GlobeNewswire Inc | Jul 29, 2020 04:01PM EDT

July 29, 2020

FAIR LAWN, N.J., July 29, 2020 (GLOBE NEWSWIRE) -- Columbia Financial, Inc. (the Company) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank (the "Bank"), reported net income of $15.1 million, or $0.14 per basic and diluted share, for the quarter ended June30, 2020, as compared to net income of $12.0 million, or $0.11 per basic and diluted share, for the quarter ended June30, 2019. Earnings for the three months ended June 30, 2020 reflected higher net interest income driven by asset growth, in part, due to the completion of the Company's acquisitions of Stewardship Financial Corporation and its wholly owned subsidiary, Atlantic Stewardship Bank ("Stewardship"), on November 1, 2019, and Roselle Bank and its parent companies ("Roselle") on April 1, 2020, and due to increases in loans, mainly granted as part of the Small Business Association's ("SBA") Paycheck Protection Program ("PPP"). These increases were partially offset by higher provision for loan losses, non-interest expense and income tax expense.

For the six months ended June30, 2020, the Company reported net income of $21.9 million, or $0.20 per basic and diluted share, as compared to net income of $27.0 million, or $0.24 per basic and diluted share, for the six months ended June30, 2019. Earnings for the six months ended June 30, 2020 reflected a higher provision for loan losses and non-interest expense, which was partially offset by higher net interest income.

The higher provision for loan losses for both the three and six months ended June30, 2020 was primarily attributable to consideration of the deterioration of economic factors and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors, and to a lesser extent, due to growth in the Bank's loan portfolio. The Company elected to defer the adoption of the Current Expected Credit Loss ("CECL") methodology permitted by the recently enacted Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). The Company will adopt CECL at the earlier of December 31, 2020 or when the national emergency has concluded.

Mr. Thomas J. Kemly, President and Chief Executive Officer commented: "Our quarterly results were strong even though we are continuing to operate in a challenging environment, where our focus is on offering support to our customers, employees, and communities. We continue to provide branch services with enhanced sanitary protocols and special senior citizen banking hours and are leveraging our digital capabilities for both customers and our operating divisions of the Bank. We are actively working with our commercial and consumer borrowers to assist them through the pandemic by providing short-term loan modifications and granting loans through the SBA Paycheck Protection Program. We are now working with borrowers to return them to making contractual payments on loans previously deferred and guiding SBA PPP borrowers through the process of obtaining forgiveness. On April 1, 2020 we successfully completed our acquisition of Roselle and subsequently, in July 2020, completed the system conversion related to this acquisition. We continue to pursue prudent strategies within our business plan that result in conservative, disciplined balance sheet growth."

Results of Operations for the Quarters Ended June30, 2020 and June30, 2019

Net income of $15.1 million was recorded for the quarter ended June30, 2020, an increase of $3.1 million, or 25.5%, compared to net income of $12.0 million for the quarter ended June30, 2019. The increase in net income was primarily attributable to a $15.0 million increase in net interest income and a $233,000 increase in non-interest income, partially offset by a $5.6 million increase in the provision for loan losses, a $5.6 million increase in non-interest expense and a $969,000 increase in income tax expense.

Net interest income was $55.9 million for the quarter ended June30, 2020, an increase of $15.0 million, or 36.8%, from $40.8 million for the quarter ended June30, 2019. The increase in net interest income was primarily attributable to a $12.9 million increase in interest income coupled with a $2.2 million decrease in interest expense. The increase in interest income for the quarter ended June30, 2020 was largely due to increases in the average balances on loans, securities and other interest-earning assets, which was the result of internal growth and the acquisitions of Stewardship and Roselle, partially offset by decreases in the average yields on these assets. Prepayment penalties, which are included in interest income on loans, totaled $964,000 for the quarter ended June30, 2020 compared to $155,000 for the quarter ended June30, 2019.

The average yield on loans for the quarter ended June30, 2020 decreased 18 basis points to 3.96%, as compared to 4.14% for the quarter ended June30, 2019, while the average yield on securities for the quarter ended June30, 2020 decreased 33 basis points to 2.56%, as compared to 2.89% for the quarter ended June30, 2019. The average yield on other interest-earning assets for the quarter ended June30, 2020 decreased 324 basis points to 2.95%, as compared to 6.19% for the quarter ended June30, 2019. Decreases in the average yields on these portfolios for the quarter ended June30, 2020 were influenced by the lower interest rate environment as the Federal Reserve reduced interest rates by 75 basis points in the third and fourth quarters of 2019, and in response to COVID-19, reduced interest rates again by 150 basis points in March 2020.

Total interest expense was $19.7 million for the quarter ended June30, 2020, a decrease of $2.2 million, or 9.9%, from $21.9 million for the quarter ended June30, 2019. The decrease in interest expense was primarily attributable to a 41 basis point decrease in the average cost of interest-bearing deposits which more than offset the impact from the increase in the average balance of deposits. The decrease in the cost of deposits was driven by both an inflow of lower costing deposits and the repricing of existing deposits at a significantly reduced rate. Interest on borrowings decreased $1.8 million due to a decrease in the average balance of borrowings coupled with an 84 basis point decrease in the cost of these borrowings due to a lower interest rate environment.

The Company's net interest margin for the quarter ended June30, 2020 increased 20 basis points to 2.73%, when compared to 2.53% for the quarter ended June30, 2019. The weighted average yield on interest-earning assets decreased 20 basis points to 3.69% for the quarter ended June30, 2020 as compared to 3.89% for the quarter ended June30, 2019. The average cost of interest-bearing liabilities decreased 51 basis points to 1.25% for the quarter ended June30, 2020 as compared to 1.76% for the quarter ended June30, 2019. The decrease in yields and costs for the quarter ended June30, 2020 were largely driven by a lower interest rate environment. The net interest margin increased for the quarter as the cost of interest-bearing liabilities repriced lower more rapidly than the yields on interest-earning assets.

The provision for loan losses was $5.7 million for the quarter ended June30, 2020, an increase of $5.6 million, from $112,000 for the quarter ended June30, 2019. The increase was primarily attributable to consideration of the deterioration of economic conditions and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors.

Non-interest income was $7.0 million for the quarter ended June 30, 2020, an increase of $233,000, or 3.4%, from $6.8 million for the quarter ended June30, 2019. The increase was primarily attributable to increases in the change in fair value of equity securities of $572,000, gain on sale of loans of $599,000 and other non-interest income of $728,000, partially offset by decreases in demand deposit account fees of $431,000, income from loan fees and service charges of $967,000 and gains on securities transactions of $339,000. The increase in other non-interest income consists of increases in ATM, check card and wealth management related activities. Demand deposit account fees and loan fees and service charges were lower due to the decrease in fees related to customer swaps and the impact of the COVID-19 pandemic, which resulted in higher fee waivers as well as customers carrying higher deposit balances related to government stimulus programs.

Non-interest expense was $37.4 million for the quarter ended June30, 2020, an increase of $5.6 million, or 17.6%, from $31.8 million for the quarter ended June30, 2019. The increase was primarily attributable to an increase in compensation and employee benefits expense of $4.9 million, an increase in occupancy expense of $877,000 and an increase in other non-interest expense of $860,000, partially offset by a decrease of $943,000 in advertising expense. The increase in compensation and employee benefits expense was primarily attributable to an increase of $2.2 million in expense recorded in connection with grants made under the Company's 2019 Equity Incentive Plan and an increase in expense due to a larger number of employees in the 2020 period, which included continuing employees of Stewardship and Roselle. During the quarter ended June 30, 2020, the Bank implemented a Voluntary Early Retirement Program which offers early retirement incentives for qualified employees. Employees may elect to retire during the third quarter of 2020 if they meet criteria established under the existing Columbia Bank Retirement Plan, with additional incentives under the program. There have been no expenses related to this program recorded through June 30, 2020, although management anticipates approximately $3.0 million in additional compensation and employee benefits expense related to the program in the third quarter. The increase in occupancy expense was primarily the result of an increase in the number of branch offices acquired from Stewardship and Roselle. In light of our focus during the pandemic of delivering our services digitally, the Bank plans to temporarily suspend de novo branching activities with an increased focus of enhancing digital capabilities. The increase in other non-interest expense includes $1.3 million related to interest rate swap transactions.

Income tax expense was $4.6 million for the quarter ended June30, 2020, an increase of $1.0 million, as compared to $3.6 million for the quarter ended June30, 2019. The increase in tax expense is attributable to higher pretax income during the quarter. The Company's effective tax rate was 23.4% and 23.2% for the quarters ended June30, 2020 and 2019, respectively.

Results of Operations for the Six Months Ended June30, 2020 and June30, 2019

Net income of $21.9 million was recorded for the six months ended June30, 2020, a decrease of $5.1 million, or 18.9%, compared to net income of $27.0 million for the six months ended June30, 2019. The decrease in net income was primarily attributable to a $14.8 million increase in provision for loan losses and a $14.6 million increase in non-interest expense, partially offset by a $23.3 million increase in net interest income and a $587,000 increase in non-interest income.

Net interest income was $106.6 million for the six months ended June30, 2020, an increase of $23.3 million, or 28.1%, from $83.2 million for the six months ended June30, 2019. The increase in net interest income was primarily attributable to a $24.7 million increase in interest income and a $1.3 million increase in interest expense. The increase in interest income for the six months ended June30, 2020 was largely due to increases in the average balances on loans, securities and other interest-earning assets, which were the result of internal growth and the acquisitions of Stewardship and Roselle, partially offset by decreases in the average yields on these assets. Prepayment penalties, which are included in interest income on loans, totaled $1.6 million for the six months ended June30, 2020 compared to $877,000 for the six months ended June30, 2019.

The average yield on loans for the six months ended June30, 2020 decreased 15 basis points to 4.05%, as compared to 4.20% for the six months ended June30, 2019, while the average yield on securities for the six months ended June30, 2020 decreased 27 basis points to 2.64%, as compared to 2.91% for the six months ended June30, 2019. The average yield on other interest-earning assets for the six months ended June30, 2020 decreased 259 basis points to 3.81%, as compared to 6.40% for the six months ended June30, 2019. Decreases in the average yields on these portfolios for the six months ended June30, 2020 were influenced by the lower interest rate environment.

Total interest expense was $43.7 million for the six months ended June30, 2020, an increase of $1.3 million, or 3.09%, from $42.4 million for the six months ended June30, 2019. The increase in interest expense on interest-bearing deposits was primarily attributable to a $1.1 billion increase in average balances, partially offset by a 22 basis point decrease in the average cost of interest-bearing deposits. The decrease in the cost of deposits was driven by both an inflow of lower costing deposits and the repricing of existing deposits at a significantly reduced rate. Interest on borrowings decreased $1.5 million due to a 60 basis point decrease in the cost of these borrowings due to a lower interest rate environment, which was partially offset by an increase in the average balance of borrowings.

The Company's net interest margin for the six months ended June30, 2020 increased 8 basis points to 2.69%, when compared to 2.61% for the six months ended June30, 2019. The weighted average yield on interest-earning assets decreased 15 basis points to 3.80% for the six months ended June30, 2020 as compared to 3.95% for the six months ended June30, 2019. The average cost of interest-bearing liabilities decreased 31 basis points to 1.41% for the six months ended June30, 2020 as compared to 1.72% for the six months ended June30, 2019. The decrease in yields and costs for the six months ended June30, 2020 were largely driven by a lower interest rate environment. The net interest margin increased for the six months ended June 30, 2020 as the cost of interest-bearing liabilities repriced lower more rapidly than the yields on interest-earning assets.

The provision for loan losses was $15.3 million for the six months ended June30, 2020, an increase of $14.8 million, from $548,000 for the six months ended June30, 2019. The increase was primarily attributable to consideration of the deterioration of economic conditions and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors.

Non-interest income was $13.4 million for the six months ended June 30, 2020, an increase of $587,000, or 4.6%, from $12.8 million for the six months ended June30, 2019. The increase was primarily attributable to increases in gain on sale of loans of $1.2 million and other non-interest income of $441,000, partially offset by decreases in loan fees and service charges of $1.1 million and a change in fair value of equity securities of $188,000. The increase in gain on sale of loans is due to increased activities related to loan sales, and the increase in other non-interest income consists of increases in ATM, check card and wealth management related activities. Loan fees and service charges were lower due to the decrease in fees related to customer swaps, and the impact of the COVID-19 pandemic which resulted in higher fee waivers.

Non-interest expense was $76.0 million for the six months ended June30, 2020, an increase of $14.6 million, or 23.7%, from $61.4 million for the six months ended June30, 2019. The increase was primarily attributable to an increase in compensation and employee benefits expense of $9.8 million, occupancy expense of $1.8 million and other non-interest expense of $3.2 million. The increase in compensation and employee benefits expense was primarily attributable to an increase of $4.4 million in expense recorded in connection with grants made under the Company's 2019 Equity Incentive Plan and an increase in expense due to a larger number of employees in the 2020 period, which included continuing employees of Stewardship and Roselle. As noted above, during the period ended June 30, 2020, the Bank implemented a Voluntary Early Retirement Program for qualified employees. There have been no expenses related to this program recorded through June 30, 2020, although management anticipates approximately $3.0 million in additional compensation and employee benefits expense related to the program in the third quarter. The increase in occupancy expense was primarily the result of an increase in the number of branch offices acquired from Stewardship and Roselle, and the increase in other non-interest expense was due to losses of $1.3 million recorded in connection with the branch consolidation resulting from the Stewardship merger and includes $2.2 million related to interest rate swap transactions. In light of our focus during the pandemic on delivering our services digitally, the Bank plans to temporarily suspend de novo branching activities with an increased focus on enhancing digital capabilities.

Balance Sheet Summary

Total assets increased $774.5 million, or 9.5%, to $9.0 billion at June30, 2020 from $8.2 billion at December31, 2019. The increase in total assets was primarily attributable to increases in cash and cash equivalents of $150.3 million, debt securities available for sale of $79.6 million, loans receivable, net, of $430.0 million, bank-owned life insurance of $20.2 million, goodwill and intangible assets of $24.1 million and other assets of $71.4 million.

Cash and cash equivalents increased $150.3 million, or 199.0% to $225.9 million at June30, 2020 from $75.5 million at December31, 2019. The increase was primarily attributable to $155.2 million in cash acquired due to the Roselle merger, higher prepayments of loans and strong growth in deposits, partially offset by $53.4 million in repurchases of common stock under our stock repurchase program.

Debt securities available for sale increased $79.6 million, or 7.2%, to $1.2 billion at June30, 2020 from $1.1 billion at December31, 2019. The increase was attributable to $51.5 million of investments acquired in the Roselle merger, purchases of $111.1 million in mortgage-backed securities, partially offset by maturities and calls of $12.4 million in U.S. agency obligations and municipal securities, repayments of $82.4 million, and sales of $20.8 million. The gross unrealized gain on debt securities available for sale increased by $32.8 million during the six months ended June30, 2020.

Loans receivable, net, increased $430.0 million, or 7.0%, to $6.6 billion at June30, 2020 from $6.1 billion at December31, 2019. The increase included $171.6 million of loans which were acquired due to the Roselle merger mainly consisting of one-to-four family real estate loans. The increases in one-to-four family real estate loans, construction and commercial business loans of $87.1 million, $27.4 million, and $416.3 million, respectively, were partially offset by decreases in multifamily and commercial real estate and home equity loans and advances of $46.0 million and $28.3 million, respectively. A significant portion of the increase in commercial business loans included loans granted as part of the SBA Paycheck Protection Program, which totaled $467.0 million at June 30, 2020. The allowance for loan loss balance increased $12.3 million to $74.0 million at June30, 2020 from $61.7 million at December31, 2019, which was primarily attributable to consideration of the deterioration of economic conditions and loan performance due to the ongoing COVID-19 pandemic resulting from increases to qualitative factors. The current allowance for loan losses was calculated utilizing the existing incurred loss methodology.

Bank-owned life insurance increased $20.2 million, or 9.5%, to $231.6 million at June30, 2020 from $211.4 million at December31, 2019. The increase was primarily attributable to $17.2 million acquired in connection with the Roselle merger.

Goodwill and intangible assets increased $24.1 million, or 35.1%, to $92.6 million at June30, 2020 from $68.6 million at December31, 2019. The increase was primarily attributable to $23.8 million in goodwill recorded in connection with the Roselle merger.

Other assets increased $71.4 million, or 49.0%, to $217.1 million at June30, 2020 from $145.7 million at December31, 2019. The increase in other assets consisted of a $20.8 million balance of a right-of-use asset recognized in connection with the adoption of Accounting Standards Update ("ASU") 2016-02-Leases, a $31.5 million increase in the collateral balance related to our swap agreement obligations, and a $17.2 million increase in interest rate swap fair value adjustments.

Total liabilities increased $716.0 million, or 9.9%, to $7.9 billion at June30, 2020 from $7.2 billion at December31, 2019. The increase was primarily attributable to an increase in total deposits of $935.3 million, or 16.6%, and an increase in accrued expenses and other liabilities of $56.6 million, or 48.0%, partially offset by a decrease in borrowings of $277.0 million, or 19.7%. The increase in total deposits was primarily driven by $333.2 million in deposits assumed due to the Roselle merger and increases in non-interest-bearing and interest-bearing demand deposits of $358.1 million and $205.6 million, respectively, which were mainly related to borrowers depositing funds received from SBA PPP loans into their business accounts. Money market accounts, savings and club deposits, and certificates of deposits also increased $91.6 million, $109.1 million and $170.9 million, respectively, during the period. The increase in accrued expenses and other liabilities consisted of a $21.9 million balance of the lease liability recognized in connection with the adoption of ASU 2016-02-Leases, and a $32.9 million increase in interest rate swap liabilities. The decrease in borrowings was primarily driven by maturing long-term borrowings of $116.5 million and a net decrease in short-term borrowings of $287.8 million, partially offset by new long-term borrowings of $90.0 million and $ 37.7 million in borrowings assumed from Roselle.

Total stockholders equity increased $58.5 million, or 6.0%, to $1.0 billion at June30, 2020 from $982.5 million at December31, 2019. The net increase was primarily attributable to net income of $21.9 million, an increase in additional capital of $68.5 million due to the issuance of 4,759,048 shares of Company common stock to Columbia Bank MHC related to the Roselle merger, and improved fair values on debt securities within our available for sale portfolio of $25.9 million, partially offset by the repurchase of approximately 3,456,200 shares of common stock totaling $53.4 million under our stock repurchase program. The repurchases under the stock repurchase program were completed in April 2020.

Asset Quality

The Company's non-performing loans at June30, 2020 totaled $13.5 million, or 0.20% of total gross loans, as compared to $6.7 million, or 0.11% of total gross loans, at December31, 2019. The $6.8 million increase in non-performing loans was primarily attributable to increases of $3.4 million in one-to-four family real estate loans, $1.7 million in multifamily and commercial real estate loans and $1.8 million in commercial business loans. The increase in non-performing one-to-four family real estate loans was due to an increase in the number of loans from 10 non-performing loans at December 31, 2019 to 27 non-performing loans at June 30, 2020. The increase in multifamily and commercial real estate loans was due to an increase in the number of loans from seven non-performing loans at December 31, 2019 to 12 non-performing loans at June 30, 2020. The increase in non-performing commercial business loans included the addition of a $1.1 million commercial loan during the period. Non-performing assets as a percentage of total assets totaled 0.15% at June30, 2020 as compared to 0.08% at December31, 2019.

For the quarter ended June30, 2020, net charge-offs totaled $2.9 million as compared to $480,000 for the quarter ended June30, 2019. For the six months ended June30, 2020, net charge-offs totaled $3.0 million as compared to $487,000 for the six months ended June 30, 2019. The increase in net charge-offs during the three and six month periods was primarily attributable to a $2.8 million charge-off of one commercial business loan.

The Company's allowance for loan losses was $74.0 million, or 1.12% of total loans, at June30, 2020, compared to $61.7 million, or 1.00% of total loans, at December31, 2019. The increase in the allowance for loan losses is primarily attributable to consideration of economic conditions and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors and, to a lesser extent, due to the growth in the Bank's loan portfolio.

COVID-19

Through June 30, 2020, the Company granted $768.0 million of commercial loan modification requests with respect to multifamily, commercial, and construction real estate loans, and $195.0 million of consumer-related loan modification requests with respect to one-to-four family real estate loans and home equity loans and advances from our customers affected by the COVID-19 pandemic. These short-term loan modifications will be treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears at December 31, 2019. Furthermore, these loans will continue to accrue interest and will not be tested for impairment during the short-term modification period. Commercial loan modification requests include various industries and property types. The following table is a summary of loan modifications that have not begun to remit full payment as of July 21, 2020:

Balance at July Percent of Total Loans at June 21, 2020 30, 2020 (Dollars in thousands)Real estate loans: One-to-four family $ 73,502 3.40 %Multifamily and 447,925 15.59 %commercialConstruction 13,525 4.14 %Commercial business 34,059 3.79 %loansHome equity loans and 8,427 2.34 %advancesTotal loans $ 577,438 8.72 %

At July 21, 2020, $248.0 million of the commercial loans in the above table are remitting partial payments and $162.0 million were granted an additional deferral period.

At June 30, 2020, the Company had originated 2,284 loans for $467.0 million under the SBA Paycheck Protection Program. Approximately eighty-one percent of the total number of loans granted have original balances of $250,000 or less.

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. The Bank offers traditional financial services to consumers and businesses in our market areas. We currently operate 66 full-services banking offices.

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 Companys 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 Companys business activities; changes in interest rates; 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 Companys loans; the effect of the COVID-19 pandemic, 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 Companys 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 Companys consolidated financial statements will become impaired; demand for loans in the Companys market area; the Companys ability to attract and maintain deposits; 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, 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 as supplemented by its Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the SEC), which are available at the SECs website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Columbia Financial, Inc.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 Companys management uses in its analysis of the Companys 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 Companys management believes that providing this information to analysts and investors allows them to better understand and evaluate the Companys core financial results for the periods in question. 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 companys financial condition and, therefore, the Companys 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".

Contact: Tony Rose 1^st Senior Vice President/Marketing Director 201-794-5828

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESConsolidated Statements of Financial Condition(In thousands)

June 30, December 31, 2020 2019Assets (Unaudited) Cash and due from banks $ 225,743 $ 75,420 Short-term investments 138 127 Total cash and cash equivalents 225,881 75,547 Debt securities available for sale, at fair value 1,177,925 1,098,336 Debt securities held to maturity, at amortizedcost (fair value of $289,836, and $289,505 at 273,997 285,756 June 30, 2020 and December 31, 2019,respectively)Equity securities, at fair value 4,710 2,855 Federal Home Loan Bank stock 57,843 69,579 Loans held-for-sale, at fair value 9,639 ? Loans receivable 6,639,874 6,197,566 Less: allowance for loan losses 74,015 61,709 Loans receivable, net 6,565,859 6,135,857 Accrued interest receivable 28,414 22,092 Office properties and equipment, net 77,588 72,967 Bank-owned life insurance 231,596 211,415 Goodwill and intangible assets 92,642 68,582 Other assets 217,098 145,708 Total assets $ 8,963,192 $ 8,188,694 Liabilities and Stockholders' Equity Liabilities: Deposits $ 6,581,109 $ 5,645,842 Borrowings 1,129,979 1,407,022 Advance payments by borrowers for taxes and 36,706 35,507 insuranceAccrued expenses and other liabilities 174,410 117,806 Total liabilities 7,922,204 7,206,177 Stockholders' equity: Total stockholders' equity 1,040,988 982,517 Total liabilities and stockholders' equity $ 8,963,192 $ 8,188,694

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESConsolidated Statements of Income(In thousands, except share and per share data)

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019Interest income: (Unaudited) (Unaudited)Loans receivable $ 65,235 $ 51,709 $ 129,253 $ 103,969 Debt securitiesavailable for 7,292 7,900 14,620 15,559 sale and equitysecuritiesDebt securities 1,993 2,115 4,058 4,022 held to maturityFederal funds andinterest-earning 27 134 216 223 depositsFederal Home LoanBank stock 1,040 874 2,130 1,846 dividendsTotal interest 75,587 62,732 150,277 125,619 incomeInterest expense: Deposits 14,911 15,250 31,743 28,929 Borrowings 4,805 6,639 11,961 13,463 Total interest 19,716 21,889 43,704 42,392 expense Net interest 55,871 40,843 106,573 83,227 income Provision for 5,736 112 15,304 548 loan losses Net interestincome after 50,135 40,731 91,269 82,679 provision forloan losses Non-interest income:Demand deposit 620 1,051 1,919 2,010 account feesBank-owned life 1,519 1,345 2,936 2,665 insuranceTitle insurance 996 1,099 2,227 2,140 feesLoan fees and 533 1,500 1,261 2,320 service chargesGain onsecurities 0 339 370 465 transactionsChange in fairvalue of equity 643 71 59 247 securitiesGain on sale of 795 196 1,549 328 loansOthernon-interest 1,902 1,174 3,078 2,637 incomeTotalnon-interest 7,008 6,775 13,399 12,812 income Non-interest expense:Compensation and 25,218 20,343 49,683 39,923 employee benefitsOccupancy 4,701 3,824 9,496 7,655 Federal depositinsurance 626 462 736 887 premiumsAdvertising 447 1,390 1,591 2,778 Professional fees 1,083 1,431 2,449 2,678 Data processing 816 669 1,581 1,307 Merger-related 432 462 1,507 462 expensesOthernon-interest 4,120 3,260 8,908 5,710 expenseTotalnon-interest 37,443 31,841 75,951 61,400 expense Income beforeincome tax 19,700 15,665 28,717 34,091 expense Income tax 4,603 3,634 6,855 7,141 expense Net income $ 15,097 $ 12,031 $ 21,862 $ 26,950 Earnings pershare-basic and $ 0.14 $ 0.11 $ 0.20 $ 0.24 dilutedWeighted averageshares 111,102,306 111,553,203 109,770,239 111,544,339 outstanding-basicand diluted

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESAverage Balances/Yields

For the Three Months Ended June 30, 2020 2019 Average Interest Yield Average Interest Yield Balance and / Cost Balance and / Cost Dividends Dividends (Dollars in thousands)Interest-earnings assets:Loans $ 6,629,428 $ 65,235 3.96 % $ 5,012,533 $ 51,709 4.14 %Securities 1,458,442 9,285 2.56 % 1,391,009 10,015 2.89 %Otherinterest-earning 145,677 1,067 2.95 % 65,348 1,008 6.19 %assetsTotalinterest-earning 8,233,547 75,587 3.69 % 6,468,890 62,732 3.89 %assetsNon-interest-earning 652,255 370,746 assetsTotal assets $ 8,885,802 $ 6,839,636 Interest-bearing liabilities:Interest-bearing $ 1,862,312 $ 3,014 0.65 % $ 1,355,796 $ 4,432 1.31 %demandMoney market 485,675 644 0.53 % 261,110 516 0.79 %accountsSavings and club 633,118 279 0.18 % 490,271 190 0.16 %depositsCertificates of 2,217,765 10,974 1.99 % 1,816,313 10,112 2.23 %depositTotalinterest-bearing 5,198,870 14,911 1.15 % 3,923,490 15,250 1.56 %depositsFHLB advances 1,133,975 4,565 1.62 % 1,066,725 6,639 2.50 %Subordinated notes 17,438 169 3.90 % ? ? ? %Junior subordinated 7,582 67 3.55 % ? ? ? %debenturesOther borrowings 7,692 4 0.21 % ? ? ? %Total borrowings 1,166,687 4,805 1.66 % 1,066,725 6,639 2.50 %Totalinterest-bearing 6,365,557 $ 19,716 1.25 % 4,990,215 $ 21,889 1.76 %liabilities Non-interest-bearing liabilities:Non-interest-bearing 1,280,181 725,684 depositsOthernon-interest-bearing 209,199 119,913 liabilitiesTotal liabilities 7,854,937 5,835,812 Total stockholders' 1,030,865 1,003,824 equityTotal liabilitiesand stockholders' $ 8,885,802 $ 6,839,636 equity Net interest income $ 55,871 $ 40,843 Interest rate spread 2.44 % 2.13 %Net interest-earning $ 1,867,990 $ 1,478,675 assetsNet interest margin 2.73 % 2.53 %Ratio ofinterest-earningassets to 129.35 % 129.63 % interest-bearingliabilities

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESAverage Balances/Yields

For the Six Months Ended June 30, 2020 2019 Average Interest Yield Average Interest Yield Balance and / Cost Balance and / Cost Dividends Dividends (Dollars in thousands)Interest-earnings assets:Loans $ 6,413,943 $ 129,253 4.05 % $ 4,997,253 $ 103,969 4.20 %Securities 1,422,649 18,678 2.64 % 1,357,565 19,581 2.91 %Otherinterest-earning 123,686 2,346 3.81 % 65,152 2,069 6.40 %assetsTotalinterest-earning 7,960,278 150,277 3.80 % 6,419,970 125,619 3.95 %assetsNon-interest-earning 608,023 369,779 assetsTotal assets $ 8,568,301 $ 6,789,749 Interest-bearing liabilities:Interest-bearing $ 1,809,100 $ 7,686 0.85 % $ 1,337,477 $ 8,649 1.30 %demandMoney market 452,453 1,715 0.76 % 259,730 958 0.74 %accountsSavings and club 588,368 494 0.17 % 496,851 386 0.16 %depositsCertificates of 2,116,873 21,848 2.08 % 1,770,836 18,936 2.16 %depositTotalinterest-bearing 4,966,794 31,743 1.29 % 3,864,894 28,929 1.51 %depositsFHLB advances 1,250,119 11,456 1.84 % 1,092,542 13,463 2.48 %Subordinated notes 17,285 336 3.91 % ? ? ? %Junior subordinated 7,515 165 4.42 % ? ? ? %debenturesOther borrowings 3,846 4 0.21 % ? ? ? %Total borrowings 1,278,765 11,961 1.88 % 1,092,542 13,463 2.48 %Totalinterest-bearing 6,245,559 $ 43,704 1.41 % 4,957,436 $ 42,392 1.72 %liabilities Non-interest-bearing liabilities:Non-interest-bearing 1,120,061 722,130 depositsOthernon-interest-bearing 197,295 118,415 liabilitiesTotal liabilities 7,562,915 5,797,981 Total stockholders' 1,005,386 991,768 equityTotal liabilitiesand stockholders' $ 8,568,301 $ 6,789,749 equity Net interest income $ 106,573 $ 83,227 Interest rate spread 2.39 % 2.23 %Net interest-earning $ 1,714,719 $ 1,462,534 assetsNet interest margin 2.69 % 2.61 %Ratio ofinterest-earningassets to 127.46 % 129.50 % interest-bearingliabilities

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESComponents of Net Interest Rate Spread and Margin

Average Yields/Costs by Quarter June 30, March 31, December September June 30, 2020 2020 31, 2019 30, 2019 2019Yield oninterest-earning assets:Loans 3.96 % 4.15 % 4.14 % 4.16 % 4.14 %Securities 2.56 2.72 2.73 2.79 2.89 Otherinterest-earning 2.95 5.06 4.87 6.10 6.19 assetsTotalinterest-earning 3.69 % 3.91 % 3.87 % 3.89 % 3.89 %assets Cost ofinterest-bearing liabilities:Totalinterest-bearing 1.15 % 1.43 % 1.48 % 1.60 % 1.56 %depositsTotal borrowings 1.66 2.07 2.21 2.40 2.50 Totalinterest-earning 1.25 % 1.58 % 1.64 % 1.77 % 1.76 %liabilities Interest rate 2.44 % 2.33 % 2.23 % 2.12 % 2.13 %spreadNet interest 2.73 % 2.65 % 2.59 % 2.52 % 2.53 %margin Ratio ofinterest-earningassets to 129.35 % 125.49 % 127.34 % 129.63 % 129.63 %interest-bearingliabilities

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESSelected Financial Highlights

For the Three Months For the Six Months Ended June 30, Ended June 30, 2020 2019 2020 2019SELECTED FINANCIAL RATIOS (1): Return on average assets 0.68 % 0.71 % 0.51 % 0.80 %Core return on average assets 0.70 % 0.71 % 0.55 % 0.80 %Return on average equity 5.89 % 4.81 % 4.37 % 5.48 %Core return on average equity 6.03 % 4.84 % 4.72 % 5.48 %Interest rate spread 2.44 % 2.13 % 2.39 % 2.23 %Net interest margin 2.73 % 2.53 % 2.69 % 2.61 %Non-interest expense to average 1.69 % 1.87 % 1.78 % 1.82 %assetsEfficiency ratio 59.55 % 66.87 % 63.31 % 63.93 %Core efficiency ratio 58.86 % 66.37 % 61.26 % 63.76 %Average interest-earning assets toaverage interest-bearing 129.35 % 129.63 % 127.46 % 129.50 %liabilitiesNet charge-offs to average 0.18 % 0.04 % 0.09 % 0.02 %outstanding loans (1) Ratios for the three months are annualized when appropriate.

CAPITAL RATIOS: June 30, December 31, 2020 2019Company: Total capital (to risk-weighted assets) 18.22 % 17.25 %Tier 1 capital (to risk-weighted assets) 16.79 % 16.05 %Common equity tier 1 capital (to risk-weighted assets) 16.67 % 15.94 %Tier 1 capital (to adjusted total assets) 11.56 % 12.92 % Bank: Total capital (to risk-weighted assets) 15.58 % 14.25 %Tier 1 capital (to risk-weighted assets) 14.33 % 13.21 %Common equity tier 1 capital (to risk-weighted assets) 14.33 % 13.21 %Tier 1 capital (to adjusted total assets) 9.79 % 10.25 %

ASSET QUALITY: June 30, December 31, 2020 2019 (Dollars in thousands)Non-accrual loans $ 13,502 $ 6,687 90+ and still accruing ? ? Non-performing loans 13,502 6,687 Real estate owned ? ? Total non-performing assets $ 13,502 $ 6,687 Non-performing loans to total gross loans 0.20 % 0.11 %Non-performing assets to total assets 0.15 % 0.08 %Allowance for loan losses $ 74,015 $ 61,709 Allowance for loan losses to total non-performing loans 548.18 % 922.82 %Allowance for loan losses to gross loans 1.12 % 1.00 %Allowance for loan losses to gross loans, excluding SBA 1.20 % ? %PPP loansUnamortized purchase accounting fair value credit marks $ 4,660 $ ? on acquired loans

LOAN DATA: June 30, December 31, 2020 2019Real estate loans: (In thousands)One-to-four family $ 2,164,185 $ 2,077,079 Multifamily and commercial 2,874,019 2,919,985 Construction 326,343 298,942 Commercial business loans * 899,506 483,215 Consumer loans: Home equity loans and advances 359,813 388,127 Other consumer loans 1,600 1,960 Total gross loans 6,625,466 6,169,308 Purchased credit-impaired ("PCI") loans 6,881 7,021 Net deferred loan costs, fees and purchased 7,527 21,237 premiums and discounts **Allowance for loan losses (74,015 ) (61,709 )Loans receivable, net $ 6,565,859 $ 6,135,857 * At June 30, 2020 includes SBA PPP loans totaling $467.0 million.** At June 30, 2020 includes SBA PPP net deferred loan fees totaling $13.5 million.

Reconciliation of GAAP to Non-GAAP Financial Measures Book and Tangible Book Value per Share June 30, December 31, 2020 2019 Total stockholders' equity $ 1,040,988 $ 982,517 Less: goodwill (85,426 ) (60,763 )Less: core deposit intangible (6,731 ) (7,245 )Total tangible stockholders' equity $ 948,831 $ 914,509 Shares outstanding 115,067,114 113,765,387 Book value per share $ 9.05 $ 8.64 Tangible book value per share $ 8.25 $ 8.04

Reconciliation of Core Net Income Three Months Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019 (In thousands) Net income $ 15,097 $ 12,031 $ 21,862 $ 26,950 Less: gain on securities ? (260 ) (279 ) (360 )transactions, net of taxAdd: merger-related expenses, 366 355 1,184 355 net of taxAdd: branch closure expenses, ? ? 878 ? net of taxCore net income $ 15,463 $ 12,126 $ 23,645 $ 26,945

Return onAverage Assets Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Dollars in thousands) Net income $ 15,097 $ 12,031 $ 21,862 $ 26,950 Average $ 8,885,802 $ 6,839,636 $ 8,568,301 $ 6,789,749 assets Return onaverage 0.68 % 0.71 % 0.51 % 0.80 %assets Core net $ 15,463 $ 12,126 $ 23,645 $ 26,945 income Core returnon average 0.70 % 0.71 % 0.55 % 0.80 %assets

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

Return on Average Equity Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Dollars in thousands) Total averagestockholders' $ 1,030,865 $ 1,003,824 $ 1,005,386 $ 991,768 equityLess: gain onsecurities ? (260 ) (279 ) (360 )transactions, netof taxAdd: merger-relatedexpenses, net of 366 355 1,184 355 taxAdd: branch closureexpenses, net of ? ? 878 ? taxCore averagestockholders' $ 1,031,231 $ 1,003,919 $ 1,007,169 $ 991,763 equity Return on average 5.89 % 4.81 % 4.37 % 5.48 %equity Core return on core 6.03 % 4.84 % 4.72 % 5.48 %average equity

Efficiency Ratios Three Months Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019 (Dollars in thousands) Net interest income $ 55,871 $ 40,843 $ 106,573 $ 83,227 Non-interest income 7,008 6,775 13,399 12,812 Total income $ 62,879 $ 47,618 $ 119,972 $ 96,039 Non-interest expense $ 37,443 $ 31,841 $ 75,951 $ 61,400 Efficiency ratio 59.55 % 66.87 % 63.31 % 63.93 % Non-interest income $ 7,008 $ 6,775 $ 13,399 $ 12,812 Less: gain on securities ? (339 ) (370 ) (465 )transactionsCore non-interest income $ 7,008 $ 6,436 $ 13,029 $ 12,347 Non-interest expense $ 37,443 $ 31,841 $ 75,951 $ 61,400 Less: merger-related expenses (432 ) (462 ) (1,507 ) (462 )Less: branch closure expenses ? ? (1,170 ) ? Core non-interest expense $ 37,011 $ 31,379 $ 73,274 $ 60,938 Core efficiency ratio 58.86 % 66.37 % 61.26 % 63.76 %