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Columbia Financial, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2022

FAIR LAWN, N.J., Oct. 26, 2022 (GLOBE NEWSWIRE) -- Columbia Financial, Inc. (the “Company”) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank ("Columbia") and Freehold Bank ("Freehold"), reported net income of $20.9 million, or $0.20 per basic share and $0.19 per diluted share, for the quarter ended September 30, 2022, as compared to net income of $21.0 million, or $0.20 per basic and diluted share, for the quarter ended September 30, 2021. Earnings for the quarter ended September 30, 2022 reflected a higher provision for credit losses and non-interest expense, partially offset by higher net interest income. For the quarter ended September 30, 2022, the Company reported core net income of $22.7 million, an increase of $3.4 million, or 17.5%, compared to core net income of $19.3 million for the quarter ended September 30, 2021.

For the nine months ended September 30, 2022, the Company reported net income of $64.3 million, or $0.61 per basic and diluted share, as compared to net income of $68.7 million, or $0.66 per basic and diluted share, for the nine months ended September 30, 2021, partially due to the 2022 period including a higher provision for credit losses of $7.1 million, in addition to recording $2.7 million in merger expenses related to the RSI Bank acquisition during the period. Earnings for the nine months ended September 30, 2022 reflected a higher provision for credit losses, lower non-interest income, and higher non-interest expense, partially offset by higher net interest income and lower income tax expense.

Mr. Thomas J. Kemly, President and Chief Executive Officer commented: “We had solid core earnings during the third quarter, due to stronger net interest income primarily driven by growth in interest income on loans. Lending volumes have increased and the pipeline remains solid. Expenses have increased due to the rising costs of attracting talent and our commitment to ongoing investments in technology, designed to enhance the customer experience and cybersecurity. Our balance sheet and capital position remains strong. Our stock price has appreciated 14.2% from October 1, 2021 through September 30, 2022, which outperforms more than 90% of the banks and thrifts listed on NASDAQ during that period. On October 15, 2022, we successfully completed the system conversion of RSI Bank to Columbia Bank.”

Results of Operations for the Three Months Ended September 30, 2022 and September 30, 2021

Net income of $20.9 million was recorded for the quarter ended September 30, 2022, a decrease of $63,000, or 0.3%, compared to net income of $21.0 million for the quarter ended September 30, 2021. The decrease in net income was primarily attributable to a $1.0 million increase in provision for credit losses, a $710,000 decrease in non-interest income, and a $10.8 million increase in non-interest expense, partially offset by an $11.8 million increase in net interest income and a $671,000 decrease in income tax expense.

Net interest income was $69.2 million for the quarter ended September 30, 2022, an increase of $11.8 million, or 20.6%, from $57.4 million for the quarter ended September 30, 2021. The increase in net interest income was primarily attributable to a $13.9 million increase in interest income, partially offset by a $2.1 million increase in interest expense on deposits and borrowings. The increase in interest income was primarily due to an increase in the average balance of interest-earning assets coupled with an increase in average yields due to the rise in interest rates in 2022. The increase in interest expense on deposits was driven by the repricing of existing deposits at higher rates as a result of the Federal Reserve announced a rate hike in March 2022 of 25 basis points, subsequently followed by four additional rate hikes between May 2022 and September 2022 ranging from 50 to 75 basis points. The rise in interest rates initially had a more immediate impact on interest income from loans, securities and other interest-earning assets than interest expense on deposits, as the repricing on deposit products lags in relation to increases in market interest rates. The increase in interest expense on borrowings was driven by an increase in interest rates related to overnight and short-term borrowing transactions executed during the quarter ended September 30, 2022. Prepayment penalties, which are included in interest income on loans, totaled $639,000 for the quarter ended September 30, 2022, compared to $778,000 for the quarter ended September 30, 2021.

The average yield on loans for the quarter ended September 30, 2022 increased 14 basis points to 3.80%, as compared to 3.66% for the quarter ended September 30, 2021, as interest income was influenced by rising interest rates and loan growth. The average yield on securities for the quarter ended September 30, 2022 increased 34 basis points to 2.27%, as compared to 1.93% for the quarter ended September 30, 2021, as $10.2 million of higher yielding securities were purchased, and a number of adjustable rate securities tied to various indexes repriced higher during the quarter. The average yield on other interest-earning assets for the quarter ended September 30, 2022 increased 214 basis points to 2.68%, as compared to 0.54% for the quarter ended September 30, 2021, due to the rise in interest rates in 2022 noted above.

Total interest expense was $10.8 million for the quarter ended September 30, 2022, an increase of $2.1 million, or 23.8%, from $8.7 million for the quarter ended September 30, 2021. The increase in interest expense was primarily attributable to a 140 basis point increase in the average cost of borrowings, and increases in the average balance of deposits, partially offset by a 3 basis point decrease in the average cost of interest-bearing deposits and a lower average balance of borrowings. Interest on borrowings increased $1.8 million, or 87.7%, due to an increase in the cost of borrowings.

The Company's net interest margin for the quarter ended September 30, 2022 increased 34 basis points to 3.01%, when compared to 2.67% for the quarter ended September 30, 2021. The weighted average yield on interest-earning assets increased 39 basis points to 3.47% for the quarter ended September 30, 2022 as compared to 3.08% for the quarter ended September 30, 2021. The average cost of interest-bearing liabilities increased 8 basis points to 0.62% for the quarter ended September 30, 2022 as compared to 0.54% for the quarter ended September 30, 2021. The increase in yields for the quarter ended September 30, 2022, was due to the impact of the rise in interest rates during the quarter. The net interest margin increased for the quarter ended September 30, 2022, as the repricing of interest-bearing deposits initially lags in relation to the repricing of yields on interest-earning assets in a rising rate environment.

The provision for credit losses for the quarter ended September 30, 2022 was $1.5 million, an increase of $1.0 million, from $480,000 for the quarter ended September 30, 2021. The increase in provision for credit losses during the quarter was primarily attributable to an increase in the balances of loans and the evaluation of current and projected economic conditions.

Non-interest income was $8.2 million for the quarter ended September 30, 2022, a decrease of $710,000, or 8.0%, from $8.9 million for the quarter ended September 30, 2021. The decrease was primarily attributable to a decrease in income from the gain on securities transactions of $2.3 million and a decrease in title insurance fees of $635,000, partially offset by an increase in demand deposit fees of $524,000, an increase in loan fees and service charges of $588,000 and an increase in other non-interest income of $942,000, mainly due to an insurance settlement.

Non-interest expense was $47.8 million for the quarter ended September 30, 2022, an increase of $10.8 million, or 29.1%, from $37.1 million for the quarter ended September 30, 2021. The increase was primarily attributable to an increase in compensation and employee benefits expense of $7.0 million and an increase in merger-related expenses of $1.1 million. The increase in compensation and employee benefits expense was due to an increase in staff levels and related personnel benefit costs, mainly due to the acquisitions of Freehold Bank in December 2021 and RSI Bank in May 2022. The increase in merger-related expenses was primarily related to the acquisition of RSI Bank.

Income tax expense was $7.0 million for the quarter ended September 30, 2022, a decrease of $671,000, as compared to $7.7 million for the quarter ended September 30, 2021, mainly due to a decrease in pre-tax income, and to a lesser extent, a decrease in the Company's effective tax rate. The Company's effective tax rate was 25.2% and 26.9% for the quarters ended September 30, 2022 and 2021, respectively.

Results of Operations for the Nine Months Ended September 30, 2022 and September 30, 2021

Net income of $64.3 million was recorded for the nine months ended September 30, 2022, a decrease of $4.4 million, or 6.5%, compared to net income of $68.7 million for the nine months ended September 30, 2021. The decrease in net income was primarily attributable to a $7.1 million increase in provision for credit losses, a $17.9 million increase in non-interest expense, and a $9.0 million decrease in non-interest income, partially offset by a $26.2 million increase in net interest income and a $3.4 million decrease in income tax expense.

Net interest income was $198.4 million for the nine months ended September 30, 2022, an increase of $26.2 million, or 15.2%, from $172.2 million for the nine months ended September 30, 2021. The increase in net interest income was primarily attributable to a $20.2 million increase in interest income coupled with a $6.0 million decrease in interest expense. The increase in interest income was primarily due to an increase in the average balance of interest-earning assets coupled with the impact of the rise in interest rates during the nine months ended September 30, 2022. The decrease in interest expense on deposits was driven by an increase in the balance of lower costing demand deposits. As noted above, the Federal Reserve raised interest rates numerous times throughout 2022. The rise in interest rates had a more immediate impact on interest income from loans, securities and other interest-earning assets than interest expense on deposits, as the repricing on deposit products initially lags in relation to increases in market interest rates. The increase in interest expense on borrowings was driven by an increase in interest rates related to overnight and short-term borrowing transactions executed during the nine months ended September 30, 2022. Prepayment penalties, which are included in interest income on loans, totaled $3.4 million for the nine months ended September 30, 2022, compared to $2.8 million for the nine months ended September 30, 2021.

The average yield on loans for the nine months ended September 30, 2022 decreased 5 basis points to 3.70%, as compared to 3.75% for the nine months ended September 30, 2021, but increased 12 basis points since June 30, 2022, as interest income increased due to rising interest rates and loan growth. The average yield on securities for the nine months ended September 30, 2022 increased 24 basis points to 2.20%, as compared to 1.96% for the nine months ended September 30, 2021, as $165.5 million of higher yielding securities were purchased, and a number of adjustable rate securities tied to various indexes repriced higher during the period. The average yield on other interest-earning assets for the nine months ended September 30, 2022 increased 176 basis points to 2.46%, as compared to 0.70% for the nine months ended September 30, 2021, due to the rise in interest rates in 2022 noted above.

Total interest expense was $23.4 million for the nine months ended September 30, 2022, a decrease of $6.0 million, or 20.6%, from $29.4 million for the nine months ended September 30, 2021. The decrease in interest expense was primarily attributable to a 20 basis point decrease in the average cost of interest-bearing deposits which was partially offset by the impact of the increase in the average balance of deposits. The decrease in interest expense on deposits was driven by an increase in the balance of lower costing demand deposits. Interest on borrowings increased $1.0 million, or 17.2%, due to an increase in the cost of borrowings.

The Company's net interest margin for the nine months ended September 30, 2022 increased 25 basis points to 3.00%, when compared to 2.75% for the nine months ended September 30, 2021. The weighted average yield on interest-earning assets for the nine months ended September 30, 2022 increased 13 basis points to 3.35%, when compared to 3.22% for the nine months ended September 30, 2021. The average cost of interest-bearing liabilities decreased 15 basis points to 0.47% for the nine months ended September 30, 2022 as compared to 0.62% for the nine months ended September 30, 2021. The decrease in costs for the nine months ended September 30, 2022 were largely driven by the sustained lower interest rate environment throughout the 2021 period until rates began to rise in March 2022. The net interest margin increased for the nine months ended September 30, 2022, as the repricing of interest-bearing liabilities initially lags in relation to the repricing of yields on interest-earning assets in a rising rate environment.

On January 1, 2022, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), also known as the Current Expected Credit Loss ("CECL") standard. CECL requires the measurement of all expected credit losses over the life of financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In connection with the adoption of CECL, the Company recognized a cumulative effect adjustment that increased stockholders' equity by $6.2 million, net of tax. At adoption and on a gross basis, the Company decreased its allowance for credit losses ("ACL") by $16.8 million for loans, increased its ACL for unfunded commitments, included in other liabilities, by $7.7 million, and established an ACL for debt securities available for sale of $490,000. The provision for credit losses for the nine months ended September 30, 2022 was $4.5 million, an increase of $7.1 million, from a reversal of provision for credit losses of $2.6 million recorded for the nine months ended September 30, 2021. The increase in provision for credit losses during the nine months ended September 30, 2022 was primarily attributable to an increase in the balances of loans and the evaluation of current and projected economic conditions.

Non-interest income was $22.9 million for the nine months ended September 30, 2022, a decrease of $9.0 million, or 28.2%, from $31.9 million for the nine months ended September 30, 2021. The decrease was primarily attributable to a decrease in income from the gain on the sale of loans of $10.7 million, a decrease in income from title insurance fees of $1.8 million, and a decrease in gain on securities transactions of $1.8 million, partially offset by an increase in the change in fair value of equity securities of $1.5 million, an increase in demand deposit fees of $1.4 million and an increase in bank-owned life insurance income of $1.0 million due to death benefit claims. The nine months ended September 30, 2021 included a $7.7 million gain on the sale of commercial business loans granted as part of the Small Business Administration PPP.

Non-interest expense was $130.3 million for the nine months ended September 30, 2022, an increase of $17.9 million, or 16.0%, from $112.4 million for the nine months ended September 30, 2021. The increase was primarily attributable to an increase in compensation and employee benefits expense of $14.9 million and an increase in merger-related expenses of $2.5 million. The increase in compensation and employee benefits expense was due to an increase in staff levels and related personnel benefit costs, mainly due to the acquisitions of Freehold Bank in December 2021 and RSI Bank in May 2022. There was an increase of 121 full time equivalent employees from September 30, 2021 compared to September 30, 2022. The increase in merger-related expenses was related to the acquisition of RSI Bank.

Income tax expense was $22.2 million for the nine months ended September 30, 2022, a decrease of $3.4 million, as compared to $25.5 million for the nine months ended September 30, 2021, mainly due to a decrease in pre-tax income, and to a lesser extent, a decrease in the Company's effective tax rate. The Company's effective tax rate was 25.6% and 27.1% for the nine months ended September 30, 2022 and 2021, respectively.

Balance Sheet Summary

Total assets increased $788.1 million, or 8.5%, to $10.0 billion at September 30, 2022 from $9.2 billion at December 31, 2021. The increase in total assets was primarily attributable to an increase in cash and cash equivalents of $31.1 million, an increase in loans receivable, net of $976.4 million, an increase in bank-owned life insurance of $15.7 million, an increase in goodwill and intangibles of $34.6 million, and an increase in other assets of $44.3 million, partially offset by a decrease in debt securities available for sale of $332.1 million.

Cash and cash equivalents increased $31.1 million, or 43.8%, to $102.0 million at September 30, 2022 from $71.0 million at December 31, 2021. The increase was primarily attributable to $140.8 million in cash and cash equivalents acquired in the RSI Bank acquisition, repayments on loans and mortgage-backed securities, and proceeds from the sale of $126.8 million of debt securities available for sale, partially offset by $142.2 million in purchases of debt securities available for sale, and $71.8 million in repurchases of common stock under our stock repurchase program.

Debt securities available for sale decreased $332.1 million, or 19.5%, to $1.4 billion at September 30, 2022 from $1.7 billion at December 31, 2021. The decrease was attributable to repayments on securities of $226.0 million, sales of securities of $126.8 million, and a decrease in the gross unrealized gain (loss) of $197.9 million, predominately due to rising interest rates, partially offset by purchases of securities of $142.2 million, primarily consisting of U.S government and agency obligations and mortgage-backed securities and $79.0 million of debt securities available for sale acquired due to the RSI Bank acquisition.

Loans receivable, net, increased $976.4 million, or 15.5%, to $7.3 billion at September 30, 2022 from $6.3 billion at December 31, 2021. One-to-four family real estate loans, multi-family real estate loans, commercial real estate loans, commercial business loans, and home equity loans and advances increased $613.8 million, $101.4 million, $184.6 million, $45.2 million, and $3.3 million, respectively, partially offset by a decrease in construction loans of $5.4 million. The Company acquired $335.5 million in loans from the RSI Bank acquisition during the second quarter of 2022. The allowance for credit losses for loans decreased $10.8 million to $51.9 million at September 30, 2022 from $62.7 million at December 31, 2021. A $16.8 million decrease in the allowance for credit losses for loans was recorded on January 1, 2022 upon adoption of the CECL standard. During the nine months ended September 30, 2022, the allowance for credit losses increased $7.1 million, primarily due to an increase in the outstanding balance of loans, including $1.9 million in allowance for credit losses recorded on loans acquired from RSI Bank. The September 30, 2022 methodology and impact of loss rates and qualitative factors remained consistent with those established upon initial adoption of the CECL standard.

Bank-owned life insurance increased $15.7 million, or 6.4%, to $263.2 million at September 30, 2022 from $247.5 million at December 31, 2021. The increase was mainly attributable to bank-owned life insurance of $13.0 million acquired in connection with the RSI Bank acquisition.

Goodwill and intangibles increased $34.6 million, or 37.7%, to $126.3 million at September 30, 2022 from $91.7 million at December 31, 2021. The increase is attributable to $25.9 million in adjusted goodwill and $10.3 million in core deposit intangibles initially recorded due to the RSI Bank acquisition.

Other assets increased $44.3 million, or 17.7%, to $293.9 million at September 30, 2022 from $249.6 million at December 31, 2021. The increase in other assets consisted of an increase of $54.8 million in net deferred tax assets, an increase of $10.1 million in interest rate swap assets, and an increase of $5.2 million in a low income housing tax credit asset, partially offset by a decrease of $17.2 million in the collateral balance related to our swap program and a decrease of $5.8 million in the Company's pension balance.

Total liabilities increased $837.5 million, or 10.3%, to $9.0 billion at September 30, 2022 from $8.1 billion at December 31, 2021. The increase was primarily attributable to an increase in total deposits of $494.7 million, or 6.5%, an increase in borrowings of $296.7 million, or 78.6%, and an increase in accrued expenses and other liabilities of $38.1 million, or 23.7%. The increase in total deposits primarily consisted of increases in non-interest bearing demand deposits, interest-bearing demand deposits, money market accounts, savings and club deposits, and certificates of deposit of $34.6 million, $101.6 million, $55.7 million, $137.7 million, and $165.0 million respectively. These increases included $502.7 million in deposits assumed in connection with the RSI Bank acquisition. The increase in borrowings was primarily driven by a $67.7 million increase in FHLB overnight borrowings and a $229.2 million increase in FHLB term advances, of which $5.8 million were acquired due to the RSI Bank acquisition. The increase in accrued expenses and other liabilities primarily consisted of $10.6 million in accrued expenses and other liabilities related to the RSI Bank acquisition, a $5.2 million increase in a low income housing tax credit liability, a $8.5 million increase in outstanding checks, a $6.1 million increase in allowance for credit losses for unfunded commitments, and a $2.9 million increase in interest rate swap liabilities.

Total stockholders’ equity decreased $49.4 million, or 4.6%, to $1.0 billion at September 30, 2022 from $1.1 billion at December 31, 2021. The decrease in equity was primarily attributable to an increase of $198.2 million in unrealized losses on debt securities available for sale, net of taxes, included in other comprehensive income, and the repurchase of 3,420,747 shares of common stock totaling $71.8 million, or $20.98 per share, under our stock repurchase program, partially offset by net income of $64.3 million and an increase in paid-in capital primarily due to the issuance of 6,086,314 shares, totaling $102.7 million, of Company common stock to Columbia Bank MHC in connection with the RSI Bank acquisition.

Asset Quality

The Company's non-performing loans at September 30, 2022 totaled $7.0 million, or 0.10% of total gross loans, as compared to $3.9 million, or 0.06% of total gross loans, at December 31, 2021. The $3.1 million increase in non-performing loans was attributable to an increase of $1.2 million in non-performing one-to-four family loans and a $1.8 million increase in commercial real estate loans. The increase in non-performing one-to-four family loans was due to an increase in the number of loans from seven non-performing loans at December 31, 2021 to 12 loans at September 30, 2022. The increase in non-performing commercial real estate loans was due to an increase in the number of loans from one non-performing loan at December 31, 2021 to three non-performing loans at September 30, 2022. Non-performing assets as a percentage of total assets totaled 0.07% at September 30, 2022 as compared to 0.04% at December 31, 2021.

For the quarter ended September 30, 2022, net charge-offs totaled $208,000, as compared to $53,000 in net charge-offs for the quarter ended September 30, 2021. For the nine months ended September 30, 2022, net recoveries totaled $8,000, as compared to $1.8 million in net charge-offs for the nine months ended September 30, 2021.

The Company's allowance for credit losses on loans was $51.9 million, or 0.71% of total gross loans, at September 30, 2022, compared to $62.7 million, or 0.99% of total gross loans, at December 31, 2021. The decrease in the allowance for credit losses for loans was primarily attributable to the impact of the initial adoption of the CECL standard on January 1, 2022, which resulted in a decrease to allowance for credit losses on loans of $16.8 million, partially offset by an increase in provision for credit losses of $7.1 million recorded during the nine months ended September 30, 2022, due to an increase in the balance of loans and evaluation of current and future economic conditions.

About Columbia Financial, Inc.

The consolidated financial results include the accounts of Columbia Financial, Inc., its wholly-owned subsidiaries Columbia Bank and Freehold Bank, and their wholly-owned subsidiaries. Columbia Financial, Inc. is a Delaware corporation organized as Columbia Bank's mid-tier stock holding company. Columbia Financial, Inc. is a majority-owned subsidiary of Columbia Bank, MHC. Columbia Bank is a federally chartered savings bank headquartered in Fair Lawn, New Jersey that operates 64 full-service banking offices. Freehold Bank is a federally chartered savings bank headquartered in Freehold, New Jersey that operates 2 full-service banking offices. Both Banks offer traditional financial services to consumers and businesses in their market areas.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “projects,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates, higher inflation and their impact on national and local economic conditions; changes in monetary and fiscal policies of the U.S. Treasury, the Board of Governors of the Federal Reserve System and other governmental entities; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which the Company operates, including changes that adversely affect a borrowers’ ability to service and repay the Company’s loans; the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; changes in the value of securities in the Company’s portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and securities; legislative changes and changes in government regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s consolidated financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy, or its integration of acquired financial institutions and businesses, and changes in assumptions used in making such forward-looking statements which are subject to numerous risks and uncertainties, including but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K and those set forth in the Company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company's actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods presented. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

The Company also provides measurements and ratios based on tangible stockholders' equity. These measures are commonly utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

A reconciliation of GAAP to non-GAAP financial measures are included at the end of this press release. See "Reconciliation of GAAP to Non-GAAP Financial Measures".

Columbia Financial, Inc.
Investor Relations Department
(833) 550-0717


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(In thousands)

 

September 30,

 

December 31,

 

2022

 

2021

Assets

(Unaudited)

 

 

Cash and due from banks

$

101,917

 

$

70,702

Short-term investments

 

131

 

 

261

Total cash and cash equivalents

 

102,048

 

 

70,963

 

 

 

 

Debt securities available for sale, at fair value

 

1,371,721

 

 

1,703,847

Debt securities held to maturity, at amortized cost (fair value of $373,494, and $434,789 at September 30, 2022 and December 31, 2021, respectively)

 

425,077

 

 

429,734

Equity securities, at fair value

 

3,453

 

 

2,710

Federal Home Loan Bank stock

 

37,726

 

 

23,141

 

 

 

 

Loans receivable

 

7,326,223

 

 

6,360,601

Less: allowance for credit losses (1)

 

51,891

 

 

62,689

Loans receivable, net

 

7,274,332

 

 

6,297,912

 

 

 

 

Accrued interest receivable

 

30,152

 

 

28,300

Office properties and equipment, net

 

84,255

 

 

78,708

Bank-owned life insurance

 

263,217

 

 

247,474

Goodwill and intangible assets

 

126,296

 

 

91,693

Other assets

 

293,894

 

 

249,615

Total assets

$

10,012,171

 

$

9,224,097

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Liabilities:

 

 

 

Deposits

$

8,064,893

 

$

7,570,216

Borrowings

 

674,018

 

 

377,309

Advance payments by borrowers for taxes and insurance

 

44,463

 

 

36,471

Accrued expenses and other liabilities

 

199,152

 

 

161,020

Total liabilities

 

8,982,526

 

 

8,145,016

 

 

 

 

Stockholders' equity:

 

 

 

Total stockholders' equity

 

1,029,645

 

 

1,079,081

Total liabilities and stockholders' equity

$

10,012,171

 

$

9,224,097

 

 

 

 

(1) The Company adopted ASU 2016-13 as of January 1, 2022. Prior year periods have not been restated.

 

 


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Interest income:

(Unaudited)

 

(Unaudited)

Loans receivable

$

68,516

 

 

$

55,451

 

 

$

187,400

 

 

$

171,902

 

Debt securities available for sale and equity securities

 

8,434

 

 

 

7,622

 

 

 

25,741

 

 

 

21,521

 

Debt securities held to maturity

 

2,440

 

 

 

2,353

 

 

 

7,223

 

 

 

6,256

 

Federal funds and interest-earning deposits

 

151

 

 

 

167

 

 

 

245

 

 

 

310

 

Federal Home Loan Bank stock dividends

 

384

 

 

 

460

 

 

 

1,129

 

 

 

1,582

 

Total interest income

 

79,925

 

 

 

66,053

 

 

 

221,738

 

 

 

201,571

 

Interest expense:

 

 

 

 

 

 

 

Deposits

 

6,968

 

 

 

6,673

 

 

 

16,326

 

 

 

23,403

 

Borrowings

 

3,806

 

 

 

2,028

 

 

 

7,028

 

 

 

5,996

 

Total interest expense

 

10,774

 

 

 

8,701

 

 

 

23,354

 

 

 

29,399

 

 

 

 

 

 

 

 

 

Net interest income

 

69,151

 

 

 

57,352

 

 

 

198,384

 

 

 

172,172

 

 

 

 

 

 

 

 

 

Provision for (reversal of) credit losses(1)

 

1,516

 

 

 

480

 

 

 

4,514

 

 

 

(2,561

)

 

 

 

 

 

 

 

 

Net interest income after provision for (reversal of) credit losses

 

67,635

 

 

 

56,872

 

 

 

193,870

 

 

 

174,733

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

Demand deposit account fees

 

1,510

 

 

 

986

 

 

 

4,129

 

 

 

2,682

 

Bank-owned life insurance

 

1,633

 

 

 

1,504

 

 

 

5,501

 

 

 

4,475

 

Title insurance fees

 

796

 

 

 

1,431

 

 

 

2,788

 

 

 

4,554

 

Loan fees and service charges

 

1,432

 

 

 

844

 

 

 

2,928

 

 

 

2,209

 

Gain on securities transactions

 

 

 

 

2,296

 

 

 

210

 

 

 

2,015

 

Change in fair value of equity securities

 

(264

)

 

 

(443

)

 

 

(332

)

 

 

(1,809

)

(Loss) gain on sale of loans

 

(1

)

 

 

140

 

 

 

109

 

 

 

10,814

 

Other non-interest income

 

3,058

 

 

 

2,116

 

 

 

7,541

 

 

 

6,920

 

Total non-interest income

 

8,164

 

 

 

8,874

 

 

 

22,874

 

 

 

31,860

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

Compensation and employee benefits

 

31,523

 

 

 

24,512

 

 

 

86,393

 

 

 

71,506

 

Occupancy

 

5,973

 

 

 

4,846

 

 

 

16,838

 

 

 

14,912

 

Federal deposit insurance premiums

 

645

 

 

 

604

 

 

 

1,922

 

 

 

1,751

 

Advertising

 

771

 

 

 

662

 

 

 

2,215

 

 

 

1,860

 

Professional fees

 

2,134

 

 

 

1,766

 

 

 

5,727

 

 

 

5,207

 

Data processing and software expenses

 

3,670

 

 

 

2,798

 

 

 

10,036

 

 

 

8,181

 

Merger-related expenses

 

1,198

 

 

 

55

 

 

 

2,676

 

 

 

130

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

742

 

Other non-interest expense, net

 

1,925

 

 

 

1,809

 

 

 

4,501

 

 

 

8,076

 

Total non-interest expense

 

47,839

 

 

 

37,052

 

 

 

130,308

 

 

 

112,365

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

27,960

 

 

 

28,694

 

 

 

86,436

 

 

 

94,228

 

 

 

 

 

 

 

 

 

Income tax expense

 

7,041

 

 

 

7,712

 

 

 

22,154

 

 

 

25,513

 

 

 

 

 

 

 

 

 

Net income

$

20,919

 

 

$

20,982

 

 

$

64,282

 

 

$

68,715

 

 

 

 

 

 

 

 

 

Earnings per share-basic

$

0.20

 

 

$

0.20

 

 

$

0.61

 

 

$

0.66

 

Earnings per share-diluted

$

0.19

 

 

$

0.20

 

 

$

0.61

 

 

$

0.66

 

Weighted average shares outstanding-basic

 

106,926,864

 

 

 

102,977,254

 

 

 

105,440,345

 

 

 

104,486,520

 

Weighted average shares outstanding-diluted

 

107,534,498

 

 

 

102,977,254

 

 

 

106,040,240

 

 

 

104,486,520

 

 

 

 

 

 

 

 

 

(1)The Company adopted ASU 2016-13 as of January 1, 2022. Prior year periods have not been restated.


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields

 

For the Three Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

Average Balance

 

Interest and Dividends

 

Yield / Cost

 

Average Balance

 

Interest and Dividends

 

Yield / Cost

 

(Dollars in thousands)

Interest-earnings assets:

 

 

 

 

 

 

 

 

 

 

 

Loans

$

7,149,327

 

 

$

68,516

 

3.80

%

 

$

6,008,998

 

 

$

55,451

 

3.66

%

Securities

 

1,897,593

 

 

 

10,874

 

2.27

%

 

 

2,049,806

 

 

 

9,975

 

1.93

%

Other interest-earning assets

 

79,329

 

 

 

535

 

2.68

%

 

 

457,880

 

 

 

627

 

0.54

%

Total interest-earning assets

 

9,126,249

 

 

 

79,925

 

3.47

%

 

 

8,516,684

 

 

 

66,053

 

3.08

%

Non-interest-earning assets

 

807,764

 

 

 

 

 

 

 

671,537

 

 

 

 

 

Total assets

$

9,934,013

 

 

 

 

 

 

$

9,188,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

$

2,739,086

 

 

$

3,162

 

0.46

%

 

$

2,441,575

 

 

$

2,003

 

0.33

%

Money market accounts

 

718,402

 

 

 

653

 

0.36

%

 

 

650,968

 

 

 

486

 

0.30

%

Savings and club deposits

 

975,152

 

 

 

119

 

0.05

%

 

 

763,717

 

 

 

213

 

0.11

%

Certificates of deposit

 

1,840,898

 

 

 

3,034

 

0.65

%

 

 

1,802,698

 

 

 

3,971

 

0.87

%

Total interest-bearing deposits

 

6,273,538

 

 

 

6,968

 

0.44

%

 

 

5,658,958

 

 

 

6,673

 

0.47

%

FHLB advances

 

571,956

 

 

 

3,396

 

2.36

%

 

 

742,261

 

 

 

1,967

 

1.05

%

Notes payable

 

30,736

 

 

 

310

 

4.00

%

 

 

 

 

 

 

%

Junior subordinated debentures

 

7,556

 

 

 

100

 

5.25

%

 

 

7,404

 

 

 

61

 

3.27

%

Other borrowings

 

54

 

 

 

 

2.53

%

 

 

 

 

 

 

%

Total borrowings

 

610,302

 

 

 

3,806

 

2.47

%

 

 

749,665

 

 

 

2,028

 

1.07

%

Total interest-bearing liabilities

 

6,883,840

 

 

$

10,774

 

0.62

%

 

 

6,408,623

 

 

$

8,701

 

0.54

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

1,751,320

 

 

 

 

 

 

 

1,540,431

 

 

 

 

 

Other non-interest-bearing liabilities

 

221,586

 

 

 

 

 

 

 

204,473

 

 

 

 

 

Total liabilities

 

8,856,746

 

 

 

 

 

 

 

8,153,527

 

 

 

 

 

Total stockholders' equity

 

1,077,267

 

 

 

 

 

 

 

1,034,694

 

 

 

 

 

Total liabilities and stockholders' equity

$

9,934,013

 

 

 

 

 

 

$

9,188,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

69,151

 

 

 

 

 

$

57,352

 

 

Interest rate spread

 

 

 

 

2.85

%

 

 

 

 

 

2.54

%

Net interest-earning assets

$

2,242,409

 

 

 

 

 

 

$

2,108,061

 

 

 

 

 

Net interest margin

 

 

 

 

3.01

%

 

 

 

 

 

2.67

%

Ratio of interest-earning assets to interest-bearing liabilities

 

132.57

%

 

 

 

 

 

 

132.89

%

 

 

 

 


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields

 

For the Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

Average Balance

 

Interest and Dividends

 

Yield / Cost

 

Average Balance

 

Interest and Dividends

 

Yield / Cost

 

(Dollars in thousands)

Interest-earnings assets:

 

 

 

 

 

 

 

 

 

 

 

Loans

$

6,764,501

 

 

$

187,400

 

3.70

%

 

$

6,130,944

 

 

$

171,902

 

3.75

%

Securities

 

2,000,131

 

 

 

32,964

 

2.20

%

 

 

1,891,023

 

 

 

27,777

 

1.96

%

Other interest-earning assets

 

74,785

 

 

 

1,374

 

2.46

%

 

 

359,438

 

 

 

1,892

 

0.70

%

Total interest-earning assets

 

8,839,417

 

 

 

221,738

 

3.35

%

 

 

8,381,405

 

 

 

201,571

 

3.22

%

Non-interest-earning assets

 

762,692

 

 

 

 

 

 

 

634,494

 

 

 

 

 

Total assets

$

9,602,109

 

 

 

 

 

 

$

9,015,899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

$

2,686,207

 

 

$

6,425

 

0.32

%

 

$

2,343,718

 

 

$

6,234

 

0.36

%

Money market accounts

 

691,217

 

 

 

1,350

 

0.26

%

 

 

627,188

 

 

 

1,536

 

0.33

%

Savings and club deposits

 

919,608

 

 

 

345

 

0.05

%

 

 

739,272

 

 

 

612

 

0.11

%

Certificates of deposit

 

1,800,295

 

 

 

8,206

 

0.61

%

 

 

1,855,582

 

 

 

15,021

 

1.08

%

Total interest-bearing deposits

 

6,097,327

 

 

 

16,326

 

0.36

%

 

 

5,565,760

 

 

 

23,403

 

0.56

%

FHLB advances

 

454,174

 

 

 

5,891

 

1.73

%

 

 

736,365

 

 

 

5,813

 

1.06

%

Notes payable

 

30,150

 

 

 

897

 

3.98

%

 

 

 

 

 

 

%

Junior subordinated debentures

 

7,634

 

 

 

240

 

4.20

%

 

 

7,480

 

 

 

183

 

3.27

%

Other borrowings

 

18

 

 

 

 

2.56

%

 

 

 

 

 

 

%

Total borrowings

 

491,976

 

 

 

7,028

 

1.91

%

 

 

743,845

 

 

 

5,996

 

1.08

%

Total interest-bearing liabilities

 

6,589,303

 

 

$

23,354

 

0.47

%

 

 

6,309,605

 

 

$

29,399

 

0.62

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

1,736,957

 

 

 

 

 

 

 

1,480,315

 

 

 

 

 

Other non-interest-bearing liabilities

 

199,263

 

 

 

 

 

 

 

210,349

 

 

 

 

 

Total liabilities

 

8,525,523

 

 

 

 

 

 

 

8,000,269

 

 

 

 

 

Total stockholders' equity

 

1,076,586

 

 

 

 

 

 

 

1,015,630

 

 

 

 

 

Total liabilities and stockholders' equity

$

9,602,109

 

 

 

 

 

 

$

9,015,899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

198,384

 

 

 

 

 

$

172,172

 

 

Interest rate spread

 

 

 

 

2.88

%

 

 

 

 

 

2.60

%

Net interest-earning assets

$

2,250,114

 

 

 

 

 

 

$

2,071,800

 

 

 

 

 

Net interest margin

 

 

 

 

3.00

%

 

 

 

 

 

2.75

%

Ratio of interest-earning assets to interest-bearing liabilities

 

134.15

%

 

 

 

 

 

 

132.84

%

 

 

 

 


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Components of Net Interest Rate Spread and Margin

 

Average Yields/Costs by Quarter

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

Yield on interest-earning assets:

 

 

 

 

 

 

 

 

 

Loans

3.80

%

 

3.68

%

 

3.62

%

 

3.66

%

 

3.66

%

Securities

2.27

 

 

2.14

 

 

2.20

 

 

2.01

 

 

1.93

 

Other interest-earning assets

2.68

 

 

1.93

 

 

2.81

 

 

0.71

 

 

0.54

 

Total interest-earning assets

3.47

%

 

3.31

%

 

3.27

%

 

3.14

%

 

3.08

%

 

 

 

 

 

 

 

 

 

 

Cost of interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

Total interest-bearing deposits

0.44

%

 

0.31

%

 

0.32

%

 

0.39

%

 

0.47

%

Total borrowings

2.47

 

 

1.67

 

 

1.32

 

 

1.08

 

 

1.07

 

Total interest-bearing liabilities

0.62

%

 

0.40

%

 

0.39

%

 

0.47

%

 

0.54

%

 

 

 

 

 

 

 

 

 

 

Interest rate spread

2.85

%

 

2.91

%

 

2.88

%

 

2.67

%

 

2.54

%

Net interest margin

3.01

%

 

3.01

%

 

2.98

%

 

2.79

%

 

2.67

%

 

 

 

 

 

 

 

 

 

 

Ratio of interest-earning assets to interest-bearing liabilities

132.57

%

 

134.81

%

 

135.20

%

 

134.13

%

 

132.89

%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Selected Financial Highlights

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

SELECTED FINANCIAL RATIOS (1):

 

 

 

 

 

 

 

Return on average assets

0.84

%

 

0.91

%

 

0.90

%

 

1.02

%

Core return on average assets

0.91

%

 

0.83

%

 

0.96

%

 

1.01

%

Return on average equity

7.70

%

 

8.05

%

 

7.98

%

 

9.05

%

Core return on average equity

8.35

%

 

7.42

%

 

8.50

%

 

8.99

%

Core return on average tangible equity

9.49

%

 

8.07

%

 

9.52

%

 

9.81

%

Interest rate spread

2.85

%

 

2.54

%

 

2.88

%

 

2.60

%

Net interest margin

3.01

%

 

2.67

%

 

3.00

%

 

2.75

%

Non-interest income to average assets

0.33

%

 

0.38

%

 

0.32

%

 

0.47

%

Non-interest expense to average assets

1.91

%

 

1.60

%

 

1.81

%

 

1.67

%

Efficiency ratio

61.88

%

 

55.95

%

 

58.89

%

 

55.07

%

Core efficiency ratio

58.43

%

 

57.89

%

 

56.08

%

 

54.92

%

Average interest-earning assets to average interest-bearing liabilities

132.57

%

 

132.89

%

 

134.15

%

 

132.84

%

Net charge-offs to average outstanding loans

0.01

%

 

%

 

%

 

0.04

%

 

 

 

 

 

 

 

 

(1) Ratios are annualized when appropriate.


CAPITAL RATIOS:

 

 

 

 

September 30,

 

December 31,

 

2022 (1)

 

2021

Company:

 

 

 

Total capital (to risk-weighted assets)

15.54

%

 

17.13

%

Tier 1 capital (to risk-weighted assets)

14.73

%

 

16.15

%

Common equity tier 1 capital (to risk-weighted assets)

14.63

%

 

16.04

%

Tier 1 capital (to adjusted total assets)

10.81

%

 

11.23

%

 

 

 

 

Columbia Bank:

 

 

 

Total capital (to risk-weighted assets)

13.90

%

 

15.39

%

Tier 1 capital (to risk-weighted assets)

13.09

%

 

14.38

%

Common equity tier 1 capital (to risk-weighted assets)

13.09

%

 

14.38

%

Tier 1 capital (to adjusted total assets)

9.62

%

 

9.80

%

 

 

 

 

Freehold Bank:

 

 

 

Total capital (to risk-weighted assets)

22.85

%

 

22.87

%

Tier 1 capital (to risk-weighted assets)

22.10

%

 

22.86

%

Common equity tier 1 capital (to risk-weighted assets)

22.10

%

 

22.86

%

Tier 1 capital (to adjusted total assets)

15.15

%

 

13.71

%

 

 

 

 

(1) Estimated ratios at September 30, 2022

 

 

 


ASSET QUALITY:

 

 

 

 

September 30,

 

December 31,

 

 

2022

 

 

 

2021

 

 

(Dollars in thousands)

 

 

 

 

Non-accrual loans

$

6,996

 

 

$

3,939

 

90+ and still accruing

 

 

 

 

 

Non-performing loans

 

6,996

 

 

 

3,939

 

Real estate owned

 

 

 

 

 

Total non-performing assets

$

6,996

 

 

$

3,939

 

 

 

 

 

Non-performing loans to total gross loans

 

0.10

%

 

 

0.06

%

Non-performing assets to total assets

 

0.07

%

 

 

0.04

%

Allowance for credit losses on loans ("ACL")

$

51,891

 

 

$

62,689

 

ACL to total non-performing loans

 

741.72

%

 

 

1,591.50

%

ACL to gross loans

 

0.71

%

 

 

0.99

%

Unamortized purchase accounting fair value credit marks on acquired loans

$

4,927

 

 

$

5,019

 


LOAN DATA:

 

 

 

 

September 30,

 

December 31,

 

 

2022

 

 

 

2021

 

 

(In thousands)

Real estate loans:

 

One-to-four family

$

2,706,114

 

 

$

2,092,317

 

Multifamily

 

1,142,459

 

 

 

1,041,108

 

Commercial real estate

 

2,354,786

 

 

 

2,170,236

 

Construction

 

289,650

 

 

 

295,047

 

Commercial business loans

 

497,478

 

 

 

452,232

 

Consumer loans:

 

 

 

Home equity loans and advances

 

279,824

 

 

 

276,563

 

Other consumer loans

 

2,214

 

 

 

1,428

 

Total gross loans

 

7,272,525

 

 

 

6,328,931

 

Purchased credit deteriorated ("PCD") loans

 

19,771

 

 

 

6,791

 

Net deferred loan costs, fees and purchased premiums and discounts

 

33,927

 

 

 

24,879

 

Allowance for credit losses

 

(51,891

)

 

 

(62,689

)

Loans receivable, net

$

7,274,332

 

 

$

6,297,912

 


Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

 

 

Book and Tangible Book Value per Share

 

 

 

September 30,

 

December 31,

 

 

 

 

2022

 

 

 

2021

 

 

 

 

(Dollars in thousands)

 

 

 

 

Total stockholders' equity

 

 

$

1,029,645

 

 

$

1,079,081

 

Less: goodwill

 

 

 

(111,206

)

 

 

(85,324

)

Less: core deposit intangible

 

 

 

(14,116

)

 

 

(5,214

)

Total tangible stockholders' equity

 

 

$

904,323

 

 

$

988,543

 

 

 

 

 

 

 

Shares outstanding

 

 

 

109,907,943

 

 

 

107,442,453

 

 

 

 

 

 

 

Book value per share

 

 

$

9.37

 

 

$

10.04

 

Tangible book value per share

 

 

$

8.23

 

 

$

9.20

 


Reconciliation of Core Net Income

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(In thousands)

 

 

 

 

 

 

 

 

Net income

$

20,919

 

 

$

20,982

 

 

$

64,282

 

 

$

68,715

 

Less: gain on securities transactions, net of tax

 

 

 

 

(1,679

)

 

 

(156

)

 

 

(1,474

)

Less: insurance settlement, net of tax

 

(486

)

 

 

 

 

 

(486

)

 

 

 

Add: merger-related expenses, net of tax

 

898

 

 

 

40

 

 

 

2,042

 

 

 

95

 

Add: loss on extinguishment of debt, net of tax

 

 

 

 

 

 

 

 

 

 

540

 

Add: litigation expenses, net of tax

 

1,269

 

 

 

 

 

 

2,867

 

 

 

 

Add/Less: branch closure expense (credit), net of tax

 

114

 

 

 

(10

)

 

 

141

 

 

 

410

 

Core net income

$

22,714

 

 

$

19,333

 

 

$

68,690

 

 

$

68,286

 


Return on Average Assets

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

Net income

$

20,919

 

 

$

20,982

 

 

$

64,282

 

 

$

68,715

 

 

 

 

 

 

 

 

 

Average assets

$

9,934,013

 

 

$

9,188,221

 

 

$

9,602,109

 

 

$

9,015,899

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.84

%

 

 

0.91

%

 

 

0.90

%

 

 

1.02

%

 

 

 

 

 

 

 

 

Core net income

$

22,714

 

 

$

19,333

 

 

$

68,690

 

 

$

68,286

 

 

 

 

 

 

 

 

 

Core return on average assets

 

0.91

%

 

 

0.83

%

 

 

0.96

%

 

 

1.01

%

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

Return on Average Equity

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

Total average stockholders' equity

$

1,077,267

 

 

$

1,034,694

 

 

$

1,076,586

 

 

$

1,015,630

 

Less: gain on securities transactions, net of tax

 

 

 

 

(1,679

)

 

 

(156

)

 

 

(1,474

)

Less: insurance settlement, net of tax

 

(486

)

 

 

 

 

 

(486

)

 

 

 

Add: merger-related expenses, net of tax

 

898

 

 

 

40

 

 

 

2,042

 

 

 

95

 

Add: loss on extinguishment of debt, net of tax

 

 

 

 

 

 

 

 

 

 

540

 

Add: litigation expenses, net of tax

 

1,269

 

 

 

 

 

 

2,867

 

 

 

 

Add/Less: branch closure expense (credit), net of tax

 

114

 

 

 

(10

)

 

 

141

 

 

 

410

 

Core average stockholders' equity

$

1,079,062

 

 

$

1,033,045

 

 

$

1,080,994

 

 

$

1,015,201

 

 

 

 

 

 

 

 

 

Return on average equity

 

7.70

%

 

 

8.05

%

 

 

7.98

%

 

 

9.05

%

 

 

 

 

 

 

 

 

Core return on core average equity

 

8.35

%

 

 

7.42

%

 

 

8.50

%

 

 

8.99

%


Return on Average Tangible Equity

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

Total average stockholders' equity

$

1,077,267

 

 

$

1,034,694

 

 

$

1,076,586

 

 

$

1,015,630

 

Less: average goodwill

 

(113,304

)

 

 

(79,220

)

 

 

(100,903

)

 

 

(79,446

)

Less: average core deposit intangible

 

(14,524

)

 

 

(5,590

)

 

 

(10,492

)

 

 

(5,842

)

Total average tangible stockholders' equity

$

949,439

 

 

$

949,884

 

 

$

965,191

 

 

$

930,342

 

 

 

 

 

 

 

 

 

Core return on average tangible equity

 

9.49

%

 

 

8.07

%

 

 

9.52

%

 

 

9.81

%

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

Efficiency Ratios

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

Net interest income

$

69,151

 

 

$

57,352

 

 

$

198,384

 

 

$

172,172

 

Non-interest income

 

8,164

 

 

 

8,874

 

 

 

22,874

 

 

 

31,860

 

Total income

$

77,315

 

 

$

66,226

 

 

$

221,258

 

 

$

204,032

 

 

 

 

 

 

 

 

 

Non-interest expense

$

47,839

 

 

$

37,052

 

 

$

130,308

 

 

$

112,365

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

61.88

%

 

 

55.95

%

 

 

58.89

%

 

 

55.07

%

 

 

 

 

 

 

 

 

Non-interest income

$

8,164

 

 

$

8,874

 

 

$

22,874

 

 

$

31,860

 

Less: gain on securities transactions

 

 

 

 

(2,296

)

 

 

(210

)

 

 

(2,015

)

Less: insurance settlement

 

(650

)

 

 

 

 

 

(650

)

 

 

 

Core non-interest income

$

7,514

 

 

$

6,578

 

 

$

22,014

 

 

$

29,845

 

 

 

 

 

 

 

 

 

Non-interest expense

$

47,839

 

 

$

37,052

 

 

$

130,308

 

 

$

112,365

 

Less: merger-related expenses

 

(1,198

)

 

 

(55

)

 

 

(2,676

)

 

 

(130

)

Less: loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

(742

)

Less: litigation expenses

 

(1,696

)

 

 

 

 

 

(3,854

)

 

 

 

Less/Add: branch closure (expense) credit

 

(152

)

 

 

14

 

 

 

(188

)

 

 

(548

)

Core non-interest expense

$

44,793

 

 

$

37,011

 

 

$

123,590

 

 

$

110,945

 

 

 

 

 

 

 

 

 

Core efficiency ratio

 

58.43

%

 

 

57.89

%

 

 

56.08

%

 

 

54.92

%