pcsb-ex991

PCSB Financial Corporation Announces Second Fiscal Quarter Financial Results and

Yorktown Heights, New York; January 27, 2022 – PCSB Financial Corporation (the “Company”) (NASDAQ: PCSB), parent of PCSB Bank (the "Bank"), today announced net income of $4.3 million, or $0.30 per diluted share, for the three months ended December 31, 2021, compared to $3.6 million, or $0.25 per diluted share, for the three months ended September 30, 2021 and $2.7 million, or $0.18 per diluted share, for the three months ended December 31, 2020.

On January 26, 2022, the Board of Directors declared a regular quarterly cash dividend of $0.06 per share. The dividend is payable on or about February 25, 2022 to shareholders of record as of the close of business on February 11, 2022.

“We are extremely pleased with the Company’s solid quarter and six-month financial performance which resulted in solid earnings”, said Joseph D. Roberto, Chairman, President & Chief Executive Officer of PCSB Financial Corporation. “Despite a difficult operating environment, our strong financial results year over year reflect continued net interest margin expansion along with continued control over operating expenses. We are encouraged by our ability to grow net loans over 10.0% annualized during the quarter despite some significant paydowns. With respect to credit quality, although we have seen recent increases in non-performing loans, our conservative underwriting has provided us strong LTVs and we believe these are isolated issues and not indicative of systemic risks in the loan portfolio. I am proud of our PCSB team who remain a source of strength to our customers and look forward to

continuing to invest in the communities we serve which we believe will create sustainable value for our shareholders.”

Net income for the current quarter was $4.3 million, which increased $674,000 from the linked quarter and $1.6 million from the prior year quarter. The change from the linked quarter is primarily due to a $723,000 increase in net interest income and a $582,000 increase in noninterest income, partially offset by increases of $251,000 in provision for loan losses, $199,000 in income tax expense, and $181,000 in noninterest expense. The change from the prior year quarter is primarily due to a $1.7 million increase in net interest income and a $452,000 increase in noninterest income, partially offset by increases of $298,000 in income tax expense, $157,000 in provision for loan losses and $114,000 in noninterest expense.

Net interest income was $13.3 million for the current quarter, increases of $723,000, or 5.8%, compared to the linked quarter and $1.7 million, or 14.8%, compared to the prior year quarter. The increase compared to the linked quarter is primarily the result of a 15 basis point increase in the tax equivalent net interest margin and a $7.9 million, or 0.4%, increase in average interest-earning assets. The increase in net interest income compared to the prior year period is primarily the result of a 27 basis point increase in the tax equivalent net interest margin and an $81.6 million, or 4.8%, increase in average interest-earning assets.

The Company recognized PPP loan interest and origination fee income (net of costs) of $332,000 in the current quarter, compared to $373,000 in the linked quarter and $159,000 in the prior year quarter. Unearned origination fees (net of costs) on PPP loans totaled $366,000 as of December 31, 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, which the Company expects to be substantially complete by June 30, 2022.

The tax equivalent net interest margin was 2.97% for the current quarter, reflecting increases of 15 basis points compared to 2.82% in the linked quarter and 27 basis points compared to 2.70% in the prior year quarter. During the current 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 2.75% for the current quarter compared to 2.71% in the linked quarter and 2.64% in the prior year quarter. Reductions in the cost of funds were partially offset by a decrease in adjusted asset yield compared to the prior year quarter, driven by lower market interest rates. 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 3.33%, increases of 13 basis points from the linked quarter and 1 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 3.11%, an increase of 2 basis points from the linked quarter and a decrease of 16 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, however the decline in asset yields (excluding the effects of PPP income) has slowed and reversed in recent quarters due to a more favorable yield curve and earning asset composition.

The cost of interest-bearing deposits was 0.39% for the current quarter, decreases of 2 basis points and 32 basis points from 0.41% and 0.71% 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 0.32%. The cost of interest-bearing liabilities was 0.47% for the current quarter, decreases of 2 basis points from 0.49% in the linked quarter and 34 basis points from 0.81% in the prior year quarter. Over the next 12 months, the Company has $40.0 million of wholesale funding maturing, comprised of FHLB advances and brokered time deposits, with a weighted average cost of 2.07%.

The provision for loan losses was $264,000 for current quarter, compared to $13,000 for the linked quarter and $107,000 for the prior year quarter. Loans on COVID-19 related payment deferral totaled $13.7 million, or 1.10% of gross loans, as of December 31, 2021, compared to $27.3 million, or 2.21% of gross loans, as of June 30, 2021. Recoveries, net of charge-offs, were $6,000 for the current quarter compared to $265,000 for the linked quarter and charge-offs, net of recoveries, of $102,000 for the prior year quarter. Non-performing loans as a percent of total loans receivable (excluding PPP loans) was 0.64% as of December 31, 2021, an increase from 0.48% as of June 30, 2021. The increase in non-performing loans over the last 12 months primarily includes three commercial relationships totaling $6.3 million, including $2.7 million of loans secured by multi-family commercial real estate

(including 1 relationship consisting of 2 construction loans totaling $1.5 million) with a weighted average loan-to-value ratio of 68.8% and one loan for $3.6 million secured by non-owner-occupied retail commercial real estate with a loan-to-value ratio of 53.9%.

Noninterest income of $1.2 million for the current quarter increased $582,000 compared to the linked quarter and $452,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to increases of $548,000 in gains on the sale of premises and $35,000 in gains on the sale of loans. The increase compared to the prior year quarter was primarily due to increases of $548,000 in gains on the sale of premises, $62,000 in bank-owned life insurance income, $44,000 in fees and service charges and $41,000 in gains on the sale of loans, partially offset by a $238,000 decrease in swap income. During the current quarter, the Company sold a parcel of unused land, resulting in the gain discussed above.

Noninterest expense of $8.8 million for the current quarter increased $181,000 compared to the linked quarter and $114,000 compared to the prior year quarter. The increase compared to the linked quarter was primarily due to higher salaries and benefits, postage and printing, as well as professional costs. Noninterest expenses increased compared to the prior year quarter primarily due to increases in salaries and benefits, including ESOP costs, and New York State capital-based taxes, which were largely offset by lower pension costs.

The effective income tax rate was 20.4% for the current quarter, as compared to 19.9% for the linked quarter and 22.9% for the prior year quarter. The decrease in the effective tax rate for the current quarter compared to the prior year quarter is the result of increases in tax-exempt municipal bond income and bank-owned life insurance income.

Total assets increased $13.2 million to $1.89 billion at December 31, 2021 as compared to June 30, 2021, as increases of $39.0 million in total investment securities and $14.2 million in net loans receivable were partially offset by a decrease of $39.0 million in cash and cash equivalents. The increase in investment securities was the result of the Company deploying excess liquidity and included increases of $29.8 million in state and municipal securities, $8.5 million in corporate securities and $5.8 million in mortgage-backed securities, partially offset by a $5.1 million decrease in U.S. government and agency bonds. Net loans receivable increased $14.2 million, primarily the result of increases in commercial mortgage loans and construction loans of $41.0 million and $1.7 million, respectively, partially offset by decreases in commercial loans and residential mortgage loans of $15.6 million and $11.5 million, respectively. The decrease in commercial loans includes a decrease in PPP loans of $24.3 million, driven by forgiveness and paydowns.

Total liabilities increased $12.9 million to $1.61 billion at December 31, 2021 compared to June 30, 2021 as an increase of $31.4 million in deposits was partially offset by decreases of $11.3 million in other liabilities and $7.6 million in FHLB advances. The $31.4 million increase in deposits includes increases in money market, NOW and savings accounts of $28.5 million, $21.4 million and $5.5 million, respectively, partially offset by decreases in time deposits and demand accounts of $20.7 million and $3.3 million, respectively.

Total shareholders’ equity increased $274,000 to $274.8 million at December 31, 2021 as compared to $274.6 million as of June 30, 2021. The increase for the six months ended December 31, 2021 was primarily due to net income of $7.9 million and $2.5 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 (440,666 shares) of common stock and $1.7 of cash dividends declared and paid. As of December 31, 2021, there were 122,417 shares available to be repurchased under the current stock repurchase plan.

At December 31, 2021, the Company’s book value per share and tangible book value per share were $17.92 and $17.51, 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 December 31, 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 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 and on our customers, 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.


	December 31,			June 30,
	2021			2021
ASSETS
Cash and due from banks	$	113,499		$	152,070
Federal funds sold		6,840			7,235
Cash and cash equivalents		120,339			159,305
Held to maturity debt securities, at amortized cost (fair value of $389,814 and $342,137, respectively)		390,312			337,584
Available for sale debt securities, at fair value		43,687			57,387
Total investment securities		433,999			394,971
Loans receivable, net of allowance for loan losses of $8,429 and $7,881, respectively		1,243,646			1,229,451
Loans held for sale		1,452			-
Accrued interest receivable		6,509			6,398
FHLB stock		4,167			4,507
Premises and equipment, net		19,550			21,099
Deferred tax asset, net		2,327			2,552
Bank-owned life insurance		35,951			35,568
Goodwill		6,106			6,106
Other intangible assets		119			151
Other assets		13,956			14,827
Total assets	$	1,888,121		$	1,874,935
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	1,307,359		$	1,272,610
Non interest-bearing deposits		215,708			219,072
Total deposits		1,523,067			1,491,682
Mortgage escrow funds		10,880			10,536
Advances from Federal Home Loan Bank		58,390			65,957
Other liabilities		20,950			32,200
Total liabilities		1,613,287			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 December 31, 2021 and June 30, 2021)		-			-
Common stock ($0.01 par value, 200,000,000 shares authorized, 18,703,577 shares issued as of both December 31, 2021 and June 30, 2021, 15,337,979 and 15,770,645 shares outstanding as of December 31, 2021 and June 30, 2021, respectively)		187			187
Additional paid in capital		191,826			189,926
Retained earnings		157,146			150,987
Unearned compensation - ESOP		(9,688	)		(10,176	)
Accumulated other comprehensive loss, net of income taxes		(3,353	)		(3,099	)
Treasury stock, at cost, 3,365,598 and 2,932,932 shares as of December 31, 2021 and June 30, 2021, respectively)		(61,284	)		(53,265	)
Total shareholders' equity		274,834			274,560
Total liabilities and shareholders' equity	$	1,888,121		$	1,874,935

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
Interest and dividend income
Loans receivable	$	12,651	$	12,182	$	24,758	$	24,729
Investment securities		2,131		1,933		4,142		3,789
Federal funds and other		88		110		197		235
Total interest and dividend income		14,870		14,225		29,097		28,753
Interest expense
Deposits and escrow interest		1,292		2,158		2,646		4,590
FHLB advances		320		520		658		1,039
Total interest expense		1,612		2,678		3,304		5,629
Net interest income		13,258		11,547		25,793		23,124
Provision for loan losses		264		107		277		216
Net interest income after provision for loan losses		12,994		11,440		25,516		22,908
Noninterest income
Fees and service charges		407		363		808		685
Gains on sales of premises		548		-		548		-
Swap income		-		238		-		367
Bank-owned life insurance		191		129		383		261
Net gains on sales of loans		41		-		47		-
Other		8		13		22		24
Total noninterest income		1,195		743		1,808		1,337
Noninterest expense
Salaries and employee benefits		5,843		5,520		11,616		11,127
Occupancy and equipment		1,348		1,374		2,701		2,692
Communications and data processing		526		446		1,053		1,022
Professional fees		420		503		813		903
Postage, printing, stationery and supplies		182		167		325		306
FDIC assessment		121		122		246		235
Advertising		100		100		200		200
Amortization of intangible assets		16		20		32		40
Other operating expenses		249		439		443		790
Total noninterest expense		8,805		8,691		17,429		17,315
Net income before income tax expense		5,384		3,492		9,895		6,930
Income tax expense		1,096		798		1,993		1,508
Net income	$	4,288	$	2,694	$	7,902	$	5,422
Earnings per common share:
Basic	$	0.30	$	0.18	$	0.55	$	0.36
Diluted		0.30		0.18		0.55		0.36
Weighted average common shares outstanding:
Basic		14,236,473		14,888,528		14,287,009		15,094,982
Diluted		14,281,232		14,899,020		14,349,272		15,094,982

	Three Months Ended
	December 31, 2021								September 30, 2021								December 31, 2020
	Average Balance			Interest / Dividends		Average Rate			Average Balance			Interest / Dividends		Average Rate			Average Balance			Interest / Dividends		Average Rate
Assets:
Loans receivable ⁽¹⁾	$	1,242,109		$	12,651		4.07	%	$	1,223,532		$	12,107		3.96	%	$	1,232,555		$	12,182		3.95	%
Investment securities ⁽¹⁾		427,918			2,131		2.08			404,565			2,011		2.07			313,812			1,933		2.51
Other interest-earning assets		126,586			88		0.28			160,659			109		0.27			168,608			110		0.26
Total interest-earning assets		1,796,613			14,870		3.33			1,788,756			14,227		3.20			1,714,975			14,225		3.32
Non-interest-earning assets		77,506								76,375								70,417
Total assets	$	1,874,119							$	1,865,131							$	1,785,392

Liabilities and equity:
NOW accounts	$	192,856			90		0.18		$	182,531			70		0.15		$	149,620			79		0.21
Money market accounts		355,708			168		0.19			350,575			186		0.21			255,961			211		0.33
Savings accounts and mortgage escrow funds		398,076			108		0.11			397,292			113		0.11			362,422			168		0.18
Time deposits		357,242			926		1.03			367,641			985		1.06			434,446			1,700		1.55
Total interest-bearing deposits		1,303,882			1,292		0.39			1,298,039			1,354		0.41			1,202,449			2,158		0.71
FHLB advances		63,805			320		1.99			65,935			338		2.03			106,034			520		1.94
Total interest-bearing liabilities		1,367,687			1,612		0.47			1,363,974			1,692		0.49			1,308,483			2,678		0.81
Non-interest-bearing deposits		214,558								207,806								178,538
Other non-interest-bearing liabilities		16,250								19,943								26,482
Total liabilities		1,598,495								1,591,723								1,513,503
Total shareholders' equity		275,624								273,408								271,889
Total liabilities and shareholders' equity	$	1,874,119							$	1,865,131							$	1,785,392

Net interest income				$	13,258							$	12,535							$	11,547
Interest rate spread - tax equivalent⁽²⁾							2.86								2.71								2.51
Net interest margin - tax equivalent⁽³⁾							2.97								2.82								2.70
Average interest-earning assets to interest-bearing liabilities		131.36	%							131.14	%							131.07	%

⁽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.

	Six Months Ended December 31,
	2021								2020
	Average Balance			Interest / Dividends		Average Rate			Average Balance			Interest / Dividends		Average Rate
Assets:
Loans receivable ⁽¹⁾	$	1,232,821		$	24,758		4.01	%	$	1,242,575		$	24,729		3.98	%
Investment securities ⁽¹⁾		416,241			4,142		2.08			314,552			3,789		2.44
Other interest-earning assets		143,622			197		0.27			163,323			235		0.29
Total interest-earning assets		1,792,684			29,097		3.26			1,720,450			28,753		3.35
Non-interest-earning assets		76,940								71,172
Total assets	$	1,869,624							$	1,791,622

Liabilities and equity:
NOW accounts	$	187,693			159		0.17		$	149,543			168		0.22
Money market accounts		353,141			355		0.20			253,129			449		0.35
Savings accounts and mortgage escrow funds		397,684			221		0.11			361,256			370		0.20
Time deposits		362,442			1,911		1.05			438,966			3,603		1.63
Total interest-bearing deposits		1,300,960			2,646		0.40			1,202,894			4,590		0.76
FHLB advances		64,870			658		2.01			106,051			1,039		1.94
Total interest-bearing liabilities		1,365,830			3,304		0.48			1,308,945			5,629		0.86
Non-interest-bearing deposits		211,182								181,312
Other non-interest-bearing liabilities		18,096								27,720
Total liabilities		1,595,108								1,517,977
Total shareholders' equity		274,516								273,645
Total liabilities and shareholders' equity	$	1,869,624							$	1,791,622

Net interest income				$	25,793							$	23,124
Interest rate spread - tax equivalent⁽²⁾							2.78								2.49
Net interest margin - tax equivalent⁽³⁾							2.90								2.70
Average interest-earning assets to interest-bearing liabilities		131.25	%							131.44	%

⁽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
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
Condensed Balance Sheets
Cash and cash equivalents	$	120,339	$	148,012	$	159,305	$	169,314	$	162,541
Total investment securities		433,999		423,525		394,971		347,302		310,231
Loans receivable, net		1,243,646		1,210,674		1,229,451		1,261,155		1,237,550
Other assets		90,137		90,968		91,208		76,903		79,517
Total assets	$	1,888,121	$	1,873,179	$	1,874,935	$	1,854,674	$	1,789,839

Total deposits and mortgage escrow funds	$	1,533,947	$	1,511,465	$	1,502,218	$	1,463,542	$	1,387,897
Advances from Federal Home Loan Bank		58,390		65,924		65,957		95,991		106,023
Other liabilities		20,950		21,062		32,200		23,844		26,595
Total liabilities		1,613,287		1,598,451		1,600,375		1,583,377		1,520,515
Total shareholders' equity		274,834		274,728		274,560		271,297		269,324
Total liabilities and shareholders' equity	$	1,888,121	$	1,873,179	$	1,874,935	$	1,854,674	$	1,789,839

	Quarter Ended											Six Months Ended
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021			December 31, 2020		December 31, 2021		December 31, 2020
Condensed Income Statements
Interest income	$	14,870	$	14,227	$	14,586	$	13,925		$	14,225	$	29,097	$	28,753
Interest expense		1,612		1,692		2,005		2,288			2,678		3,304		5,629
Net interest income		13,258		12,535		12,581		11,637			11,547		25,793		23,124
Provision (benefit) for loan losses		264		13		5		(894	)		107		277		216
Noninterest income		1,195		613		568		592			743		1,808		1,337
Noninterest expense		8,805		8,624		8,867		8,572			8,691		17,429		17,315
Income before income tax expense		5,384		4,511		4,277		4,551			3,492		9,895		6,930
Income tax expense		1,096		897		867		959			798		1,993		1,508
Net income	$	4,288	$	3,614	$	3,410	$	3,592		$	2,694	$	7,902	$	5,422

Earnings per share:
Basic	$	0.30	$	0.25	$	0.23	$	0.25		$	0.18	$	0.55	$	0.36
Diluted		0.30		0.25		0.23		0.25			0.18		0.55		0.36

	Quarter Ended															Six Months Ended
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Performance Ratios ⁽¹⁾:
Return on average assets		0.92	%		0.78	%		0.73	%		0.80	%		0.60	%		0.85	%		0.61	%
Return on average equity		6.22	%		5.29	%		4.95	%		5.32	%		3.96	%		5.76	%		3.96	%
Interest rate spread		2.86	%		2.71	%		2.67	%		2.53	%		2.51	%		2.78	%		2.49	%
Net interest margin		2.97	%		2.82	%		2.81	%		2.69	%		2.70	%		2.90	%		2.70	%
Efficiency ratio		60.92	%		65.59	%		67.43	%		70.10	%		70.72	%		63.15	%		70.79	%

Noninterest income to average assets		0.26	%		0.13	%		0.12	%		0.13	%		0.17	%		0.19	%		0.15	%
Noninterest expense to average assets		1.88	%		1.85	%		1.89	%		1.90	%		1.95	%		1.86	%		1.93	%

Average interest-earning assets to average interest-bearing liabilities		131.36	%		131.14	%		131.21	%		131.31	%		131.07	%		131.25	%		131.44	%
Average equity to average assets		14.71	%		14.66	%		14.67	%		14.99	%		15.23	%		14.68	%		15.27	%
Dividend payout ratio ⁽²⁾		20.22	%		24.24	%		26.07	%		16.65	%		22.57	%		22.06	%		22.83	%

	As of and for the quarter ended
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Loans to deposits		81.65	%		80.46	%		82.42	%		86.72	%		89.85	%

Share Data:
Shares outstanding		15,337,979			15,574,310			15,770,645			15,966,216			16,097,867
Book value per common share	$	17.92		$	17.64		$	17.41		$	16.99		$	16.73
Tangible book value per common share ⁽³⁾	$	17.51		$	17.24		$	17.01		$	16.60		$	16.34

Asset Quality Ratios:
Non-performing loans receivable	$	7,890		$	5,732		$	5,764		$	2,054		$	1,668
Non-performing assets	$	7,890		$	5,732		$	5,764		$	2,054		$	1,668
Allowance for loan losses as a percent of total loans receivable⁽⁴⁾		0.68	%		0.68	%		0.66	%		0.65	%		0.72	%
Allowance for loan losses as a percent of non-performing loans receivable		106.83	%		142.34	%		136.73	%		382.91	%		520.20	%
Non-performing loans as a percent of total loans receivable, net⁽⁴⁾		0.64	%		0.48	%		0.48	%		0.17	%		0.14	%
Non-performing assets as a percent of total assets		0.42	%		0.31	%		0.31	%		0.11	%		0.09	%
Net (recoveries) charge-offs	$	(6	)	$	(265	)	$	(11	)	$	(82	)	$	102
Net (recoveries) charge-offs to average outstanding loans during the period ⁽¹⁾		0.00	%		(0.09	%)		0.00	%		(0.03	%)		0.03	%

Capital Ratios ⁽⁵⁾:
Tier 1 capital (to adjusted total assets)		12.91	%		12.72	%		12.48	%		12.76	%		12.66	%
Common equity Tier 1 capital (to risk-weighted assets)		17.67	%		17.84	%		17.93	%		17.72	%		17.74	%
Tier 1 capital (to risk-weighted assets)		17.67	%		17.84	%		17.93	%		17.72	%		17.74	%
Total capital (to risk-weighted assets)		18.28	%		18.46	%		18.53	%		18.33	%		18.42	%

⁽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
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Mortgage loans:
Residential mortgages	$	212,817		$	221,735		$	224,305		$	229,008		$	237,987
Commercial mortgages		867,581			838,021			826,624			831,162			801,348
Construction		11,857			11,639			10,151			10,047			17,551
Net deferred loan origination (fees) costs		(18	)		97			196			365			600
Total mortgage loans		1,092,237			1,071,492			1,061,276			1,070,582			1,057,486
Commercial and consumer loans:
Commercial loans ⁽¹⁾		135,055			122,031			150,658			171,314			160,678
Home equity credit lines		24,142			24,936			25,439			27,211			27,653
Consumer and overdrafts		356			394			345			269			328
Net deferred loan origination costs (fees)		285			(20	)		(386	)		(356	)		82
Total commercial and consumer loans		159,838			147,341			176,056			198,438			188,741
Total loans receivable		1,252,075			1,218,833			1,237,332			1,269,020			1,246,227
Allowance for loan losses		(8,429	)		(8,159	)		(7,881	)		(7,865	)		(8,677	)
Loans receivable, net	$	1,243,646		$	1,210,674		$	1,229,451		$	1,261,155		$	1,237,550

⁽¹⁾ Includes PPP loans totaling:	$	12,769		$	19,763		$	37,050		$	50,380		$	35,687

	Quarter Ended															Six Months Ended
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Computation of Adjusted Net Income and Adjusted Earnings Per Share
Net income applicable to common stock (GAAP)	$	4,288		$	3,614		$	3,410		$	3,592		$	2,694		$	7,902		$	5,422

Adjustments ⁽¹⁾:
Prepayment income on loans receivable and investment securities		(442	)		(26	)		(532	)		(43	)		(136	)		(468	)		(194	)
Gains on sales of premises		(436	)		-			-			-			-			(436	)		-
PPP interest and fee income		(264	)		(299	)		(411	)		(220	)		(123	)		(563	)		(295	)
Gains on sale of investment securities		-			-			-			(89	)		-			-			-
Adjusted net income (Non-GAAP)	$	3,146		$	3,289		$	2,467		$	3,240		$	2,435		$	6,435		$	4,933

Average number of common shares outstanding:
Basic		14,236,473			14,337,543			14,553,783			14,631,122			14,888,528			14,287,009			15,094,982
Diluted		14,281,232			14,405,816			14,586,928			14,632,342			14,899,020			14,349,272			15,094,982
Earnings per share (GAAP):
Basic	$	0.30		$	0.25		$	0.23		$	0.25		$	0.18		$	0.55		$	0.36
Diluted		0.30			0.25			0.23			0.25			0.18			0.55			0.36
Adjusted earnings per common share (Non-GAAP):
Basic	$	0.22		$	0.23		$	0.17		$	0.22		$	0.16		$	0.45		$	0.33
Diluted		0.22			0.23			0.17			0.22			0.16			0.45			0.33

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

	Quarter Ended															Six Months Ended
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Computation of Efficiency Ratio
Noninterest expense (GAAP)	$	8,805		$	8,624		$	8,867		$	8,572		$	8,691		$	17,429		$	17,315

Net interest income (GAAP)	$	13,258		$	12,535		$	12,581		$	11,637		$	11,547		$	25,793		$	23,124
Noninterest income (GAAP)		1,195			613			568			592			743			1,808			1,337
Total (GAAP)		14,453			13,148			13,149			12,229			12,290			27,601			24,461
Adjustments:
Prepayment income on loans receivable and investment securities		(555	)		(32	)		(667	)		(55	)		(176	)		(587	)		(249	)
Gains on sales of premises		(548	)		-			-			-			-			(548	)		-
PPP interest and fee income		(332	)		(373	)		(516	)		(279	)		(159	)		(705	)		(376	)
Gains on sales of investment securities		-			-			-			(113	)		-			-			-
Adjusted total (Non-GAAP)	$	13,018		$	12,743		$	11,966		$	11,782		$	11,955		$	25,761		$	23,836

Efficiency ratio (GAAP)		60.92	%		65.59	%		67.43	%		70.10	%		70.72	%		63.15	%		70.79	%
Adjusted efficiency ratio (Non-GAAP)		67.64	%		67.68	%		74.10	%		72.76	%		72.70	%		67.66	%		72.64	%

	As of
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Computation of Tangible Book Value per Common Share
Total shareholders' equity (GAAP)	$	274,834		$	274,728		$	274,560		$	271,297		$	269,324
Adjustments:
Goodwill		(6,106	)		(6,106	)		(6,106	)		(6,106	)		(6,106	)
Other intangible assets		(119	)		(135	)		(151	)		(168	)		(189	)
Tangible common shareholders' equity (Non-GAAP)	$	268,609		$	268,487		$	268,303		$	265,023		$	263,029

Common shares outstanding		15,337,979			15,574,310			15,770,645			15,966,216			16,097,867

Book value per share (GAAP)	$	17.92		$	17.64		$	17.41		$	16.99		$	16.73
Adjustments:
Effects of intangible assets		(0.41	)		(0.40	)		(0.40	)		(0.39	)		(0.39	)

Tangible book value per common share (Non-GAAP)	$	17.51		$	17.24		$	17.01		$	16.60		$	16.34

	Quarter Ended									Six Months Ended
	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Computation of Adjusted Yield on Assets and Adjusted Net Interest Margin
Average interest-earning assets	$	1,796,613		$	1,788,756		$	1,714,975		$	1,792,684		$	1,720,450

Interest and dividend income (GAAP)	$	14,870		$	14,227		$	14,225		$	29,097		$	28,753
Less: PPP interest and fee income		(332	)		(373	)		(159	)		(705	)		(376	)
Less: Prepayment income on loans receivable		(555	)		(32	)		(59	)		(587	)		(132	)
Adjusted interest and dividend income (Non-GAAP)	$	13,983		$	13,822		$	14,007		$	27,805		$	28,245

Yield on interest-earning assets (GAAP)		3.33	%		3.20	%		3.32	%		3.26	%		3.35	%
Adjusted yield on interest-earning assets (Non-GAAP)		3.11	%		3.09	%		3.27	%		3.10	%		3.28	%

Net interest income (GAAP)	$	13,258		$	12,535		$	11,547		$	25,793		$	23,124
Less: PPP interest and fee income		(332	)		(373	)		(159	)		(705	)		(376	)
Less: Prepayment income on loans receivable		(555	)		(32	)		(59	)		(587	)		(132	)
Adjusted net interest income (Non-GAAP)	$	12,371		$	12,130		$	11,329		$	24,501		$	22,616

Net interest margin (GAAP)		2.97	%		2.82	%		2.70	%		2.90	%		2.70	%
Adjusted net interest margin (Non-GAAP)		2.75	%		2.71	%		2.64	%		2.73	%		2.63	%

	As of
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
Demand deposits	$	215,708	$	216,470	$	219,072	$	203,344	$	189,968
NOW accounts		198,610		181,572		177,223		169,077		159,919
Money market accounts		361,352		363,090		332,843		301,892		256,132
Savings		393,041		381,836		387,529		372,151		354,882
Time deposits		354,356		361,669		375,015		407,826		416,386
Total deposits	$	1,523,067	$	1,504,637	$	1,491,682	$	1,454,290	$	1,377,287