CLBK Columbia Financial Inc

Columbia Financial, Inc. (the “Company”) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank ("Columbia") and Freehold Bank ("Freehold"), reported net income of $6.6 million, or $0.06 per basic and diluted share, for the quarter ended December 31, 2023, as compared to net income of $21.9 million, or $0.21 per basic and diluted share, for the quarter ended December 31, 2022. Earnings for the quarter ended December 31, 2023 reflected lower net interest income, mainly due to an increase in interest expense, a higher provision for credit losses and higher non-interest expense, which included a one-time Federal Deposit Insurance Corporation special assessment, partially offset by higher non-interest income and a lower income tax expense. For the quarter ended December 31, 2023, the Company reported core net income of $10.1 million, a decrease of $12.0 million, or 54.3%, compared to core net income of $22.2 million for the quarter ended December 31, 2022. (Refer to "Reconciliation of GAAP to Non-GAAP Financial Measures" for a reconciliation of GAAP net income to core net income.)

For the year ended December 31, 2023, the Company reported net income of $36.1 million, or $0.35 per basic and diluted share, as compared to net income of $86.2 million, or $0.82 per basic and $0.81 per diluted share, for the year ended December 31, 2022. Earnings for the year ended December 31, 2023 reflected lower net interest income, mainly due to an increase in interest expense, lower non-interest income, and higher non-interest expense partially offset by a lower provision for credit losses and a lower income tax expense. Non-interest income for the year ended December 31, 2023 included a $10.8 million loss on the sale of available for sale securities. For the year ended December 31, 2023, the Company reported core net income of $50.8 million, a decrease of $40.1 million, or 44.1%, compared to core net income of $90.9 million for the year ended December 31, 2022.

Thomas J. Kemly, President and Chief Executive Officer commented: "The Company's balance sheet, asset quality, liquidity position and capital remained strong in 2023. This year was uniquely challenging due to a difficult operating environment resulting from a dramatic rise in interest rates, and new industry concerns that emerged from a few bank failures earlier in the year. We continue to implement prudent strategies that mitigate risks and build a foundation for future success and increased profitability. We are focused on providing outstanding customer service and continue our investment in technology to enhance our products and delivery channels."

Results of Operations for the Three Months Ended December 31, 2023 and December 31, 2022

Net income of $6.6 million was recorded for the quarter ended December 31, 2023, a decrease of $15.3 million, or 70.0%, compared to net income of $21.9 million for the quarter ended December 31, 2022. The decrease in net income was primarily attributable to a $23.1 million decrease in net interest income and a $3.5 million increase in non-interest expense, partially offset by a $3.7 million increase in non-interest income and a $7.7 million decrease in income tax expense.

Net interest income was $45.3 million for the quarter ended December 31, 2023, a decrease of $23.1 million, or 33.7%, from $68.4 million for the quarter ended December 31, 2022. The decrease in net interest income was primarily attributable to a $42.7 million increase in interest expense on deposits and borrowings, partially offset by a $19.6 million increase in interest income. The increase in interest income was primarily due to an increase in the average balance of interest-earning assets coupled with an increase in average yields due to market interest rate increases that occurred over the previous two years. The increase in interest expense on deposits was driven by these same rate increases coupled with intense competition for deposits in the market and the repricing of existing deposits into higher cost products. The increase in interest expense on borrowings was also impacted by the significant increase in interest rates for new borrowings since interest rates began rising in March 2022, along with an increase in the average balance of borrowings. Prepayment penalties, which are included in interest income on loans, totaled $419,000 for the quarter ended December 31, 2023, compared to $1.0 million for the quarter ended December 31, 2022.

The average yield on loans for the quarter ended December 31, 2023 increased 61 basis points to 4.66%, as compared to 4.05% for the quarter ended December 31, 2022, as interest income was influenced by rising interest rates and loan growth. The average yield on securities for the quarter ended December 31, 2023 increased 13 basis points to 2.58%, as compared to 2.45% for the quarter ended December 31, 2022, as a number of adjustable rate securities tied to various indexes continued to reprice higher during the quarter, and new securities purchased during 2023 were at higher interest rates. The average yield on other interest-earning assets for the quarter ended December 31, 2023 increased 164 basis points to 5.64%, as compared to 4.00% for the quarter ended December 31, 2022, due to interest rates paid on cash balances and an increase in the dividend paid on Federal Home Loan Bank stock.

Total interest expense was $62.2 million for the quarter ended December 31, 2023, an increase of $42.7 million, or 218.4%, from $19.5 million for the quarter ended December 31, 2022. The increase in interest expense was primarily attributable to a 203 basis point increase in the average cost of interest-bearing deposits, partially offset by a decrease in the average balance of interest-bearing deposits, coupled with a 127 basis point increase in the average cost of borrowings, and a significant increase in the average balance of borrowings. Interest expense on borrowings increased $10.8 million, or 135.2%, and interest expense on deposits increased $31.9 million or 275.9% due to the rise in interest rates as noted above.

The Company's net interest margin for the quarter ended December 31, 2023 decreased 106 basis points to 1.85%, when compared to 2.91% for the quarter ended December 31, 2022. The weighted average yield on interest-earning assets increased 64 basis points to 4.39% for the quarter ended December 31, 2023 as compared to 3.75% for the quarter ended December 31, 2022. The average cost of interest-bearing liabilities increased 209 basis points to 3.18% for the quarter ended December 31, 2023 as compared to 1.09% for the quarter ended December 31, 2022. The increase in yields for the quarter ended December 31, 2023 was due to the impact of market interest rate increases between periods. The net interest margin decreased for the quarter ended December 31, 2023, as the increase in the average cost of interest-bearing liabilities outweighed the increase in the average yield on interest-earning assets.

The provision for credit losses for the quarter ended December 31, 2023 was $1.2 million, an increase of $184,000, from $971,000 for the quarter ended December 31, 2022. The increase in provision for credit losses during the quarter was primarily attributable to an increase in the outstanding balance of loans, partially offset by a decrease in loan loss rates.

Non-interest income was $11.2 million for the quarter ended December 31, 2023, an increase of $3.7 million, or 49.5%, from $7.5 million for the quarter ended December 31, 2022. The increase was primarily attributable to an increase in bank-owned life insurance income of $2.6 million which included death benefit claims, coupled with a $515,000 increase in the fair value of equity securities.

Non-interest expense was $48.0 million for the quarter ended December 31, 2023, an increase of $3.5 million, or 7.8%, from $44.5 million for the quarter ended December 31, 2022. The increase was primarily attributable to an increase in federal deposit insurance premiums of $4.3 million, an increase in data processing and software expenses of $828,000 and a loss on the extinguishment of debt of $300,000, partially offset by a decrease of $2.1 million in compensation and employee benefits expense. The increase in federal deposit insurance premiums was due to a one-time Federal Deposit Insurance Corporation special assessment recorded in December 2023, and an increase in the assessment rate imposed by the FDIC effective January 1, 2023. The increase in data processing and software expenses mainly related to the increase in core processing expense. During the quarter ended December 31, 2023, the Company prepaid a term note which resulted in a $300,000 loss on the early extinguishment of debt. The decrease in compensation and employee benefits expense was due to the result of a workforce reduction in June 2023, along with other related employee expense cutting strategies implemented during the current year including a reduction in bonus accrual.

Income tax expense was $865,000 for the quarter ended December 31, 2023, a decrease of $7.7 million, as compared to $8.5 million for the quarter ended December 31, 2022, mainly due to a decrease in pre-tax income and a decrease in the Company's effective tax rate. The Company's effective tax rate was 11.6% and 28.1% for the quarters ended December 31, 2023 and 2022, respectively. The effective tax rate for the 2023 period was primarily impacted by lower net interest income and higher actual tax-exempt income.

Results of Operations for the Years Ended December 31, 2023 and December 31, 2022

Net income of $36.1 million was recorded for the year ended December 31, 2023, a decrease of $50.1 million, or 58.1%, compared to net income of $86.2 million for the year ended December 31, 2022. The decrease in net income was primarily attributable to a $60.9 million decrease in net interest income, a $3.0 million decrease in non-interest income, and a $7.6 million increase in non-interest expense, partially offset by a $698,000 decrease in provision for credit losses and a $20.7 million decrease in income tax expense.

Net interest income was $205.9 million for the year ended December 31, 2023, a decrease of $60.9 million, or 22.8%, from $266.8 million for the year ended December 31, 2022. The decrease in net interest income was primarily attributable to a $146.2 million increase in interest expense on deposits and borrowings, partially offset by a $85.3 million increase in interest income. The increase in interest income was primarily due to an increase in the average balance of total interest-earning assets coupled with an increase in average yields due to market interest rate increases in 2022 and 2023. The increase in interest expense on deposits and borrowings was driven by these same rate increases coupled with intense competition for deposits in the market and the repricing of existing deposits into higher cost products. The increase in interest expense on borrowings was also impacted by the significant increase in interest rates for new borrowings since interest rates began rising in March 2022, along with an increase in the average balance of borrowings. Prepayment penalties, which are included in interest income on loans, totaled $817,000 for the year ended December 31, 2023, compared to $4.5 million for the year ended December 31, 2022.

The average yield on loans for the year ended December 31, 2023 increased 64 basis points to 4.44%, as compared to 3.80% for the year ended December 31, 2022, as interest income increased due to rising rates and loan growth. The average yield on securities for the year ended December 31, 2023 increased 20 basis points to 2.46%, as compared to 2.26% for the year ended December 31, 2022 as $124.6 million of higher yielding securities were purchased, and a number of adjustable rate securities tied to various indexes continued to reprice higher during the year. The average yield on other interest-earning assets for the year ended December 31, 2023 increased 267 basis points to 5.54%, as compared to 2.87% for the year ended December 31, 2022, due to the rise in interest rates, as noted above.

Total interest expense was $189.1 million for the year ended December 31, 2023, an increase of $146.2 million, or 340.9%, from $42.9 million for the year ended December 31, 2022. The increase in interest expense was primarily attributable to a 158 basis point increase in the average cost of interest-bearing deposits and an increase in the average balance of deposits, coupled with an increase in interest on borrowings of $48.9 million due to a 218 basis point increase in the cost of total borrowings and an increase in the average balance of borrowings.

The Company's net interest margin for the year ended December 31, 2023 decreased 82 basis points to 2.16%, when compared to 2.98% for the year ended December 31, 2022. The weighted average yield on interest-earning assets for the year ended December 31, 2023 increased 68 basis points to 4.14%, as compared to 3.46% for the year ended December 31, 2022. The average cost of interest-bearing liabilities increased 188 basis points to 2.52% for the year ended December 31, 2023 as compared to 0.64% for the year ended December 31, 2022. The increase in yields for the year ended December 31, 2023 was due to the impact of market rate increases between periods. The net interest margin decreased for the year ended December 31, 2023, as the average cost of interest- bearing liabilities outweighed the increase in the average yield on interest-earning assets.

The provision for credit losses for the year ended December 31, 2023 was $4.8 million, a decrease of $698,000, from $5.5 million for the year ended December 31, 2022. The decrease in provision for credit losses during the year was primarily attributable to a decrease in loan loss rates, partially offset by an increase in the outstanding balance of loans.

Non-interest income was $27.4 million for the year ended December 31, 2023, a decrease of $3.0 million, or 9.9%, from $30.4 million for the year ended December 31, 2022. The decrease was primarily attributable to an increase in the loss of securities transactions of $11.1 million, partially offset by an increase in bank-owned life insurance income of $2.7 million due to death benefit claims, an increase in the change in fair value of equity securities of $1.1 million, an increase in the gain on sale of loans of $1.0 million and an increase in other non-interest income of $3.8 million, primarily related to swap income.

Non-interest expense was $182.4 million for the year ended December 31, 2023, an increase of $7.6 million, or 4.3%, from $174.8 million for the year ended December 31, 2022. The increase was primarily attributable to an increase in compensation and employee benefits expense of $3.9 million, an increase in federal deposit insurance premiums of $6.0 million, and a loss on extinguishment of debt of $300,000, resulting from the prepayment of a term note. These increases were partially offset by a decrease in merger-related expenses of $2.2 million and a decrease in other non-interest expense of $4.1 million. The increase in compensation and employee benefits expense for the 2023 period was due to normal annual increases in employee related compensation, increased staff levels due to the May 2022 merger with RSI Bank, and severance expense recorded in June 2023 as a result of a workforce reduction. The federal deposit insurance premium expense increased due to the one-time Federal Deposit Insurance Corporation special assessment recorded in December 2023, and an increase in the assessment rate imposed by the FDIC effective January 1, 2023. The decrease in other non-interest expense was primarily related to non-recurring litigation settlements included in the 2022 period and the decrease in expenses related to swap transactions.

Income tax expense was $10.0 million for the year ended December 31, 2023, a decrease of $20.7 million, as compared to $30.7 million for the year ended December 31, 2022, mainly due to a decrease in pre-tax income, and to a lesser extent, a decrease in the Company's effective tax rate. The Company's effective tax rate was 21.6% and 26.3% for the years ended December 31, 2023 and 2022, respectively. The effective tax rate for the 2023 period was primarily impacted by lower net interest income and the loss on the sale of securities, and higher tax-exempt income.

Balance Sheet Summary

Total assets increased $237.4 million, or 2.3%, to $10.6 billion at December 31, 2023 from $10.4 billion at December 31, 2022. The increase in total assets was primarily attributable to an increase in cash and cash equivalents of $244.0 million, an increase in loans receivable, net, of $194.7 million, an increase in Federal Home Loan Bank stock of $22.9 million, and an increase in other assets of $23.7 million, partially offset by decrease in debt securities available for sale of $235.1 million.

Cash and cash equivalents increased $244.0 million, or 136.2%, to $423.2 million at December 31, 2023 from $179.2 million at December 31, 2022. The increase was primarily attributable to $277.0 million in proceeds from the sale of debt securities available for sale, and an increase in borrowings of $401.6 million, or 35.6%, partially offset by purchases of debt securities available for sale of $124.6 million, a decrease in total deposits of $154.6 million and $80.5 million in repurchases of common stock under our stock repurchase program.

Debt securities available for sale decreased $235.1 million, or 17.7%, to $1.1 billion at December 31, 2023 from $1.3 billion at December 31, 2022. The decrease was attributable to sales of securities of $277.0 million which resulted in a realized loss of $10.8 million, and repayments on securities of $100.9 million, which was partially offset by purchases of U.S. government obligations of $124.6 million and a decrease in the gross unrealized loss on securities of $30.3 million. The Bank sold U.S. government obligations at a weighted average rate of 2.36%, and mortgage-backed securities at a weighted average rate of 3.12% during the year ended December 31, 2023. The Bank sold predominantly fixed rate, low-yielding debt securities and used the proceeds to repay high costing short term borrowings to improve net interest rate margin.

Loans receivable, net, increased $194.7 million, or 2.6%, to $7.8 billion at December 31, 2023 from $7.6 billion at December 31, 2022. Multifamily real estate loans, construction loans, and commercial business loans increased $170.0 million, $106.5 million, and $35.6 million, respectively, partially offset by decreases in one-to-four family real estate loans, commercial real estate loans and home equity loans and advances of $67.4 million, $36.3 million and $7.7 million, respectively. The allowance for credit losses for loans increased $2.3 million to $55.1 million at December 31, 2023 from $52.8 million at December 31, 2022. During the year ended December 31, 2023, the increase in the allowance for credit losses for loans was primarily due to an increase in the outstanding balance of loans and an increase in qualitative factors, partially offset by a decrease in loan loss rates.

Federal Home Loan Bank stock increased $22.9 million, or 39.4%, to $81.0 million at December 31, 2023 from $58.1 million at December 31, 2022. The increase was due to the purchase of stock required upon acquiring new FHLB borrowings.

Other assets increased $23.7 million, or 8.3%, to $308.4 million at December 31, 2023 from $284.8 million at December 31, 2022, primarily due to a $15.1 million increase in the Company's pension plan balance, as the return on plan assets outpaced the growth in the plan’s obligations, and a $10.0 million increase in a low income housing tax credit asset.

Total liabilities increased $250.7 million, or 2.7%, to $9.6 billion at December 31, 2023 from $9.4 billion at December 31, 2022. The increase was primarily attributable to an increase in borrowings of $401.6 million, or 35.6%, partially offset by a decrease in total deposits of $154.6 million, or 1.9%. The $401.6 million increase in borrowings was primarily driven by a net increase in long-term borrowings of $494.5 million, partially offset by a decrease in short-term borrowing of $93.2 million. The decrease in total deposits primarily consisted of decreases in non-interest-bearing and interest-bearing demand deposits and savings and club accounts of $368.8 million, $626.4 million, and $213.4 million, respectively, partially offset by increases in money market accounts of $537.0 million and certificates of deposit of $517.0 million. The Bank has priced select money market and certificates of deposit accounts very competitively to the market, but there continues to be strong competition for funds from other banks and non-bank investment products.

Total stockholders’ equity decreased $13.3 million, or 1.3%, to $1.0 billion at December 31, 2023 from $1.1 billion December 31, 2022. The decrease in equity was primarily attributable to the repurchase of 4,242,693 shares of common stock at a cost of approximately $80.5 million, or $18.97 per share, under our stock repurchase program, partially offset by net income of $36.1 million, and a decrease of $21.8 million in unrealized losses on debt securities available for sale, net of taxes, included in other comprehensive income.

Asset Quality

The Company's non-performing loans at December 31, 2023 totaled $12.6 million, or 0.16% of total gross loans, as compared to $6.7 million, or 0.09% of total gross loans, at December 31, 2022. The $5.9 million increase in non-performing loans was primarily attributable to an increase in non-performing commercial business loans of $5.7 million and an increase in non-performing one-to-four family real estate loans of $410,000. The increase in non-performing commercial business loans was due to an increase in the number of loans from three non-performing loans at December 31, 2022 to ten loans at December 31, 2023, including a $3.7 million loan to a technology company. The increase in non-performing one-to-four family real estate loans was due to an increase in the number of loans from 12 non-performing loans at December 31, 2022 to 17 loans at December 31, 2023. Non-performing assets as a percentage of total assets totaled 0.12% at December 31, 2023 as compared to 0.06% at December 31, 2022.

For the quarter ended December 31, 2023, net charge-offs totaled $173,000, as compared to $59,000 in net charge-offs recorded for the quarter ended December 31, 2022. For the year ended December 31, 2023, net charge-offs totaled $2.5 million, as compared to $45,000 in net charge-offs recorded for the year ended December 31, 2022.

The Company's allowance for credit losses on loans was $55.1 million, or 0.70% of total gross loans, at December 31, 2023, compared to $52.8 million, or 0.69% of total gross loans, at December 31, 2022. The increase in the allowance for credit losses for loans was primarily due to an increase in the outstanding balance of loans and an increase in qualitative factors, partially offset by a decrease in loan loss rates.

Stock Repurchase Program

During the year ended December 31, 2023, the Company repurchased 4,242,693 shares of common stock at a cost of $80.5 million, or $18.97 per share, and during the quarter ended December 31, 2023, the Company repurchased 138,620 shares of common stock at a cost of $2.2 million, or $15.88 per share. On May 25, 2023, the Company announced that its Board of Directors authorized the Company's sixth stock repurchase program to acquire up to 2,000,000 shares, or approximately 1.9% of the Company's then issued and outstanding common stock. As of January 19, 2024, there are 1,106,841 shares remaining to be repurchased under the existing program. Management has slowed repurchase activity to maintain higher capital and due to the increased value of the stock during the fourth quarter of 2023.

Additional Liquidity, Loan, and Deposit Information

The Company services a diverse retail and commercial deposit base through its 67 branches. With over 215,000 accounts, the average deposit account balance was approximately $36,000 at December 31, 2023.

The Company had uninsured deposits totaling $1.8 billion at both December 31, 2023 and September 30, 2023, excluding municipal deposits of $825.9 million and $810.8 million, respectively, which are collateralized, and intercompany deposits of $3.5 billion and $3.6 billion, respectively.

The Company had uninsured deposits as summarized below:

	At December 31, 2023				At September 30, 2023
	(Dollars in thousands)
Uninsured deposits	$	1,837,083			$	1,773,116
Uninsured deposits to total deposits		23.4	%			23.0	%

Deposit balances are summarized as follows:

	At December 31, 2023						At September 30, 2023
	Balance			WeightedAverageRate			Balance			WeightedAverageRate
	(Dollars in thousands)
Non-interest-bearing demand	$	1,437,361		—	%		$	1,439,517		—	%
Interest-bearing demand		1,966,463		2.07				2,001,260		1.77
Money market accounts		1,255,528		3.28				1,196,983		3.09
Savings and club deposits		700,348		0.48				736,558		0.38
Certificates of deposit		2,486,856		3.91				2,328,848		3.27
Total deposits	$	7,846,556		2.31	%		$	7,703,166		1.97	%

The Company continues to maintain strong liquidity and capital positions. The Company has not utilized the Federal Reserve’s Bank Term Funding Program and had no outstanding borrowings from the Federal Reserve Discount Window at December 31, 2023. As of December 31, 2023, the Company had immediate access to approximately $3.0 billion of funding, with additional unpledged loan collateral available to pledge in excess of $1.4 billion. Available sources of liquidity include but are not limited to:

• Cash and cash equivalents of $423.2 million;
• Borrowing capacity based on unencumbered collateral pledged at the FHLB totaling $617.2 million;
• Borrowing capacity based on unencumbered collateral pledged at the Federal Reserve Bank totaling $2.0 billion; and
• Available correspondent lines of credit of $339.0 million with various third parties.

At December 31, 2023, the Company's non-performing commercial real estate loans totaled $2.7 million, or 0.03%, of the total loans receivable loan portfolio balance.

The following table presents multifamily real estate, owner occupied commercial real estate, and the components of investor owned commercial real estate loans included in the real estate loan portfolio.

	At December 31, 2023
	(Dollars in thousands)
	Balance			% ofGross Loans			Weighted AverageLoan toValue Ratio			Weighted AverageDebt ServiceCoverage
Multifamily Real Estate	$	1,409,187		18.0	%		62.2	%		1.54x
Owner Occupied Commercial Real Estate	$	485,968		6.2	%		50.4	%		1.95x
Investor Owned Commercial Real Estate:
Retail / Shopping centers	$	489,777		6.3	%		52.5	%		1.51x
Mixed Use		312,410		4.0			58.6			1.52
Industrial / Warehouse		400,945		5.1			53.2			1.73
Non-Medical Office		219,284		2.8			51.6			1.58
Medical Office		138,964		1.8			58.9			1.70
Single Purpose		81,780		1.0			56.9			2.31
Other		248,984		3.2			50.2			1.80
Total	$	1,892,144		24.2	%		53.9	%		1.65
Total Multifamily and Commercial Real Estate Loans	$	3,787,299		48.4	%		56.6	%		1.65x

Annual Meeting of Stockholders

On January 25, 2024, the Company also announced that its annual meeting of stockholders will be held on June 6, 2024.

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 65 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 Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates, higher inflation and their impact on national and local economic conditions; changes in monetary and fiscal policies of the U.S. Treasury, the Board of Governors of the Federal Reserve System and other governmental entities; the impact of legal, judicial and regulatory proceedings or investigations, competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which the Company operates, including changes that adversely affect a borrowers’ ability to service and repay the Company’s loans; the effect of acts of terrorism, war or pandemics,, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; changes in the value of securities in the Company’s portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and securities; legislative changes and changes in government regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s consolidated financial statements will become impaired; cyber-attacks, computer viruses and other technological risks that may breach the security of our systems and allow unauthorized access to confidential information; the inability of third party service providers to perform; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits and effectively manage liquidity; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy, or its integration of acquired financial institutions and businesses, and changes in assumptions used in making such forward-looking statements which are subject to numerous risks and uncertainties, including but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K and those set forth in the Company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company's actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods presented. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

The Company also provides measurements and ratios based on tangible stockholders' equity. These measures are commonly utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

A reconciliation of GAAP to non-GAAP financial measures are included at the end of this press release. See "Reconciliation of GAAP to Non-GAAP Financial Measures".

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(In thousands)
	December 31,
		2023			2022
Assets	(Unaudited)
Cash and due from banks	$	423,140		$	179,097
Short-term investments		109			131
Total cash and cash equivalents		423,249			179,228
Debt securities available for sale, at fair value		1,093,557			1,328,634
Debt securities held to maturity, at amortized cost (fair value of $357,177, and $370,391 at December 31, 2023 and 2022, respectively)		401,154			421,523
Equity securities, at fair value		4,079			3,384
Federal Home Loan Bank stock		81,022			58,114
Loans receivable		7,874,537			7,677,564
Less: allowance for credit losses		55,096			52,803
Loans receivable, net		7,819,441			7,624,761
Accrued interest receivable		39,345			33,898
Office properties and equipment, net		83,577			83,877
Bank-owned life insurance		268,362			264,854
Goodwill and intangible assets		123,350			125,142
Other assets		308,432			284,754
Total assets	$	10,645,568		$	10,408,169
Liabilities and Stockholders' Equity
Liabilities:
Deposits	$	7,846,556		$	8,001,159
Borrowings		1,528,695			1,127,047
Advance payments by borrowers for taxes and insurance		43,509			45,460
Accrued expenses and other liabilities		186,473			180,908
Total liabilities		9,605,233			9,354,574
Stockholders' equity:
Total stockholders' equity		1,040,335			1,053,595
Total liabilities and stockholders' equity	$	10,645,568		$	10,408,169

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except share and per share data)
	Three Months Ended December 31,							Year Ended December 31,
		2023			2022				2023				2022
Interest income:	(Unaudited)							(Unaudited)
Loans receivable	$	91,744		$	76,159			$	343,770			$	263,559
Debt securities available for sale and equity securities		7,077			8,480				28,120				34,221
Debt securities held to maturity		2,370			2,471				9,708				9,694
Federal funds and interest-earning deposits		4,828			229				8,188				474
Federal Home Loan Bank stock dividends		1,531			593				5,192				1,722
Total interest income		107,550			87,932				394,978				309,670
Interest expense:
Deposits		43,429			11,552				125,162				27,878
Borrowings		18,782			7,987				63,940				15,015
Total interest expense		62,211			19,539				189,102				42,893
Net interest income		45,339			68,393				205,876				266,777
Provision for credit losses		1,155			971				4,787				5,485
Net interest income after provision for credit losses		44,184			67,422				201,089				261,292
Non-interest income:
Demand deposit account fees		1,330			1,164				5,145				5,293
Bank-owned life insurance		4,456			1,892				10,126				7,393
Title insurance fees		560			635				2,400				3,423
Loan fees and service charges		1,144			996				4,510				3,924
(Loss) gain on securities transactions		—			—				(10,847	)			210
Change in fair value of equity securities		446			(69	)			695				(401	)
Gain on sale of loans		154			69				1,214				178
Other non-interest income		3,159			2,839				14,136				10,380
Total non-interest income		11,249			7,526				27,379				30,400
Non-interest expense:
Compensation and employee benefits		28,463			30,533				120,846				116,926
Occupancy		5,590			5,751				22,927				22,589
Federal deposit insurance premiums		5,015			669				8,639				2,591
Advertising		498			650				2,805				2,865
Professional fees		3,083			2,431				9,824				8,158
Data processing and software expenses		4,154			3,326				15,039				13,362
Merger-related expenses		326			134				606				2,810
Loss on extinguishment of debt		300			—				300				—
Other non-interest expense		570			1,014				1,431				5,515
Total non-interest expense		47,999			44,508				182,417				174,816
Income before income tax expense		7,434			30,440				46,051				116,876
Income tax expense		865			8,549				9,965				30,703
Net income	$	6,569		$	21,891			$	36,086			$	86,173
Earnings per share-basic	$	0.06		$	0.21			$	0.35			$	0.82
Earnings per share-diluted	$	0.06		$	0.21			$	0.35			$	0.81
Weighted average shares outstanding-basic		101,656,890			105,997,676				102,656,388				105,580,823
Weighted average shares outstanding-diluted		101,817,194			106,631,357				102,894,969				106,193,161

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields
	For the Three Months Ended December 31,
		2023										2022
	AverageBalance				Interest andDividends			Yield / Cost			AverageBalance				Interest andDividends			Yield / Cost
	(Dollars in thousands)
Interest-earnings assets:
Loans	$	7,816,272			$	91,744		4.66	%		$	7,458,467			$	76,159		4.05	%
Securities		1,453,863				9,447		2.58	%			1,774,890				10,951		2.45	%
Other interest-earning assets		447,369				6,359		5.64	%			81,592				822		4.00	%
Total interest-earning assets		9,717,504				107,550		4.39	%			9,314,949				87,932		3.75	%
Non-interest-earning assets		854,857										842,571
Total assets	$	10,572,361									$	10,157,520
Interest-bearing liabilities:
Interest-bearing demand	$	2,000,406			$	12,308		2.44	%		$	2,684,095			$	4,882		0.72	%
Money market accounts		1,119,290				8,962		3.18	%			709,591				1,244		0.70	%
Savings and club deposits		714,664				846		0.47	%			932,732				121		0.05	%
Certificates of deposit		2,416,773				21,313		3.50	%			1,937,489				5,305		1.09	%
Total interest-bearing deposits		6,251,133				43,429		2.76	%			6,263,907				11,552		0.73	%
FHLB advances		1,494,794				18,592		4.93	%			821,141				7,558		3.65	%
Notes payable		916				23		9.96	%			29,885				297		3.94	%
Junior subordinated debentures		7,013				167		9.45	%			6,992				130		7.38	%
Other borrowings		—				—		—	%			163				2		4.87	%
Total borrowings		1,502,723				18,782		4.96	%			858,181				7,987		3.69	%
Total interest-bearing liabilities		7,753,856			$	62,211		3.18	%			7,122,088			$	19,539		1.09	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,441,005										1,759,372
Other non-interest-bearing liabilities		247,545										244,504
Total liabilities		9,442,406										9,125,964
Total stockholders' equity		1,129,955										1,031,556
Total liabilities and stockholders' equity	$	10,572,361									$	10,157,520
Net interest income					$	45,339									$	68,393
Interest rate spread								1.21	%									2.66	%
Net interest-earning assets	$	1,963,648									$	2,192,861
Net interest margin								1.85	%									2.91	%
Ratio of interest-earning assets to interest-bearing liabilities		125.32	%									130.79	%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields
	For the Years Ended December 31,
		2023										2022
	AverageBalance				Interest andDividends			Yield / Cost			AverageBalance				Interest andDividends			Yield / Cost
	(Dollars in thousands)
Interest-earnings assets:
Loans	$	7,748,096			$	343,770		4.44	%		$	6,939,419			$	263,559		3.80	%
Securities		1,540,726				37,828		2.46	%			1,943,459				43,915		2.26	%
Other interest-earning assets		241,520				13,380		5.54	%			76,500				2,196		2.87	%
Total interest-earning assets		9,530,342			$	394,978		4.14	%			8,959,378			$	309,670		3.46	%
Non-interest-earning assets		840,215										782,444
Total assets	$	10,370,557									$	9,741,822
Interest-bearing liabilities:
Interest-bearing demand	$	2,183,333			$	37,774		1.73	%		$	2,685,675			$	11,307		0.42	%
Money market accounts		951,174				24,296		2.55	%			695,849				2,593		0.37	%
Savings and club deposits		793,303				2,231		0.28	%			922,916				466		0.05	%
Certificates of deposit		2,229,042				60,861		2.73	%			1,834,876				13,512		0.74	%
Total interest-bearing deposits		6,156,852				125,162		2.03	%			6,139,316				27,878		0.45	%
FHLB advances		1,315,401				62,398		4.74	%			547,158				13,449		2.46	%
Notes payable		22,780				918		4.03	%			30,084				1,194		3.97	%
Junior subordinated debentures		7,054				624		8.85	%			6,984				370		5.30	%
Other borrowings		—				—		—	%			55				2		3.64	%
Total borrowings		1,345,235				63,940		4.75	%			584,281				15,015		2.57	%
Total interest-bearing liabilities		7,502,087			$	189,102		2.52	%			6,723,597			$	42,893		0.64	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,539,354										1,742,607
Other non-interest-bearing liabilities		231,018										210,280
Total liabilities		9,272,459										8,676,484
Total stockholders' equity		1,098,098										1,065,338
Total liabilities and stockholders' equity	$	10,370,557									$	9,741,822
Net interest income					$	205,876									$	266,777
Interest rate spread								1.62	%									2.82	%
Net interest-earning assets	$	2,028,255									$	2,235,781
Net interest margin								2.16	%									2.98	%
Ratio of interest-earning assets to interest-bearing liabilities		127.04	%									133.25	%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Components of Net Interest Rate Spread and Margin
	Average Yields/Costs by Quarter
	December 31,2023			September 30,2023			June 30,2023			March 31,2023			December 31,2022
Yield on interest-earning assets:
Loans	4.66	%		4.47	%		4.36	%		4.24	%		4.05	%
Securities	2.58			2.37			2.33			2.53			2.45
Other interest-earning assets	5.64			5.91			6.08			4.22			4.00
Total interest-earning assets	4.39	%		4.17	%		4.07	%		3.93	%		3.75	%
Cost of interest-bearing liabilities:
Total interest-bearing deposits	2.76	%		2.31	%		1.90	%		1.13	%		0.73	%
Total borrowings	4.96			4.70			4.72			4.60			3.69
Total interest-earning liabilities	3.18	%		2.70	%		2.42	%		1.74	%		1.09	%
Interest rate spread	1.21	%		1.47	%		1.65	%		2.19	%		2.66	%
Net interest margin	1.85	%		2.06	%		2.17	%		2.58	%		2.91	%
Ratio of interest-earning assets to interest-bearing liabilities	125.32	%		127.46	%		126.86	%		128.60	%		130.79	%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Selected Financial Highlights
	December 31,2023			September 30,2023			June 30,2023			March 31,2023			December 31,2022
SELECTED FINANCIAL RATIOS (1):
Return on average assets	0.25	%		0.36	%		0.06	%		0.73	%		0.86	%
Core return on average assets	0.38	%		0.36	%		0.46	%		0.77	%		0.87	%
Return on average equity	2.31	%		3.23	%		0.61	%		7.20	%		8.42	%
Core return on average equity	3.55	%		3.24	%		4.29	%		7.59	%		8.52	%
Core return on average tangible equity	3.99	%		3.64	%		4.89	%		8.61	%		9.70	%
Interest rate spread	1.21	%		1.47	%		1.65	%		2.19	%		2.66	%
Net interest margin	1.85	%		2.06	%		2.17	%		2.58	%		2.91	%
Non-interest income to average assets	0.42	%		0.33	%		(0.02	)%		0.31	%		0.29	%
Non-interest expense to average assets	1.80	%		1.67	%		1.85	%		1.71	%		1.74	%
Efficiency ratio	84.82	%		75.12	%		94.07	%		63.68	%		58.63	%
Core efficiency ratio	76.93	%		75.09	%		75.68	%		62.35	%		58.26	%
Average interest-earning assets to average interest-bearing liabilities	125.32	%		127.46	%		126.86	%		128.60	%		130.79	%
Net charge-offs to average outstanding loans	0.01	%		0.09	%		0.03	%		0.01	%		—	%
(1) Ratios for the three months are annualized when appropriate.

ASSET QUALITY:
	December 31,2023				September 30,2023				June 30,2023				March 31,2023				December 31,2022
	(Dollars in thousands)
Non-accrual loans	$	12,618			$	15,150			$	11,091			$	6,610			$	6,721
90+ and still accruing		—				—				—				—				—
Non-performing loans		12,618				15,150				11,091				6,610				6,721
Real estate owned		—				—				—				—				—
Total non-performing assets	$	12,618			$	15,150			$	11,091			$	6,610			$	6,721
Non-performing loans to total gross loans		0.16	%			0.19	%			0.14	%			0.09	%			0.09	%
Non-performing assets to total assets		0.12	%			0.15	%			0.11	%			0.06	%			0.06	%
Allowance for credit losses on loans ("ACL")	$	55,096			$	54,113			$	53,456			$	52,873			$	52,803
ACL to total non-performing loans		436.65	%			357.18	%			481.98	%			799.89	%			785.64	%
ACL to gross loans		0.70	%			0.69	%			0.69	%			0.68	%			0.69	%

LOAN DATA:
	December 31,2023				September 30,2023				June 30,2023				March 31,2023				December 31,2022
	(In thousands)
Real estate loans:
One-to-four family	$	2,792,833			$	2,791,939			$	2,789,269			$	2,860,964			$	2,860,184
Multifamily		1,409,187				1,417,233				1,376,999				1,315,143				1,239,207
Commercial real estate		2,377,077				2,374,488				2,386,896				2,393,918				2,413,394
Construction		443,094				390,940				378,988				374,434				336,553
Commercial business loans		533,041				546,750				505,524				516,682				497,469
Consumer loans:
Home equity loans and advances		266,632				267,016				269,310				271,620				274,302
Other consumer loans		2,801				2,586				2,552				2,322				3,425
Total gross loans		7,824,665				7,790,952				7,709,538				7,735,083				7,624,534
Purchased credit deteriorated ("PCD") loans		15,089				15,228				16,107				16,245				17,059
Net deferred loan costs, fees and purchased premiums and discounts		34,783				34,360				34,791				35,744				35,971
Allowance for credit losses		(55,096	)			(54,113	)			(53,456	)			(52,873	)			(52,803	)
Loans receivable, net	$	7,819,441			$	7,786,427			$	7,706,980			$	7,734,199			$	7,624,761

CAPITAL RATIOS:
	December 31,
	2023 (1)			2022
Company:
Total capital (to risk-weighted assets)	14.08	%		15.39	%
Tier 1 capital (to risk-weighted assets)	13.32	%		14.59	%
Common equity tier 1 capital (to risk-weighted assets)	13.23	%		14.49	%
Tier 1 capital (to adjusted total assets)	10.04	%		10.68	%
Columbia Bank:
Total capital (to risk-weighted assets)	14.02	%		14.12	%
Tier 1 capital (to risk-weighted assets)	13.22	%		13.32	%
Common equity tier 1 capital (to risk-weighted assets)	13.22	%		13.32	%
Tier 1 capital (to adjusted total assets)	9.48	%		9.74	%
Freehold Bank:
Total capital (to risk-weighted assets)	22.49	%		22.92	%
Tier 1 capital (to risk-weighted assets)	21.81	%		22.19	%
Common equity tier 1 capital (to risk-weighted assets)	21.81	%		22.19	%
Tier 1 capital (to adjusted total assets)	15.27	%		15.19	%
(1) Estimated ratios at December 31, 2023.

Reconciliation of GAAP to Non-GAAP Financial Measures
Book and Tangible Book Value per Share
	December 31,
		2023				2022
	(Dollars in thousands)
Total stockholders' equity	$	1,040,335			$	1,053,595
Less: goodwill		(110,715	)			(110,715	)
Less: core deposit intangible		(11,155	)			(13,505	)
Total tangible stockholders' equity	$	918,465			$	929,375
Shares outstanding		104,918,905				108,970,476
Book value per share	$	9.92			$	9.67
Tangible book value per share	$	8.75			$	8.53

Reconciliation of Core Net Income
	Three Months Ended December 31,						Years Ended December 31,
		2023			2022			2023			2022
	(In thousands)
Net income	$	6,569		$	21,891		$	36,086		$	86,173
Add/less: loss (gain) on securities transactions, net of tax		—			—			9,249			(156	)
Less: insurance settlement, net of tax		—			—			—			(486	)
Add: FDIC special assessment, net of tax		3,009			—			3,009			—
Add: severance expense from reduction in workforce, net of tax		—			—			1,390			—
Add: merger-related expenses, net of tax		288			168			529			2,210
Add: loss on extinguishment of debt, net of tax		265			—			265			—
Add: litigation expense, net of tax		—			46			262			2,913
Add: branch closure expense, net of tax		—			58			—			199
Core net income	$	10,131		$	22,163		$	50,790		$	90,853

Return on Average Assets
	Three Months Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
	(Dollars in thousands)
Net income	$	6,569			$	21,891			$	36,086			$	86,173
Average assets	$	10,572,361			$	10,157,520			$	10,370,557			$	9,741,822
Return on average assets		0.25	%			0.86	%			0.35	%			0.88	%
Core net income	$	10,131			$	22,163			$	50,790			$	90,853
Core return on average assets		0.38	%			0.87	%			0.49	%			0.93	%

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Return on Average Equity
	Three Months Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
	(Dollars in thousands)
Total average stockholders' equity	$	1,129,955			$	1,031,556			$	1,098,098			$	1,065,338
Add/Less: loss (gain) on securities transactions, net of tax		—				—				9,249				(156	)
Less: insurance settlement, net of tax		—				—				—				(486	)
Add: FDIC special assessment, net of tax		3,009				—				3,009				—
Add: severance expense from reduction in workforce, net of tax		—				—				1,390				—
Add: merger-related expenses, net of tax		288				168				529				2,210
Add: loss on extinguishment of debt, net of tax		265				—				265				—
Add: litigation expenses, net of tax		—				46				262				2,913
Add: branch closure expense, net of tax		—				58				—				199
Core average stockholders' equity	$	1,133,517			$	1,031,828			$	1,112,802			$	1,070,018
Return on average equity		2.31	%			8.42	%			3.29	%			8.09	%
Core return on core average equity		3.55	%			8.52	%			4.56	%			8.49	%

Return on Average Tangible Equity
	Three Months Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
	(Dollars in thousands)
Total average stockholders' equity	$	1,129,955			$	1,031,556			$	1,098,098			$	1,065,338
Less: average goodwill		(110,715	)			(111,115	)			(110,715	)			(103,477	)
Less: average core deposit intangible		(11,524	)			(13,905	)			(12,398	)			(11,352	)
Total average tangible stockholders' equity	$	1,007,716			$	906,536			$	974,985			$	950,509
Core return on average tangible equity		3.99	%			9.70	%			5.21	%			9.56	%

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Efficiency Ratios
	Three Months Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
	(Dollars in thousands)
Net interest income	$	45,339			$	68,393			$	205,876			$	266,777
Non-interest income		11,249				7,526				27,379				30,400
Total income	$	56,588			$	75,919			$	233,255			$	297,177
Non-interest expense	$	47,999			$	44,508			$	182,417			$	174,816
Efficiency ratio		84.82	%			58.63	%			78.20	%			58.83	%
Non-interest income	$	11,249			$	7,526			$	27,379			$	30,400
Add/less: loss (gain) on securities transactions		—				—				10,847				(210	)
Less: insurance settlement		—				—				—				(650	)
Core non-interest income	$	11,249			$	7,526			$	38,226			$	29,540
Non-interest expense	$	47,999			$	44,508			$	182,417			$	174,816
Less: FDIC special assessment		(3,840	)			—				(3,840	)			—
Less: severance expense from reduction in workforce		—				—				(1,605	)			—
Less: merger-related expenses		(326	)			(134	)			(606	)			(2,810	)
Less: loss on extinguishment of debt		(300	)			—				(300	)			—
Less: litigation expense		—				(62	)			(317	)			(3,916	)
Less: branch closure expense		—				(78	)			—				(266	)
Core non-interest expense	$	43,533			$	44,234			$	175,749			$	167,824
Core efficiency ratio		76.93	%			58.26	%			72.00	%			56.64	%

Columbia Financial, Inc.Investor Relations Department(833) 550-0717