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Columbia Financial, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2024
来源: Nasdaq GlobeNewswire / 24 10月 2024 06:55:01 America/Chicago
FAIR LAWN, N.J., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Columbia Financial, Inc. (the “Company”) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank ("Columbia"), reported net income of $6.2 million, or $0.06 per basic and diluted share, for the quarter ended September 30, 2024, as compared to $9.1 million, or $0.09 per basic and diluted share, for the quarter ended September 30, 2023. The income for the quarter ended September 30, 2024 reflected lower net interest income, mainly due to an increase in interest expense, and higher provision for credit losses, partially offset by higher non-interest income and lower income tax expense.
For the nine months ended September 30, 2024, the Company reported net income of $9.6 million, or $0.09 per basic and diluted share, as compared to $29.5 million, or $0.29 per basic and diluted share, for the nine months ended September 30, 2023. Earnings for the nine months ended September 30, 2024 reflected lower net interest income, mainly due to an increase in interest expense, and higher provision for credit losses, partially offset by higher non-interest income and lower income tax expense. Non-interest income for the 2023 period included a $10.8 million loss on securities transactions.
Mr. Thomas J. Kemly, President and Chief Executive Officer commented: “The third quarter earnings have been challenged by continuing pressure on funding costs. Our net interest margin, which has increased 9 basis points since the first quarter of 2024, and our expense management, we believe, will contribute to improved earnings on a go forward basis. The Company's balance sheet and capital remain strong. We successfully closed the merger and performed the system conversion of Freehold Bank into Columbia Bank in October 2024. This was the final step of our fourth completed merger over the last five years."
Results of Operations for the Three Months Ended September 30, 2024 and September 30, 2023
Net income of $6.2 million was recorded for the quarter ended September 30, 2024, a decrease of $2.9 million, or 32.3%, compared to $9.1 million for the quarter ended September 30, 2023. The decrease in net income was primarily attributable to a $3.2 million decrease in net interest income, and a $1.7 million increase in provision for credit losses, partially offset by a $376,000 increase in non-interest income, and a $1.6 million decrease in income tax expense.
Net interest income was $45.3 million for the quarter ended September 30, 2024, a decrease of $3.2 million, or 6.7%, from $48.5 million for the quarter ended September 30, 2023. The decrease in net interest income was primarily attributable to a $20.7 million increase in interest expense on deposits and borrowings, partially offset by a $17.5 million increase in interest income. The increase in interest income was primarily due to an increase in the average balance of total interest-earning assets coupled with an increase in average yields due to market interest rate increases that occurred throughout 2023, and adjustable rate securities and loans tied to various indexes that repriced higher in the 2024 period. The 50 basis point decrease in market rates in September 2024 did not significantly impact the 2024 period results. The increase in interest expense on deposits was driven by the 2023 rate increases and an increase in the average balance of interest-bearing deposits, coupled with the continued intense competition for deposits in the market and the repricing of existing deposits into higher cost products. The increase in interest expense on borrowings was also impacted by an increase in the average balance of borrowings and the increase in interest rates for new borrowings. Prepayment penalties, which are included in interest income on loans, totaled $171,000 for the quarter ended September 30, 2024, compared to $83,000 for the quarter ended September 30, 2023.
The average yield on loans for the quarter ended September 30, 2024 increased 53 basis points to 5.00%, as compared to 4.47% for the quarter ended September 30, 2023, as interest income was influenced by rising interest rates and the average balance of loans. The average yield on securities for the quarter ended September 30, 2024 increased 53 basis points to 2.90%, as compared to 2.37% for the quarter ended September 30, 2023, as new securities purchased during the 2024 period were at higher rates. The average yield on other interest-earning assets for the quarter ended September 30, 2024 increased 81 basis points to 6.72%, as compared to 5.91% for the quarter ended September 30, 2023, due to the rise in average balances and interest rates paid on cash balances and an increase in the dividend rate paid on Federal Home Loan Bank stock.
Total interest expense was $70.6 million for the quarter ended September 30, 2024, an increase of $20.7 million, or 41.6%, from $49.9 million for the quarter ended September 30, 2023. The increase in interest expense was primarily attributable to a 90 basis point increase in the average cost of interest-bearing deposits, coupled with an increase in the average balance of interest-bearing deposits, along with a 17 basis point increase in the average cost of borrowings, coupled with an increase in the average balance of borrowings. Interest expense on deposits increased $16.3 million, or 45.3%, and interest expense on borrowings increased $4.5 million, or 31.9%.
The Company's net interest margin for the quarter ended September 30, 2024 decreased 22 basis points to 1.84%, when compared to 2.06% for the quarter ended September 30, 2023. The weighted average yield on interest-earning assets increased 53 basis points to 4.70% for the quarter ended September 30, 2024, as compared to 4.17% for the quarter ended September 30, 2023. The average cost of interest-bearing liabilities increased 82 basis points to 3.52% for the quarter ended September 30, 2024, as compared to 2.70% for the quarter ended September 30, 2023. The increase in yields for the quarter ended September 30, 2024 was due to the impact of market interest rate increases in 2023. The net interest margin decreased for the quarter ended September 30, 2024, as the increase in the average cost of interest-bearing liabilities outweighed the increase in the average yield on interest-earning assets. The Company's net interest margin for the quarter ended September 30, 2024 when compared to the quarter ended March 31, 2024 increased 9 basis points from 1.75% to 1.84%.
The provision for credit losses for the quarter ended September 30, 2024 was $4.1 million, an increase of $1.7 million, from $2.4 million for the quarter ended September 30, 2023. The increase in provision for credit losses during the quarter was primarily attributable to net charge-offs totaling $2.7 million and an increase in the loan performance qualitative factors.
Non-interest income was $9.0 million for the quarter ended September 30, 2024, an increase of $376,000, from $8.6 million for the quarter ended September 30, 2023. The increase was primarily attributable to an increase of $347,000 in demand deposit account fees, mainly related to commercial account treasury services.
Non-interest expense was $42.8 million for the quarter ended September 30, 2024, a decrease of $76,000, from $42.9 million for the quarter ended September 30, 2023. The decrease was primarily attributable to a decrease in compensation and employee benefits expense of $1.0 million, partially offset by an increase in data processing fees of $666,000, and federal deposit insurance premiums of $317,000. The decrease in compensation and employee benefits expense was the result of workforce reduction and lower incentive compensation related to employee cost cutting strategies implemented during 2023 and 2024. Data processing and software expenses increased due to costs related to cybersecurity and technology enhancements, and federal deposit insurance premiums increased due to the 2024 quarter including an increase in a one-time special assessment charge.
Income tax expense was $1.1 million for the quarter ended September 30, 2024, a decrease of $1.6 million, as compared to income tax expense of $2.7 million for the quarter ended September 30, 2023, mainly due to a decrease in pre-tax income. The Company's effective tax rate was 15.5% and 22.9% for the quarters ended September 30, 2024 and 2023, respectively. The effective tax rate for the 2024 quarter was primarily impacted by permanent income tax differences.
Results of Operations for the Nine Months Ended September 30, 2024 and September 30, 2023
Net income of $9.6 million was recorded for the nine months ended September 30, 2024, a decrease of $19.9 million, or 67.6%, compared to $29.5 million for the nine months ended September 30, 2023. The decrease in net income was primarily attributable to a $29.0 million decrease in net interest income and a $7.9 million increase in provision for credit losses, partially offset by a $9.5 million increase in non-interest income and a $7.8 million decrease in income tax expense.
Net interest income was $131.6 million for the nine months ended September 30, 2024, a decrease of $29.0 million, or 18.1%, from $160.5 million for the nine months ended September 30, 2023. The decrease in net interest income was primarily attributable to a $79.4 million increase in interest expense on deposits and borrowings, partially offset by a $50.4 million increase in interest income. The increase in interest income was primarily due to an increase in the average balance of total interest-earning assets coupled with an increase in average yields due to market interest rate increases that occurred throughout 2023, and adjustable rate securities and loans tied to various indexes that repriced higher in the 2024 period. The 50 basis point decrease in market rates in September 2024 did not significantly impact the 2024 period results. The increase in interest expense on deposits was driven by the 2023 rate increases and an increase in the average balance of interest-bearing deposits, coupled with the continued intense competition for deposits in the market and the repricing of existing deposits into higher cost products. The increase in interest expense on borrowings was also impacted by an increase in the average balance of borrowings and the increase in interest rates for new borrowings. Prepayment penalties, which are included in interest income on loans, totaled $875,000 for the nine months ended September 30, 2024, compared to $339,000 for the nine months ended September 30, 2023.
The average yield on loans for the nine months ended September 30, 2024 increased 55 basis points to 4.91%, as compared to 4.36% for the nine months ended September 30, 2023, as interest income was influenced by higher interest rates and loan growth. The average yield on securities for the nine months ended September 30, 2024 increased 40 basis points to 2.82%, as compared to 2.42% for the nine months ended September 30, 2023, as a number of adjustable rate securities tied to various indexes repriced higher during the nine months, and new securities purchased during the 2024 period were at higher yields. The average yield on other interest-earning assets for the nine months ended September 30, 2024 increased 90 basis points to 6.35%, as compared to 5.45% for the nine months ended September 30, 2023, due to the rise in average balances and interest rates paid on cash balances and an increase in the dividend rate paid on Federal Home Loan Bank stock.
Total interest expense was $206.2 million for the nine months ended September 30, 2024, an increase of $79.4 million, 62.5%, from $126.9 million for the nine months ended September 30, 2023. The increase in interest expense was primarily attributable to a 134 basis point increase in the average cost of interest-bearing deposits, coupled with an increase in the average balance of interest-bearing deposits, along with a 25 basis point increase in the average cost of borrowings, and an increase in the average balance of borrowings. Interest expense on deposits increased $68.7 million, or 84.1%, and interest expense on borrowings increased $10.6 million, or 23.6%.
The Company's net interest margin for the nine months ended September 30, 2024 decreased 47 basis points to 1.80%, when compared to 2.27% for the nine months ended September 30, 2023. The weighted average yield on interest-earning assets increased 55 basis points to 4.61% for the nine months ended September 30, 2024, as compared to 4.06% for the nine months ended September 30, 2023. The average cost of interest-bearing liabilities increased 118 basis points to 3.47% for the nine months ended September 30, 2024, as compared to 2.29% for the nine months ended September 30, 2023. The increase in yields for the nine months ended September 30, 2024 was due to the impact of market interest rate increases between periods. The net interest margin decreased for the nine months ended September 30, 2024, as the increase in the average cost of interest-bearing liabilities outweighed the increase in the average yield on interest-earning assets.
The provision for credit losses for the nine months ended September 30, 2024 was $11.6 million, an increase of $7.9 million, from $3.6 million for the nine months ended September 30, 2023. The increase in provision for credit losses was primarily attributable to net charge-offs totaling $8.2 million and an increase in the loan performance qualitative factors.
Non-interest income was $25.6 million for the nine months ended September 30, 2024, an increase of $9.5 million, from $16.1 million for the nine months ended September 30, 2023. The increase was primarily attributable to a decrease in the loss on securities transactions of $9.6 million.
Non-interest expense was $134.7 million for the nine months ended September 30, 2024, an increase of $321,000, from $134.4 million for the nine months ended September 30, 2023. The increase was primarily attributable to an increase in federal deposit insurance premiums of $2.1 million, due to the 2024 period including an increase in a one-time special assessment charge. In addition, there was an increase in professional fees of $4.9 million, an increase in data processing and software expenses of $1.1 million, an increase in merger-related expense of $457,000, and an increase in other non-interest expense of $1.2 million, partially offset by a decrease in compensation and employee benefits expense of $9.5 million. Professional fees included an increase in legal, regulatory and compliance-related costs while data processing and software expenses increased due to costs related to cybersecurity and technology enhancements. The decrease in compensation and employee benefits expense was the result of workforce reduction and lower incentive compensation related to employee cost cutting strategies implemented during 2023 and 2024.
Income tax expense was $1.3 million for the nine months ended September 30, 2024, a decrease of $7.8 million, as compared to income tax expense of $9.1 million for the nine months ended September 30, 2023, mainly due to a decrease in pre-tax income. The Company's effective tax rate was 11.8% and 23.6% for the nine months ended September 30, 2024 and 2023, respectively. The effective tax rate for the 2024 period was also impacted by permanent income tax differences.
Balance Sheet Summary
Total assets increased $40.9 million, or 0.4%, to $10.7 billion at September 30, 2024 as compared to $10.6 billion at December 31, 2023. The increase in total assets was primarily attributable to an increase in debt securities available for sale of $178.9 million, and an increase in other assets of $21.3 million, partially offset by a decrease in cash and cash equivalents of $139.7 million, and a decrease in loans receivable, net, of $20.7 million.
Cash and cash equivalents decreased $139.7 million, or 33.0%, to $283.5 million at September 30, 2024 from $423.2 million at December 31, 2023. The decrease was primarily attributable to purchases of securities of $283.5 million and repurchases of common stock under our stock repurchase program of $5.9 million, partially offset by proceeds from principal repayments on securities of $119.3 million, and repayments on loans receivable.
Debt securities available for sale increased $178.9 million, or 16.4%, to $1.3 billion at September 30, 2024 from $1.1 billion at December 31, 2023. The increase was attributable to the purchases of debt securities available for sale of $266.9 million, consisting primarily of U.S. government obligations and mortgage-backed securities, and a decrease in gross unrealized losses on securities of $34.3 million, partially offset by repayments on securities of $107.8 million, maturities of securities of $10.0 million, and the sale of one corporate debt security with a carrying value of $4.8 million, resulting in a loss of $1.3 million.
Loans receivable, net, decreased $20.7 million, or 0.3%, with a balance of $7.8 billion at both September 30, 2024 and December 31, 2023. One-to-four family real estate loans, multifamily loans, commercial real estate loans, and home equity loans and advances decreased $55.6 million, $10.2 million, $64.3 million, and $5.6 million, respectively, partially offset by increases in construction loans of $67.3 million and commercial business loans of $53.4 million. The allowance for credit losses for loans increased $3.4 million to $58.5 million at September 30, 2024 from $55.1 million at December 31, 2023.
Other assets increased $21.3 million or 6.9%, to $329.7 million at September 30, 2024 compared to $308.4 million at December 31, 2023, primarily due to a $10.4 million increase in the Company's pension plan balance, as the return on plan assets outpaced the growth in the plan's obligations and a $12.6 million increase in the Company's collateral posting with certain of its derivative counterparties.
Total liabilities increased $2.1 million, or 0.02%, totaling $9.6 billion at both September 30, 2024 and December 31, 2023. The increase was primarily attributable to an increase in total deposits of $111.5 million, or 1.4%, partially offset by a decrease in borrowings of $108.1 million, or 7.1%. The increase in total deposits primarily consisted of an increase in certificates of deposit and interest-bearing demand deposits of $195.7 million, and $13.8 million, respectively, partially offset by decreases in non-interest-bearing demand deposits, money market accounts, and savings and club accounts of $31.2 million, $16.3 million, and $50.5 million, respectively. The Bank has priced select certificates of deposit accounts very competitively to the market to attract new customers. The $108.1 million decrease in borrowings was primarily driven by a net decrease in short-term borrowings of $167.8 million and repayments of $175.5 million in maturing long-term borrowings, partially offset by an increase in long-term borrowings of $235.2 million.
Total stockholders’ equity increased $38.8 million, or 3.7%, to $1.1 billion at September 30, 2024 as compared to $1.0 billion at December 31, 2023. The increase in total stockholders' equity was primarily attributable to net income of $9.6 million, a $5.5 million increase in stock based compensation and an increase of $27.7 million in other comprehensive income, which includes changes in unrealized losses on debt securities available for sale and unrealized gains on swap contracts, net of taxes, included in other comprehensive income. These increases were partially offset by the repurchase of 365,116 shares of common stock at a cost of approximately $5.9 million, or $16.14 per share, under our stock repurchase program. Repurchases have been paused in order to retain capital.
Asset Quality
The Company's non-performing loans at September 30, 2024 totaled $28.0 million, or 0.36% of total gross loans, as compared to $12.6 million, or 0.16% of total gross loans, at December 31, 2023. The $15.4 million increase in non-performing loans was primarily attributable to an increase in non-performing one-to-four family real estate loans of $4.2 million, an increase in non-performing commercial real estate loans of $6.7 million, and an increase in non-performing commercial business loans of $4.5 million. One borrower with an outstanding $5.7 million commercial real estate loan and a related $3.5 million commercial business loan was placed on non-accrual status, representing approximately 60% of the increase in non-performing loans during the 2024 period. This borrower is a healthcare facility that was acquired by another healthcare provider in 2024. The acquiring entity has strong cash flow, has guaranteed the commercial business loan and has provided cash collateral. The Company has the first lien on the healthcare facility which has a 2024 appraised value of approximately $18.5 million along with additional collateral. One commercial real estate loan for $2.0 million secured by a medical condominium was transferred to other real estate owned in May 2024, and a related commercial business loan to the same borrower for $54,000 was charged-off during the nine months ended September 30, 2024.
The increase in non-performing one-to-four family real estate loans was due to an increase in the number of loans from 17 non-performing loans at December 31, 2023 to 27 loans at September 30, 2024. Non-performing assets as a percentage of total assets totaled 0.28% and 0.12% at September 30, 2024 and December 31, 2023, respectively.
For the quarter ended September 30, 2024, net charge-offs totaled $2.7 million, as compared to $1.7 million in net charge-offs recorded for the quarter ended September 30, 2023. For the nine months ended September 30, 2024, net charge-offs totaled $8.2 million, as compared to $2.3 million in net charge-offs recorded for the nine months ended September 30, 2023. Net charge-offs recorded for the nine months ended September 30, 2024 included charge-offs related to 15 commercial business loans totaling $7.7 million. The majority of these loans have continued making monthly payments, and management expects additional recoveries from these borrowers on a go forward basis.
The Company's allowance for credit losses on loans was $58.5 million, or 0.75% of total gross loans, at September 30, 2024, compared to $55.1 million, or 0.70% of total gross loans, at December 31, 2023.
Additional Liquidity, Loan, and Deposit Information
The Company services a diverse retail and commercial deposit base through its 68 branches. With approximately 215,000 accounts, the average deposit account balance was approximately $37,000 at September 30, 2024.
Deposit balances are summarized as follows:
At September 30, 2024 At June 30, 2024 Balance Weighted
Average
RateBalance Weighted
Average
Rate(Dollars in thousands) Non-interest-bearing demand $ 1,406,152 — % $ 1,405,441 — % Interest-bearing demand 1,980,298 2.41 1,904,483 2.37 Money market accounts 1,239,204 2.92 1,246,663 3.17 Savings and club deposits 649,858 0.79 673,031 0.83 Certificates of deposit 2,682,547 4.45 2,551,929 4.34 Total deposits $ 7,958,059 2.62 % $ 7,781,547 2.56 % The Company continues to maintain strong liquidity and capital positions. The Company had no outstanding borrowings from the Federal Reserve Discount Window at September 30, 2024. As of September 30, 2024, the Company had immediate access to approximately $2.6 billion of funding, with additional unpledged loan collateral in excess of $1.8 billion.
At September 30, 2024, the Company's non-performing commercial real estate loans totaled $9.4 million, or 0.12%, of the total loans receivable loan portfolio balance.
The following table presents multifamily real estate, owner occupied commercial real estate, and the components of investor owned commercial real estate loans included in the real estate loan portfolio.
At September 30, 2024 (Dollars in thousands) Balance % of Gross Loans Weighted Average
Loan to Value RatioWeighted
Average
Debt Service
CoverageMultifamily Real Estate $ 1,399,000 17.8 % 61.0 % 1.62 x Owner Occupied Commercial Real Estate $ 683,523 8.7 % 53.6 % 2.10 x Investor Owned Commercial Real Estate: Retail / Shopping centers $ 484,121 6.2 % 51.7 % 1.59 x Mixed Use 211,853 2.7 58.1 1.61 Industrial / Warehouse 389,470 5.0 54.9 1.70 Non-Medical Office 197,768 2.5 54.2 1.64 Medical Office 126,947 1.6 57.9 1.50 Single Purpose 94,497 1.2 54.5 3.23 Other 124,580 1.6 52.0 1.67 Total $ 1,629,236 20.7 % 54.3 % 1.72 x Total Multifamily and Commercial Real Estate Loans $ 3,711,759 47.2 % 56.7 % 1.75 x As of September 30, 2024, the Company had less than $1.0 million in loan exposure to office or rent stabilized multifamily loans in New York City.
About Columbia Financial, Inc.
The consolidated financial results include the accounts of Columbia Financial, Inc., its wholly-owned subsidiary Columbia Bank (the "Bank") and the Bank's wholly-owned subsidiaries. Columbia Financial, Inc. is a Delaware corporation organized as Columbia Bank's mid-tier stock holding company. Columbia Financial, Inc. is a majority-owned subsidiary of Columbia Bank, MHC. Columbia Bank is a federally chartered savings bank headquartered in Fair Lawn, New Jersey that operates 68 full-service banking offices and offers traditional financial services to consumers and businesses in its market area.
Forward Looking Statements
Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “projects,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates, higher inflation and their impact on national and local economic conditions; changes in monetary and fiscal policies of the U.S. Treasury, the Board of Governors of the Federal Reserve System and other governmental entities; the impact of legal, judicial and regulatory proceedings or investigations, competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which the Company operates, including changes that adversely affect a borrowers’ ability to service and repay the Company’s loans; the effect of acts of terrorism, war or pandemics,, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; changes in the value of securities in the Company’s portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and securities; legislative changes and changes in government regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s consolidated financial statements will become impaired; cyber-attacks, computer viruses and other technological risks that may breach the security of our systems and allow unauthorized access to confidential information; the inability of third party service providers to perform; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits and effectively manage liquidity; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy, or its integration of acquired financial institutions and businesses, and changes in assumptions used in making such forward-looking statements which are subject to numerous risks and uncertainties, including but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K and those set forth in the Company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company's actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.
Non-GAAP Financial Measures
Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods presented. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
The Company also provides measurements and ratios based on tangible stockholders' equity. These measures are commonly utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.
A reconciliation of GAAP to non-GAAP financial measures are included at the end of this press release. See "Reconciliation of GAAP to Non-GAAP Financial Measures".
COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(In thousands)September 30, December 31, 2024 2023 Assets (Unaudited) Cash and due from banks $ 283,391 $ 423,140 Short-term investments 110 109 Total cash and cash equivalents 283,501 423,249 Debt securities available for sale, at fair value 1,272,464 1,093,557 Debt securities held to maturity, at amortized cost (fair value of $367,559, and $357,177 at September 30, 2024 and December 31, 2023, respectively) 401,331 401,154 Equity securities, at fair value 4,504 4,079 Federal Home Loan Bank stock 75,847 81,022 Loans receivable 7,857,190 7,874,537 Less: allowance for credit losses 58,495 55,096 Loans receivable, net 7,798,695 7,819,441 Accrued interest receivable 41,659 39,345 Office properties and equipment, net 82,248 83,577 Bank-owned life insurance 272,970 268,362 Goodwill and intangible assets 121,569 123,350 Other real estate owned 1,974 — Other assets 329,741 308,432 Total assets $ 10,686,503 $ 10,645,568 Liabilities and Stockholders' Equity Liabilities: Deposits $ 7,958,059 $ 7,846,556 Borrowings 1,420,640 1,528,695 Advance payments by borrowers for taxes and insurance 42,793 43,509 Accrued expenses and other liabilities 185,861 186,473 Total liabilities 9,607,353 9,605,233 Stockholders' equity: Total stockholders' equity 1,079,150 1,040,335 Total liabilities and stockholders' equity $ 10,686,503 $ 10,645,568 COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)Three Months Ended
September 30,Nine Months Ended
September 30,2024 2023 2024 2023 Interest income: (Unaudited) (Unaudited) Loans receivable $ 97,863 $ 87,548 $ 286,064 $ 252,026 Debt securities available for sale and equity securities 9,592 6,147 26,618 21,043 Debt securities held to maturity 2,616 2,434 7,487 7,338 Federal funds and interest-earning deposits 3,850 747 11,872 3,360 Federal Home Loan Bank stock dividends 1,966 1,529 5,759 3,661 Total interest income 115,887 98,405 337,800 287,428 Interest expense: Deposits 52,196 35,918 150,440 81,733 Borrowings 18,416 13,965 55,805 45,158 Total interest expense 70,612 49,883 206,245 126,891 Net interest income 45,275 48,522 131,555 160,537 Provision for credit losses 4,103 2,379 11,575 3,632 Net interest income after provision for credit losses 41,172 46,143 119,980 156,905 Non-interest income: Demand deposit account fees 1,695 1,348 4,698 3,815 Bank-owned life insurance 1,669 2,014 5,253 5,670 Title insurance fees 688 629 1,935 1,840 Loan fees and service charges 951 969 3,290 3,366 Loss on securities transactions — — (1,256 ) (10,847 ) Change in fair value of equity securities (27 ) (81 ) 425 249 Gain on sale of loans 459 397 825 1,060 Other non-interest income 3,543 3,326 10,440 10,977 Total non-interest income 8,978 8,602 25,610 16,130 Non-interest expense: Compensation and employee benefits 27,738 28,765 82,910 92,383 Occupancy 5,594 5,845 17,621 17,337 Federal deposit insurance premiums 1,518 1,201 5,752 3,624 Advertising 766 834 2,053 2,307 Professional fees 2,454 2,490 11,597 6,741 Data processing and software expenses 4,125 3,459 12,006 10,885 Merger-related expenses 23 14 737 280 Other non-interest expense, net 616 302 2,063 861 Total non-interest expense 42,834 42,910 134,739 134,418 Income before income tax expense 7,316 11,835 10,851 38,617 Income tax expense 1,131 2,705 1,281 9,100 Net income $ 6,185 $ 9,130 $ 9,570 $ 29,517 Earnings per share-basic $ 0.06 $ 0.09 $ 0.09 $ 0.29 Earnings per share-diluted $ 0.06 $ 0.09 $ 0.09 $ 0.29 Weighted average shares outstanding-basic 101,623,160 101,968,294 101,673,619 102,993,215 Weighted average shares outstanding-diluted 101,832,048 102,097,491 101,813,253 103,257,616 COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/YieldsFor the Three Months Ended September 30, 2024 2023 Average
BalanceInterest
and
DividendsYield / Cost Average
BalanceInterest
and
DividendsYield / Cost (Dollars in thousands) Interest-earnings assets: Loans $ 7,791,131 $ 97,863 5.00 % $ 7,763,368 $ 87,548 4.47 % Securities 1,676,781 12,208 2.90 % 1,437,944 8,581 2.37 % Other interest-earning assets 344,560 5,816 6.72 % 152,900 2,276 5.91 % Total interest-earning assets 9,812,472 115,887 4.70 % 9,354,212 98,405 4.17 % Non-interest-earning assets 870,155 844,884 Total assets $ 10,682,627 $ 10,199,096 Interest-bearing liabilities: Interest-bearing demand $ 1,970,444 $ 14,581 2.94 % $ 2,054,464 $ 10,274 1.98 % Money market accounts 1,250,676 8,256 2.63 % 1,049,277 7,763 2.94 % Savings and club deposits 658,628 1,313 0.79 % 758,999 691 0.36 % Certificates of deposit 2,589,190 28,046 4.31 % 2,296,573 17,190 2.97 % Total interest-bearing deposits 6,468,938 52,196 3.21 % 6,159,313 35,918 2.31 % FHLB advances 1,497,580 18,249 4.85 % 1,142,484 13,508 4.69 % Notes payable — — — % 29,925 297 3.94 % Junior subordinated debentures 7,028 164 9.28 % 7,315 160 8.68 % Other borrowings 217 3 5.50 % — — — % Total borrowings 1,504,825 18,416 4.87 % 1,179,724 13,965 4.70 % Total interest-bearing liabilities 7,973,763 $ 70,612 3.52 % 7,339,037 $ 49,883 2.70 % Non-interest-bearing liabilities: Non-interest-bearing deposits 1,411,622 1,498,726 Other non-interest-bearing liabilities 235,990 241,463 Total liabilities 9,621,375 9,079,226 Total stockholders' equity 1,061,252 1,119,870 Total liabilities and stockholders' equity $ 10,682,627 $ 10,199,096 Net interest income $ 45,275 $ 48,522 Interest rate spread 1.18 % 1.47 % Net interest-earning assets $ 1,838,709 $ 2,015,175 Net interest margin 1.84 % 2.06 % Ratio of interest-earning assets to interest-bearing liabilities 123.06 % 127.46 % COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/YieldsFor the Nine Months Ended September 30, 2024 2023 Average
BalanceInterest
and
DividendsYield / Cost Average
BalanceInterest
and
DividendsYield / Cost (Dollars in thousands) Interest-earnings assets: Loans $ 7,789,356 $ 286,064 4.91 % $ 7,725,121 $ 252,026 4.36 % Securities 1,618,319 34,105 2.82 % 1,569,999 28,381 2.42 % Other interest-earning assets 370,749 17,631 6.35 % 172,151 7,021 5.45 % Total interest-earning assets 9,778,424 337,800 4.61 % 9,467,271 287,428 4.06 % Non-interest-earning assets 864,036 835,459 Total assets $ 10,642,460 $ 10,302,730 Interest-bearing liabilities: Interest-bearing demand $ 1,972,520 $ 41,673 2.82 % $ 2,244,978 $ 25,465 1.52 % Money market accounts 1,235,520 25,349 2.74 % 894,520 15,334 2.29 % Savings and club deposits 673,930 3,920 0.78 % 819,804 1,384 0.23 % Certificates of deposit 2,550,634 79,498 4.16 % 2,165,778 39,550 2.44 % Total interest-bearing deposits 6,432,604 150,440 3.12 % 6,125,080 81,733 1.78 % FHLB advances 1,507,045 55,316 4.90 % 1,254,637 43,806 4.67 % Notes payable — — — % 30,148 895 3.97 % Junior subordinated debentures 7,023 486 9.24 % 7,377 457 8.28 % Other borrowings 73 3 5.49 % — — — % Total borrowings 1,514,141 55,805 4.92 % 1,292,162 45,158 4.67 % Total interest-bearing liabilities 7,946,745 $ 206,245 3.47 % 7,417,242 $ 126,891 2.29 % Non-interest-bearing liabilities: Non-interest-bearing deposits 1,406,666 1,572,497 Other non-interest-bearing liabilities 243,848 225,629 Total liabilities 9,597,259 9,215,368 Total stockholders' equity 1,045,201 1,087,362 Total liabilities and stockholders' equity $ 10,642,460 $ 10,302,730 Net interest income $ 131,555 $ 160,537 Interest rate spread 1.15 % 1.77 % Net interest-earning assets $ 1,831,679 $ 2,050,029 Net interest margin 1.80 % 2.27 % Ratio of interest-earning assets to interest-bearing liabilities 123.05 % 127.64 % COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Components of Net Interest Rate Spread and MarginAverage Yields/Costs by Quarter September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023Yield on interest-earning assets: Loans 5.00 % 4.93 % 4.79 % 4.66 % 4.47 % Securities 2.90 2.89 2.65 2.58 2.37 Other interest-earning assets 6.72 6.30 6.06 5.64 5.91 Total interest-earning assets 4.70 % 4.64 % 4.50 % 4.39 % 4.17 % Cost of interest-bearing liabilities: Total interest-bearing deposits 3.21 % 3.14 % 3.02 % 2.76 % 2.31 % Total borrowings 4.87 4.92 4.98 4.96 4.70 Total interest-bearing liabilities 3.52 % 3.49 % 3.38 % 3.18 % 2.70 % Interest rate spread 1.18 % 1.15 % 1.12 % 1.21 % 1.47 % Net interest margin 1.84 % 1.81 % 1.75 % 1.85 % 2.06 % Ratio of interest-earning assets to interest-bearing liabilities 123.06 % 123.03 % 123.06 % 125.32 % 127.46 % COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Selected Financial HighlightsSeptember 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023SELECTED FINANCIAL RATIOS (1): Return on average assets 0.23 % 0.17 % (0.04 )% 0.25 % 0.36 % Core return on average assets 0.23 % 0.20 % 0.02 % 0.38 % 0.36 % Return on average equity 2.32 % 1.77 % (0.45 )% 2.31 % 3.23 % Core return on average equity 2.29 % 2.06 % 0.18 % 3.55 % 3.24 % Core return on average tangible equity 2.58 % 2.34 % 0.20 % 3.99 % 3.64 % Interest rate spread 1.18 % 1.15 % 1.12 % 1.21 % 1.47 % Net interest margin 1.84 % 1.81 % 1.75 % 1.85 % 2.06 % Non-interest income to average assets 0.33 % 0.35 % 0.28 % 0.42 % 0.33 % Non-interest expense to average assets 1.60 % 1.74 % 1.74 % 1.80 % 1.67 % Efficiency ratio 78.95 % 86.83 % 91.96 % 84.82 % 75.12 % Core efficiency ratio 79.14 % 85.34 % 88.39 % 76.93 % 75.09 % Average interest-earning assets to average interest-bearing liabilities 123.06 % 123.03 % 123.06 % 125.32 % 127.46 % Net charge-offs to average outstanding loans 0.14 % 0.03 % 0.26 % 0.01 % 0.09 % (1) Ratios are annualized when appropriate. ASSET QUALITY DATA: September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023(Dollars in thousands) Non-accrual loans $ 28,014 $ 25,281 $ 22,935 $ 12,618 $ 15,150 90+ and still accruing — — — — — Non-performing loans 28,014 25,281 22,935 12,618 15,150 Real estate owned 1,974 1,974 — — — Total non-performing assets $ 29,988 $ 27,255 $ 22,935 $ 12,618 $ 15,150 Non-performing loans to total gross loans 0.36 % 0.33 % 0.30 % 0.16 % 0.19 % Non-performing assets to total assets 0.28 % 0.25 % 0.22 % 0.12 % 0.15 % Allowance for credit losses on loans ("ACL") $ 58,495 $ 57,062 $ 55,401 $ 55,096 $ 54,113 ACL to total non-performing loans 208.81 % 225.71 % 241.56 % 436.65 % 357.18 % ACL to gross loans 0.75 % 0.73 % 0.71 % 0.70 % 0.69 % LOAN DATA: September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023(In thousands) Real estate loans: One-to-four family $ 2,737,190 $ 2,764,177 $ 2,778,932 $ 2,792,833 $ 2,791,939 Multifamily 1,399,000 1,409,316 1,429,369 1,409,187 1,417,233 Commercial real estate 2,312,759 2,316,252 2,318,178 2,377,077 2,374,488 Construction 510,439 462,880 437,566 443,094 390,940 Commercial business loans 586,447 554,768 538,260 533,041 546,750 Consumer loans: Home equity loans and advances 261,041 260,427 260,786 266,632 267,016 Other consumer loans 2,877 2,689 2,601 2,801 2,586 Total gross loans 7,809,753 7,770,509 7,765,692 7,824,665 7,790,952 Purchased credit deteriorated loans 11,795 12,150 14,945 15,089 15,228 Net deferred loan costs, fees and purchased premiums and discounts 35,642 36,352 34,992 34,783 34,360 Allowance for credit losses (58,495 ) (57,062 ) (55,401 ) (55,096 ) (54,113 ) Loans receivable, net $ 7,798,695 $ 7,761,949 $ 7,760,228 $ 7,819,441 $ 7,786,427 CAPITAL RATIOS: September 30, December 31, 2024 (1) 2023 Company: Total capital (to risk-weighted assets) 14.37 % 14.08 % Tier 1 capital (to risk-weighted assets) 13.59 % 13.32 % Common equity tier 1 capital (to risk-weighted assets) 13.50 % 13.23 % Tier 1 capital (to adjusted total assets) 10.16 % 10.04 % Columbia Bank: Total capital (to risk-weighted assets) 14.44 % 14.02 % Tier 1 capital (to risk-weighted assets) 13.61 % 13.22 % Common equity tier 1 capital (to risk-weighted assets) 13.61 % 13.22 % Tier 1 capital (to adjusted total assets) 9.62 % 9.48 % Freehold Bank: Total capital (to risk-weighted assets) 25.98 % 22.49 % Tier 1 capital (to risk-weighted assets) 25.41 % 21.81 % Common equity tier 1 capital (to risk-weighted assets) 25.41 % 21.81 % Tier 1 capital (to adjusted total assets) 16.63 % 15.27 % (1) Estimated ratios at September 30, 2024 Reconciliation of GAAP to Non-GAAP Financial Measures Book and Tangible Book Value per Share September 30, December 31, 2024 2023 (Dollars in thousands) Total stockholders' equity $ 1,079,150 $ 1,040,335 Less: goodwill (110,715 ) (110,715 ) Less: core deposit intangible (9,496 ) (11,155 ) Total tangible stockholders' equity $ 958,939 $ 918,465 Shares outstanding 104,725,436 104,918,905 Book value per share $ 10.30 $ 9.92 Tangible book value per share $ 9.16 $ 8.75 Reconciliation of Core Net Income Three Months Ended
September 30,Nine Months Ended
September 30,2024 2023 2024 2023 (In thousands) Net income $ 6,185 $ 9,130 $ 9,570 $ 29,517 Add: loss on securities transactions, net of tax — — 1,130 9,249 Less/add: FDIC special assessment, net of tax (107 ) — 385 — Add: severance expense from reduction in workforce, net of tax — — 67 1,390 Add: merger-related expenses, net of tax 19 11 691 241 Add: litigation expenses, net of tax — — — 262 Core net income $ 6,097 $ 9,141 $ 11,843 $ 40,659 Return on Average Assets Three Months Ended
September 30,Nine Months Ended
September 30,2024 2023 2024 2023 (Dollars in thousands) Net income $ 6,185 $ 9,130 $ 9,570 $ 29,517 Average assets $ 10,682,627 $ 10,199,096 $ 10,642,460 $ 10,302,730 Return on average assets 0.23 % 0.36 % 0.12 % 0.38 % Core net income $ 6,097 $ 9,141 $ 11,843 $ 40,659 Core return on average assets 0.23 % 0.36 % 0.15 % 0.53 % Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Return on Average Equity Three Months Ended
September 30,Nine Months Ended
September 30,2024 2023 2024 2023 (Dollars in thousands) Total average stockholders' equity $ 1,061,252 $ 1,119,870 $ 1,045,201 $ 1,087,362 Add: loss on securities transactions, net of tax — — 1,130 9,249 Less/add: FDIC special assessment, net of tax (107 ) — 385 — Add: severance expense from reduction in workforce, net of tax — — 67 1,390 Add: merger-related expenses, net of tax 19 11 691 241 Add: litigation expenses, net of tax — — — 262 Core average stockholders' equity $ 1,061,164 $ 1,119,881 $ 1,047,474 $ 1,098,504 Return on average equity 2.32 % 3.23 % 1.22 % 3.63 % Core return on core average equity 2.29 % 3.24 % 1.51 % 4.95 % Return on Average Tangible Equity Three Months Ended
September 30,Nine Months Ended
September 30,2024 2023 2024 2023 (Dollars in thousands) Total average stockholders' equity $ 1,061,252 $ 1,119,870 $ 1,045,201 $ 1,087,362 Less: average goodwill (110,715 ) (110,715 ) (110,715 ) (110,715 ) Less: average core deposit intangible (9,842 ) (12,109 ) (10,391 ) (12,989 ) Total average tangible stockholders' equity $ 940,695 $ 997,046 $ 924,095 $ 963,658 Core return on average tangible equity 2.58 % 3.64 % 1.71 % 5.64 % Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Efficiency Ratios Three Months Ended
September 30,Nine Months Ended
September 30,2024 2023 2024 2023 (Dollars in thousands) Net interest income $ 45,275 $ 48,522 $ 131,555 $ 160,537 Non-interest income 8,978 8,602 25,610 16,130 Total income $ 54,253 $ 57,124 $ 157,165 $ 176,667 Non-interest expense $ 42,834 $ 42,910 $ 134,739 $ 134,418 Efficiency ratio 78.95 % 75.12 % 85.73 % 76.09 % Non-interest income $ 8,978 $ 8,602 $ 25,610 $ 16,130 Add: loss on securities transactions — — 1,256 10,847 Core non-interest income $ 8,978 $ 8,602 $ 26,866 $ 26,977 Non-interest expense $ 42,834 $ 42,910 $ 134,739 $ 134,418 Add/less: FDIC special assessment, net 126 — (439 ) — Less: severance expense from reduction in workforce — — (74 ) (1,605 ) Less: merger-related expenses (23 ) (14 ) (737 ) (280 ) Less: litigation expenses — — — (317 ) Core non-interest expense $ 42,937 $ 42,896 $ 133,489 $ 132,216 Core efficiency ratio 79.14 % 75.09 % 84.26 % 70.51 % Columbia Financial, Inc.
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