Locations and Hours Icon Contact Us Icon

Press Release

PCSB Financial Corporation Announces Third Quarter Results and Declares Quarterly Cash Dividend

Company Release - 4/26/2018 8:30 AM ET

YORKTOWN HEIGHTS, N.Y., April 26, 2018 (GLOBE NEWSWIRE) -- PCSB Financial Corporation (the “Company”) (NASDAQ:PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $2.2 million, or $0.13 per basic and diluted share, for the three months ended March 31, 2018 compared to $2,000, or $0.00 per basic and diluted share, for the quarter ended December 31, 2017 and $1.9 million for the three months ended March 31, 2017. For the nine months ended March 31, 2018, net income was $3.9 million, or $0.23 per basic and diluted share, compared to $5.0 million for the nine months ended March 31, 2017. Results for the nine months ended March 31, 2018 include a $1.6 million tax re-measurement charge associated with federal tax law changes enacted in the second quarter.

The following nonrecurring items were recorded in the periods indicated:

  • In connection with the passage of the Tax Cuts and Jobs Act, the Company recorded a $1.6 million charge to income tax expense for the nine months ended March 31, 2018, including a $182,000 benefit recorded in the current quarter, primarily reflecting a write-down of our deferred tax assets resulting from a decrease in the corporate income tax rate from 34% to 21%.
  • A $173,000 pre-tax gain on sale of securities recorded during the nine months ended March 31, 2018.
  • A $919,000 pre-tax curtailment of the Bank’s defined benefit plan resulting in a reduction to the salaries and benefits component of noninterest expense recorded in the three and nine months ended March 31, 2017.
  • A $1.6 million settlement on an acquired loan included in other noninterest income in the nine months ended March 31, 2017.
  • A $521,000 lease write-down expense in the nine months ended March 31, 2017.

On a non-GAAP basis, which excludes the nonrecurring items discussed above, the Company recorded net income of $2.0 million and $5.4 million for the three and nine months ended March 31, 2018, or $0.12 and $0.32 per diluted share, respectively. This compares to non-GAAP net income of $1.3 and $3.7 million for the three and nine months ended March 31, 2017. 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, financial results for dates and periods prior to April 20, 2017 are for the Bank only.

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 proud of the Company's accomplishment as we bring to a close our one-year anniversary as a public company. Some of these accomplishments include a $77.1 million (9.5%) increase in net loans from June 30, 2017, along with a 15.0% increase in net interest income leading to continued earnings growth and operating efficiency. Additionally, we continue to reduce problem assets as the Bank's non-performing asset to total assets declined to 0.50% at March 31, 2018 from 0.91% at June 30, 2017. These results continue to follow our strategy to leverage our capital in a safe and disciplined way in order to maximize stockholder value. We also continue to be focused on capital management and I am pleased to announce our first quarterly cash dividend of $0.03 per share."

Income Statement Summary
Net interest income increased $1.2 million, or 13.2%, to $10.1 million for the three months ended March 31, 2018, compared to the same period in 2017 and decreased $43,000 from the previous quarter.  The increase in net interest income compared to the prior year is a result of a $172.6 million increase in average net interest earning assets and a 3 basis point increase in the net interest margin. The increase in net interest earning assets is due to the Company deploying the capital raised in the initial public offering into loans receivable and investments. The net interest margin was 2.99% for the three months ended March 31, 2018, increasing from 2.96% for the three months ended March 31, 2017 and down slightly from 3.00% for the three months ended December 31, 2017.

The provision for loan losses decreased $181,000 to $54,000 for the three months March 31, 2018 compared to the same period in 2017 due to increases in specific reserves on impaired loans in the prior year period.  The provision for loan losses decreased $146,000 compared to prior quarter due primarily to recoveries realized in the current quarter.  Recoveries, net of charge-offs, were $99,000 for the three months ended March 31, 2018, compared to charge-offs net of recoveries, of $997,000 for the three months ended December 31, 2017 and $33,000 for the three months ended March 31, 2017.  Loans classified as substandard and doubtful decreased $1.0 million or 5.2% to $19.6 million at March 31, 2018 from $20.6 million at December 31, 2017 and decreased $5.6 million or 22.2% from $25.1 million at June 30, 2017. Non-performing loans were 0.80% of gross loans as of March 31, 2018, down from 0.97% as of December 31, 2017 and 1.48% as of June 30, 2017.

Noninterest income decreased $114,000 to $512,000 for the three months ended March 31, 2018 compared to the same period in 2017, primarily due to higher loan-related fees earned in the prior year period, and decreased $180,000 from the three months ended December 31, 2017, due primarily to higher loan-related fees and nonrecurring rental income on the settlement of a nonperforming asset earned in the prior quarter.

Noninterest expense increased $1.3 million to $7.8 million for the three months ended March 31, 2018 compared to the same period in 2017 and decreased $292,000 from the three months ended December 31, 2017. The $1.3 million increase was caused primarily by increases in salaries and employee benefits, primarily reflecting a $919,000 curtailment gain recognized in the prior year period related to the defined benefit pension plan, $192,000 of net increases in other retirement expenses, including ESOP expense which commenced in April 2017, and a $181,000 increase in salaries expense due primarily to increased staffing. Additionally, salaries and employee benefits expense increased $2.2 million to $14.4 million for the nine months ended March 31, 2018 compared to the prior year, primarily due to a $1.8 million increase in ESOP expense and a $598,000 increase due to additional headcount, partially offset by a $73,000 net decrease in defined benefit pension and other retirement plan costs. Occupancy expense and other operating expenses were unchanged compared to the prior year quarter as increases in Director and Officer insurance expense and other professional fees associated with being a public company were offset by lower FDIC assessments and expenses on foreclosed real estate. The $292,000 decrease in noninterest expense from the three months ended December 31, 2017 was primarily due to a loss recorded on a receivable in the three months ended December 31, 2017 as well as lower advertising costs.

Income tax expense decreased $287,000 or 32.7% to $591,000 for the three months ended March 31, 2018 compared to the same period in 2017 due to a $182,000 tax benefit from the adjustment of the re-measurement charge associated with the recent tax reform and the related reduction of the corporate income tax rate from 34% to 21%. The effective income tax rate was 21.4% (27.9% excluding the effects of the current quarter re-measurement charge) for the three months ended March 31, 2018 as compared to 31.7% for the three months ended March 31, 2017. Income tax expense decreased $2.0 million compared to the three months ended December 31, 2017 due primarily to the $1.8 million deferred tax re-measurement charge recorded in the prior quarter.

Balance Sheet Summary
Total assets increased $30.5 million to $1.46 billion at March 31, 2018 from $1.43 billion at June 30, 2017.  This increase was primarily due to an increase of $77.1 million in net loans receivable, partially offset by decreases of $24.0 million and $21.8 million in cash and cash equivalents and total investment securities, respectively. The $77.1 million increase in net loans included increases of $47.2 million in commercial mortgage loans, $36.1 million in residential mortgage loans, and $2.6 million in commercial loans, partially offset by decreases of $6.3 million in construction loans and $3.7 million in home equity lines of credit. Loan growth was funded by decreases in cash and cash equivalents and investment securities, as well as increased FHLB advances.

Total liabilities increased $25.7 million to $1.17 billion at March 31, 2018 from $1.15 billion at June 30, 2017.  This increase was primarily due to a $26.3 million increase in advances from FHLB. 

Total shareholders’ equity increased $4.9 million to $284.7 million at March 31, 2018 from $279.8 million at June 30, 2017.  This increase was primarily due to net income of $3.9 million and a $1.7 million reduction in unearned ESOP shares for plan shares earned during the period, partially offset by other comprehensive losses of $861,000 due largely to increased unrealized losses in the available for sale investment securities portfolio driven by increased market interest rates.  At March 31, 2018, the Company’s book value per share and tangible book value per share were $15.67 and $15.31, 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 14. At March 31, 2018, the Bank was considered “well capitalized” under applicable regulatory guidelines.

Dividend
The Board of Directors has declared a regular quarterly cash dividend of $0.03 per share. The dividend is payable on or about May 25, 2018 to stockholders of record on May 11, 2018.

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)

  March 31,  June 30, 
  2018  2017 
ASSETS        
Cash and due from banks $35,307  $59,115 
Federal funds sold  1,198   1,371 
Cash and cash equivalents  36,505   60,486 
Investment Securities:        
Held to maturity investment securities, at amortized cost
  (fair value of $357,761 and $383,588, respectively)
  366,362   383,551 
Available for sale securities, at fair value  107,321   111,889 
Total investment securities  473,683   495,440 
Loans receivable, net of allowance for loan losses of $4,624 and $5,150, respectively  886,718   809,648 
Accrued interest receivable  4,458   3,693 
Federal Home Loan Bank stock  4,112   3,132 
Premises and equipment, net  12,522   12,959 
Deferred tax asset, net  2,832   4,770 
Foreclosed real estate  142   977 
Bank-owned life insurance  23,609   23,179 
Goodwill  6,106   6,106 
Other intangible assets  463   559 
Other assets  5,819   5,509 
Total assets $1,456,969  $1,426,458 
LIABILITIES AND SHAREHOLDERS' EQUITY        
Interest bearing deposits $960,666  $952,109 
Non-interest bearing deposits  127,319   136,352 
Total deposits  1,087,985   1,088,461 
Mortgage escrow funds  7,596   8,084 
Advances from Federal Home Loan Bank  68,872   42,598 
Other liabilities  7,856   7,469 
Total liabilities  1,172,309   1,146,612 
Commitments and contingencies  -   - 
Preferred stock ($0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2018 and June 30, 2017, respectively)  -   - 
Common stock ($0.01 par value, 200,000,000 shares authorized, 18,165,110 shares issued and outstanding as of March 31, 2018 and June 30, 2017, respectively)  182   182 
Additional paid in capital  178,795   177,993 
Retained earnings  126,200   121,148 
Unallocated common stock of Employee Stock Ownership Plan ("ESOP")  (13,324)  (14,262)
Accumulated other comprehensive loss, net of income taxes  (7,193)  (5,215)
Total shareholders' equity  284,660   279,846 
Total liabilities and shareholders' equity $1,456,969  $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  Nine Months Ended 
  March 31,  March 31, 
  2018  2017  2018  2017 
Interest and dividend income                
Loans receivable $9,103  $8,493  $27,092  $25,256 
Investment securities  2,368   1,633   6,882   4,643 
Federal funds and other  177   150   628   336 
Total interest and dividend income  11,648   10,276   34,602   30,235 
Interest expense                
Deposits  1,380   1,263   3,954   3,839 
FHLB advances  125   55   443   136 
Total interest expense  1,505   1,318   4,397   3,975 
Net interest income  10,143   8,958   30,205   26,260 
Provision for loan losses  54   235   389   823 
Net interest income after provision for loan losses  10,089   8,723   29,816   25,437 
Noninterest income                
Fees and service charges  241   353   810   955 
Gains on sales of securities, net  -   -   173   - 
Bank-owned life insurance  136   146   430   474 
Settlement on acquired loan  -   -   -   1,615 
Other  135   127   505   393 
Total noninterest income  512   626   1,918   3,437 
Noninterest expense                
Salaries and employee benefits  4,755   3,495   14,391   12,189 
Occupancy and equipment  1,326   1,362   3,904   4,497 
Professional fees  465   273   1,257   858 
Advertising  112   135   456   364 
Postage, printing, stationary and supplies  161   140   435   404 
FDIC assessment  93   160   235   481 
Amortization of intangible assets  32   36   97   109 
Other operating expenses  889   979   3,077   2,670 
Total noninterest expense  7,833   6,580   23,852   21,572 
Net income before income tax expense  2,768   2,769   7,882   7,302 
Income tax expense  591   878   3,947   2,283 
Net income $2,177  $1,891  $3,935  $5,019 
                 
Earnings per common share:                
Basic $0.13  n/a  $0.23  n/a 
Diluted $0.13  n/a  $0.23  n/a 
                 
Weighted average common share - basic and diluted  16,820,726  n/a   16,789,131  n/a 
               

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

 Three months ended March 31, 
 2018  2017 
 Average Balance  Interest / Dividends  Average Rate  Average Balance  Interest / Dividends  Average Rate 
                        
Assets:                       
Loans receivable$843,557  $9,103   4.32% $773,022  $8,493   4.40%
Investment securities 471,932   2,368   2.01   379,364   1,633   1.72 
Other interest-earning assets 42,860   177   1.68   59,915   150   1.02 
Total interest-earning assets 1,358,349   11,648   3.44   1,212,301   10,276   3.39 
Non-interest-earning assets 56,874           61,354         
Total assets$1,415,223          $1,273,655         
                        
Liabilities and equity:                       
NOW accounts$113,178   49   0.18  $139,306   54   0.17 
Money market accounts 42,448   50   0.48   31,689   21   0.26 
Savings accounts and escrow 496,574   297   0.24   523,045   315   0.24 
Time deposits 314,815   984   1.27   311,092   873   1.14 
Total interest-bearing deposits 967,015   1,380   0.58   1,005,132   1,263   0.52 
Federal Home Loan Bank advances 27,444   125   1.84   15,920   55   1.38 
Total interest-bearing liabilities 994,459   1,505   0.62   1,021,052   1,318   0.52 
Non-interest-bearing deposits 129,905           125,774         
Other non-interest-bearing liabilities 6,719           12,617         
Total liabilities 1,131,083           1,159,443         
Total shareholders' equity 284,140           114,212         
Total liabilities and shareholders' equity$1,415,223          $1,273,655         
                        
                        
Net interest income    $10,143          $8,958     
Interest rate spread (1)         2.82           2.87 
Net interest margin (2)         2.99           2.96 
Average interest-earning assets to interest-bearing liabilities 136.59%          118.73%        
                        
(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 (unaudited)
(dollar amounts in thousands)

 Nine months ended March 31, 
 2018  2017 
 Average Balance  Interest / Dividends  Average Rate  Average Balance  Interest / Dividends  Average Rate 
                        
Assets:                       
Loans receivable$828,138  $27,092   4.36% $770,567  $25,256   4.37%
Investment securities 477,199   6,882   1.92   372,358   4,643   1.66 
Other interest-earning assets 55,502   628   1.51   59,838   336   0.75 
Total interest-earning assets 1,360,839   34,602   3.39   1,202,763   30,235   3.35 
Non-interest-earning assets 57,927           58,405         
Total assets$1,418,766          $1,261,168         
                        
Liabilities and equity:                       
NOW accounts$113,365   146   0.17  $118,304   142   0.16 
Money market accounts 33,854   93   0.37   31,658   63   0.26 
Savings accounts and escrow 508,259   930   0.24   526,735   970   0.25 
Time deposits 306,527   2,785   1.21   318,214   2,664   1.12 
Total interest-bearing deposits 962,005   3,954   0.55   994,911   3,839   0.52 
Federal Home Loan Bank advances 34,712   443   1.70   12,583   136   1.43 
Total interest-bearing liabilities 996,717   4,397   0.59   1,007,494   3,975   0.52 
Non-interest-bearing deposits 131,629           126,559         
Other non-interest-bearing liabilities 7,590           14,468         
Total liabilities 1,135,936           1,148,521         
Total shareholders' equity 282,830           112,647         
Total liabilities and shareholders' equity$1,418,766          $1,261,168         
                        
                        
Net interest income    $30,205          $26,260     
Interest rate spread (1)         2.80           2.83 
Net interest margin (2)         2.96           2.91 
Average interest-earning assets to interest-bearing liabilities 136.53%          119.38%        
  
(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)

 As of 
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 
                
Condensed Balance Sheets               
Cash and cash equivalents$36,505 $77,106 $34,733 $60,486 $178,409 
Total investment securities 473,683  470,360  475,823  495,440  391,359 
Loans receivable, net 886,718  838,120  839,963  809,648  776,756 
Other assets 60,063  57,682  61,187  60,884  60,797 
Total assets$1,456,969 $1,443,268 $1,411,706 $1,426,458 $1,407,321 
                
Total deposits and escrow$1,095,581 $1,122,558 $1,086,662 $1,096,545 $1,121,201 
Advances from Federal Home Loan Bank 68,872  30,720  35,750  42,598  24,446 
Other liabilities 7,856  7,579  7,209  7,469  144,404 
Total liabilities 1,172,309  1,160,857  1,129,621  1,146,612  1,290,051 
Total shareholders' equity 284,660  282,411  282,085  279,846  117,270 
Total liabilities and shareholders' equity$1,456,969 $1,443,268 $1,411,706 $1,426,458 $1,407,321 
                


 Quarter Ended  Nine Months Ended 
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
  March 31,
2018
 March 31,
2017
 
Condensed Income Statements                      
Interest income$11,648 $11,657 $11,297 $10,723 $10,276  $34,602 $30,235 
Interest expense 1,505  1,471  1,421  1,318  1,318   4,397  3,975 
Net interest income 10,143  10,186  9,876  9,405  8,958   30,205  26,260 
Provision for loan losses 54  200  135  -  235   389  823 
Noninterest income 512  692  714  647  626   1,918  3,437 
Noninterest expense 7,833  8,125  7,894  12,859  6,580   23,852  21,572 
Income before income tax expense (benefit) 2,768  2,553  2,561  (2,807) 2,769   7,882  7,302 
Income tax expense (benefit) 591  2,551  805  (1,017) 878   3,947  2,283 
Net income (loss)$2,177 $2 $1,756 $(1,790)$1,891  $3,935 $5,019 
                       
Earnings per share:                      
Basic$0.13 $0.00 $0.10 n/a n/a  $0.23 n/a 
Diluted$0.13 $0.00 $0.10 n/a n/a  $0.23 n/a 
                    

PCSB Financial Corporation and Subsidiaries
Selected Financial Data (unaudited)

 Quarter Ended  Nine Months Ended 
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
  March 31,
2018
 March 31,
2017
 
Performance Ratios (1):                      
Return on average assets 0.62% 0.00% 0.49% (0.50%) 0.59%  0.37% 0.53%
Return on average equity 3.06% 0.00% 2.44% (2.69%) 6.62%  1.86% 5.94%
Interest rate spread 2.82% 2.85% 2.74% 2.69% 2.87%  2.80% 2.83%
Net interest margin 2.99% 3.00% 2.89% 2.81% 2.96%  2.96% 2.91%
Adjusted Efficiency ratio (2) 73.51% 74.69% 75.78% 78.18% 78.24%  74.65% 78.24%
                       
Noninterest income to average assets 0.14% 0.20% 0.20% 0.18% 0.20%  0.18% 0.36%
Noninterest expense to average assets 2.21% 2.30% 2.20% 3.60% 2.07%  2.24% 2.28%
                       
Average interest-earning assets to average interest-bearing liabilities 136.59% 136.51% 136.50% 130.71% 118.73%  136.53% 119.38%
Equity to assets (3) 20.08% 20.00% 20.10% 18.65% 8.97%  19.93% 8.93%
                       

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

 As of 
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 
                
Loans to deposits 81.50% 75.21% 77.65% 74.38% 69.70%
                
Share Data:               
Shares outstanding 18,165,110  18,165,110  18,165,110  18,165,110 n/a 
Book value per common share$15.67 $15.55 $15.53 $15.41 n/a 
Tangible book value per common share (4)$15.31 $15.18 $15.16 $15.04 n/a 
                
Asset Quality Ratios:               
Non-performing assets$7,307 $8,191 $12,354 $13,049 $13,363 
Allowance for loan losses as a percent of total gross loans 0.52% 0.53% 0.62% 0.63% 0.62%
Allowance for loan losses as a percent of non-performing loans 64.54% 54.58% 48.53% 42.66% 41.58%
Non-performing loans as a percent of total loans 0.80% 0.97% 1.35% 1.48% 1.49%
Non-performing assets as a percent of total assets 0.50% 0.57% 0.88% 0.91% 0.95%
                
Net charge-offs (recoveries)$(99)$997 $17 $(320)$33 
Net charge-offs (recoveries) to average outstanding loans during the period (0.05%) 0.48% 0.01% (0.16%) 0.02%
                
Capital Ratios (5):               
Tier 1 capital (to adjusted total assets) 13.97% 13.84% 13.52% 13.65% 9.13%
Common equity Tier 1 capital (to risk-weighted assets) 21.16% 21.64% 21.13% 21.69% 13.99%
Tier 1 capital (to risk-weighted assets) 21.16% 21.64% 21.13% 21.69% 13.99%
Total capital (to risk-weighted assets) 21.65% 22.13% 21.71% 22.27% 14.57%
                
(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 impact of 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 (unaudited)
(amounts in thousands)

 As of 
 March 31, December 31, September 30, June 30, March 31, 
 2018 2017 2017 2017 2017 
Mortgage loans:               
Residential mortgages$253,847 $213,716 $215,551 $217,778 $219,797 
Commercial mortgage 484,810  481,169  469,983  437,651  394,738 
Construction 16,098  16,379  23,104  22,404  28,518 
Net deferred loan origination costs 1,203  210  384  397  472 
  755,958  711,474  709,022  678,230  643,525 
Commercial and consumer loans:               
Commercial loans 35,897  31,276  31,407  33,297  35,420 
Other loans secured 47,770  46,056  48,460  46,802  46,874 
Home equity credit lines 38,220  40,158  42,044  41,927  40,323 
Consumer and installment loans 12,773  12,860  13,526  13,765  14,659 
Net deferred loan origination costs 724  767  772  777  785 
  135,384  131,117  136,209  136,568  138,061 
Total loans receivable 891,342  842,591  845,231  814,798  781,586 
Allowance for loan loss (4,624) (4,471) (5,268) (5,150) (4,830)
Loans receivable, net$886,718 $838,120 $839,963 $809,648 $776,756 
                


 As of 
 March 31, December 31, September 30, June 30, March 31, 
 2018 2017 2017 2017 2017 
                
Demand deposits$127,319 $150,830 $133,461 $136,361 $135,568 
Now accounts 114,899  118,462  110,646  115,527  112,746 
Money market accounts 40,374  31,021  28,590  29,097  31,895 
Savings 482,968  502,469  504,291  512,697  526,347 
Time deposits 322,425  311,547  304,719  294,779  307,913 
Total deposits$1,087,985 $1,114,329 $1,081,707 $1,088,461 $1,114,469 
                

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

  Three Months Ended  Nine Months Ended 
  March 31,  March 31, 
  2018  2017  2018  2017 
Computation of Adjusted Net Income and Earnings Per Share                
Net income $2,177  $1,891  $3,935  $5,019 
Adjustments:                
Deferred tax re-measurement (benefit) charge  (182)  -   1,570   - 
Defined benefit pension plan curtailment (1)  -   (607)  -   (607)
Write-down of operating lease obligation (1)  -   -   -   344 
Settlement on acquired loan (1)  -   -   -   (1,066)
Gain on sale of securities (1)  -   -   (114)  - 
Adjusted net income $1,995  $1,284  $5,391  $3,690 
                 
Average number of common shares outstanding used to calculate basic earnings per common share  16,820,726  n/a   16,789,131  n/a 
                 
Adjusted earnings per common share (basic and diluted): $0.12  n/a  $0.32  n/a 
                 
Computation of Adjusted Effective Tax Rate                
Net income before income tax expense $2,768  $2,769  $7,882  $7,302 
                 
Income tax expense  591   878   3,947   2,283 
Adjustments:                
Deferred tax re-measurement benefit (charge)  182   -   (1,570)  - 
Adjusted income tax expense $773  $878  $2,377  $2,283 
                 
Effective tax rate  21.4%  31.7%  50.1%  31.3%
Adjusted effective tax rate  27.9%  31.7%  30.2%  31.3%
                 
(1) Amounts net of tax.                
                 

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  Nine Months Ended 
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
  March 31,
2018
 March 31,
2017
 
Computation of Efficiency Ratio                      
Noninterest expense$7,833 $8,125 $7,894 $12,859 $6,580  $23,852 $21,572 
Adjustments:                      
PCSB Community Foundation contribution -  -  -  (5,000) -   -  - 
Defined benefit pension plan curtailment -  -  -  -  919   -  919 
Write-down of operating lease obligation -  -  -  -  -   -  (521)
Adjusted noninterest expense$7,833 $8,125 $7,894 $7,859 $7,499  $23,852 $21,970 
                       
Net interest income$10,143 $10,186 $9,876 $9,405 $8,958  $30,205 $26,260 
Noninterest income 512  692  714  647  626   1,918  3,437 
Total revenue 10,655  10,878  10,590  10,052  9,584   32,123  29,697 
Adjustments:                      
Settlement on acquired loan -  -  -  -  -   -  (1,615)
Gain on sale of securities -  -  (173) -  -   (173) - 
Adjusted operating revenue$10,655 $10,878 $10,417 $10,052 $9,584  $31,950 $28,082 
                       
Efficiency ratio 73.51% 74.69% 74.54% 127.92% 68.66%  74.25% 72.64%
Adjusted efficiency ratio 73.51% 74.69% 75.78% 78.18% 78.24%  74.65% 78.24%
                       

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 
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 March 31,
2017
 
Computation of Tangible Book Value per Common Share               
Total shareholders' equity$284,660 $282,411 $282,085 $279,846 $117,270 
Adjustments:               
Preferred stock -  -  -  -  - 
Common shareholders' equity 284,660  282,411  282,085  279,846  117,270 
Adjustments:               
Goodwill (6,106) (6,106) (6,106) (6,106) (6,106)
Other intangible assets (463) (495) (527) (559) (593)
Tangible common shareholders' equity$278,091 $275,810 $275,452 $273,181 $110,571 
                
Common shares outstanding 18,165,110  18,165,110  18,165,110  18,165,110 n/a 
                
Book value per share$15.67 $15.55 $15.53 $15.41 n/a 
Adjustments:               
Effects of intangible assets (0.36) (0.37) (0.37) (0.37)n/a 
                
Tangible book value per common share$15.31 $15.18 $15.16 $15.04 n/a 
               

Primary Logo

Source: PCSB Financial Corporation