GlobeNewswire Inc | Jan 25, 2022 04:05PM EST

January 25, 2022

FAIR LAWN, N. J., Jan. 25, 2022 (GLOBE NEWSWIRE) -- Columbia Financial, Inc. (the Company) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank ("Columbia") and Freehold Bank ("Freehold"), reported net income of $23.3 million, or $0.23 per basic and diluted share, for the quarter ended December31, 2021, as compared to net income of $20.7 million, or $0.19 per basic and diluted share, for the quarter ended December31, 2020. Earnings for the quarter ended December31, 2021 reflected higher net interest income and a lower provision for loan losses, partially offset by lower non-interest income, higher non-interest expense and higher income tax expense. The Company successfully completed its acquisition of Freehold MHC, Freehold Bancorp and Freehold Bank on December 1, 2021. Freehold Bank will continue to operate as a wholly owned subsidiary of the Company for at least two years.

For the year ended December31, 2021, the Company reported net income of $92.0 million, or $0.88 per basic and diluted share, as compared to net income of $57.6 million, or $0.52 per basic and diluted share, for the year ended December31, 2020. Earnings for the year ended December31, 2021 reflected higher net interest income, a lower provision for loan losses, higher non-interest income and lower non-interest expense, partially offset by higher income tax expense.

Thomas J. Kemly, President and Chief Executive Officer commented: "During 2021, the Company achieved outstanding core profitability performance as our net income increased $34.4 million, or 59.8%, over 2020, and we increased our earnings per share by 69.2% to $0.88 for the year ended December31, 2021, from $0.52 for year ended December 31, 2020. On December 1, 2021, we successfully completed our acquisition of Freehold Bank and announced our pending acquisition of RSI Bank. This past year has been full of unique challenges resulting from the continued disruptions from the pandemic, and we supported community recovery efforts by participating in the Paycheck Protection Program ("PPP") as well as providing loan deferral relief for both our residential and commercial loan clients. We remained focused in our commitment to personalized service, and continued to deliver results for our Company and our clients. We invested in new technological initiatives to improve the customer experience, increased product offerings, increased revenue and improved efficiency, all which have contributed to enhance the strength of our Company."

Results of Operations for the Quarters Ended December31, 2021 and December31, 2020

Net income of $23.3 million was recorded for the quarter ended December31, 2021, an increase of $2.7 million, or 13.0%, compared to net income of $20.7 million for the quarter ended December31, 2020. The increase in net income was primarily attributable to a $2.3 million increase in net interest income, and an $8.0 million decrease in provision for loan losses, partially offset by a $3.0 million decrease in non-interest income, a $2.6 million increase in non-interest expense, and a $2.1 million increase in income tax expense.

Net interest income was $61.0 million for the quarter ended December31, 2021, an increase of $2.3 million, or 3.9%, from $58.7 million for the quarter ended December31, 2020. The increase in net interest income was primarily attributable to a $6.2 million decrease in interest expense, resulting from a decrease in both interest expense on deposits and interest expense on borrowings, partially offset by a $3.9 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 reduced rates as a result of a sustained 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 quarter ended December31, 2021, $439.0 million of Federal Home Loan Bank of New York ("FHLB") borrowings were prepaid. The decrease in interest income for the quarter ended December31, 2021 was largely due to decreases in the average yields on loans and securities. Prepayment penalties, which are included in interest income on loans, totaled $2.2 million for the quarter ended December31, 2021, compared to $1.8 million for the quarter ended December31, 2020.

The average yield on loans for the quarter ended December31, 2021 decreased 31 basis points to 3.66%, as compared to 3.97% for the quarter ended December31, 2020, while the average yield on securities for the quarter ended December31, 2021 decreased 29 basis points to 2.01%, as compared to 2.30% for the quarter ended December31, 2020. Decreases in the average yields on these portfolios for the quarter ended December31, 2021 were influenced by the sustained lower interest rate environment. The Federal Reserve reduced interest rates by 150 basis points in March 2020 in response to the COVID-19 pandemic, and rates have remained low throughout 2021 with record levels of liquidity injected into the banking system as a result of pandemic related stimulus programs. The average yield on other interest-earning assets for the quarter ended December31, 2021 increased 3 basis points to 0.71%, as compared to 0.68% for the quarter ended December31, 2020, as the average cash balances in lower yielding bank accounts decreased for the quarter ended December31, 2021.

Total interest expense was $7.6 million for the quarter ended December31, 2021, a decrease of $6.2 million, or 44.9%, from $13.8 million for the quarter ended December31, 2020. The decrease in interest expense was primarily attributable to a 39 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 $1.2 million, or 39.3%, due to a decrease in the average balance of borrowings primarily due to the prepayment of FHLB borrowings, coupled with a 24 basis point decrease in the cost of total borrowings.

The Company's net interest margin for the quarter ended December31, 2021 decreased 2 basis points to 2.79%, when compared to 2.81% for the quarter ended December31, 2020. The weighted average yield on interest-earning assets decreased 33 basis points to 3.14% for the quarter ended December31, 2021 as compared to 3.47% for the quarter ended December31, 2020. The average cost of interest-bearing liabilities decreased 39 basis points to 0.47% for the quarter ended December31, 2021 as compared to 0.86% for the quarter ended December31, 2020. The decrease in yields and costs for the quarter ended December31, 2021 were largely driven by a continued lower interest rate environment, coupled with the utilization of excess liquidity to prepay higher costing FHLB borrowings.

The reversal of provision for loan loss recorded for the quarter ended December31, 2021 was $7.4 million, a decrease of $8.0 million, from $627,000 of provision for loan loss expense recorded for the quarter ended December31, 2020. The comparatively lower level of provision for the 2021 period was primarily attributable to 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 $7.0 million for the quarter ended December31, 2021, a decrease of $3.0 million, or 30.0%, from $10.0 million for the quarter ended December31, 2020. The decrease was primarily attributable to a decrease in income from the gain on the sale of loans of $2.0 million and a decrease in the change in fair value of equity securities of $695,000.

Non-interest expense was $43.4 million for the quarter ended December31, 2021, an increase of $2.6 million, or 6.3%, from $40.8 million for the quarter ended December31, 2020. The increase was primarily attributable to an increase in compensation and employee benefits expense of $3.7 million, an increase in merger-related expenses of $692,000, and an increase in the loss on the extinguishment of debt of $1.0 million, partially offset by a decrease in other non-interest expense of $4.0 million. The increase in compensation and employee benefits expense was due to the increase in the number of employees as a result of recent mergers, along with normal annual increases in salaries and bonuses. The increase in merger-related expenses primarily related to the acquisition of Freehold Bank in the 2021 period. During the quarter ended December 31, 2021, the Company utilized excess liquidity to prepay $439.0 million in borrowings and also terminated related derivative contracts, which resulted in a $2.1 million loss on early extinguishment of debt. The decrease in other non-interest expense was primarily attributable to a $3.0 million decrease in pension plan expense.

Income tax expense was $8.6 million for the quarter ended December31, 2021, an increase of $2.1 million, as compared to $6.5 million for the quarter ended December31, 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 27.0% and 24.1% for the quarters ended December31, 2021 and 2020, respectively.

Results of Operations for the Years Ended December31, 2021 and December31, 2020

Net income of $92.0 million was recorded for the year ended December31, 2021, an increase of $34.4 million, or 59.8%, compared to net income of $57.6 million for the year ended December31, 2020. The increase in net income was primarily attributable to a $11.6 million increase in net interest income, a $28.4 million decrease in provision for loan losses, a $7.6 million increase in non-interest income, and a $2.4 million decrease in non-interest expense, partially offset by a $15.5 million increase in income tax expense.

Net interest income was $233.1 million for the year ended December31, 2021, an increase of $11.6 million, or 5.2%, from $221.6 million for the year ended December31, 2020. The increase in net interest income was primarily attributable to a $37.1 million decrease in interest expense, resulting from a decrease in both interest expense on deposits and interest expense on borrowings, partially offset by a $25.6 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 reduced rates 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 year ended December31, 2021, $495.5 million of FHLB borrowings were prepaid. The decrease in interest income for the year ended December31, 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 $5.0 million for the year ended December31, 2021, compared to $3.8 million for the year ended December31, 2020.

The average yield on loans for the year ended December31, 2021 decreased 25 basis points to 3.73%, as compared to 3.98% for the year ended December31, 2020, while the average yield on securities for the year ended December31, 2021 decreased 50 basis points to 1.98%, as compared to 2.48% for the year ended December31, 2020. The average yield on other interest-earning assets for the year ended December31, 2021 decreased 90 basis points to 0.70%, as compared to 1.60% for the year ended December31, 2020, as there were substantially higher cash balances in low yielding bank accounts for the year ended December31, 2021. Decreases in the average yields on these portfolios for the year ended December31, 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 $37.0 million for the year ended December31, 2021, a decrease of $37.1 million, or 50.1%, from $74.1 million for the year ended December31, 2020. The decrease in interest expense was primarily attributable to a 55 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 $11.0 million due to a decrease in the average balance of borrowings, coupled with a 57 basis point decrease in the cost of total borrowings. During the year ended December31, 2021, the Company prepaid $495.5 million of FHLB borrowings with an average rate of 1.35% and original contractual maturities through 2024. The prepayments were funded by excess cash liquidity. The transactions were accounted for as early debt extinguishments resulting in a loss of $1.9 million.

The Company's net interest margin for the year ended December31, 2021 increased 4 basis points to 2.76%, when compared to 2.72% for the year ended December31, 2020. The weighted average yield on interest-earning assets decreased 44 basis points to 3.20% for the year ended December31, 2021 as compared to 3.64% for the year ended December31, 2020. Excluding the impact of the acceleration of PPP loan deferred fee for the year ended December31, 2021, the net interest margin would have been 2.67%. The average cost of interest-bearing liabilities decreased 59 basis points to 0.58% for the year ended December31, 2021 as compared to 1.17% for the year ended December31, 2020. The decreases in yields and costs for the year ended December31, 2021 were largely driven by a continued lower interest rate environment. The net interest margin increased for the year ended December31, 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 year ended December31, 2021 was $10.0 million, a decrease of $28.4 million, from $18.4 million of provision for loan loss expense recorded for the year ended December31, 2020. The comparatively lower level of provision for the 2021 period was primarily attributable to 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 $38.8 million for the year ended December31, 2021, an increase of $7.6 million, or 24.2%, from $31.3 million for the year ended December31, 2020. The increase was primarily attributable to an increase in title insurance fees of $1.1 million, an increase in the income from gains on securities transactions of $1.7 million, an increase in income from the gain on the sale of loans of $5.3 million and an increase in other non-interest income of $2.0 million, partially offset by a decrease in the fair value of equity securities of $2.6 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 includes an increase of $1.0 million from debit card transactions.

Non-interest expense was $155.7 million for the year ended December31, 2021, a decrease of $2.4 million, or 1.5%, from $158.1 million for the year ended December31, 2020. The decrease was primarily attributable to a decrease in merger-related expenses of $1.1 million, and a decrease in other non-interest expense of $5.7 million, partially offset by an increase in professional fees of $1.6 million, an increase in data processing and software expenses of $1.2 million, and an increase in the loss on the extinguishment of debt of $1.7 million. Merger-related expenses recorded for the year ended December 31, 2020 related to the completed acquisitions of Stewardship Financial Corporation and Roselle Bank, while 2021 merger-related expenses primarily related to the acquisition of Freehold Bank, which will be fully integrated into the Company within two years. The decrease in other non-interest expense was primarily attributable to a $6.0 million decrease in pension plan expense. 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 year ended December31, 2021, the Company utilized excess liquidity to prepay $495.5 million in borrowings and also terminated related derivative contracts, which resulted in a $2.9 million loss on the early extinguishment of debt.

Income tax expense was $34.1 million for the year ended December31, 2021, an increase of $15.5 million, as compared to $18.7 million for the year ended December31, 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 24.5% for the year ended December31, 2021 and 2020, respectively.

Balance Sheet Summary

Total assets increased $425.6 million, or 4.8%, to $9.2 billion at December31, 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 $386.9 million, debt securities held to maturity of $167.0 million, loans receivable, net of $190.8 million, and other assets of $39.8 million, partially offset by decreases of $352.0 million in cash and cash equivalents, and $20.6 million in Federal Home Loan Bank stock.

Cash and cash equivalents decreased $352.0 million, or 83.2%, to $71.0 million at December31, 2021 from $423.0 million at December31, 2020. The decrease was primarily attributable to $870.9 million in purchases of debt securities available for sale and held to maturity, $107.8 million in repurchases of common stock under our stock repurchase program, and $495.5 million in prepayments of borrowings, partially offset by an increase in repayments on loans, repayments on mortgage-backed securities, growth in deposits and $20.4 million in cash and cash equivalents acquired in the Freehold acquisition.

Debt securities available for sale increased $386.9 million, or 29.4%, to $1.7 billion at December31, 2021 from $1.3 billion at December31, 2020. The increase was attributable to purchases of $667.0 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 $104.5 million in U.S. government and agency obligations, corporate debt and municipal securities, and repayments of $354.1 million. The gross unrealized gain (loss) on debt securities available for sale decreased by $36.9 million during the year ended December31, 2021.

Debt securities held to maturity increased $167.0 million, or 63.6%, to $429.7 million at December31, 2021 from $262.7 million at December31, 2020. The increase was primarily attributable to purchases of $203.8 million of securities primarily consisting of U.S. agency obligations and mortgage-backed securities, partially offset by calls of $5.1 million in U.S. agency obligations and repayments of $31.0 million.

Federal Home Loan Bank stock decreased $20.6 million, or 47.1%, to $23.1 million at December31, 2021 from $43.8 million at December31, 2020. The decrease was attributable to the redemption of stock as required upon repayment of FHLB borrowings.

Loans receivable, net, increased $190.8 million, or 3.1%, to $6.3 billion at December31, 2021 from $6.1 billion at December31, 2020. One-to-four family real estate loans and multifamily and commercial real estate loans increased $152.0 million and $393.4 million, respectively, partially offset by decreases in commercial business loans, construction loans, and home equity loans and advances of $300.6 million, $33.7 million, and $44.6 million, respectively. Loans receivable, net, for the year ended December 31, 2021 also included $158.9 million of loans which were acquired due to the Freehold acquisition, which mainly consisted of one-to four family and multifamily and commercial real estate loans. The increase in one-to-four family real estate loans included the purchase of $11.8 million in loans from a third party. The increase in multi-family and commercial real estate loans included the purchase of $73.6 million of loan participations. The decrease in commercial business loans was mainly due to the sale of $237.0 million in loans granted and $277.7 million in forgiven PPP loans included as part of the Small Business Administration PPP. The allowance for loan loss balance decreased $12.0 million to $62.7 million at December31, 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 adopted CECL on January 1, 2022.

Other assets increased $39.8 million, or 18.9%, to $249.6 million at December31, 2021 from $209.9 million at December31, 2020. The increase in other assets consisted of an increase of $82.2 million in the Company's pension plan balance, partially offset by a decrease of $24.1 million in the collateral balance related to our swap agreement obligations, and a decrease of $9.9 million in interest rate swap assets. The 2020 period also included net deferred tax assets totaling $7.2 million.

Total liabilities increased $357.8 million, or 4.6%, to $8.1 billion at December31, 2021 from $7.8 billion at December31, 2020. The increase was primarily attributable to an increase in total deposits of $791.6 million, or 11.7%, partially offset by a decrease in borrowings of $422.1 million, or 52.8%, and a decrease in accrued expenses and other liabilities of $15.7 million, or 8.9%. The increase in total deposits consisted of increases in non-interest-bearing and interest-bearing demand deposits of $357.5 million and $410.8 million, respectively, and money market accounts and savings and club deposits of $69.0 million and $134.5 million, respectively, partially offset by a decrease in certificates of deposit accounts of $180.2 million. In addition, the increase in deposits included $210.1 million in deposits assumed in connection with the Freehold acquisition. The decrease in borrowings was primarily driven by the prepayment of $495.5 million of FHLB borrowings. The decrease in accrued expenses and other liabilities primarily consisted of a $24.6 million decrease in interest rate swap liabilities, partially offset by an increase in net deferred tax liabilities of $9.7 million, primarily due to the change in the Company's pension plan balance.

Total stockholders equity increased $67.8 million, or 6.7%, to $1.1 billion at December31, 2021 from $1.0 billion at December31, 2020. The increase was primarily attributable to net income of $92.0 million, an increase in paid in capital of $47.2 million due to the issuance of 2,591,007 shares of Company common stock to Columbia Bank MHC in connection with the Freehold acquisition, and a change in the pension obligation of $41.2 million, partially offset by the repurchase of 6,055,119 shares of common stock totaling $107.8 million under our stock repurchase program.

Asset Quality

The Company's non-performing loans at December31, 2021 totaled $3.9 million, or 0.06% of total gross loans, as compared to $8.2 million, or 0.13% of total gross loans, at December31, 2020. The $4.2 million decrease in non-performing loans was primarily attributable to decreases of $1.2 million in non-performing one-to-four family real estate loans, $2.0 million in non-performing commercial business loans, and $478,000 in non-performing home equity loans and advances. 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 December31, 2021. The decrease in non-performing commercial business loans was due to charge-offs totaling $2.0 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 December31, 2020 to four non-performing loans at December31, 2021. Non-performing assets as a percentage of total assets totaled 0.04% at December31, 2021 as compared to 0.09% at December31, 2020.

For the quarter ended December31, 2021, net charge-offs totaled $245,000 as compared to $2.1 million for the quarter ended December31, 2020. For the year ended December31, 2021, net charge-offs totaled $2.0 million as compared to $5.5 million for the year ended December31, 2020.

The Company's allowance for loan losses was $62.7 million, or 0.99% of total gross loans, at December31, 2021, compared to $74.7 million, or 1.21% of total gross 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.

Stock Repurchase Program

During the year ended December31, 2021, the Company repurchased 6,055,119 shares of common stock at a cost of $107.8 million, or $17.80 per share, and during the quarter ended December31, 2021, the Company repurchased 1,421,579 shares of common stock at a cost of $28.7 million, or $20.18 per share. As of January 22, 2022, there are 4,441,339 shares remaining to be repurchased under this existing program.

COVID-19

At December31, 2021, there were four loans on deferral for $24.3 million, a decrease of $3.7 million, compared to $28.0 million at September 30, 2021, and a decrease of $60.8 million, compared to $85.1 million at December 31, 2020. These short-term loan modifications are treated in accordance with Section 4013 of the CARES Act and are not 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 through January 1, 2022, including provisions permitting loan deferral extension requests to not be treated as troubled debt restructurings.

At December31, 2021, two loans totaling approximately $24.3 million are remitting partial payments.

Merger with RSI

On December 1, 2021, the Company announced the signing of a definitive agreement and plan of merger pursuant to which the Company will acquire RSI Bancorp, M.H.C., RSI Bancorp, Inc. and RSI Bank (collectively, the RSI Entities). As part of the transaction, the Company will issue additional shares of its common stock to Columbia Bank, MHC in an amount equal to the fair value of the RSI Entities as determined by an independent appraiser. Subject to the receipt of all required regulatory approvals and the satisfaction of customary closing conditions, the Company expects to complete its acquisition of the RSI Entities in the second quarter of 2022.

Annual Meeting of Stockholders

On January 25, 2022, the Company also announced that its annual meeting of stockholders will be held on June 22, 2022.

About Columbia Financial, Inc.

The consolidated financial results include the accounts of Columbia Financial, Inc., its wholly-owned subsidiaries Columbia Bank and Freehold Bank, and their wholly-owned subsidiaries. Columbia Financial, Inc. is a Delaware corporation organized as Columbia Bank's mid-tier stock holding company. Columbia Financial, Inc. is a majority-owned subsidiary of Columbia Bank MHC. Columbia Bank is a federally chartered savings bank headquartered in Fair Lawn, New Jersey that operates 62 full-service banking offices. Freehold Bank is a federally chartered savings bank headquartered in Freehold, New Jersey that operates 2 full-service banking offices. Both Banks offer traditional financial services to consumers and businesses in their market areas.

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 RSI 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 those set forth in the Company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all as filed with the Securities and Exchange Commission (the SEC), which are available at the 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".



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

December 31, 2021 2020Assets (Unaudited) Cash and due from banks $ 70,702 $ 422,787Short-term investments 261 170Total cash and cash equivalents 70,963 422,957 Debt securities available for sale, at fair value 1,703,847 1,316,952Debt securities held to maturity, at amortized cost(fair value of $434,789, and$277,091 at December 31, 429,734 262,7202021 and 2020, respectively)Equity securities, at fair value 2,710 5,418Federal Home Loan Bank stock 23,141 43,759Loans held-for-sale, at fair value ? 4,146 Loans receivable 6,360,601 6,181,770Less: allowance for loan losses 62,689 74,676Loans receivable, net 6,297,912 6,107,094 Accrued interest receivable 28,300 29,456Real estate owned ? ?Office properties and equipment, net 78,708 75,974Bank-owned life insurance 247,474 232,824Goodwill and intangible assets 91,693 87,384Other assets 249,615 209,852Total assets $ 9,224,097 $ 8,798,536 Liabilities and Stockholders' Equity Liabilities: Deposits $ 7,570,216 $ 6,778,624Borrowings 377,309 799,364Advance payments by borrowers for taxes and insurance 36,471 32,570Accrued expenses and other liabilities 161,021 176,691Total liabilities 8,145,017 7,787,249 Stockholders' equity: Total stockholders' equity 1,079,081 1,011,287Total liabilities and stockholders' equity $ 9,224,098 $ 8,798,536

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

Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020Interest income: (Unaudited) (Unaudited) Loans receivable $ 56,939 $ 62,725 $ 228,841 $ 255,236Debt securitiesavailable for sale 8,690 6,722 30,211 28,376and equitysecuritiesDebt securities 2,376 2,218 8,632 8,025held to maturityFederal funds andinterest-earning 120 126 430 413depositsFederal Home LoanBank stock 454 710 2,036 3,661dividendsTotal interest 68,579 72,501 270,150 295,711incomeInterest expense: Deposits 5,706 10,677 29,109 55,246Borrowings 1,911 3,148 7,907 18,892Total interest 7,617 13,825 37,016 74,138expense Net interest income 60,962 58,676 233,134 221,573 (Reversal of)provision for loan (7,392 ) 627 (9,953 ) 18,447losses Net interest incomeafter (reversal of) 68,354 58,049 243,087 203,126provision for loanlosses Non-interest income:Demand deposit 1,121 927 3,803 3,633account feesBank-owned life 1,519 2,153 5,994 6,620insuranceTitle insurance 1,534 1,589 6,088 5,034feesLoan fees and 774 593 2,983 2,419service chargesGain on securities 10 ? 2,025 370transactionsChange in fairvalue of equity 17 712 (1,792 ) 767securities(Loss) gain on sale (24 ) 2,022 10,790 5,444of loansOther non-interest 2,020 1,966 8,940 6,983incomeTotal non-interest 6,971 9,962 38,831 31,270income Non-interest expense:Compensation and 28,028 24,338 99,534 100,687employee benefitsOccupancy 5,159 4,851 20,071 19,170Federal deposit 623 551 2,374 1,901insurance premiumsAdvertising 498 566 2,358 2,641Professional fees 2,156 1,681 7,363 5,810Data processing and 3,316 2,865 11,497 10,285software expensesMerger-related 692 ? 822 1,931expensesLoss onextinguishment of 2,109 1,158 2,851 1,158debtOther non-interest 791 4,800 8,867 14,556expenseTotal non-interest 43,372 40,810 155,737 158,139expense Income before 31,953 27,201 126,181 76,257income tax expense Income tax expense 8,619 6,547 34,132 18,654 Net income $ 23,334 $ 20,654 $ 92,049 $ 57,603 Earnings pershare-basic and $ 0.23 $ 0.19 $ 0.88 $ 0.52dilutedWeighted averageshares 103,175,662 108,499,658 104,156,112 109,755,924outstanding-basicWeighted averageshares 103,441,082 108,499,658 104,156,112 109,755,924outstanding-diluted

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESAverage Balances/Yields

For the Three Months Ended December 31, 2021 2020 Average Interest Yield Average Interest Yield Balance and / Cost Balance and / Cost Dividends Dividends (Dollars in thousands)Interest-earnings assets: Loans $ 6,164,058 $ 56,939 3.66 % $ 6,282,151 $ 62,725 3.97 %Securities 2,188,093 11,066 2.01 % 1,546,657 8,940 2.30 %Other interest-earning 322,636 574 0.71 % 489,880 836 0.68 %assetsTotal interest-earning 8,674,787 68,579 3.14 % 8,318,688 72,501 3.47 %assetsNon-interest-earning 690,630 600,226 assetsTotal assets $ 9,365,417 $ 8,918,914 Interest-bearing liabilities:Interest-bearing demand $ 2,549,131 $ 1,942 0.30 % $ 2,142,190 $ 2,373 0.44 %Money market accounts 646,324 363 0.22 % 613,871 603 0.39 %Savings and club deposits 793,670 119 0.06 % 670,737 269 0.16 %Certificates of deposit 1,777,361 3,282 0.73 % 2,004,074 7,432 1.48 %Total interest-bearing 5,766,486 5,706 0.39 % 5,430,872 10,677 0.78 %depositsFHLB advances 690,445 1,824 1.05 % 942,644 3,082 1.30 %Notes payable 2,933 25 3.38 % ? ? ? %Junior subordinated 7,352 62 3.35 % 8,369 66 3.14 %debenturesTotal borrowings 700,730 1,911 1.08 % 951,013 3,148 1.32 %Total interest-bearing 6,467,216 $ 7,617 0.47 % 6,381,885 $ 13,825 0.86 %liabilities Non-interest-bearing liabilities:Non-interest-bearing 1,646,975 1,326,030 depositsOthernon-interest-bearing 198,765 207,409 liabilitiesTotal liabilities 8,312,956 7,915,324 Total stockholders' 1,052,462 1,003,590 equityTotal liabilities and $ 9,365,418 $ 8,918,914 stockholders' equity Net interest income $ 60,962 $ 58,676 Interest rate spread 2.67 % 2.61 %Net interest-earning $ 2,207,571 $ 1,936,803 assetsNet interest margin 2.79 % 2.81 %Ratio of interest-earningassets to 134.13 % 130.35 % interest-bearingliabilities

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESAverage Balances/Yields

For the Years Ended December 31, 2021 2020 Average Interest Yield Average Interest Yield Balance and / Cost Balance and / Cost Dividends Dividends (Dollars in thousands)Interest-earnings assets:Loans $ 6,139,290 $ 228,841 3.73 % $ 6,413,559 $ 255,236 3.98 %Securities 1,965,901 38,843 1.98 % 1,465,093 36,401 2.48 %Otherinterest-earning 350,162 2,466 0.70 % 255,369 4,074 1.60 %assetsTotalinterest-earning 8,455,353 $ 270,150 3.20 % 8,134,021 $ 295,711 3.64 %assetsNon-interest-earning 647,650 610,952 assetsTotal assets $ 9,103,003 $ 8,744,973 Interest-bearing liabilities:Interest-bearing $ 2,395,493 $ 8,177 0.34 % $ 1,945,075 $ 12,666 0.65 %demandMoney market 632,011 1,900 0.30 % 510,189 2,890 0.57 %accountsSavings and club 752,983 731 0.10 % 623,964 1,023 0.16 %depositsCertificates of 1,835,866 18,301 1.00 % 2,088,488 38,667 1.85 %depositTotalinterest-bearing 5,616,353 29,109 0.52 % 5,167,716 55,246 1.07 %depositsFHLB advances 724,790 7,637 1.05 % 1,122,633 18,145 1.62 %Notes payable 740 25 3.38 % ? ? ? %Junior subordinated 7,448 245 3.29 % 8,481 295 3.48 %debenturesOther borrowings ? ? ? % 1,913 4 0.21 %Total borrowings 732,978 7,907 1.08 % 1,144,094 18,892 1.65 %Totalinterest-bearing 6,349,331 $ 37,016 0.58 % 6,311,810 $ 74,138 1.17 %liabilities Non-interest-bearing liabilities:Non-interest-bearing 1,522,322 1,215,352 depositsOthernon-interest-bearing 206,436 201,714 liabilitiesTotal liabilities 8,078,089 7,728,876 Total stockholders' 1,024,914 1,016,097 equityTotal liabilitiesand stockholders' $ 9,103,003 $ 8,744,973 equity Net interest income $ 233,134 $ 221,573 Interest rate spread 2.62 % 2.47 %Net interest-earning $ 2,106,022 $ 1,822,211 assetsNet interest margin 2.76 % 2.72 %Ratio ofinterest-earningassets to 133.17 % 128.87 % interest-bearingliabilities

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

Average Yields/Costs by Quarter December September June 30, March 31, December 31, 30, 2021 2021 31, 2021 2021 2020Yield oninterest-earning assets:Loans 3.66 % 3.66 % 3.72 % 3.87 % 3.97 %Securities 2.01 1.93 1.93 2.05 2.30 Otherinterest-earning 0.71 0.54 1.24 0.67 0.68 assetsTotalinterest-earning 3.14 % 3.08 % 3.24 % 3.34 % 3.47 %assets Cost ofinterest-bearing liabilities:Totalinterest-bearing 0.39 % 0.47 % 0.57 % 0.66 % 0.78 %depositsTotal borrowings 1.08 1.07 1.07 1.09 1.32 Totalinterest-earning 0.47 % 0.54 % 0.62 % 0.71 % 0.86 %liabilities Interest rate 2.67 % 2.54 % 2.62 % 2.63 % 2.61 %spreadNet interest 2.79 % 2.67 % 2.77 % 2.80 % 2.81 %margin Ratio ofinterest-earningassets to 134.13 % 132.89 % 133.53 % 132.06 % 130.35 %interest-bearingliabilities

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIESSelected Financial Highlights

Three Months Years Ended Ended December 31, December 31, 2021 2020 2021 2020SELECTED FINANCIAL RATIOS^ (1): Return on average assets 0.99 % 0.92 % 1.01 % 0.66 %Core return on average assets 1.09 % 0.97 % 1.03 % 0.72 %Return on average equity 8.80 % 8.19 % 8.98 % 5.67 %Core return on average equity 9.68 % 8.60 % 9.16 % 6.17 %Core return on average tangible 10.57 % 9.47 % 10.01 % 6.78 %equityInterest rate spread 2.67 % 2.61 % 2.62 % 2.47 %Net interest margin 2.79 % 2.81 % 2.76 % 2.72 %Non-interest income to average 0.30 % 0.44 % 0.43 % 0.36 %assetsNon-interest expense to average 1.84 % 1.82 % 1.71 % 1.81 %assetsEfficiency ratio 63.85 % 59.46 % 57.26 % 62.54 %Core efficiency ratio 59.73 % 57.42 % 56.13 % 59.65 %Average interest-earning assets toaverage interest-bearing 134.13 % 130.35 % 133.17 % 128.87 %liabilitiesNet charge-offs to average 0.02 % 0.13 % 0.03 % 0.09 %outstanding loans ^(1) Ratios for the three months are annualized when appropriate.

CAPITAL RATIOS: December 31, 2021 ^(1) 2020Company: Total capital (to risk-weighted assets) 17.13 % 18.54 %Tier 1 capital (to risk-weighted assets) 16.15 % 17.29 %Common equity tier 1 capital (to risk-weighted assets) 16.04 % 17.17 %Tier 1 capital (to adjusted total assets) 11.23 % 11.38 % Columbia Bank: Total capital (to risk-weighted assets) 15.39 % 16.05 %Tier 1 capital (to risk-weighted assets) 14.38 % 14.80 %Common equity tier 1 capital (to risk-weighted assets) 14.38 % 14.80 %Tier 1 capital (to adjusted total assets) 9.80 % 9.72 % Freehold Bank: Total capital (to risk-weighted assets) 22.87 % N/ATier 1 capital (to risk-weighted assets) 22.86 % N/ACommon equity tier 1 capital (to risk-weighted assets) 22.86 % N/ATier 1 capital (to adjusted total assets) 13.71 % N/A ^(1) Estimated ratios at December 31, 2021.

ASSET QUALITY: December 31, 2021 2020 (Dollars in thousands)Non-accrual loans $ 3,939 $ 8,156 90+ and still accruing ? ? Non-performing loans 3,939 8,156 Real estate owned ? ? Total non-performing assets $ 3,939 $ 8,156 Non-performing loans to total gross loans 0.06 % 0.13 %Non-performing assets to total assets 0.04 % 0.09 %Allowance for loan losses $ 62,689 $ 74,676 Allowance for loan losses to total non-performing 1,591.50 % 915.60 %loansAllowance for loan losses to gross loans 0.99 % 1.21 %Allowance for loan losses to gross loans, excluding 1.00 % 1.28 %SBA PPP loansUnamortized purchase accounting fair value credit $ 5,019 $ 6,486 marks on acquired loans

LOAN DATA: December 31, 2021 2020Real estate loans: (In thousands)One-to-four family $ 2,092,317 $ 1,940,327 Multifamily and commercial 3,211,344 2,817,965 Construction 295,047 328,711 Commercial business loans * 452,232 752,870 Consumer loans: Home equity loans and advances 276,563 321,177 Other consumer loans 1,428 1,497 Total gross loans 6,328,931 6,162,547 Purchased credit-impaired ("PCI") loans 6,791 6,345 Net deferred loan costs, fees and purchased 24,879 12,878 premiums and discounts **Allowance for loan losses (62,689 ) (74,676 )Loans receivable, net $ 6,297,912 $ 6,107,094 * At December 31, 2021 and 2020 includes SBA PPP loans totaling $45.0 millionand $344.4 million, respectively.** At December 31, 2021 and 2020 includes SBA PPP net deferred loan feestotaling $1.2 million and $6.6 million, respectively.

Reconciliation of GAAP to Non-GAAP Financial Measures Book and Tangible Book Value per Share December 31, 2021 2020 Total stockholders' equity $ 1,079,081 $ 1,011,287 Less: goodwill (85,324 ) (80,285 )Less: core deposit intangible (5,214 ) (6,197 )Total tangible stockholders' equity $ 988,543 $ 924,805 Shares outstanding 107,442,453 110,939,753 Book value per share $ 10.04 $ 9.12 Tangible book value per share $ 9.20 $ 8.34

Reconciliation of Core Net Income Three Months Ended Years Ended December 31, December 31, 2021 2020 2021 2020 (In thousands)Net income $ 23,334 $ 20,654 $ 92,049 $ 57,603 Less: gain on securities (7 ) ? (1,481 ) (279 )transactions, net of taxLess/Add: voluntary earlyretirement plan (credit) ? (18 ) ? 2,255 expenses, net of tax(benefit)Add: merger-related expenses, 879 ? 974 1,500 net of taxAdd: loss on extinguishment 1,539 879 2,079 879 of debt, net of taxAdd: branch closure expense, ? 197 410 1,075 net of taxCore net income $ 25,745 $ 21,712 $ 94,031 $ 63,033

Return on Average Assets Three Months Ended Years Ended December 31, December 31, 2021 2020 2021 2020 (Dollars in thousands)Net $ 23,334 $ 20,654 $ 92,049 $ 57,603 income Average $ 9,365,417 $ 8,918,914 $ 9,103,003 $ 8,744,973 assets Returnon 0.99 % 0.92 % 1.01 % 0.66 %averageassets Core net $ 25,745 $ 21,712 $ 94,031 $ 63,033 income Corereturnon 1.09 % 0.97 % 1.03 % 0.72 %averageassets

Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Return on Average Equity Three Months Ended Years Ended December 31, December 31, 2021 2020 2021 2020 (Dollars in thousands)Total averagestockholders' $ 1,052,462 $ 1,003,590 $ 1,024,914 $ 1,016,097 equityLess: gain onsecurities (7 ) ? (1,481 ) (279 )transactions, netof taxLess/Add:voluntary earlyretirement plan ? (18 ) ? 2,255 (credit)expenses, net oftax (benefit)Add:merger-related 879 ? 974 1,500 expenses, net oftaxAdd: loss onextinguishment of 1,539 879 2,079 879 debt, net of taxAdd: branchclosure expenses, ? 197 410 1,075 net of taxCore averagestockholders' $ 1,054,873 $ 1,004,648 $ 1,026,896 $ 1,021,527 equity Return on average 8.80 % 8.19 % 8.98 % 5.67 %equity Core return oncore average 9.68 % 8.60 % 9.16 % 6.17 %equity

Return on Average Tangible Equity Three Months Ended Years Ended December 31, December 31, 2021 2020 2021 2020 (Dollars in thousands)Total averagestockholders' $ 1,052,462 $ 1,003,590 $ 1,024,914 $ 1,016,097 equityLess: average (81,018 ) (85,370 ) (79,842 ) (79,593 )goodwillLess: averagecore deposit (5,346 ) (6,367 ) (5,717 ) (6,769 )intangibleTotal averagetangible $ 966,098 $ 911,853 $ 939,355 $ 929,735 stockholders'equity Core return onaverage 10.57 % 9.47 % 10.01 % 6.78 %tangible equity

Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Efficiency Ratios Three Months Ended Years Ended December 31, December 31, 2021 2020 2021 2020 (Dollars in thousands)Net interest income $ 60,962 $ 58,676 $ 233,134 $ 221,573 Non-interest income 6,971 9,962 38,831 31,270 Total income $ 67,933 $ 68,638 $ 271,965 $ 252,843 Non-interest expense $ 43,372 $ 40,810 $ 155,737 $ 158,139 Efficiency ratio 63.85 % 59.46 % 57.26 % 62.54 % Non-interest income $ 6,971 $ 9,962 $ 38,831 $ 31,270 Less: gain on securities (10 ) ? (2,025 ) (370 )transactionsCore non-interest income $ 6,961 $ 9,962 $ 36,806 $ 30,900 Non-interest expense $ 43,372 $ 40,810 $ 155,737 $ 158,139 Add/Less: voluntary early ? 24 ? (3,018 )retirement plan credit/ expensesLess: merger-related expenses (692 ) ? $ (822 ) (1,931 )Less: loss on extinguishment of (2,109 ) (1,158 ) (2,851 ) (1,158 )debtLess: branch closure expense ? (264 ) (548 ) (1,434 )Core non-interest expense $ 40,571 $ 39,412 $ 151,516 $ 150,598 Core efficiency ratio 59.73 % 57.42 % 56.13 % 59.65 %



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