PCSB Financial Corporation Announces Second Fiscal Quarter Financial Results and

Declares Quarterly Cash Dividend

Yorktown Heights, New York; January 27, 2022 - PCSB Financial Corporation (the "Company") (NASDAQ: PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $4.3 million, or $0.30 per diluted share, for the three months ended December 31, 2021, compared to $3.6 million, or $0.25 per diluted share, for the three months ended September 30, 2021 and $2.7 million, or $0.18 per diluted share, for the three months ended December 31, 2020.

On January 26, 2022, the Board of Directors declared a regular quarterly cash dividend of $0.06 per share. The dividend is payable on or about February 25, 2022 to shareholders of record as of the close of business on February 11, 2022.

Second Quarter Highlights

•

Net income of $4.3 million or $0.30 per diluted share for the current quarter, increases of 18.6% and 59.2% compared to the linked quarter and same quarter last year, respectively. Excluding certain non-recurring items, current quarter adjusted net income (non-GAAP) was $3.1 million or $0.22 per diluted share, a decrease of 4.3% compared to the linked quarter and an increase of 29.2% compared to the same quarter last year, respectively. The decrease in adjusted net income from the linked quarter is largely due to higher provision for loan losses tied to loan portfolio growth. Reconciliations of GAAP to non-GAAP financial measures are included at the end of this release.

•

Net interest income of $13.3 million for the current quarter, increases of 5.8% and 14.8% from the linked quarter and the same quarter last year, respectively. Adjusted net interest income (non-GAAP) of $12.4 million for the current quarter, increases of 2.0% and 9.2% from the linked quarter and the same quarter last year, respectively.

•

Tax equivalent net interest margin of 2.97% for the current quarter, an increase from 2.82% in the linked quarter and 2.70% for the same quarter last year. Adjusted tax equivalent net interest margin (non-GAAP) of 2.75% for the current quarter, an increase from 2.71% in the linked quarter and 2.64% for the same quarter last year.

•

Average cost of interest-bearing deposits of 0.39% for the current quarter, a decrease from 0.41% in the linked quarter and 0.71% for the same quarter last year.

•

Efficiency ratio of 60.92% for the current quarter, improved from 65.59% for the linked quarter and 70.72% for the same quarter last year. Adjusted efficiency ratio (non-GAAP) of 67.64% for the current quarter, unchanged from the linked quarter and improved from 72.70% for the same quarter last year.

•

Average loans receivable, excluding SBA Paycheck Protection Program ("PPP") loans, of $1.23 billion for the current quarter, increased from $1.20 billion in both the linked quarter and the same quarter last year.

•

Average deposits of $1.52 billion for the current quarter, increases of 0.8% and 10.0% compared to the linked quarter and same quarter last year, respectively.

•

Allowance for loan losses to total net loans receivable (excluding PPP loans) of 0.68% as of December 31, 2021, an increase from 0.66% as of June 30, 2021.

•

Non-performing loans of $7.9 million, or 0.64% of total net loans receivable (excluding PPP loans), as of December 31, 2021, increased from 0.48% as of June 30, 2021.

•

Loans on COVID-19-related payment deferral totaled $13.7 million, or 1.10% of gross loans, as of December 31, 2021, compared to $27.3 million, or 2.21% of gross loans, as of June 30, 2021. Loans on deferral totaling $10.1 million have resumed payments in January 2022, with the remaining $3.6 million (1 loan) scheduled to resume payments in June 2022.

President's Comments

"We are extremely pleased with the Company's solid quarter and six-month financial performance which resulted in solid earnings", said Joseph D. Roberto, Chairman, President & Chief Executive Officer of PCSB Financial Corporation. "Despite a difficult operating environment, our strong financial results year over year reflect continued net interest margin expansion along with continued control over operating expenses. We are encouraged by our ability to grow net loans over 10.0% annualized during the quarter despite some significant paydowns. With respect to credit quality, although we have seen recent increases in non-performing loans, our conservative underwriting has provided us strong LTVs and we believe these are isolated issues and not indicative of systemic risks in the loan portfolio. I am proud of our PCSB team who remain a source of strength to our customers and look forward to

1

continuing to invest in the communities we serve which we believe will create sustainable value for our shareholders."

Income Statement Summary

Net income for the current quarter was $4.3 million, which increased $674,000 from the linked quarter and $1.6 million from the prior year quarter. The change from the linked quarter is primarily due to a $723,000 increase in net interest income and a $582,000 increase in noninterest income, partially offset by increases of $251,000 in provision for loan losses, $199,000 in income tax expense, and $181,000 in noninterest expense. The change from the prior year quarter is primarily due to a $1.7 million increase in net interest income and a $452,000 increase in noninterest income, partially offset by increases of $298,000 in income tax expense, $157,000 in provision for loan losses and $114,000 in noninterest expense.

Net interest income was $13.3 million for the current quarter, increases of $723,000, or 5.8%, compared to the linked quarter and $1.7 million, or 14.8%, compared to the prior year quarter. The increase compared to the linked quarter is primarily the result of a 15 basis point increase in the tax equivalent net interest margin and a $7.9 million, or 0.4%, increase in average interest-earning assets. The increase in net interest income compared to the prior year period is primarily the result of a 27 basis point increase in the tax equivalent net interest margin and an $81.6 million, or 4.8%, increase in average interest-earning assets.

The Company recognized PPP loan interest and origination fee income (net of costs) of $332,000 in the current quarter, compared to $373,000 in the linked quarter and $159,000 in the prior year quarter. Unearned origination fees (net of costs) on PPP loans totaled $366,000 as of December 31, 2021 and will be recognized in income over the remaining lives of the loans. The timing of such recognition is largely dependent on the timing of forgiveness, which the Company expects to be substantially complete by June 30, 2022.

The tax equivalent net interest margin was 2.97% for the current quarter, reflecting increases of 15 basis points compared to 2.82% in the linked quarter and 27 basis points compared to 2.70% in the prior year quarter. During the current quarter, the Company recognized $555,000 of loan prepayment income. Adjusted net interest margin, which excludes the effects of loan prepayment income and PPP loan interest and fees, was 2.75% for the current quarter compared to 2.71% in the linked quarter and 2.64% in the prior year quarter. Reductions in the cost of funds were partially offset by a decrease in adjusted asset yield compared to the prior year quarter, driven by lower market interest rates. Reconciliations of GAAP to non-GAAP financial measures are included at the end of this release.

Tax equivalent yield on interest-earning assets for the current quarter was 3.33%, increases of 13 basis points from the linked quarter and 1 basis point from the prior year quarter. Excluding the effects of non-recurring PPP loan income and loan prepayment income, the tax equivalent yield on interest-earning assets for the current quarter was 3.11%, an increase of 2 basis points from the linked quarter and a decrease of 16 basis points from the same quarter last year. The decrease in yield compared to the prior year quarter is a result of the loan and investment portfolios continuing to re-price downward due to lower market interest rates, however the decline in asset yields (excluding the effects of PPP income) has slowed and reversed in recent quarters due to a more favorable yield curve and earning asset composition.

The cost of interest-bearing deposits was 0.39% for the current quarter, decreases of 2 basis points and 32 basis points from 0.41% and 0.71% in the linked quarter and prior year quarter, respectively. In response to lower market interest rates and increased liquidity levels, deposit rate reductions have been implemented throughout the last 2 years, the effects of which continue to be realized. As of quarter end, the weighted average cost of interest-bearing deposits was 0.32%. The cost of interest-bearing liabilities was 0.47% for the current quarter, decreases of 2 basis points from 0.49% in the linked quarter and 34 basis points from 0.81% in the prior year quarter. Over the next 12 months, the Company has $40.0 million of wholesale funding maturing, comprised of FHLB advances and brokered time deposits, with a weighted average cost of 2.07%.

The provision for loan losses was $264,000 for current quarter, compared to $13,000 for the linked quarter and $107,000 for the prior year quarter. Loans on COVID-19 related payment deferral totaled $13.7 million, or 1.10% of gross loans, as of December 31, 2021, compared to $27.3 million, or 2.21% of gross loans, as of June 30, 2021. Recoveries, net of charge-offs, were $6,000 for the current quarter compared to $265,000 for the linked quarter and charge-offs, net of recoveries, of $102,000 for the prior year quarter. Non-performing loans as a percent of total loans receivable (excluding PPP loans) was 0.64% as of December 31, 2021, an increase from 0.48% as of June 30, 2021. The increase in non-performing loans over the last 12 months primarily includes three commercial relationships totaling $6.3 million, including $2.7 million of loans secured by multi-family commercial real estate

2

(including 1 relationship consisting of 2 construction loans totaling $1.5 million) with a weighted average loan-to-value ratio of 68.8% and one loan for $3.6 million secured by non-owner-occupied retail commercial real estate with a loan-to-value ratio of 53.9%.

Noninterest income of $1.2 million for the current quarter increased $582,000 compared to the linked quarter and $452,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to increases of $548,000 in gains on the sale of premises and $35,000 in gains on the sale of loans. The increase compared to the prior year quarter was primarily due to increases of $548,000 in gains on the sale of premises, $62,000 in bank-owned life insurance income, $44,000 in fees and service charges and $41,000 in gains on the sale of loans, partially offset by a $238,000 decrease in swap income. During the current quarter, the Company sold a parcel of unused land, resulting in the gain discussed above.

Noninterest expense of $8.8 million for the current quarter increased $181,000 compared to the linked quarter and $114,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to higher salaries and benefits, postage and printing, as well as professional costs. Noninterest expenses increased compared to the prior year quarter primarily due to increases in salaries and benefits, including ESOP costs, and New York State capital-based taxes, which were largely offset by lower pension costs.

The effective income tax rate was 20.4% for the current quarter, as compared to 19.9% for the linked quarter and 22.9% for the prior year quarter. The decrease in the effective tax rate for the current quarter compared to the prior year quarter is the result of increases in tax-exempt municipal bond income and bank-owned life insurance income.

Balance Sheet Summary

Total assets increased $13.2 million to $1.89 billion at December 31, 2021 as compared to June 30, 2021, as increases of $39.0 million in total investment securities and $14.2 million in net loans receivable were partially offset by a decrease of $39.0 million in cash and cash equivalents. The increase in investment securities was the result of the Company deploying excess liquidity and included increases of $29.8 million in state and municipal securities, $8.5 million in corporate securities and $5.8 million in mortgage-backed securities, partially offset by a $5.1 million decrease in U.S. government and agency bonds. Net loans receivable increased $14.2 million, primarily the result of increases in commercial mortgage loans and construction loans of $41.0 million and $1.7 million, respectively, partially offset by decreases in commercial loans and residential mortgage loans of $15.6 million and $11.5 million, respectively. The decrease in commercial loans includes a decrease in PPP loans of $24.3 million, driven by forgiveness and paydowns.

Total liabilities increased $12.9 million to $1.61 billion at December 31, 2021 compared to June 30, 2021 as an increase of $31.4 million in deposits was partially offset by decreases of $11.3 million in other liabilities and $7.6 million in FHLB advances. The $31.4 million increase in deposits includes increases in money market, NOW and savings accounts of $28.5 million, $21.4 million and $5.5 million, respectively, partially offset by decreases in time deposits and demand accounts of $20.7 million and $3.3 million, respectively.

Total shareholders' equity increased $274,000 to $274.8 million at December 31, 2021 as compared to $274.6 million as of June 30, 2021. The increase for the six months ended December 31, 2021 was primarily due to net income of $7.9 million and $2.5 million of stock-based compensation and reduction in unearned ESOP shares for plan shares earned during the period, partially offset by the repurchase of $8.2 million (440,666 shares) of common stock and $1.7 of cash dividends declared and paid. As of December 31, 2021, there were 122,417 shares available to be repurchased under the current stock repurchase plan.

At December 31, 2021, the Company's book value per share and tangible book value per share were $17.92 and $17.51, respectively, compared to $17.41 and $17.01, respectively, at June 30, 2021. 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 December 31, 2021, the Bank was considered "well capitalized" under applicable regulatory guidelines.

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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 14 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 and on our customers, 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

4

PCSB Financial Corporation and Subsidiaries

Consolidated Balance Sheets (unaudited)

(amounts in thousands, except share and per share data)

December 31,

June 30,

2021

2021

ASSETS

Cash and due from banks

$

113,499

$

152,070

Federal funds sold

6,840

7,235

Cash and cash equivalents

120,339

159,305

Held to maturity debt securities, at amortized cost

(fair value of $389,814 and $342,137, respectively)

390,312

337,584

Available for sale debt securities, at fair value

43,687

57,387

Total investment securities

433,999

394,971

Loans receivable, net of allowance for loan losses of $8,429 and $7,881, respectively

1,243,646

1,229,451

Loans held for sale

1,452

-

Accrued interest receivable

6,509

6,398

FHLB stock

4,167

4,507

Premises and equipment, net

19,550

21,099

Deferred tax asset, net

2,327

2,552

Bank-owned life insurance

35,951

35,568

Goodwill

6,106

6,106

Other intangible assets

119

151

Other assets

13,956

14,827

Total assets

$

1,888,121

$

1,874,935

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits

$

1,307,359

$

1,272,610

Non interest-bearing deposits

215,708

219,072

Total deposits

1,523,067

1,491,682

Mortgage escrow funds

10,880

10,536

Advances from Federal Home Loan Bank

58,390

65,957

Other liabilities

20,950

32,200

Total liabilities

1,613,287

1,600,375

Commitments and contingencies

-

-

Shareholders' equity:

Preferred stock ($0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding as of December 31, 2021 and June 30, 2021)

-

-

Common stock ($0.01 par value, 200,000,000 shares authorized, 18,703,577 shares issued as of both December 31, 2021 and June 30, 2021, 15,337,979 and 15,770,645 shares outstanding as of December 31, 2021 and June 30, 2021, respectively)

187

187

Additional paid in capital

191,826

189,926

Retained earnings

157,146

150,987

Unearned compensation - ESOP

(9,688

)

(10,176

)

Accumulated other comprehensive loss, net of income taxes

(3,353

)

(3,099

)

Treasury stock, at cost, 3,365,598 and 2,932,932 shares as of December 31, 2021 and June 30, 2021, respectively)

(61,284

)

(53,265

)

Total shareholders' equity

274,834

274,560

Total liabilities and shareholders' equity

$

1,888,121

$

1,874,935

5

PCSB Financial Corporation and Subsidiaries

Consolidated Statements of Operations (unaudited)

(amounts in thousands, except share and per share data)

Three Months Ended

Six Months Ended

December 31,

December 31,

2021

2020

2021

2020

Interest and dividend income

Loans receivable

$

12,651

$

12,182

$

24,758

$

24,729

Investment securities

2,131

1,933

4,142

3,789

Federal funds and other

88

110

197

235

Total interest and dividend income

14,870

14,225

29,097

28,753

Interest expense

Deposits and escrow interest

1,292

2,158

2,646

4,590

FHLB advances

320

520

658

1,039

Total interest expense

1,612

2,678

3,304

5,629

Net interest income

13,258

11,547

25,793

23,124

Provision for loan losses

264

107

277

216

Net interest income after provision for loan losses

12,994

11,440

25,516

22,908

Noninterest income

Fees and service charges

407

363

808

685

Gains on sales of premises

548

-

548

-

Swap income

-

238

-

367

Bank-owned life insurance

191

129

383

261

Net gains on sales of loans

41

-

47

-

Other

8

13

22

24

Total noninterest income

1,195

743

1,808

1,337

Noninterest expense

Salaries and employee benefits

5,843

5,520

11,616

11,127

Occupancy and equipment

1,348

1,374

2,701

2,692

Communications and data processing

526

446

1,053

1,022

Professional fees

420

503

813

903

Postage, printing, stationery and supplies

182

167

325

306

FDIC assessment

121

122

246

235

Advertising

100

100

200

200

Amortization of intangible assets

16

20

32

40

Other operating expenses

249

439

443

790

Total noninterest expense

8,805

8,691

17,429

17,315

Net income before income tax expense

5,384

3,492

9,895

6,930

Income tax expense

1,096

798

1,993

1,508

Net income

$

4,288

$

2,694

$

7,902

$

5,422

Earnings per common share:

Basic

$

0.30

$

0.18

$

0.55

$

0.36

Diluted

0.30

0.18

0.55

0.36

Weighted average common shares outstanding:

Basic

14,236,473

14,888,528

14,287,009

15,094,982

Diluted

14,281,232

14,899,020

14,349,272

15,094,982

6

PCSB Financial Corporation and Subsidiaries

Net Interest Margin Analysis (unaudited)

(dollar amounts in thousands)

Three Months Ended

December 31, 2021

September 30, 2021

December 31, 2020

Average Balance

Interest / Dividends

Average Rate

Average Balance

Interest / Dividends

Average Rate

Average Balance

Interest / Dividends

Average Rate

Assets:

Loans receivable (1)

$

1,242,109

$

12,651

4.07

%

$

1,223,532

$

12,107

3.96

%

$

1,232,555

$

12,182

3.95

%

Investment securities (1)

427,918

2,131

2.08

404,565

2,011

2.07

313,812

1,933

2.51

Other interest-earning assets

126,586

88

0.28

160,659

109

0.27

168,608

110

0.26

Total interest-earning assets

1,796,613

14,870

3.33

1,788,756

14,227

3.20

1,714,975

14,225

3.32

Non-interest-earning assets

77,506

76,375

70,417

Total assets

$

1,874,119

$

1,865,131

$

1,785,392

Liabilities and equity:

NOW accounts

$

192,856

90

0.18

$

182,531

70

0.15

$

149,620

79

0.21

Money market accounts

355,708

168

0.19

350,575

186

0.21

255,961

211

0.33

Savings accounts and mortgage escrow funds

398,076

108

0.11

397,292

113

0.11

362,422

168

0.18

Time deposits

357,242

926

1.03

367,641

985

1.06

434,446

1,700

1.55

Total interest-bearing deposits

1,303,882

1,292

0.39

1,298,039

1,354

0.41

1,202,449

2,158

0.71

FHLB advances

63,805

320

1.99

65,935

338

2.03

106,034

520

1.94

Total interest-bearing liabilities

1,367,687

1,612

0.47

1,363,974

1,692

0.49

1,308,483

2,678

0.81

Non-interest-bearing deposits

214,558

207,806

178,538

Other non-interest-bearing liabilities

16,250

19,943

26,482

Total liabilities

1,598,495

1,591,723

1,513,503

Total shareholders' equity

275,624

273,408

271,889

Total liabilities and shareholders' equity

$

1,874,119

$

1,865,131

$

1,785,392

Net interest income

$

13,258

$

12,535

$

11,547

Interest rate spread - tax equivalent (2)

2.86

2.71

2.51

Net interest margin - tax equivalent (3)

2.97

2.82

2.70

Average interest-earning assets to interest-bearing liabilities

131.36

%

131.14

%

131.07

%

(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 GAAP to 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 GAAP to non-GAAP measures at the end of this release.

7

PCSB Financial Corporation and Subsidiaries

Net Interest Margin Analysis (unaudited)

(dollar amounts in thousands)

Six Months Ended December 31,

2021

2020

Average Balance

Interest / Dividends

Average Rate

Average Balance

Interest / Dividends

Average Rate

Assets:

Loans receivable (1)

$

1,232,821

$

24,758

4.01

%

$

1,242,575

$

24,729

3.98

%

Investment securities (1)

416,241

4,142

2.08

314,552

3,789

2.44

Other interest-earning assets

143,622

197

0.27

163,323

235

0.29

Total interest-earning assets

1,792,684

29,097

3.26

1,720,450

28,753

3.35

Non-interest-earning assets

76,940

71,172

Total assets

$

1,869,624

$

1,791,622

Liabilities and equity:

NOW accounts

$

187,693

159

0.17

$

149,543

168

0.22

Money market accounts

353,141

355

0.20

253,129

449

0.35

Savings accounts and mortgage escrow funds

397,684

221

0.11

361,256

370

0.20

Time deposits

362,442

1,911

1.05

438,966

3,603

1.63

Total interest-bearing deposits

1,300,960

2,646

0.40

1,202,894

4,590

0.76

FHLB advances

64,870

658

2.01

106,051

1,039

1.94

Total interest-bearing liabilities

1,365,830

3,304

0.48

1,308,945

5,629

0.86

Non-interest-bearing deposits

211,182

181,312

Other non-interest-bearing liabilities

18,096

27,720

Total liabilities

1,595,108

1,517,977

Total shareholders' equity

274,516

273,645

Total liabilities and shareholders' equity

$

1,869,624

$

1,791,622

Net interest income

$

25,793

$

23,124

Interest rate spread - tax equivalent (2)

2.78

2.49

Net interest margin - tax equivalent (3)

2.90

2.70

Average interest-earning assets to interest-bearing liabilities

131.25

%

131.44

%

(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 GAAP to 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 GAAP to non-GAAP measures at the end of this release.

8

PCSB Financial Corporation and Subsidiaries

Condensed Financial Information (unaudited)

(amounts in thousands, except per share data)

As of

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

Condensed Balance Sheets

Cash and cash equivalents

$

120,339

$

148,012

$

159,305

$

169,314

$

162,541

Total investment securities

433,999

423,525

394,971

347,302

310,231

Loans receivable, net

1,243,646

1,210,674

1,229,451

1,261,155

1,237,550

Other assets

90,137

90,968

91,208

76,903

79,517

Total assets

$

1,888,121

$

1,873,179

$

1,874,935

$

1,854,674

$

1,789,839

Total deposits and mortgage escrow funds

$

1,533,947

$

1,511,465

$

1,502,218

$

1,463,542

$

1,387,897

Advances from Federal Home Loan Bank

58,390

65,924

65,957

95,991

106,023

Other liabilities

20,950

21,062

32,200

23,844

26,595

Total liabilities

1,613,287

1,598,451

1,600,375

1,583,377

1,520,515

Total shareholders' equity

274,834

274,728

274,560

271,297

269,324

Total liabilities and shareholders' equity

$

1,888,121

$

1,873,179

$

1,874,935

$

1,854,674

$

1,789,839

Quarter Ended

Six Months Ended

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

December 31,

2021

December 31,

2020

Condensed Income Statements

Interest income

$

14,870

$

14,227

$

14,586

$

13,925

$

14,225

$

29,097

$

28,753

Interest expense

1,612

1,692

2,005

2,288

2,678

3,304

5,629

Net interest income

13,258

12,535

12,581

11,637

11,547

25,793

23,124

Provision (benefit) for loan losses

264

13

5

(894

)

107

277

216

Noninterest income

1,195

613

568

592

743

1,808

1,337

Noninterest expense

8,805

8,624

8,867

8,572

8,691

17,429

17,315

Income before income tax expense

5,384

4,511

4,277

4,551

3,492

9,895

6,930

Income tax expense

1,096

897

867

959

798

1,993

1,508

Net income

$

4,288

$

3,614

$

3,410

$

3,592

$

2,694

$

7,902

$

5,422

Earnings per share:

Basic

$

0.30

$

0.25

$

0.23

$

0.25

$

0.18

$

0.55

$

0.36

Diluted

0.30

0.25

0.23

0.25

0.18

0.55

0.36

9

PCSB Financial Corporation and Subsidiaries

Selected Financial Data (unaudited)

Quarter Ended

Six Months Ended

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

December 31,

2021

December 31,

2020

Performance Ratios (1):

Return on average assets

0.92

%

0.78

%

0.73

%

0.80

%

0.60

%

0.85

%

0.61

%

Return on average equity

6.22

%

5.29

%

4.95

%

5.32

%

3.96

%

5.76

%

3.96

%

Interest rate spread

2.86

%

2.71

%

2.67

%

2.53

%

2.51

%

2.78

%

2.49

%

Net interest margin

2.97

%

2.82

%

2.81

%

2.69

%

2.70

%

2.90

%

2.70

%

Efficiency ratio

60.92

%

65.59

%

67.43

%

70.10

%

70.72

%

63.15

%

70.79

%

Noninterest income to average assets

0.26

%

0.13

%

0.12

%

0.13

%

0.17

%

0.19

%

0.15

%

Noninterest expense to average assets

1.88

%

1.85

%

1.89

%

1.90

%

1.95

%

1.86

%

1.93

%

Average interest-earning assets to average interest-bearing liabilities

131.36

%

131.14

%

131.21

%

131.31

%

131.07

%

131.25

%

131.44

%

Average equity to average assets

14.71

%

14.66

%

14.67

%

14.99

%

15.23

%

14.68

%

15.27

%

Dividend payout ratio (2)

20.22

%

24.24

%

26.07

%

16.65

%

22.57

%

22.06

%

22.83

%

10

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

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

Loans to deposits

81.65

%

80.46

%

82.42

%

86.72

%

89.85

%

Share Data:

Shares outstanding

15,337,979

15,574,310

15,770,645

15,966,216

16,097,867

Book value per common share

$

17.92

$

17.64

$

17.41

$

16.99

$

16.73

Tangible book value per common share (3)

$

17.51

$

17.24

$

17.01

$

16.60

$

16.34

Asset Quality Ratios:

Non-performing loans receivable

$

7,890

$

5,732

$

5,764

$

2,054

$

1,668

Non-performing assets

$

7,890

$

5,732

$

5,764

$

2,054

$

1,668

Allowance for loan losses as a percent of total loans receivable (4)

0.68

%

0.68

%

0.66

%

0.65

%

0.72

%

Allowance for loan losses as a percent of non-performing loans receivable

106.83

%

142.34

%

136.73

%

382.91

%

520.20

%

Non-performing loans as a percent of total loans receivable, net (4)

0.64

%

0.48

%

0.48

%

0.17

%

0.14

%

Non-performing assets as a percent of total assets

0.42

%

0.31

%

0.31

%

0.11

%

0.09

%

Net (recoveries) charge-offs

$

(6

)

$

(265

)

$

(11

)

$

(82

)

$

102

Net (recoveries) charge-offs to average outstanding loans during the period (1)

0.00

%

(0.09

%)

0.00

%

(0.03

%)

0.03

%

Capital Ratios (5):

Tier 1 capital (to adjusted total assets)

12.91

%

12.72

%

12.48

%

12.76

%

12.66

%

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

17.67

%

17.84

%

17.93

%

17.72

%

17.74

%

Tier 1 capital (to risk-weighted assets)

17.67

%

17.84

%

17.93

%

17.72

%

17.74

%

Total capital (to risk-weighted assets)

18.28

%

18.46

%

18.53

%

18.33

%

18.42

%

(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.

11

PCSB Financial Corporation and Subsidiaries

Loan and Deposit Portfolios (unaudited)

(amounts in thousands)

As of

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

Mortgage loans:

Residential mortgages

$

212,817

$

221,735

$

224,305

$

229,008

$

237,987

Commercial mortgages

867,581

838,021

826,624

831,162

801,348

Construction

11,857

11,639

10,151

10,047

17,551

Net deferred loan origination (fees) costs

(18

)

97

196

365

600

Total mortgage loans

1,092,237

1,071,492

1,061,276

1,070,582

1,057,486

Commercial and consumer loans:

Commercial loans (1)

135,055

122,031

150,658

171,314

160,678

Home equity credit lines

24,142

24,936

25,439

27,211

27,653

Consumer and overdrafts

356

394

345

269

328

Net deferred loan origination costs (fees)

285

(20

)

(386

)

(356

)

82

Total commercial and consumer loans

159,838

147,341

176,056

198,438

188,741

Total loans receivable

1,252,075

1,218,833

1,237,332

1,269,020

1,246,227

Allowance for loan losses

(8,429

)

(8,159

)

(7,881

)

(7,865

)

(8,677

)

Loans receivable, net

$

1,243,646

$

1,210,674

$

1,229,451

$

1,261,155

$

1,237,550

(1) Includes PPP loans totaling:

$

12,769

$

19,763

$

37,050

$

50,380

$

35,687

As of

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

Demand deposits

$

215,708

$

216,470

$

219,072

$

203,344

$

189,968

NOW accounts

198,610

181,572

177,223

169,077

159,919

Money market accounts

361,352

363,090

332,843

301,892

256,132

Savings

393,041

381,836

387,529

372,151

354,882

Time deposits

354,356

361,669

375,015

407,826

416,386

Total deposits

$

1,523,067

$

1,504,637

$

1,491,682

$

1,454,290

$

1,377,287

12

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

Six Months Ended

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

December 31,

2021

December 31,

2020

Computation of Adjusted Net Income and Adjusted Earnings Per Share

Net income applicable to common stock (GAAP)

$

4,288

$

3,614

$

3,410

$

3,592

$

2,694

$

7,902

$

5,422

Adjustments (1):

Prepayment income on loans receivable and investment securities

(442

)

(26

)

(532

)

(43

)

(136

)

(468

)

(194

)

Gains on sales of premises

(436

)

-

-

-

-

(436

)

-

PPP interest and fee income

(264

)

(299

)

(411

)

(220

)

(123

)

(563

)

(295

)

Gains on sale of investment securities

-

-

-

(89

)

-

-

-

Adjusted net income (Non-GAAP)

$

3,146

$

3,289

$

2,467

$

3,240

$

2,435

$

6,435

$

4,933

Average number of common shares outstanding:

Basic

14,236,473

14,337,543

14,553,783

14,631,122

14,888,528

14,287,009

15,094,982

Diluted

14,281,232

14,405,816

14,586,928

14,632,342

14,899,020

14,349,272

15,094,982

Earnings per share (GAAP):

Basic

$

0.30

$

0.25

$

0.23

$

0.25

$

0.18

$

0.55

$

0.36

Diluted

0.30

0.25

0.23

0.25

0.18

0.55

0.36

Adjusted earnings per common share (Non-GAAP):

Basic

$

0.22

$

0.23

$

0.17

$

0.22

$

0.16

$

0.45

$

0.33

Diluted

0.22

0.23

0.17

0.22

0.16

0.45

0.33

(1) Amounts included in income before income tax expense are presented net of tax.

13

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

Six Months Ended

December 31,

2021

September 30,

2021

December 31,

2020

December 31,

2021

December 31,

2020

Computation of Tax Equivalent Net Interest Income

Total interest income

$

14,870

$

14,227

$

14,225

$

29,097

$

28,753

Total interest expense

1,612

1,692

2,678

3,304

5,629

Net interest income (GAAP)

13,258

12,535

11,547

25,793

23,124

Tax equivalent adjustment

99

89

45

188

78

Net interest income - tax equivalent (Non-GAAP)

$

13,357

$

12,624

$

11,592

$

25,981

$

23,202

Quarter Ended

Six Months Ended

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

December 31,

2021

December 31,

2020

Computation of Efficiency Ratio

Noninterest expense (GAAP)

$

8,805

$

8,624

$

8,867

$

8,572

$

8,691

$

17,429

$

17,315

Net interest income (GAAP)

$

13,258

$

12,535

$

12,581

$

11,637

$

11,547

$

25,793

$

23,124

Noninterest income (GAAP)

1,195

613

568

592

743

1,808

1,337

Total (GAAP)

14,453

13,148

13,149

12,229

12,290

27,601

24,461

Adjustments:

Prepayment income on loans receivable and investment securities

(555

)

(32

)

(667

)

(55

)

(176

)

(587

)

(249

)

Gains on sales of premises

(548

)

-

-

-

-

(548

)

-

PPP interest and fee income

(332

)

(373

)

(516

)

(279

)

(159

)

(705

)

(376

)

Gains on sales of investment securities

-

-

-

(113

)

-

-

-

Adjusted total (Non-GAAP)

$

13,018

$

12,743

$

11,966

$

11,782

$

11,955

$

25,761

$

23,836

Efficiency ratio (GAAP)

60.92

%

65.59

%

67.43

%

70.10

%

70.72

%

63.15

%

70.79

%

Adjusted efficiency ratio (Non-GAAP)

67.64

%

67.68

%

74.10

%

72.76

%

72.70

%

67.66

%

72.64

%

14

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

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

Computation of Tangible Book Value per Common Share

Total shareholders' equity (GAAP)

$

274,834

$

274,728

$

274,560

$

271,297

$

269,324

Adjustments:

Goodwill

(6,106

)

(6,106

)

(6,106

)

(6,106

)

(6,106

)

Other intangible assets

(119

)

(135

)

(151

)

(168

)

(189

)

Tangible common shareholders' equity (Non-GAAP)

$

268,609

$

268,487

$

268,303

$

265,023

$

263,029

Common shares outstanding

15,337,979

15,574,310

15,770,645

15,966,216

16,097,867

Book value per share (GAAP)

$

17.92

$

17.64

$

17.41

$

16.99

$

16.73

Adjustments:

Effects of intangible assets

(0.41

)

(0.40

)

(0.40

)

(0.39

)

(0.39

)

Tangible book value per common share (Non-GAAP)

$

17.51

$

17.24

$

17.01

$

16.60

$

16.34

15

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

Six Months Ended

December 31,

2021

September 30,

2021

December 31,

2020

December 31,

2021

December 31,

2020

Computation of Adjusted Yield on Assets and Adjusted Net Interest Margin

Average interest-earning assets

$

1,796,613

$

1,788,756

$

1,714,975

$

1,792,684

$

1,720,450

Interest and dividend income (GAAP)

$

14,870

$

14,227

$

14,225

$

29,097

$

28,753

Less: PPP interest and fee income

(332

)

(373

)

(159

)

(705

)

(376

)

Less: Prepayment income on loans receivable

(555

)

(32

)

(59

)

(587

)

(132

)

Adjusted interest and dividend income (Non-GAAP)

$

13,983

$

13,822

$

14,007

$

27,805

$

28,245

Yield on interest-earning assets (GAAP)

3.33

%

3.20

%

3.32

%

3.26

%

3.35

%

Adjusted yield on interest-earning assets (Non-GAAP)

3.11

%

3.09

%

3.27

%

3.10

%

3.28

%

Net interest income (GAAP)

$

13,258

$

12,535

$

11,547

$

25,793

$

23,124

Less: PPP interest and fee income

(332

)

(373

)

(159

)

(705

)

(376

)

Less: Prepayment income on loans receivable

(555

)

(32

)

(59

)

(587

)

(132

)

Adjusted net interest income (Non-GAAP)

$

12,371

$

12,130

$

11,329

$

24,501

$

22,616

Net interest margin (GAAP)

2.97

%

2.82

%

2.70

%

2.90

%

2.70

%

Adjusted net interest margin (Non-GAAP)

2.75

%

2.71

%

2.64

%

2.73

%

2.63

%

16

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Disclaimer

PCSB Financial Corporation published this content on 27 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2022 15:21:02 UTC.