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

Company Release - 10/23/2019 8:30 AM ET

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. Roberto
Chairman, President and Chief Executive Officer
(914) 248-7272

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

 September 30,  June 30, 
 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 Subsidiaries
Consolidated 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 Subsidiaries
Net 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 Subsidiaries
Condensed 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 Subsidiaries
Selected 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 Subsidiaries
Selected Financial Data (unaudited) - Continued
(dollar amounts in thousands, except share and per share data)

 As of and for the quarter ended 
 September 30,
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 Subsidiaries
Selected 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 Subsidiaries
Loan 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 Subsidiaries
Reconciliation 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 Subsidiaries
Reconciliation 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 Subsidiaries
Reconciliation 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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Source: PCSB Financial Corporation