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PCSB Financial Corporation Announces Second Quarter Results

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  
               

/EIN News/ --

  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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