PCSB Financial Corporation Announces First Fiscal Quarter Financial Results and Declares Quarterly Cash Dividend

Rhea-AI Summary

PCSB Financial Corporation (NASDAQ: PCSB) reported a net income of $3.6 million, or $0.25 per diluted share, for Q1 2022, reflecting increases of 6.0% and 32.5% from the prior quarter and year, respectively. Net interest income remained steady at $12.5 million, while the efficiency ratio improved to 65.59%. The Board declared a $0.06 dividend, payable on November 26, 2021. Average loans receivable was $1.20 billion, unchanged from the prior quarter but down from $1.21 billion year-over-year. Total assets slightly decreased to $1.87 billion.

Positive

• Net income increased by $204,000 from the linked quarter and $886,000 from the prior year quarter.
• Tax equivalent net interest margin improved to 2.82%, up from 2.69% year-over-year.
• Efficiency ratio decreased to 65.59%, indicating better cost management.

Negative

• Non-performing loans increased from 0.17% in the prior year to 0.48%.
• Average loans receivable decreased from $1.21 billion year-over-year.
• Net interest income slightly declined by $46,000 from the linked quarter.

YORKTOWN HEIGHTS, N.Y., Oct. 28, 2021 (GLOBE NEWSWIRE) -- 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 150^th 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 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 $958,000 increase 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.

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 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

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

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

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.

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

PCSB Financial Corporation and Subsidiaries
Selected Financial Data (unaudited)

		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	%

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.

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

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

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

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	%

FAQ

What were PCSB's earnings for Q1 2022?

PCSB reported net income of $3.6 million for Q1 2022.

What is the dividend declared by PCSB?

PCSB declared a quarterly cash dividend of $0.06 per share.

How did PCSB perform compared to the previous year?

PCSB's net income increased by 32.5% compared to the same quarter last year.

What is the current efficiency ratio for PCSB?

PCSB's efficiency ratio improved to 65.59% for Q1 2022.