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

Published

YORKTOWN HEIGHTS, N.Y., Oct. 23, 2019 (GLOBE NEWSWIRE) -- PCSB Financial Corporation (the “Company”) (NASDAQ: PCSB), parent of PCSB Bank (the "Bank"), today announced its results for the three months ended September 30, 2019. For the three months ended September 30, 2019, net income was $2.8 million, or $0.18 per share, compared to $1.7 million, or $0.10 per share, for the three months ended June 30, 2019 and $2.3 million, or $0.14 per share, for the three months ended September 30, 2018.

On a non-GAAP basis, which excludes certain nonrecurring items, the Company recorded adjusted net income of $2.4 million, or $0.15 per diluted share for the three months ended September 30, 2019 as compared to adjusted net income of $1.6 million, or $0.10 per diluted share for the three months ended June 30, 2019 and $2.2 million, or $0.13 per diluted share, for the three months ended September 30, 2018. Reconciliations of GAAP to non-GAAP measures appear at the end of this release.

The Board of Directors declared a regular quarterly cash dividend of $0.04 per share. The dividend is payable on or about November 29, 2019 to stockholders of record as of the close of business on November 15, 2019.

First Quarter Highlights

  • Diluted earnings per share of $0.18, an increase of 28.6% compared to the same quarter last year.
  • Net interest income of $12.0 million, an increase of $1.5 million, or 14.7%, compared to the same quarter last year.
  • Net interest margin was 3.03% for the quarter, an increase from 2.94% for the same quarter last year.
  • The efficiency ratio was 68.85% for the quarter, compared to 72.11% for the same quarter last year.
  • Total loans receivable was $1.16 billion, a result of loan growth of $70.1 million, or 6.4%, during the quarter.
  • Loans to deposits ratio was 94.27%, an increase from 78.49% as of the same quarter last year.
  • The Company repurchased 179,800 shares during the quarter at a total cost of $3.5 million, or an average cost of $19.60 per share.

President’s Comments

Commenting on the Company’s results, Joseph D. Roberto. Chairman, President and Chief Executive Officer of PCSB Financial Corporation said, “I am pleased to report continued growth in our core business as we begin our third fiscal year as a public company.  We continue to build off the strong results achieved in fiscal 2019 with solid results in the first quarter of fiscal 2020 as loans grew an additional $70.1 million or 6.4%, resulting in a 28.5% increase over the year ago period.  Profitability continues to improve as net income of $2.8 million increased $500,000 or 21.5% over the year ago period.  Asset quality remains strong as the ratio of non-performing assets to total assets of 0.26% decreased from 0.43% at September 30, 2018.  As we move forward, we remain focused on enhancing shareholder value through continued growth in earnings together with capital management techniques such as share repurchases and dividends.”

Income Statement Summary

Net interest income was $12.0 million for the quarter ended September 30, 2019, an increase of $1.2 million, or 11.5%, compared to the quarter ended June 30, 2019, and an increase of $1.5 million, or 14.7%, compared to quarter ended September 30, 2018. These increases in net interest income are primarily the result of increases in average net interest earning assets, as the Company has accomplished significant growth in average loans receivable compared to both the prior quarter and the same quarter last year, as well as increases in net interest margin.

The net interest margin was 3.03% for the current quarter, an increase of nine basis points compared to 2.94% in both the prior quarter and prior year quarter. Included in current quarter net interest income is $477,000 of prepayment income earned on loans receivable and investment securities. Excluding this nonrecurring prepayment income, net interest margin for the quarter would have been 2.91%, a decrease of three basis points from both the prior quarter and the prior year quarter. Despite rising funding costs due to higher short-term interest rates along with competitive loan and deposit pricing, continued asset growth and a shift in the asset mix has mitigated the decrease in the net interest margin.

The yield on interest-earning assets for the current quarter was 4.04%, a 23 basis point increase from the prior quarter and a 50 basis point increase from the prior year quarter. Excluding the effects of prepayment income, the yield on interest-earning assets was 3.92% for the current quarter.

The cost of interest-bearing deposits was 1.20% for the current quarter, an increase of eight basis points from 1.12% for the prior quarter and an increase of 41 basis points from 0.79% for the prior year quarter. The Company has experienced a shift in the deposit mix as customers in lower costing saving products moved to higher rate money market and time deposits. Additionally, as the Company has increasingly utilized borrowings over the past year to fund loan growth, the cost of interest-bearing liabilities was 1.32% for the current quarter, an increase of 16 basis points from 1.16% for the prior quarter and an increase of 51 basis points from 0.81% for the prior year quarter.

The provision for loan losses was $335,000 for the three months ended September 30, 2019 compared to $737,000 in the prior quarter and $58,000 for the same period in 2018. Charge-offs, net of recoveries, were $6,000 for the three months ended September 30, 2019 compared to $18,000 for the three months ended June 30, 2019 and $3,000 for the three months ended September 30, 2018.  Loans classified as substandard or doubtful increased $2.8 million, or 33.1%, to $11.3 million at September 30, 2019 from $8.5 million at June 30, 2019 and decreased $1.7 million, or 13.7%, from $13.0 million at September 30, 2018. Non-performing loans as a percent of total loans receivable was 0.29% as of September 30, 2019, an increase from 0.25% as of June 30, 2019 and a decrease from 0.62% as of September 30, 2018.

Noninterest income increased $124,000 to $765,000 for the three months ended September 30, 2019 compared to the same period in 2018, primarily due to increases of $99,000 in swap income and $23,000 in gains on sale of foreclosed real estate. Noninterest income decreased $197,000 from the three months ended June 30, 2019, primarily due to a $191,000 decrease in swap income.

Noninterest expense increased $779,000 to $8.8 million for the three months ended September 30, 2019 compared to the same period in 2018 and increased $79,000 compared to the three months ended June 30, 2019. The $779,000 increase from the prior year period was caused primarily by $829,000 of stock-based compensation expense recorded in the current quarter, compared to no such expense in the prior year period. The Company applied small bank assessment credits of $98,000 which fully offset the Company’s FDIC assessment for the current quarter. The remaining credits available are $239,000.

The effective income tax rate was 22.3% for the three months ended September 30, 2019, as compared to 26.2% for the three months ended June 30, 2019 and 23.4% for the three months ended September 30, 2018.

Balance Sheet Summary

Total assets increased $21.0 million to $1.66 billion at September 30, 2019 from $1.64 billion at June 30, 2019.  This increase was primarily due to an increase of $70.1 million in net loans receivable, partially offset by decreases of $38.8 million in total investment securities and $22.2 million in cash and cash equivalents. The $70.1 million increase in loans was the result of $64.9 million of originations and $44.1 million of loan purchases, partially offset by $38.9 million of net amortization and repayments. Commercial mortgages increased $74.9 million or 11.5%, and construction loans increased $5.6 million, or 42.3%, while commercial loans decreased $7.7 million or 5.8%.

Total liabilities increased $20.8 million to $1.38 billion at September 30, 2019 from $1.36 billion at June 30, 2019.  This increase was primarily due to a $14.6 million increase in other liabilities, as a result of recording a $12.0 million lease liability (a related lease asset was also recorded as part of bank premises and equipment) associated with the adoption of new lease accounting standards, and a net increase of $6.3 million in deposits and escrow balances.

Total shareholders’ equity increased $215,000 to $281.5 million at September 30, 2019 from $281.3 million at June 30, 2019.  This increase was primarily due to net income of $2.8 million, as well as $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 $3.5 million (179,800 shares) of common stock and $659,000 of cash dividends declared and paid. As of September 30, 2019, there were 710,221 shares available to be repurchased under the current stock repurchase plan.

At September 30, 2019, the Company’s book value per share and tangible book value per share were $15.97 and $15.61, respectively, compared to $15.80 and $15.44, respectively, at June 30, 2019.  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, 2019, 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 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. RobertoChairman, President and Chief Executive Officer(914) 248-7272

PCSB Financial Corporation and SubsidiariesConsolidated Balance Sheets (unaudited)(amounts in thousands, except share and per share data)

  September 30,     June 30,  
  2019     2019  
               
ASSETS              
Cash and due from banks $ 36,544     $ 58,756  
Federal funds sold   1,253       1,273  
Cash and cash equivalents   37,797       60,029  
Held to maturity debt securities, at amortized cost  (fair value of $315,901 and $346,243, respectively)   314,165       345,545  
Available for sale debt securities, at fair value   64,842       72,228  
Total investment securities   379,007       417,773  
Loans receivable, net of allowance for loan losses of $5,993 and $5,664, respectively   1,163,254       1,093,121  
Accrued interest receivable   5,494       4,797  
FHLB stock   6,254       6,255  
Premises and equipment, net   23,946       11,802  
Deferred tax asset, net   2,291       2,478  
Foreclosed real estate   856       1,158  
Bank-owned life insurance   24,428       24,291  
Goodwill   6,106       6,106  
Other intangible assets   298       323  
Other assets   8,877       9,446  
Total assets $ 1,658,608     $ 1,637,579  
LIABILITIES AND SHAREHOLDERS' EQUITY              
Interest bearing deposits $ 1,092,338     $ 1,084,442  
Non-interest bearing deposits   141,567       141,379  
Total deposits   1,233,905       1,225,821  
Mortgage escrow funds   7,553       9,355  
Advances from Federal Home Loan Bank   111,185       111,216  
Other liabilities   24,443       9,880  
Total liabilities   1,377,086       1,356,272  
Commitments and contingencies   -       -  
Preferred stock ($0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding as of September 30, 2019 and June 30, 2019, respectively)   -       -  
Common stock ($0.01 par value, 200,000,000 shares authorized, 18,712,295 shares issued as of September 30, 2019 and June 30, 2019, and 17,624,239 and 17,804,039 shares outstanding as of September 30, 2019 and June 30, 2019, respectively)   187       187  
Additional paid in capital   183,198       182,129  
Retained earnings   136,670       134,500  
Unearned compensation - ESOP   (11,870 )     (12,114 )
Accumulated other comprehensive loss, net of income taxes   (4,834 )     (5,090 )
Treasury stock, at cost (1,088,056 and 908,256 shares as of September 30, 2019 and June 30, 2019, respectively)   (21,829 )     (18,305 )
Total shareholders' equity   281,522       281,307  
Total liabilities and shareholders' equity $ 1,658,608     $ 1,637,579  
               

 

PCSB Financial Corporation and SubsidiariesConsolidated Statements of Operations (unaudited)(amounts in thousands, except share and per share data)

  Three Months Ended  
  September 30,  
  2019     2018  
Interest and dividend income              
Loans receivable $ 13,036     $ 9,898  
Investment securities   2,692       2,366  
Federal funds and other   298       345  
Total interest and dividend income   16,026       12,609  
Interest expense              
Deposits   3,301       2,056  
FHLB advances   727       89  
Total interest expense   4,028       2,145  
Net interest income   11,998       10,464  
Provision for loan losses   335       58  
Net interest income after provision for loan losses   11,663       10,406  
Noninterest income              
Fees and service charges   402       418  
Bank-owned life insurance   137       140  
Swap income   170       71  
Other   56       12  
Total noninterest income   765       641  
Noninterest expense              
Salaries and employee benefits   5,764       5,140  
Occupancy and equipment   1,315       1,241  
Communications and data processing   531       472  
Professional fees   404       369  
Postage, printing, stationary and supplies   140       138  
FDIC assessment   -       93  
Advertising   100       87  
Amortization of intangible assets   24       28  
Other operating expenses   509       440  
Total noninterest expense   8,787       8,008  
Net income before income tax expense   3,641       3,039  
Income tax expense   812       710  
Net income $ 2,829     $ 2,329  
Earnings per common share:              
Basic $ 0.18     $ 0.14  
Diluted $ 0.18     $ 0.14  
Weighted average common shares outstanding:              
Basic   15,979,762       16,869,100  
Diluted   16,082,276       16,869,100  
               

PCSB Financial Corporation and SubsidiariesNet Interest Margin Analysis (unaudited)(dollar amounts in thousands)

  Three Months Ended September 30,  
  2019     2018  
  Average Balance     Interest / Dividends     Average Rate     Average Balance     Interest / Dividends     Average Rate  
Assets:                                              
Loans receivable $ 1,142,025     $ 13,036       4.56 %   $ 903,021     $ 9,898       4.38 %
Investment securities   399,190       2,692       2.70       453,671       2,366       2.09  
Other interest-earning assets   45,914       298       2.58       67,222       345       2.03  
Total interest-earning assets   1,587,129       16,026       4.04       1,423,914       12,609       3.54  
Non-interest-earning assets   70,266                       55,251                  
Total assets $ 1,657,395                     $ 1,479,165                  
                                               
Liabilities and equity:                                              
NOW accounts $ 119,852       57       0.19     $ 119,404       53       0.18  
Money market accounts   149,880       463       1.23       61,679       139       0.89  
Savings accounts and escrow   362,569       232       0.25       462,542       289       0.25  
Time deposits   459,348       2,549       2.20       392,336       1,575       1.59  
Total interest-bearing deposits   1,091,649       3,301       1.20       1,035,961       2,056       0.79  
FHLB advances   121,855       727       2.37       18,821       89       1.89  
Total interest-bearing liabilities   1,213,504       4,028       1.32       1,054,782       2,145       0.81  
Non-interest-bearing deposits   140,627                       127,762                  
Other non-interest-bearing liabilities   21,211                       7,282                  
Total liabilities   1,375,342                       1,189,826                  
Total shareholders' equity   282,053                       289,339                  
Total liabilities and shareholders' equity $ 1,657,395                     $ 1,479,165                  
                                               
Net interest income         $ 11,998                     $ 10,464          
Interest rate spread (1)                   2.72                       2.73  
Net interest margin (2)                   3.03                       2.94  
Average interest-earning assets to interest-bearing liabilities   130.79 %                     135.00 %                
                                               
(1) 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.  
(2) Net interest margin represents annualized net interest income divided by average interest-earning assets.  
   

PCSB Financial Corporation and SubsidiariesCondensed Financial Information (unaudited)(amounts in thousands, except per share data)

                               
  As of  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Condensed Balance Sheets                          
Cash and cash equivalents $ 37,797   $ 60,029   $ 87,105   $ 143,119   $ 68,323  
Total investment securities   379,007     417,773     440,014     452,463     441,748  
Loans receivable, net   1,163,254     1,093,121     935,680     904,377     905,093  
Other assets   78,550     66,656     60,959     57,356     59,331  
Total assets $ 1,658,608   $ 1,637,579   $ 1,523,758   $ 1,557,315   $ 1,474,495  
                               
Total deposits and escrow $ 1,241,458   $ 1,235,176   $ 1,209,868   $ 1,234,409   $ 1,158,102  
Advances from Federal Home Loan Bank   111,185     111,216     26,248     26,279     18,810  
Other liabilities   24,443     9,880     9,326     7,845     7,706  
Total liabilities   1,377,086     1,356,272     1,245,442     1,268,533     1,184,618  
Total shareholders' equity   281,522     281,307     278,316     288,782     289,877  
Total liabilities and shareholders' equity $ 1,658,608   $ 1,637,579   $ 1,523,758   $ 1,557,315   $ 1,474,495  
                               

   Quarter Ended  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Condensed Income Statements                          
Interest income $ 16,026   $ 13,952   $ 13,646   $ 13,240   $ 12,609  
Interest expense   4,028     3,193     2,909     2,496     2,145  
Net interest income   11,998     10,759     10,737     10,744     10,464  
Provision for loan losses   335     737     7     6     58  
Noninterest income   765     962     579     920     641  
Noninterest expense   8,787     8,708     8,698     8,580     8,008  
Income before income tax expense   3,641     2,276     2,611     3,078     3,039  
Income tax expense   812     597     625     754     710  
Net income $ 2,829   $ 1,679   $ 1,986   $ 2,324   $ 2,329  
                               
Earnings per share:                              
Basic $ 0.18   $ 0.10   $ 0.12   $ 0.14   $ 0.14  
Diluted $ 0.18   $ 0.10   $ 0.12   $ 0.14   $ 0.14  
                               

PCSB Financial Corporation and SubsidiariesSelected Financial Data (unaudited)

  Quarter Ended  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Performance Ratios (1):                          
Return on average assets   0.68 %   0.44 %   0.52 %   0.62 %   0.63 %
Return on average equity   4.01 %   2.40 %   2.83 %   3.20 %   3.22 %
Interest rate spread   2.72 %   2.65 %   2.67 %   2.75 %   2.73 %
Net interest margin   3.03 %   2.94 %   2.94 %   3.00 %   2.94 %
Adjusted Efficiency ratio (2)   71.80 %   74.55 %   77.04 %   74.74 %   72.85 %
                               
Noninterest income to average assets   0.18 %   0.25 %   0.15 %   0.25 %   0.17 %
Noninterest expense to average assets   2.12 %   2.29 %   2.29 %   2.30 %   2.17 %
                               
Average interest-earning assets to average interest-bearing liabilities   130.79 %   132.96 %   133.68 %   135.40 %   135.00 %
Average equity to average assets   17.02 %   18.40 %   18.52 %   19.48 %   19.56 %
Dividend payout ratio (3)   23.29 %   39.43 %   24.97 %   22.42 %   21.64 %
                               

 

PCSB Financial Corporation and SubsidiariesSelected Financial Data (unaudited) - Continued(dollar amounts in thousands, except share and per share data)

  As of and for the quarter ended  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Loans to deposits   94.27 %   89.17 %   77.83 %   73.81 %   78.49 %
                               
Share Data:                              
Shares outstanding   17,624,239     17,804,039     17,804,039     18,490,225     18,165,110  
Book value per common share $ 15.97   $ 15.80   $ 15.63   $ 15.62   $ 15.96  
Tangible book value per common share (4) $ 15.61   $ 15.44   $ 15.27   $ 15.27   $ 15.60  
                               
Asset Quality Ratios:                              
Non-performing loans receivable $ 3,425   $ 2,727   $ 2,847   $ 3,576   $ 5,630  
Non-performing assets $ 4,281   $ 3,885   $ 3,500   $ 4,148   $ 6,384  
Allowance for loan losses as a percent of total loans receivable   0.51 %   0.52 %   0.53 %   0.54 %   0.54 %
Total valuation adjustment as a percent of total gross loans receivable (5)   0.60 %   0.62 %   0.66 %   0.69 %   0.70 %
Allowance for loan losses as a percent of non-performing loans receivable   174.98 %   207.70 %   173.67 %   138.23 %   88.08 %
Non-performing loans as a percent of total loans receivable, net   0.29 %   0.25 %   0.30 %   0.39 %   0.62 %
Non-performing assets as a percent of total assets   0.26 %   0.24 %   0.23 %   0.27 %   0.43 %
                               
Net charge-offs $ 6   $ 18   $ 5   $ 22   $ 3  
Net charge-offs to average outstanding loans during the period (1)   0.00 %   0.01 %   0.00 %   0.00 %   0.00 %
                               
Capital Ratios (6):                              
Tier 1 capital (to adjusted total assets)   12.89 %   13.81 %   13.71 %   13.78 %   13.80 %
Common equity Tier 1 capital (to risk-weighted assets)   17.16 %   17.96 %   20.47 %   20.73 %   21.17 %
Tier 1 capital (to risk-weighted assets)   17.16 %   17.96 %   20.47 %   20.73 %   21.17 %
Total capital (to risk-weighted assets)   17.64 %   18.45 %   20.96 %   21.23 %   21.68 %
                               
(1) Performance ratios are annualized.  
(2) Adjusted efficiency ratio is a non-GAAP measure and is defined as noninterest expense, less certain nonrecurring items, divided by operating revenue, which is equal to net interest income plus non-interest income excluding certain nonrecurring items. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the impact of certain one-time items and other discrete items that are unrelated to our core business. Reconciliations of GAAP to non-GAAP measures appear at the end of this release.  
(3) Dividends declared per share divided by net income per share.  
(4) 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.  
   

PCSB Financial Corporation and SubsidiariesSelected Financial Data (unaudited) - Continued(dollar amounts in thousands)

 (5) Loans acquired in 2015 as part of the CMS Bancorp. Inc./CMS Bank acquisition were recorded at their estimated fair value at the acquisition date and did not include a carry-over of the related pre-acquisition allowance for loan losses. Total valuation adjustments equal the allowance for loan losses plus the remaining discounts on acquired loans. We believe this ratio provides investors a more meaningful comparison to periods presented prior to the 2015 acquisition, as well as to our peers. Reconciliations of GAAP to non-GAAP measures appear at the end of this release.
(6) Represents Bank ratios.
 

PCSB Financial Corporation and SubsidiariesLoan and Deposit Portfolios (unaudited)(amounts in thousands)

  As of  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Mortgage loans:                              
Residential mortgages $ 264,251   $ 265,167   $ 261,970   $ 248,575   $ 249,894  
Commercial mortgage   726,315     651,396     499,284     499,930     495,944  
Construction   18,830     13,231     16,302     16,023     16,890  
Net deferred loan origination costs   1,202     1,031     843     842     859  
Total mortgage loans   1,010,598     930,825     778,399     765,370     763,587  
Commercial and consumer loans:                              
Commercial loans   125,926     133,614     126,514     107,899     110,196  
Home equity credit lines   31,503     33,204     34,525     35,029     35,191  
Consumer and overdrafts   437     365     459     321     344  
Net deferred loan origination costs   783     777     728     701     734  
Total commercial and consumer loans   158,649     167,960     162,226     143,950     146,465  
Total loans receivable   1,169,247     1,098,785     940,625     909,320     910,052  
Allowance for loan losses   (5,993 )   (5,664 )   (4,945 )   (4,943 )   (4,959 )
Loans receivable, net $ 1,163,254   $ 1,093,121   $ 935,680   $ 904,377   $ 905,093  
                               

  As of  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Demand deposits $ 141,567   $ 141,379   $ 137,899   $ 162,113   $ 131,024  
NOW accounts   124,062     123,069     120,353     123,251     121,449  
Money market accounts   151,652     148,134     137,197     121,146     79,266  
Savings   350,250     357,844     379,550     397,460     425,189  
Time deposits   466,374     455,395     427,194     421,354     396,193  
Total deposits $ 1,233,905   $ 1,225,821   $ 1,202,193   $ 1,225,324   $ 1,153,121  
                               

PCSB Financial Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Measures (unaudited)(dollar amounts in thousands, except share and per share data)

  Quarter Ended  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Computation of Adjusted Net Income and Adjusted Earnings Per Share  
Net income applicable to common stock (GAAP) $ 2,829   $ 1,679   $ 1,986   $ 2,324   $ 2,329  
                               
Adjustments (1):                              
Losses on other receivables   -     -     -     68     -  
Prepayment income on loans receivable and investment securities   (371 )   (25 )   (20 )   (72 )   (68 )
Gain on sale of foreclosed real estate   (37 )   -     -     -     (19 )
Gain on sale of investment securities   -     (5 )   -     (42 )   -  
Gain on sale of bank premises   -     -     -     (118 )   -  
Adjusted net income (Non-GAAP) $ 2,421   $ 1,649   $ 1,966   $ 2,160   $ 2,242  
                               
Average number of common shares outstanding:              
Basic   15,979,762     16,033,505     16,204,393     16,852,718     16,869,100  
Diluted   16,082,276     16,099,846     16,261,755     16,868,464     16,869,100  
Earnings per share (GAAP):                              
Basic $ 0.18   $ 0.10   $ 0.12   $ 0.14   $ 0.14  
Diluted $ 0.18   $ 0.10   $ 0.12   $ 0.14   $ 0.14  
Adjusted earnings per common share (Non-GAAP):              
Basic $ 0.15   $ 0.10   $ 0.12   $ 0.13   $ 0.13  
Diluted $ 0.15   $ 0.10   $ 0.12   $ 0.13   $ 0.13  
                               
(1) Amounts included in income before income tax expense are presented net of tax.  
   

PCSB Financial Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued(dollar amounts in thousands, except share and per share data)

  Quarter Ended  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Computation of Efficiency Ratio        
Noninterest expense (GAAP) $ 8,787   $ 8,708   $ 8,698   $ 8,580   $ 8,008  
Adjustments:                              
Losses on other receivables   -     -     -     (90 )   -  
Adjusted noninterest expense (non-GAAP) $ 8,787   $ 8,708   $ 8,698   $ 8,490   $ 8,008  
                               
Net interest income $ 11,998   $ 10,759   $ 10,737   $ 10,744   $ 10,464  
Noninterest income   765     962     579     920     641  
Total (GAAP)   12,763     11,721     11,316     11,664     11,105  
Adjustments:                              
Prepayment income on loans receivable and investment securities   (477 )   (34 )   (26 )   (95 )   (89 )
Gain on sale of foreclosed real estate   (47 )   -     -     -     (24 )
Gain on sale of investment securities   -     (7 )   -     (55 )   -  
Gain on sale of bank premises   -     -     -     (155 )   -  
Adjusted total (Non-GAAP) $ 12,239   $ 11,680   $ 11,290   $ 11,359   $ 10,992  
                               
Efficiency ratio (GAAP)   68.85 %   74.29 %   76.86 %   73.56 %   72.11 %
Adjusted efficiency ratio (Non-GAAP)   71.80 %   74.55 %   77.04 %   74.74 %   72.85 %
                               

PCSB Financial Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued(dollar amounts in thousands, except share and per share data)

  As of  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Computation of Tangible Book Value per Common Share        
Total shareholders' equity (GAAP) $ 281,522   $ 281,307   $ 278,316   $ 288,782   $ 289,877  
Adjustments:                              
Preferred stock   -     -     -     -     -  
Common shareholders' equity   281,522     281,307     278,316     288,782     289,877  
Adjustments:                              
Goodwill   (6,106 )   (6,106 )   (6,106 )   (6,106 )   (6,106 )
Other intangible assets   (298 )   (323 )   (348 )   (376 )   (405 )
Tangible common shareholders' equity (Non-GAAP) $ 275,118   $ 274,878   $ 271,862   $ 282,300   $ 283,366  
                               
Common shares outstanding   17,624,239     17,804,039     17,804,039     18,490,225     18,165,110  
                               
Book value per share (GAAP) $ 15.97   $ 15.80   $ 15.63   $ 15.62   $ 15.96  
Adjustments:                              
Effects of intangible assets   (0.36 )   (0.36 )   (0.36 )   (0.35 )   (0.36 )
                               
Tangible book value per common share (Non-GAAP) $ 15.61   $ 15.44   $ 15.27   $ 15.27   $ 15.60  

  Quarter Ended  
  September 30,2019   June 30,2019   March 31,2019   December 31,2018   September 30,2018  
Computation of valuation adjustment                    
Allowance for loan losses $ 5,993   $ 5,664   $ 4,945   $ 4,943   $ 4,959  
Add: Purchase accounting discounts on acquired loans   983     1,180     1,262     1,349     1,442  
Total valuation adjustments $ 6,976   $ 6,844   $ 6,207   $ 6,292   $ 6,401  
Total gross loans $ 1,169,247   $ 1,098,785   $ 940,625   $ 909,320   $ 910,052  
Total valuation adjustments as a percent of total gross loans   0.60 %   0.62 %   0.66 %   0.69 %   0.70 %
                               

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