3.4 million, for the quarter ended December 31, 2019.

Non-interest income was $10.0 million for the quarter ended December 31, 2020, an increase of $1.3 million, or 14.4%, from $8.7 million for the quarter ended December 31, 2019. The increase was primarily attributable to an increase in income from the gain on the sale of loans of $1.9 million, income from bank-owned life insurance of $756,000 and an increase in the fair value of equity securities of $595,000, partially offset by a decrease in gain on securities transactions of $891,000 and loan fees and services charges of $756,000. The decrease in loan fees and service charges includes a decrease in income from swap transactions.

Non-interest expense was $40.8 million for the quarter ended December 31, 2020, an increase of $4.6 million, or 12.6%, from $36.2 million for the quarter ended December 31, 2019. The increase was primarily attributable to an increase in compensation and employee benefits expense of $1.4 million, a loss on the extinguishment of debt of $1.2 million, and an increase in other non-interest expense of $2.9 million, partially offset by a decrease in merger-related expenses of $1.6 million during the quarter. The increase in other non-interest expense includes $1.6 million related to interest rate swap transactions.

Income tax expense was $6.5 million for the quarter ended December 31, 2020, an increase of $2.7 million, as compared to $3.8 million for the quarter ended December 31, 2019, mainly due to an increase in pre-tax income, and to a lesser extent, an increase in the effective tax rate. The Company's effective tax rate was 24.1% and 22.0% for the quarters ended December 31, 2020 and 2019, respectively.

Results of Operations for the Years Ended December 31, 2020 and December 31, 2019

Net income of $57.6 million was recorded for the year ended December 31, 2020, an increase of $2.9 million, or 5.3%, compared to net income of $54.7 million for the year ended December 31, 2019. The increase in net income was primarily attributable to a $49.2 million increase in net interest income, partially offset by a $14.2 million increase in provision for loan losses, a $29.4 million increase in non-interest expense and a $2.3 million increase in income tax expense.

Net interest income was $221.6 million for the year ended December 31, 2020, an increase of $49.2 million, or 28.5%, from $172.4 million for the year ended December 31, 2019. The increase in net interest income was primarily attributable to a $34.6 million increase in interest income and a $14.6 million decrease in interest expense. The increase in interest income for the year ended December 31, 2020 was largely due to increases in the average balances on loans, securities and other interest-earning assets, which was the result of internal growth and the acquisitions of Stewardship and Roselle, partially offset by decreases in the average yields on these assets. Net deferred fee acceleration of $2.9 million was recognized upon the forgiveness and settlement of $144.0 million of SBA PPP loans for the year ended December 31, 2020. Prepayment penalties, which are included in interest income on loans, totaled $3.8 million for the year ended December 31, 2020, compared to $2.7 million for the year ended December 31, 2019.

The average yield on loans for the year ended December 31, 2020 decreased 19 basis point to 3.98%, as compared to 4.17%, for the year ended December 31, 2019, while the average yield on securities for the year ended December 31, 2020 decreased 35 basis points to 2.48%, as compared to 2.83%, for the year ended December 31, 2019. The average yield on other interest-earning assets for the year ended December 31, 2020 decreased 426 basis points to 1.60%, as compared to 5.86% for the year ended December 31, 2019. Decreases in average yields on these portfolios for the year ended December 31, 2020 were influenced by the lower interest rate environment.

Total interest expense was $74.1 million for the year ended December 31, 2020, a decrease of $14.6 million, or 16.4%, from $88.7 million for the year ended December 31, 2019. The decrease in interest expense on deposits was primarily attributable to a 45 basis point decrease in the average cost of interest-bearing deposits which was partially offset by the impact from the increase in the average balance of deposits. The decrease in the cost of deposits was driven by both an inflow of lower costing deposits and the repricing of existing deposits at a significantly reduced rate. Interest on borrowings decreased $8.3 million due to a 74 basis point decrease in the total cost of these borrowings due to the reduction of higher costing borrowings, as discussed above, and a lower interest rate environment.

The Company's net interest margin for the year ended December 31, 2020 increased 14 basis points to 2.72%, when compared to 2.58% for the year ended December 31, 2019. The weighted average yield on interest-earning assets decreased 27 basis points to 3.64% for the year ended December 31, 2020 as compared to 3.91% for the year ended December 31, 2019. The average cost of interest-bearing liabilities decreased 54 basis points to 1.17% for the year ended December 31, 2020 as compared to 1.71% for the year ended December 31, 2019. The decrease in yields and costs for the year ended December 31, 2020 were largely driven by a lower interest rate environment. The net interest margin increased for the year ended December 31, 2020 as the cost of interest-bearing liabilities repriced lower more rapidly than yields on interest-earning assets.

The provision for loan losses was $18.4 million for the year ended December 31, 2020, an increase of $14.2 million, from $4.2 million for the year ended December 31, 2019. The increase was primarily attributable to consideration of the deterioration of economic conditions and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors. Net charge-offs totaled $5.5 million for the year ended December 31, 2020, as compared to $4.9 million for the year ended December 31, 2019.

Non-interest expense was $158.1 million for the year ended December 31, 2020, an increase of $29.4 million, or 22.9%, from $128.7 million for the year ended December 31, 2019. The increase was primarily attributable to an increase in compensation and employee benefits expense of $16.4 million, occupancy expense of $3.0 million, loss on extinguishment of debt of $1.2 million, and other non-interest expense of $9.7 million. The increase in compensation and employee benefits expense was primarily attributable to an increase of $5.1 million in expense recorded in connection with grants made under the Company's 2019 Equity Incentive Plan. In addition, $3.0 million in expense was recorded in connection with the Company's previously announced voluntary early retirement program that was completed during the third quarter of 2020 and offered early retirement incentives for qualified employees. The increase in occupancy expense was primarily the result of an increase in the number of branch offices acquired from Stewardship and Roselle, and the increase in other non-interest expense was due to losses of $1.4 million recorded in connection with the branch consolidation resulting from the Stewardship merger and also includes $5.5 million related to interest rate swap transactions

Income tax expense was $18.7 million for the year ended December 31, 2020, an increase of $2.3 million, or 14.0%, as compared to $16.4 million for the year ended December 31, 2019, mainly due to an increase in pre-tax income, and to a lesser extent, an increase in the effective tax rate. The Company's effective tax rate was 24.5% and 23.0% for the years ended December 31, 2020 and 2019, respectively.

Balance Sheet Summary

Total assets increased $609.8 million, or 7.4%, to $8.8 billion at December 31, 2020 from $8.2 billion at December 31, 2019. The increase in total assets was primarily attributable to increases in cash and cash equivalents of $347.4 million, debt securities available for sale of $218.6 million, bank-owned life insurance of $21.4 million, goodwill and intangible assets of $18.8 million, and other assets of $64.1 million, partially offset by decreases of $25.8 million in Federal Home Loan Bank stock and $23.0 million in debt securities held to maturity.

Cash and cash equivalents increased $347.4 million, or 459.9%, to $423.0 million at December 31, 2020 from $75.5 million at December 31, 2019. The increase was primarily attributable to $155.2 million in cash acquired in the Roselle acquisition, an increase in repayments on loans, and strong growth in deposits, partially offset by $108.2 million in repurchases of common stock under our stock repurchase program.

Debt securities available for sale increased $218.6 million, or 19.9%, to $1.3 billion at December 31, 2020 from $1.1 billion at December 31, 2019. The increase was attributable to $51.5 million of investments acquired in the Roselle acquisition, purchases of $292.8 million of securities primarily consisting of mortgage-backed securities, and $117.3 million purchases of guarantor swaps with Freddie Mac, partially offset by maturities and calls of $22.5 million in U.S. agency obligations and municipal securities, repayments of $225.4 million, and sales of $20.8 million. The gross unrealized gain on debt securities available for sale increased by $27.2 million during the year ended December 31, 2020.

Loans receivable, net, decreased $28.8 million, or 0.5%, to $6.11 billion at December 31, 2020 from $6.14 billion at December 31, 2019. One-to-four family real estate loans, multifamily and commercial real estate loans and home equity loans and advances decreased $136.8 million, $102.0 million, and $67.0 million, respectively, partially offset by increases in construction loans and commercial business loans of $29.8 million and $269.7 million, respectively. The 2020 period included $171.6 million of loans which were acquired due to the Roselle acquisition, which mainly consisted of one-to-four family real estate loans. A significant portion of the increase in commercial business loans included loans granted as part of the SBA PPP, which totaled $344.4 million at December 31, 2020. The allowance for loan loss balance increased $13.0 million to $74.7 million at December 31, 2020 from $61.7 million at December 31, 2019, which was primarily attributable to consideration of the deterioration of economic conditions and loan performance due to the ongoing COVID-19 pandemic resulting from increases in qualitative factors. The current allowance for loan losses was calculated using the existing incurred loss methodology.

Bank-owned life insurance increased $21.4 million, or 10.1%, to $232.8 million at December 31, 2020 from $211.4 million at December 31, 2019. The increase was primarily attributable to $17.2 million acquired in connection with the Roselle acquisition.

Goodwill and intangible assets increased $18.8 million, or 27.4%, to $87.4 million at December 31, 2020 from $68.6 million at December 31, 2019. The increase was primarily attributable to $18.7 million in goodwill recorded in connection with the Roselle acquisition.

Other assets increased $64.1 million, or 44.0%, to $209.9 million at December 31, 2020 from $145.7 million at December 31, 2019. The increase is other assets consisted of a $19.0 million balance of a right-of-use asset recognized in connection with the adoption of Accounting Standards Update 2016-02-Leases ("ASU 2016-02"), a $22.9 million increase in the collateral balance related to our swap agreement obligations, and a $13.2 million increase in interest rate swap fair value adjustments.

Total liabilities increased $581.1 million, or 8.1%, to $7.8 billion at December 31, 2020 from $7.2 billion at December 31, 2019. The increase was primarily attributable to an increase in total deposits of $1.1 billion, or 20.1%, and an increase in accrued expenses and other liabilities of $58.9 million, or 50.0%, partially offset by a decrease in borrowings of $607.7 million, or 43.2%. The increase in total deposits was partially driven by $333.2 million in deposits assumed in connection with the Roselle acquisition. Non-interest bearing and interest-bearing demand deposits increased $396.2 million and $468.8 million, respectively. The increase in accrued expenses and other liabilities consisted of a $20.1 million lease liability recognized in connection with the adoption of ASU 2016-02, and a $24.2 million increase in interest rate swap liabilities. The decrease in borrowings was primarily driven by maturing long-term borrowings of $194.3 million, a net decrease in short-term borrowings of $372.8 million, the prepayment of $149.6 million of FHLB borrowings and a payoff of $16.6 million of subordinated notes, partially offset by new long-term borrowings of $90.0 million and $37.7 million in borrowings assumed from Roselle.

Total stockholders’ equity increased $28.8 million, or 2.9%, to $1.0 billion at December 31, 2020 from $982.5 million at December 31, 2019. The net increase was primarily attributable to net income of $57.6 million, an increase in additional paid in capital of $68.5 million due to the issuance of 4,759,048 shares of Company common stock to Columbia Bank MHC in connection with the Roselle acquisition, and improved fair values on debt securities within our available for sale portfolio of $27.2 million, partially offset by the repurchase of 7,587,142 shares of common stock totaling $108.2 million under our stock repurchase program and the increase in the funded status of the retirement plan obligations of $14.2 million.

Asset Quality

The Company's non-performing loans at December 31, 2020 totaled $8.2 million, or 0.13% of total gross loans, as compared to $6.7 million, or 0.11% of total gross loans, at December 31, 2019. The $1.5 million increase in non-performing loans was primarily attributable to increases of $904,000 in non-performing one-to-four family real estate loans and $1.2 million in non-performing multifamily and commercial real estate loans, partially offset by a $718,000 decrease in non-performing commercial business loans. The increase in non-performing one-to-four family real estate loans was due to an increase in the number of loans from 10 non-performing loans at December 31, 2019 to 13 non-performing loans at December 31, 2020. The increase in non-performing multifamily and commercial real estate loans was due to two higher balance loans included at December 31, 2020, despite a decrease in the number of loans from 8 non-performing loans at December 31, 2019 to 4 non-performing loans at December 31, 2020. Non-performing assets as a percentage of total assets totaled 0.09% at December 31, 2020 as compared to 0.08% at December 31, 2019.

For the quarter ended December 31, 2020, net charge-offs totaled $2.1 million as compared to $3.4 million for the quarter ended December 31, 2019. For the year ended December 31, 2020, net charge-offs totaled $5.5 million as compared to $4.9 million for the year ended December 31, 2019. The increase in net charge-offs for the year ended December 31, 2020 included a $2.8 million charge-off of one commercial business loan.

The Company's allowance for loan losses was $74.7 million, or 1.21% of total loans, at December 31, 2020, compared to $61.7 million, or 1.00% of total loans, at December 31, 2019. The increase in the allowance for loan losses was primarily attributable to consideration of economic conditions and loan performance due to the ongoing COVID-19 pandemic which resulted in increase to qualitative factors.

Stock Repurchase Program

During the year ended December 31, 2020, the Company repurchased 7,587,142 shares of common stock at a cost of $108.2 million, or $14.26 per share. This includes 4,130,942 shares repurchased at a cost of $54.8 million, or $13.27 per share, under the second stock repurchase program announced on September 10, 2020. As of January 22, 2021, there are 353,128 shares remaining to be purchased under this existing program.

COVID-19

Through December 31, 2020, the Company granted commercial loan modification requests with respect to multifamily, commercial, and construction real estate loans with current balances of $735.1 million and consumer-related loan modification requests with respect to one-to-four family real estate loans and home equity loans and advances with current balances of $180.2 million to our customers affected by the COVID-19 pandemic. These short-term loan modifications are being treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears at December 31, 2019. Furthermore, based on current evaluations, generally, we have continued the accrual of interest on these loans during the short-term modification period. The Consolidated Appropriations Act, 2021 ("CAA"), which was enacted in late December 2020, extended certain provisions of the CARES Act, including provisions permitting loan deferral extension requests to not be treated as troubled debt restructurings. Commercial loan modification requests include various industries and property types. The following table is a summary of loan modifications that have not begun to remit full payment:

Balance at
December 31, 2020

Percent of Total
Loans at December
31, 2020

Balance at
January 22, 2021

Percent of Total
Loans at January
22, 2021

Real estate loans:

One-to-four family

$

6,770

0.35

%

$

6,488

0.34

%

Multifamily and commercial

71,348

2.53

54,418

1.93

Construction

3,312

1.01

3,337

1.04

Commercial business loans

3,397

0.45

3,395

0.47

Consumer loans:

Home equity loans and advances

314

0.10

145

0.05

Total loans

$

85,141

1.38

%

$

67,783

1.11

%

At December 31, 2020, $65.8 million of the commercial loans in the above table are remitting partial payments and $29.6 million were granted an additional deferral period, of which all are remitting payments.

Through December 31, 2020, the Company originated 2,438 loans for $488.8 million under the SBA Paycheck Protection Program. Borrowers began filing applications for forgiveness during the third and fourth quarters of 2020. Through December 31, 2020, $144.0 million of these applications have been approved, and $2.9 million of deferred fees were accelerated and recognized in income for the quarter ended December 31, 2020.

Annual Meeting of Stockholders

On January 27, 2021, the Company also announced that its annual meeting of stockholders will be held on May 20, 2021.

About Columbia Financial, Inc.

The consolidated financial results include the accounts of Columbia Financial, Inc. its wholly-owned subsidiary Columbia Bank (the "Bank") and the Bank's wholly-owned subsidiaries. Columbia Financial, Inc. is a Delaware corporation organized as Columbia Bank's mid-tier stock holding company. Columbia Financial, Inc. is a majority-owned subsidiary of Columbia Bank, MHC. Columbia Bank is a federally chartered savings bank headquartered in Fair Lawn, New Jersey. The Bank offers traditional financial services to consumers and businesses in our market areas. We currently operate 61 full-service banking offices.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “projects,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which the Company operates, including changes that adversely affect a borrowers’ ability to service and repay the Company’s loans; the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; changes in the value of securities in the Company’s portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and securities; legislative changes and changes in government regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s consolidated financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy or its integration of acquired financial institutions and businesses; and changes in assumptions used in making such forward-looking statements which are subject to numerous risks and uncertainties, including but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K as supplemented by its Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods presented. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

The Company also provides measurements and ratios based on tangible stockholders' equity. These measures are commonly utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

A reconciliation of GAAP to non-GAAP financial measures are included at the end of this press release. See "Reconciliation of GAAP to Non-GAAP Financial Measures".

Contact:
Tony Rose

1st Senior Vice President/Marketing Director
201-794-5828


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(In thousands)

December 31,

2020

2019

Assets

(Unaudited)

Cash and due from banks

$

422,787

$

75,420

Short-term investments

170

127

Total cash and cash equivalents

422,957

75,547

Debt securities available for sale, at fair value

1,316,952

1,098,336

Debt securities held to maturity, at amortized cost (fair value of $277,091, and $289,505 at December 31, 2020 and 2019, respectively)

262,720

285,756

Equity securities, at fair value

5,418

2,855

Federal Home Loan Bank stock

43,759

69,579

Loans held-for-sale, at fair value

4,146

Loans receivable

6,181,770

6,197,566

Less: allowance for loan losses

74,676

61,709

Loans receivable, net

6,107,094

6,135,857

Accrued interest receivable

29,456

22,092

Real estate owned

Office properties and equipment, net

75,974

72,967

Bank-owned life insurance

232,824

211,415

Goodwill and intangible assets

87,384

68,582

Other assets

209,852

145,708

Total assets

$

8,798,536

$

8,188,694

Liabilities and Stockholders' Equity

Liabilities:

Deposits

$

6,778,624

$

5,645,842

Borrowings

799,364

1,407,022

Advance payments by borrowers for taxes and insurance

32,570

35,507

Accrued expenses and other liabilities

176,691

117,806

Total liabilities

7,787,249

7,206,177

Stockholders' equity:

Total stockholders' equity

1,011,287

982,517

Total liabilities and stockholders' equity

$

8,798,536

$

8,188,694

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except share and per share data)

Three Months Ended
December 31,

Year Ended December 31,

2020

2019

2020

2019

Interest income:

(Unaudited)

(Unaudited)

Loans receivable

$

62,725

$

60,211

$

255,236

$

217,774

Debt securities available for sale and equity securities

6,722

7,643

28,376

30,938

Debt securities held to maturity

2,218

2,090

8,025

8,180

Federal funds and interest-earning deposits

126

189

413

594

Federal Home Loan Bank stock dividends

710

893

3,661

3,597

Total interest income

72,501

71,026

295,711

261,083

Interest expense:

Deposits

10,677

16,567

55,246

61,551

Borrowings

3,148

7,031

18,892

27,161

Total interest expense

13,825

23,598

74,138

88,712

Net interest income

58,676

47,428

221,573

172,371

Provision for loan losses

627

2,519

18,447

4,224

Net interest income after provision for loan losses

58,049

44,909

203,126

168,147

Non-interest income:

Demand deposit account fees

927

1,362

3,633

4,478

Bank-owned life insurance

2,153

1,397

6,620

5,846

Title insurance fees

1,589

1,491

5,034

4,981

Loan fees and service charges

593

1,349

2,419

6,707

Gain on securities transactions

891

370

2,612

Change in fair value of equity securities

712

117

767

305

Gain on sale of loans

2,022

75

5,444

785

Other non-interest income

1,966

2,027

6,983

5,922

Total non-interest income

9,962

8,709

31,270

31,636

Non-interest expense:

Compensation and employee benefits

24,338

22,971

100,687

84,256

Occupancy

4,851

4,552

19,170

16,180

Federal deposit insurance premiums

551

(32

)

1,901

895

Advertising

566

621

2,641

3,932

Professional fees

1,681

1,694

5,810

5,913

Data processing

922

1,036

3,342

3,001

Merger-related expenses

1,553

1,931

2,755

Loss on extinguishment of debt

1,158

1,158

Other non-interest expense

6,743

3,842

21,499

11,769

Total non-interest expense

40,810

36,237

158,139

128,701

Income before income tax expense

27,201

17,381

76,257

71,082

Income tax expense

6,547

3,832

18,654

16,365

Net income

$

20,654

$

13,549

$

57,603

$

54,717

Earnings per share-basic and diluted

$

0.19

$

0.12

$

0.52

$

0.49

Weighted average shares outstanding-basic and diluted

108,499,658

109,958,999

109,755,924

111,101,246

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields

For the Three Months Ended December 31,

2020

2019

Average
Balance

Interest and
Dividends

Yield / Cost

Average
Balance

Interest and
Dividends

Yield / Cost

(Dollars in thousands)

Interest-earnings assets:

Loans

$

6,282,151

$

62,725

3.97

%

$

5,774,359

$

60,211

4.14

%

Securities

1,546,657

8,940

2.30

%

1,415,495

9,733

2.73

%

Other interest-earning assets

489,880

836

0.68

%

88,081

1,082

4.87

%

Total interest-earning assets

8,318,688

72,501

3.47

%

7,277,935

71,026

3.87

%

Non-interest-earning assets

600,226

499,408

Total assets

$

8,918,914

$

7,777,343

Interest-bearing liabilities:

Interest-bearing demand

$

2,142,190

$

2,373

0.44

%

$

1,613,885

$

4,484

1.10

%

Money market accounts

613,871

603

0.39

%

362,205

792

0.87

%

Savings and club deposits

670,737

269

0.16

%

513,667

198

0.15

%

Certificates of deposit

2,004,074

7,432

1.48

%

1,962,822

11,093

2.24

%

Total interest-bearing deposits

5,430,872

10,677

0.78

%

4,452,579

16,567

1.48

%

FHLB advances

942,644

3,082

1.30

%

1,246,444

6,853

2.18

%

Subordinated notes

%

11,434

113

3.92

%

Junior subordinated debentures

8,369

66

3.14

%

4,970

65

5.19

%

Total borrowings

951,013

3,148

1.32

%

1,262,848

7,031

2.21

%

Total interest-bearing liabilities

6,381,885

$

13,825

0.86

%

5,715,427

$

23,598

1.64

%

Non-interest-bearing liabilities:

Non-interest-bearing deposits

1,326,030

911,990

Other non-interest-bearing liabilities

207,409

156,637

Total liabilities

7,915,324

6,784,054

Total stockholders' equity

1,003,590

993,289

Total liabilities and stockholders' equity

$

8,918,914

$

7,777,343

Net interest income

$

58,676

$

47,428

Interest rate spread

2.61

%

2.23

%

Net interest-earning assets

$

1,936,803

$

1,562,508

Net interest margin

2.81

%

2.59

%

Ratio of interest-earning assets to interest-bearing liabilities

130.35

%

127.34

%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields

For the Year Ended December 31,

2020

2019

Average
Balance

Interest and
Dividends

Yield / Cost

Average
Balance

Interest and
Dividends

Yield / Cost

(Dollars in thousands)

Interest-earnings assets:

Loans

$

6,413,559

$

255,236

3.98

%

$

5,222,953

$

217,774

4.17

%

Securities

1,465,093

36,401

2.48

%

1,380,801

39,118

2.83

%

Other interest-earning assets

255,369

4,074

1.60

%

71,551

4,191

5.86

%

Total interest-earning assets

8,134,021

$

295,711

3.64

%

6,675,305

$

261,083

3.91

%

Non-interest-earning assets

610,952

411,549

Total assets

$

8,744,973

$

7,086,854

Interest-bearing liabilities:

Interest-bearing demand

$

1,945,075

$

12,666

0.65

%

$

1,420,667

$

17,621

1.24

%

Money market accounts

510,189

2,890

0.57

%

286,281

2,301

0.80

%

Savings and club deposits

623,964

1,023

0.16

%

495,261

770

0.16

%

Certificates of deposit

2,088,488

38,667

1.85

%

1,842,243

40,859

2.22

%

Total interest-bearing deposits

5,167,716

55,246

1.07

%

4,044,452

61,551

1.52

%

FHLB advances

1,122,633

18,145

1.62

%

1,133,280

26,983

2.38

%

Subordinated notes

11,067

448

4.05

%

2,881

113

3.92

%

Junior subordinated debentures

8,481

295

3.48

%

1,253

65

5.19

%

Other borrowings

1,913

4

0.21

%

%

Total borrowings

1,144,094

18,892

1.65

%

1,137,414

27,161

2.39

%

Total interest-bearing liabilities

6,311,810

$

74,138

1.17

%

5,181,866

$

88,712

1.71

%

Non-interest-bearing liabilities:

Non-interest-bearing deposits

1,215,352

776,850

Other non-interest-bearing liabilities

201,714

133,213

Total liabilities

7,728,876

6,091,929

Total stockholders' equity

1,016,097

994,925

Total liabilities and stockholders' equity

$

8,744,973

$

7,086,854

Net interest income

$

221,573

$

172,371

Interest rate spread

2.47

%

2.20

%

Net interest-earning assets

$

1,822,211

$

1,493,439

Net interest margin

2.72

%

2.58

%

Ratio of interest-earning assets to interest-bearing liabilities

128.87

%

128.82

%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Components of Net Interest Rate Spread and Margin

Average Yields/Costs by Quarter

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Yield on interest-earning assets:

Loans

3.97

%

3.85

%

3.96

%

4.15

%

4.14

%

Securities

2.30

2.38

2.56

2.72

2.73

Other interest-earning assets

0.68

1.26

2.95

5.06

4.87

Total interest-earning assets

3.47

%

3.50

%

3.69

%

3.91

%

3.87

%

Cost of interest-bearing liabilities:

Total interest-bearing deposits

0.78

%

0.96

%

1.15

%

1.43

%

1.48

%

Total borrowings

1.32

1.41

1.66

2.07

2.21

Total interest-earning liabilities

0.86

%

1.04

%

1.25

%

1.58

%

1.64

%

Interest rate spread

2.61

%

2.46

%

2.44

%

2.33

%

2.23

%

Net interest margin

2.81

%

2.70

%

2.73

%

2.65

%

2.59

%

Ratio of interest-earning assets to interest-bearing liabilities

130.35

%

130.13

%

129.35

%

125.49

%

127.34

%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Selected Financial Highlights

Three Months
Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

SELECTED FINANCIAL RATIOS (1):

Return on average assets

0.92

%

0.69

%

0.66

%

0.77

%

Core return on average assets

0.97

%

0.72

%

0.72

%

0.77

%

Return on average equity

8.19

%

5.41

%

5.67

%

5.50

%

Core return on average equity

8.60

%

5.62

%

6.17

%

5.51

%

Interest rate spread

2.61

%

2.23

%

2.47

%

2.20

%

Net interest margin

2.81

%

2.59

%

2.72

%

2.58

%

Non-interest expense to average assets

1.82

%

1.85

%

1.81

%

1.82

%

Efficiency ratio

59.46

%

64.55

%

62.54

%

63.09

%

Core efficiency ratio

57.42

%

62.78

%

59.65

%

62.54

%

Average interest-earning assets to average interest-bearing liabilities

130.35

%

127.34

%

128.87

%

128.82

%

Net charge-offs to average outstanding loans

0.13

%

0.24

%

0.09

%

0.09

%

(1) Ratios for the three months are annualized when appropriate.


CAPITAL RATIOS:

December 31,

2020

2019

Company:

Total capital (to risk-weighted assets)

18.54

%

17.25

%

Tier 1 capital (to risk-weighted assets)

17.29

%

16.05

%

Common equity tier 1 capital (to risk-weighted assets)

17.17

%

15.94

%

Tier 1 capital (to adjusted total assets)

11.38

%

12.92

%

Bank:

Total capital (to risk-weighted assets)

16.05

%

14.25

%

Tier 1 capital (to risk-weighted assets)

14.80

%

13.21

%

Common equity tier 1 capital (to risk-weighted assets)

14.80

%

13.21

%

Tier 1 capital (to adjusted total assets)

9.72

%

10.25

%


ASSET QUALITY:

December 31,

2020

2019

(Dollars in thousands)

Non-accrual loans

$

8,156

$

6,687

90+ and still accruing

Non-performing loans

8,156

6,687

Real estate owned

Total non-performing assets

$

8,156

$

6,687

Non-performing loans to total gross loans

0.13

%

0.11

%

Non-performing assets to total assets

0.09

%

0.08

%

Allowance for loan losses

$

74,676

$

61,709

Allowance for loan losses to total non-performing loans

915.60

%

922.82

%

Allowance for loan losses to gross loans

1.21

%

1.00

%

Allowance for loan losses to gross loans, excluding SBA PPP loans

1.28

%

%

Unamortized purchase accounting fair value credit marks on acquired loans

$

6,486

$

6,955


LOAN DATA:

December 31,

2020

2019

Real estate loans:

(In thousands)

One-to-four family

$

1,940,327

$

2,077,079

Multifamily and commercial

2,817,965

2,919,985

Construction

328,711

298,942

Commercial business loans*

752,870

483,215

Consumer loans:

Home equity loans and advances

321,177

388,127

Other consumer loans

1,497

1,960

Total gross loans

6,162,547

6,169,308

Purchased credit-impaired ("PCI") loans

6,345

7,021

Net deferred loan costs, fees and purchased premiums and discounts**

12,878

21,237

Allowance for loan losses

(74,676

)

(61,709

)

Loans receivable, net

$

6,107,094

$

6,135,857

*At December 31, 2020 includes SBA PPP loans totaling $344.4 million.

**At December 31, 2020 includes SBA PPP net deferred loan fees totaling $6.6 million.


Reconciliation of GAAP to Non-GAAP Financial Measures

Book and Tangible Book Value per Share

December 31,

2020

2019

Total stockholders' equity

$

1,011,287

$

982,517

Less: goodwill

(80,285

)

(60,763

)

Less: core deposit intangible

(6,197

)

(7,245

)

Total tangible stockholders' equity

$

924,805

$

914,509

Shares outstanding

110,939,753

113,765,387

Book value per share

$

9.12

$

8.64

Tangible book value per share

$

8.34

$

8.04

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

Reconciliation of Core Net Income

Three Months Ended
December 31,

Year Ended December 31,

2020

2019

2020

2019

(In thousands)

Net income

$

20,654

$

13,549

$

57,603

$

54,717

Less: gain on securities transactions, net of tax

(695

)

(279

)

(2,006

)

Add: voluntary early retirement plan expenses, net of tax

(18

)

2,255

Add: merger-related expenses, net of tax

1,229

1,500

2,162

Add: loss on extinguishment of debt

879

879

Add: branch closure expense, net of tax

197

1,075

Core net income

$

21,712

$

14,083

$

63,033

$

54,873


Return on Average Assets

Three Months Ended
December 31,

Year Ended December 31,

2020

2019

2020

2019

(Dollars in thousands)

Net income

$

20,654

$

13,549

$

57,603

$

54,717

Average assets

$

8,918,914

$

7,777,343

$

8,744,973

$

7,086,854

Return on average assets

0.92

%

0.69

%

0.66

%

0.77

%

Core net income

$

21,712

$

14,083

$

63,033

$

54,873

Core return on average assets

0.97

%

0.72

%

0.72

%

0.77

%


Return on Average Equity

Three Months Ended
December 31,

Year Ended December 31,

2020

2019

2020

2019

(Dollars in thousands)

Total average stockholders' equity

$

1,003,590

$

993,289

$

1,016,097

$

994,925

Less: gain on securities transactions, net of tax

(695

)

(279

)

(2,006

)

Add: voluntary early retirement plan expenses, net of tax (benefit)

(18

)

2,255

Add: merger-related expenses, net of tax

1,229

1,500

2,162

Add: loss on extinguishment of debt, net of tax

879

879

Add: branch closure expenses, net of tax

197

1,075

Core average stockholders' equity

$

1,004,648

$

993,823

$

1,021,527

$

995,081

Return on average equity

8.19

%

5.41

%

5.67

%

5.50

%

Core return on core average equity

8.60

%

5.62

%

6.17

%

5.51

%


Efficiency Ratios

Three Months Ended
December 31,

Year Ended December 31,

2020

2019

2020

2019

(Dollars in thousands)

Net interest income

$

58,676

$

47,428

$

221,573

$

172,371

Non-interest income

9,962

8,709

31,270

31,636

Total income

$

68,638

$

56,137

$

252,843

$

204,007

Non-interest expense

$

40,810

$

36,237

$

158,139

$

128,701

Efficiency ratio

59.46

%

64.55

%

62.54

%

63.09

%

Non-interest income

$

9,962

$

8,709

$

31,270

$

31,636

Less: gain on securities transactions

(891

)

(370

)

(2,612

)

Core non-interest income

$

9,962

$

7,818

$

30,900

$

29,024

Non-interest expense

$

40,810

$

36,237

$

158,139

$

128,701

Less: voluntary early retirement plan expenses

24

(3,018

)

Less: merger-related expenses

(1,553

)

$

(1,931

)

(2,755

)

Less: loss on extinguishment of debt

(1,158

)

(1,158

)

Less: branch closure expenses

(264

)

(1,434

)

Core non-interest expense

$

39,412

$

34,684

$

150,598

$

125,946

Core efficiency ratio

57.42

%

62.78

%

59.65

%

62.54

%