PCSB Financial Corporation Announces Fourth Fiscal Quarter and Year End Financial Results and Declares Quarterly Cash Dividend
YORKTOWN HEIGHTS, N.Y., Aug. 05, 2021 (GLOBE NEWSWIRE) -- PCSB Financial Corporation (the “Company”) (NASDAQ: PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $3.4 million, or $0.23 per diluted share, for the three months ended June 30, 2021, compared to $3.6 million, or $0.25 per diluted share, for the three months ended March 31, 2021 and $3.0 million, or $0.19 per diluted share, for the three months ended June 30, 2020. Net income was $12.4 million, or $0.84 per diluted share, for the year ended June 30, 2021, compared to $9.4 million, or $0.60 per diluted share, for the year ended June 30, 2020.
Results for the year ended June 30, 2021 include a benefit for loan losses of $673,000, or $0.04 per diluted share, net of tax, which includes the release of the qualitative reserves established in the prior fiscal year associated with the COVID-19 pandemic. The prior year results include a provision for loan losses of $3.1 million, or $0.15 per diluted share, net of tax, for the year ended June 30, 2020, of which $1.9 million, or $0.10 per diluted share, net of tax, related to the establishment of these qualitative reserves. Substantially all of these qualitative reserves have been released as of June 30, 2021.
On July 28, 2021, the Board of Directors declared a regular quarterly cash dividend of $0.06 per share. The dividend is payable on or about September 3, 2021 to shareholders of record as of the close of business on August 20, 2021.
Fourth Quarter and Year End Highlights
Earnings before income tax expense and provision for loan losses of $4.3 million for the current quarter increased 17.1% from the linked quarter and 4.4% from the same quarter last year. Earnings before income tax expense and provision for loan losses of $15.1 million for the current year was unchanged from the prior year.
Net interest income of $12.6 million for the current quarter increased 8.1% from the linked quarter and 9.8% from the same quarter last year. Net interest income of $47.3 million for the current year increased 1.4% from the prior year.
Tax equivalent net interest margin was 2.81% for the current quarter, an increase from 2.69% in the linked quarter and 2.73% for the same quarter last year. Tax equivalent net interest margin was 2.73% for the current year, a decrease from 2.89% in the prior year.
The average cost of interest-bearing deposits was 0.48% for the current quarter, a decrease from 0.59% in the linked quarter and 0.97% for the same quarter last year. The average cost of interest-bearing deposit was 0.64% for the current year, a decrease from 1.14% in the prior year.
The efficiency ratio was 67.43% for the current quarter compared to 70.10% for the linked quarter and 67.53% for the prior year quarter. The efficiency ratio was 69.73% for the current year compared to 69.62% in the prior year.
Average loans receivable, excluding SBA Paycheck Protection Program (“PPP”) loans, of $1.20 billion for the current quarter, a decrease from $1.23 billion in the same quarter last year.
Average deposits of $1.48 billion for the current quarter, increases of 5.8% and 10.1% compared to the linked quarter and same quarter last year, respectively.
Allowance for loan losses to total net loans receivable (excluding PPP loans) of 0.66% as of June 30, 2021, a decrease from 0.71% as of June 30, 2020.
Non-performing loans of $5.8 million, or 0.48% of total net loans receivable (excluding PPP loans), as of June 30, 2021, compared to 0.17% as of March 31, 2021 and 0.15% as of June 30, 2020. The increase in the current quarter was the result of one commercial mortgage with an LTV of 53.9% upon origination being placed on nonaccrual status.
Loans on a COVID-19 related payment deferral totaled $27.3 million, or 2.21% of gross loans, compared to $34.4 million, or 2.71% of gross loans as of March 31, 2021. Loans on deferral totaling $12.5 million, $1.3 million and $13.5 million are scheduled to resume payments in the next three consecutive quarters, respectively.
President’s Comments
Joseph D. Roberto, Chairman, President & Chief Executive Officer of PCSB Financial Corporation, commented, “We are pleased with the Company’s solid operating and financial results for the fourth quarter and year ended June 30, 2021. I am proud of what our team achieved over the past 12 months during a time of disruption and uncertainty presented by the pandemic, especially during the first half of our fiscal year. Our employees came together and provided vital support to our communities during this difficult period. That support included participation in the PPP program, loan payment deferrals, loan modifications and fee waivers. All of this was accomplished while adjusting to a new work environment and all the challenges that it presented operationally. As the economy continues to improve, PCSB with strong liquidity and capital is well positioned to build on these results in fiscal 2022 and continue to create value for our shareholders.”
Income Statement Summary
Net income for the three months ended June 30, 2021 was $3.4 million, a $182,000 decrease from the linked quarter and a $450,000 increase from the prior year period. The change from the linked quarter is primarily due to an $899,000 increase in the provision for loan losses, a $295,000 increase in noninterest expense and a $24,000 decrease in noninterest income, partially offset by a $944,000 increase in net interest income and a $92,000 decrease in income tax expense. The change from the prior year period is primarily due to a $1.1 million increase in net interest income and a $304,000 decrease in provision for loan losses, partially offset by a $609,000 decrease in noninterest income, a $334,000 increase in noninterest expense, and a $33,000 increase in income tax expense.
Net interest income was $12.6 million for the quarter ended June 30, 2021, increases of $944,000 and $1.1 million, or 8.1% and 9.8%, compared to the linked quarter and prior year quarter, respectively. The increase compared to the linked quarter is primarily the result of a $65.4 million, or 3.8%, increase in average interest-earning assets and a 12 basis point increase in the tax equivalent net interest margin. The increase in net interest income compared to the prior year period is primarily the result of a $115.7 million, or 6.9%, increase in average interest-earning assets and an 8 basis point increase in the tax equivalent net interest margin.
The tax equivalent net interest margin was 2.81% for the current quarter, reflecting increases of 12 basis points compared to 2.69% in the linked quarter and 8 basis points compared to 2.73% in the prior year quarter. Adjusted net interest margin, which excludes the effect of PPP loans, was 2.68% for the current quarter compared to 2.62% in the linked quarter and 2.68% in the prior year quarter. Adjusted net interest margin was 2.65% for the current year compared to 2.88% in the prior year. Adjusted margin for the current quarter is unchanged compared to the prior year quarter as pressures on asset yields, driven by lower market interest rates and significant increases in cash liquidity, were offset by a reduction in the cost of funds. The increase in adjusted margin compared to the linked quarter is the result of a stable yield on assets and the continued decrease in the average cost of funds.
The Company recognized PPP loan interest and origination fee income (net of costs) of $516,000 in the current quarter, compared to $279,000 in the linked quarter and $172,000 in the prior year quarter. PPP loan interest and origination fee income (net of costs) totaled $1.2 million for the current year compared to $172,000 in the prior year. Unearned origination fees (net of costs) on PPP loans totaled $1.0 million as of June 30, 2021 and will be recognized in income over the remaining lives of the loans and the timing of such income is largely dependent on the timing of forgiveness.
Tax equivalent yield on interest-earning assets for the current quarter was 3.26%, a 3 basis point increase from the prior quarter and a 27 basis point decrease from the prior year quarter. The increase in asset yield compared to the linked quarter was a result of $610,000 in loan prepayment fees as well as the deployment of excess cash liquidity into investment securities. The decrease in yield compared to the prior year quarter is a result of decreases in market interest rates, lower average loan balances due to muted origination activity, the origination of lower yielding PPP loans, and significant increases in liquidity over the last twelve months. The rate of asset yield decrease (excluding the effects of PPP income) has slowed in recent quarters due to a more stable yield curve and earning asset composition.
The cost of interest-bearing deposits was 0.48% for the current quarter, decreases of 11 basis points and 49 basis points from 0.59% and 0.97% in the prior quarter and prior year quarter, respectively. In response to the significant decrease in market interest rates in March 2020, deposit rate reductions have been implemented throughout the last year, the effects of which continue to be realized. As of quarter end, the weighted average cost of interest-bearing deposits was 0.42%. The cost of interest-bearing liabilities was 0.59% for the current quarter, decreases of 11 basis points from 0.70% in the prior quarter and 46 basis points from 1.05% in the prior year quarter. During fiscal year 2022, the Company has $27.5 million of wholesale funding maturing, comprised of FHLB advances and brokered time deposits, with a weighted average cost of 2.43%.
The provision for loan losses was $5,000 for the three months ended June 30, 2021 compared to a benefit for loan losses of $894,000 for the linked quarter and a provision for loan losses of $309,000 for the prior year quarter. Included in the linked quarter was a benefit for loan losses associated with the release of qualitative reserves established in the prior fiscal year in response to the COVID-19 pandemic. Loans on a COVID-19 related payment deferral totaled $27.3 million, or 2.21% of gross loans, as of June 30, 2021, compared to $34.4 million, or 2.71% of the gross loans, as of March 31, 2021. Recoveries, net of charge-offs, were $11,000 for the three months ended June 30, 2021 compared to $82,000 for the linked quarter and charge-offs, net of recoveries, of $17,000 for the prior year quarter. Non-performing loans as a percent of total loans receivable (excluding PPP loans) was 0.48% as of June 30, 2021, an increase from 0.17% as of March 31, 2021 and 0.15% as of June 30, 2020. The increase in non-performing loans for the current quarter relates to one non-owner-occupied commercial mortgage loan with an outstanding principal balance of $3.6 million at June 30, 2021. The loan has been granted a principal and interest payment deferral through January 2022 and has a loan-to-value ratio of 53.9% based on the collateral value upon origination.
The table below provides additional detail for those loans on deferral as of June 30, 2021 (dollar amounts in thousands):
Industry Sector: | Number of | Recorded | % secured by | Loan-to- | Weighted | |||||
Consumer (1) | 7 | $ | 3,147 | 100.0 | % | 57.5 | % | 0.3 | ||
Commercial: | ||||||||||
Retail | 3 | 11,591 | 100.0 | 48.7 | 4.8 | |||||
Hotels and accommodation services | 2 | 7,648 | 100.0 | 55.6 | 0.6 | |||||
Food service | 2 | 3,018 | 100.0 | 59.8 | 6.1 | |||||
All other commercial | 5 | 1,903 | 89.2 | 70.0 | 2.2 | |||||
Total commercial | 12 | 24,160 | 99.2 | 57.8 | 3.9 | |||||
Total | 19 | $ | 27,307 | 99.2 | % | 57.7 | % | 3.5 | ||
(1) Includes first and second lien residential mortgages of $2.9 million and $294,000, respectively. | ||||||||||
(2) Includes loans classified as special mention and substandard of $1.7 million and $14.2 million, respectively. | ||||||||||
(3) Includes $3.6 million of nonaccrual loans. All loans are considered current. | ||||||||||
(4) Generally based on collateral values upon origination. | ||||||||||
Noninterest income of $568,000 for the three months ended June 30, 2021 decreased $24,000 compared to the linked quarter and $609,000 compared to the prior year quarter. The decrease compared to the linked quarter was primarily due to a decrease of $113,000 in gains on sale of securities, partially offset by increases of $48,000 in bank-owned life insurance income and $37,000 in fees and service charges. The decrease compared to the prior year quarter was primarily due to a decrease of $814,000 in swap income, partially offset by increases of $163,000 in fees and service charges and $39,000 in bank-owned life insurance income. The increase in fees and service charges compared to the prior year quarter was the result of our waiver in the prior year of certain overdraft fees, ATM usage fees, wire and CD early withdrawal fees in response to COVID-19.
Noninterest expense of $8.9 million for the three months ended June 30, 2021 increased $295,000 compared to the linked quarter and $334,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to increases of $200,000 in salaries and benefits and $186,000 in New York State franchise taxes associated with tax legislation enacted during the quarter, partially offset by a $91,000 net decrease in all other expenses. The increase compared to the prior year quarter was primarily due to increases of $296,000 in salaries and benefits, $173,000 in New York State franchise taxes and $98,000 in occupancy and equipment costs, partially offset by a $158,000 decrease in professional fees and a $75,000 net decrease in all other expenses.
The effective income tax rate was 20.3% for the three months ended June 30, 2021, as compared to 22.0% for the prior year quarter. The effective income tax rate was 21.2% for the current year compared to 22.3% for the prior year.
Balance Sheet Summary
Total assets increased $83.0 million to $1.87 billion at June 30, 2021 as compared to $1.79 billion as of June 30, 2020, primarily due to increases of $81.8 million in total investment securities, $23.0 million in cash and cash equivalents and $10.5 million in bank-owned life insurance, partially offset by a $31.5 million decrease in net loans receivable. The increase in investment securities was primarily driven by increases of $55.5 million in state and municipal securities and $20.8 million in mortgage-backed securities as the Company deployed excess liquidity. The increase in cash and cash equivalents is a result of an increase in deposits and reduced loan originations experienced during the year due to reduced economic activity resulting from the COVID-19 pandemic. Net loans receivable decreased $31.5 million, primarily the result of decreases in residential mortgages, commercial loans and home equity lines of credit of $31.1 million, $13.6 million and $4.4 million, respectively, partially offset by an increase in commercial mortgages of $19.5 million. The decrease in commercial loans includes a decrease in PPP loans of $12.6 million, driven by the origination of $23.8 million in PPP loans being more than offset by paydowns and forgiveness of $36.4 million. During the current quarter, the Company experienced the paydown of a $26.2 million commercial mortgage loan, resulting in the receipt of a prepayment penalty of $524,000.
Total liabilities increased $82.2 million to $1.60 billion at June 30, 2021 compared to June 30, 2020 as increases of $118.4 million, or 8.6%, in deposits and $3.9 million in all other liabilities was partially offset by a $40.1 million decrease in FHLB advances.
Total shareholders’ equity increased $847,000 to $274.6 million at June 30, 2021 as compared to $273.7 million as of June 30, 2020. This increase was primarily due to net income of $12.4 million, $4.8 million of stock-based compensation and reduction in unearned ESOP shares for plan shares earned during the period and $3.3 million of other comprehensive income, partially offset by the repurchase of $16.9 million (1,121,774 shares) of common stock and $2.7 million of cash dividends declared and paid. As of June 30, 2021, there were 544,089 shares available to be repurchased under the current stock repurchase plan.
At June 30, 2021, the Company’s book value per share and tangible book value per share were $17.41 and $17.01, respectively, compared to $16.20 and $15.82, respectively, at June 30, 2020. Reconciliations of book value per share (GAAP measure) to tangible book value per share (non-GAAP measure) appear at the end of this release. At June 30, 2021, the Bank was considered “well capitalized” under applicable regulatory guidelines.
About PCSB Financial Corporation and PCSB Bank
PCSB Financial Corporation is the bank holding company for PCSB Bank. PCSB Bank is a New York-chartered commercial bank that has served the banking needs of its customers in the Lower Hudson Valley of New York State since 1871. It operates from its executive offices/headquarters and 15 branch offices located in Dutchess, Putnam, Rockland and Westchester Counties in New York.
This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.
Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the duration, extent and severity of the COVID-19 pandemic, including its impact on our business and operations, the impact of lost fee revenue and increased operating expenses, as well as its effect on our customers and issuers of securities, including their ability to make timely payments on obligations, service providers and on economies and markets more generally, the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the Company's business; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.
Contact: Joseph D. Roberto
Chairman, President and Chief Executive Officer
(914) 248-7272
PCSB Financial Corporation and Subsidiaries
Consolidated Balance Sheets (unaudited)
(amounts in thousands, except share and per share data)
June 30, | June 30, | ||||||
2021 | 2020 | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 152,070 | $ | 135,045 | |||
Federal funds sold | 7,235 | 1,257 | |||||
Cash and cash equivalents | 159,305 | 136,302 | |||||
Held to maturity debt securities, at amortized cost (fair value of $342,137 and $281,497, respectively) | 337,584 | 275,772 | |||||
Available for sale debt securities, at fair value | 57,387 | 37,426 | |||||
Total investment securities | 394,971 | 313,198 | |||||
Loans receivable, net of allowance for loan losses of $7,881 and $8,639, respectively | 1,229,451 | 1,260,947 | |||||
Accrued interest receivable | 6,398 | 6,880 | |||||
FHLB stock | 4,507 | 6,308 | |||||
Premises and equipment, net | 21,099 | 20,853 | |||||
Deferred tax asset, net | 2,552 | 3,129 | |||||
Bank-owned life insurance | 35,568 | 25,019 | |||||
Goodwill | 6,106 | 6,106 | |||||
Other intangible assets | 151 | 229 | |||||
Other assets | 14,827 | 12,958 | |||||
Total assets | $ | 1,874,935 | $ | 1,791,929 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Interest-bearing deposits | $ | 1,272,610 | $ | 1,181,357 | |||
Non interest-bearing deposits | 219,072 | 191,898 | |||||
Total deposits | 1,491,682 | 1,373,255 | |||||
Mortgage escrow funds | 10,536 | 10,123 | |||||
Advances from Federal Home Loan Bank | 65,957 | 106,089 | |||||
Other liabilities | 32,200 | 28,749 | |||||
Total liabilities | 1,600,375 | 1,518,216 | |||||
Commitments and contingencies | - | - | |||||
Shareholders' equity: | |||||||
Preferred stock ($0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding as of June 30, 2021 and June 30, 2020) | - | - | |||||
Common stock ($0.01 par value, 200,000,000 shares authorized, 18,703,577 and 18,712,295 shares issued as of June 30, 2021 and June 30, 2020, respectively, 15,770,645 and 16,898,137 shares outstanding as of June 30, 2021 and June 30, 2020, respectively) | 187 | 187 | |||||
Additional paid in capital | 189,926 | 186,200 | |||||
Retained earnings | 150,987 | 141,288 | |||||
Unearned compensation - ESOP | (10,176 | ) | (11,145 | ) | |||
Accumulated other comprehensive loss, net of income taxes | (3,099 | ) | (6,403 | ) | |||
Treasury stock, at cost (2,932,932 and 1,814,158 shares as of June 30, 2021 and June 30, 2020, respectively) | (53,265 | ) | (36,414 | ) | |||
Total shareholders' equity | 274,560 | 273,713 | |||||
Total liabilities and shareholders' equity | $ | 1,874,935 | $ | 1,791,929 | |||
PCSB Financial Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
(amounts in thousands, except share and per share data)
Three Months Ended | Year Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Interest and dividend income | |||||||||||||||
Loans receivable | $ | 12,625 | $ | 12,808 | $ | 49,470 | $ | 52,107 | |||||||
Investment securities | 1,851 | 1,896 | 7,340 | 8,870 | |||||||||||
Federal funds and other | 110 | 117 | 454 | 933 | |||||||||||
Total interest and dividend income | 14,586 | 14,821 | 57,264 | 61,910 | |||||||||||
Interest expense | |||||||||||||||
Deposits and escrow interest | 1,519 | 2,848 | 7,891 | 12,775 | |||||||||||
FHLB advances | 486 | 514 | 2,031 | 2,456 | |||||||||||
Total interest expense | 2,005 | 3,362 | 9,922 | 15,231 | |||||||||||
Net interest income | 12,581 | 11,459 | 47,342 | 46,679 | |||||||||||
Provision (benefit) for loan losses | 5 | 309 | (673 | ) | 3,064 | ||||||||||
Net interest income after provision (benefit) for loan losses | 12,576 | 11,150 | 48,015 | 43,615 | |||||||||||
Noninterest income | |||||||||||||||
Fees and service charges | 390 | 227 | 1,428 | 1,397 | |||||||||||
Swap income | - | 814 | 367 | 984 | |||||||||||
Bank-owned life insurance | 168 | 129 | 549 | 528 | |||||||||||
Gains on sale of securities, net | - | - | 113 | 38 | |||||||||||
Other | 10 | 7 | 40 | 122 | |||||||||||
Total noninterest income | 568 | 1,177 | 2,497 | 3,069 | |||||||||||
Noninterest expense | |||||||||||||||
Salaries and employee benefits | 5,795 | 5,499 | 22,517 | 22,934 | |||||||||||
Occupancy and equipment | 1,362 | 1,264 | 5,413 | 5,223 | |||||||||||
Communications and data processing | 525 | 502 | 2,064 | 2,061 | |||||||||||
Professional fees | 405 | 563 | 1,690 | 1,739 | |||||||||||
Postage, printing, stationery and supplies | 137 | 145 | 589 | 584 | |||||||||||
Advertising | 100 | 100 | 400 | 400 | |||||||||||
FDIC assessment | 113 | 87 | 463 | 87 | |||||||||||
Amortization of intangible assets | 17 | 21 | 78 | 94 | |||||||||||
Other operating expenses | 413 | 352 | 1,540 | 1,512 | |||||||||||
Total noninterest expense | 8,867 | 8,533 | 34,754 | 34,634 | |||||||||||
Net income before income tax expense | 4,277 | 3,794 | 15,758 | 12,050 | |||||||||||
Income tax expense | 867 | 834 | 3,334 | 2,691 | |||||||||||
Net income | $ | 3,410 | $ | 2,960 | $ | 12,424 | $ | 9,359 | |||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.23 | $ | 0.19 | $ | 0.84 | $ | 0.60 | |||||||
Diluted | 0.23 | 0.19 | 0.84 | 0.60 | |||||||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 14,553,783 | 15,334,098 | 14,846,786 | 15,648,627 | |||||||||||
Diluted | 14,586,928 | 15,334,098 | 14,847,579 | 15,674,169 | |||||||||||
PCSB Financial Corporation and Subsidiaries
Net Interest Margin Analysis (unaudited)
(dollar amounts in thousands)
Three Months Ended | |||||||||||||||||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | |||||||||||||||||||||||||||||||||
Average | Interest / Dividends | Average | Average | Interest / Dividends | Average | Average | Interest / Dividends | Average | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Loans receivable (1) | $ | 1,245,610 | $ | 12,625 | 4.06 | % | $ | 1,252,492 | $ | 12,116 | 3.88 | % | $ | 1,263,600 | $ | 12,808 | 4.06 | % | |||||||||||||||||
Investment securities (1) | 363,175 | 1,851 | 2.11 | 319,239 | 1,700 | 2.18 | 304,383 | 1,896 | 2.50 | ||||||||||||||||||||||||||
Other interest-earning assets | 190,582 | 110 | 0.23 | 162,193 | 109 | 0.27 | 115,652 | 117 | 0.41 | ||||||||||||||||||||||||||
Total interest-earning assets | 1,799,367 | 14,586 | 3.26 | 1,733,924 | 13,925 | 3.23 | 1,683,635 | 14,821 | 3.53 | ||||||||||||||||||||||||||
Non-interest-earning assets | 79,015 | 68,748 | 70,120 | ||||||||||||||||||||||||||||||||
Total assets | $ | 1,878,382 | $ | 1,802,672 | $ | 1,753,755 | |||||||||||||||||||||||||||||
Liabilities and equity: | |||||||||||||||||||||||||||||||||||
NOW accounts | $ | 182,475 | 69 | 0.15 | $ | 161,049 | 59 | 0.15 | $ | 140,954 | 79 | 0.23 | |||||||||||||||||||||||
Money market accounts | 311,255 | 162 | 0.21 | 274,516 | 208 | 0.31 | 218,023 | 289 | 0.53 | ||||||||||||||||||||||||||
Savings accounts and mortgage escrow funds | 387,422 | 109 | 0.11 | 368,791 | 132 | 0.15 | 343,472 | 192 | 0.22 | ||||||||||||||||||||||||||
Time deposits | 395,240 | 1,179 | 1.20 | 411,500 | 1,383 | 1.36 | 470,279 | 2,288 | 1.95 | ||||||||||||||||||||||||||
Total interest-bearing deposits | 1,276,392 | 1,519 | 0.48 | 1,215,856 | 1,782 | 0.59 | 1,172,728 | 2,848 | 0.97 | ||||||||||||||||||||||||||
FHLB advances | 94,970 | 486 | 2.05 | 104,604 | 506 | 1.96 | 106,099 | 514 | 1.94 | ||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,371,362 | 2,005 | 0.59 | 1,320,460 | 2,288 | 0.70 | 1,278,827 | 3,362 | 1.05 | ||||||||||||||||||||||||||
Non-interest-bearing deposits | 208,265 | 187,778 | 176,146 | ||||||||||||||||||||||||||||||||
Other non-interest-bearing liabilities | 23,114 | 24,272 | 23,505 | ||||||||||||||||||||||||||||||||
Total liabilities | 1,602,741 | 1,532,510 | 1,478,478 | ||||||||||||||||||||||||||||||||
Total shareholders' equity | 275,641 | 270,162 | 275,277 | ||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,878,382 | $ | 1,802,672 | $ | 1,753,755 | |||||||||||||||||||||||||||||
Net interest income | $ | 12,581 | $ | 11,637 | $ | 11,459 | |||||||||||||||||||||||||||||
Interest rate spread - tax equivalent (2) | 2.67 | 2.53 | 2.48 | ||||||||||||||||||||||||||||||||
Net interest margin - tax equivalent (3) | 2.81 | 2.69 | 2.73 | ||||||||||||||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 131.21 | % | 131.31 | % | 131.65 | % | |||||||||||||||||||||||||||||
(1) Tax exempt yield is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for all periods presented. See reconciliation of non-GAAP measures at the end of this release. | |||||||||||||||||||||||||||||||||||
(2) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. | |||||||||||||||||||||||||||||||||||
(3) Net interest margin represents tax equivalent net interest income divided by average interest-earning assets. See reconciliation of non-GAAP measures at the end of this release. | |||||||||||||||||||||||||||||||||||
PCSB Financial Corporation and Subsidiaries
Net Interest Margin Analysis (unaudited)
(dollar amounts in thousands)
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Average | Interest / | Average | Average | Interest / | Average | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Loans receivable (1) | $ | 1,245,818 | $ | 49,470 | 3.97 | % | $ | 1,198,449 | $ | 52,107 | 4.35 | % | |||||||||||
Investment securities (1) | 327,879 | 7,340 | 2.29 | 346,569 | 8,870 | 2.57 | |||||||||||||||||
Other interest-earning assets | 169,855 | 454 | 0.27 | 69,371 | 933 | 1.34 | |||||||||||||||||
Total interest-earning assets | 1,743,552 | 57,264 | 3.30 | 1,614,389 | 61,910 | 3.84 | |||||||||||||||||
Non-interest-earning assets | 72,522 | 69,268 | |||||||||||||||||||||
Total assets | $ | 1,816,074 | $ | 1,683,657 | |||||||||||||||||||
Liabilities and equity: | |||||||||||||||||||||||
NOW accounts | $ | 160,652 | 296 | 0.18 | $ | 127,091 | 270 | 0.21 | |||||||||||||||
Money market accounts | 273,007 | 819 | 0.30 | 177,052 | 1,647 | 0.93 | |||||||||||||||||
Savings accounts and mortgage escrow funds | 369,681 | 611 | 0.17 | 350,897 | 866 | 0.25 | |||||||||||||||||
Time deposits | 421,168 | 6,165 | 1.46 | 469,336 | 9,992 | 2.13 | |||||||||||||||||
Total interest-bearing deposits | 1,224,508 | 7,891 | 0.64 | 1,124,376 | 12,775 | 1.14 | |||||||||||||||||
FHLB advances | 102,919 | 2,031 | 1.97 | 111,008 | 2,456 | 2.21 | |||||||||||||||||
Total interest-bearing liabilities | 1,327,427 | 9,922 | 0.75 | 1,235,384 | 15,231 | 1.23 | |||||||||||||||||
Non-interest-bearing deposits | 189,667 | 148,262 | |||||||||||||||||||||
Other non-interest-bearing liabilities | 25,707 | 21,563 | |||||||||||||||||||||
Total liabilities | 1,542,801 | 1,405,209 | |||||||||||||||||||||
Total shareholders' equity | 273,273 | 278,448 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,816,074 | $ | 1,683,657 | |||||||||||||||||||
Net interest income | $ | 47,342 | $ | 46,679 | |||||||||||||||||||
Interest rate spread - tax equivalent (2) | 2.55 | 2.61 | |||||||||||||||||||||
Net interest margin - tax equivalent (3) | 2.73 | 2.89 | |||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 131.35 | % | 130.68 | % | |||||||||||||||||||
(1) Tax exempt yield is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for all periods presented. See reconciliation of non-GAAP measures at the end of this release. | |||||||||||||||||||||||
(2) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. | |||||||||||||||||||||||
(3) Net interest margin represents tax equivalent net interest income divided by average interest-earning assets. See reconciliation of non-GAAP measures at the end of this release. | |||||||||||||||||||||||
PCSB Financial Corporation and Subsidiaries
Condensed Financial Information (unaudited)
(amounts in thousands, except per share data)
As of | ||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
Condensed Balance Sheets | ||||||||||||||
Cash and cash equivalents | $ | 159,305 | $ | 169,314 | $ | 162,541 | $ | 162,739 | $ | 136,302 | ||||
Total investment securities | 394,971 | 347,302 | 310,231 | 318,509 | 313,198 | |||||||||
Loans receivable, net | 1,229,451 | 1,261,155 | 1,237,550 | 1,227,913 | 1,260,947 | |||||||||
Other assets | 91,208 | 76,903 | 79,517 | 81,914 | 81,482 | |||||||||
Total assets | $ | 1,874,935 | $ | 1,854,674 | $ | 1,789,839 | $ | 1,791,075 | $ | 1,791,929 | ||||
Total deposits and mortgage escrow funds | $ | 1,502,218 | $ | 1,463,542 | $ | 1,387,897 | $ | 1,383,432 | $ | 1,383,378 | ||||
Advances from Federal Home Loan Bank | 65,957 | 95,991 | 106,023 | 106,056 | 106,089 | |||||||||
Other liabilities | 32,200 | 23,844 | 26,595 | 27,908 | 28,749 | |||||||||
Total liabilities | 1,600,375 | 1,583,377 | 1,520,515 | 1,517,396 | 1,518,216 | |||||||||
Total shareholders' equity | 274,560 | 271,297 | 269,324 | 273,679 | 273,713 | |||||||||
Total liabilities and shareholders' equity | $ | 1,874,935 | $ | 1,854,674 | $ | 1,789,839 | $ | 1,791,075 | $ | 1,791,929 | ||||
Quarter Ended | Year Ended | |||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | June 30, | ||||||||||||||
Condensed Income Statements | ||||||||||||||||||||
Interest income | $ | 14,586 | $ | 13,925 | $ | 14,225 | $ | 14,528 | $ | 14,821 | $ | 57,264 | $ | 61,910 | ||||||
Interest expense | 2,005 | 2,288 | 2,678 | 2,951 | 3,362 | 9,922 | 15,231 | |||||||||||||
Net interest income | 12,581 | 11,637 | 11,547 | 11,577 | 11,459 | 47,342 | 46,679 | |||||||||||||
Provision (benefit) for loan losses | 5 | (894 | ) | 107 | 109 | 309 | (673 | ) | 3,064 | |||||||||||
Noninterest income | 568 | 592 | 743 | 594 | 1,177 | 2,497 | 3,069 | |||||||||||||
Noninterest expense | 8,867 | 8,572 | 8,691 | 8,624 | 8,533 | 34,754 | 34,634 | |||||||||||||
Income before income tax expense | 4,277 | 4,551 | 3,492 | 3,438 | 3,794 | 15,758 | 12,050 | |||||||||||||
Income tax expense | 867 | 959 | 798 | 710 | 834 | 3,334 | 2,691 | |||||||||||||
Net income | $ | 3,410 | $ | 3,592 | $ | 2,694 | $ | 2,728 | $ | 2,960 | $ | 12,424 | $ | 9,359 | ||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 0.23 | $ | 0.25 | $ | 0.18 | $ | 0.18 | $ | 0.19 | $ | 0.84 | $ | 0.60 | ||||||
Diluted | 0.23 | 0.25 | 0.18 | 0.18 | 0.19 | 0.84 | 0.60 | |||||||||||||
PCSB Financial Corporation and Subsidiaries
Selected Financial Data (unaudited)
Quarter Ended | Year Ended | |||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | June 30, | ||||||||
Performance Ratios (1): | ||||||||||||||
Return on average assets | 0.73 | % | 0.80 | % | 0.60 | % | 0.61 | % | 0.68 | % | 0.68 | % | 0.56 | % |
Return on average equity | 4.95 | % | 5.32 | % | 3.96 | % | 3.96 | % | 4.30 | % | 4.55 | % | 3.36 | % |
Interest rate spread | 2.67 | % | 2.53 | % | 2.52 | % | 2.47 | % | 2.48 | % | 2.55 | % | 2.61 | % |
Net interest margin | 2.81 | % | 2.69 | % | 2.71 | % | 2.69 | % | 2.73 | % | 2.73 | % | 2.89 | % |
Efficiency ratio | 67.43 | % | 70.10 | % | 70.72 | % | 70.86 | % | 67.53 | % | 69.73 | % | 69.62 | % |
Noninterest income to average assets | 0.12 | % | 0.13 | % | 0.17 | % | 0.13 | % | 0.27 | % | 0.14 | % | 0.18 | % |
Noninterest expense to average assets | 1.89 | % | 1.90 | % | 1.95 | % | 1.92 | % | 1.95 | % | 1.91 | % | 2.06 | % |
Average interest-earning assets to average interest-bearing liabilities | 131.21 | % | 131.31 | % | 131.07 | % | 131.81 | % | 131.65 | % | 131.35 | % | 130.68 | % |
Average equity to average assets | 14.67 | % | 14.99 | % | 15.23 | % | 15.32 | % | 15.70 | % | 15.05 | % | 16.54 | % |
Dividend payout ratio (2) | 26.07 | % | 16.65 | % | 22.57 | % | 23.09 | % | 21.25 | % | 21.93 | % | 27.47 | % |
PCSB Financial Corporation and Subsidiaries
Selected Financial Data (unaudited) - Continued
(dollar amounts in thousands, except share and per share data)
As of and for the quarter ended | |||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
Loans to deposits | 82.42 | % | 86.72 | % | 89.85 | % | 89.17 | % | 91.82 | % | |||||
Share Data: | |||||||||||||||
Shares outstanding | 15,770,645 | 15,966,216 | 16,097,867 | 16,634,237 | 16,898,137 | ||||||||||
Book value per common share | $ | 17.41 | $ | 16.99 | $ | 16.73 | $ | 16.45 | $ | 16.20 | |||||
Tangible book value per common share (3) | $ | 17.01 | $ | 16.60 | $ | 16.34 | $ | 16.07 | $ | 15.82 | |||||
Asset Quality Ratios: | |||||||||||||||
Non-performing loans receivable | $ | 5,764 | $ | 2,054 | $ | 1,668 | $ | 2,083 | $ | 1,795 | |||||
Non-performing assets | $ | 5,764 | $ | 2,054 | $ | 1,668 | $ | 2,083 | $ | 1,795 | |||||
Allowance for loan losses as a percent of total loans receivable (4) | 0.66 | % | 0.65 | % | 0.72 | % | 0.72 | % | 0.71 | % | |||||
Allowance for loan losses as a percent of non-performing loans receivable | 136.73 | % | 382.91 | % | 520.20 | % | 416.32 | % | 481.28 | % | |||||
Non-performing loans as a percent of total loans receivable, net (4) | 0.48 | % | 0.17 | % | 0.14 | % | 0.17 | % | 0.15 | % | |||||
Non-performing assets as a percent of total assets | 0.31 | % | 0.11 | % | 0.09 | % | 0.12 | % | 0.10 | % | |||||
Net (recoveries) charge-offs | $ | (11 | ) | $ | (82 | ) | $ | 102 | $ | 76 | $ | 17 | |||
Net (recoveries) charge-offs to average outstanding loans during the period (1) | 0.00 | % | (0.03 | %) | 0.03 | % | 0.02 | % | 0.01 | % | |||||
Capital Ratios (5): | |||||||||||||||
Tier 1 capital (to adjusted total assets) | 12.48 | % | 12.76 | % | 12.66 | % | 12.41 | % | 12.51 | % | |||||
Common equity Tier 1 capital (to risk-weighted assets) | 17.93 | % | 17.72 | % | 17.74 | % | 17.56 | % | 16.98 | % | |||||
Tier 1 capital (to risk-weighted assets) | 17.93 | % | 17.72 | % | 17.74 | % | 17.56 | % | 16.98 | % | |||||
Total capital (to risk-weighted assets) | 18.53 | % | 18.33 | % | 18.42 | % | 18.24 | % | 17.65 | % | |||||
(1) Performance ratios for quarter ended periods are annualized. | |||||||||||||||
(2) Dividends declared per share divided by net income per share. | |||||||||||||||
(3) Tangible book value per share is a non-GAAP measure and equals total shareholders’ equity, less goodwill and other intangible assets, divided by shares outstanding. We believe this disclosure may be meaningful to those investors who seek to evaluate our equity without giving effect to goodwill and other intangible assets. Reconciliations of GAAP to non-GAAP measures appear at the end of this release. | |||||||||||||||
(4) Total loans receivable excludes PPP loans. | |||||||||||||||
(5) Represents Bank ratios. | |||||||||||||||
PCSB Financial Corporation and Subsidiaries
Loan and Deposit Portfolios (unaudited)
(amounts in thousands)
As of | |||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
Mortgage loans: | |||||||||||||||
Residential mortgages | $ | 224,305 | $ | 229,008 | $ | 237,987 | $ | 245,008 | $ | 255,382 | |||||
Commercial mortgages | 826,624 | 831,162 | 801,348 | 794,248 | 807,106 | ||||||||||
Construction | 10,151 | 10,047 | 17,551 | 11,512 | 11,053 | ||||||||||
Net deferred loan origination costs | 196 | 365 | 600 | 666 | 739 | ||||||||||
Total mortgage loans | 1,061,276 | 1,070,582 | 1,057,486 | 1,051,434 | 1,074,280 | ||||||||||
Commercial and consumer loans: | |||||||||||||||
Commercial loans (1) | 150,658 | 171,314 | 160,678 | 155,569 | 164,257 | ||||||||||
Home equity credit lines | 25,439 | 27,211 | 27,653 | 29,249 | 29,838 | ||||||||||
Consumer and overdrafts | 345 | 269 | 328 | 308 | 481 | ||||||||||
Net deferred loan origination costs | (386 | ) | (356 | ) | 82 | 25 | 730 | ||||||||
Total commercial and consumer loans | 176,056 | 198,438 | 188,741 | 185,151 | 195,306 | ||||||||||
Total loans receivable | 1,237,332 | 1,269,020 | 1,246,227 | 1,236,585 | 1,269,586 | ||||||||||
Allowance for loan losses | (7,881 | ) | (7,865 | ) | (8,677 | ) | (8,672 | ) | (8,639 | ) | |||||
Loans receivable, net | $ | 1,229,451 | $ | 1,261,155 | $ | 1,237,550 | $ | 1,227,913 | $ | 1,260,947 | |||||
(1) Includes PPP loans totaling: | $ | 37,050 | $ | 50,380 | $ | 35,687 | $ | 35,687 | $ | 49,603 | |||||
As of | |||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
Demand deposits | $ | 219,072 | $ | 203,344 | $ | 189,968 | $ | 183,844 | $ | 191,898 | |||||
NOW accounts | 177,223 | 169,077 | 159,919 | 148,176 | 151,797 | ||||||||||
Money market accounts | 332,843 | 301,892 | 256,132 | 253,176 | 239,942 | ||||||||||
Savings | 387,529 | 372,151 | 354,882 | 349,805 | 343,352 | ||||||||||
Time deposits | 375,015 | 407,826 | 416,386 | 442,011 | 446,266 | ||||||||||
Total deposits | $ | 1,491,682 | $ | 1,454,290 | $ | 1,377,287 | $ | 1,377,012 | $ | 1,373,255 | |||||
PCSB Financial Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(dollar amounts in thousands, except share and per share data)
Quarter Ended | Year Ended | |||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
Computation of Tax Equivalent Net Interest Income | ||||||||||||||||
Total interest income | $ | 14,586 | $ | 13,925 | $ | 14,821 | $ | 57,264 | $ | 61,910 | ||||||
Total interest expense | 2,005 | 2,288 | 3,362 | 9,922 | 15,231 | |||||||||||
Net interest income (GAAP) | 12,581 | 11,637 | 11,459 | 47,342 | 46,679 | |||||||||||
Tax equivalent adjustment | 68 | 51 | 18 | 198 | 56 | |||||||||||
Net interest income - tax equivalent (Non-GAAP) | $ | 12,649 | $ | 11,688 | $ | 11,477 | $ | 47,540 | $ | 46,735 | ||||||
PCSB Financial Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued
(dollar amounts in thousands, except share and per share data)
As of | |||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
Computation of Tangible Book Value per Common Share | |||||||||||||||
Total shareholders' equity (GAAP) | $ | 274,560 | $ | 271,297 | $ | 269,324 | $ | 273,679 | $ | 273,713 | |||||
Adjustments: | |||||||||||||||
Goodwill | (6,106 | ) | (6,106 | ) | (6,106 | ) | (6,106 | ) | (6,106 | ) | |||||
Other intangible assets | (151 | ) | (168 | ) | (189 | ) | (209 | ) | (229 | ) | |||||
Tangible common shareholders' equity (Non-GAAP) | $ | 268,303 | $ | 265,023 | $ | 263,029 | $ | 267,364 | $ | 267,378 | |||||
Common shares outstanding | 15,770,645 | 15,966,216 | 16,097,867 | 16,634,237 | 16,898,137 | ||||||||||
Book value per share (GAAP) | $ | 17.41 | $ | 16.99 | $ | 16.73 | $ | 16.45 | $ | 16.20 | |||||
Adjustments: | |||||||||||||||
Effects of intangible assets | (0.40 | ) | (0.39 | ) | (0.39 | ) | (0.38 | ) | (0.38 | ) | |||||
Tangible book value per common share (Non-GAAP) | $ | 17.01 | $ | 16.60 | $ | 16.34 | $ | 16.07 | $ | 15.82 | |||||
PCSB Financial Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued
(dollar amounts in thousands, except share and per share data)
Quarter Ended | Year Ended | ||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||
Computation of Adjusted Yield on Assets and Adjusted Net Interest Margin, Excluding PPP income | |||||||||||||||
Average interest-earning assets | $ | 1,799,485 | $ | 1,733,924 | $ | 1,683,635 | $ | 1,743,581 | $ | 1,614,389 | |||||
Interest and dividend income (GAAP) | $ | 14,586 | $ | 13,925 | $ | 14,821 | $ | 57,264 | $ | 61,910 | |||||
Less: PPP income | (516 | ) | (279 | ) | (172 | ) | (1,171 | ) | (172 | ) | |||||
Adjusted interest and dividend income (Non-GAAP) | $ | 14,070 | $ | 13,646 | $ | 14,649 | $ | 56,093 | $ | 61,738 | |||||
Yield on interest-earning assets (GAAP) | 3.26 | % | 3.23 | % | 3.53 | % | 3.30 | % | 3.84 | % | |||||
Adjusted yield on interest-earning assets (Non-GAAP) | 3.13 | % | 3.15 | % | 3.48 | % | 3.22 | % | 3.82 | % | |||||
Net interest income (GAAP) | $ | 12,581 | $ | 11,637 | $ | 11,459 | $ | 47,342 | $ | 46,679 | |||||
Less: PPP income | (516 | ) | (279 | ) | (172 | ) | (1,171 | ) | (172 | ) | |||||
Adjusted net interest income (Non-GAAP) | $ | 12,065 | $ | 11,358 | $ | 11,287 | $ | 46,171 | $ | 46,507 | |||||
Net interest margin (GAAP) | 2.81 | % | 2.69 | % | 2.73 | % | 2.73 | % | 2.89 | % | |||||
Adjusted net interest margin (Non-GAAP) | 2.68 | % | 2.62 | % | 2.68 | % | 2.65 | % | 2.88 | % | |||||
