YORKTOWN HEIGHTS, N.Y., Jan. 25, 2018 (GLOBE NEWSWIRE) -- PCSB Financial Corporation (the “Company”) (NASDAQ:PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $2,000, or $0.00 per basic and diluted share, for the three months ended December 31, 2017 compared to $1.8 million for the quarter ended September 30, 2017 and $1.7 million for the three months ended December 31, 2016. For the six months ended December 31, 2017, net income was $1.8 million, or $0.10 per basic and diluted share, compared to $3.1 million for the six months ended December 31, 2016. Results for the three and six months ended December 31, 2017 include a $1.8 million deferred tax re-measurement charge associated with federal tax law changes enacted during the current quarter.
The following nonrecurring items were recorded in the periods indicated:
- In connection with the passing of the Tax Cuts and Jobs Act, the Company recorded a $1.8 million charge to tax expense, reflecting a write-down of our deferred tax assets resulting from a decrease in the corporate income tax rate from 34% to 21%. The amount recorded in the current quarter is an estimate which may be refined in future periods as the Company finalizes its analysis of the tax law changes.
- A $173,000 pre-tax gain on sale of securities recorded during the three months ended September 30, 2017 and six months ended December 31, 2017.
- A $1.6 million settlement on an acquired loan included in other noninterest income in the three and six months ended December 31, 2016.
- A $521,000 lease write-down expense in the three and six months ended December 31, 2016.
On a non-GAAP basis, which excludes the nonrecurring items discussed above, the Company recorded net income of $1.8 million and $3.4 million for the three and six months ended December 31, 2017, or $0.10 and $0.20 per diluted share, respectively. This compares to non-GAAP net income of $950,000 and $2.4 million for the three and six months ended December 31, 2016. Reconciliations of GAAP to non-GAAP measures begin on page 12.
Effective April 20, 2017, PCSB Bank completed its mutual-to-stock conversion and the Company completed its related initial public offering. Accordingly, 2016 financial results are for the Bank only.
President’s Comments
Commenting on the Company's results, Joseph Roberto, Chairman, President and Chief Executive Officer of PCSB Financial Corporation said, “We are pleased with our core second quarter results. Loans and deposits have grown $28.5 million (3.5%) and $25.9 million (2.4%), respectively; net interest income increased 19.5% from last year and 3.1% from last quarter; and non-performing assets as a percent of total assets has decreased from 0.91% at June 30, 2017 to 0.57% at December 31, 2017. These results are consistent with our continued strategy to leverage the capital raised in our initial public offering in April 2017 in a safe and disciplined way.”
“While the Tax Cuts and Jobs Act required the Company to record a write-down of our deferred tax assets, we expect to benefit from the lower tax rate going forward, allowing for increased investment in strategic opportunities to increase stockholder value.”
Income Statement Summary
Net interest income increased $1.7 million, or 19.5%, to $10.2 million for the three months ended December 31, 2017, compared to the same period in 2016 and increased $310,000, or 3.1%, compared to the previous quarter. Net interest income increased as a result of an increase in the average balances of loans and investment securities outstanding, partially offset by an increase in the average balance of advances from Federal Home Loan Bank. The net interest margin was 3.00% for the three months ended December 31, 2017, increasing from 2.89% for both the three months ended December 31, 2016 and September 30, 2017.
The provision for loan losses decreased $362,000 to $200,000 for the three months ended December 31, 2017 compared to the same period in 2016 due to increases in specific reserves on impaired loans in the prior year period. The provision for loan losses increased $65,000 compared to the prior quarter due primarily to increases in specific reserves on impaired loans. Charge-offs, net of recoveries, were $997,000 for the three months ended December 31, 2017, compared to $17,000 for the three months ended September 30, 2017 and net recoveries of $1,000 for the three months ended December 31, 2016. Loans classified as substandard and doubtful decreased $6.3 million or 25.7% to $18.3 million at December 31, 2017 from $24.6 million at September 30, 2017 and decreased $3.4 million or 15.9% from $21.7 million at December 31, 2016.
Noninterest income decreased $1.6 million to $692,000 for the three months ended December 31, 2017 compared to the same period in 2016, due to a one-time settlement on an acquired loan of $1.6 million in the prior period, and decreased $22,000 from the three months ended June 30, 2017, due primarily to $173,000 in gains on sale of securities recognized in the prior quarter, partially offset by loan-related fees.
Noninterest expense increased $331,000 to $8.1 million for the three months ended December 31, 2017 compared to the same period in 2016 and increased $231,000 from the three months ended September 30, 2017. The $331,000 increase was caused primarily by increases in salaries and employee benefits of $379,000 and in all other operating expenses of $500,000, partially offset by a decrease in occupancy expense of $548,000. The increase in salaries and benefits was due primarily to a $301,000 increase in retirement expenses, including ESOP expense which commenced in April 2017, and a $159,000 increase in salaries expense due primarily to increased staffing, partially offset by a $97,000 decrease in benefits expense due primarily to lower healthcare costs. The increase in other operating expenses was caused primarily by increases in Director and Officer insurance and other professional fees associated with being a public company, as well as increased advertising and data processing costs. Occupancy expense decreased due primarily to a $521,000 lease obligation write-off recorded in the prior period. The $231,000 increase in noninterest expense from the three months ended September 30, 2017 was primarily due to a loss recorded on a receivable.
Income tax expense increased $1.8 million to $2.6 million for the three months ended December 31, 2017 compared to the same period in 2016 as well as the prior quarter and was caused by the $1.8 million deferred tax re-measurement charge recorded in the current quarter. The effective income tax rate was 99.9% (31.3% excluding the effects of the re-measurement charge) for the three months ended December 31, 2017 as compared to 31.2% for the three months ended December 31, 2016.
Balance Sheet Summary
Total assets increased $16.8 million to $1.44 billion at December 31, 2017 from $1.43 billion at June 30, 2017. This increase was primarily due to increases of $16.6 million in cash and cash equivalents and $28.5 million in net loans receivable, partially offset by a decrease of $25.1 million in total investment securities. The increase in cash and cash equivalents and loans was primarily funded by the increase in liabilities and the decrease in investment securities. The $28.5 million increase in net loans was primarily due to an increase of $43.5 million in commercial mortgage loans, partially offset by decreases of $6.0 million in construction loans, $4.1 million in residential mortgage loans, $2.0 million in commercial loans and $1.8 million in home equity lines of credit.
Total liabilities increased $14.2 million to $1.16 billion at December 31, 2017 from $1.15 billion at June 30, 2017. This increase was primarily due to an increase of $25.9 million in total deposits, partially offset by a $11.9 million decrease in advances from FHLB.
Total shareholders’ equity increased $2.6 million to $282.4 million at December 31, 2017 from $279.8 million at June 30, 2017. This increase was primarily due to net income of $1.8 million and a $1.3 million reduction in unearned ESOP shares for plan shares earned during the period. At December 31, 2017, the Company’s book value per share and tangible book value per share were $15.55 and $15.18, respectively, compared to $15.41 and $15.04, respectively, at June 30, 2017. For reconciliations of book value per share (GAAP measure) to tangible book value per share (non-GAAP measure), see page 13. At December 31, 2017, the Bank was considered “well capitalized” under applicable regulatory guidelines.
About PCSB Financial Corporation and PCSB Bank
PCSB Financial Corporation is the bank holding company for PCSB Bank. PCSB Bank is a New York-chartered stock savings bank and has served the banking needs of its customers in the Lower Hudson Valley of New York State since 1871. It operates from its executive offices/headquarters and 15 branch offices located in Dutchess, Putnam, Rockland and Westchester Counties in New York.
This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.
Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the Company's business; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.
Contact: Joseph D. Roberto
Chairman, President and Chief Executive Officer
(914) 248-7272
PCSB Financial Corporation and Subsidiaries Consolidated Balance Sheets (unaudited) (amounts in thousands, except share data) | ||||||||
December 31, | June 30, | |||||||
2017 | 2017 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 75,778 | $ | 59,115 | ||||
Federal funds sold | 1,328 | 1,371 | ||||||
Cash and cash equivalents | 77,106 | 60,486 | ||||||
Investment Securities: | ||||||||
Held to maturity investment securities, at amortized cost (fair value of $363,457 and $383,588, respectively) | 367,646 | 383,551 | ||||||
Available for sale securities, at fair value | 102,714 | 111,889 | ||||||
Total investment securities | 470,360 | 495,440 | ||||||
Loans receivable, net of allowance for loan losses of $4,471 and $5,150, respectively | 838,120 | 809,648 | ||||||
Accrued interest receivable | 4,001 | 3,693 | ||||||
Federal Home Loan Bank stock | 2,395 | 3,132 | ||||||
Premises and equipment, net | 12,625 | 12,959 | ||||||
Deferred tax asset, net | 2,832 | 4,770 | ||||||
Foreclosed real estate | — | 977 | ||||||
Bank-owned life insurance | 23,473 | 23,179 | ||||||
Goodwill | 6,106 | 6,106 | ||||||
Other intangible assets | 495 | 559 | ||||||
Other assets | 5,755 | 5,509 | ||||||
Total assets | $ | 1,443,268 | $ | 1,426,458 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Interest bearing deposits | $ | 963,495 | $ | 952,109 | ||||
Non-interest bearing deposits | 150,834 | 136,352 | ||||||
Total deposits | 1,114,329 | 1,088,461 | ||||||
Mortgage escrow funds | 8,229 | 8,084 | ||||||
Advances from Federal Home Loan Bank | 30,720 | 42,598 | ||||||
Other liabilities | 7,579 | 7,469 | ||||||
Total liabilities | 1,160,857 | 1,146,612 | ||||||
Total shareholders' equity | 282,411 | 279,846 | ||||||
Total liabilities and shareholders' equity | $ | 1,443,268 | $ | 1,426,458 | ||||
PCSB Financial Corporation and Subsidiaries Consolidated Statements of Operations (unaudited) (amounts in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended, | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Interest and dividend income | ||||||||||||||||
Loans receivable | $ | 9,171 | $ | 8,238 | $ | 17,989 | $ | 16,763 | ||||||||
Investment securities | 2,269 | 1,530 | 4,514 | 3,010 | ||||||||||||
Federal funds and other | 217 | 82 | 451 | 186 | ||||||||||||
Total interest and dividend income | 11,657 | 9,850 | 22,954 | 19,959 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 1,307 | 1,292 | 2,574 | 2,576 | ||||||||||||
FHLB advances | 164 | 31 | 318 | 81 | ||||||||||||
Total interest expense | 1,471 | 1,323 | 2,892 | 2,657 | ||||||||||||
Net interest income | 10,186 | 8,527 | 20,062 | 17,302 | ||||||||||||
Provision for loan losses | 200 | 562 | 335 | 588 | ||||||||||||
Net interest income after provision for loan losses | 9,986 | 7,965 | 19,727 | 16,714 | ||||||||||||
Noninterest income | ||||||||||||||||
Fees and service charges | 293 | 360 | 569 | 602 | ||||||||||||
Gains on sales of securities, net | - | - | 173 | - | ||||||||||||
Bank-owned life insurance | 145 | 160 | 294 | 328 | ||||||||||||
Settlement on acquired loan | - | 1,615 | - | 1,615 | ||||||||||||
Other | 254 | 124 | 370 | 266 | ||||||||||||
Total noninterest income | 692 | 2,259 | 1,406 | 2,811 | ||||||||||||
Noninterest expense | ||||||||||||||||
Salaries and employee benefits | 4,823 | 4,444 | 9,636 | 8,694 | ||||||||||||
Occupancy and equipment | 1,296 | 1,844 | 2,578 | 3,135 | ||||||||||||
Professional fees | 379 | 276 | 792 | 585 | ||||||||||||
Advertising | 179 | 90 | 344 | 229 | ||||||||||||
Postage, printing, stationary and supplies | 142 | 131 | 274 | 264 | ||||||||||||
FDIC assessment | 64 | 106 | 142 | 321 | ||||||||||||
Amortization of intangible assets | 33 | 37 | 65 | 73 | ||||||||||||
Other operating expenses | 1,209 | 866 | 2,188 | 1,691 | ||||||||||||
Total noninterest expense | 8,125 | 7,794 | 16,019 | 14,992 | ||||||||||||
Net income before income tax expense | 2,553 | 2,430 | 5,114 | 4,533 | ||||||||||||
Income tax expense | 2,551 | 758 | 3,356 | 1,405 | ||||||||||||
Net income | $ | 2 | $ | 1,672 | $ | 1,758 | $ | 3,128 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.00 | n/a | $ | 0.10 | n/a | ||||||||||
Diluted | $ | 0.00 | n/a | $ | 0.10 | n/a | ||||||||||
Weighted average common share - basic and diluted | 16,791,305 | n/a | 16,773,883 | n/a | ||||||||||||
PCSB Financial Corporation and Subsidiaries Net Interest Margin Analysis (amounts in thousands) | |||||||||||||||||||||||
Three months ended December 31, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Average Balance | Interest / Dividends | Average Rate | Average Balance | Interest / Dividends | Average Rate | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Loans receivable | $ | 827,614 | $ | 9,171 | 4.43 | % | $ | 762,538 | $ | 8,238 | 4.32 | % | |||||||||||
Investment securities | 473,641 | 2,269 | 1.92 | 362,954 | 1,530 | 1.69 | |||||||||||||||||
Other interest-earning assets | 54,388 | 217 | 1.58 | 56,045 | 82 | 0.58 | |||||||||||||||||
Total interest-earning assets | 1,355,643 | 11,657 | 3.44 | 1,181,537 | 9,850 | 3.33 | |||||||||||||||||
Non-interest-earning assets | 58,665 | 58,604 | |||||||||||||||||||||
Total assets | $ | 1,414,308 | $ | 1,240,141 | |||||||||||||||||||
Liabilities and equity: | |||||||||||||||||||||||
NOW accounts | $ | 112,147 | 48 | 0.17 | $ | 105,647 | 44 | 0.16 | |||||||||||||||
Money market accounts | 29,014 | 22 | 0.30 | 31,874 | 21 | 0.26 | |||||||||||||||||
Savings accounts and escrow | 509,888 | 309 | 0.24 | 527,779 | 327 | 0.25 | |||||||||||||||||
Certificates of deposit | 306,756 | 928 | 1.20 | 317,757 | 900 | 1.12 | |||||||||||||||||
Total interest-bearing deposits | 957,805 | 1,307 | 0.54 | 983,057 | 1,292 | 0.52 | |||||||||||||||||
Federal Home Loan Bank advances | 35,293 | 164 | 1.85 | 6,354 | 31 | 1.96 | |||||||||||||||||
Total interest-bearing liabilities | 993,098 | 1,471 | 0.59 | 989,411 | 1,323 | 0.53 | |||||||||||||||||
Non-interest-bearing deposits | 130,614 | 123,135 | |||||||||||||||||||||
Other non-interest-bearing liabilities | 7,765 | 15,101 | |||||||||||||||||||||
Total liabilities | 1,131,477 | 1,127,647 | |||||||||||||||||||||
Total shareholders' equity | 282,831 | 112,494 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,414,308 | $ | 1,240,141 | |||||||||||||||||||
Net interest income | $ | 10,186 | $ | 8,527 | |||||||||||||||||||
Interest rate spread (1) | 2.85 | 2.80 | |||||||||||||||||||||
Net interest margin (2) | 3.00 | 2.89 | |||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 136.51 | % | 119.42 | % | |||||||||||||||||||
(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. | |||||||||||||||||||||||
(2) Net interest margin represents annualized net interest income divided by average interest-earning assets. | |||||||||||||||||||||||
PCSB Financial Corporation and Subsidiaries Net Interest Margin Analysis (amounts in thousands) | |||||||||||||||||||||||
Six months ended December 31, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Average Balance | Interest / Dividends | Average Rate | Average Balance | Interest / Dividends | Average Rate | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Loans receivable | $ | 820,429 | $ | 17,989 | 4.38 | % | $ | 769,340 | $ | 16,763 | 4.35 | % | |||||||||||
Investment securities | 479,833 | 4,514 | 1.88 | 368,855 | 3,010 | 1.63 | |||||||||||||||||
Other interest-earning assets | 61,822 | 451 | 1.45 | 59,800 | 186 | 0.62 | |||||||||||||||||
Total interest-earning assets | 1,362,084 | 22,954 | 3.37 | 1,197,995 | 19,959 | 3.33 | |||||||||||||||||
Non-interest-earning assets | 58,453 | 56,929 | |||||||||||||||||||||
Total assets | $ | 1,420,537 | $ | 1,254,924 | |||||||||||||||||||
Liabilities and equity: | |||||||||||||||||||||||
NOW accounts | $ | 113,458 | 97 | 0.17 | $ | 107,803 | 88 | 0.16 | |||||||||||||||
Money market accounts | 29,557 | 43 | 0.29 | 31,642 | 42 | 0.26 | |||||||||||||||||
Savings accounts and escrow | 514,102 | 633 | 0.25 | 528,580 | 654 | 0.25 | |||||||||||||||||
Certificates of deposit | 302,382 | 1,801 | 1.18 | 321,775 | 1,792 | 1.10 | |||||||||||||||||
Total interest-bearing deposits | 959,499 | 2,574 | 0.53 | 989,800 | 2,576 | 0.52 | |||||||||||||||||
Federal Home Loan Bank advances | 38,346 | 318 | 1.65 | 10,914 | 81 | 1.48 | |||||||||||||||||
Total interest-bearing liabilities | 997,845 | 2,892 | 0.58 | 1,000,714 | 2,657 | 0.53 | |||||||||||||||||
Non-interest-bearing deposits | 132,491 | 126,951 | |||||||||||||||||||||
Other non-interest-bearing liabilities | 8,026 | 15,394 | |||||||||||||||||||||
Total liabilities | 1,138,362 | 1,143,059 | |||||||||||||||||||||
Total shareholders' equity | 282,175 | 111,865 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,420,537 | $ | 1,254,924 | |||||||||||||||||||
Net interest income | $ | 20,062 | $ | 17,302 | |||||||||||||||||||
Interest rate spread (1) | 2.79 | 2.80 | |||||||||||||||||||||
Net interest margin (2) | 2.95 | 2.89 | |||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 136.50 | % | 119.71 | % | |||||||||||||||||||
(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. | |||||||||||||||||||||||
(2) Net interest margin represents annualized net interest income divided by average interest-earning assets. | |||||||||||||||||||||||
PCSB Financial Corporation and Subsidiaries Condensed Financial Information (unaudited) (amounts in thousands, except per share data) | |||||||||||||||
For the Quarter Ended | |||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
Condensed Income Statements | |||||||||||||||
Interest income | $ | 11,657 | $ | 11,297 | $ | 10,723 | $ | 10,276 | $ | 9,850 | |||||
Interest expense | 1,471 | 1,421 | 1,318 | 1,318 | 1,323 | ||||||||||
Net interest income | 10,186 | 9,876 | 9,405 | 8,958 | 8,527 | ||||||||||
Provision for loan losses | 200 | 135 | - | 235 | 562 | ||||||||||
Noninterest income | 692 | 714 | 647 | 626 | 2,259 | ||||||||||
Noninterest expense | 8,125 | 7,894 | 12,859 | 6,580 | 7,794 | ||||||||||
Income before income tax expense (benefit) | 2,553 | 2,561 | (2,807 | ) | 2,769 | 2,430 | |||||||||
Income tax expense (benefit) | 2,551 | 805 | (1,017 | ) | 878 | 758 | |||||||||
Net income (loss) | $ | 2 | $ | 1,756 | $ | (1,790 | ) | $ | 1,891 | $ | 1,672 | ||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.00 | $ | 0.10 | n/a | n/a | n/a | ||||||||
Diluted | $ | 0.00 | $ | 0.10 | n/a | n/a | n/a | ||||||||
As of | |||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
Condensed Balance Sheets | |||||||||||||||
Cash and cash equivalents | $ | 77,106 | $ | 34,733 | $ | 60,486 | $ | 178,409 | $ | 48,327 | |||||
Total investment securities | 470,360 | 475,823 | 495,440 | 391,359 | 367,954 | ||||||||||
Loans receivable, net | 838,120 | 839,963 | 809,648 | 776,756 | 766,681 | ||||||||||
Other assets | 57,682 | 61,187 | 60,884 | 60,797 | 57,921 | ||||||||||
Total assets | $ | 1,443,268 | $ | 1,411,706 | $ | 1,426,458 | $ | 1,407,321 | $ | 1,240,883 | |||||
Total deposits and escrow | $ | 1,122,558 | $ | 1,086,662 | $ | 1,096,545 | $ | 1,121,201 | $ | 1,114,457 | |||||
Advances from Federal Home Loan Bank | 30,720 | 35,750 | 42,598 | 24,446 | 4,022 | ||||||||||
Other liabilities | 7,579 | 7,209 | 7,469 | 144,404 | 9,647 | ||||||||||
Total liabilities | 1,160,857 | 1,129,621 | 1,146,612 | 1,290,051 | 1,128,126 | ||||||||||
Total shareholders' equity | 282,411 | 282,085 | 279,846 | 117,270 | 112,757 | ||||||||||
Total liabilities and shareholders' equity | $ | 1,443,268 | $ | 1,411,706 | $ | 1,426,458 | $ | 1,407,321 | $ | 1,240,883 | |||||
PCSB Financial Corporation and Subsidiaries Selected Financial Data (unaudited) | |||||||||||||||
For the Quarter Ended | |||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
Performance Ratios (1): | |||||||||||||||
Return on average assets | 0.00 | % | 0.49 | % | -0.50 | % | 0.59 | % | 0.54 | % | |||||
Return on average equity | 0.00 | % | 2.44 | % | -2.69 | % | 6.62 | % | 5.95 | % | |||||
Interest rate spread | 2.85 | % | 2.74 | % | 2.69 | % | 2.87 | % | 2.80 | % | |||||
Net interest margin | 3.00 | % | 2.89 | % | 2.81 | % | 2.96 | % | 2.89 | % | |||||
Adjusted Efficiency ratio (2) | 74.69 | % | 75.78 | % | 78.18 | % | 78.24 | % | 79.30 | % | |||||
Noninterest income to average assets | 0.20 | % | 0.20 | % | 0.18 | % | 0.20 | % | 0.73 | % | |||||
Noninterest expense to average assets | 2.30 | % | 2.20 | % | 3.60 | % | 2.07 | % | 2.51 | % | |||||
Average interest-earning assets to average interest-bearing liabilities | 136.51 | % | 136.50 | % | 130.71 | % | 118.73 | % | 119.42 | % | |||||
Equity to assets (3) | 20.00 | % | 20.10 | % | 18.65 | % | 8.97 | % | 9.17 | % | |||||
PCSB Financial Corporation and Subsidiaries Selected Financial Data (unaudited) - Continued (amounts in thousands, except share and per share data) | |||||||||||||||
As of | |||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
Loans to deposits | 75.21 | % | 77.65 | % | 74.38 | % | 69.70 | % | 69.21 | % | |||||
Share Data: | |||||||||||||||
Shares outstanding | 18,165,110 | 18,165,110 | 18,165,110 | n/a | n/a | ||||||||||
Book value per common share | $ | 15.55 | $ | 15.53 | $ | 15.41 | n/a | n/a | |||||||
Tangible book value per common share (4) | $ | 15.18 | $ | 15.16 | $ | 15.04 | n/a | n/a | |||||||
Asset Quality Ratios: | |||||||||||||||
Non-performing assets | $ | 8,191 | $ | 12,354 | $ | 13,049 | $ | 13,363 | $ | 9,248 | |||||
Allowance for loan losses as a percent of total gross loans | 0.53 | % | 0.62 | % | 0.63 | % | 0.62 | % | 0.60 | % | |||||
Allowance for loan losses as a percent of non-performing loans | 54.58 | % | 48.53 | % | 42.66 | % | 41.58 | % | 65.86 | % | |||||
Non-performing loans as a percent of total loans | 0.97 | % | 1.35 | % | 1.48 | % | 1.49 | % | 0.91 | % | |||||
Non-performing assets as a percent of total assets | 0.57 | % | 0.88 | % | 0.91 | % | 0.95 | % | 0.75 | % | |||||
Net charge-offs (recoveries) | $ | 997 | $ | 17 | $ | (320 | ) | $ | 33 | $ | (1 | ) | |||
Net charge-offs (recoveries) to average outstanding loans during the period | 0.48 | % | 0.01 | % | -0.16 | % | 0.02 | % | 0.00 | % | |||||
Capital Ratios (5): | |||||||||||||||
Tier 1 capital (to adjusted total assets) | 13.84 | % | 13.52 | % | 13.65 | % | 9.13 | % | 9.28 | % | |||||
Common equity Tier 1 capital (to risk-weighted assets) | 21.64 | % | 21.13 | % | 21.69 | % | 13.99 | % | 14.05 | % | |||||
Tier 1 capital (to risk-weighted assets) | 21.64 | % | 21.13 | % | 21.69 | % | 13.99 | % | 14.05 | % | |||||
Total capital (to risk-weighted assets) | 22.13 | % | 21.71 | % | 22.27 | % | 14.57 | % | 14.62 | % | |||||
(1) Performance ratios are annualized. | |||||||||||||||
(2) Adjusted efficiency ratio is a non-GAAP measure and is defined as noninterest expense, less certain nonrecurring items, divided by our operating revenue, which is equal to net interest income plus non-interest income excluding certain nonrecurring items. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business. | |||||||||||||||
(3) Represents average shareholders' equity divided by average total assets. | |||||||||||||||
(4) Tangible book value per share is a non-GAAP measure and equals total shareholders’ equity, less goodwill and other intangible assets, divided by shares outstanding. We believe this disclosure may be meaningful to those investors who seek to evaluate our equity without giving effect to goodwill and other intangible assets. | |||||||||||||||
(5) Represents Bank ratios. | |||||||||||||||
PCSB Financial Corporation and Subsidiaries Loan and Deposit Portfolio (amounts in thousands) | |||||||
December 31, | June 30, | ||||||
2017 | 2017 | ||||||
Mortgage loans: | |||||||
Residential mortgages | $ | 213,716 | $ | 217,778 | |||
Commercial mortgage | 481,169 | 437,651 | |||||
Construction | 16,379 | 22,404 | |||||
Net deferred loan origination costs | 210 | 397 | |||||
711,474 | 678,230 | ||||||
Commercial and consumer loans: | |||||||
Commercial loans | 31,276 | 33,297 | |||||
Other loans secured | 46,056 | 46,802 | |||||
Home equity credit lines | 40,158 | 41,927 | |||||
Consumer and installment loans | 12,860 | 13,765 | |||||
Net deferred loan origination costs | 767 | 777 | |||||
131,117 | 136,568 | ||||||
Total loans receivable | 842,591 | 814,798 | |||||
Allowance for loan loss | (4,471 | ) | (5,150 | ) | |||
Loans receivable, net | $ | 838,120 | $ | 809,648 | |||
December 31, | June 30, | ||||||
2017 | 2017 | ||||||
Demand deposits | $ | 150,830 | $ | 136,361 | |||
Now accounts | 118,462 | 115,527 | |||||
Money market accounts | 31,021 | 29,097 | |||||
Savings | 502,469 | 512,697 | |||||
Time deposits | 311,547 | 294,779 | |||||
Total deposits | $ | 1,114,329 | $ | 1,088,461 | |||
PCSB Financial Corporation and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (unaudited) (amounts in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended, | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Computation of Adjusted Net Income | ||||||||||||||||
Net income | $ | 2 | $ | 1,672 | $ | 1,758 | $ | 3,128 | ||||||||
Adjustments: | ||||||||||||||||
Deferred tax re-measurement charge | 1,752 | - | 1,752 | - | ||||||||||||
Write-down of operating lease obligation (1) | - | 344 | - | 344 | ||||||||||||
Settlement on acquired loan (1) | - | (1,066 | ) | - | (1,066 | ) | ||||||||||
Gain on sale of securities (1) | - | - | (114 | ) | - | |||||||||||
Adjusted net income | $ | 1,754 | $ | 950 | $ | 3,396 | $ | 2,406 | ||||||||
Average number of common shares outstanding used to calculate basic earnings per common share | 16,791,305 | n/a | 16,773,883 | n/a | ||||||||||||
Adjusted earnings per common share (basic and diluted): | $ | 0.10 | n/a | $ | 0.20 | n/a | ||||||||||
Computation of Adjusted Effective Tax Rate | ||||||||||||||||
Net income before income tax expense | 2,553 | 2,430 | 5,114 | 4,533 | ||||||||||||
Income tax expense | 2,551 | 758 | 3,356 | 1,405 | ||||||||||||
Adjustments: | ||||||||||||||||
Deferred tax re-measurement charge | (1,752 | ) | - | (1,752 | ) | - | ||||||||||
Adjusted income tax expense | 799 | 758 | 1,604 | 1,405 | ||||||||||||
Effective tax rate % | 99.9 | % | 31.2 | % | 65.6 | % | 31.0 | % | ||||||||
Adjusted effective tax rate % | 31.3 | % | 31.2 | % | 31.4 | % | 31.0 | % | ||||||||
(1) Amounts net of tax. | ||||||||||||||||
PCSB Financial Corporation and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (unaudited) (amounts in thousands, except share and per share data) | |||||||||||||||
For the Quarter Ended | |||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
Computation of Efficiency Ratio | |||||||||||||||
Noninterest expense | $ | 8,125 | $ | 7,894 | $ | 12,859 | $ | 6,580 | $ | 7,794 | |||||
Adjustments: | |||||||||||||||
PCSB Community Foundation contribution | - | - | (5,000 | ) | - | - | |||||||||
Defined benefit pension plan curtailment | - | - | - | 919 | - | ||||||||||
Write-down of operating lease obligation | - | - | - | - | (521 | ) | |||||||||
Adjusted noninterest expense | $ | 8,125 | $ | 7,894 | $ | 7,859 | $ | 7,499 | $ | 7,273 | |||||
Net interest income | $ | 10,186 | $ | 9,876 | $ | 9,405 | $ | 8,958 | $ | 8,527 | |||||
Noninterest income | 692 | 714 | 647 | 626 | 2,259 | ||||||||||
Total revenue | 10,878 | 10,590 | 10,052 | 9,584 | 10,786 | ||||||||||
Adjustments: | |||||||||||||||
Settlement on acquired loan | - | - | - | - | (1,615 | ) | |||||||||
Gain on sale of securities | - | (173 | ) | - | - | - | |||||||||
Adjusted operating revenue | $ | 10,878 | $ | 10,417 | $ | 10,052 | $ | 9,584 | $ | 9,171 | |||||
Efficiency ratio | 74.69 | % | 74.54 | % | 127.92 | % | 68.66 | % | 72.26 | % | |||||
Adjusted efficiency ratio | 74.69 | % | 75.78 | % | 78.18 | % | 78.24 | % | 79.30 | % |
As of | |||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
Computation of Tangible Book Value per Common Share | |||||||||||||||
Total shareholders' equity | $ | 282,411 | $ | 282,085 | $ | 279,846 | $ | 117,270 | $ | 112,757 | |||||
Adjustments: | |||||||||||||||
Preferred stock | - | - | - | - | - | ||||||||||
Common shareholders' equity | 282,411 | 282,085 | 279,846 | 117,270 | 112,757 | ||||||||||
Adjustments: | |||||||||||||||
Goodwill | (6,106 | ) | (6,106 | ) | (6,106 | ) | (6,106 | ) | (6,106 | ) | |||||
Other intangible assets | (495 | ) | (527 | ) | (559 | ) | (593 | ) | (629 | ) | |||||
Tangible common shareholders' equity | $ | 275,810 | $ | 275,452 | $ | 273,181 | $ | 110,571 | $ | 106,022 | |||||
Common shares outstanding | 18,165,110 | 18,165,110 | 18,165,110 | n/a | n/a | ||||||||||
Book value per share | $ | 15.55 | $ | 15.53 | $ | 15.41 | n/a | n/a | |||||||
Adjustments: | |||||||||||||||
Effects of intangible assets | (0.37 | ) | (0.37 | ) | (0.37 | ) | n/a | n/a | |||||||
Tangible book value per common share | $ | 15.18 | $ | 15.16 | $ | 15.04 | n/a | n/a |