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PCSB Financial Corporation Announces Second Quarter Results

Company Release - 1/25/2018 8:30 AM ET

YORKTOWN HEIGHTS, N.Y., Jan. 25, 2018 (GLOBE NEWSWIRE) -- PCSB Financial Corporation (the “Company”) (NASDAQ:PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $2,000, or $0.00 per basic and diluted share, for the three months ended December 31, 2017 compared to $1.8 million for the quarter ended September 30, 2017 and $1.7 million for the three months ended December 31, 2016. For the six months ended December 31, 2017, net income was $1.8 million, or $0.10 per basic and diluted share, compared to $3.1 million for the six months ended December 31, 2016. Results for the three and six months ended December 31, 2017 include a $1.8 million deferred tax re-measurement charge associated with federal tax law changes enacted during the current quarter.

The following nonrecurring items were recorded in the periods indicated:

  • In connection with the passing of the Tax Cuts and Jobs Act, the Company recorded a $1.8 million charge to tax expense, reflecting a write-down of our deferred tax assets resulting from a decrease in the corporate income tax rate from 34% to 21%. The amount recorded in the current quarter is an estimate which may be refined in future periods as the Company finalizes its analysis of the tax law changes.
  • A $173,000 pre-tax gain on sale of securities recorded during the three months ended September 30, 2017 and six months ended December 31, 2017.
  • A $1.6 million settlement on an acquired loan included in other noninterest income in the three and six months ended December 31, 2016.
  • A $521,000 lease write-down expense in the three and six months ended December 31, 2016.

On a non-GAAP basis, which excludes the nonrecurring items discussed above, the Company recorded net income of $1.8 million and $3.4 million for the three and six months ended December 31, 2017, or $0.10 and $0.20 per diluted share, respectively. This compares to non-GAAP net income of $950,000 and $2.4 million for the three and six months ended December 31, 2016. Reconciliations of GAAP to non-GAAP measures begin on page 12.

Effective April 20, 2017, PCSB Bank completed its mutual-to-stock conversion and the Company completed its related initial public offering. Accordingly, 2016 financial results are for the Bank only.

President’s Comments
Commenting on the Company's results, Joseph Roberto, Chairman, President and Chief Executive Officer of PCSB Financial Corporation said, “We are pleased with our core second quarter results. Loans and deposits have grown $28.5 million (3.5%) and $25.9 million (2.4%), respectively; net interest income increased 19.5% from last year and 3.1% from last quarter; and non-performing assets as a percent of total assets has decreased from 0.91% at June 30, 2017 to 0.57% at December 31, 2017. These results are consistent with our continued strategy to leverage the capital raised in our initial public offering in April 2017 in a safe and disciplined way.”

“While the Tax Cuts and Jobs Act required the Company to record a write-down of our deferred tax assets, we expect to benefit from the lower tax rate going forward, allowing for increased investment in strategic opportunities to increase stockholder value.”

Income Statement Summary
Net interest income increased $1.7 million, or 19.5%, to $10.2 million for the three months ended December 31, 2017, compared to the same period in 2016 and increased $310,000, or 3.1%, compared to the previous quarter.  Net interest income increased as a result of an increase in the average balances of loans and investment securities outstanding, partially offset by an increase in the average balance of advances from Federal Home Loan Bank.  The net interest margin was 3.00% for the three months ended December 31, 2017, increasing from 2.89% for both the three months ended December 31, 2016 and September 30, 2017. 

The provision for loan losses decreased $362,000 to $200,000 for the three months ended December 31, 2017 compared to the same period in 2016 due to increases in specific reserves on impaired loans in the prior year period.  The provision for loan losses increased $65,000 compared to the prior quarter due primarily to increases in specific reserves on impaired loans.  Charge-offs, net of recoveries, were $997,000 for the three months ended December 31, 2017, compared to $17,000 for the three months ended September 30, 2017 and net recoveries of $1,000 for the three months ended December 31, 2016.  Loans classified as substandard and doubtful decreased $6.3 million or 25.7% to $18.3 million at December 31, 2017 from $24.6 million at September 30, 2017 and decreased $3.4 million or 15.9% from $21.7 million at December 31, 2016.

Noninterest income decreased $1.6 million to $692,000 for the three months ended December 31, 2017 compared to the same period in 2016, due to a one-time settlement on an acquired loan of $1.6 million in the prior period, and decreased $22,000 from the three months ended June 30, 2017, due primarily to $173,000 in gains on sale of securities recognized in the prior quarter, partially offset by loan-related fees.

Noninterest expense increased $331,000 to $8.1 million for the three months ended December 31, 2017 compared to the same period in 2016 and increased $231,000 from the three months ended September 30, 2017. The $331,000 increase was caused primarily by increases in salaries and employee benefits of $379,000 and in all other operating expenses of $500,000, partially offset by a decrease in occupancy expense of $548,000.  The increase in salaries and benefits was due primarily to a $301,000 increase in retirement expenses, including ESOP expense which commenced in April 2017, and a $159,000 increase in salaries expense due primarily to increased staffing, partially offset by a $97,000 decrease in benefits expense due primarily to lower healthcare costs.  The increase in other operating expenses was caused primarily by increases in Director and Officer insurance and other professional fees associated with being a public company, as well as increased advertising and data processing costs. Occupancy expense decreased due primarily to a $521,000 lease obligation write-off recorded in the prior period.  The $231,000 increase in noninterest expense from the three months ended September 30, 2017 was primarily due to a loss recorded on a receivable.

Income tax expense increased $1.8 million to $2.6 million for the three months ended December 31, 2017 compared to the same period in 2016 as well as the prior quarter and was caused by the $1.8 million deferred tax re-measurement charge recorded in the current quarter. The effective income tax rate was 99.9% (31.3% excluding the effects of the re-measurement charge) for the three months ended December 31, 2017 as compared to 31.2% for the three months ended December 31, 2016.

Balance Sheet Summary
Total assets increased $16.8 million to $1.44 billion at December 31, 2017 from $1.43 billion at June 30, 2017.  This increase was primarily due to increases of $16.6 million in cash and cash equivalents and $28.5 million in net loans receivable, partially offset by a decrease of $25.1 million in total investment securities. The increase in cash and cash equivalents and loans was primarily funded by the increase in liabilities and the decrease in investment securities. The $28.5 million increase in net loans was primarily due to an increase of $43.5 million in commercial mortgage loans, partially offset by decreases of $6.0 million in construction loans, $4.1 million in residential mortgage loans, $2.0 million in commercial loans and $1.8 million in home equity lines of credit.

Total liabilities increased $14.2 million to $1.16 billion at December 31, 2017 from $1.15 billion at June 30, 2017.  This increase was primarily due to an increase of $25.9 million in total deposits, partially offset by a $11.9 million decrease in advances from FHLB. 

Total shareholders’ equity increased $2.6 million to $282.4 million at December 31, 2017 from $279.8 million at June 30, 2017.  This increase was primarily due to net income of $1.8 million and a $1.3 million reduction in unearned ESOP shares for plan shares earned during the period.  At December 31, 2017, the Company’s book value per share and tangible book value per share were $15.55 and $15.18, respectively, compared to $15.41 and $15.04, respectively, at June 30, 2017.  For reconciliations of book value per share (GAAP measure) to tangible book value per share (non-GAAP measure), see page 13. At December 31, 2017, 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 stock savings bank and 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. Roberto
Chairman, President and Chief Executive Officer
(914) 248-7272


 
PCSB Financial Corporation and Subsidiaries
Consolidated Balance Sheets (unaudited)
(amounts in thousands, except share data)
 
  December 31,  June 30, 
  2017  2017 
ASSETS        
Cash and due from banks $75,778  $59,115 
Federal funds sold  1,328   1,371 
Cash and cash equivalents  77,106   60,486 
Investment Securities:        
Held to maturity investment securities, at amortized cost
  (fair value of $363,457 and $383,588, respectively)
  367,646   383,551 
Available for sale securities, at fair value  102,714   111,889 
Total investment securities  470,360   495,440 
Loans receivable, net of allowance for loan losses of $4,471 and $5,150, respectively  838,120   809,648 
Accrued interest receivable  4,001   3,693 
Federal Home Loan Bank stock  2,395   3,132 
Premises and equipment, net  12,625   12,959 
Deferred tax asset, net  2,832   4,770 
Foreclosed real estate     977 
Bank-owned life insurance  23,473   23,179 
Goodwill  6,106   6,106 
Other intangible assets  495   559 
Other assets  5,755   5,509 
Total assets $1,443,268  $1,426,458 
LIABILITIES AND SHAREHOLDERS' EQUITY        
Interest bearing deposits $963,495  $952,109 
Non-interest bearing deposits  150,834   136,352 
Total deposits  1,114,329   1,088,461 
Mortgage escrow funds  8,229   8,084 
Advances from Federal Home Loan Bank  30,720   42,598 
Other liabilities  7,579   7,469 
Total liabilities  1,160,857   1,146,612 
Total shareholders' equity  282,411   279,846 
Total liabilities and shareholders' equity $1,443,268  $1,426,458 
 


 
PCSB Financial Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
(amounts in thousands, except share and per share data)
 
  Three Months Ended  Six Months Ended, 
  December 31,  December 31, 
  2017  2016  2017  2016 
Interest and dividend income                
Loans receivable $9,171  $8,238  $17,989  $16,763 
Investment securities  2,269   1,530   4,514   3,010 
Federal funds and other  217   82   451   186 
Total interest and dividend income  11,657   9,850   22,954   19,959 
Interest expense                
Deposits  1,307   1,292   2,574   2,576 
FHLB advances  164   31   318   81 
Total interest expense  1,471   1,323   2,892   2,657 
Net interest income  10,186   8,527   20,062   17,302 
Provision for loan losses  200   562   335   588 
Net interest income after provision for loan losses  9,986   7,965   19,727   16,714 
Noninterest income                
Fees and service charges  293   360   569   602 
Gains on sales of securities, net  -   -   173   - 
Bank-owned life insurance  145   160   294   328 
Settlement on acquired loan  -   1,615   -   1,615 
Other  254   124   370   266 
Total noninterest income  692   2,259   1,406   2,811 
Noninterest expense                
Salaries and employee benefits  4,823   4,444   9,636   8,694 
Occupancy and equipment  1,296   1,844   2,578   3,135 
Professional fees  379   276   792   585 
Advertising  179   90   344   229 
Postage, printing, stationary and supplies  142   131   274   264 
FDIC assessment  64   106   142   321 
Amortization of intangible assets  33   37   65   73 
Other operating expenses  1,209   866   2,188   1,691 
Total noninterest expense  8,125   7,794   16,019   14,992 
Net income before income tax expense  2,553   2,430   5,114   4,533 
Income tax expense  2,551   758   3,356   1,405 
Net income $2  $1,672  $1,758  $3,128 
                 
Earnings per common share:                
Basic $0.00  n/a  $0.10  n/a 
Diluted $0.00  n/a  $0.10  n/a 
                 
Weighted average common share - basic and diluted  16,791,305  n/a   16,773,883  n/a 
 


 
PCSB Financial Corporation and Subsidiaries
Net Interest Margin Analysis
(amounts in thousands)
                       
 Three months ended December 31, 
 2017  2016 
 Average
Balance
  Interest /
Dividends
  Average
Rate
  Average
Balance
  Interest /
Dividends
  Average
Rate
 
                        
Assets:                       
Loans receivable$827,614  $9,171   4.43% $762,538  $8,238   4.32%
Investment securities 473,641   2,269   1.92   362,954   1,530   1.69 
Other interest-earning assets 54,388   217   1.58   56,045   82   0.58 
Total interest-earning assets 1,355,643   11,657   3.44   1,181,537   9,850   3.33 
Non-interest-earning assets 58,665           58,604         
Total assets$1,414,308          $1,240,141         
                        
Liabilities and equity:                       
NOW accounts$112,147   48   0.17  $105,647   44   0.16 
Money market accounts 29,014   22   0.30   31,874   21   0.26 
Savings accounts and escrow 509,888   309   0.24   527,779   327   0.25 
Certificates of deposit 306,756   928   1.20   317,757   900   1.12 
Total interest-bearing deposits 957,805   1,307   0.54   983,057   1,292   0.52 
Federal Home Loan Bank advances 35,293   164   1.85   6,354   31   1.96 
Total interest-bearing liabilities 993,098   1,471   0.59   989,411   1,323   0.53 
Non-interest-bearing deposits 130,614           123,135         
Other non-interest-bearing liabilities 7,765           15,101         
Total liabilities 1,131,477           1,127,647         
Total shareholders' equity 282,831           112,494         
Total liabilities and shareholders' equity$1,414,308          $1,240,141         
                        
                        
Net interest income    $10,186          $8,527     
Interest rate spread (1)         2.85           2.80 
Net interest margin (2)         3.00           2.89 
Average interest-earning assets to interest-bearing liabilities 136.51%          119.42%        
                        
(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 Subsidiaries
Net Interest Margin Analysis
(amounts in thousands)
                       
 Six months ended December 31, 
 2017  2016 
 Average
Balance
  Interest /
Dividends
  Average
Rate
  Average
Balance
  Interest /
Dividends
  Average
Rate
 
                        
Assets:                       
Loans receivable$820,429  $17,989   4.38% $769,340  $16,763   4.35%
Investment securities 479,833   4,514   1.88   368,855   3,010   1.63 
Other interest-earning assets 61,822   451   1.45   59,800   186   0.62 
Total interest-earning assets 1,362,084   22,954   3.37   1,197,995   19,959   3.33 
Non-interest-earning assets 58,453           56,929         
Total assets$1,420,537          $1,254,924         
                        
Liabilities and equity:                       
NOW accounts$113,458   97   0.17  $107,803   88   0.16 
Money market accounts 29,557   43   0.29   31,642   42   0.26 
Savings accounts and escrow 514,102   633   0.25   528,580   654   0.25 
Certificates of deposit 302,382   1,801   1.18   321,775   1,792   1.10 
Total interest-bearing deposits 959,499   2,574   0.53   989,800   2,576   0.52 
Federal Home Loan Bank advances 38,346   318   1.65   10,914   81   1.48 
Total interest-bearing liabilities 997,845   2,892   0.58   1,000,714   2,657   0.53 
Non-interest-bearing deposits 132,491           126,951         
Other non-interest-bearing liabilities 8,026           15,394         
Total liabilities 1,138,362           1,143,059         
Total shareholders' equity 282,175           111,865         
Total liabilities and shareholders' equity$1,420,537          $1,254,924         
                        
                        
Net interest income    $20,062          $17,302     
Interest rate spread (1)         2.79           2.80 
Net interest margin (2)         2.95           2.89 
Average interest-earning assets to interest-bearing liabilities 136.50%          119.71%        
  
(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 Subsidiaries
Condensed Financial Information (unaudited)
(amounts in thousands, except per share data)
               
 For the Quarter Ended 
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 December 31,
2016
 
Condensed Income Statements               
Interest income$11,657 $11,297 $10,723 $10,276 $9,850 
Interest expense 1,471  1,421  1,318  1,318  1,323 
Net interest income 10,186  9,876  9,405  8,958  8,527 
Provision for loan losses 200  135  -  235  562 
Noninterest income 692  714  647  626  2,259 
Noninterest expense 8,125  7,894  12,859  6,580  7,794 
Income before income tax expense (benefit) 2,553  2,561  (2,807) 2,769  2,430 
Income tax expense (benefit) 2,551  805  (1,017) 878  758 
Net income (loss)$2 $1,756 $(1,790)$1,891 $1,672 
                
Earnings per share:               
Basic$0.00 $0.10 n/a n/a n/a 
Diluted$0.00 $0.10 n/a n/a n/a 
                
 As of 
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 December 31,
2016
 
Condensed Balance Sheets               
Cash and cash equivalents$77,106 $34,733 $60,486 $178,409 $48,327 
Total investment securities 470,360  475,823  495,440  391,359  367,954 
Loans receivable, net 838,120  839,963  809,648  776,756  766,681 
Other assets 57,682  61,187  60,884  60,797  57,921 
Total assets$1,443,268 $1,411,706 $1,426,458 $1,407,321 $1,240,883 
                
Total deposits and escrow$1,122,558 $1,086,662 $1,096,545 $1,121,201 $1,114,457 
Advances from Federal Home Loan Bank 30,720  35,750  42,598  24,446  4,022 
Other liabilities 7,579  7,209  7,469  144,404  9,647 
Total liabilities 1,160,857  1,129,621  1,146,612  1,290,051  1,128,126 
Total shareholders' equity 282,411  282,085  279,846  117,270  112,757 
Total liabilities and shareholders' equity$1,443,268 $1,411,706 $1,426,458 $1,407,321 $1,240,883 
                


 
PCSB Financial Corporation and Subsidiaries
Selected Financial Data (unaudited)
 
 For the Quarter Ended 
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 December 31,
2016
 
Performance Ratios (1):               
Return on average assets 0.00% 0.49% -0.50% 0.59% 0.54%
Return on average equity 0.00% 2.44% -2.69% 6.62% 5.95%
Interest rate spread 2.85% 2.74% 2.69% 2.87% 2.80%
Net interest margin 3.00% 2.89% 2.81% 2.96% 2.89%
Adjusted Efficiency ratio (2) 74.69% 75.78% 78.18% 78.24% 79.30%
                
Noninterest income to average assets 0.20% 0.20% 0.18% 0.20% 0.73%
Noninterest expense to average assets 2.30% 2.20% 3.60% 2.07% 2.51%
                
Average interest-earning assets to average interest-bearing liabilities 136.51% 136.50% 130.71% 118.73% 119.42%
Equity to assets (3) 20.00% 20.10% 18.65% 8.97% 9.17%
 


 
PCSB Financial Corporation and Subsidiaries
Selected Financial Data (unaudited) - Continued
(amounts in thousands, except share and per share data)
 
 As of 
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 December 31,
2016
 
                
Loans to deposits 75.21% 77.65% 74.38% 69.70% 69.21%
                
Share Data:               
Shares outstanding 18,165,110  18,165,110  18,165,110 n/a n/a 
Book value per common share$15.55 $15.53 $15.41 n/a n/a 
Tangible book value per common share (4)$15.18 $15.16 $15.04 n/a n/a 
                
Asset Quality Ratios:               
Non-performing assets$8,191 $12,354 $13,049 $13,363 $9,248 
Allowance for loan losses as a percent of total gross loans 0.53% 0.62% 0.63% 0.62% 0.60%
Allowance for loan losses as a percent of non-performing loans 54.58% 48.53% 42.66% 41.58% 65.86%
Non-performing loans as a percent of total loans 0.97% 1.35% 1.48% 1.49% 0.91%
Non-performing assets as a percent of total assets 0.57% 0.88% 0.91% 0.95% 0.75%
                
Net charge-offs (recoveries)$997 $17 $(320)$33 $(1)
Net charge-offs (recoveries) to average outstanding loans during the period 0.48% 0.01% -0.16% 0.02% 0.00%
                
Capital Ratios (5):               
Tier 1 capital (to adjusted total assets) 13.84% 13.52% 13.65% 9.13% 9.28%
Common equity Tier 1 capital (to risk-weighted assets) 21.64% 21.13% 21.69% 13.99% 14.05%
Tier 1 capital (to risk-weighted assets) 21.64% 21.13% 21.69% 13.99% 14.05%
Total capital (to risk-weighted assets) 22.13% 21.71% 22.27% 14.57% 14.62%
  
(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 our 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 volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business. 
(3) Represents average shareholders' equity divided by average total assets. 
(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. 
(5) Represents Bank ratios. 
  


 
PCSB Financial Corporation and Subsidiaries
Loan and Deposit Portfolio
(amounts in thousands)
 
 December 31,  June 30, 
 2017  2017 
Mortgage loans:       
Residential mortgages$213,716  $217,778 
Commercial mortgage 481,169   437,651 
Construction 16,379   22,404 
Net deferred loan origination costs 210   397 
  711,474   678,230 
Commercial and consumer loans:       
Commercial loans 31,276   33,297 
Other loans secured 46,056   46,802 
Home equity credit lines 40,158   41,927 
Consumer and installment loans 12,860   13,765 
Net deferred loan origination costs 767   777 
  131,117   136,568 
Total loans receivable 842,591   814,798 
Allowance for loan loss (4,471)  (5,150)
Loans receivable, net$838,120  $809,648 
        


 December 31,  June 30, 
 2017  2017 
        
Demand deposits$150,830  $136,361 
Now accounts 118,462   115,527 
Money market accounts 31,021   29,097 
Savings 502,469   512,697 
Time deposits 311,547   294,779 
Total deposits$1,114,329  $1,088,461 
        


 
PCSB Financial Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(amounts in thousands, except share and per share data)
 
  Three Months Ended  Six Months Ended, 
  December 31,  December 31, 
  2017  2016  2017  2016 
Computation of Adjusted Net Income                
Net income $2  $1,672  $1,758  $3,128 
Adjustments:                
Deferred tax re-measurement charge  1,752   -   1,752   - 
Write-down of operating lease obligation (1)  -   344   -   344 
Settlement on acquired loan (1)  -   (1,066)  -   (1,066)
Gain on sale of securities (1)  -   -   (114)  - 
Adjusted net income $1,754  $950  $3,396  $2,406 
                 
Average number of common shares outstanding used to calculate basic earnings per common share  16,791,305  n/a   16,773,883  n/a 
                 
Adjusted earnings per common share (basic and diluted): $0.10  n/a  $0.20  n/a 
                 
Computation of Adjusted Effective Tax Rate                
Net income before income tax expense  2,553   2,430   5,114   4,533 
                 
Income tax expense  2,551   758   3,356   1,405 
Adjustments:                
Deferred tax re-measurement charge  (1,752)  -   (1,752)  - 
Adjusted income tax expense  799   758   1,604   1,405 
                 
Effective tax rate %  99.9%  31.2%  65.6%  31.0%
Adjusted effective tax rate %  31.3%  31.2%  31.4%  31.0%
                 
(1) Amounts net of tax.                
                 


 
PCSB Financial Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(amounts in thousands, except share and per share data)
 
 For the Quarter Ended 
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 December 31,
2016
 
Computation of Efficiency Ratio               
Noninterest expense$8,125 $7,894 $12,859 $6,580 $7,794 
Adjustments:               
PCSB Community Foundation contribution -  -  (5,000) -  - 
Defined benefit pension plan curtailment -  -  -  919  - 
Write-down of operating lease obligation -  -  -  -  (521)
Adjusted noninterest expense$8,125 $7,894 $7,859 $7,499 $7,273 
                
Net interest income$10,186 $9,876 $9,405 $8,958 $8,527 
Noninterest income 692  714  647  626  2,259 
Total revenue 10,878  10,590  10,052  9,584  10,786 
Adjustments:               
Settlement on acquired loan -  -  -  -  (1,615)
Gain on sale of securities -  (173) -  -  - 
Adjusted operating revenue$10,878 $10,417 $10,052 $9,584 $9,171 
                
Efficiency ratio 74.69% 74.54% 127.92% 68.66% 72.26%
Adjusted efficiency ratio 74.69% 75.78% 78.18% 78.24% 79.30%


 As of 
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 December 31,
2016
 
Computation of Tangible Book Value per Common Share               
Total shareholders' equity$282,411 $282,085 $279,846 $117,270 $112,757 
Adjustments:               
Preferred stock -  -  -  -  - 
Common shareholders' equity 282,411  282,085  279,846  117,270  112,757 
Adjustments:               
Goodwill (6,106) (6,106) (6,106) (6,106) (6,106)
Other intangible assets (495) (527) (559) (593) (629)
Tangible common shareholders' equity$275,810 $275,452 $273,181 $110,571 $106,022 
                
Common shares outstanding 18,165,110  18,165,110  18,165,110 n/a n/a 
                
Book value per share$15.55 $15.53 $15.41 n/a n/a 
Adjustments:               
Effects of intangible assets (0.37) (0.37) (0.37)n/a n/a 
                
Tangible book value per common share$15.18 $15.16 $15.04 n/a n/a 

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Source: PCSB Financial Corporation