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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

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

October 23, 2019 GMT

YORKTOWN HEIGHTS, N.Y., Oct. 23, 2019 (GLOBE NEWSWIRE) -- PCSB Financial Corporation (the “Company”) (NASDAQ: PCSB), parent of PCSB Bank (the “Bank”), today announced its results for the three months ended September 30, 2019. For the three months ended September 30, 2019, net income was $2.8 million, or $0.18 per share, compared to $1.7 million, or $0.10 per share, for the three months ended June 30, 2019 and $2.3 million, or $0.14 per share, for the three months ended September 30, 2018.

On a non-GAAP basis, which excludes certain nonrecurring items, the Company recorded adjusted net income of $2.4 million, or $0.15 per diluted share for the three months ended September 30, 2019 as compared to adjusted net income of $1.6 million, or $0.10 per diluted share for the three months ended June 30, 2019 and $2.2 million, or $0.13 per diluted share, for the three months ended September 30, 2018. Reconciliations of GAAP to non-GAAP measures appear at the end of this release.

The Board of Directors declared a regular quarterly cash dividend of $0.04 per share. The dividend is payable on or about November 29, 2019 to stockholders of record as of the close of business on November 15, 2019.

First Quarter Highlights

-- Diluted earnings per share of $0.18, an increase of 28.6% compared to the same quarter last year. -- Net interest income of $12.0 million, an increase of $1.5 million, or 14.7%, compared to the same quarter last year. -- Net interest margin was 3.03% for the quarter, an increase from 2.94% for the same quarter last year. -- The efficiency ratio was 68.85% for the quarter, compared to 72.11% for the same quarter last year. -- Total loans receivable was $1.16 billion, a result of loan growth of $70.1 million, or 6.4%, during the quarter. -- Loans to deposits ratio was 94.27%, an increase from 78.49% as of the same quarter last year. -- The Company repurchased 179,800 shares during the quarter at a total cost of $3.5 million, or an average cost of $19.60 per share.

President’s Comments

Commenting on the Company’s results, Joseph D. Roberto. Chairman, President and Chief Executive Officer of PCSB Financial Corporation said, “I am pleased to report continued growth in our core business as we begin our third fiscal year as a public company. We continue to build off the strong results achieved in fiscal 2019 with solid results in the first quarter of fiscal 2020 as loans grew an additional $70.1 million or 6.4%, resulting in a 28.5% increase over the year ago period. Profitability continues to improve as net income of $2.8 million increased $500,000 or 21.5% over the year ago period. Asset quality remains strong as the ratio of non-performing assets to total assets of 0.26% decreased from 0.43% at September 30, 2018. As we move forward, we remain focused on enhancing shareholder value through continued growth in earnings together with capital management techniques such as share repurchases and dividends.”

Income Statement Summary

Net interest income was $12.0 million for the quarter ended September 30, 2019, an increase of $1.2 million, or 11.5%, compared to the quarter ended June 30, 2019, and an increase of $1.5 million, or 14.7%, compared to quarter ended September 30, 2018. These increases in net interest income are primarily the result of increases in average net interest earning assets, as the Company has accomplished significant growth in average loans receivable compared to both the prior quarter and the same quarter last year, as well as increases in net interest margin.

The net interest margin was 3.03% for the current quarter, an increase of nine basis points compared to 2.94% in both the prior quarter and prior year quarter. Included in current quarter net interest income is $477,000 of prepayment income earned on loans receivable and investment securities. Excluding this nonrecurring prepayment income, net interest margin for the quarter would have been 2.91%, a decrease of three basis points from both the prior quarter and the prior year quarter. Despite rising funding costs due to higher short-term interest rates along with competitive loan and deposit pricing, continued asset growth and a shift in the asset mix has mitigated the decrease in the net interest margin.

The yield on interest-earning assets for the current quarter was 4.04%, a 23 basis point increase from the prior quarter and a 50 basis point increase from the prior year quarter. Excluding the effects of prepayment income, the yield on interest-earning assets was 3.92% for the current quarter.

The cost of interest-bearing deposits was 1.20% for the current quarter, an increase of eight basis points from 1.12% for the prior quarter and an increase of 41 basis points from 0.79% for the prior year quarter. The Company has experienced a shift in the deposit mix as customers in lower costing saving products moved to higher rate money market and time deposits. Additionally, as the Company has increasingly utilized borrowings over the past year to fund loan growth, the cost of interest-bearing liabilities was 1.32% for the current quarter, an increase of 16 basis points from 1.16% for the prior quarter and an increase of 51 basis points from 0.81% for the prior year quarter.

The provision for loan losses was $335,000 for the three months ended September 30, 2019 compared to $737,000 in the prior quarter and $58,000 for the same period in 2018. Charge-offs, net of recoveries, were $6,000 for the three months ended September 30, 2019 compared to $18,000 for the three months ended June 30, 2019 and $3,000 for the three months ended September 30, 2018. Loans classified as substandard or doubtful increased $2.8 million, or 33.1%, to $11.3 million at September 30, 2019 from $8.5 million at June 30, 2019 and decreased $1.7 million, or 13.7%, from $13.0 million at September 30, 2018. Non-performing loans as a percent of total loans receivable was 0.29% as of September 30, 2019, an increase from 0.25% as of June 30, 2019 and a decrease from 0.62% as of September 30, 2018.

Noninterest income increased $124,000 to $765,000 for the three months ended September 30, 2019 compared to the same period in 2018, primarily due to increases of $99,000 in swap income and $23,000 in gains on sale of foreclosed real estate. Noninterest income decreased $197,000 from the three months ended June 30, 2019, primarily due to a $191,000 decrease in swap income.

Noninterest expense increased $779,000 to $8.8 million for the three months ended September 30, 2019 compared to the same period in 2018 and increased $79,000 compared to the three months ended June 30, 2019. The $779,000 increase from the prior year period was caused primarily by $829,000 of stock-based compensation expense recorded in the current quarter, compared to no such expense in the prior year period. The Company applied small bank assessment credits of $98,000 which fully offset the Company’s FDIC assessment for the current quarter. The remaining credits available are $239,000.

The effective income tax rate was 22.3% for the three months ended September 30, 2019, as compared to 26.2% for the three months ended June 30, 2019 and 23.4% for the three months ended September 30, 2018.

Balance Sheet Summary

Total assets increased $21.0 million to $1.66 billion at September 30, 2019 from $1.64 billion at June 30, 2019. This increase was primarily due to an increase of $70.1 million in net loans receivable, partially offset by decreases of $38.8 million in total investment securities and $22.2 million in cash and cash equivalents. The $70.1 million increase in loans was the result of $64.9 million of originations and $44.1 million of loan purchases, partially offset by $38.9 million of net amortization and repayments. Commercial mortgages increased $74.9 million or 11.5%, and construction loans increased $5.6 million, or 42.3%, while commercial loans decreased $7.7 million or 5.8%.

Total liabilities increased $20.8 million to $1.38 billion at September 30, 2019 from $1.36 billion at June 30, 2019. This increase was primarily due to a $14.6 million increase in other liabilities, as a result of recording a $12.0 million lease liability (a related lease asset was also recorded as part of bank premises and equipment) associated with the adoption of new lease accounting standards, and a net increase of $6.3 million in deposits and escrow balances.

Total shareholders’ equity increased $215,000 to $281.5 million at September 30, 2019 from $281.3 million at June 30, 2019. This increase was primarily due to net income of $2.8 million, as well as $1.3 million of stock-based compensation and reduction in unearned ESOP shares for plan shares earned during the period, partially offset by the repurchase of $3.5 million (179,800 shares) of common stock and $659,000 of cash dividends declared and paid. As of September 30, 2019, there were 710,221 shares available to be repurchased under the current stock repurchase plan.

At September 30, 2019, the Company’s book value per share and tangible book value per share were $15.97 and $15.61, respectively, compared to $15.80 and $15.44, respectively, at June 30, 2019. Reconciliations of book value per share (GAAP measure) to tangible book value per share (non-GAAP measure) appear at the end of this release. At September 30, 2019, the Bank was considered “well capitalized” under applicable regulatory guidelines.

About PCSB Financial Corporation and PCSB Bank

PCSB Financial Corporation is the bank holding company for PCSB Bank. PCSB Bank is a New York-chartered commercial bank that has served the banking needs of its customers in the Lower Hudson Valley of New York State since 1871. It operates from its executive offices/headquarters and 15 branch offices located in Dutchess, Putnam, Rockland and Westchester Counties in New York.

This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar terms and phrases, including references to assumptions.

Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management’s experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company’s control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the Company’s business; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company’s financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.

Contact: Joseph D. RobertoChairman, President and Chief Executive Officer(914) 248-7272

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

September June 30, 30, 2019 2019 ----------- ----------- ASSETS Cash and due from banks $ 36,544 $ 58,756 Federal funds sold 1,253 1,273 - --------- - --------- Cash and cash equivalents 37,797 60,029 Held to maturity debt securities, at amortized cost 314,165 345,545 (fair value of $315,901 and $346,243, respectively) Available for sale debt securities, at fair value 64,842 72,228 - --------- - --------- Total investment securities 379,007 417,773 Loans receivable, net of allowance for loan losses of $5,993 and $5,664, 1,163,254 1,093,121 respectively Accrued interest receivable 5,494 4,797 FHLB stock 6,254 6,255 Premises and equipment, net 23,946 11,802 Deferred tax asset, net 2,291 2,478 Foreclosed real estate 856 1,158 Bank-owned life insurance 24,428 24,291 Goodwill 6,106 6,106 Other intangible assets 298 323 Other assets 8,877 9,446 - --------- - --------- Total assets $ 1,658,608 $ 1,637,579 - --------- - --------- LIABILITIES AND SHAREHOLDERS’ EQUITY Interest bearing deposits $ 1,092,338 $ 1,084,442 Non-interest bearing deposits 141,567 141,379 - --------- - --------- Total deposits 1,233,905 1,225,821 Mortgage escrow funds 7,553 9,355 Advances from Federal Home Loan Bank 111,185 111,216 Other liabilities 24,443 9,880 - --------- - --------- Total liabilities 1,377,086 1,356,272 - --------- - --------- Commitments and contingencies - - Preferred stock ($0.01 par value, 10,000,000 shares authorized, no shares issued - - or outstanding as of September 30, 2019 and June 30, 2019, respectively) Common stock ($0.01 par value, 200,000,000 shares authorized, 18,712,295 shares issued as of September 30, 2019 and June 30, 2019, and 17,624,239 and 17,804,039 187 187 shares outstanding as of September 30, 2019 and June 30, 2019, respectively) Additional paid in capital 183,198 182,129 Retained earnings 136,670 134,500 Unearned compensation - ESOP (11,870 ) (12,114 ) Accumulated other comprehensive loss, net of income taxes (4,834 ) (5,090 ) Treasury stock, at cost (1,088,056 and 908,256 shares as of September 30, 2019 (21,829 ) (18,305 ) and June 30, 2019, respectively) - --------- - --------- Total shareholders’ equity 281,522 281,307 - --------- - --------- Total liabilities and shareholders’ equity $ 1,658,608 $ 1,637,579 - --------- - ---------

PCSB Financial Corporation and SubsidiariesConsolidated Statements of Operations (unaudited)(amounts in thousands, except share and per share data)

Three Months Ended September 30, --------------------------- 2019 2018 ------------ ------------ Interest and dividend income Loans receivable $ 13,036 $ 9,898 Investment securities 2,692 2,366 Federal funds and other 298 345 - ---------- - ---------- Total interest and dividend income 16,026 12,609 - ---------- - ---------- Interest expense Deposits 3,301 2,056 FHLB advances 727 89 - ---------- - ---------- Total interest expense 4,028 2,145 - ---------- - ---------- Net interest income 11,998 10,464 Provision for loan losses 335 58 - ---------- - ---------- Net interest income after provision for loan losses 11,663 10,406 Noninterest income Fees and service charges 402 418 Bank-owned life insurance 137 140 Swap income 170 71 Other 56 12 - ---------- - ---------- Total noninterest income 765 641 Noninterest expense Salaries and employee benefits 5,764 5,140 Occupancy and equipment 1,315 1,241 Communications and data processing 531 472 Professional fees 404 369 Postage, printing, stationary and supplies 140 138 FDIC assessment - 93 Advertising 100 87 Amortization of intangible assets 24 28 Other operating expenses 509 440 - ---------- - ---------- Total noninterest expense 8,787 8,008 - ---------- - ---------- Net income before income tax expense 3,641 3,039 Income tax expense 812 710 - ---------- - ---------- Net income $ 2,829 $ 2,329 - ---------- - ---------- Earnings per common share: Basic $ 0.18 $ 0.14 Diluted $ 0.18 $ 0.14 Weighted average common shares outstanding: Basic 15,979,762 16,869,100 Diluted 16,082,276 16,869,100

PCSB Financial Corporation and SubsidiariesNet Interest Margin Analysis (unaudited)(dollar amounts in thousands)

Three Months Ended September 30, ------------------------------------------------------------------ 2019 2018 ------------------------------- ------------------------------- Average Interest Averag Average Interest Averag Balance / e Balance / e Dividends Rate Dividends Rate ----------- -------- ----- ----------- -------- ----- Assets: Loans receivable $ 1,142,025 $ 13,036 4.56 % $ 903,021 $ 9,898 4.38 % Investment securities 399,190 2,692 2.70 453,671 2,366 2.09 Other interest-earning assets 45,914 298 2.58 67,222 345 2.03 - --------- - ------ - --------- - ------ Total interest-earning assets 1,587,129 16,026 4.04 1,423,914 12,609 3.54 - ------ - ------ Non-interest-earning assets 70,266 55,251 - --------- - --------- Total assets $ 1,657,395 $ 1,479,165 - --------- - --------- Liabilities and equity: NOW accounts $ 119,852 57 0.19 $ 119,404 53 0.18 Money market accounts 149,880 463 1.23 61,679 139 0.89 Savings accounts and escrow 362,569 232 0.25 462,542 289 0.25 Time deposits 459,348 2,549 2.20 392,336 1,575 1.59 - --------- - ------ - --------- - ------ Total interest-bearing deposits 1,091,649 3,301 1.20 1,035,961 2,056 0.79 FHLB advances 121,855 727 2.37 18,821 89 1.89 - --------- - ------ - --------- - ------ Total interest-bearing liabilities 1,213,504 4,028 1.32 1,054,782 2,145 0.81 - ------ - ------ Non-interest-bearing deposits 140,627 127,762 Other non-interest-bearing liabilities 21,211 7,282 - --------- - --------- Total liabilities 1,375,342 1,189,826 Total shareholders’ equity 282,053 289,339 - --------- - --------- Total liabilities and shareholders’ $ 1,657,395 $ 1,479,165 equity - --------- - --------- Net interest income $ 11,998 $ 10,464 - ------ - ------ Interest rate spread(1) 2.72 2.73 Net interest margin(2) 3.03 2.94 Average interest-earning assets to 130.79 % 135.00 % interest-bearing liabilities (1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. (2) Net interest margin represents annualized net interest income divided by average interest-earning assets.

PCSB Financial Corporation and SubsidiariesCondensed Financial Information (unaudited)(amounts in thousands, except per share data)

As of --------------------------------------------------------------- September June 30, March 31, December September 30, 2019 2019 31, 30, 2019 2018 2018 ----------- ----------- ----------- ----------- ----------- Condensed Balance Sheets Cash and cash equivalents $ 37,797 $ 60,029 $ 87,105 $ 143,119 $ 68,323 Total investment securities 379,007 417,773 440,014 452,463 441,748 Loans receivable, net 1,163,254 1,093,121 935,680 904,377 905,093 Other assets 78,550 66,656 60,959 57,356 59,331 - --------- - --------- - --------- - --------- - --------- Total assets $ 1,658,608 $ 1,637,579 $ 1,523,758 $ 1,557,315 $ 1,474,495 - --------- - --------- - --------- - --------- - --------- Total deposits and escrow $ 1,241,458 $ 1,235,176 $ 1,209,868 $ 1,234,409 $ 1,158,102 Advances from Federal Home Loan Bank 111,185 111,216 26,248 26,279 18,810 Other liabilities 24,443 9,880 9,326 7,845 7,706 - --------- - --------- - --------- - --------- - --------- Total liabilities 1,377,086 1,356,272 1,245,442 1,268,533 1,184,618 Total shareholders’ equity 281,522 281,307 278,316 288,782 289,877 - --------- - --------- - --------- - --------- - --------- Total liabilities and shareholders’ equity $ 1,658,608 $ 1,637,579 $ 1,523,758 $ 1,557,315 $ 1,474,495 - --------- - --------- - --------- - --------- - ---------

Quarter Ended ------------------------------------------------ September June 30, March December September 30, 2019 31, 31, 30, 2019 2019 2018 2018 -------- -------- -------- -------- -------- Condensed Income Statements Interest income $ 16,026 $ 13,952 $ 13,646 $ 13,240 $ 12,609 Interest expense 4,028 3,193 2,909 2,496 2,145 - ------ - ------ - ------ - ------ - ------ Net interest income 11,998 10,759 10,737 10,744 10,464 Provision for loan losses 335 737 7 6 58 Noninterest income 765 962 579 920 641 Noninterest expense 8,787 8,708 8,698 8,580 8,008 - ------ - ------ - ------ - ------ - ------ Income before income tax expense 3,641 2,276 2,611 3,078 3,039 Income tax expense 812 597 625 754 710 - ------ - ------ - ------ - ------ - ------ Net income $ 2,829 $ 1,679 $ 1,986 $ 2,324 $ 2,329 - ------ - ------ - ------ - ------ - ------ Earnings per share: Basic $ 0.18 $ 0.10 $ 0.12 $ 0.14 $ 0.14 Diluted $ 0.18 $ 0.10 $ 0.12 $ 0.14 $ 0.14

PCSB Financial Corporation and SubsidiariesSelected Financial Data (unaudited)

Quarter Ended ----------------------------------------------- Septembe June March December Septembe r 30, 30, 31, 31, r 30, 2019 2019 2019 2018 2018 ------- ------- ------- ------- ------- Performance Ratios (1): Return on average assets 0.68 % 0.44 % 0.52 % 0.62 % 0.63 % Return on average equity 4.01 % 2.40 % 2.83 % 3.20 % 3.22 % Interest rate spread 2.72 % 2.65 % 2.67 % 2.75 % 2.73 % Net interest margin 3.03 % 2.94 % 2.94 % 3.00 % 2.94 % Adjusted Efficiency ratio (2) 71.80 % 74.55 % 77.04 % 74.74 % 72.85 % Noninterest income to average assets 0.18 % 0.25 % 0.15 % 0.25 % 0.17 % Noninterest expense to average assets 2.12 % 2.29 % 2.29 % 2.30 % 2.17 % Average interest-earning assets to average interest-bearing 130.79 % 132.96 % 133.68 % 135.40 % 135.00 % liabilities Average equity to average assets 17.02 % 18.40 % 18.52 % 19.48 % 19.56 % Dividend payout ratio (3) 23.29 % 39.43 % 24.97 % 22.42 % 21.64 %

PCSB Financial Corporation and SubsidiariesSelected Financial Data (unaudited) - Continued(dollar amounts in thousands, except share and per share data)

As of and for the quarter ended ------------------------------------------------------------------------ September June 30, March 31, December 31, September 30, 2019 2019 2018 30, 2019 2018 ------------ ------------ ------------ ------------ ------------ Loans to deposits 94.27 % 89.17 % 77.83 % 73.81 % 78.49 % Share Data: Shares outstanding 17,624,239 17,804,039 17,804,039 18,490,225 18,165,110 Book value per common share $ 15.97 $ 15.80 $ 15.63 $ 15.62 $ 15.96 Tangible book value per common $ 15.61 $ 15.44 $ 15.27 $ 15.27 $ 15.60 share (4) Asset Quality Ratios: Non-performing loans receivable $ 3,425 $ 2,727 $ 2,847 $ 3,576 $ 5,630 Non-performing assets $ 4,281 $ 3,885 $ 3,500 $ 4,148 $ 6,384 Allowance for loan losses as a 0.51 % 0.52 % 0.53 % 0.54 % 0.54 % percent of total loans receivable Total valuation adjustment as a percent of total gross loans 0.60 % 0.62 % 0.66 % 0.69 % 0.70 % receivable (5) Allowance for loan losses as a percent of non-performing loans 174.98 % 207.70 % 173.67 % 138.23 % 88.08 % receivable Non-performing loans as a percent 0.29 % 0.25 % 0.30 % 0.39 % 0.62 % of total loans receivable, net Non-performing assets as a percent 0.26 % 0.24 % 0.23 % 0.27 % 0.43 % of total assets Net charge-offs $ 6 $ 18 $ 5 $ 22 $ 3 Net charge-offs to average outstanding loans during the period 0.00 % 0.01 % 0.00 % 0.00 % 0.00 % (1) Capital Ratios (6): Tier 1 capital (to adjusted total 12.89 % 13.81 % 13.71 % 13.78 % 13.80 % assets) Common equity Tier 1 capital (to 17.16 % 17.96 % 20.47 % 20.73 % 21.17 % risk-weighted assets) Tier 1 capital (to risk-weighted 17.16 % 17.96 % 20.47 % 20.73 % 21.17 % assets) Total capital (to risk-weighted 17.64 % 18.45 % 20.96 % 21.23 % 21.68 % assets) (1) Performance ratios are annualized. (2) Adjusted efficiency ratio is a non-GAAP measure and is defined as noninterest expense, less certain nonrecurring items, divided by operating revenue, which is equal to net interest income plus non-interest income excluding certain nonrecurring items. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the impact of certain one-time items and other discrete items that are unrelated to our core business. Reconciliations of GAAP to non-GAAP measures appear at the end of this release. (3)Dividends declared per share divided by net income per share. (4)Tangible book value per share is a non-GAAP measure and equals total shareholders’ equity, less goodwill and other intangible assets, divided by shares outstanding. We believe this disclosure may be meaningful to those investors who seek to evaluate our equity without giving effect to goodwill and other intangible assets. Reconciliations of GAAP to non-GAAP measures appear at the end of this release.

PCSB Financial Corporation and SubsidiariesSelected Financial Data (unaudited) - Continued(dollar amounts in thousands)

(5)Loans acquired in 2015 as part of the CMS Bancorp. Inc./CMS Bank acquisition were recorded at their estimated fair value at the acquisition date and did not include a carry-over of the related pre-acquisition allowance for loan losses. Total valuation adjustments equal the allowance for loan losses plus the remaining discounts on acquired loans. We believe this ratio provides investors a more meaningful comparison to periods presented prior to the 2015 acquisition, as well as to our peers. Reconciliations of GAAP to non-GAAP measures appear at the end of this release. (6)Represents Bank ratios.

PCSB Financial Corporation and SubsidiariesLoan and Deposit Portfolios (unaudited)(amounts in thousands)

As of ------------------------------------------------------------- September June 30, March 31, December September 30, 2019 2019 31, 30, 2019 2018 2018 ----------- ----------- --------- --------- --------- Mortgage loans: Residential mortgages $ 264,251 $ 265,167 $ 261,970 $ 248,575 $ 249,894 Commercial mortgage 726,315 651,396 499,284 499,930 495,944 Construction 18,830 13,231 16,302 16,023 16,890 Net deferred loan origination costs 1,202 1,031 843 842 859 - --------- - --------- - ------- - ------- - ------- Total mortgage loans 1,010,598 930,825 778,399 765,370 763,587 Commercial and consumer loans: Commercial loans 125,926 133,614 126,514 107,899 110,196 Home equity credit lines 31,503 33,204 34,525 35,029 35,191 Consumer and overdrafts 437 365 459 321 344 Net deferred loan origination costs 783 777 728 701 734 - --------- - --------- - ------- - ------- - ------- Total commercial and consumer loans 158,649 167,960 162,226 143,950 146,465 - --------- - --------- - ------- - ------- - ------- Total loans receivable 1,169,247 1,098,785 940,625 909,320 910,052 Allowance for loan losses (5,993 ) (5,664 ) (4,945 ) (4,943 ) (4,959 ) - --------- - --------- - ------- - ------- - ------- Loans receivable, net $ 1,163,254 $ 1,093,121 $ 935,680 $ 904,377 $ 905,093 - --------- - --------- - ------- - ------- - -------

As of --------------------------------------------------------------- September June 30, March 31, December September 30, 2019 2019 31, 30, 2019 2018 2018 ----------- ----------- ----------- ----------- ----------- Demand deposits $ 141,567 $ 141,379 $ 137,899 $ 162,113 $ 131,024 NOW accounts 124,062 123,069 120,353 123,251 121,449 Money market accounts 151,652 148,134 137,197 121,146 79,266 Savings 350,250 357,844 379,550 397,460 425,189 Time deposits 466,374 455,395 427,194 421,354 396,193 - --------- - --------- - --------- - --------- - --------- Total deposits $ 1,233,905 $ 1,225,821 $ 1,202,193 $ 1,225,324 $ 1,153,121 - --------- - --------- - --------- - --------- - ---------

PCSB Financial Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Measures (unaudited)(dollar amounts in thousands, except share and per share data)

Quarter Ended ------------------------------------------------------------------------ September June 30, March 31, December 31, September 30, 2019 2019 2018 30, 2019 2018 ------------ ------------ ------------ ------------ ------------ Computation of Adjusted Net Income and Adjusted Earnings Per Share Net income applicable to common $ 2,829 $ 1,679 $ 1,986 $ 2,324 $ 2,329 stock (GAAP) Adjustments (1): Losses on other receivables - - - 68 - Prepayment income on loans receivable and investment (371 ) (25 ) (20 ) (72 ) (68 ) securities Gain on sale of foreclosed real (37 ) - - - (19 ) estate Gain on sale of investment - (5 ) - (42 ) - securities Gain on sale of bank premises - - - (118 ) - - ---------- - ---------- - ---------- - ---------- - ---------- Adjusted net income (Non-GAAP) $ 2,421 $ 1,649 $ 1,966 $ 2,160 $ 2,242 - ---------- - ---------- - ---------- - ---------- - ---------- Average number of common shares outstanding: Basic 15,979,762 16,033,505 16,204,393 16,852,718 16,869,100 Diluted 16,082,276 16,099,846 16,261,755 16,868,464 16,869,100 Earnings per share (GAAP): Basic $ 0.18 $ 0.10 $ 0.12 $ 0.14 $ 0.14 Diluted $ 0.18 $ 0.10 $ 0.12 $ 0.14 $ 0.14 Adjusted earnings per common share (Non-GAAP): Basic $ 0.15 $ 0.10 $ 0.12 $ 0.13 $ 0.13 Diluted $ 0.15 $ 0.10 $ 0.12 $ 0.13 $ 0.13 (1)Amounts included in income before income tax expense are presented net of tax.

PCSB Financial Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued(dollar amounts in thousands, except share and per share data)

Quarter Ended ---------------------------------------------------- September June 30, March December September 30, 2019 31, 31, 30, 2019 2019 2018 2018 -------- -------- -------- -------- -------- Computation of Efficiency Ratio Noninterest expense (GAAP) $ 8,787 $ 8,708 $ 8,698 $ 8,580 $ 8,008 Adjustments: Losses on other receivables - - - (90 ) - - ------ - ------ - ------ - ------ - ------ Adjusted noninterest expense (non-GAAP) $ 8,787 $ 8,708 $ 8,698 $ 8,490 $ 8,008 - ------ - ------ - ------ - ------ - ------ Net interest income $ 11,998 $ 10,759 $ 10,737 $ 10,744 $ 10,464 Noninterest income 765 962 579 920 641 - ------ - ------ - ------ - ------ - ------ Total (GAAP) 12,763 11,721 11,316 11,664 11,105 Adjustments: Prepayment income on loans receivable and investment (477 ) (34 ) (26 ) (95 ) (89 ) securities Gain on sale of foreclosed real estate (47 ) - - - (24 ) Gain on sale of investment securities - (7 ) - (55 ) - Gain on sale of bank premises - - - (155 ) - - ------ - ------ - ------ - ------ - ------ Adjusted total (Non-GAAP) $ 12,239 $ 11,680 $ 11,290 $ 11,359 $ 10,992 - ------ - ------ - ------ - ------ - ------ Efficiency ratio (GAAP) 68.85 % 74.29 % 76.86 % 73.56 % 72.11 % Adjusted efficiency ratio (Non-GAAP) 71.80 % 74.55 % 77.04 % 74.74 % 72.85 %

PCSB Financial Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Measures (unaudited) - Continued(dollar amounts in thousands, except share and per share data)

As of ------------------------------------------------------------------------ September June 30, March 31, December 31, September 30, 2019 2019 2018 30, 2019 2018 ------------ ------------ ------------ ------------ ------------ Computation of Tangible Book Value per Common Share Total shareholders’ equity (GAAP) $ 281,522 $ 281,307 $ 278,316 $ 288,782 $ 289,877 Adjustments: Preferred stock - - - - - - ---------- - ---------- - ---------- - ---------- - ---------- Common shareholders’ equity 281,522 281,307 278,316 288,782 289,877 Adjustments: Goodwill (6,106 ) (6,106 ) (6,106 ) (6,106 ) (6,106 ) Other intangible assets (298 ) (323 ) (348 ) (376 ) (405 ) - ---------- - ---------- - ---------- - ---------- - ---------- Tangible common shareholders’ $ 275,118 $ 274,878 $ 271,862 $ 282,300 $ 283,366 equity (Non-GAAP) Common shares outstanding 17,624,239 17,804,039 17,804,039 18,490,225 18,165,110 Book value per share (GAAP) $ 15.97 $ 15.80 $ 15.63 $ 15.62 $ 15.96 Adjustments: Effects of intangible assets (0.36 ) (0.36 ) (0.36 ) (0.35 ) (0.36 ) - ---------- - ---------- - ---------- - ---------- - ---------- Tangible book value per common $ 15.61 $ 15.44 $ 15.27 $ 15.27 $ 15.60 share (Non-GAAP)

Quarter Ended ------------------------------------------------------------- September June 30, March 31, December September 30, 2019 2019 31, 30, 2019 2018 2018 ----------- ----------- --------- --------- --------- Computation of valuation adjustment Allowance for loan losses $ 5,993 $ 5,664 $ 4,945 $ 4,943 $ 4,959 Add: Purchase accounting discounts on acquired 983 1,180 1,262 1,349 1,442 loans - --------- - --------- - ------- - ------- - ------- Total valuation adjustments $ 6,976 $ 6,844 $ 6,207 $ 6,292 $ 6,401 Total gross loans $ 1,169,247 $ 1,098,785 $ 940,625 $ 909,320 $ 910,052 Total valuation adjustments as a percent of 0.60 % 0.62 % 0.66 % 0.69 % 0.70 % total gross loans