GlobeNewswire Inc | Jul 28, 2021 07:35AM EDT

July 28, 2021

FAIR LAWN, N.J., July 28, 2021 (GLOBE NEWSWIRE) -- Columbia Financial, Inc. (the Company) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank (the "Bank"), reported net income of $26.7 million, or $0.26 per basic and diluted share, for the quarter ended June30, 2021, as compared to net income of $15.1 million, or $0.14 per basic and diluted share, for the quarter ended June30, 2020. Earnings for the quarter ended June30, 2021 reflected higher net interest income, a reversal of provision for loan losses, and higher non-interest income, partially offset by higher income tax expense.

For the six months ended June30, 2021, the Company reported net income of $47.7 million, or $0.45 per basic and diluted share, as compared to net income of $21.9 million, or $0.20 per basic and diluted share, for the six months ended June30, 2020. Earnings for the six months ended June30, 2021 reflected higher net interest income, a reversal of provision for loan losses, and higher non-interest income, partially offset by higher income tax expense.

Mr. Thomas J. Kemly, President and Chief Executive Officer commented: "We had strong growth in our net income which increased $11.6 million over the same 2020 period, as we successfully implemented strategies focused on increasing income while reducing our cost of funds and efficiently managing our operating expenses. This quarter included the sale of a significant portion of our lower yielding Paycheck Protection Program ("PPP") loans to an experienced servicer, which resulted in a gain of $7.7 million and allows us to refocus our efforts on our core business lending activities. We are looking forward to the continuation of these successful strategies throughout the remainder of the year, as well as the opportunity to expand our franchise with the acquisition of Freehold Bank, which is anticipated to close during the fourth quarter of 2021."

Results of Operations for the Quarters Ended June30, 2021 and June30, 2020

Net income of $26.7 million was recorded for the quarter ended June30, 2021, an increase of $11.6 million, or 76.8%, compared to net income of $15.1 million for the quarter ended June30, 2020. The increase in net income was primarily attributable to a $2.2 million increase in net interest income, a $7.5 million decrease in provision for loan losses, and a $7.4 million increase in non-interest income, partially offset by a $5.3 million increase in income tax expense.

Net interest income was $58.1 million for the quarter ended June30, 2021, an increase of $2.2 million, or 4.0%, from $55.9 million for the quarter ended June30, 2020. The increase in net interest income was primarily attributable to a $9.9 million decrease in interest expense, partially offset by a $7.7 million decrease in interest income. The decrease in interest expense on deposits was driven by both an inflow of lower cost deposits and the repricing of existing deposits at a significantly reduced rate as a result of a lower interest rate environment. The decrease in interest expense on borrowings was the result of decreases in both the average balance and average cost of borrowings. The decrease in interest income for the quarter ended June30, 2021 was largely due to decreases in the average yields on interest-earning assets. Prepayment penalties, which are included in interest income on loans, totaled $1.1 million for the quarter ended June30, 2021, compared to $964,000 for the quarter ended June30, 2020.

The average yield on loans for the quarter ended June30, 2021 decreased 24 basis points to 3.72%, as compared to 3.96% for the quarter ended June30, 2020, while the average yield on securities for the quarter ended June30, 2021 decreased 63 basis points to 1.93%, as compared to 2.56% for the quarter ended June30, 2020. The average yield on other interest-earning assets for the quarter ended June30, 2021 decreased 171 basis points to 1.24%, as compared to 2.95% for the quarter ended June30, 2020, as there were substantially higher cash balances in low yielding bank accounts for the quarter ended June 30, 2021. Decreases in the average yields on these portfolios for the quarter ended June30, 2021 were influenced by the lower interest rate environment as the Federal Reserve reduced interest rates by 150 basis points in March 2020 in response to the COVID-19 pandemic.

Total interest expense was $9.8 million for the quarter ended June30, 2021, a decrease of $9.9 million, or 50.3%, from $19.7 million for the quarter ended June30, 2020. The decrease in interest expense was primarily attributable to a 58 basis point decrease in the average cost of interest-bearing deposits which was partially offset by the impact of the increase in the average balance of deposits. The decrease in the cost of deposits was driven by both an inflow of lower cost deposits and the repricing of existing deposits at lower interest rates. Interest on borrowings decreased $2.9 million due to a decrease in the average balances of FHLB advances and subordinated notes, coupled with a 59 basis point decrease in the cost of total borrowings.

The Company's net interest margin for the quarter ended June30, 2021 increased 4 basis points to 2.77%, when compared to 2.73% for the quarter ended June30, 2020. The weighted average yield on interest-earning assets decreased 45 basis points to 3.24% for the quarter ended June30, 2021 as compared to 3.69% for the quarter ended June30, 2020. Excluding the impact of PPP loan deferred fee acceleration for the quarter ended June 30, 2021, the net interest margin would have been 2.66%. The average cost of interest-bearing liabilities decreased 63 basis points to 0.62% for the quarter ended June30, 2021 as compared to 1.25% for the quarter ended June30, 2020. The decrease in yields and costs for the quarter ended June30, 2021 were largely driven by a continued lower interest rate environment. The net interest margin increased for the quarter ended June 30, 2021 as the cost of interest-bearing liabilities continued to reprice lower more rapidly than the yields on interest-earning assets.

The reversal of provision for loan loss recorded for the quarter ended June30, 2021 was $1.8 million, a decrease of $7.5 million, from $5.7 million of provision for loan loss expense recorded for the quarter ended June30, 2020. The comparatively lower level of provision for the 2021 period was primarily attributable to a decrease in the average balance of loans, a decrease in loan loss rates, a decrease in the balances of delinquent and non-accrual loans, and the consideration of the improving economic environment.

Non-interest income was $14.4 million for the quarter ended June30, 2021, an increase of $7.4million, or 105.4%, from $7.0 million for the quarter ended June30, 2020. The increase was primarily attributable to an increase in income from a $7.7 million gain on the sale of $237.0 million of commercial business loans granted as part of the Small Business Administration PPP, and an increase in title insurance fees of $507,000, partially offset by the decrease in the fair value of equity securities of $1.4 million.

Non-interest expense was $37.6 million for the quarter ended June30, 2021, an increase of $167,000, or 0.4%, from $37.4 million for the quarter ended June30, 2020. The increase was primarily attributable to an increase in data processing and software expenses of $248,000, professional fees of $568,000, and other non-interest expenses of $1.1 million, partially offset by a decrease in compensation and employee benefits expense of $1.6 million, and a decrease in merger-related expenses of $357,000. Professional fees included an increase in consulting expenses related to information technology improvements, and the increase in other non-interest expense included $561,000 of branch closure costs.

Income tax expense was $9.9 million for the quarter ended June30, 2021, an increase of $5.3 million, as compared to $4.6 million for the quarter ended June30, 2020, mainly due to an increase in pre-tax income, and to a lesser extent, an increase in the Company's effective state income tax rate. The Company's effective tax rate was 27.1% and 23.4% for the quarters ended June30, 2021 and 2020, respectively.

Results of Operations for the Six Months Ended June30, 2021 and June30, 2020

Net income of $47.7 million was recorded for the six months ended June30, 2021, an increase of $25.9 million, or 118.3%, compared to net income of $21.9 million for the six months ended June30, 2020. The increase in net income was primarily attributable to an $8.2 million increase in net interest income, an $18.3 million decrease in provision for loan losses, and a $9.6 million increase in non-interest income, partially offset by a $10.9 million increase in income tax expense.

Net interest income was $114.8 million for the six months ended June30, 2021, an increase of $8.2 million, or 7.7%, from $106.6 million for the six months ended June30, 2020. The increase in net interest income was primarily attributable to a $23.0 million decrease in interest expense, partially offset by a $14.8 million decrease in interest income. The decrease in interest expense on deposits was driven by both an inflow of lower cost deposits and the repricing of existing deposits at a significantly reduced rate as a result of a lower interest rate environment. The decrease in interest expense on borrowings was the result of decreases in both the average balance and average cost of borrowings. During the six months ended June 30, 2021, $56.5 million of Federal Home Loan Bank of New York ("FHLB") borrowings were prepaid, resulting in a $742,000 loss on early extinguishment of debt included in non-interest expense. The Company has significantly reduced the cost of borrowings over the period by prepaying high rate borrowings. The decrease in interest income for the six months ended June30, 2021 was largely due to decreases in the average yields on interest-earning assets. Prepayment penalties, which are included in interest income on loans, totaled $2.0 million for the six months ended June30, 2021, compared to $1.6 million for the six months ended June30, 2020.

The average yield on loans for the six months ended June30, 2021 decreased 26 basis points to 3.79%, as compared to 4.05% for the six months ended June30, 2020, while the average yield on securities for the six months ended June30, 2021 decreased 66 basis points to 1.98%, as compared to 2.64% for the six months ended June30, 2020. The average yield on other interest-earning assets for the six months ended June30, 2021 decreased 299 basis points to 0.82%, as compared to 3.81% for the six months ended June30, 2020, as there were substantially higher cash balances in low yielding bank accounts for the six months ended June 30, 2021. Decreases in the average yields on these portfolios for the six months ended June30, 2021 were influenced by the lower interest rate environment as the Federal Reserve reduced interest rates in early 2020 in response to the COVID-19 pandemic.

Total interest expense was $20.7 million for the six months ended June30, 2021, a decrease of $23.0 million, or 52.6%, from $43.7 million for the six months ended June30, 2020. The decrease in interest expense was primarily attributable to a 68 basis point decrease in the average cost of interest-bearing deposits which was partially offset by the impact of the increase in the average balance of deposits. The decrease in the cost of deposits was driven by both an inflow of lower cost deposits and the repricing of existing deposits at lower interest rates. Interest on borrowings decreased $8.0 million due to a decrease in the average balances of FHLB advances and subordinated notes, coupled with a 80 basis point decrease in the cost of total borrowings. During the six months ended June 30, 2021, we prepaid $53.5 million of FHLB borrowings with an average rate of 2.64% and original contractual maturities through March 2022, and a $3.0 million FHLB borrowing acquired in our acquisition of Roselle Bank with a rate of 2.74% and an original contractual maturity of March 2024. The prepayments were funded by excess cash liquidity. The transactions were accounted for as early debt extinguishments resulting in a loss of $742,000.

The Company's net interest margin for the six months ended June30, 2021 increased 10 basis points to 2.79%, when compared to 2.69% for the six months ended June30, 2020. The weighted average yield on interest-earning assets decreased 51 basis points to 3.29% for the six months ended June30, 2021 as compared to 3.80% for the six months ended June30, 2020. Excluding the impact of PPP loan deferred fee acceleration for the six months ended June 30, 2021, the net interest margin would have been 2.64%. The average cost of interest-bearing liabilities decreased 74 basis points to 0.67% for the six months ended June30, 2021 as compared to 1.41% for the six months ended June30, 2020. The decreases in yields and costs for the six months ended June30, 2021 were largely driven by a continued lower interest rate environment. The net interest margin increased for the six months ended June30, 2021 as the cost of interest-bearing liabilities continued to reprice lower more rapidly than the yields on interest-earning assets.

The reversal of provision for loan loss recorded for the six months ended June30, 2021 was $3.0 million, a decrease of $18.3 million, from $15.3 million of provision for loan loss expense recorded for the six months ended June30, 2020. The comparatively lower level of provision for the 2021 period was primarily attributable to a decrease in the average balance of loans, a decrease in loan loss rates, a decrease in the balances of delinquent and non-accrual loans, and the consideration of the improving economic environment.

Non-interest income was $23.0 million for the six months ended June30, 2021, an increase of $9.6 million, or 71.6%, from $13.4 million for the six months ended June30, 2020. The increase was primarily attributable to an increase in income from the gain on the sale of loans of $9.1 million and an increase in other non-interest income of $1.7 million, partially offset by the decrease in the fair value of equity securities of $1.4 million. The increase in the gain on sale of loans was primarily attributable to a gain of $7.7 million resulting from the sale of $237.0 million of commercial business loans granted as part of the Small Business Administration PPP. Other non-interest income included increases of $755,000 from debit card transactions and $651,000 from swap transactions.

Non-interest expense was $75.3 million for the six months ended June30, 2021, a decrease of $638,000, or 0.8%, from $76.0 million for the six months ended June30, 2020. The decrease was primarily attributable to a decrease in compensation and employee benefits expense of $2.7 million, and a decrease in merger-related expenses of $1.4 million, partially offset by an increase in professional fees of $992,000, an increase in data processing and software expenses of $789,000, and the loss on the extinguishment of debt of $742,000. The decrease in compensation and employee benefits was primarily attributable to an increase in amounts deferred as direct loan origination costs as a result of an increase in originations. Merger-related expenses recorded in the 2020 period related to the acquisitions of Stewardship Financial Corporation and Roselle Bank. Professional fees included an increase in consulting expenses related to information technology, and the increase in data processing and software expenses was attributable to the purchase and implementation of several digital banking and other Fintech solutions, as well as the amortization of software costs related to a digital small business lending solution. As noted above, during the six months ended June 30, 2021, the Company utilized excess liquidity to prepay long-term borrowings which resulted in a $742,000 loss on the early extinguishment of debt.

Income tax expense was $17.8 million for the six months ended June30, 2021, an increase of $10.9 million, as compared to $6.9 million for the six months ended June30, 2020, mainly due to an increase in pre-tax income, and to a lesser extent, an increase in the Company's effective state income tax rate. The Company's effective tax rate was 27.2% and 23.9% for the six months ended June30, 2021 and 2020, respectively.

Balance Sheet Summary

Total assets increased $268.9 million, or 3.1%, to $9.1 billion at June30, 2021 from $8.8 billion at December31, 2020. The increase in total assets was primarily attributable to increases in debt securities available for sale of $325.5 million, debt securities held to maturity of $139.4 million, and other assets of $7.2 million, partially offset by decreases of $35.7 million in cash and cash equivalents, and $159.2 million in loans receivable, net.

Cash and cash equivalents decreased $35.7 million, or 8.4%, to $387.2 million at June30, 2021 from $423.0 million at December31, 2020. The decrease was primarily attributable to $576.6 million in purchases of debt securities available for sale and held to maturity, $58.5 million in repurchases of common stock under our stock repurchase program, and $56.5 million in prepayments of borrowings, partially offset by an increase in repayments on loans, repayments on mortgage-backed securities, and growth in deposits.

Debt securities available for sale increased $325.5 million, or 24.7%, to $1.6 billion at June30, 2021 from $1.3 billion at December31, 2020. The increase was attributable to purchases of $416.1 million of securities primarily consisting of U.S. government and agency obligations, mortgage-backed securities and municipal securities, and $99.6 million in purchases of guarantor swaps with Freddie Mac, partially offset by maturities, calls and sales of $9.9 million in U.S. government and agency obligations, corporate debt and municipal securities, and repayments of $164.4 million. The gross unrealized gain (loss) on debt securities available for sale decreased by $13.5 million during the six months ended June30, 2021.

Debt securities held to maturity increased $139.4 million, or 53.1%, to $402.1 million at June30, 2021 from $262.7 million at December31, 2020. The increase was primarily attributable to purchases of $160.5 million of securities primarily consisting of U.S. agency obligations and mortgage-backed securities, partially offset by the call of a $5.0 million U.S. agency obligation and repayments of $15.5 million.

Loans receivable, net, decreased $159.2 million, or 2.6%, to $5.9 billion at June30, 2021 from $6.1 billion at December31, 2020. Multi-family and commercial real estate loans increased $297.1 million, partially offset by decreases in commercial business loans, one-to-four family real estate loans, construction loans, and home equity loans and advances of $281.2 million, $72.4 million, $67.6 million and $43.1 million, respectively. The increase in multi-family and commercial real estate loans included the purchase of $71.6 million of loan participations in June 2021. The decrease in commercial business loans was mainly due to the sale of $237.0 million in loans granted and $255.7 in forgiven PPP loans as part of the Small Business Administration PPP. The allowance for loan loss balance decreased $4.8 million to $69.9 million at June30, 2021 from $74.7 million at December31, 2020, which was primarily attributable to a decrease in loan loss rates, and a decrease in the balance of delinquent and non-accrual loans, as well as the consideration of improving economic conditions. The current allowance for loan losses was calculated utilizing the existing incurred loss methodology. The Company elected to defer the adoption of the Current Expected Credit Loss ("CECL") methodology as was originally permitted by the CARES Act and the Consolidated Appropriations Act, 2021, which, when enacted, extended certain provisions of the CARES Act. The Company expects to adopt CECL on January 1, 2022.

Other assets increased $7.2 million, or 3.4%, to $217.0 million at June30, 2021 from $209.9 million at December31, 2020. The increase in other assets consisted of an increase of $36.2 million in the Company's pension plan balance based on a revaluation of the plan, partially offset by a decrease of $13.3 million in the collateral balance related to our swap agreement obligations, a decrease of $6.8 million in interest rate swap assets, a decrease of $6.3 million in federal and state income tax receivables, and a decrease of $2.5 million in deferred taxes.

Total liabilities increased $247.1 million, or 3.2%, to $8.0 billion at June30, 2021 from $7.8 billion at December31, 2020. The increase was primarily attributable to an increase in total deposits of $300.7 million, or 4.4%, partially offset by a decrease in borrowings of $49.7 million, or 6.2%, and a decrease in accrued expenses and other liabilities of $7.4 million, or 4.2%. The increase in total deposits consisted of increases in non-interest-bearing and interest-bearing demand deposits of $158.6 million and $166.7 million, respectively, and money market accounts and savings and club deposits of $57.4 million and $61.2 million, respectively, partially offset by a decrease in certificates of deposit accounts of $143.2 million. The decrease in borrowings was primarily driven by the prepayment of $56.5 million of FHLB borrowings. The decrease in accrued expenses and other liabilities consisted of a $14.0 million decrease in interest rate swap liabilities, partially offset by a $7.6 million increase in balance of outstanding checks.

Total stockholders equity increased $21.8 million, or 2.2%, with a balance of $1.0 billion at both June30, 2021 and December31, 2020. The increase was primarily attributable to net income of $47.7 million, and a change in the pension obligation of $32.2 million due a revaluation of the plan, partially offset by the repurchase of 3,470,040 shares of common stock totaling $58.5 million under our stock repurchase program.

Asset Quality

The Company's non-performing loans at June30, 2021 totaled $4.3 million, or 0.07% of total gross loans, as compared to $8.2 million, or 0.13% of total gross loans, at December31, 2020. The $3.8 million decrease in non-performing loans was primarily attributable to decreases of $1.8 million in non-performing one-to-four family real estate loans, $2.6 million in non-performing commercial business loans, and $43,000 in non-performing home equity loans and advances, partially offset by an increase of $560,000 in non-performing multifamily and commercial real estate loans. The decrease in non-performing one-to-four family real estate loans was due to a decrease in the number of loans from 13 non-performing loans at December 31, 2020 to six non-performing loans at June30, 2021. The decrease in non-performing commercial business loans was mainly due to charge-offs totaling $1.7 million. The decrease in non-performing home equity loans and advances was due to a decrease in the number of loans from 12 non-performing loans at December 31, 2020 to eight non-performing loans at June30, 2021. Non-performing assets as a percentage of total assets totaled 0.05% at June30, 2021 as compared to 0.09% at December31, 2020.

For the quarter ended June30, 2021, net charge-offs totaled $244,000 as compared to $2.9 million for the quarter ended June30, 2020. For the six months ended June30, 2021, net charge-offs totaled $1.7 million as compared to $3.0 million for the six months ended June30, 2020.

The Company's allowance for loan losses was $69.9 million, or 1.17% of total loans, at June30, 2021, compared to $74.7 million, or 1.21% of total loans, at December31, 2020. The decrease in the allowance for loan losses was primarily attributable to a decrease in loan loss rates, and a decrease in the balance of delinquent and non-accrual loans, as well as the consideration of improving economic conditions.

COVID-19

Through June30, 2021, the Company granted commercial loan modification requests with respect to multifamily, commercial, and construction real estate loans with current balances of $705.8 million and consumer-related loan modification requests with respect to one-to-four family real estate loans and home equity loans and advances with current balances of $142.4 million to 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. The Consolidated Appropriations Act, 2021, which was enacted in late December 2020, extended certain provisions of the CARES Act, including provisions permitting loan deferral extension requests to not be treated as troubled debt restructurings. 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:

Percent Percent Percent of of of Balance at Total Balance at Total Balance at Total December Loans at June 30, Loans July 22, Loans 31, December 2021 at 2021 at July 2020 31, June 22, 2020 30, 2021 2021 (Dollars in thousands)Real estate loans:One-to-four $ 6,770 0.35 % $ 2,459 0.13 % $ 2,105 0.11 %familyMultifamilyand 71,348 2.53 55,617 1.79 27,173 0.88 commercialConstruction 3,312 1.01 3,337 1.28 2,537 0.98 Commercialbusiness 3,397 0.45 2,301 0.49 1,457 0.31 loansHome equityloans and 314 0.10 57 0.02 57 0.02 advancesTotal loans $ 85,141 1.38 % $ 63,771 1.06 % $ 33,329 0.56 %

At June30, 2021, $37.9 million of the commercial loans in the above table are remitting partial payments and $61.3 million were granted an additional deferral period.

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 61 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, including the successful consummation of its pending acquisition of Freehold Bank, 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 Current Reports on Form 8-K filed with the Securities and Exchange Commission (the SEC), which is available at the SECs 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 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 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 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, 2021 2020Assets (Unaudited) Cash and due from banks $ 387,034 $ 422,787 Short-term investments 197 170 Total cash and cash equivalents 387,231 422,957 Debt securities available for sale, at fair value 1,642,413 1,316,952 Debt securities held to maturity, at amortizedcost (fair value of $415,033, and $277,091 at 402,145 262,720 June30, 2021 and December 31, 2020,respectively)Equity securities, at fair value 4,053 5,418 Federal Home Loan Bank stock 40,922 43,759 Loans held-for-sale, at fair value ? 4,146 Loans receivable 6,017,802 6,181,770 Less: allowance for loan losses 69,898 74,676 Loans receivable, net 5,947,904 6,107,094 Accrued interest receivable 28,296 29,456 Office properties and equipment, net 75,450 75,974 Bank-owned life insurance 235,790 232,824 Goodwill and intangible assets 86,189 87,384 Other assets 217,042 209,852 Total assets $ 9,067,435 $ 8,798,536 Liabilities and Stockholders' Equity Liabilities: Deposits $ 7,079,276 $ 6,778,624 Borrowings 749,683 799,364 Advance payments by borrowers for taxes and 36,155 32,570 insuranceAccrued expenses and other liabilities 169,275 176,691 Total liabilities 8,034,389 7,787,249 Stockholders' equity: Total stockholders' equity 1,033,046 1,011,287 Total liabilities and stockholders' equity $ 9,067,435 $ 8,798,536

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, 2021 2020 2021 2020Interest income: (Unaudited) (Unaudited)Loans receivable $ 57,683 $ 65,235 $ 116,451 $ 129,253 Debt securitiesavailable for 7,521 7,292 13,899 14,620 sale and equitysecuritiesDebt securities 2,151 1,993 3,903 4,058 held to maturityFederal funds andinterest-earning 39 27 143 216 depositsFederal Home LoanBank stock 487 1,040 1,122 2,130 dividendsTotal interest 67,881 75,587 135,518 150,277 incomeInterest expense: Deposits 7,855 14,911 16,730 31,743 Borrowings 1,946 4,805 3,968 11,961 Total interest 9,801 19,716 20,698 43,704 expense Net interest 58,080 55,871 114,820 106,573 income (Reversal of)provision for (1,761 ) 5,736 (3,041 ) 15,304 loan losses Net interestincome after(reversal of) 59,841 50,135 117,861 91,269 provision forloan losses Non-interest income:Demand deposit 858 620 1,696 1,919 account feesBank-owned life 1,497 1,519 2,971 2,936 insuranceTitle insurance 1,503 996 3,123 2,227 feesLoan fees and 714 533 1,365 1,261 service charges(Loss) gain onsecurities (281 ) 0 (281 ) 370 transactionsChange in fairvalue of equity (778 ) 643 (1,366 ) 59 securitiesGain on sale of 8,524 795 10,674 1,549 loansOthernon-interest 2,354 1,902 4,804 3,078 incomeTotalnon-interest 14,391 7,008 22,986 13,399 income Non-interest expense:Compensation and 23,601 25,218 46,994 49,683 employee benefitsOccupancy 4,814 4,701 10,066 9,496 Federal depositinsurance 567 626 1,147 736 premiumsAdvertising 663 447 1,198 1,591 Professional fees 1,651 1,083 3,441 2,449 Data processingand software 2,612 2,364 5,383 4,594 expensesMerger-related 75 432 75 1,507 expensesLoss onextinguishment of ? ? 742 ? debtOthernon-interest 3,627 2,572 6,267 5,895 expenseTotalnon-interest 37,610 37,443 75,313 75,951 expense Income beforeincome tax 36,622 19,700 65,534 28,717 expense Income tax 9,934 4,603 17,801 6,855 expense Net income $ 26,688 $ 15,097 $ 47,733 $ 21,862 Earnings pershare-basic and $ 0.26 $ 0.14 $ 0.45 $ 0.20 dilutedWeighted averageshares 104,537,656 111,102,306 105,253,661 109,770,239 outstanding-basicand diluted

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESAverage Balances/Yields

For the Three Months Ended June 30, 2021 2020 Average Interest Yield Average Interest Yield Balance and / Cost Balance and / Cost Dividends Dividends (Dollars in thousands)Interest-earnings assets:Loans $ 6,224,035 $ 57,683 3.72 % $ 6,629,428 $ 65,235 3.96 %Securities 2,006,842 9,672 1.93 % 1,458,442 9,285 2.56 %Otherinterest-earning 170,763 526 1.24 % 145,677 1,067 2.95 %assetsTotalinterest-earning 8,401,640 67,881 3.24 % 8,233,547 75,587 3.69 %assetsNon-interest-earning 611,674 652,255 assetsTotal assets $ 9,013,314 $ 8,885,802 Interest-bearing liabilities:Interest-bearing $ 2,333,638 $ 2,092 0.36 % $ 1,862,312 $ 3,014 0.65 %demandMoney market 636,964 533 0.34 % 485,675 644 0.53 %accountsSavings and club 745,827 205 0.11 % 633,118 279 0.18 %depositsCertificates of 1,844,425 5,025 1.09 % 2,217,765 10,974 1.99 %depositTotalinterest-bearing 5,560,854 7,855 0.57 % 5,198,870 14,911 1.15 %depositsFHLB advances 723,553 1,885 1.04 % 1,133,975 4,565 1.62 %Subordinated notes ? ? ? % 17,438 169 3.90 %Junior subordinated 7,455 61 3.28 % 7,582 67 3.55 %debenturesOther borrowings ? ? ? % 7,692 4 0.21 %Total borrowings 731,008 1,946 1.07 % 1,166,687 4,805 1.66 %Totalinterest-bearing 6,291,862 $ 9,801 0.62 % 6,365,557 $ 19,716 1.25 %liabilities Non-interest-bearing liabilities:Non-interest-bearing 1,491,084 1,280,181 depositsOthernon-interest-bearing 223,021 209,199 liabilitiesTotal liabilities 8,005,967 7,854,937 Total stockholders' 1,007,347 1,030,865 equityTotal liabilitiesand stockholders' $ 9,013,314 $ 8,885,802 equity Net interest income $ 58,080 $ 55,871 Interest rate spread 2.62 % 2.44 %Net interest-earning $ 2,109,778 $ 1,867,990 assetsNet interest margin 2.77 % 2.73 %Ratio ofinterest-earningassets to 133.53 % 129.35 % interest-bearingliabilities

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESAverage Balances/Yields

For the Six Months Ended June 30, 2021 2020 Average Interest Yield Average Interest Yield Balance and / Cost Balance and / Cost Dividends Dividends (Dollars in thousands)Interest-earnings assets:Loans $ 6,192,893 $ 116,451 3.79 % $ 6,413,943 $ 129,253 4.05 %Securities 1,810,317 17,802 1.98 % 1,422,649 18,678 2.64 %Otherinterest-earning 309,401 1,265 0.82 % 123,686 2,346 3.81 %assetsTotalinterest-earning 8,312,611 135,518 3.29 % 7,960,278 150,277 3.80 %assetsNon-interest-earning 617,780 608,023 assetsTotal assets $ 8,930,391 $ 8,568,301 Interest-bearing liabilities:Interest-bearing $ 2,293,979 $ 4,231 0.37 % $ 1,809,100 $ 7,686 0.85 %demandMoney market 615,101 1,051 0.34 % 452,453 1,715 0.76 %accountsSavings and club 726,846 399 0.11 % 588,368 494 0.17 %depositsCertificates of 1,882,463 11,049 1.18 % 2,116,873 21,848 2.08 %depositTotalinterest-bearing 5,518,389 16,730 0.61 % 4,966,794 31,743 1.29 %depositsFHLB advances 733,369 3,846 1.06 % 1,250,119 11,456 1.84 %Subordinated notes ? ? ? % 17,285 336 3.91 %Junior subordinated 7,518 122 3.27 % 7,515 165 4.42 %debenturesOther borrowings ? ? ? % 3,846 4 0.21 %Total borrowings 740,887 3,968 1.08 % 1,278,765 11,961 1.88 %Totalinterest-bearing 6,259,276 $ 20,698 0.67 % 6,245,559 $ 43,704 1.41 %liabilities Non-interest-bearing liabilities:Non-interest-bearing 1,449,759 1,120,061 depositsOthernon-interest-bearing 215,415 197,295 liabilitiesTotal liabilities 7,924,450 7,562,915 Total stockholders' 1,005,941 1,005,386 equityTotal liabilitiesand stockholders' $ 8,930,391 $ 8,568,301 equity Net interest income $ 114,820 $ 106,573 Interest rate spread 2.62 % 2.39 %Net interest-earning $ 2,053,335 $ 1,714,719 assetsNet interest margin 2.79 % 2.69 %Ratio ofinterest-earningassets to 132.80 % 127.46 % 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, 2021 2021 31, 30, 2020 2020 2020Yield oninterest-earning assets:Loans 3.72 % 3.87 % 3.97 % 3.85 % 3.96 %Securities 1.93 2.05 2.30 2.38 2.56 Otherinterest-earning 1.24 0.67 0.68 1.26 2.95 assetsTotalinterest-earning 3.24 % 3.34 % 3.47 % 3.50 % 3.69 %assets Cost ofinterest-bearing liabilities:Totalinterest-bearing 0.57 % 0.66 % 0.78 % 0.96 % 1.15 %depositsTotal borrowings 1.07 1.09 1.32 1.41 1.66 Totalinterest-bearing 0.62 % 0.71 % 0.86 % 1.04 % 1.25 %liabilities Interest rate 2.62 % 2.63 % 2.61 % 2.46 % 2.44 %spreadNet interest 2.77 % 2.80 % 2.81 % 2.70 % 2.73 %margin Ratio ofinterest-earningassets to 133.53 % 132.06 % 130.35 % 130.13 % 129.35 %interest-bearingliabilities

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESSelected Financial Highlights

For the Three Months For the Six Months Ended Ended June 30, June 30, 2021 2020 2021 2020SELECTED FINANCIAL RATIOS (1): Return on average assets 1.19 % 0.68 % 1.08 % 0.51 %Core return on average assets 1.22 % 0.70 % 1.11 % 0.55 %Return on average equity 10.63 % 5.89 % 9.57 % 4.37 %Core return on average equity 10.89 % 6.03 % 9.80 % 4.72 %Core return on average tangible 11.90 % 6.64 % 10.73 % 5.14 %equityInterest rate spread 2.62 % 2.44 % 2.62 % 2.39 %Net interest margin 2.77 % 2.73 % 2.79 % 2.69 %Non-interest income to average 0.64 % 0.32 % 0.52 % 0.31 %assetsNon-interest expense to average 1.67 % 1.69 % 1.70 % 1.78 %assetsEfficiency ratio 51.90 % 59.55 % 54.65 % 63.31 %Core efficiency ratio 50.82 % 58.86 % 53.54 % 61.26 %Average interest-earning assets toaverage interest-bearing 133.53 % 129.35 % 132.80 % 127.46 %liabilitiesNet charge-offs to average 0.02 % 0.18 % 0.06 % 0.09 %outstanding loans (1) Ratios for the three and six months are annualized when appropriate.

CAPITAL RATIOS: June 30, December 31, 2021 2020Company: Total capital (to risk-weighted assets) 17.87 % 18.54 %Tier 1 capital (to risk-weighted assets) 16.69 % 17.29 %Common equity tier 1 capital (to risk-weighted assets) 16.57 % 17.17 %Tier 1 capital (to adjusted total assets) 11.25 % 11.38 % Bank: Total capital (to risk-weighted assets) 16.41 % 16.05 %Tier 1 capital (to risk-weighted assets) 15.23 % 14.80 %Common equity tier 1 capital (to risk-weighted assets) 15.23 % 14.80 %Tier 1 capital (to adjusted total assets) 10.23 % 9.72 %

ASSET QUALITY: June 30, December 31, 2021 2020 (Dollars in thousands)Non-accrual loans $ 4,314 $ 8,156 90+ and still accruing ? ? Non-performing loans 4,314 8,156 Real estate owned ? ? Total non-performing assets $ 4,314 $ 8,156 Non-performing loans to total gross loans 0.07 % 0.13 %Non-performing assets to total assets 0.05 % 0.09 %Allowance for loan losses $ 69,898 $ 74,676 Allowance for loan losses to total non-performing loans 1,620.26 % 915.60 %Allowance for loan losses to gross loans 1.17 % 1.21 %Allowance for loan losses to gross loans, excluding SBA 1.18 % 1.28 %PPP loansUnamortized purchase accounting fair value credit marks $ 5,228 $ 6,486 on acquired loans

LOAN DATA: June 30, December 31, 2021 2020Real estate loans: (In thousands)One-to-four family $ 1,867,924 $ 1,940,327 Multifamily and commercial 3,115,054 2,817,965 Construction 261,159 328,711 Commercial business loans * 471,700 752,870 Consumer loans: Home equity loans and advances 278,078 321,177 Other consumer loans 1,158 1,497 Total gross loans 5,995,073 6,162,547 Purchased credit-impaired ("PCI") loans 3,116 6,345 Net deferred loan costs, fees and purchased 19,613 12,878 premiums and discounts **Allowance for loan losses (69,898 ) (74,676 )Loans receivable, net $ 5,947,904 $ 6,107,094 * At June 30, 2021 and December 31, 2020 includes SBA PPP loans totaling $91.1million and $344.4 million, respectively.** At June 30, 2021 and December 31, 2020 includes SBA PPP net deferred loanfees totaling $2.3 million and $6.6 million, respectively.

Reconciliation of GAAP to Non-GAAP Financial Measures Book and Tangible Book Value per Share June 30, December 31, 2021 2020 Total stockholders' equity $ 1,033,046 $ 1,011,287 Less: goodwill (79,220 ) (80,285 )Less: core deposit intangible (5,677 ) (6,197 )Total tangible stockholders' equity $ 948,149 $ 924,805 Shares outstanding 107,506,075 110,939,753 Book value per share $ 9.61 $ 9.12 Tangible book value per share $ 8.82 $ 8.34

Reconciliation of Core Net Income Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020 (In thousands) Net income $ 26,688 $ 15,097 $ 47,733 $ 21,862 Add/Less: loss (gain) onsecurities transactions, net 205 ? 205 (279 )of taxAdd: merger-related expenses, 55 366 55 1,184 net of taxAdd: loss on extinguishment ? ? 540 ? of debt, net of taxAdd: branch closure expense, 420 ? 420 878 net of taxCore net income $ 27,368 $ 15,463 $ 48,953 $ 23,645

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

Return onAverage Assets Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in thousands) Net income $ 26,688 $ 15,097 $ 47,733 $ 21,862 Average $ 9,013,314 $ 8,885,802 $ 8,930,391 $ 8,568,301 assets Return onaverage 1.19 % 0.68 % 1.08 % 0.51 %assets Core net $ 27,368 $ 15,463 $ 48,953 $ 23,645 income Core returnon average 1.22 % 0.70 % 1.11 % 0.55 %assets

Return on Average Equity Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in thousands) Total averagestockholders' $ 1,007,347 $ 1,030,865 $ 1,005,941 $ 1,005,386 equityAdd/Less: loss(gain) onsecurities 205 ? 205 (279 ) transactions,net of taxAdd:merger-related 55 366 55 1,184 expenses, netof taxAdd: loss onextinguishment ? ? 540 ? of debt, net oftaxAdd: branchclosure 420 ? 420 878 expense, net oftaxCore averagestockholders' $ 1,008,027 $ 1,031,231 $ 1,007,161 $ 1,007,169 equity Return on 10.63 % 5.89 % 9.57 % 4.37 %average equity Core return oncore average 10.89 % 6.03 % 9.80 % 4.72 %equity

Return on Average Tangible Equity Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Total averagestockholders' $ 1,007,347 $ 1,030,865 $ 1,005,941 $ 1,005,386 equityLess: average (79,220 ) (86,684 ) (79,561 ) (73,724 ) goodwillLess: averagecore deposit (5,677 ) (6,902 ) (5,969 ) (7,038 ) intangibleTotal averagetangible $ 922,450 $ 937,279 $ 920,411 $ 924,624 stockholders'equity Core returnon average 11.90 % 6.64 % 10.73 % 5.14 %tangibleequity

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

Efficiency Ratios Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in thousands) Net interest income $ 58,080 $ 55,871 $ 114,820 $ 106,573 Non-interest income 14,391 7,008 22,986 13,399 Total income $ 72,471 $ 62,879 $ 137,806 $ 119,972 Non-interest $ 37,610 $ 37,443 $ 75,313 $ 75,951 expense Efficiency ratio 51.90 % 59.55 % 54.65 % 63.31 % Non-interest income $ 14,391 $ 7,008 $ 22,986 $ 13,399 Add/Less: loss(gain) on 281 ? 281 (370 ) securitiestransactionsCore non-interest $ 14,672 $ 7,008 $ 23,267 $ 13,029 income Non-interest $ 37,610 $ 37,443 $ 75,313 $ 75,951 expenseLess:merger-related (75 ) (432 ) (75 ) (1,507 ) expensesLess: loss onextinguishment of ? ? (742 ) ? debtLess: branch (561 ) ? (561 ) (1,170 ) closure expenseCore non-interest $ 36,974 $ 37,011 $ 73,935 $ 73,274 expense Core efficiency 50.82 % 58.86 % 53.54 % 61.26 %ratio