pcsb-ex991

Yorktown Heights, New York; October 28, 2021 – PCSB Financial Corporation (the “Company”) (NASDAQ: PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $3.6 million, or $0.25 per diluted share, for the three months ended September 30, 2021, compared to $3.4 million, or $0.23 per diluted share, for the three months ended June 30, 2021 and $2.7 million, or $0.18 per diluted share, for the three months ended September 30, 2020.

On October 20, 2021, the Board of Directors declared a regular quarterly cash dividend of $0.06 per share. The dividend is payable on or about November 26, 2021 to shareholders of record as of the close of business on November 12, 2021.

“As we celebrate our 150^th anniversary, we are extremely pleased with the Company’s solid first quarter financial performance which resulted in record earnings”, said Joseph D. Roberto, Chairman, President & Chief Executive Officer of PCSB Financial Corporation. “Despite the challenging low interest rate environment, improvement in our year over year financial performance was largely driven by net interest margin expansion and control over operating expenses. With respect to maintaining control over operating expenses, we have received notice of non-objection from the New York State Department of Financial Services to consolidate one of our branch offices which is expected to occur on or about December 30, 2021. Meanwhile, our staff remains a source of strength to our customers and communities by providing them with personal attention to help them get through lingering economic challenges caused by the pandemic. Moving forward, our sustained focus on our communities’ needs is a core principle that has made PCSB successful over the past 150 years and will continue to create sustainable value for our shareholders.”

Net income for the current quarter was $3.6 million, which increased $204,000 from the linked quarter and $886,000 from the prior year period. The change from the linked quarter is primarily due to a $243,000 decrease in noninterest

expense and a $45,000 increase in noninterest income, partially offset by a $46,000 decrease in net interest income, a $30,000 increase in income tax expense and an $8,000 increase in the provision for loan losses. The change from the prior year period is primarily due to a $958,000 increase in net interest income, a $96,000 decrease in provision for loan losses and a $19,000 increase in noninterest income, partially offset by a $187,000 increase in income tax expense.

Net interest income was $12.5 million for the current quarter, a decrease of $46,000, or 0.4%, compared to the linked quarter and an increase of $958,000, or 8.3%, compared to the prior year quarter. The decrease compared to the linked quarter is primarily the result of a $10.6 million, or 0.6%, decrease in average interest-earning assets, partially offset by a 1 basis point increase in the tax equivalent net interest margin. The increase in net interest income compared to the prior year period is primarily the result of a $62.8 million, or 3.6%, increase in average interest-earning assets and a 13 basis point increase in the tax equivalent net interest margin.

The tax equivalent net interest margin was 2.82% for the current quarter, reflecting increases of 1 basis point compared to 2.81% in the linked quarter and 13 basis points compared to 2.69% in the prior year quarter. Adjusted net interest margin, which excludes the effect of PPP loan interest and fees, was 2.72% for the current quarter compared to 2.68% in the linked quarter and 2.63% in the prior year quarter, as reductions in the cost of funds were partially offset by decreases in asset yields, driven by lower market interest rates.

The Company recognized PPP loan interest and origination fee income (net of costs) of $381,000 in the current quarter, compared to $516,000 in the linked quarter and $217,000 in the prior year quarter. Unearned origination fees (net of costs) on PPP loans totaled $698,000 as of September 30, 2021 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 forgiveness.

Tax equivalent yield on interest-earning assets for the current quarter was 3.20%, a 6 basis point decrease from the linked quarter and a 17 basis point decrease from the prior year quarter. The decrease in yield compared to the linked quarter and the prior year quarter is a result of decreases in market interest rates, lower average loan balances due to muted origination activity and elevated amounts of liquidity over the last twelve months. The decline in asset yields (excluding the effects of PPP income) has slowed in recent quarters due to a more stable yield curve and a more favorable earning asset composition.

The cost of interest-bearing deposits was 0.41% for the current quarter, decreases of 7 basis points and 39 basis points from 0.48% and 0.80% 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 18 months, the effects of which continue to be realized. As of quarter end, the weighted average cost of interest-bearing deposits was 0.34%. The cost of interest-bearing liabilities was 0.49% for the current quarter, decreases of 10 basis points from 0.59% in the linked quarter and 40 basis points from 0.89% in the prior year quarter. During the remainder of fiscal year 2022, the Company has $27.5 million of wholesale funding maturing, comprised of FHLB advances and brokered time deposits, with a weighted average cost of 2.43%.

The provision for loan losses was $13,000 for current quarter, compared to $5,000 for the linked quarter and $109,000 for the prior year quarter. Loans on COVID-19 related payment deferral totaled $18.5 million, or 1.52% of gross loans, as of September 30, 2021, compared to $27.3 million, or 2.21% of gross loans, as of June 30, 2021. Recoveries, net of charge-offs, were $265,000 for the current quarter compared to $11,000 for the linked quarter and charge-offs, net of recoveries, of $76,000 for the prior year quarter. Non-performing loans as a percent of total loans receivable (excluding PPP loans) was 0.48% as of September 30, 2021, unchanged compared to June 30, 2021 and increased from 0.17% as of September 30, 2020.

The table below provides additional detail for those loans on deferral as of September 30, 2021 (dollar amounts in thousands):

Noninterest income of $613,000 for the current quarter increased $45,000 compared to the linked quarter and $19,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to increases of $24,000 in bank-owned life insurance income, $11,000 in fees and service charges and $10,000 in all other noninterest income. The increase compared to the prior year quarter was primarily due to increases of $79,000 in fees and service charges, $60,000 in bank-owned life insurance income and $9,000 in all other noninterest income, partially offset by a $129,000 decrease in swap income. The increase in fees and service charges compared to the prior year quarter was partially the result of the waiver in the prior year of certain overdraft fees, ATM usage fees, wire and CD early withdrawal fees in response to COVID-19, as well an increase in debit card and interchange income. Current quarter noninterest income includes net gains on the sale of loans of $6,000, compared to none in the linked quarter and prior year quarter.

Noninterest expense of $8.6 million for the current quarter decreased $243,000 compared to the linked quarter and was unchanged compared to the prior year quarter. The decrease compared to the linked quarter was primarily due to lower pension costs. Noninterest expenses were unchanged compared to the prior year quarter primarily due to increases in New York State capital-based taxes and ESOP costs, which were largely offset by lower pension costs.

The effective income tax rate was 19.9% for the current quarter, as compared to 20.2% for the linked quarter and 20.7% for the prior year quarter.

Total assets were largely unchanged at $1.87 billion at September 30, 2021 as compared to June 30, 2021, as an increase of $28.6 million in total investment securities, was largely offset by decreases of $18.8 million in net loans receivable and $11.3 million in cash and cash equivalents. The increase in investment securities was the result of the Company deploying excess liquidity and included increases of $26.9 million in state and municipal securities, $5.5 million in corporate securities and $5.1 million in mortgage-backed securities, partially offset by a $9.0 million decrease in U.S. government and agency bonds. Net loans receivable decreased $18.8 million, primarily the result of decreases in commercial loans and residential mortgage loans of $28.6 million and $2.6 million, respectively, partially offset by increases in commercial mortgage loans and construction loans of $11.4 million and $1.5 million, respectively. The decrease in commercial loans includes a decrease in PPP loans of $17.3 million, driven by paydowns and forgiveness.

Total liabilities were largely unchanged at $1.60 billion at September 30, 2021 compared to June 30, 2021 as an increase of $13.0 million in deposits was largely offset by decreases of $11.1 million in other liabilities and $3.7 million in mortgage escrow funds. The $13.0 million increase in deposits includes increases in money market and NOW accounts of $30.2 million and $4.4 million, respectively, partially offset by decreases in time deposits, savings and demand accounts of $13.3 million, $5.7 million and $2.6 million, respectively.

Total shareholders’ equity increased $168,000 to $274.7 million at September 30, 2021 as compared to $274.6 million as of June 30, 2021. This increase was primarily due to net income of $3.6 million and $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 $3.7 million (204,335 shares) of common stock and $876,000 of cash dividends declared and

paid. As of September 30, 2021, there were 339,828 shares available to be repurchased under the current stock repurchase plan.

At September 30, 2021, the Company’s book value per share and tangible book value per share were $17.64 and $17.24, 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 September 30, 2021, the Bank was considered “well capitalized” under applicable regulatory guidelines.

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 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.


	September 30,			June 30,
	2021			2021
ASSETS
Cash and due from banks	$	145,875		$	152,070
Federal funds sold		2,137			7,235
Cash and cash equivalents		148,012			159,305
Held to maturity debt securities, at amortized cost (fair value of $381,521 and $342,137, respectively)		378,510			337,584
Available for sale debt securities, at fair value		45,015			57,387
Total investment securities		423,525			394,971
Loans receivable, net of allowance for loan losses of $8,159 and $7,881, respectively		1,210,674			1,229,451
Accrued interest receivable		6,550			6,398
FHLB stock		4,506			4,507
Premises and equipment, net		20,536			21,099
Deferred tax asset, net		2,540			2,552
Bank-owned life insurance		35,760			35,568
Goodwill		6,106			6,106
Other intangible assets		135			151
Other assets		14,835			14,827
Total assets	$	1,873,179		$	1,874,935
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	1,288,167		$	1,272,610
Non interest-bearing deposits		216,470			219,072
Total deposits		1,504,637			1,491,682
Mortgage escrow funds		6,828			10,536
Advances from Federal Home Loan Bank		65,924			65,957
Other liabilities		21,062			32,200
Total liabilities		1,598,451			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 September 30, 2021 and June 30, 2021)		-			-
Common stock ($0.01 par value, 200,000,000 shares authorized, 18,703,577 shares issued as of both September 30, 2021 and June 30, 2021, 15,574,310 and 15,770,645 shares outstanding as of September 30, 2021 and June 30, 2021, respectively)		187			187
Additional paid in capital		190,793			189,926
Retained earnings		153,725			150,987
Unearned compensation - ESOP		(9,932	)		(10,176	)
Accumulated other comprehensive loss, net of income taxes		(3,204	)		(3,099	)
Treasury stock, at cost, 3,129,267 and 2,932,932 shares as of September 30, 2021 and June 30, 2021, respectively)		(56,841	)		(53,265	)
Total shareholders' equity		274,728			274,560
Total liabilities and shareholders' equity	$	1,873,179		$	1,874,935

	Three Months Ended
	September 30,
	2021		2020
Interest and dividend income
Loans receivable	$	12,107	$	12,547
Investment securities		2,011		1,856
Federal funds and other		109		125
Total interest and dividend income		14,227		14,528
Interest expense
Deposits and escrow interest		1,354		2,432
FHLB advances		338		519
Total interest expense		1,692		2,951
Net interest income		12,535		11,577
Provision for loan losses		13		109
Net interest income after provision for loan losses		12,522		11,468
Noninterest income
Fees and service charges		401		322
Swap income		-		129
Bank-owned life insurance		192		132
Other		20		11
Total noninterest income		613		594
Noninterest expense
Salaries and employee benefits		5,773		5,607
Occupancy and equipment		1,353		1,318
Communications and data processing		527		576
Professional fees		393		400
Postage, printing, stationery and supplies		143		139
Advertising		100		100
FDIC assessment		125		113
Amortization of intangible assets		16		20
Other operating expenses		194		351
Total noninterest expense		8,624		8,624
Net income before income tax expense		4,511		3,438
Income tax expense		897		710
Net income	$	3,614	$	2,728
Earnings per common share:
Basic	$	0.25	$	0.18
Diluted		0.25		0.18
Weighted average common shares outstanding:
Basic		14,337,543		15,302,838
Diluted		14,405,816		15,302,949

	Three Months Ended
	September 30, 2021								June 30, 2021								September 30, 2020
	Average Balance			Interest / Dividends		Average Rate			Average Balance			Interest / Dividends		Average Rate			Average Balance		Interest / Dividends		Average Rate
Assets:
Loans receivable ⁽¹⁾	$	1,223,532		$	12,107		3.96	%	$	1,245,610		$	12,625		4.06	%	$	1,252,595	$	12,547		4.01	%
Investment securities ⁽¹⁾		404,565			2,011		2.07			363,175			1,851		2.11			315,292		1,856		2.38
Other interest-earning assets		160,659			109		0.27			190,582			110		0.23			158,038		125		0.31
Total interest-earning assets		1,788,756			14,227		3.20			1,799,367			14,586		3.26			1,725,925		14,528		3.37
Non-interest-earning assets		76,375								79,015								71,926
Total assets	$	1,865,131							$	1,878,382							$	1,797,851

Liabilities and equity:
NOW accounts	$	182,531			70		0.15		$	182,475			69		0.15		$	149,466		89		0.24
Money market accounts		350,575			186		0.21			311,255			162		0.21			250,297		238		0.38
Savings accounts and mortgage escrow funds		397,292			113		0.11			387,422			109		0.11			360,091		202		0.22
Time deposits		367,641			985		1.06			395,240			1,179		1.20			443,487		1,903		1.70
Total interest-bearing deposits		1,298,039			1,354		0.41			1,276,392			1,519		0.48			1,203,341		2,432		0.80
FHLB advances		65,935			338		2.03			94,970			486		2.05			106,067		519		1.94
Total interest-bearing liabilities		1,363,974			1,692		0.49			1,371,362			2,005		0.59			1,309,408		2,951		0.89
Non-interest-bearing deposits		207,806								208,265								184,085
Other non-interest-bearing liabilities		19,943								23,114								28,958
Total liabilities		1,591,723								1,602,741								1,522,451
Total shareholders' equity		273,408								275,641								275,400
Total liabilities and shareholders' equity	$	1,865,131							$	1,878,382							$	1,797,851

Net interest income				$	12,535							$	12,581						$	11,577
Interest rate spread - tax equivalent⁽²⁾							2.71								2.67							2.48
Net interest margin - tax equivalent⁽³⁾							2.82								2.81							2.69
Average interest-earning assets to interest-bearing liabilities		131.14	%							131.21	%

⁽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.

	As of
	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Condensed Balance Sheets
Cash and cash equivalents	$	148,012	$	159,305	$	169,314	$	162,541	$	162,739
Total investment securities		423,525		394,971		347,302		310,231		318,509
Loans receivable, net		1,210,674		1,229,451		1,261,155		1,237,550		1,227,913
Other assets		90,968		91,208		76,903		79,517		81,914
Total assets	$	1,873,179	$	1,874,935	$	1,854,674	$	1,789,839	$	1,791,075

Total deposits and mortgage escrow funds	$	1,511,465	$	1,502,218	$	1,463,542	$	1,387,897	$	1,383,432
Advances from Federal Home Loan Bank		65,924		65,957		95,991		106,023		106,056
Other liabilities		21,062		32,200		23,844		26,595		27,908
Total liabilities		1,598,451		1,600,375		1,583,377		1,520,515		1,517,396
Total shareholders' equity		274,728		274,560		271,297		269,324		273,679
Total liabilities and shareholders' equity	$	1,873,179	$	1,874,935	$	1,854,674	$	1,789,839	$	1,791,075

	Quarter Ended
	September 30, 2021		June 30, 2021		March 31, 2021			December 31, 2020		September 30, 2020
Condensed Income Statements
Interest income	$	14,227	$	14,586	$	13,925		$	14,225	$	14,528
Interest expense		1,692		2,005		2,288			2,678		2,951
Net interest income		12,535		12,581		11,637			11,547		11,577
Provision (benefit) for loan losses		13		5		(894	)		107		109
Noninterest income		613		568		592			743		594
Noninterest expense		8,624		8,867		8,572			8,691		8,624
Income before income tax expense		4,511		4,277		4,551			3,492		3,438
Income tax expense		897		867		959			798		710
Net income	$	3,614	$	3,410	$	3,592		$	2,694	$	2,728

Earnings per share:
Basic	$	0.25	$	0.23	$	0.25		$	0.18	$	0.18
Diluted		0.25		0.23		0.25			0.18		0.18

	Quarter Ended
	September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Performance Ratios ⁽¹⁾:
Return on average assets		0.78	%		0.73	%		0.80	%		0.60	%		0.61	%
Return on average equity		5.29	%		4.95	%		5.32	%		3.96	%		3.96	%
Interest rate spread		2.71	%		2.67	%		2.53	%		2.52	%		2.47	%
Net interest margin		2.82	%		2.81	%		2.69	%		2.71	%		2.69	%
Efficiency ratio		65.59	%		67.43	%		70.10	%		70.72	%		70.86	%

Noninterest income to average assets		0.13	%		0.12	%		0.13	%		0.17	%		0.13	%
Noninterest expense to average assets		1.85	%		1.89	%		1.90	%		1.95	%		1.92	%

Average interest-earning assets to average interest-bearing liabilities		131.14	%		131.21	%		131.31	%		131.07	%		131.81	%
Average equity to average assets		14.66	%		14.67	%		14.99	%		15.23	%		15.32	%
Dividend payout ratio ⁽²⁾		24.24	%		26.07	%		16.65	%		22.57	%		23.09	%

	As of and for the quarter ended
	September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Loans to deposits		80.46	%		82.42	%		86.72	%		89.85	%		89.17	%

Share Data:
Shares outstanding		15,574,310			15,770,645			15,966,216			16,097,867			16,634,237
Book value per common share	$	17.64		$	17.41		$	16.99		$	16.73		$	16.45
Tangible book value per common share ⁽³⁾	$	17.24		$	17.01		$	16.60		$	16.34		$	16.07

Asset Quality Ratios:
Non-performing loans receivable	$	5,732		$	5,764		$	2,054		$	1,668		$	2,083
Non-performing assets	$	5,732		$	5,764		$	2,054		$	1,668		$	2,083
Allowance for loan losses as a percent of total loans receivable⁽⁴⁾		0.68	%		0.66	%		0.65	%		0.72	%		0.72	%
Allowance for loan losses as a percent of non-performing loans receivable		142.34	%		136.73	%		382.91	%		520.20	%		416.32	%
Non-performing loans as a percent of total loans receivable, net⁽⁴⁾		0.48	%		0.48	%		0.17	%		0.14	%		0.17	%
Non-performing assets as a percent of total assets		0.31	%		0.31	%		0.11	%		0.09	%		0.12	%
Net (recoveries) charge-offs	$	(265	)	$	(11	)	$	(82	)	$	102		$	76
Net (recoveries) charge-offs to average outstanding loans during the period ⁽¹⁾		(0.09	%)		0.00	%		(0.03	%)		0.03	%		0.02	%

Capital Ratios ⁽⁵⁾:
Tier 1 capital (to adjusted total assets)		12.72	%		12.48	%		12.76	%		12.66	%		12.41	%
Common equity Tier 1 capital (to risk-weighted assets)		17.84	%		17.93	%		17.72	%		17.74	%		17.56	%
Tier 1 capital (to risk-weighted assets)		17.84	%		17.93	%		17.72	%		17.74	%		17.56	%
Total capital (to risk-weighted assets)		18.46	%		18.53	%		18.33	%		18.42	%		18.24	%

⁽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.

	As of
	September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Mortgage loans:
Residential mortgages	$	221,735		$	224,305		$	229,008		$	237,987		$	245,008
Commercial mortgages		838,021			826,624			831,162			801,348			794,248
Construction		11,639			10,151			10,047			17,551			11,512
Net deferred loan origination costs		97			196			365			600			666
Total mortgage loans		1,071,492			1,061,276			1,070,582			1,057,486			1,051,434
Commercial and consumer loans:
Commercial loans ⁽¹⁾		122,031			150,658			171,314			160,678			155,569
Home equity credit lines		24,936			25,439			27,211			27,653			29,249
Consumer and overdrafts		394			345			269			328			308
Net deferred loan origination costs		(20	)		(386	)		(356	)		82			25
Total commercial and consumer loans		147,341			176,056			198,438			188,741			185,151
Total loans receivable		1,218,833			1,237,332			1,269,020			1,246,227			1,236,585
Allowance for loan losses		(8,159	)		(7,881	)		(7,865	)		(8,677	)		(8,672	)
Loans receivable, net	$	1,210,674		$	1,229,451		$	1,261,155		$	1,237,550		$	1,227,913

⁽¹⁾ Includes PPP loans totaling:	$	19,763		$	37,050		$	50,380		$	35,687		$	35,687

	As of
	September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Computation of Tangible Book Value per Common Share
Total shareholders' equity (GAAP)	$	274,728		$	274,560		$	271,297		$	269,324		$	273,679
Adjustments:
Goodwill		(6,106	)		(6,106	)		(6,106	)		(6,106	)		(6,106	)
Other intangible assets		(135	)		(151	)		(168	)		(189	)		(209	)
Tangible common shareholders' equity (Non-GAAP)	$	268,487		$	268,303		$	265,023		$	263,029		$	267,364

Common shares outstanding		15,574,310			15,770,645			15,966,216			16,097,867			16,634,237

Book value per share (GAAP)	$	17.64		$	17.41		$	16.99		$	16.73		$	16.45
Adjustments:
Effects of intangible assets		(0.40	)		(0.40	)		(0.39	)		(0.39	)		(0.38	)

Tangible book value per common share (Non-GAAP)	$	17.24		$	17.01		$	16.60		$	16.34		$	16.07

Industry Sector:	Number of loans		Recorded Investment ^{(1) (2)}		% secured by real estate collateral			Loan-to-Value %⁽³⁾			Weighted average term of remaining deferral (in months)
Retail		3	$	11,590		100.0	%		59.8	%		3.1
Hotels and accommodation services		1		2,013		100.0			54.8			0.1
Food service		2		3,018		100.0			48.7			1.7
All other commercial		5		1,903		89.2			70.0			2.7
Total		11	$	18,524		98.9	%		58.3	%		2.5

⁽¹⁾ Includes loans classified as special mention and substandard of $1.7 million and $8.6 million, respectively.
⁽²⁾ Includes $3.6 million of nonaccrual loans. All loans are considered current.
⁽³⁾ Generally based on collateral values upon origination.

	As of
	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Demand deposits	$	216,470	$	219,072	$	203,344	$	189,968	$	183,844
NOW accounts		181,572		177,223		169,077		159,919		148,176
Money market accounts		363,090		332,843		301,892		256,132		253,176
Savings		381,836		387,529		372,151		354,882		349,805
Time deposits		361,669		375,015		407,826		416,386		442,011
Total deposits	$	1,504,637	$	1,491,682	$	1,454,290	$	1,377,287	$	1,377,012

	Quarter Ended
	September 30, 2021			June 30, 2021			September 30, 2020
Computation of Adjusted Yield on Assets and Adjusted Net Interest Margin, Excluding PPP interest and fee income
Average interest-earning assets	$	1,788,756		$	1,799,367		$	1,725,925

Interest and dividend income (GAAP)	$	14,227		$	14,586		$	14,528
Less: PPP interest and fee income		(381	)		(516	)		(217	)
Adjusted interest and dividend income (Non-GAAP)	$	13,846		$	14,070		$	14,311

Yield on interest-earning assets (GAAP)		3.20	%		3.26	%		3.37	%
Adjusted yield on interest-earning assets (Non-GAAP)		3.10	%		3.13	%		3.32	%

Net interest income (GAAP)	$	12,535		$	12,581		$	11,577
Less: PPP interest and fee income		(381	)		(516	)		(217	)
Adjusted net interest income (Non-GAAP)	$	12,154		$	12,065		$	11,360

Net interest margin (GAAP)		2.82	%		2.81	%		2.69	%
Adjusted net interest margin (Non-GAAP)		2.72	%		2.68	%		2.63	%