PCSB Financial Corporation
10/28/2021 | Press release | Distributed by Public on 10/28/2021 06:21
PCSB Financial Corporation Announces First Fiscal Quarter Financial Results and Declares Quarterly Cash Dividend - Form 8-K
PCSB Financial Corporation Announces First Fiscal Quarter Financial Results and
Declares Quarterly Cash Dividend
Yorktown Heights, New York; October 28, 2021 - PCSB Financial Corporation (the "Company") (NASDAQ: PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $3.6 million, or $0.25 per diluted share, for the three months ended September 30, 2021, compared to $3.4 million, or $0.23 per diluted share, for the three months ended June 30, 2021 and $2.7 million, or $0.18 per diluted share, for the three months ended September 30, 2020.
On October 20, 2021, the Board of Directors declared a regular quarterly cash dividend of $0.06 per share. The dividend is payable on or about November 26, 2021 to shareholders of record as of the close of business on November 12, 2021.
First Quarter Highlights
|
• |
Net income of $3.6 million for the current quarter, increases of 6.0% and 32.5% compared to the linked quarter and the same quarter last year, respectively. |
|
• |
Net interest income of $12.5 million for the current quarter, unchanged from the linked quarter and increased 8.3% from the same quarter last year. |
|
• |
Tax equivalent net interest margin was 2.82% for the current quarter, an increase from 2.81% in the linked quarter and 2.69% for the same quarter last year. |
|
• |
The average cost of interest-bearing deposits was 0.41% for the current quarter, a decrease from 0.48% in the linked quarter and 0.80% for the same quarter last year. |
|
• |
The efficiency ratio was 65.59% for the current quarter, decreased from 67.43% for the linked quarter and 70.86% for the prior year quarter. |
|
• |
Average loans receivable, excluding SBA Paycheck Protection Program ("PPP") loans, of $1.20 billion for the current quarter, unchanged from the linked quarter and a decrease from $1.21 billion in the same quarter last year. |
|
• |
Average deposits of $1.51 billion for the current quarter, increases of 1.4% and 8.5% 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 September 30, 2021, an increase from 0.66% as of June 30, 2021. |
|
• |
Non-performing loans of $5.7 million, or 0.48% of total net loans receivable (excluding PPP loans), as of September 30, 2021, unchanged compared to June 30, 2021 and increased from 0.17% as of September 30, 2020. |
|
• |
Loans on COVID-19-related payment deferral totaled $18.5 million, or 1.52% of gross loans, as of September 30, 2021, compared to $27.3 million, or 2.21% of gross loans, as of June 30, 2021. Loans on deferral totaling $3.5 million and $15.0 million are scheduled to resume payments in the next two quarters, respectively. |
President's Comments
"As we celebrate our 150th anniversary, we are extremely pleased with the Company's solid first quarter financial performance which resulted in record earnings", said Joseph D. Roberto, Chairman, President & Chief Executive Officer of PCSB Financial Corporation. "Despite the challenging low interest rate environment, improvement in our year over year financial performance was largely driven by net interest margin expansion and control over operating expenses. With respect to maintaining control over operating expenses, we have received notice of non-objection from the New York State Department of Financial Services to consolidate one of our branch offices which is expected to occur on or about December 30, 2021. Meanwhile, our staff remains a source of strength to our customers and communities by providing them with personal attention to help them get through lingering economic challenges caused by the pandemic. Moving forward, our sustained focus on our communities' needs is a core principle that has made PCSB successful over the past 150 years and will continue to create sustainable value for our shareholders."
Income Statement Summary
Net income for the current quarter was $3.6 million, which increased $204,000 from the linked quarter and $886,000 from the prior year period. The change from the linked quarter is primarily due to a $243,000 decrease in noninterest
1
expense and a $45,000 increase in noninterest income, partially offset by a $46,000 decrease in net interest income, a $30,000 increase in income tax expense and an $8,000 increase in the provision for loan losses.The change from the prior year period is primarily due to a $958,000increase in net interest income, a $96,000 decrease in provision for loan losses and a $19,000 increase in noninterest income, partially offset by a$187,000 increase in income tax expense.
Net interest income was $12.5 million for the current quarter, a decrease of $46,000, or 0.4%, compared to the linked quarter and an increase of $958,000, or 8.3%, compared to the prior year quarter. The decrease compared to the linked quarter is primarily the result of a $10.6 million, or 0.6%, decrease in average interest-earning assets, partially offset by a 1 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 $62.8 million, or 3.6%, increase in average interest-earning assets and a 13 basis point increase in the tax equivalent net interest margin.
The tax equivalent net interest margin was 2.82% for the current quarter, reflecting increases of 1 basis point compared to 2.81% in the linked quarter and 13 basis points compared to 2.69% in the prior year quarter. Adjusted net interest margin, which excludes the effect of PPP loan interest and fees, was 2.72% for the current quarter compared to 2.68% in the linked quarter and 2.63% in the prior year quarter, as reductions in the cost of funds were partially offset by decreases in asset yields, driven by lower market interest rates.
The Company recognized PPP loan interest and origination fee income (net of costs) of $381,000 in the current quarter, compared to $516,000 in the linked quarter and $217,000 in the prior year quarter. Unearned origination fees (net of costs) on PPP loans totaled $698,000 as of September 30, 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.
Tax equivalent yield on interest-earning assets for the current quarter was 3.20%, a 6 basis point decrease from the linked quarter and a 17 basis point decrease from the prior year quarter.The decrease in yield compared to the linked quarter and the prior year quarter is a result of decreases in market interest rates, lower average loan balances due to muted origination activity and elevated amounts of liquidity over the last twelve months. The decline in asset yields (excluding the effects of PPP income) has slowed in recent quarters due to a more stable yield curve and a more favorable earning asset composition.
The cost of interest-bearing deposits was 0.41% for the current quarter, decreases of 7 basis points and 39 basis points from 0.48% and 0.80% 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 18 months, the effects of which continue to be realized.As of quarter end, the weighted average cost of interest-bearing deposits was 0.34%. The cost of interest-bearing liabilities was 0.49% for the current quarter, decreases of 10 basis points from 0.59% in the linked quarter and 40 basis points from 0.89% in the prior year quarter. During the remainder of 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 $13,000 for current quarter, compared to $5,000 for the linked quarter and $109,000 for the prior year quarter. Loans on COVID-19 related payment deferral totaled $18.5 million, or 1.52% of gross loans, as of September 30, 2021, compared to $27.3 million, or 2.21% of gross loans, as of June 30, 2021. Recoveries, net of charge-offs, were $265,000 for the current quarter compared to $11,000 for the linked quarter and charge-offs, net of recoveries, of $76,000 for the prior year quarter.Non-performing loans as a percent of total loans receivable (excluding PPP loans) was 0.48% as of September 30, 2021, unchanged compared to June 30, 2021 and increased from 0.17% as of September 30, 2020.
2
The table below provides additional detail for those loans on deferral as of September 30, 2021 (dollar amounts in thousands):
|
Industry Sector: |
Number of loans |
Recorded Investment (1) (2) |
% secured by real estate collateral |
Loan-to-Value % (3) |
Weighted average term of remaining deferral (in months) |
||||||||||||||
|
Retail |
3 |
$ |
11,590 |
100.0 |
% |
59.8 |
% |
3.1 |
|||||||||||
|
Hotels and accommodation services |
1 |
2,013 |
100.0 |
54.8 |
0.1 |
||||||||||||||
|
Food service |
2 |
3,018 |
100.0 |
48.7 |
1.7 |
||||||||||||||
|
All other commercial |
5 |
1,903 |
89.2 |
70.0 |
2.7 |
||||||||||||||
|
Total |
11 |
$ |
18,524 |
98.9 |
% |
58.3 |
% |
2.5 |
|||||||||||
|
(1) Includes loans classified as special mention and substandard of $1.7 million and $8.6 million, respectively. |
|||||||||||||||||||
|
(2) Includes $3.6 million of nonaccrual loans. All loans are considered current. |
|||||||||||||||||||
|
(3) Generally based on collateral values upon origination. |
Noninterest income of $613,000 for the current quarter increased $45,000 compared to the linked quarter and $19,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to increases of $24,000 in bank-owned life insurance income, $11,000 in fees and service charges and $10,000 in all other noninterest income. The increase compared to the prior year quarter was primarily due to increases of $79,000 in fees and service charges, $60,000 in bank-owned life insurance income and $9,000 in all other noninterest income, partially offset by a $129,000 decrease in swap income. The increase in fees and service charges compared to the prior year quarter was partially the result of the waiver in the prior year of certain overdraft fees, ATM usage fees, wire and CD early withdrawal fees in response to COVID-19, as well an increase in debit card and interchange income. Current quarter noninterest income includes net gains on the sale of loans of $6,000, compared to none in the linked quarter and prior year quarter.
Noninterest expense of $8.6 million for the current quarter decreased $243,000 compared to the linked quarter and was unchanged compared to the prior year quarter. The decrease compared to the linked quarter was primarily due to lower pension costs. Noninterest expenses were unchanged compared to the prior year quarter primarily due to increases in New York State capital-based taxes and ESOP costs, which were largely offset by lower pension costs.
The effective income tax rate was 19.9% for the current quarter, as compared to 20.2% for the linked quarter and 20.7% for the prior year quarter.
Balance Sheet Summary
Total assets were largely unchanged at $1.87 billion at September 30, 2021 as compared to June 30, 2021, as an increase of $28.6 million in total investment securities, was largely offset by decreases of $18.8 million in net loans receivable and $11.3 million in cash and cash equivalents. The increase in investment securities was the result of the Company deploying excess liquidity and included increases of $26.9 million in state and municipal securities, $5.5 million in corporate securities and $5.1 million in mortgage-backed securities, partially offset by a $9.0 million decrease in U.S. government and agency bonds. Net loans receivable decreased $18.8 million, primarily the result of decreases in commercial loans and residential mortgage loans of $28.6 million and $2.6 million, respectively, partially offset by increases in commercial mortgage loans and construction loans of $11.4 million and $1.5 million, respectively.The decrease in commercial loans includes a decrease in PPP loans of $17.3 million, driven by paydowns and forgiveness.
Total liabilities were largely unchanged at $1.60 billion at September 30, 2021 compared to June 30, 2021 as an increase of $13.0 million in deposits was largely offset by decreases of $11.1 million in other liabilities and $3.7 million in mortgage escrow funds. The $13.0 million increase in deposits includes increases in money market and NOW accounts of $30.2 million and $4.4 million, respectively, partially offset by decreases in time deposits, savings and demand accounts of $13.3 million, $5.7 million and $2.6 million, respectively.
Total shareholders' equity increased $168,000 to $274.7 million at September 30, 2021 as compared to $274.6 million as of June 30, 2021. This increase was primarily due to net income of $3.6 million and $1.3 million of stock-based compensation and reduction in unearned ESOP shares for plan shares earned during the period, partially offset by the repurchase of $3.7 million (204,335 shares) of common stock and $876,000 of cash dividends declared and
3
paid. As of September 30, 2021, there were 339,828 shares available to be repurchased under the current stock repurchase plan.
At September 30, 2021, the Company's book value per share and tangible book value per share were $17.64 and $17.24, 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 September 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
4
PCSB Financial Corporation and Subsidiaries
Consolidated Balance Sheets (unaudited)
(amounts in thousands, except share and per share data)
|
September 30, |
June 30, |
|||||||
|
2021 |
2021 |
|||||||
|
ASSETS |
||||||||
|
Cash and due from banks |
$ |
145,875 |
$ |
152,070 |
||||
|
Federal funds sold |
2,137 |
7,235 |
||||||
|
Cash and cash equivalents |
148,012 |
159,305 |
||||||
|
Held to maturity debt securities, at amortized cost (fair value of $381,521 and $342,137, respectively) |
378,510 |
337,584 |
||||||
|
Available for sale debt securities, at fair value |
45,015 |
57,387 |
||||||
|
Total investment securities |
423,525 |
394,971 |
||||||
|
Loans receivable, net of allowance for loan losses of $8,159 and $7,881, respectively |
1,210,674 |
1,229,451 |
||||||
|
Accrued interest receivable |
6,550 |
6,398 |
||||||
|
FHLB stock |
4,506 |
4,507 |
||||||
|
Premises and equipment, net |
20,536 |
21,099 |
||||||
|
Deferred tax asset, net |
2,540 |
2,552 |
||||||
|
Bank-owned life insurance |
35,760 |
35,568 |
||||||
|
Goodwill |
6,106 |
6,106 |
||||||
|
Other intangible assets |
135 |
151 |
||||||
|
Other assets |
14,835 |
14,827 |
||||||
|
Total assets |
$ |
1,873,179 |
$ |
1,874,935 |
||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
|
Interest-bearing deposits |
$ |
1,288,167 |
$ |
1,272,610 |
||||
|
Non interest-bearing deposits |
216,470 |
219,072 |
||||||
|
Total deposits |
1,504,637 |
1,491,682 |
||||||
|
Mortgage escrow funds |
6,828 |
10,536 |
||||||
|
Advances from Federal Home Loan Bank |
65,924 |
65,957 |
||||||
|
Other liabilities |
21,062 |
32,200 |
||||||
|
Total liabilities |
1,598,451 |
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 September 30, 2021 and June 30, 2021) |
- |
- |
||||||
|
Common stock ($0.01 par value, 200,000,000 shares authorized, 18,703,577 shares issued as of both September 30, 2021 and June 30, 2021, 15,574,310 and 15,770,645 shares outstanding as of September 30, 2021 and June 30, 2021, respectively) |
187 |
187 |
||||||
|
Additional paid in capital |
190,793 |
189,926 |
||||||
|
Retained earnings |
153,725 |
150,987 |
||||||
|
Unearned compensation - ESOP |
(9,932 |
) |
(10,176 |
) |
||||
|
Accumulated other comprehensive loss, net of income taxes |
(3,204 |
) |
(3,099 |
) |
||||
|
Treasury stock, at cost, 3,129,267 and 2,932,932 shares as of September 30, 2021 and June 30, 2021, respectively) |
(56,841 |
) |
(53,265 |
) |
||||
|
Total shareholders' equity |
274,728 |
274,560 |
||||||
|
Total liabilities and shareholders' equity |
$ |
1,873,179 |
$ |
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 |
||||||||
|
September 30, |
||||||||
|
2021 |
2020 |
|||||||
|
Interest and dividend income |
||||||||
|
Loans receivable |
$ |
12,107 |
$ |
12,547 |
||||
|
Investment securities |
2,011 |
1,856 |
||||||
|
Federal funds and other |
109 |
125 |
||||||
|
Total interest and dividend income |
14,227 |
14,528 |
||||||
|
Interest expense |
||||||||
|
Deposits and escrow interest |
1,354 |
2,432 |
||||||
|
FHLB advances |
338 |
519 |
||||||
|
Total interest expense |
1,692 |
2,951 |
||||||
|
Net interest income |
12,535 |
11,577 |
||||||
|
Provision for loan losses |
13 |
109 |
||||||
|
Net interest income after provision for loan losses |
12,522 |
11,468 |
||||||
|
Noninterest income |
||||||||
|
Fees and service charges |
401 |
322 |
||||||
|
Swap income |
- |
129 |
||||||
|
Bank-owned life insurance |
192 |
132 |
||||||
|
Other |
20 |
11 |
||||||
|
Total noninterest income |
613 |
594 |
||||||
|
Noninterest expense |
||||||||
|
Salaries and employee benefits |
5,773 |
5,607 |
||||||
|
Occupancy and equipment |
1,353 |
1,318 |
||||||
|
Communications and data processing |
527 |
576 |
||||||
|
Professional fees |
393 |
400 |
||||||
|
Postage, printing, stationery and supplies |
143 |
139 |
||||||
|
Advertising |
100 |
100 |
||||||
|
FDIC assessment |
125 |
113 |
||||||
|
Amortization of intangible assets |
16 |
20 |
||||||
|
Other operating expenses |
194 |
351 |
||||||
|
Total noninterest expense |
8,624 |
8,624 |
||||||
|
Net income before income tax expense |
4,511 |
3,438 |
||||||
|
Income tax expense |
897 |
710 |
||||||
|
Net income |
$ |
3,614 |
$ |
2,728 |
||||
|
Earnings per common share: |
||||||||
|
Basic |
$ |
0.25 |
$ |
0.18 |
||||
|
Diluted |
0.25 |
0.18 |
||||||
|
Weighted average common shares outstanding: |
||||||||
|
Basic |
14,337,543 |
15,302,838 |
||||||
|
Diluted |
14,405,816 |
15,302,949 |
6
PCSB Financial Corporation and Subsidiaries
Net Interest Margin Analysis (unaudited)
(dollar amounts in thousands)
|
Three Months Ended |
|||||||||||||||||||||||||||||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
|||||||||||||||||||||||||||||||||||||||
|
Average Balance |
Interest / Dividends |
Average Rate |
Average Balance |
Interest / Dividends |
Average Rate |
Average Balance |
Interest / Dividends |
Average Rate |
|||||||||||||||||||||||||||||||||
|
Assets: |
|||||||||||||||||||||||||||||||||||||||||
|
Loans receivable (1) |
$ |
1,223,532 |
$ |
12,107 |
3.96 |
% |
$ |
1,245,610 |
$ |
12,625 |
4.06 |
% |
$ |
1,252,595 |
$ |
12,547 |
4.01 |
% |
|||||||||||||||||||||||
|
Investment securities (1) |
404,565 |
2,011 |
2.07 |
363,175 |
1,851 |
2.11 |
315,292 |
1,856 |
2.38 |
||||||||||||||||||||||||||||||||
|
Other interest-earning assets |
160,659 |
109 |
0.27 |
190,582 |
110 |
0.23 |
158,038 |
125 |
0.31 |
||||||||||||||||||||||||||||||||
|
Total interest-earning assets |
1,788,756 |
14,227 |
3.20 |
1,799,367 |
14,586 |
3.26 |
1,725,925 |
14,528 |
3.37 |
||||||||||||||||||||||||||||||||
|
Non-interest-earning assets |
76,375 |
79,015 |
71,926 |
||||||||||||||||||||||||||||||||||||||
|
Total assets |
$ |
1,865,131 |
$ |
1,878,382 |
$ |
1,797,851 |
|||||||||||||||||||||||||||||||||||
|
Liabilities and equity: |
|||||||||||||||||||||||||||||||||||||||||
|
NOW accounts |
$ |
182,531 |
70 |
0.15 |
$ |
182,475 |
69 |
0.15 |
$ |
149,466 |
89 |
0.24 |
|||||||||||||||||||||||||||||
|
Money market accounts |
350,575 |
186 |
0.21 |
311,255 |
162 |
0.21 |
250,297 |
238 |
0.38 |
||||||||||||||||||||||||||||||||
|
Savings accounts and mortgage escrow funds |
397,292 |
113 |
0.11 |
387,422 |
109 |
0.11 |
360,091 |
202 |
0.22 |
||||||||||||||||||||||||||||||||
|
Time deposits |
367,641 |
985 |
1.06 |
395,240 |
1,179 |
1.20 |
443,487 |
1,903 |
1.70 |
||||||||||||||||||||||||||||||||
|
Total interest-bearing deposits |
1,298,039 |
1,354 |
0.41 |
1,276,392 |
1,519 |
0.48 |
1,203,341 |
2,432 |
0.80 |
||||||||||||||||||||||||||||||||
|
FHLB advances |
65,935 |
338 |
2.03 |
94,970 |
486 |
2.05 |
106,067 |
519 |
1.94 |
||||||||||||||||||||||||||||||||
|
Total interest-bearing liabilities |
1,363,974 |
1,692 |
0.49 |
1,371,362 |
2,005 |
0.59 |
1,309,408 |
2,951 |
0.89 |
||||||||||||||||||||||||||||||||
|
Non-interest-bearing deposits |
207,806 |
208,265 |
184,085 |
||||||||||||||||||||||||||||||||||||||
|
Other non-interest-bearing liabilities |
19,943 |
23,114 |
28,958 |
||||||||||||||||||||||||||||||||||||||
|
Total liabilities |
1,591,723 |
1,602,741 |
1,522,451 |
||||||||||||||||||||||||||||||||||||||
|
Total shareholders' equity |
273,408 |
275,641 |
275,400 |
||||||||||||||||||||||||||||||||||||||
|
Total liabilities and shareholders' equity |
$ |
1,865,131 |
$ |
1,878,382 |
$ |
1,797,851 |
|||||||||||||||||||||||||||||||||||
|
Net interest income |
$ |
12,535 |
$ |
12,581 |
$ |
11,577 |
|||||||||||||||||||||||||||||||||||
|
Interest rate spread - tax equivalent (2) |
2.71 |
2.67 |
2.48 |
||||||||||||||||||||||||||||||||||||||
|
Net interest margin - tax equivalent (3) |
2.82 |
2.81 |
2.69 |
||||||||||||||||||||||||||||||||||||||
|
Average interest-earning assets to interest-bearing liabilities |
131.14 |
% |
131.21 |
% |
|||||||||||||||||||||||||||||||||||||
|
(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
Condensed Financial Information (unaudited)
(amounts in thousands, except per share data)
|
As of |
|||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||||||||
|
Condensed Balance Sheets |
|||||||||||||||
|
Cash and cash equivalents |
$ |
148,012 |
$ |
159,305 |
$ |
169,314 |
$ |
162,541 |
$ |
162,739 |
|||||
|
Total investment securities |
423,525 |
394,971 |
347,302 |
310,231 |
318,509 |
||||||||||
|
Loans receivable, net |
1,210,674 |
1,229,451 |
1,261,155 |
1,237,550 |
1,227,913 |
||||||||||
|
Other assets |
90,968 |
91,208 |
76,903 |
79,517 |
81,914 |
||||||||||
|
Total assets |
$ |
1,873,179 |
$ |
1,874,935 |
$ |
1,854,674 |
$ |
1,789,839 |
$ |
1,791,075 |
|||||
|
Total deposits and mortgage escrow funds |
$ |
1,511,465 |
$ |
1,502,218 |
$ |
1,463,542 |
$ |
1,387,897 |
$ |
1,383,432 |
|||||
|
Advances from Federal Home Loan Bank |
65,924 |
65,957 |
95,991 |
106,023 |
106,056 |
||||||||||
|
Other liabilities |
21,062 |
32,200 |
23,844 |
26,595 |
27,908 |
||||||||||
|
Total liabilities |
1,598,451 |
1,600,375 |
1,583,377 |
1,520,515 |
1,517,396 |
||||||||||
|
Total shareholders' equity |
274,728 |
274,560 |
271,297 |
269,324 |
273,679 |
||||||||||
|
Total liabilities and shareholders' equity |
$ |
1,873,179 |
$ |
1,874,935 |
$ |
1,854,674 |
$ |
1,789,839 |
$ |
1,791,075 |
|||||
|
Quarter Ended |
|||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||||||||
|
Condensed Income Statements |
|||||||||||||||
|
Interest income |
$ |
14,227 |
$ |
14,586 |
$ |
13,925 |
$ |
14,225 |
$ |
14,528 |
|||||
|
Interest expense |
1,692 |
2,005 |
2,288 |
2,678 |
2,951 |
||||||||||
|
Net interest income |
12,535 |
12,581 |
11,637 |
11,547 |
11,577 |
||||||||||
|
Provision (benefit) for loan losses |
13 |
5 |
(894 |
) |
107 |
109 |
|||||||||
|
Noninterest income |
613 |
568 |
592 |
743 |
594 |
||||||||||
|
Noninterest expense |
8,624 |
8,867 |
8,572 |
8,691 |
8,624 |
||||||||||
|
Income before income tax expense |
4,511 |
4,277 |
4,551 |
3,492 |
3,438 |
||||||||||
|
Income tax expense |
897 |
867 |
959 |
798 |
710 |
||||||||||
|
Net income |
$ |
3,614 |
$ |
3,410 |
$ |
3,592 |
$ |
2,694 |
$ |
2,728 |
|||||
|
Earnings per share: |
|||||||||||||||
|
Basic |
$ |
0.25 |
$ |
0.23 |
$ |
0.25 |
$ |
0.18 |
$ |
0.18 |
|||||
|
Diluted |
0.25 |
0.23 |
0.25 |
0.18 |
0.18 |
8
PCSB Financial Corporation and Subsidiaries
Selected Financial Data (unaudited)
|
Quarter Ended |
|||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||||||||
|
Performance Ratios (1): |
|||||||||||||||
|
Return on average assets |
0.78 |
% |
0.73 |
% |
0.80 |
% |
0.60 |
% |
0.61 |
% |
|||||
|
Return on average equity |
5.29 |
% |
4.95 |
% |
5.32 |
% |
3.96 |
% |
3.96 |
% |
|||||
|
Interest rate spread |
2.71 |
% |
2.67 |
% |
2.53 |
% |
2.52 |
% |
2.47 |
% |
|||||
|
Net interest margin |
2.82 |
% |
2.81 |
% |
2.69 |
% |
2.71 |
% |
2.69 |
% |
|||||
|
Efficiency ratio |
65.59 |
% |
67.43 |
% |
70.10 |
% |
70.72 |
% |
70.86 |
% |
|||||
|
Noninterest income to average assets |
0.13 |
% |
0.12 |
% |
0.13 |
% |
0.17 |
% |
0.13 |
% |
|||||
|
Noninterest expense to average assets |
1.85 |
% |
1.89 |
% |
1.90 |
% |
1.95 |
% |
1.92 |
% |
|||||
|
Average interest-earning assets to average interest-bearing liabilities |
131.14 |
% |
131.21 |
% |
131.31 |
% |
131.07 |
% |
131.81 |
% |
|||||
|
Average equity to average assets |
14.66 |
% |
14.67 |
% |
14.99 |
% |
15.23 |
% |
15.32 |
% |
|||||
|
Dividend payout ratio (2) |
24.24 |
% |
26.07 |
% |
16.65 |
% |
22.57 |
% |
23.09 |
% |
|||||
9
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 |
|||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||||||||
|
Loans to deposits |
80.46 |
% |
82.42 |
% |
86.72 |
% |
89.85 |
% |
89.17 |
% |
|||||
|
Share Data: |
|||||||||||||||
|
Shares outstanding |
15,574,310 |
15,770,645 |
15,966,216 |
16,097,867 |
16,634,237 |
||||||||||
|
Book value per common share |
$ |
17.64 |
$ |
17.41 |
$ |
16.99 |
$ |
16.73 |
$ |
16.45 |
|||||
|
Tangible book value per common share (3) |
$ |
17.24 |
$ |
17.01 |
$ |
16.60 |
$ |
16.34 |
$ |
16.07 |
|||||
|
Asset Quality Ratios: |
|||||||||||||||
|
Non-performing loans receivable |
$ |
5,732 |
$ |
5,764 |
$ |
2,054 |
$ |
1,668 |
$ |
2,083 |
|||||
|
Non-performing assets |
$ |
5,732 |
$ |
5,764 |
$ |
2,054 |
$ |
1,668 |
$ |
2,083 |
|||||
|
Allowance for loan losses as a percent of total loans receivable (4) |
0.68 |
% |
0.66 |
% |
0.65 |
% |
0.72 |
% |
0.72 |
% |
|||||
|
Allowance for loan losses as a percent of non-performing loans receivable |
142.34 |
% |
136.73 |
% |
382.91 |
% |
520.20 |
% |
416.32 |
% |
|||||
|
Non-performing loans as a percent of total loans receivable, net (4) |
0.48 |
% |
0.48 |
% |
0.17 |
% |
0.14 |
% |
0.17 |
% |
|||||
|
Non-performing assets as a percent of total assets |
0.31 |
% |
0.31 |
% |
0.11 |
% |
0.09 |
% |
0.12 |
% |
|||||
|
Net (recoveries) charge-offs |
$ |
(265 |
) |
$ |
(11 |
) |
$ |
(82 |
) |
$ |
102 |
$ |
76 |
||
|
Net (recoveries) charge-offs to average outstanding loans during the period (1) |
(0.09 |
%) |
0.00 |
% |
(0.03 |
%) |
0.03 |
% |
0.02 |
% |
|||||
|
Capital Ratios (5): |
|||||||||||||||
|
Tier 1 capital (to adjusted total assets) |
12.72 |
% |
12.48 |
% |
12.76 |
% |
12.66 |
% |
12.41 |
% |
|||||
|
Common equity Tier 1 capital (to risk-weighted assets) |
17.84 |
% |
17.93 |
% |
17.72 |
% |
17.74 |
% |
17.56 |
% |
|||||
|
Tier 1 capital (to risk-weighted assets) |
17.84 |
% |
17.93 |
% |
17.72 |
% |
17.74 |
% |
17.56 |
% |
|||||
|
Total capital (to risk-weighted assets) |
18.46 |
% |
18.53 |
% |
18.33 |
% |
18.42 |
% |
18.24 |
% |
|||||
|
(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. |
10
PCSB Financial Corporation and Subsidiaries
Loan and Deposit Portfolios (unaudited)
(amounts in thousands)
|
As of |
|||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||||||||
|
Mortgage loans: |
|||||||||||||||
|
Residential mortgages |
$ |
221,735 |
$ |
224,305 |
$ |
229,008 |
$ |
237,987 |
$ |
245,008 |
|||||
|
Commercial mortgages |
838,021 |
826,624 |
831,162 |
801,348 |
794,248 |
||||||||||
|
Construction |
11,639 |
10,151 |
10,047 |
17,551 |
11,512 |
||||||||||
|
Net deferred loan origination costs |
97 |
196 |
365 |
600 |
666 |
||||||||||
|
Total mortgage loans |
1,071,492 |
1,061,276 |
1,070,582 |
1,057,486 |
1,051,434 |
||||||||||
|
Commercial and consumer loans: |
|||||||||||||||
|
Commercial loans (1) |
122,031 |
150,658 |
171,314 |
160,678 |
155,569 |
||||||||||
|
Home equity credit lines |
24,936 |
25,439 |
27,211 |
27,653 |
29,249 |
||||||||||
|
Consumer and overdrafts |
394 |
345 |
269 |
328 |
308 |
||||||||||
|
Net deferred loan origination costs |
(20 |
) |
(386 |
) |
(356 |
) |
82 |
25 |
|||||||
|
Total commercial and consumer loans |
147,341 |
176,056 |
198,438 |
188,741 |
185,151 |
||||||||||
|
Total loans receivable |
1,218,833 |
1,237,332 |
1,269,020 |
1,246,227 |
1,236,585 |
||||||||||
|
Allowance for loan losses |
(8,159 |
) |
(7,881 |
) |
(7,865 |
) |
(8,677 |
) |
(8,672 |
) |
|||||
|
Loans receivable, net |
$ |
1,210,674 |
$ |
1,229,451 |
$ |
1,261,155 |
$ |
1,237,550 |
$ |
1,227,913 |
|||||
|
(1) Includes PPP loans totaling: |
$ |
19,763 |
$ |
37,050 |
$ |
50,380 |
$ |
35,687 |
$ |
35,687 |
|
As of |
|||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||||||||
|
Demand deposits |
$ |
216,470 |
$ |
219,072 |
$ |
203,344 |
$ |
189,968 |
$ |
183,844 |
|||||
|
NOW accounts |
181,572 |
177,223 |
169,077 |
159,919 |
148,176 |
||||||||||
|
Money market accounts |
363,090 |
332,843 |
301,892 |
256,132 |
253,176 |
||||||||||
|
Savings |
381,836 |
387,529 |
372,151 |
354,882 |
349,805 |
||||||||||
|
Time deposits |
361,669 |
375,015 |
407,826 |
416,386 |
442,011 |
||||||||||
|
Total deposits |
$ |
1,504,637 |
$ |
1,491,682 |
$ |
1,454,290 |
$ |
1,377,287 |
$ |
1,377,012 |
|||||
11
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 |
|||||||||
|
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
|||||||
|
Computation of Tax Equivalent Net Interest Income |
|||||||||
|
Total interest income |
$ |
14,227 |
$ |
14,586 |
$ |
14,528 |
|||
|
Total interest expense |
1,692 |
2,005 |
2,951 |
||||||
|
Net interest income (GAAP) |
12,535 |
12,581 |
11,577 |
||||||
|
Tax equivalent adjustment |
89 |
68 |
33 |
||||||
|
Net interest income - tax equivalent (Non-GAAP) |
$ |
12,624 |
$ |
12,649 |
$ |
11,610 |
|||
12
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 |
|||||||||||||||
|
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||||||||
|
Computation of Tangible Book Value per Common Share |
|||||||||||||||
|
Total shareholders' equity (GAAP) |
$ |
274,728 |
$ |
274,560 |
$ |
271,297 |
$ |
269,324 |
$ |
273,679 |
|||||
|
Adjustments: |
|||||||||||||||
|
Goodwill |
(6,106 |
) |
(6,106 |
) |
(6,106 |
) |
(6,106 |
) |
(6,106 |
) |
|||||
|
Other intangible assets |
(135 |
) |
(151 |
) |
(168 |
) |
(189 |
) |
(209 |
) |
|||||
|
Tangible common shareholders' equity (Non-GAAP) |
$ |
268,487 |
$ |
268,303 |
$ |
265,023 |
$ |
263,029 |
$ |
267,364 |
|||||
|
Common shares outstanding |
15,574,310 |
15,770,645 |
15,966,216 |
16,097,867 |
16,634,237 |
||||||||||
|
Book value per share (GAAP) |
$ |
17.64 |
$ |
17.41 |
$ |
16.99 |
$ |
16.73 |
$ |
16.45 |
|||||
|
Adjustments: |
|||||||||||||||
|
Effects of intangible assets |
(0.40 |
) |
(0.40 |
) |
(0.39 |
) |
(0.39 |
) |
(0.38 |
) |
|||||
|
Tangible book value per common share (Non-GAAP) |
$ |
17.24 |
$ |
17.01 |
$ |
16.60 |
$ |
16.34 |
$ |
16.07 |
13
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 |
|||||||||
|
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
|||||||
|
Computation of Adjusted Yield on Assets and Adjusted Net Interest Margin, Excluding PPP interest and fee income |
|||||||||
|
Average interest-earning assets |
$ |
1,788,756 |
$ |
1,799,367 |
$ |
1,725,925 |
|||
|
Interest and dividend income (GAAP) |
$ |
14,227 |
$ |
14,586 |
$ |
14,528 |
|||
|
Less: PPP interest and fee income |
(381 |
) |
(516 |
) |
(217 |
) |
|||
|
Adjusted interest and dividend income (Non-GAAP) |
$ |
13,846 |
$ |
14,070 |
$ |
14,311 |
|||
|
Yield on interest-earning assets (GAAP) |
3.20 |
% |
3.26 |
% |
3.37 |
% |
|||
|
Adjusted yield on interest-earning assets (Non-GAAP) |
3.10 |
% |
3.13 |
% |
3.32 |
% |
|||
|
Net interest income (GAAP) |
$ |
12,535 |
$ |
12,581 |
$ |
11,577 |
|||
|
Less: PPP interest and fee income |
(381 |
) |
(516 |
) |
(217 |
) |
|||
|
Adjusted net interest income (Non-GAAP) |
$ |
12,154 |
$ |
12,065 |
$ |
11,360 |
|||
|
Net interest margin (GAAP) |
2.82 |
% |
2.81 |
% |
2.69 |
% |
|||
|
Adjusted net interest margin (Non-GAAP) |
2.72 |
% |
2.68 |
% |
2.63 |
% |
14