YORKTOWN HEIGHTS, N.Y., April 28, 2022 (GLOBE NEWSWIRE) -- PCSB Financial Corporation (the "Company") (NASDAQ:PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $3.5 million, or $0.24 per diluted share, for the three months ended March 31, 2022, compared to $4.3 million, or $0.30 per diluted share, for the three months ended December 31, 2021 and $3.6 million, or $0.25 per diluted share, for the three months ended March 31, 2021.

Results for the three months ended March 31, 2021 include a benefit for loan losses of $944,000, or $0.05 per diluted share, net of tax, related to the release of qualitative reserves established in the prior fiscal year associated with the COVID-19 pandemic.

On April 27, 2022, the Board of Directors declared a regular quarterly cash dividend of $0.07 per share, representing a 17% increase compared to the linked quarter. The dividend is payable on or about May 27, 2022 to shareholders of record as of the close of business on May 13, 2022.

Third Quarter Highlights

Net income of $3.5 million or $0.24 per diluted share for the current quarter, decreases of 19.0% and 3.3% compared to the linked quarter and same quarter last year, respectively. Excluding certain non-recurring items, current quarter adjusted net income (non-GAAP) was $3.2 million or $0.23 per diluted share, an increase of 2.4% compared to the linked quarter and a decrease of 0.6% compared to the same quarter last year. The decrease in net income compared to the prior year quarter includes a $1.2 million increase in the provision for loan losses, as the prior year quarter included a $944,000 release of qualitative reserves associated with the COVID-19 pandemic. Reconciliations of GAAP to non-GAAP financial measures are included at the end of this release.
Net interest income of $12.7 million for the current quarter, a decrease of 4.1% from the linked quarter and an increase of 9.3% from the same quarter last year. Adjusted net interest income (non-GAAP) of $12.4 million for the current quarter, unchanged from the linked quarter and an increase of 9.7% from the same quarter last year.
Tax equivalent net interest margin of 2.80% for the current quarter, a decrease from 2.97% in the linked quarter and an increase from 2.69% for the same quarter last year. Adjusted tax equivalent net interest margin (non-GAAP) of 2.70% for the current quarter, a decrease from 2.75% for the linked quarter and an increase from 2.61% for the same quarter last year.
Average cost of interest-bearing deposits of 0.37% for the current quarter, a decrease from 0.39% in the linked quarter and 0.59% for the same quarter last year.
Efficiency ratio of 65.66% for the current quarter, compared to 60.92% for the linked quarter and 70.10% for the same quarter last year. Adjusted efficiency ratio (non-GAAP) of 67.24% for the current quarter, largely unchanged from the linked quarter and improved from 72.76% for the same quarter last year.
Average loans receivable, excluding SBA Paycheck Protection Program ("PPP") loans, of $1.25 billion for the current quarter, increased from $1.23 billion and $1.21 billion in the linked quarter and the same quarter last year, respectively.
Average deposits of $1.56 billion for the current quarter, increases of 2.8% and 11.2% compared to the linked quarter and same quarter last year, respectively.
Allowance for loan losses to total net loans receivable (excluding PPP loans) of 0.68% as of March 31, 2022, an increase from 0.66% as of June 30, 2021.
Non-performing loans of $7.9 million, or 0.61% of total net loans receivable (excluding PPP loans), as of March 31, 2022, increased from 0.48% as of June 30, 2021.
Loans on COVID-19-related payment deferral totaled $3.6 million (1 loan), or 0.28% of gross loans, as of March 31, 2022, compared to $27.3 million (19 loans), or 2.21% of gross loans, as of June 30, 2021.

President's Comments

"We are extremely pleased with our third quarter and nine-month financial results which exhibited solid core earnings combined with strong loan and deposit growth despite continued economic uncertainty," said Joseph D. Roberto, Chairman, President & Chief Executive Officer of PCSB Financial Corporation. "Annualized loan growth excluding PPP loans was 10.0% for the nine months and 13.6% for the current quarter. I am encouraged by the increased opportunities to originate quality loans within our strong market footprint. We believe we are well positioned to take advantage of the increase in market rates because of our current elevated liquidity position, resulting from significant deposit growth, and expected loan and securities portfolio repricing opportunities. Of the $1.3 billion of loan balances, 15% are subject to daily or monthly repricing with another 4% scheduled to mature or re-price within the next 12 months; additionally, approximately 13% of our securities portfolio have adjustable rates, more than half of which are subject to re-pricing in the June quarter. I am proud of what our PCSB team has accomplished as we continue working to create sustainable value for our shareholders."

Income Statement Summary

Net income for the current quarter was $3.5 million, which decreased $814,000 from the linked quarter and $118,000 from the prior year quarter. The change from the linked quarter is primarily due to a $541,000 decrease in net interest income, a $272,000 decrease in noninterest income and increases of $151,000 in noninterest expense and $22,000 in provision for loan losses, partially offset by a $172,000 decrease in income tax expense. The change from the prior year quarter is primarily due to increases of $1.2 million in provision for loan losses and $384,000 in noninterest expense, largely offset by increases of $1.1 million in net interest income and $331,000 in noninterest income, and a $35,000 decrease in income tax expense.

Net interest income was $12.7 million for the current quarter, a decrease of $541,000, or 4.1%, compared to the linked quarter and an increase of $1.1 million, or 9.3%, compared to the prior year quarter. The decrease compared to the linked quarter is primarily the result of a 17 basis point decrease in the tax equivalent net interest margin, partially offset by a $36.9 million, or 2.1%, increase in average interest-earning assets. The increase in net interest income compared to the prior year period is primarily the result of an 11 basis point increase in the tax equivalent net interest margin and a $99.6 million, or 5.7%, increase in average interest-earning assets.

The Company recognized PPP loan interest and origination fee income (net of costs) of $266,000 in the current quarter, compared to $332,000 in the linked quarter and $279,000 in the prior year quarter. Unearned origination fees (net of costs) on PPP loans totaled $117,000 as of March 31, 2022 and will be recognized in income over the remaining lives of the loans. The timing of such recognition is largely dependent on the timing of loan forgiveness, which the Company expects to be substantially complete by June 30, 2022.

The tax equivalent net interest margin was 2.80% for the current quarter, reflecting a decrease of 17 basis points compared to 2.97% in the linked quarter and an increase of 11 basis points compared to 2.69% in the prior year quarter. During the linked quarter, the Company recognized $555,000 of loan prepayment income. Adjusted net interest margin, which excludes the effects of loan prepayment income and PPP loan interest and fees, was 2.70% for the current quarter compared to 2.75% in the linked quarter and 2.61% in the prior year quarter. Compared to the prior year quarter, reductions in the cost of funds were partially offset by a decrease in adjusted asset yield, driven by lower market interest rates. Compared to the linked quarter, margin compression was the result of an increase in cash liquidity. Reconciliations of GAAP to non-GAAP financial measures are included at the end of this release.

Tax equivalent yield on interest-earning assets for the current quarter was 3.12%, decreases of 21 basis points from the linked quarter and 11 basis point from the prior year quarter. Excluding the effects of non-recurring PPP loan income and loan prepayment income, the tax equivalent yield on interest-earning assets for the current quarter was 3.03%, decreases of 8 basis points from the linked quarter and 10 basis points from the same quarter last year. The decrease in yield compared to the prior year quarter is a result of the loan and investment portfolios continuing to re-price downward due to lower market interest rates.

The cost of interest-bearing deposits was 0.37% for the current quarter, decreases of 2 basis points and 22 basis points from 0.39% and 0.59% in the linked quarter and prior year quarter, respectively. In response to lower market interest rates and increased liquidity levels, deposit rate reductions have been implemented throughout the last 2 years, the effects of which continue to be realized. As of quarter end, the weighted average cost of interest-bearing deposits was 0.35%. The cost of interest-bearing liabilities was 0.43% for the current quarter, decreases of 4 basis points from 0.47% in the linked quarter and 27 basis points from 0.70% in the prior year quarter. Over the next 12 months, the Company has $50.0 million of wholesale funding maturing, comprised of FHLB advances and brokered time deposits, with a weighted average cost of 2.03%.

The provision for loan losses was $286,000 for current quarter, compared to $264,000 for the linked quarter and a benefit for loan losses of $894,000 for the prior year quarter. Loans on COVID-19 related payment deferral totaled $3.6 million, or 0.28% of gross loans, as of March 31, 2022, compared to $27.3 million, or 2.21% of gross loans, as of June 30, 2021. Charge-offs, net of recoveries, were $4,000 for the current quarter compared to recoveries, net of charge-offs, of $6,000 for the linked quarter and $82,000 for the prior year quarter. Non-performing loans as a percent of total loans receivable (excluding PPP loans) was 0.61% as of March 31, 2022, an increase from 0.48% as of June 30, 2021.

Noninterest income of $923,000 for the current quarter decreased $272,000 compared to the linked quarter and increased $331,000 compared to the prior year quarter. The decrease compared to the linked quarter was primarily due to decreases of $548,000 in gain on the sale of premises, $32,000 in gains on the sale of loans and $25,000 in all other noninterest income, partially offset by an increase of $333,000 in swap income. The increase compared to the prior year quarter was primarily due to increases of $333,000 in swap income, $65,000 in bank-owned life insurance income, $37,000 in fees and service charges and $9,000 in gains on the sale of loans, partially offset by a $113,000 decrease in gains on the sale of securities.

Noninterest expense of $9.0 million for the current quarter increased $151,000 compared to the linked quarter and $384,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to increased professional, occupancy and data processing costs, partially offset by lower salary and benefits expense. Noninterest expenses increased compared to the prior year quarter primarily due to higher salaries and benefits and professional costs which were partially offset by lower pension costs.

The effective income tax rate was 21.0% for the current quarter, as compared to 20.4% for the linked quarter and 21.1% for the prior year quarter.

Balance Sheet Summary

Total assets increased $109.6 million to $1.98 billion at March 31, 2022 as compared to June 30, 2021, due to increases of $56.4 million in net loans receivable and $53.1 million in investment securities. Net loans receivable increased $56.4 million, or 4.6%, and $89.6 million or 7.5% excluding PPP loans. The increase was primarily the result of increases in commercial mortgage loans and construction loans of $70.8 million and $6.7 million, respectively, partially offset by decreases in commercial loans and residential mortgage loans of $9.2 million and $8.9 million, respectively. The decrease in commercial loans includes a decrease in PPP loans of $32.3 million, driven by forgiveness and paydowns, largely offset by a net increase of $23.0 million in all other commercial loans. The increase in investment securities was the result of the Company deploying excess liquidity and included increases of $28.2 million in state and municipal securities, $15.2 million in mortgage-backed securities, $5.3 million in corporate securities and $4.4 million in U.S. government and agency bonds.

Total liabilities increased $107.8 million to $1.71 billion at March 31, 2022 as compared to June 30, 2021 as an increase of $133.0 million in deposits was partially offset by decreases of $17.6 million in FHLB advances and $7.7 million in all other liabilities. The $133.0 million increase in deposits includes increases in money market, NOW, savings and demand accounts of $63.5 million, $44.2 million, $30.4 million and $24.8 million, respectively, partially offset by decreases in time deposits of $29.9 million. Current quarter deposit growth of $101.7 million or 6.7% includes approximately $38.1 million of transient deposits expected to outflow in the subsequent quarter.

Total shareholders' equity increased $1.8 million to $276.4 million at March 31, 2022 as compared to $274.6 million as of June 30, 2021. The increase for the nine months ended March 31, 2022 was primarily due to net income of $11.4 million and $3.8 million of stock-based compensation and reduction in unearned ESOP shares for plan shares earned during the period, partially offset by the repurchase of $8.2 million (443,788 shares) of common stock, $2.5 million of other comprehensive losses related primarily to unrealized losses on investment securities driven by higher market interest rates and $2.6 million of cash dividends declared and paid.

At March 31, 2022, the Company's book value per share and tangible book value per share were $18.02 and $17.62, respectively, compared to $17.41 and $17.01, respectively, at June 30, 2021. Reconciliations of book value per share (GAAP measure) to tangible book value per share (non-GAAP measure) appear at the end of this release. At March 31, 2022, the Bank was considered "well capitalized" under applicable regulatory guidelines.

About PCSB Financial Corporation and PCSB Bank

PCSB Financial Corporation is the bank holding company for PCSB Bank. PCSB Bank is a New York-chartered commercial bank that has served the banking needs of its customers in the Lower Hudson Valley of New York State since 1871. It operates from its executive offices/headquarters and 14 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 duration, extent and severity of the COVID-19 pandemic, including its impact on our business and operations, the impact of lost fee revenue and increased operating expenses, as well as its effect on our customers and issuers of securities, including their ability to make timely payments on obligations, service providers and on economies and markets more generally, the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company's control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the Company's business; changes in accounting principles, policies or guidelines may cause the Company's financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company's business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.

Contact: Joseph D. Roberto

Chairman, President and Chief Executive Officer

(914) 248-7272

PCSB Financial Corporation and Subsidiaries

Consolidated Balance Sheets (unaudited)

(amounts in thousands, except share and per share data)

	March 31,			June 30,
	2022			2021
ASSETS
Cash and due from banks	$	156,982		$	152,070
Federal funds sold		1,910			7,235
Total cash and cash equivalents		158,892			159,305
Held to maturity debt securities, at amortized cost (fair value of $379,500 and $342,137 as of March 31, 2022 and June 30, 2021, respectively)		410,896			337,584
Available for sale debt securities, at fair value		37,185			57,387
Total investment securities		448,081			394,971
Loans receivable, net of allowance for loan losses of $8,711 and $7,881 as of March 31, 2022 and June 30, 2021, respectively		1,285,886			1,229,451
Accrued interest receivable		6,583			6,398
FHLB stock		3,715			4,507
Premises and equipment, net		18,904			21,099
Deferred tax asset, net		3,089			2,552
Bank-owned life insurance		36,136			35,568
Goodwill		6,106			6,106
Other intangible assets		102			151
Other assets		17,047			14,827
Total assets	$	1,984,541		$	1,874,935
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing deposits	$	1,380,811		$	1,272,610
Non-interest bearing deposits		243,908			219,072
Total deposits		1,624,719			1,491,682
Mortgage escrow funds		8,744			10,536
Advances from FHLB		48,357			65,957
Other liabilities		26,329			32,200
Total liabilities		1,708,149			1,600,375
Commitments and contingencies		-			-
Shareholders' equity:
Preferred stock ($0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2022 and June 30, 2021)		-			-
Common stock ($0.01 par value, 200,000,000 shares authorized, 18,703,577 shares issued as of both March 31, 2022 and June 30, 2021, and 15,334,857 and 15,770,645 shares outstanding as of March 31, 2022 and June 30, 2021, respectively)		187			187
Additional paid in capital		192,860			189,926
Retained earnings		159,765			150,987
Unearned compensation - ESOP		(9,449	)		(10,176	)
Accumulated other comprehensive loss, net of income taxes		(5,628	)		(3,099	)
Treasury stock, at cost (3,368,720 and 2,932,932 shares as of March 31, 2022 and June 30, 2021, respectively)		(61,343	)		(53,265	)
Total shareholders' equity		276,392			274,560
Total liabilities and shareholders' equity	$	1,984,541		$	1,874,935

PCSB Financial Corporation and Subsidiaries

Consolidated Statements of Operations (unaudited)

(amounts in thousands, except share and per share data)

	Three Months Ended					Nine Months Ended
	March 31,					March 31,
	2022		2021			2022		2021
Interest and dividend income
Loans receivable	$	11,943	$	12,116		$	36,701	$	36,845
Investment securities		2,152		1,700			6,294		5,489
Federal funds and other		105		109			302		344
Total interest and dividend income		14,200		13,925			43,297		42,678
Interest expense
Deposits and escrow interest		1,217		1,782			3,863		6,372
FHLB advances		266		506			924		1,545
Total interest expense		1,483		2,288			4,787		7,917
Net interest income		12,717		11,637			38,510		34,761
Provision (benefit) for loan losses		286		(894	)		563		(678	)
Net interest income after provision for loan losses		12,431		12,531			37,947		35,439
Noninterest income
Fees and service charges		390		353			1,198		1,038
Bank-owned life insurance		185		120			568		381
Gain on sale of premises		-		-			548		-
Swap income		333		-			333		367
Gains on sales of loans receivable		9		-			56		-
Gains on sales of securities		-		113			-		113
Other		6		6			28		30
Total noninterest income		923		592			2,731		1,929
Noninterest expense
Salaries and employee benefits		5,737		5,595			17,353		16,722
Occupancy and equipment		1,414		1,359			4,115		4,051
Communication and data processing		573		517			1,626		1,539
Professional fees		543		382			1,356		1,285
Postage, printing, stationery and supplies		153		146			478		452
FDIC assessment		125		115			371		350
Advertising		100		100			300		300
Amortization of intangible assets		17		21			49		61
Other operating expenses		294		337			737		1,127
Total noninterest expense		8,956		8,572			26,385		25,887
Net income before income tax expense		4,398		4,551			14,293		11,481
Income tax expense		924		959			2,917		2,467
Net income	$	3,474	$	3,592		$	11,376	$	9,014
Earnings per common share:
Basic	$	0.25	$	0.25		$	0.80	$	0.60
Diluted		0.24		0.25			0.80		0.60
Weighted average common shares outstanding:
Basic		14,165,775		14,631,122			14,247,188		14,944,097
Diluted		14,197,716		14,632,342			14,301,150		14,944,664

PCSB Financial Corporation and Subsidiaries

Net Interest Margin Analysis (unaudited)

(dollar amounts in thousands)

	Three Months Ended
	March 31, 2022								December 31, 2021								March 31, 2021
	Average Balance			Interest / Dividends		Average Rate			Average Balance			Interest / Dividends		Average Rate			Average Balance			Interest / Dividends		Average Rate
Assets:
Loans receivable ⁽¹⁾	$	1,255,117		$	11,943		3.81	%	$	1,242,109		$	12,651		4.07	%	$	1,252,492		$	12,116		3.88	%
Investment securities ⁽¹⁾		436,702			2,152		2.06			427,918			2,131		2.08			319,239			1,700		2.18
Other interest-earning assets		141,677			105		0.30			126,586			88		0.28			162,193			109		0.27
Total interest-earning assets		1,833,496			14,200		3.12			1,796,613			14,870		3.33			1,733,924			13,925		3.23
Non-interest-earning assets		77,202								77,506								68,748
Total assets	$	1,910,698							$	1,874,119							$	1,802,672

Liabilities and equity:
NOW accounts	$	215,021			94		0.18		$	192,856			90		0.18		$	161,049			59		0.15
Money market accounts		360,131			144		0.16			355,708			168		0.19			274,516			208		0.31
Savings accounts and mortgage escrow funds		415,850			113		0.11			398,076			108		0.11			368,791			132		0.15
Time deposits		349,266			866		1.00			357,242			926		1.03			411,500			1,383		1.36
Total interest-bearing deposits		1,340,268			1,217		0.37			1,303,882			1,292		0.39			1,215,856			1,782		0.59
FHLB advances		57,185			266		1.89			63,805			320		1.99			104,604			506		1.96
Total interest-bearing liabilities		1,397,453			1,483		0.43			1,367,687			1,612		0.47			1,320,460			2,288		0.70
Non-interest-bearing deposits		220,809								214,558								187,778
Other non-interest-bearing liabilities		15,370								16,250								24,272
Total liabilities		1,633,632								1,598,495								1,532,510
Total shareholders' equity		277,066								275,624								270,162
Total liabilities and shareholders' equity	$	1,910,698							$	1,874,119							$	1,802,672

Net interest income				$	12,717							$	13,258							$	11,637
Interest rate spread - tax equivalent⁽²⁾							2.69								2.86								2.53
Net interest margin - tax equivalent⁽³⁾							2.80								2.97								2.69
Average interest-earning assets to interest-bearing liabilities		131.20	%							131.36	%							131.31	%

⁽¹⁾ Tax exempt yield is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for all periods presented. See reconciliation of GAAP to non-GAAP measures at the end of this release.
⁽²⁾ 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.
⁽³⁾ Net interest margin represents tax equivalent net interest income divided by average interest-earning assets. See reconciliation of GAAP to non-GAAP measures at the end of this release.

PCSB Financial Corporation and Subsidiaries

Net Interest Margin Analysis (unaudited)

(dollar amounts in thousands)

	Nine Months Ended March 31,
	2022								2021
	Average Balance			Interest/ Dividends		Average Rate			Average Balance			Interest/ Dividends		Average Rate
Assets:
Loans receivable ⁽¹⁾	$	1,240,253		$	36,701		3.95	%	$	1,245,881		$	36,845		3.95	%
Investment securities ⁽¹⁾		423,062			6,294		2.07			316,114			5,489		2.36
Other interest-earning assets		142,974			302		0.28			162,946			344		0.28
Total interest-earning assets		1,806,289			43,297		3.22			1,724,941			42,678		3.31
Non-interest-earning assets		77,027								70,364
Total assets	$	1,883,316							$	1,795,305

Liabilities and equity:
NOW accounts	$	196,803			254		0.17		$	153,378			227		0.20
Money market accounts		355,471			499		0.19			260,258			657		0.34
Savings accounts and escrow		403,740			334		0.11			363,768			502		0.18
Time deposits		358,050			2,776		1.03			429,811			4,986		1.54
Total interest-bearing deposits		1,314,064			3,863		0.39			1,207,215			6,372		0.70
FHLB advances		62,309			924		1.98			105,569			1,545		1.95
Total interest-bearing liabilities		1,376,373			4,787		0.46			1,312,784			7,917		0.80
Non-interest-bearing deposits		214,391								183,467
Other non-interest-bearing liabilities		17,186								26,570
Total liabilities		1,607,950								1,522,821
Total shareholders' equity		275,366								272,484
Total liabilities and shareholders' equity	$	1,883,316							$	1,795,305

Net interest income				$	38,510							$	34,761
Interest rate spread - tax equivalent ⁽²⁾							2.76								2.51
Net interest margin - tax equivalent⁽³⁾							2.86								2.70
Average interest-earning assets to interest-bearing liabilities		131.24	%							131.40	%

⁽¹⁾ Tax exempt yield is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for all periods presented. See reconciliation of GAAP to non-GAAP measures at the end of this release.
⁽²⁾ 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.
⁽³⁾ Net interest margin represents tax equivalent net interest income divided by average interest-earning assets. See reconciliation of GAAP to non-GAAP measures at the end of this release.

PCSB Financial Corporation and Subsidiaries

Condensed Financial Information (unaudited)

(amounts in thousands, except per share data)

	As of
	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021
Condensed Balance Sheets
Cash and cash equivalents	$	158,892	$	120,339	$	148,012	$	159,305	$	169,314
Total investment securities		448,081		433,999		423,525		394,971		347,302
Loans receivable, net		1,285,886		1,243,646		1,210,674		1,229,451		1,261,155
Other assets		91,682		90,137		90,968		91,208		76,903
Total assets	$	1,984,541	$	1,888,121	$	1,873,179	$	1,874,935	$	1,854,674

Total deposits and mortgage escrow funds	$	1,633,463	$	1,533,947	$	1,511,465	$	1,502,218	$	1,463,542
Advances from Federal Home Loan Bank		48,357		58,390		65,924		65,957		95,991
Other liabilities		26,329		20,950		21,062		32,200		23,844
Total liabilities		1,708,149		1,613,287		1,598,451		1,600,375		1,583,377
Total shareholders' equity		276,392		274,834		274,728		274,560		271,297
Total liabilities and shareholders' equity	$	1,984,541	$	1,888,121	$	1,873,179	$	1,874,935	$	1,854,674

	Quarter Ended											Nine Months Ended
	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021			March 31, 2022		March 31, 2021
Condensed Income Statements
Interest income	$	14,200	$	14,870	$	14,227	$	14,586	$	13,925		$	43,297	$	42,678
Interest expense		1,483		1,612		1,692		2,005		2,288			4,787		7,917
Net interest income		12,717		13,258		12,535		12,581		11,637			38,510		34,761
Provision (benefit) for loan losses		286		264		13		5		(894	)		563		(678	)
Noninterest income		923		1,195		613		568		592			2,731		1,929
Noninterest expense		8,956		8,805		8,624		8,867		8,572			26,385		25,887
Income before income tax expense		4,398		5,384		4,511		4,277		4,551			14,293		11,481
Income tax expense		924		1,096		897		867		959			2,917		2,467
Net income	$	3,474	$	4,288	$	3,614	$	3,410	$	3,592		$	11,376	$	9,014

Earnings per share:
Basic	$	0.25	$	0.30	$	0.25	$	0.23	$	0.25		$	0.80	$	0.60
Diluted		0.24		0.30		0.25		0.23		0.25			0.80		0.60

PCSB Financial Corporation and Subsidiaries

Selected Financial Data (unaudited)

	Quarter Ended															Nine Months Ended
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			March 31, 2022			March 31, 2021
Performance Ratios ⁽¹⁾:
Return on average assets		0.73	%		0.92	%		0.78	%		0.73	%		0.80	%		0.81	%		0.67	%
Return on average equity		5.02	%		6.22	%		5.29	%		4.95	%		5.32	%		5.51	%		4.41	%
Interest rate spread		2.69	%		2.86	%		2.71	%		2.67	%		2.53	%		2.76	%		2.51	%
Net interest margin		2.80	%		2.97	%		2.82	%		2.81	%		2.69	%		2.86	%		2.70	%
Efficiency ratio		65.66	%		60.92	%		65.59	%		67.43	%		70.10	%		63.98	%		70.56	%

Noninterest income to average assets		0.19	%		0.26	%		0.13	%		0.12	%		0.13	%		0.19	%		0.14	%
Noninterest expense to average assets		1.87	%		1.88	%		1.85	%		1.89	%		1.90	%		1.87	%		1.92	%

Average interest-earning assets to average interest-bearing liabilities		131.20	%		131.36	%		131.14	%		131.21	%		131.31	%		131.24	%		131.40	%
Average equity to average assets		14.50	%		14.71	%		14.66	%		14.67	%		14.99	%		14.62	%		15.18	%
Dividend payout ratio ⁽²⁾		24.61	%		20.22	%		24.24	%		26.07	%		16.65	%		22.84	%		20.37	%

PCSB Financial Corporation and Subsidiaries

Selected Financial Data (unaudited) - Continued

(dollar amounts in thousands, except share and per share data)

	As of and for the quarter ended
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
Loans to deposits		79.15	%		81.65	%		80.46	%		82.42	%		86.72	%

Share Data:
Shares outstanding		15,334,857			15,337,979			15,574,310			15,770,645			15,966,216
Book value per common share	$	18.02		$	17.92		$	17.64		$	17.41		$	16.99
Tangible book value per common share ⁽³⁾	$	17.62		$	17.51		$	17.24		$	17.01		$	16.60

Asset Quality Ratios:
Non-performing loans receivable	$	7,859		$	7,890		$	5,732		$	5,764		$	2,054
Non-performing assets	$	7,859		$	7,890		$	5,732		$	5,764		$	2,054
Allowance for loan losses as a percent of total loans receivable⁽⁴⁾		0.68	%		0.68	%		0.68	%		0.66	%		0.65	%
Allowance for loan losses as a percent of non-performing loans receivable		110.84	%		106.83	%		142.34	%		136.73	%		382.91	%
Non-performing loans as a percent of total loans receivable, net⁽⁴⁾		0.61	%		0.64	%		0.48	%		0.48	%		0.17	%
Non-performing assets as a percent of total assets		0.40	%		0.42	%		0.31	%		0.31	%		0.11	%
Net charge-offs (recoveries)	$	4		$	(6	)	$	(265	)	$	(11	)	$	(82	)
Net charge-offs (recoveries) to average outstanding loans during the period ⁽¹⁾		0.00	%		0.00	%		(0.09	%)		0.00	%		(0.03	%)

Capital Ratios ⁽⁵⁾:
Tier 1 capital (to adjusted total assets)		12.86	%		12.91	%		12.72	%		12.48	%		12.76	%
Common equity Tier 1 capital (to risk-weighted assets)		17.22	%		17.67	%		17.84	%		17.93	%		17.72	%
Tier 1 capital (to risk-weighted assets)		17.22	%		17.67	%		17.84	%		17.93	%		17.72	%
Total capital (to risk-weighted assets)		17.83	%		18.28	%		18.46	%		18.53	%		18.33	%

⁽¹⁾ Performance ratios for quarter ended periods are annualized.
⁽²⁾Dividends declared per share divided by net income per share.
⁽³⁾Tangible book value per share is a non-GAAP measure and equals total shareholders' equity, less goodwill and other intangible assets, divided by shares outstanding. We believe this disclosure may be meaningful to those investors who seek to evaluate our equity without giving effect to goodwill and other intangible assets. Reconciliations of GAAP to non-GAAP measures appear at the end of this release.
⁽⁴⁾Total loans receivable excludes PPP loans.
⁽⁵⁾Represents Bank ratios.

PCSB Financial Corporation and Subsidiaries

Loan and Deposit Portfolios (unaudited)

(amounts in thousands)

	As of
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
Mortgage loans:
Residential mortgages	$	215,431		$	212,817		$	221,735		$	224,305		$	229,008
Commercial mortgages		897,424			867,581			838,021			826,624			831,162
Construction		16,894			11,857			11,639			10,151			10,047
Net deferred loan origination (fees) costs		(23	)		(18	)		97			196			365
Total mortgage loans		1,129,726			1,092,237			1,071,492			1,061,276			1,070,582
Commercial and consumer loans:
Commercial loans ⁽¹⁾		141,427			135,055			122,031			150,658			171,314
Home equity credit lines		22,557			24,142			24,936			25,439			27,211
Consumer and overdrafts		348			356			394			345			269
Net deferred loan origination costs (fees)		539			285			(20	)		(386	)		(356	)
Total commercial and consumer loans		164,871			159,838			147,341			176,056			198,438
Total loans receivable		1,294,597			1,252,075			1,218,833			1,237,332			1,269,020
Allowance for loan losses		(8,711	)		(8,429	)		(8,159	)		(7,881	)		(7,865	)
Loans receivable, net	$	1,285,886		$	1,243,646		$	1,210,674		$	1,229,451		$	1,261,155

⁽¹⁾ Includes PPP loans totaling:	$	4,701		$	12,769		$	19,763		$	37,050		$	50,380

	As of
	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021
Demand deposits	$	243,908	$	215,708	$	216,470	$	219,072	$	203,344
NOW accounts		221,386		198,610		181,572		177,223		169,077
Money market accounts		396,358		361,352		363,090		332,843		301,892
Savings		417,975		393,041		381,836		387,529		372,151
Time deposits		345,092		354,356		361,669		375,015		407,826
Total deposits	$	1,624,719	$	1,523,067	$	1,504,637	$	1,491,682	$	1,454,290

PCSB Financial Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (unaudited)

(dollar amounts in thousands, except share and per share data)

	Quarter Ended															Nine Months Ended
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			March 31, 2022			March 31, 2021
Computation of Adjusted Net Income and Adjusted Earnings Per Share
Net income applicable to common stock (GAAP)	$	3,474		$	4,288		$	3,614		$	3,410		$	3,592		$	11,376		$	9,014

Adjustments ⁽¹⁾:
Prepayment income on loans receivable		(43	)		(442	)		(26	)		(532	)		(43	)		(511	)		(147	)
Prepayment income on investment securities		-			-			-			-			-			-			(90	)
Gain on sale of premises		-			(436	)		-			-			-			(436	)		-
PPP interest and fee income		(210	)		(264	)		(299	)		(411	)		(220	)		(773	)		(515	)
Gains on sale of investment securities		-			-			-			-			(89	)		-			(89	)
Adjusted net income (Non-GAAP)	$	3,221		$	3,146		$	3,289		$	2,467		$	3,240		$	9,656		$	8,173

Average number of common shares outstanding:
Basic		14,165,775			14,236,473			14,337,543			14,553,783			14,631,122			14,247,188			14,944,097
Diluted		14,197,716			14,281,232			14,405,816			14,586,928			14,632,342			14,301,150			14,944,664
Earnings per share (GAAP):
Basic	$	0.25		$	0.30		$	0.25		$	0.23		$	0.25		$	0.80		$	0.60
Diluted		0.24			0.30			0.25			0.23			0.25			0.80			0.60
Adjusted earnings per common share (Non-GAAP):
Basic	$	0.23		$	0.22		$	0.23		$	0.17		$	0.22		$	0.68		$	0.55
Diluted		0.23			0.22			0.23			0.17			0.22			0.68			0.55

⁽¹⁾Amounts included in income before income tax expense are presented net of tax.

PCSB Financial Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (unaudited)

(dollar amounts in thousands, except share and per share data)

	Quarter Ended						Nine Months Ended
	March 31, 2022		December 31, 2021		March 31, 2021		March 31, 2022		March 31, 2021
Computation of Tax Equivalent Net Interest Income
Total interest income	$	14,200	$	14,870	$	13,925	$	43,297	$	42,678
Total interest expense		1,483		1,612		2,288		4,787		7,917
Net interest income (GAAP)		12,717		13,258		11,637		38,510		34,761
Tax equivalent adjustment		101		99		51		289		130
Net interest income - tax equivalent (Non-GAAP)	$	12,818	$	13,357	$	11,688	$	38,799	$	34,891

	Quarter Ended															Nine Months Ended
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			March 31, 2022			March 31, 2021
Computation of Efficiency Ratio
Noninterest expense (GAAP)	$	8,956		$	8,805		$	8,624		$	8,867		$	8,572		$	26,385		$	25,887

Net interest income (GAAP)	$	12,717		$	13,258		$	12,535		$	12,581		$	11,637		$	38,510		$	34,761
Noninterest income (GAAP)		923			1,195			613			568			592			2,731			1,929
Total (GAAP)		13,640			14,453			13,148			13,149			12,229			41,241			36,690
Adjustments:
Prepayment income on loans receivable		(55	)		(555	)		(32	)		(667	)		(55	)		(642	)		(187	)
Prepayment income on investment securities		-			-			-			-			-			-			(117	)
Gains on sales of premises		-			(548	)		-			-			-			(548	)		-
PPP interest and fee income		(266	)		(332	)		(373	)		(516	)		(279	)		(971	)		(655	)
Gains on sales of investment securities		-			-			-			-			(113	)		-			(113	)
Adjusted total (Non-GAAP)	$	13,319		$	13,018		$	12,743		$	11,966		$	11,782		$	39,080		$	35,618

Efficiency ratio (GAAP)		65.66	%		60.92	%		65.59	%		67.43	%		70.10	%		63.98	%		70.56	%
Adjusted efficiency ratio (Non-GAAP)		67.24	%		67.64	%		67.68	%		74.10	%		72.76	%		67.52	%		72.68	%

PCSB Financial Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued

(dollar amounts in thousands, except share and per share data)

	As of
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
Computation of Tangible Book Value per Common Share
Total shareholders' equity (GAAP)	$	276,392		$	274,834		$	274,728		$	274,560		$	271,297
Adjustments:
Goodwill		(6,106	)		(6,106	)		(6,106	)		(6,106	)		(6,106	)
Other intangible assets		(102	)		(119	)		(135	)		(151	)		(168	)
Tangible common shareholders' equity (Non-GAAP)	$	270,184		$	268,609		$	268,487		$	268,303		$	265,023

Common shares outstanding		15,334,857			15,337,979			15,574,310			15,770,645			15,966,216

Book value per share (GAAP)	$	18.02		$	17.92		$	17.64		$	17.41		$	16.99
Adjustments:
Effects of intangible assets		(0.40	)		(0.41	)		(0.40	)		(0.40	)		(0.39	)

Tangible book value per common share (Non-GAAP)	$	17.62		$	17.51		$	17.24		$	17.01		$	16.60

PCSB Financial Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued

(dollar amounts in thousands, except share and per share data)

	Quarter Ended									Nine Months Ended
	March 31, 2022			December 31, 2021			March 31, 2021			March 31, 2022			March 31, 2021
Computation of Adjusted Yield on Assets and Adjusted Net Interest Margin
Average interest-earning assets	$	1,833,496		$	1,796,613		$	1,733,924		$	1,806,289		$	1,724,941

Interest and dividend income (GAAP)	$	14,200		$	14,870		$	13,925		$	43,297		$	42,678
Less: PPP interest and fee income		(266	)		(332	)		(279	)		(971	)		(655	)
Less: Prepayment income on loans receivable		(55	)		(555	)		(55	)		(642	)		(187	)
Adjusted interest and dividend income (Non-GAAP)	$	13,879		$	13,983		$	13,591		$	41,684		$	41,836

Yield on interest-earning assets (GAAP)		3.12	%		3.33	%		3.23	%		3.22	%		3.31	%
Adjusted yield on interest-earning assets (Non-GAAP)		3.03	%		3.11	%		3.14	%		3.08	%		3.23	%

Net interest income (GAAP)	$	12,717		$	13,258		$	11,637		$	38,510		$	34,761
Less: PPP interest and fee income		(266	)		(332	)		(279	)		(971	)		(655	)
Less: Prepayment income on loans receivable		(55	)		(555	)		(55	)		(642	)		(187	)
Adjusted net interest income (Non-GAAP)	$	12,396		$	12,371		$	11,303		$	36,897		$	33,919

Net interest margin (GAAP)		2.80	%		2.97	%		2.69	%		2.86	%		2.70	%
Adjusted net interest margin (Non-GAAP)		2.70	%		2.75	%		2.61	%		2.72	%		2.62	%

PCSB Financial Corporation Announces Third Fiscal Quarter Financial Results and Declares a 17% Increase In Quarterly Cash Dividend