 FAIR LAWN, N.J., July 29, 2020 GLOBE NEWSWIRE -- Columbia Financial, Inc. the Company NASDAQ: CLBK, the mid-tier holding company for Columbia Bank the Bank, reported net income of 15.1 million, or 0.14 per basic and diluted share, for the quarter ended June 30, 2020, as compared to net income of 12.0 million, or 0.11 per basic and diluted share, for the quarter ended June 30, 2019. Earnings for the three months ended June 30, 2020 reflected higher net interest income driven by asset growth, in part, due to the completion of the Companys acquisitions of Stewardship Financial Corporation and its wholly owned subsidiary, Atlantic Stewardship Bank Stewardship, on November 1, 2019, and Roselle Bank and its parent companies Roselle on April 1, 2020, and due to increases in loans, mainly granted as part of the Small Business Associations SBA Paycheck Protection Program PPP. These increases were partially offset by higher provision for loan losses, non-interest expense and income tax expense. For the six months ended June 30, 2020, the Company reported net income of 21.9 million, or 0.20 per basic and diluted share, as compared to net income of 27.0 million, or 0.24 per basic and diluted share, for the six months ended June 30, 2019. Earnings for the six months ended June 30, 2020 reflected a higher provision for loan losses and non-interest expense, which was partially offset by higher net interest income.The higher provision for loan losses for both the three and six months ended June 30, 2020 was primarily attributable to consideration of the deterioration of economic factors and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors, and to a lesser extent, due to growth in the Banks loan portfolio. The Company elected to defer the adoption of the Current Expected Credit Loss CECL methodology permitted by the recently enacted Coronavirus Aid, Relief and Economic Security Act CARES Act. The Company will adopt CECL at the earlier of December 31, 2020 or when the national emergency has concluded.Mr. Thomas J. Kemly, President and Chief Executive Officer commented: Our quarterly results were strong even though we are continuing to operate in a challenging environment, where our focus is on offering support to our customers, employees, and communities. We continue to provide branch services with enhanced sanitary protocols and special senior citizen banking hours and are leveraging our digital capabilities for both customers and our operating divisions of the Bank. We are actively working with our commercial and consumer borrowers to assist them through the pandemic by providing short-term loan modifications and granting loans through the SBA Paycheck Protection Program. We are now working with borrowers to return them to making contractual payments on loans previously deferred and guiding SBA PPP borrowers through the process of obtaining forgiveness. On April 1, 2020 we successfully completed our acquisition of Roselle and subsequently, in July 2020, completed the system conversion related to this acquisition. We continue to pursue prudent strategies within our business plan that result in conservative, disciplined balance sheet growth.Results of Operations for the Quarters Ended June 30, 2020 and June 30, 2019Net income of 15.1 million was recorded for the quarter ended June 30, 2020, an increase of 3.1 million, or 25.5, compared to net income of 12.0 million for the quarter ended June 30, 2019. The increase in net income was primarily attributable to a 15.0 million increase in net interest income and a 233,000 increase in non-interest income, partially offset by a 5.6 million increase in the provision for loan losses, a 5.6 million increase in non-interest expense and a 969,000 increase in income tax expense.Net interest income was 55.9 million for the quarter ended June 30, 2020, an increase of 15.0 million, or 36.8, from 40.8 million for the quarter ended June 30, 2019. The increase in net interest income was primarily attributable to a 12.9 million increase in interest income coupled with a 2.2 million decrease in interest expense. The increase in interest income for the quarter ended June 30, 2020 was largely due to increases in the average balances on loans, securities and other interest-earning assets, which was the result of internal growth and the acquisitions of Stewardship and Roselle, partially offset by decreases in the average yields on these assets. Prepayment penalties, which are included in interest income on loans, totaled 964,000 for the quarter ended June 30, 2020 compared to 155,000 for the quarter ended June 30, 2019.The average yield on loans for the quarter ended June 30, 2020 decreased 18 basis points to 3.96, as compared to 4.14 for the quarter ended June 30, 2019, while the average yield on securities for the quarter ended June 30, 2020 decreased 33 basis points to 2.56, as compared to 2.89 for the quarter ended June 30, 2019. The average yield on other interest-earning assets for the quarter ended June 30, 2020 decreased 324 basis points to 2.95, as compared to 6.19 for the quarter ended June 30, 2019. Decreases in the average yields on these portfolios for the quarter ended June 30, 2020 were influenced by the lower interest rate environment as the Federal Reserve reduced interest rates by 75 basis points in the third and fourth quarters of 2019, and in response to COVID-19, reduced interest rates again by 150 basis points in March 2020.Total interest expense was 19.7 million for the quarter ended June 30, 2020, a decrease of 2.2 million, or 9.9, from 21.9 million for the quarter ended June 30, 2019. The decrease in interest expense was primarily attributable to a 41 basis point decrease in the average cost of interest-bearing deposits which more than offset the impact from the increase in the average balance of deposits. The decrease in the cost of deposits was driven by both an inflow of lower costing deposits and the repricing of existing deposits at a significantly reduced rate. Interest on borrowings decreased 1.8 million due to a decrease in the average balance of borrowings coupled with an 84 basis point decrease in the cost of these borrowings due to a lower interest rate environment.The Companys net interest margin for the quarter ended June 30, 2020 increased 20 basis points to 2.73, when compared to 2.53 for the quarter ended June 30, 2019. The weighted average yield on interest-earning assets decreased 20 basis points to 3.69 for the quarter ended June 30, 2020 as compared to 3.89 for the quarter ended June 30, 2019. The average cost of interest-bearing liabilities decreased 51 basis points to 1.25 for the quarter ended June 30, 2020 as compared to 1.76 for the quarter ended June 30, 2019. The decrease in yields and costs for the quarter ended June 30, 2020 were largely driven by a lower interest rate environment. The net interest margin increased for the quarter as the cost of interest-bearing liabilities repriced lower more rapidly than the yields on interest-earning assets.The provision for loan losses was 5.7 million for the quarter ended June 30, 2020, an increase of 5.6 million, from 112,000 for the quarter ended June 30, 2019. The increase was primarily attributable to consideration of the deterioration of economic conditions and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors.Non-interest income was 7.0 million for the quarter ended June 30, 2020, an increase of 233,000, or 3.4, from 6.8 million for the quarter ended June 30, 2019. The increase was primarily attributable to increases in the change in fair value of equity securities of 572,000, gain on sale of loans of 599,000 and other non-interest income of 728,000, partially offset by decreases in demand deposit account fees of 431,000, income from loan fees and service charges of 967,000 and gains on securities transactions of 339,000. The increase in other non-interest income consists of increases in ATM, check card and wealth management related activities. Demand deposit account fees and loan fees and service charges were lower due to the decrease in fees related to customer swaps and the impact of the COVID-19 pandemic, which resulted in higher fee waivers as well as customers carrying higher deposit balances related to government stimulus programs.Non-interest expense was 37.4 million for the quarter ended June 30, 2020, an increase of 5.6 million, or 17.6, from 31.8 million for the quarter ended June 30, 2019. The increase was primarily attributable to an increase in compensation and employee benefits expense of 4.9 million, an increase in occupancy expense of 877,000 and an increase in other non-interest expense of 860,000, partially offset by a decrease of 943,000 in advertising expense. The increase in compensation and employee benefits expense was primarily attributable to an increase of 2.2 million in expense recorded in connection with grants made under the Companys 2019 Equity Incentive Plan and an increase in expense due to a larger number of employees in the 2020 period, which included continuing employees of Stewardship and Roselle. During the quarter ended June 30, 2020, the Bank implemented a Voluntary Early Retirement Program which offers early retirement incentives for qualified employees. Employees may elect to retire during the third quarter of 2020 if they meet criteria established under the existing Columbia Bank Retirement Plan, with additional incentives under the program. There have been no expenses related to this program recorded through June 30, 2020, although management anticipates approximately 3. 