UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
FORM
10-Q

(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 20202021


or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number 001-38456
001-38456

Columbia Financial, Inc.
(Exact name of registrant as specified in its charter)
Delaware
22-3504946
(State or other jurisdiction

of incorporation or organization)
(I.R.S. Employer Identification Number)
19-01 Route 208 North,Fair Lawn,
New Jersey07140
(Address of principal executive offices)(Zip Code)

(800) (800) 522-4167
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareCLBKThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filerSmaller reporting company
Non-accelerated filerEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No

As of August 7, 2020,5, 2021, there were 115,055,092106,789,198 shares issued and outstanding of the Registrant's common stock, par value $0.01 per share.




COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Index to Form 10-Q
Item NumberPage Number
PART I.Financial Information
Item Number1.Page NumberFinancial Statements
PART I.Financial Information
Item 1.Financial Statements
Consolidated Statements of Financial Condition as of June 30, 20202021 (Unaudited) and December 31, 20192020
Consolidated Statements of Income for the Three and Six Months Ended June 30, 20202021 and 20192020 (Unaudited)
Consolidated Statements of Comprehensive Income (Loss) for the Six Months Ended June 30, 2020 and 2019 (Unaudited)
Consolidated Statements of Changes in Stockholder's Equity for the Three and Six Months Ended June 30, 20202021 and 20192020 (Unaudited)
Consolidated Statements of Changes in Stockholder's Equity for the Three and Six Months Ended June 30, 2021 and 2020 (Unaudited)
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 20202021 and 20192020 (Unaudited)
Item 2.
Item 3.
Item 4.
PART II.





COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(In thousands, except share and per share data)
June 30,December 31,
20212020
Assets (Unaudited)
Cash and due from banks$387,034 $422,787 
Short-term investments197 170 
Total cash and cash equivalents387,231 422,957 
Debt securities available for sale, at fair value1,642,413 1,316,952 
Debt securities held to maturity, at amortized cost (fair value of $415,033 and $277,091 at June 30, 2021 and December 31, 2020, respectively)402,145 262,720 
Equity securities, at fair value4,053 5,418 
Federal Home Loan Bank stock40,922 43,759 
Loans held-for-sale, at fair value4,146 
Loans receivable6,017,802 6,181,770 
Less: allowance for loan losses69,898 74,676 
Loans receivable, net5,947,904 6,107,094 
Accrued interest receivable28,296 29,456 
Office properties and equipment, net75,450 75,974 
Bank-owned life insurance ("BOLI")235,790 232,824 
Goodwill and intangible assets86,189 87,384 
Other assets217,042 209,852 
Total assets$9,067,435 $8,798,536 
Liabilities and Stockholders' Equity
Liabilities:
Deposits$7,079,276 $6,778,624 
Borrowings749,683 799,364 
Advance payments by borrowers for taxes and insurance36,155 32,570 
Accrued expenses and other liabilities169,275 176,691 
Total liabilities8,034,389 7,787,249 
Stockholders' equity:
Preferred stock, $0.01 par value. 10,000,000 shares authorized; NaN issued and outstanding at June 30, 2021 and December 31, 2020
Common stock, $0.01 par value. 500,000,000 shares authorized; 122,037,926 shares issued and 107,506,075 shares outstanding at June 30, 2021 and 122,037,793 shares issued and 110,939,753 shares outstanding at December 31, 20201,220 1,220 
Additional paid-in capital614,381 609,531 
Retained earnings720,817 673,084 
Accumulated other comprehensive loss(43,267)(69,625)
Treasury stock, at cost; 14,531,851 shares at June 30, 2021 and 11,098,040 shares at December 31, 2020(221,072)(163,015)
Common stock held by the Employee Stock Ownership Plan(38,169)(39,293)
Stock held by Rabbi Trust(2,205)(1,875)
Deferred compensation obligations1,341 1,260 
Total stockholders' equity1,033,046 1,011,287 
Total liabilities and stockholders' equity$9,067,435 $8,798,536 
See accompanying notes to unaudited consolidated financial statements.
2
 June 30, December 31,
 2020 2019
Assets (Unaudited)  
    
Cash and due from banks$225,743
 $75,420
Short-term investments138
 127
Total cash and cash equivalents225,881
 75,547
    
Debt securities available for sale, at fair value1,177,925
 1,098,336
Debt securities held to maturity, at amortized cost (fair value of $289,836 and $289,505 at June 30, 2020 and December 31, 2019, respectively)273,997
 285,756
Equity securities, at fair value4,710
 2,855
Federal Home Loan Bank stock57,843
 69,579
Loans held-for-sale, at fair value9,639
 
    
Loans receivable6,639,874
 6,197,566
Less: allowance for loan losses74,015
 61,709
Loans receivable, net6,565,859
 6,135,857
    
Accrued interest receivable28,414
 22,092
Office properties and equipment, net77,588
 72,967
Bank-owned life insurance231,596
 211,415
Goodwill and intangible assets92,642
 68,582
Other assets217,098
 145,708
Total assets$8,963,192
 $8,188,694
    
Liabilities and Stockholders' Equity   
Liabilities:   
Deposits$6,581,109
 $5,645,842
Borrowings1,129,979
 1,407,022
Advance payments by borrowers for taxes and insurance36,706
 35,507
Accrued expenses and other liabilities174,410
 117,806
Total liabilities7,922,204
 7,206,177
    
Stockholders' equity:   
Preferred stock, $0.01 par value. 10,000,000 shares authorized; none issued and outstanding at June 30, 2020 and December 31, 2019
 
Common stock, $0.01 par value. 500,000,000 shares authorized; 122,037,793 shares issued and 115,067,114 shares outstanding at June 30, 2020, and 113,765,387 shares issued and outstanding at December 31, 20191,220
 1,173
Additional paid-in capital605,124
 531,667
Retained earnings637,343
 615,481
Accumulated other comprehensive loss(53,207) (68,735)
Treasury stock, at cost; 6,970,679 shares at June 30, 2020 and 3,513,358 shares at December 31, 2019(108,327) (54,950)
Common stock held by the Employee Stock Ownership Plan(40,434) (41,564)
Stock held by Rabbi Trust(1,767) (1,520)
Deferred compensation obligations1,036
 965
Total stockholders' equity1,040,988
 982,517
Total liabilities and stockholders' equity$8,963,192
 $8,188,694
    
See accompanying notes to unaudited consolidated financial statements.



COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except share and per share data)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Interest income:(Unaudited)
Loans receivable$57,683 $65,235 $116,451 $129,253 
Debt securities available for sale and equity securities7,521 7,292 13,899 14,620 
Debt securities held to maturity2,151 1,993 3,903 4,058 
Federal funds and interest earning deposits39 27 143 216 
Federal Home Loan Bank stock dividends487 1,040 1,122 2,130 
Total interest income67,881 75,587 135,518 150,277 
Interest expense:
Deposits7,855 14,911 16,730 31,743 
Borrowings1,946 4,805 3,968 11,961 
Total interest expense9,801 19,716 20,698 43,704 
Net interest income58,080 55,871 114,820 106,573 
(Reversal of) provision for loan losses(1,761)5,736 (3,041)15,304 
Net interest income after (reversal of) provision for loan losses59,841 50,135 117,861 91,269 
Non-interest income:
Demand deposit account fees858 620 1,696 1,919 
Bank-owned life insurance1,497 1,519 2,971 2,936 
Title insurance fees1,503 996 3,123 2,227 
Loan fees and service charges714 533 1,365 1,261 
(Loss) gain on securities transactions(281)(281)370 
Change in fair value of equity securities(778)643 (1,366)59 
Gain on sale of loans8,524 795 10,674 1,549 
Other non-interest income2,354 1,902 4,804 3,078 
Total non-interest income14,391 7,008 22,986 13,399 
Non-interest expense:
Compensation and employee benefits23,601 25,218 46,994 49,683 
Occupancy4,814 4,701 10,066 9,496 
Federal deposit insurance premiums567 626 1,147 736 
Advertising663 447 1,198 1,591 
Professional fees1,651 1,083 3,441 2,449 
Data processing and software expenses2,612 2,364 5,383 4,594 
Merger-related expenses75 432 75 1,507 
Loss on extinguishment of debt742 
Other non-interest expense3,627 2,572 6,267 5,895 
Total non-interest expense37,610 37,443 75,313 75,951 
 Income before income tax expense36,622 19,700 65,534 28,717 
Income tax expense9,934 4,603 17,801 6,855 
Net income$26,688 $15,097 $47,733 $21,862 
Earnings per share - basic and diluted$0.26 $0.14 $0.45 $0.20 
Weighted average shares outstanding -basic and diluted104,537,656 111,102,306 105,253,661 109,770,239 
See accompanying notes to unaudited consolidated financial statements.
3
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
Interest income:(Unaudited)
Loans receivable$65,235
 $51,709
 129,253
 103,969
Debt securities available for sale and equity securities7,292
 7,900
 14,620
 15,559
Debt securities held to maturity1,993
 2,115
 4,058
 4,022
Federal funds and interest earning deposits27
 134
 216
 223
Federal Home Loan Bank stock dividends1,040
 874
 2,130
 1,846
Total interest income75,587
 62,732
 150,277
 125,619
Interest expense:       
Deposits14,911
 15,250
 31,743
 28,929
Borrowings4,805
 6,639
 11,961
 13,463
Total interest expense19,716
 21,889
 43,704
 42,392
     
 
Net interest income55,871
 40,843
 106,573
 83,227
     
 
Provision for loan losses5,736
 112
 15,304
 548
     
 
Net interest income after provision for loan losses50,135
 40,731
 91,269
 82,679
        
Non-interest income:       
Demand deposit account fees620
 1,051
 1,919
 2,010
Bank-owned life insurance1,519
 1,345
 2,936
 2,665
Title insurance fees996
 1,099
 2,227
 2,140
Loan fees and service charges533
 1,500
 1,261
 2,320
Gain on securities transactions
 339
 370
 465
Change in fair value of equity securities643
 71
 59
 247
Gain on sale of loans795
 196
 1,549
 328
Other non-interest income1,902
 1,174
 3,078
 2,637
Total non-interest income7,008
 6,775
 13,399
 12,812
        
Non-interest expense:       
Compensation and employee benefits25,218
 20,343
 49,683
 39,923
Occupancy4,701
 3,824
 9,496
 7,655
Federal deposit insurance premiums626
 462
 736
 887
Advertising447
 1,390
 1,591
 2,778
Professional fees1,083
 1,431
 2,449
 2,678
Data processing816
 669
 1,581
 1,307
Merger-related expenses432
 462
 1,507
 462
Other non-interest expense4,120
 3,260
 8,908
 5,710
Total non-interest expense37,443
 31,841
 75,951
 61,400
        
 Income before income tax expense19,700
 15,665
 28,717
 34,091
        
Income tax expense4,603
 3,634
 6,855
 7,141
        
Net income$15,097
 $12,031
 21,862
 26,950
        
Earnings per share - basic and diluted$0.14
 $0.11
 $0.20
 $0.24
Weighted average shares outstanding -basic and diluted111,102,306
 111,553,203
 109,770,239
 111,544,339
        
See accompanying notes to unaudited consolidated financial statements.



COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(Unaudited)
Net income$26,688 $15,097 $47,733 $21,862 
Other comprehensive gain (loss) income, net of tax:
Unrealized gain (loss) on debt securities available for sale4,788 6,352 (12,246)25,619 
Accretion of unrealized (loss) gain on debt securities reclassified as held to maturity(12)(2)
Reclassification adjustment for gain included in net income(202)(202)289 
4,574 6,350 (12,446)25,912 
Derivatives, net of tax:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges948 (750)6,631 (12,099)
948 (750)6,631 (12,099)
Employee benefit plans, net of tax:
Amortization of prior service cost included in net income(11)(11)(20)(22)
Reclassification adjustment of actuarial net (loss) gain included in net income(1,089)(845)(2,178)(1,692)
Change in funded status of retirement obligations24,818 1,714 34,371 3,429 
23,718 858 32,173 1,715 
Total other comprehensive income29,240 6,458 26,358 15,528 
Total comprehensive income, net of tax$55,928 $21,555 $74,091 $37,390 
See accompanying notes to unaudited consolidated financial statements.

4
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (Unaudited)
        
Net income$15,097
 $12,031
 $21,862
 $26,950
        
Other comprehensive income, net of tax:       
Unrealized gains on debt securities available for sale6,352
 14,092
 25,619
 23,387
Accretion of unrealized (loss) gain on debt securities reclassified as held to maturity(2) (2) 4
 8
Reclassification adjustment for gains included in net income
 260
 289
 360
 6,350
 14,350
 25,912
 23,755
        
Derivatives, net of tax:       
Unrealized (loss) on swap contracts accounted for as cash flow hedges(750) (4,676) (12,099) (7,456)
 (750) (4,676) (12,099) (7,456)
        
Employee benefit plans, net of tax:       
Amortization of prior service cost included in net income(11) (11) (22) (22)
Reclassification adjustment of actuarial net gain included in net income(845) (731) (1,692) (1,461)
Change in funded status of retirement obligations1,714
 (4,431) 3,429
 (3,690)
 858
 (5,173) 1,715
 (5,173)
        
Total other comprehensive income6,458
 4,501
 15,528
 11,126
        
Total comprehensive income, net of tax$21,555
 $16,532
 $37,390
 $38,076
        
See accompanying notes to unaudited consolidated financial statements.




COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
Three Months Ended June 30, 20202021 and 20192020
(In thousands)
Common StockAdditional Paid-in-CapitalRetained EarningsAccumulated Other Comprehensive (Loss)Treasury StockCommon Stock Held by the Employee Stock Ownership PlanStock Held by Rabbi TrustDeferred Compensation ObligationsTotal Stockholders' Equity
Balance at March 31, 2020$1,173 $534,213 $622,246 $(59,665)$(95,326)$(40,999)$(1,728)$1,212 $961,126 
Net income— — 15,097 — — — — — 15,097 
Other comprehensive income— — — 6,458 — — — — 6,458 
Issuance of common stock to Columbia Bank MHC47 68,483 — — — — — — 68,530 
Stock based compensation— 2,205 — — — — — — 2,205 
Purchase of treasury stock (899,074 shares)— — — — (12,998)— — — (12,998)
Restricted stock forfeitures (240 shares)— — — — (3)— — — (3)
Employee Stock Ownership Plan shares committed to be released— 223 — — — 565 — — 788 
Funding of deferred compensation obligations— — — — — — (39)(176)(215)
Balance at June 30, 2020$1,220 $605,124 $637,343 $(53,207)$(108,327)$(40,434)$(1,767)$1,036 $1,040,988 
Balance at March 31, 2021$1,220 $611,549 $694,129 $(72,507)$(195,361)$(38,734)$(2,141)$1,494 $999,649 
Net income— — 26,688 — — — — — 26,688 
Other comprehensive income— — — 29,240 — — — — 29,240 
Stock based compensation— 2,397 — — — — — — 2,397 
Purchase of treasury stock (1,471,501 shares)— — — — (25,709)— — — (25,709)
Exercise of stock options— — — — — — — 
Restricted stock forfeitures (128 shares)— — — (2)— — — 
Employee Stock Ownership Plan shares committed to be released— 432 — — — 565 — — 997 
Funding of deferred compensation obligations— — — — — — (64)(153)(217)
Balance at June 30, 2021$1,220 $614,381 $720,817 $(43,267)$(221,072)$(38,169)$(2,205)$1,341 $1,033,046 
See accompanying notes to unaudited consolidated financial statements.
5
 Common Stock Additional Paid-in-Capital Retained Earnings Accumulated Other Comprehensive (Loss) Treasury Stock Common Stock Held by the Employee Stock Ownership Plan Stock Held by Rabbi Trust Deferred Compensation Obligations Total Stockholders' Equity
                  
Balance at March 31, 2019$1,159
 $527,346
 $575,683
 $(65,820) $
 $(43,276) $(1,359) $769
 $994,502
Net income
 
 12,031
 
 
 
 
 
 12,031
Other comprehensive income
 
 
 4,501
 
 
 
 
 4,501
Purchase of treasury stock
 
 
 
 (3,867) 
 
 
 (3,867)
Employee Stock Ownership Plan shares committed to be released
 304
 
 
 
 566
 
 
 870
Funding of deferred compensation obligations
 
 
 
 
 
 (48) (80) (128)
Balance at June 30, 2019$1,159
 $527,650
 $587,714
 $(61,319) $(3,867) $(42,710) $(1,407) $689
 $1,007,909
                  
Balance at March 31, 2020$1,173
 $534,213
 $622,246
 $(59,665) $(95,326) $(40,999) $(1,728) $1,212
 $961,126
Net income
 
 15,097
 
 
 
 
 
 15,097
Other comprehensive income
 
 
 6,458
 
 
 
 
 6,458
Issuance of common stock to Columbia Bank MHC47
 68,483
 
 
 
 
 
 
 68,530
Stock based compensation
 2,205
 
 
 
 
 
 
 2,205
Purchase of treasury stock (899,074 shares)
 
 
 
 (12,998) 
 
 
 (12,998)
Restricted stock forfeitures (240 shares)
 
 
 
 (3) 
 
 
 (3)
Employee Stock Ownership Plan shares committed to be released
 223
 
 
 
 565
 
 
 788
Funding of deferred compensation obligations
 
 
 
 
 
 (39) (176) (215)
Balance at June 30, 2020$1,220
 $605,124
 $637,343
 $(53,207) $(108,327) $(40,434) $(1,767) $1,036
 $1,040,988
                  
See accompanying notes to unaudited consolidated financial statements.








COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
Six Months Ended June 30, 20202021 and 20192020
(In thousands)
Common StockAdditional Paid-in-CapitalRetained EarningsAccumulated Other Comprehensive (Loss)Treasury StockCommon Stock Held by the Employee Stock Ownership PlanStock Held by Rabbi TrustDeferred Compensation ObligationsTotal Stockholders' Equity
Balance at December 31, 2019$1,173 $531,667 $615,481 $(68,735)$(54,950)$(41,564)$(1,520)$965 $982,517 
Net income— — 21,862 — — — — — 21,862 
Other comprehensive income— — — 15,528 — — — — 15,528 
Issuance of common stock to Columbia Bank MHC47 68,483 — — — — — — 68,530 
Stock based compensation— 4,409 — — — — — — 4,409 
Purchase of treasury stock (3,456,200 shares)— — — — (53,361)— — — (53,361)
Restricted stock forfeitures ( 1,121 shares)— — — — (16)— — — (16)
Employee Stock Ownership Plan shares committed to be released— 565 — — — 1,130 — — 1,695 
Funding of deferred compensation obligations— — — — — — (247)71 (176)
Balance at June 30, 2020$1,220 $605,124 $637,343 $(53,207)$(108,327)$(40,434)$(1,767)$1,036 $1,040,988 
Balance at December 31, 2020$1,220 $609,531 $673,084 $(69,625)$(163,015)$(39,293)$(1,875)$1,260 $1,011,287 
Net income— — 47,733 — — — — — 47,733 
Other comprehensive income— — — 26,358 — — — — 26,358 
Treasury stock allocated to restricted stock award grants— (733)— — 733 — — — 
Stock based compensation— 4,540 — — — — — — 4,540 
Purchase of treasury stock (3,470,040 shares)— — — — (58,546)— — — (58,546)
Exercise of stock options— — — — — — — 
Restricted stock forfeitures (13,974 shares)— 244 — — (244)— — — 
Employee Stock Ownership Plan shares committed to be released— 798 — — — 1,124 — — 1,922 
Funding of deferred compensation obligations— — — — — — (330)81 (249)
Balance at June 30, 2021$1,220 $614,381 $720,817 $(43,267)$(221,072)$(38,169)$(2,205)$1,341 $1,033,046 

6
 Common Stock Additional Paid-in-Capital Retained Earnings Accumulated Other Comprehensive (Loss) Treasury Stock Common Stock Held by the Employee Stock Ownership Plan Stock Held by Rabbi Trust Deferred Compensation Obligations Total Stockholders' Equity
                  
Balance at December 31, 2018$1,159
 $527,037
 $560,216
 $(71,897) $
 $(43,835) $(1,259) $639
 $972,060
Effect of the adoption of Accounting Standards Update ("ASC") 2016-01
 
 548
 (548) 
 
 
 
 
Balance at January 1, 20191,159
 527,037
 560,764
 (72,445) 
 (43,835) (1,259) 639
 972,060
Net income
 
 26,950
 
 
 
 
 
 26,950
Other comprehensive income
 
 
 11,126
 
 
 
 
 11,126
Purchase of treasury stock
 
 
 
 (3,867) 
 
 
 (3,867)
Employee Stock Ownership Plan shares committed to be released
 613
 
 
 
 1,125
 
 
 1,738
Funding of deferred compensation obligations
 
 
 
 
 
 (148) 50
 (98)
Balance at June 30, 2019$1,159
 $527,650
 $587,714
 $(61,319) $(3,867) $(42,710) $(1,407) $689
 $1,007,909
                  
Balance at December 31, 2019$1,173
 $531,667
 $615,481
 $(68,735) $(54,950) $(41,564) $(1,520) $965
 $982,517
Net income
 
 21,862
 
 
 
 
 
 21,862
Other comprehensive income
 
 
 15,528
 
 
 
 
 15,528
Issuance of common stock to Columbia Bank MHC47
 68,483
 
 
 
 
 
 
 68,530
Stock based compensation
 4,409
 
 
 
 
 
 
 4,409
Purchase of treasury (3,456,200 shares)
 
 
 
 (53,361) 
 
 
 (53,361)
Restricted stock forfeitures (1,121 shares)
 
 
 
 (16) 
 
 
 (16)
Employee Stock Ownership Plan shares committed to be released
 565
 
 
 
 1,130
 
 
 1,695
Funding of deferred compensation obligations
 
 
 
 
 
 (247) 71
 (176)
Balance at June 30, 2020$1,220
 $605,124
 $637,343
 $(53,207) $(108,327) $(40,434) $(1,767) $1,036
 $1,040,988
                  
See accompanying notes to unaudited consolidated financial statements.



COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30,
Six Months Ended June 30,20212020
2020 2019(In thousands, unaudited)
Cash flows from operating activities:(In thousands, unaudited)Cash flows from operating activities:
Net income$21,862
 $26,950
Net income$47,733 $21,862 
Adjustments to reconcile net income to net cash provided by operating activities:   
Adjustments to reconcile net income to net cash provided by (used in) operating activities:Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of deferred loan costs, fees and purchased premiums and discounts656
 1,102
Amortization of deferred loan costs, fees and purchased premiums and discounts(1,439)656 
Net amortization of premiums and discounts on securities854
 589
Net amortization of premiums and discounts on securities2,541 854 
Net amortization of mortgage servicing rights57
 (52)Net amortization of mortgage servicing rights129 57 
Amortization of intangible assets514
 
Amortization of intangible assets520 514 
Depreciation and amortization of office properties and equipment3,314
 2,170
Depreciation and amortization of office properties and equipment3,362 3,314 
Amortization of operating lease right-of-use assets1,440
 
Amortization of operating lease right-of-use assets1,811 1,440 
Provision for loan losses15,304
 548
Gain on securities transactions(370) (465)
Loss on extinguishment of debtLoss on extinguishment of debt742 
(Reversal of) provision for loan losses(Reversal of) provision for loan losses(3,041)15,304 
Loss (gain) on securities transactionsLoss (gain) on securities transactions281 (370)
Change in fair value of equity securities(59) (247)Change in fair value of equity securities1,365 (59)
Gain on securitizationsGain on securitizations(2,259)
Gain on sale of loans(1,549) (328)Gain on sale of loans(8,415)(1,549)
Loss on real estate owned
 1
Loss on disposal of office properties and equipment691
 
Loss on disposal of office properties and equipment61 691 
Loss on write-down of mortgage servicing rights34
 
Loss on write-down of mortgage servicing rights34 
Deferred tax expense (benefit)7,220
 (7,160)
(Increase) in accrued interest receivable(5,643) (1,416)
(Increase) in other assets(80,652) (34,322)
Deferred tax expenseDeferred tax expense736 7,220 
Decrease (increase) in accrued interest receivableDecrease (increase) in accrued interest receivable1,160 (5,643)
Decrease (increase) in other assetsDecrease (increase) in other assets23,155 (80,652)
Increase in accrued expenses and other liabilities36,507
 12,880
Increase in accrued expenses and other liabilities592 36,507 
Income on bank-owned life insurance(2,936) (2,665)Income on bank-owned life insurance(2,971)(2,936)
Employee stock ownership plan expense1,695
 1,738
Employee stock ownership plan expense1,922 1,695 
Stock based compensation4,409
 
Stock based compensation4,540 4,409 
Increase in deferred compensation obligations under Rabbi Trust(176) (98)
(Decrease) in deferred compensation obligations under Rabbi Trust(Decrease) in deferred compensation obligations under Rabbi Trust(249)(176)
Net cash provided by operating activities3,172
 (775)Net cash provided by operating activities72,276 3,172 
Cash flows from investing activities:   Cash flows from investing activities:
Proceeds from sales of debt securities available for sale20,761
 15,711
Proceeds from sales of debt securities available for sale4,719 20,761 
Proceeds from sales of equity securities
 765
Proceeds from paydowns/maturities/calls of debt securities available for sale94,758
 49,569
Proceeds from paydowns/maturities/calls of debt securities available for sale169,638 94,758 
Proceeds from paydowns/maturities/calls of debt securities held to maturity24,971
 9,964
Proceeds from paydowns/maturities/calls of debt securities held to maturity20,633 24,971 
Purchases of debt securities available for sale(111,113) (80,499)Purchases of debt securities available for sale(416,106)(111,113)
Purchases of debt securities held to maturity
 (47,671)Purchases of debt securities held to maturity(160,466)
Purchases of equity securities
 (417)
Proceeds from sales of loans held-for-sale103,992
 45,003
Proceeds from sales of loans held-for-sale274,980 103,992 
Proceeds from sales of loans receivable22,876
 2,483
Proceeds from sales of loans receivable22,876 
Purchases of loans receivable
 (29,885)Purchases of loans receivable(71,590)
Net increase in loans receivable(409,327) (168,486)Net increase in loans receivable(125,022)(409,327)
Proceeds from bank-owned life insurance death benefitsProceeds from bank-owned life insurance death benefits
Proceeds from redemptions of Federal Home Loan Bank stock35,660
 32,851
Proceeds from redemptions of Federal Home Loan Bank stock7,630 35,660 
Purchases of Federal Home Loan Bank stock(21,914) (32,526)Purchases of Federal Home Loan Bank stock(4,793)(21,914)
Proceeds from sales of office properties and equipmentProceeds from sales of office properties and equipment685 
Additions to office properties and equipment(2,852) (11,387)Additions to office properties and equipment(3,584)(2,852)
Proceeds from sale of real estate owned
 91
Net cash acquired in acquisition155,248
 
Net cash acquired in acquisition155,248 
Net cash used in investing activities(86,940) (214,434)
Cash flows from financing activities:
  
Net increase in deposits602,033
 254,772
Proceeds from long-term borrowings90,000
 78,991
Payments on long-term borrowings(116,465) (160,000)
Net (decrease) increase in short-term borrowings(288,306) 55,100
Increase in advance payments by borrowers for taxes and insurance217
 2,389
Purchase of treasury stock(53,361) (3,867)
Restricted stock forfeitures(16) 
Net cash provided by financing activities234,102
 227,385
Net cash (used in) investing activitiesNet cash (used in) investing activities$(303,271)$(86,940)







7


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
Six Months Ended June 30,
20212020
( In thousands, unaudited)
Cash flows from financing activities:
Net increase in deposits$300,652 $602,033 
Proceeds from long-term borrowings37,120 90,000 
Payments on long-term borrowings(54,168)(116,465)
Net decrease in short-term borrowings(33,375)(288,306)
Increase in advance payments by borrowers for taxes and insurance3,585 217 
Exercise of stock options
Purchase of treasury stock(58,546)(53,361)
Restricted stock forfeitures(16)
Net cash provided by financing activities$195,269 $234,102 
Net (decrease) increase in cash and cash equivalents$(35,726)$150,334 
Cash and cash equivalents at beginning of year422,957 75,547 
Cash and cash equivalents at end of period$387,231 $225,881 
Cash paid during the period for:
Interest on deposits and borrowings$20,892 $43,801 
Income tax payments, net of (refunds)$8,528 $1,300 
Non-cash investing and financing activities:
Transfer of loans receivable to loans held-for-sale$262,419 $112,219 
Securitization of loans99,603 
Initial recognition of operating lease right-of-use assets22,218 
Initial recognition of operating lease liabilities23,290 
Acquisition:
Non-cash assets acquired:
Debt securities available for sale$$51,479 
Debt securities held to maturity13,418 
Equity securities1,796 
Federal Home Loan Bank stock2,010 
Loans receivable171,593 
Accrued interest receivable679 
Office properties and equipment, net5,774 
Bank-owned life insurance17,245 
Other assets2,823 
Total non-cash assets acquired$$266,817 
Liabilities assumed:
Deposits$$333,234 
Borrowings37,728 
Advance payments by borrowers for taxes and insurance982 
Accrued expenses and other liabilities5,400 
Total liabilities assumed$$377,344 
Net non-cash liabilities assumed$$(110,527)
Net cash and cash equivalents acquired in acquisition$$155,248 
See accompanying notes to unaudited consolidated financial statements.
8
 Six Months Ended June 30,
 2020 2019
 ( In thousands, unaudited)
    
Net increase in cash and cash equivalents$150,334
 $12,176
    
Cash and cash equivalents at beginning of year75,547
 42,201
Cash and cash equivalents at end of period$225,881
 $54,377
    
Cash paid during the period for:   
Interest on deposits and borrowings$43,801
 $21,491
Income tax payments, net of (refunds)$1,300
 $(5,174)
    
Non-cash investing and financing activities:   
Transfer of loans receivable to loans held-for-sale$112,219
 $38,966
Securitization of loans$
 $21,615
Initial recognition of operating lease right-of-use assets$22,218
 $
Initial recognition of operating lease liabilities$23,290
 $
Acquisition:   
Non-cash assets acquired:   
Debt securities available for sale$51,479
 $
Debt securities held to maturity13,418
 
Equity securities1,796
 
Federal Home Loan Bank stock2,010
 
Loans receivable171,593
 
Accrued interest receivable679
 
Office properties and equipment, net5,774
 
Bank-owned life insurance17,245
 
Other assets2,823
 
Total non-cash assets acquired$266,817
 $
Liabilities assumed:   
Deposits$333,234
 $
Borrowings37,728
 
Advance payments by borrowers for taxes and insurance982
 
Accrued expenses and other liabilities5,400
 
Total liabilities assumed$377,344
 $
Net non-cash liabilities acquired$(110,527) $
Net cash and cash equivalents acquired in acquisition$155,248
 $
    
See accompanying notes to unaudited consolidated financial statements.


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements


1.Basis of Financial Statement Presentation

The accompanying unaudited consolidated financial statements include the accounts of Columbia Financial, Inc., its wholly-owned subsidiary Columbia Bank (the "Bank"), and the Bank's wholly-owned subsidiaries (collectively, the “Company”). In consolidation, all intercompany accounts and transactions are eliminated.

Columbia Financial, Inc. is a majority-owned subsidiary of Columbia Bank, MHC (the "MHC"). The accounts of the MHC are not consolidated in the accompanying consolidated financial statements of the Company.
    
In preparing the interim unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the Consolidated Statements of Financial Condition and Consolidated Statements of Income for the periods presented. Actual results could differ from these estimates. Material estimates that are particularly susceptible to change are the determination of the adequacy of the allowance for credit losses, evaluation of the need for valuation allowances on deferred tax assets, and determination of liabilities related to retirement and other post-retirement benefits. These estimates and assumptions are evaluated on an ongoing basis and are adjusted when facts and circumstances dictate.

The interim unaudited consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three and six month periods ended June 30, 20202021 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year or any other period. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.

The interim unaudited consolidated financial statements of the Company presented herein have been prepared in accordance with the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and U.S. generally accepted accounting principles (“GAAP”). Certain information and note disclosures have been condensed or omitted pursuant to the rules and regulations of the SEC.

These unaudited consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 20192020 and the audited consolidated financial statements included therein.

2.    Acquisitions
Stewardship Financial Corporation

On November 1, 2019, the Company completed its acquisition of Stewardship Financial Corporation ("Stewardship"), pursuant to the Agreement and Plan of Merger, dated as of June 6, 2019 (the "Merger Agreement"), by and among Columbia Financial, Broadway Acquisition Corp. (a wholly owned subsidiary of Columbia Financial) and Stewardship. Under the terms of the merger agreement, each outstanding share of Stewardship common stock was converted into the right to received $15.75 in cash at the effective time of the merger. At the time of closing, Stewardship had $956.0 million in total assets, including $756.9 million in net loans receivable, and $52.6 million in securities, and $877.8 million in total liabilities, including $781.4 million in deposits and $81.8 million in borrowings.The aggregate merger consideration paid was $136.3 million. The deposits initially acquired from Stewardship were held across a network of 12 branches located in New Jersey throughout Bergen, Morris, and Passaic Counties. During the six months ended June 30, 2020, 4 of these branches were closed, and the Bank recorded a loss of $770,000 related to these branch closures. During both the three and six months ended June 30, 2021, the Bank recorded additional losses of $314,000 related to these branches.

Merger-related expenses are recorded in the Consolidated Statements of Income and are expensed as incurred. Direct acquisition and other charges incurred in connection with the Stewardship acquisition totaled $102,000 and $1.1 million during the three and six months ended June 30, 2020, respectively. MergerThere were 0 merger expenses recorded during bothfor the three and six months ended June 30, 2019 were $462,000.2021.

9
The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The fair value estimates are subject to change for up to one year after the closing date of the transaction if additional information (existing at the date of closing) relative to closing date fair values becomes available. As the Company continues to analyze the acquired assets and assumed liabilities, there may be adjustments to the recorded carrying values. However, management does not expect significant future adjustments to the recorded amounts as at November 1, 2019.



COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

2.    Acquisitions (continued)

Roselle Bank

On April 1, 2020, the Company completed its acquisition of RSB Bancorp, MHC, RSB Bancorp, Inc. and Roselle Bank (collectively, the "Roselle Entities" or "Roselle"). Pursuant to the terms of the Merger Agreement, RSB Bancorp, MHC merged with and into the MHC, with the MHC as the surviving entity; RSB Bancorp, Inc.: merged with and into the Company,Columbia Financial, with the CompanyColumbia Financial as the surviving entity; and Roselle Bank merged with and into the Bank, with the Bank as the surviving institution. Under the terms of the merger agreement, depositors of Roselle Bank became depositors of the Bank and have the same rights and privileges in the MHC as if their accounts had been established at the Bank on the date established at Roselle Bank. The Company issued 4,759,048 shares of its common stock to the MHC, representing an amount equal to the fair value of the Roselle Entities as determined by an independent appraiser, at the effective time of the merger.

Merger-related expenses are recorded in the Consolidated Statements of Income and are expensed as incurred. Direct acquisition and other charges incurred in connection with the acquisition of the Roselle Entitiesacquisition totaled $335,000 and $443,000 during the three and six months ended June 30, 2020, respectively.2020. There were 0 merger expenses recorded duringfor the three and six months ended June 30, 2019.2021.

The following table sets forth assets acquired and liabilities assumed in the acquisition of the Roselle Entities,acquisition, at their estimated fair values as of the closing date of the transaction:
 April 1, 2020
 (In thousands)
Assets acquired: 
Cash and cash equivalents$155,248
Debt securities available for sale51,479
Debt securities held to maturity13,418
Equity securities1,796
Federal Home Loan Bank stock2,010
Loans receivable171,593
Accrued interest receivable679
Office properties and equipment, net5,774
Bank-owned life insurance17,245
Deferred tax asset, net1,334
Other assets1,489
Total assets acquired$422,065
�� 
Liabilities assumed: 
Deposits$333,234
Borrowings37,728
Advance payments by borrowers for taxes and insurance982
Accrued expenses and other liabilities5,400
Total liabilities assumed$377,344
  
Net assets acquired44,721
Fair market value of stock issued to Columbia Bank MHC for purchase68,530
Goodwill recorded at merger$23,809

April 1, 2020
(In thousands)
Assets acquired:
Cash and cash equivalents$155,248 
Debt securities available for sale51,479 
Debt securities held to maturity13,418 
Equity securities1,796 
Federal Home Loan Bank stock2,010 
Loans receivable171,593 
Accrued interest receivable679 
Office properties and equipment, net5,774 
Bank-owned life insurance17,245 
Deferred tax asset, net1,334 
Other assets1,489 
Total assets acquired$422,065 
Liabilities assumed:
Deposits$333,234 
Borrowings37,728 
Advance payments by borrowers for taxes and insurance982 
Accrued expenses and other liabilities5,400 
Total liabilities assumed$377,344 
Net assets acquired44,721 
Fair market value of stock issued to Columbia Bank MHC for purchase68,530 
Goodwill recorded at merger$23,809 

10






COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

2.    Acquisitions (continued)

Roselle Bank (continued)
The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities were recorded at their fair values as of April 1, 2020, and resulted in the recognition of goodwill of $23.8 million. The determination of the fair value of assets acquired and liabilities assumed required management to make estimates about discount rates, future expected cash flows, market condition, and other future events that are highly subjective in nature and subject to change. The fair value estimates are subjectDuring the fourth quarter of 2020, the Company completed all tax returns related to change for upthe operation of the acquired entity and its impact on the Company's income taxes, which resulted in a $5.1 million adjustment to one year afterdeferred income taxes, net, and a decrease in goodwill. During the closingquarter ended March 31, 2021, the Company recorded a final adjustment of $1.1 million to deferred income taxes, net, and a decrease in goodwill. At June 30, 2021, goodwill related to the Roselle acquisition totaled $17.6 million.

Freehold Bank

On June 17, 2021, the MHC, Columbia Financial, Inc. and the Bank (collectively, “Columbia”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Freehold MHC, Freehold Bancorp and Freehold Bank (collectively, “Freehold”), pursuant to which Columbia will acquire Freehold, with Freehold MHC and Freehold Bancorp merging into the MHC and Columbia Financial, respectively. At the effective time of these mergers, Freehold Bank will convert to a federal savings bank and operate as a wholly-owned subsidiary of Columbia Financial. As a subsidiary of Columbia Financial, current depositors of Freehold Bank will become members of, and will have the same rights and privileges in the MHC, the mutual holding company parent of Columbia Bank, as if their accounts had been established in Columbia Bank on the date established at Freehold. As part of the transaction, ifColumbia Financial will issue additional information (existing at the dateshares of closing) relative to closing date fair values becomes available. As the Company continues to analyze the acquired assets and assumed liabilities, there may be adjustmentsits common stock to the recorded carrying values. However, management does not expect significant future adjustmentsMHC in an amount equal to the recorded amounts as at April 1, 2020.

Fair Value Measurement of Assets Acquired and Liabilities Assumed

Described below are the methods used to determine the fair values of the significant assets acquired and liabilities assumed:

Cash and cash equivalents. The estimated fair values of cash and cash equivalents approximate their stated face amounts, as these financial instruments are either due on demand or have short-term maturities.
Debt securities available for sale. The estimated fair values of the debt securities were calculated utilizing Level 2 inputs. The majority of the acquired securities were fixed income instruments that are not quoted on an exchange, but are traded in active markets. The prices for these instruments are obtained through an independent pricing service when available, or dealer market participants with whom the Company has historically transacted with for both purchases and sales of securities. The prices are derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, and the bond's terms and conditions, among other things. Management reviewed the data and assumptions used in pricing securities by its third party provider to ensure the highest level of significant inputs are derived from market observable data.

Loans receivable. The acquired loan portfolio was segregated into pools for valuation purposes primarily based on loan type, non-accrual status, and credit risk rating. The estimated fair values were computed by discounting the expected cash flows from the respective pools. Cash flows were estimated by using valuation models that incorporated estimates of current key assumptions such as prepayment speeds, default rates, and loss severity rates. The process included: (1) projecting monthly principal and/or interest cash flows based on the contractual terms of the loans, including both maturity and contractual amortization; (2) adjusting projected cash flows for expected losses and prepayments, where appropriate; (3) developing a discount rate based on the relative risk of the cash flows, considering the loan type, liquidity risk, the maturity of the loans, servicing costs, and a required return on capital; and (4) discounting the projected cash flows to a present value, to arrive at the calculated value of the loans.

The methods used to estimate the fair values of loans are extremely sensitive to the assumptions and estimates used. While management attempted to use assumptions and estimates that best reflected the acquired loan portfolios and current market conditions, a greater degree of subjectivity is inherent in the values than in those determined in active markets.

Office properties and equipment, net. The fair value of landFreehold as determined by an independent appraiser. These shares are expected to be issued immediately prior to completion of the mergers. The Merger Agreement has been unanimously approved by the Boards of Directors of each of Columbia Financial, the MHC and buildings was estimated using current appraisals. Acquired equipment was not material. Buildings are amortized over their estimated useful lives. Equipment is amortized or depreciated over their estimated useful lives usually ranging for three to ten years.

Goodwill. Goodwill is not amortized for book purposes: however, it is reviewed at least annually for impairmentthe Bank and is 0t deductible for tax purposes.

Deposits. The fair valuesthe Boards of deposit liabilities with no stated maturity (i.e., non-interest bearingDirectors of each of Freehold MHC, Freehold Bancorp and interest-bearing demand deposit accounts, money market and savings and club accounts) are equalFreehold Bank. Subject to the carrying amounts payable on demand. The fair valuereceipt of certificatesall required regulatory and other approvals, and the satisfaction or waiver of deposit represent contractual cash flows, discountedother customary closing conditions, the parties anticipate that the transactions contemplated by the Merger Agreement is anticipated to present value using interest rates currently offered on depositsclose in the fourth quarter of 2021.
Merger-related expenses are recorded in the Consolidated Statements of Income and are expensed as incurred. Direct acquisition and other charges incurred in connection with similar characteristicsthe Freehold acquisition totaled $75,000 during the three and remaining maturities.six months ended June 30, 2021. There were 0 merger expenses recorded for the three and six months ended June 30, 2020.


Borrowings. The fair values of borrowings consisting of FHLB advances were estimated by discounting future cash flows using market discount rates for borrowings with similar characteristics, terms and remaining maturities.





COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

3.        Earnings per Share

Basic earnings per share ("EPS") is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. For purposes of calculating basic EPS, weighted average common shares outstanding excludes treasury stock, unallocated employee stock ownership plan shares that have not been committed for release and deferred compensation obligations required to be settled in shares of Company stock.

Diluted EPS is computed using the same method as basic EPS and reflects the potential dilution which could occur if stock options and unvested shares were exercised and converted into common stock. The potentially diluted shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and six months ended June 30, 20202021 and 2019:2020:
 For the Three Months Ended June 30, For the Six Months Ended June 30,
 2020 2019 2020 2019
 (Dollars in thousands, except per share data)
        
Net income$15,097
 $12,031
 $21,862
 $26,950
Shares:       
Weighted average shares outstanding - basic111,102,306
 111,553,203
 109,770,239
 111,544,339
Weighted average dilutive shares outstanding
 
 
 
Weighted average shares outstanding - diluted111,102,306
 111,553,203
 109,770,239
 111,544,339
Earnings per share:       
Basic$0.14
 $0.11
 $0.20
 $0.24
Diluted$0.14
 $0.11
 $0.20
 $0.24









11

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
3.        Earnings per Share (continued)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
(Dollars in thousands, except per share data)
Net income$26,688 $15,097 $47,733 $21,862 
Shares:
Weighted average shares outstanding - basic104,537,656 111,102,306 105,253,661 109,770,239 
Weighted average dilutive shares outstanding
Weighted average shares outstanding - diluted104,537,656 111,102,306 105,253,661 109,770,239 
Earnings per share:
Basic$0.26 $0.14 $0.45 $0.20 
Diluted$0.26 $0.14 $0.45 $0.20 

ForDuring the three and six months ended June 30, 2021, the average number of stock options which were anti-dilutive and were not included in the computation of diluted earnings per share totaled 466,265 and 321,263, respectively. During the three and six months ended June 30, 2020, the average number of stock options which were anti-dilutive and were not included in the computation of diluted earnings per share totaled 1,494,367 and 1,101,780, respectively. There were 0 stock options outstanding for the three and six months ended June 30, 2019.

4.    Stock Repurchase Program

On June 11, 2019, the Company announced that its Board of Directors authorized the Company's first stock repurchase program since the completion of its minority public offering in April 2018. This program, which commenced on June 13, 2019, authorized the purchase of up to 4,000,000 shares, or approximately 3.5%, of the Company's then issued and outstanding common stock. On December 5, 2019, the Company announced that itsthe Board of Directors had expanded its stock repurchase program to authorize the purchase of an additional 3,000,000 shares of the Company's outstanding common stock in addition to the shares remaining under the repurchase program announced on June 11, 2019. On April 23, 2020, the Company completed the repurchases under these stock repurchase programs.

On September 10, 2020, the Company announced that its Board of Directors authorized the Company's second stock repurchase program for the purchase of up to 5,000,000 shares, or approximately 4.3%, of the Company's issued and outstanding common stock, commencing on September 15, 2020. On February 1, 2021, the Company announced that its Board of Directors authorized the Company's third stock repurchase program to acquire up to 5,000,000 shares, or approximately 4.5%, of the Company's then issued and outstanding common stock, commencing upon completion of the Company's second stock repurchase program. On February 5, 2021, the Company completed the repurchases under the second stock repurchase program.

During the three and six months ended June 30, 2021, the Company repurchased 1,471,501 shares at a cost of approximately $25.7 million, or $17.47 per share, and 3,470,040 shares, at a cost of approximately $58.5 million, or $16.87 per share, respectively, under these programs. During the three and six months ended June 30, 2020, the Company repurchased 899,074 shares at a cost of approximately $13.0 million, or $14.46 per share, and 3,456,200 shares at a cost of approximately $53.4 million, or $15.44 per share, respectively, under this program. During the three and six months ended June 30, 2019, the Company repurchased 263,900 shares at a cost of approximately $3.9 million, or $14.65 per share. On April 23, 2020, the Company completed the repurchases under the stock repurchasethese programs. Repurchased shares are held as treasury stock and are available for general corporate purposes.

5.    Summary of Significant Accounting Policies

Accounting PronouncementsPronouncement Adopted in 2020

2021

In OctoberAugust 2018, the FASB issued ASU No. 2018-16,2018-14, Derivatives and Hedging (Topic 815)- Inclusion of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. This ASU permits the use of the OIS rate based upon SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in additionCompensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the direct Treasury obligations of the U.S. Government, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the Securities Industry and Financial Markets Association Municipal Swap Rate. Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing disclosures that no longer are considered cost beneficial, clarifying the specific requirements of disclosures, and adding disclosure requirements identified as relevant. Among other changes, the ASU are requiredadds disclosure requirements to be adopted concurrently with the amendments in ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities, which was issued in August 2017. The effective date for this ASUTopic 715-20 for the Company isweighted-average interest crediting rates for fiscal years beginning after December 15, 2019,cash balance plans and other plans with early adoption, including adoption inpromised interest crediting rates and an interim period permitted. The amendments should be adopted on a
5.    Summary of Significant Accounting Policies (continued)

12

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

5.    Summary of Significant Accounting Policies

Accounting PronouncementsPronouncement Adopted in 20202021 (continued)

prospective basisexplanation of the reasons for qualifying new or redesignated hedging relationships entered intosignificant gains and losses related to changes in benefit obligation for the period. The amendments remove disclosure requirements for the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, the amount and timing of plan assets expected to be returned to the employer, and the effects of a one-percentage-point change in assumed health care cost trend rates on orthe (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for post-retirement health care benefits. ASU 2018-14 is effective for fiscal years beginning after date of adoption.December 15, 2020, including interim reporting periods within that reporting period, with early adoption permitted. The Company adopted this guidanceASU effective January 1, 2020.2021. The update will be applied on a retrospective basis to disclosures with regard to employee benefit plans. The adoption of this ASUupdate did not have a materialsignificant impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820):Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The purpose of this updated guidance is to improve the effectiveness and disclosures in the notes to the financial statements. The ASU removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; removes the policy for timing of transfers between levels; and removes the disclosure related to the valuation process for Level 3 fair value measurements. The ASU also modifies existing disclosure requirements
which relate to the disclosure for investments in certain entities which calculate net asset value and clarifies the disclosure about uncertainty in the measurements as of the reporting date. For all entities, the effective date for this guidance is fiscal years beginning after December 15, 2019, including interim periods within the reporting period, with early adoption permitted. Entities are also allowed to elect early adoption of the eliminated or modified disclosure requirements and delay adoption of the new disclosure requirements until their effective date. The Company adopted this guidance effective January 1, 2020. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.
In March 2017, the FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20):Premium Amortization on Purchased Callable Debt Securities. This guidance shortens the amortization period for premiums on callable debt securities by requiring that premiums be amortized to the first (or earliest) call date instead of as an adjustment to the yield over the contractual life. This change more closely aligns the accounting with the economics of a callable debt security and the amortization period with expectations that already are included in market pricing on callable debt securities. This guidance does not change the accounting for discounts on callable debt securities, which will continue to be amortized to the maturity date. This guidance includes only instruments that are held at a premium and have explicit call features. It does not include instruments that contain prepayment features, such as mortgage backed securities; nor does it include call options that are contingent upon future events or in which the timing or amount to be paid is not fixed. The effective date for this ASU for the Company is fiscal years beginning after December 15, 2019, including interim periods within the reporting period, with early adoption permitted. Transition is on a modified retrospective basis with an adjustment to retained earnings as of the beginning of the period of adoption. The Company adopted this guidance effective January 1, 2020. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The main objective of this guidance is to simplify the accounting for goodwill impairment by requiring that impairment charges be based upon the first step in the current two-step impairment test under ASC 350. Currently, if the fair value of a reporting unit is lower than its carrying amount (Step 1), an entity calculates any impairment charge by comparing the implied fair value of goodwill with its carrying amount (Step 2). The implied fair value of goodwill is calculated by deducting the fair value of all assets and liabilities of the reporting unit from the reporting unit’s fair value as determined in Step 1. To determine the implied fair value of goodwill, entities estimate the fair value of any unrecognized intangible assets and any corporate-level assets or liabilities that were included in the determination of the carrying amount and fair value of the reporting unit in Step 1. Under this guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. This guidance eliminates the requirement to calculate a goodwill impairment charge using Step 2. This guidance does not change the guidance on completing Step 1 of the goodwill impairment test. Under this guidance, an entity will still be able to perform the current optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. The guidance in the ASU was applied prospectively and is effective for the Company for annual and interim impairment tests performed in periods beginning after December 15, 2019. The Company adopted this guidance effective January 1, 2020. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This guidance requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date for leases classified as operating leases as well as finance leases. The update also requires new quantitative disclosures related to leases in the Company's consolidated financial statements. There are also practical expedients in this update related to leases that commenced before the effective date, initial direct costs and the use of hindsight to extend or terminate a lease or purchase a leased asset. Lessor accounting remains largely unchanged under this new guidance. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842)-Land Easement Practical Expedient for Transition to Topic 842, which provides an optional practical expedient to not evaluate land easements which were existing or expired before the adoption of Topic 842 that were not accounted for as leases under Topic 840.

5.    Summary of Significant Accounting Policies (continued)
COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements


Accounting Pronouncements Adopted in 2020 (continued)

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842) -Targeted Improvements which provides entities with an optional transition method under which comparative periods presented in the financial statements will continue to be in accordance with current Topic 840, Leases, and a practical expedient to not separate non-lease components from the associated lease component. The guidance is effective for the Company for annual periods beginning after December 15, 2019, including interim periods within that reporting period. In the evaluation of this guidance, the Company identified the inventory of leases and actively accumulated the requisite lease data necessary to apply the guidance. The Company selected a software platform to support the recording, accounting and disclosure requirements of the new lease guidance. Upon adoption, the Company recorded a right-of-use asset and lease liability as of January 1, 2020. See note 10 for more information regarding adoption.

Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"), further amended by ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. Topic 326 pertains to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better determine their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019.

The Company elected to defer the adoption of the CECL methodology until December 31, 2020 as permitted by the recently enacted Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). In late December 2020, the Consolidated Appropriations Act, 2021 was enacted, and extended certain provisions of the CARES Act, which allowed the Company to extend the adoption of CECL until January 1, 2022. The Company will adoptelected to extend its adoption of CECL at the earlier of December 31, 2020 or when the national emergency concerning the COVID-19 outbreak has concluded. The Companyin accordance with this legislation, and will adopt the above mentioned ASUs related to Financial Instruments -Credit Losses (Topic 326) using a modified retrospective approach. Our CECL methodology includes the following key factors and assumptions for all loan portfolio segments:

a historical loss period, which represents a full economic credit cycle utilizing internal loss experience, as well as industry and peer historical loss data;

a single economic scenario with a reasonable and supportable forecast period of four to six quarters based on management’s current review of macroeconomic factors and the reliability of extended economic forecasts over different time horizons;

a reversion to historical mean period (after the reasonable and supportable forecast period) using a straight-line approach that extends through the shorter of six quarters or the end of the remaining contractual term; and

expected prepayment rates based on a combination of our historical experience and market observations.

Based on several analyses performed, as well as an implementation analysis utilizing existing exposures and forecasts of macroeconomic conditions at June 30, 2020,2021, we currently expect the adoption of ASU 2016-13 will result in an increasea decrease between 10%15% and 20%25% in our allowance for loan losses and our reserves for unfunded commitments.

As part of the implementation of the ASU, the Company will reconcile historical loan data, determine segmentation of the loan portfolio for application of the CECL calculation, determine the key assumptions, select calculation methods, and establish an internal control framework. We are currently finalizing the execution of our implementation controls and enhancing process documentation.

The expected increasedecrease in the allowance for loan losses and reserve for unfunded commitments is a result of the change from an incurred loss model, which encompasses allowances for current known and inherent losses within the portfolio, to an expected loss model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore, ASU 2016-13


13

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
5.    Summary of Significant Accounting Policies

Accounting Pronouncements Not Yet Adopted (continued)

will necessitate
that we establish an allowance for expected credit losses for certain debt securities and other financial assets; however, we do not expect these allowances to be significant.

Future amounts of provision expense related to our allowance for loan losses and reserves for unfunded commitments will depend on the size and composition of our loan portfolio, future economic conditions and borrowers’ payment performance. Future amounts of provision related our debt securities will depend on the composition of our securities portfolio and current market conditions.

The adoption of ASU 2016-13 is not expected to have a significant impact on our regulatory capital ratios.
    
COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

5.    Summary of Significant Accounting Policies (continued)

Accounting Pronouncements Not Yet Adopted (continued)

Upon adoption, any impact to the allowance for credit losses as of January 1, 2022, currently the allowance for loan losses, will be reflected as an adjustment, net of tax, to retained earnings.

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing disclosures that no longer are considered cost beneficial, clarifying the specific requirements of disclosures, and adding disclosure requirements identified as relevant. Among other changes, the ASU adds disclosure requirements to Topic 715-20 for the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in benefit obligation for the period. The amendments remove disclosure requirements for the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, the amount and timing of plan assets expected to be returned to the employer, and the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for post-retirement health care benefits. ASU 2018-14 is effective for fiscal years beginning after December 15, 2020, including interim reporting periods within that reporting period, with early adoption permitted. The update is to be applied on a retrospective basis. The Company is currently evaluating the effect of ASU 2018-14 on its disclosures in the Company's consolidated financial statements, and as its adoption is only disclosure related, does not expect it will have a significant impact on the Company's consolidated financial statements.

6.    Debt Securities Available for Sale

Debt securities available for sale at June 30, 20202021 and December 31, 20192020 are summarized as follows:
June 30, 2021
Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
(In thousands)
U.S. government and agency obligations$39,023 $913 $(80)$39,856 
Mortgage-backed securities and collateralized mortgage obligations1,495,440 28,231 (5,396)1,518,275 
Municipal obligations19,281 22 19,303 
Corporate debt securities62,705 2,424 (150)64,979 
$1,616,449 $31,590 $(5,626)$1,642,413 
 June 30, 2020
 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value
   (In thousands)  
        
U.S. government and agency obligations$35,433
 $1,238
 $
 $36,671
Mortgage-backed securities and collateralized mortgage obligations1,013,079
 43,526
 (377) 1,056,228
Municipal obligations1,873
 14
 
 1,887
Corporate debt securities77,551
 2,038
 (749) 78,840
Trust preferred securities5,000
 
 (701) 4,299
 $1,132,936
 $46,816
 $(1,827) $1,177,925
 December 31, 2019
 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value
   (In thousands)  
        
U.S. government and agency obligations$42,081
 $321
 $(16) $42,386
Mortgage-backed securities and collateralized mortgage obligations968,165
 12,981
 (1,265) 979,881
Municipal obligations2,284
 1
 (1) 2,284
Corporate debt securities68,613
 945
 (378) 69,180
Trust preferred securities5,000
 
 (395) 4,605
 $1,086,143
 $14,248
 $(2,055) $1,098,336

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
December 31, 2020
Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
(In thousands)
U.S. government and agency obligations$24,425 $1,124 $$25,549 
Mortgage-backed securities and collateralized mortgage obligations1,163,613 37,343 (562)1,200,394 
Municipal obligations16,845 17 16,862 
Corporate debt securities67,628 2,264 (415)69,477 
Trust preferred securities5,000 (330)4,670 
$1,277,511 $40,748 $(1,307)$1,316,952 
Notes to Unaudited Consolidated Financial Statements



6.    Debt Securities Available for Sale (continued)

The amortized cost and fair value of debt securities available for sale at June 30, 2020,2021, by contractual final maturity, is shown below. Expected maturities may differ from contractual maturities due to prepayment or early call options exercised by the issuer.
 June 30, 2020
 Amortized Cost Fair Value
 (In thousands)
    
One year or less$22,397
 $22,464
More than one year to five years37,414
 39,410
More than five years to ten years59,575
 59,338
More than ten years471
 485
 $119,857
 $121,697
Mortgage-backed securities and collateralized mortgage obligations1,013,079
 1,056,228
 $1,132,936
 $1,177,925




14

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
6.    Debt Securities Available for Sale (continued)

June 30, 2021
Amortized CostFair Value
(In thousands)
One year or less$15,118 $15,118 
More than one year to five years69,279 71,911 
More than five years to ten years36,612 37,109 
$121,009 $124,138 
Mortgage-backed securities and collateralized mortgage obligations1,495,440 1,518,275 
$1,616,449 $1,642,413 

Mortgage-backed securities and collateralized mortgage obligations totaling $1.0$1.5 billion at amortized cost and $1.1 billion at fair value, respectively, are not classified by maturity in the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.
    
    During the three months ended June 30, 2021, the sale of 1 debt security available for sale totaled $4.7 million, resulting in a gross loss of $281,000. There were 0 calls or matured debt securities available for sale during the quarter.

During the six months ended June 30, 2021, the sale of a debt security available for sale totaled $4.7 million, resulting in a gross loss of $281,000. Proceeds from called debt securities available for sale totaled $5.0 million, resulting in 0 gross gains or losses. Proceeds from matured debt securities available for sale totaled $210,000.

During the three months ended June 30, 2020, there were 0 sales of debt securities available for sale. Proceeds from called debt securities available for sale totaled $5.5 million. NaNmillion, resulting in 0 gross gains or gross losses were recognized on the securities called.losses. Proceeds from matured debt securities available for sale totaled $5.1 million.

During the six months ended June 30, 2020, proceeds from the sale of debt securities available for sale totaled $20.8 million, resulting in $369,000 of gross gains and 0 gross losses. Proceeds from called debt securities available for sale totaled $6.6 million, resulting in $1,000 of gross gains and 0 gross losses. Proceeds from matured debt securities available for sale totaled $5.8 million.

During the three and six months ended June 30, 2019, proceeds from the sale of debt securities available for sale totaled $15.7 million resulting in $339,000 of gross gains and 0 gross losses. During the three and six months ended June 30, 2019, there were 0 maturities of debt securities available for sale. During the six months ended June 30, 2019, proceeds from 1 called debt security available for sale totaled $797,000. NaN gross gains or losses were recognized on the security which was called. During the three months ended June 30, 2019 there were 0 calls of debt securities available for sale.

Debt securities available for sale having a carrying value of $769.7$626.4 million and $462.0$822.2 million, respectively, at June 30, 20202021 and December 31, 2019,2020, respectively, were pledged as security for public funds on deposit at the Bank as required and permitted by law, pledged for outstanding borrowings at the Federal Home Loan Bank, and pledged for potential borrowings at the Federal Reserve Bank of New York.
















COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements


6.    Debt Securities Available for Sale (continued)

The following tables summarize the fair value and gross unrealized losses of those securities that reported an unrealized loss at June 30, 20202021 and December 31, 20192020 and if the unrealized loss position was continuous for the twelve months prior to those respective dates:














15

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
 June 30, 2020
 Less Than 12 Months 12 Months or Longer Total
 Fair Value Gross Unrealized (Losses) Fair Value Gross Unrealized (Losses) Fair Value Gross Unrealized (Losses)
 (In thousands)
            
Mortgage-backed securities and collateralized mortgage obligations$43,842
 $(267) $31,643
 $(110) $75,485
 $(377)
Corporate debt securities15,912
 (88) 4,340
 (661) 20,252
 (749)
Trust preferred securities
 
 4,298
 (701) 4,298
 (701)
 $59,754
 $(355) $40,281
 $(1,472) $100,035
 $(1,827)
6.    Debt Securities Available for Sale (continued)
June 30, 2021
Less Than 12 Months12 Months or LongerTotal
Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)
(In thousands)
U.S. government and agency obligations$4,902 $(80)$$$4,902 $(80)
Mortgage-backed securities and collateralized mortgage obligations382,594 (5,006)21,245 (390)403,839 (5,396)
Corporate debt securities4,850 (150)4,850 (150)
Trust preferred securities
$387,496 $(5,086)$26,095 $(540)$413,591 $(5,626)
 December 31, 2019
 Less Than 12 Months 12 Months or Longer Total
 Fair Value
Gross Unrealized (Losses)
Fair Value
Gross Unrealized (Losses)
Fair Value
Gross Unrealized (Losses)
 (In thousands)
            
U.S. government and agency obligations$5,106
 $(13) $4,988
 $(3) $10,094
 $(16)
Mortgage-backed securities and collateralized mortgage obligations178,665
 (946) 58,208
 (319) 236,873
 (1,265)
Municipal obligations696
 (1) 
 
 696
 (1)
Corporate debt securities2,588
 (5) 4,627
 (373) 7,215
 (378)
Trust preferred securities
 
 4,605
 (395) 4,605
 (395)
 $187,055
 $(965) $72,428
 $(1,090) $259,483
 $(2,055)

December 31, 2020
Less Than 12 Months12 Months or LongerTotal
Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)
(In thousands)
Mortgage-backed securities and collateralized mortgage obligations$117,978 $(481)$24,018 $(81)$141,996 $(562)
Corporate debt securities9,845 (155)5,740 (260)15,585 (415)
Trust preferred securities4,670 (330)4,670 (330)
$127,823 $(636)$34,428 $(671)$162,251 $(1,307)

The Company evaluates securities for other-than-temporary impairment at each reporting period and more frequently when economic or market conditions warrant such evaluation. The temporary loss position associated with debt securities available for sale was the result of changes in market interest rates relative to the coupon of the individual security and changes in credit spreads. The Company does not have the intent to sell securities in a temporary loss position at June 30, 2020,2021, nor is it more likely than not that the Company will be required to sell the securities before the anticipated recovery.

The number of securities in an unrealized loss position at June 30, 20202021 totaled 31,65, compared with 9740 at December 31, 2019.2020. All temporarily impaired securities were investment grade atas of June 30, 20202021 and December 31, 2019.2020.

The Company did not0t record an other-than-temporary impairment charge on debt securities available for sale during the three and six months ended June 30, 20202021 and 2019.2020.

16

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

7.    Debt Securities Held to Maturity

Debt securities held to maturity at June 30, 20202021 and December 31, 20192020 are summarized as follows:
June 30, 2021
Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
(In thousands)
U.S. government and agency obligations$34,870 $$(183)$34,689 
Mortgage-backed securities and collateralized mortgage obligations367,275 13,280 (211)380,344 
$402,145 $13,282 $(394)$415,033 
 June 30, 2020
 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value
 (In thousands)
        
Mortgage-backed securities and collateralized mortgage obligations$273,997
 $15,878
 $(39) $289,836
 $273,997
 $15,878
 $(39) $289,836
 December 31, 2019
 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value
 (In thousands)
        
U.S. government and agency obligations$20,000
 $26
 $(66) $19,960
Mortgage-backed securities and collateralized mortgage obligations265,756
 4,048
 (259) 269,545
 $285,756
 $4,074
 $(325) $289,505

December 31, 2020
Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
(In thousands)
U.S. government and agency obligations$5,000 $$$5,001 
Mortgage-backed securities and collateralized mortgage obligations257,720 14,372 (2)272,090 
$262,720 $14,373 $(2)$277,091 
The amortized cost and fair value of debt held to maturity at June 30, 2021, by contractual final maturity, is shown below. Expected maturities may differ from contractual maturities due to prepayment or early call options exercised by the issuer.
June 30, 2021
Amortized CostFair Value
(In thousands)
More than one year to five years$14,875 $14,877 
More than five years to ten years19,995 19,812 
34,870 34,689 
Mortgage-backed securities and collateralized mortgage obligations367,275 380,344 
$402,145 $415,033 
    
Mortgage-backed securities and collateralized mortgage obligations totaling $274.0$367.3 million at amortized cost, and $289.8$380.3 million at fair value at June 30, 2021, are not classified by maturity as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

    During the three and six months ended June 30, 2021, there were 0 sales or maturities of debt securities held to maturity. During the three months ended June 30, 2021, proceeds from 1 called debt security held to maturity totaled $125,000, resulting in 0 gross gain or loss. During the six months ended June 30, 2021, proceeds from called debt securities held to maturity totaled $5.1 million, resulting in 0 gross gains or losses.

During the three and six months ended June 30, 2020, there were 0 sales or maturities of debt securities held to maturity. During both the three and six months ended June 30, 2020, proceeds from called debt securities held to maturity totaled $20.0 million. NaN gross gains or losses were recognized on the securities which were called.

During the three and six months ended June 30, 2019, there were 0 sales or maturities of debt securities held for maturity. During the three and six months ended June 30, 2019, proceeds from 1 called debt security held to maturity totaled $5.0 million, resulting in 0 gross gaingains or loss.losses.



17

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
7.    Debt Securities Held to Maturity (continued)

Debt securities held to maturity having a carrying value of $240.0$187.9 million and $236.0$220.5 million, at June 30, 20202021 and December 31, 2019,2020, respectively, were pledged as security for public funds on deposit at the Bank as required and permitted by law, pledged for outstanding borrowings at the Federal Home Loan Bank, and pledged for potential borrowings at the Federal Reserve Bank of New York.

The following tables summarize the fair value and gross unrealized losses of those securities that reported an unrealized loss at June 30, 20202021 and December 31, 20192020 and if the unrealized loss position was continuous for the twelve months prior to those respective dates:
June 30, 2021
Less Than 12 Months12 Months or LongerTotal
Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)
(In thousands)
U.S. government and agency obligations$19,812 $(183)$$$19,812 $(183)
Mortgage-backed securities and collateralized mortgage obligations11,347 (211)11,347 (211)
$31,159 $(394)$$$31,159 $(394)
 June 30, 2020
 Less Than 12 Months 12 Months or Longer Total
 Fair Value Gross Unrealized (Losses) Fair Value Gross Unrealized (Losses) Fair Value Gross Unrealized (Losses)
 (In thousands)
            
Mortgage-backed securities and collateralized mortgage obligations$7,974
 $(39) $
 $
 $7,974
 $(39)


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

7.    Debt Securities Held to Maturity (continued)

 December 31, 2019
 Less Than 12 Months 12 Months or Longer Total
 Fair Value Gross Unrealized (Losses) Fair Value Gross Unrealized (Losses) Fair Value Gross Unrealized (Losses)
 (In thousands)
            
U.S. government and agency obligations$9,934
 $(66) $
 $
 $9,934
 $(66)
Mortgage-backed securities and collateralized mortgage obligations27,911
 (251) 772
 (8) 28,683
 (259)
 $37,845
 $(317) $772
 $(8) $38,617
 $(325)

December 31, 2020
Less Than 12 Months12 Months or LongerTotal
Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)Fair ValueGross Unrealized (Losses)
(In thousands)
Mortgage-backed securities and collateralized mortgage obligations$2,176 $(2)$$$2,176 $(2)
The Company evaluates securities for other-than-temporary impairment at each reporting period and more frequently when economic or market conditions warrant such evaluation. The temporary loss position associated with debt securities held to maturity was the result of changes in market interest rates relative to the coupon of the individual security and changes in credit spreads. The Company does not have the intent to sell securities in a temporary loss position at June 30, 2020,2021, nor is it more likely than not that the Company will be required to sell the securities before the anticipated recovery.

There were 5    The number of securities in an unrealized loss position at June 30, 2020,2021 totaled 7, compared with 222 at December 31, 2019.2020. All temporarily impaired securities were investment grade atas of June 30, 20202021 and December 31, 2019.2020.

The Company did not0t record an other-than-temporary impairment charge on debt securities held to maturity during the three and six months ended June 30, 20202021 and 2019.2020.

18

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
8.    Equity Securities at Fair Value

The Company has an equity securities portfolio which consists of common stock in other financial institutions, a payment technology company, a community bank correspondent services company, and preferred stock in U.S. Government agencies which are reported at fair value on the Company's Consolidated Statements of Financial Condition. The fair value of the equities portfolio at June 30, 20202021 and December 31, 20192020 was $4.7$4.1 million and $2.9$5.4 million, respectively.

The Company adopted ASU 2016-01 on January 1, 2019, resulting in a $548,000 after tax cumulative-effect adjustment from other comprehensive income (loss) to retained earnings, as reflected in the Consolidated Statements of Changes in Stockholders' Equity.    The Company recorded a net increasedecrease in the fair value of equity securities of $643,000$778,000 and $59,000,$1.4 million, during the three and six months ended June 30, 2020,2021, respectively, as a component of non-interest income. During the three and six months ended June 30, 2019,2020, the Company recorded a net increase in the fair value of equity securities of $71,000$643,000 and $247,000,$59,000, respectively, as a component of non-interest income.

During the three and six months ended June 30, 2021 and 2020, there were 0 sales of equity securities. During the three months ended June 30, 2019 there were 0 sales of equity securities, and during the six months ended June 30, 2019, proceeds from sales of equity securities totaled $765,000, resulting in gross gains of $126,000 and 0 gross losses.


19

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.    Loans Receivable and Allowance for Loan Losses

Loans receivable at June 30, 20202021 and December 31, 20192020 are summarized as follows:
June 30,December 31,
20212020
(In thousands)
Real estate loans:
One-to-four family$1,867,924 $1,940,327 
Multifamily and commercial3,115,054 2,817,965 
Construction261,159 328,711 
Commercial business loans471,700 752,870 
Consumer loans:
Home equity loans and advances278,078 321,177 
Other consumer loans1,158 1,497 
Total gross loans5,995,073 6,162,547 
Purchased credit-impaired ("PCI") loans3,116 6,345 
Net deferred loan costs, fees and purchased premiums and discounts19,613 12,878 
Loans receivable$6,017,802 $6,181,770 
 June 30, December 31,
 2020 2019
 (In thousands)
Real estate loans:   
One-to-four family$2,164,185
 $2,077,079
Multifamily and commercial2,874,019
 2,919,985
Construction326,343
 298,942
Commercial business loans899,506
 483,215
Consumer loans:   
Home equity loans and advances359,813
 388,127
Other consumer loans1,600
 1,960
Total gross loans6,625,466
 6,169,308
Purchased credit-impaired loans6,881
 7,021
Net deferred loan costs, fees and purchased premiums and discounts7,527
 21,237
Loans receivable$6,639,874
 $6,197,566


The Company had $9.60 loans held-for-sale at June 30, 2021. The Company had $4.1 million of SBA loans held-for-sale at December 31, 2020. During the three months ended June 30, 2021, the Company sold $14.4 million of one-to-four family real estate loans and home equity loans held-for-sale, resulting in gross gains of $277,000 and 0 gross losses. During the three months ended June 30, 2021, the Company sold $244.7 million of SBA loans held-for-sale included in commercial business loans, held-for-sale atresulting in gross gains of $7.7 million and 0 gross losses. During the three months ended June 30, 2020. The2021, the Company hadalso sold a $31,000 construction loan held-for-sale resulting in 0 gross gain or loss. During the six months ended June 30, 2021, the Company sold $15.6 million, $4.1 million, $248.9 million, and $6.4 million of one-to-four family real estate loans and home equity loans, multifamily and commercial real estate loans, commercial business and SBA loans, and construction loans held-for-sale, at December 31, 2019. respectively, resulting in gross gains of $8.4 million and 0 gross losses.

During the three months ended June 30, 2020, the Company sold $52.4 million of one-to-four family real estate loans held-for-sale resulting in gross gains of $740,000 and 0 gross losses. During the six months ended June 30, 2020, the Company sold $104.0 million of one-to-four family real estate loans held-for-sale resulting in gross gains of $1.4 million and 0 gross losses.

During the three and six months ended June 30, 2021, 0 loans included in loans receivable were sold by the Company. During the three months ended June 30, 2019,2020, the Company sold $27.6a construction loan totaling $6.7 million of one-to-four family real estateincluded in loans held-for-salereceivable, resulting in gross gains of $196,000 and 0 gross losses. During the six months ended June 30, 2019, the Company sold $45.0 million of one-to-four family real estate loans held-for-sale resulting in gross gains of $328,000 and 0 gross losses.

gain or loss. During the six months ended June 30, 2020, the Company sold $8.8 million and $7.3 million of one-to-four family real estate and home equity loans, and commercial business loans, respectively, included in loans receivable. The Company recognizedreceivable, resulting in gross gains of $82,000 and $55,000, respectively, and 0 gross losses, respectively. During the three months ended June 30, 2020, the Company sold $579,000 of commercial business loans included in loans receivable, resulting in $55,000 gross gains or losses.

    During the three and six months ended June 30, 2020, the Company sold 1 construction loan totaling $6.7 million included in loans receivable, resulting in 0 gross gains or gross losses. During the three and six months ended June 30, 2019, the Company sold $2.5 million of one-to-four family real estate and home equity loans included in loans receivable, resulting in 0 gross gains or gross losses.

During the three and six months ended June 30, 2020, there were 0 loans purchased by the Company. During the three and six months ended June 30, 2019,2021, the Company purchased $2.6$71.6 million of multifamily and $5.0 million, respectively, of one-to-four familycommercial real estate loanloans from third parties. During the three and six months ended June 30, 2019,2020, 0 loans were purchased by the Company purchased $24.9 million of commercial real estate loans from third parties.Company.

At June 30, 2021 and December 31, 2020, commercial business loans include $467.0included $91.1 million ofand $344.4 million, respectively, in SBA PPPPayroll Protection Program ("PPP") loans and net deferred loan costs and fees of $13.5 million. At December 31, 2019 there were 0 SBA PPP loans.

At June 30, 2020 and December 31, 2019, the carrying value ofrelated to these loans serviced by the Company for investors was $592.8totaling $2.3 million and $526.3$6.6 million, respectively.

The Company has entered into guarantor swaps with Freddie Mac which results in improved liquidity. During the three months ended June 30, 2021, the Company exchanged $35.6 million of loans for Freddie Mac mortgage participation certificates, resulting in gross gains of $544,000 and 0 gross losses. During the six months ended June 30, 2021, the Company exchanged $99.6 million of loans for Freddie Mac mortgage participation certificates, resulting in gross gains of $2.3 million and 0 gross losses. The Company retained the servicing of these loans. During the three and six months ended June 30, 2020, 0 loans were sold. During the three and six months ended

At June 30, 2019,2021 and December 31, 2020, the carrying value of loans serviced by the Company exchanged $15.6for investors was $581.0 million and $21.6$598.0 million, respectively,respectively. These loans are not included in the Consolidated Statements of loans for a Freddie Mac mortgage participation certificate. The Company retained the servicing of these loans.Financial Condition.

20


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.    Loans Receivable and Allowance for Loan Losses (continued)

The following tables summarize the aging of loans receivable by portfolio segment, including non-accrual loans and excluding PCI loans at June 30, 20202021 and December 31, 2019:2020:
June 30, 2021
30-59 Days60-89 Days90 Days or MoreTotal Past DueNon-accrualCurrentTotal
(In thousands)
Real estate loans:
One-to-four family$1,471 $957 $316 $2,744 $862 $1,864,318 $1,867,924 
Multifamily and commercial3,893 392 2,433 6,718 2,433 3,105,903 3,115,054 
Construction261,159 261,159 
Commercial business loans1,617 434 349 2,400 383 468,917 471,700 
Consumer loans:
Home equity loans and advances355 192 395 942 636 276,500 278,078 
Other consumer loans1,158 1,158 
Total loans$7,336 $1,975 $3,493 $12,804 $4,314 $5,977,955 $5,995,073 
 June 30, 2020
 30-59 Days 60-89 Days 90 Days or More Total Past Due Non-accrual Current Total
 (In thousands)
Real estate loans:             
One-to-four family$4,105
 $1,120
 $3,278
 $8,503
 $4,872
 $2,150,810
 $2,164,185
Multifamily and commercial3,830
 2,072
 2,169
 8,071
 2,368
 2,863,580
 2,874,019
Construction1,580
 
 
 1,580
 
 324,763
 326,343
Commercial business loans594
 4,460
 3,515
 8,569
 5,167
 885,770
 899,506
Consumer loans:        
    
Home equity loans and advances1,344
 348
 310
 2,002
 1,095
 356,716
 359,813
Other consumer loans
 
 
 
 
 1,600
 1,600
Total loans$11,453
 $8,000
 $9,272
 $28,725
 $13,502
 $6,583,239
 $6,625,466
 December 31, 2019
 30-59 Days 60-89 Days 90 Days or More Total Past Due Non-accrual Current Total
 (In thousands)
Real estate loans:             
One-to-four family$6,249
 $2,132
 $1,638
 $10,019
 $1,732
 $2,065,328
 $2,077,079
Multifamily and commercial626
 1,210
 716
 2,552
 716
 2,916,717
 2,919,985
Construction
 
 
 
 
 298,942
 298,942
Commercial business loans1,056
 
 2,489
 3,545
 3,686
 475,984
 483,215
Consumer loans:             
Home equity loans and advances1,708
 246
 405
 2,359
 553
 385,215
 388,127
Other consumer loans3
 
 
 3
 
 1,957
 1,960
Total loans$9,642
 $3,588
 $5,248
 $18,478
 $6,687
 $6,144,143
 $6,169,308


December 31, 2020
30-59 Days60-89 Days90 Days or MoreTotal Past DueNon-accrualCurrentTotal
(In thousands)
Real estate loans:
One-to-four family$3,068 $912 $1,901 $5,881 $2,637 $1,931,809 $1,940,327 
Multifamily and commercial15,645 1,238 16,883 1,873 2,799,209 2,817,965 
Construction550 550 328,161 328,711 
Commercial business loans2,343 1,056 2,453 5,852 2,968 744,050 752,870 
Consumer loans:
Home equity loans and advances1,156 696 394 2,246 678 318,253 321,177 
Other consumer loans1,493 1,497 
Total loans$22,766 $2,664 $5,986 $31,416 $8,156 $6,122,975 $6,162,547 

The Company considers a loan to be delinquent when we have not received a payment within 30 days of its contractual due date. Generally, a loan is designated as a non-accrual loan when the payment of interest is 90 days or more in arrears of its contractual due date. Non-accruing loans are returned to accrual status after there has been a sustained period of repayment performance (generally
six consecutive months of payments) and both principal and interest are deemed collectible. The Company identifies loans that may need to be charged-off as a loss, by reviewing all delinquent loans, classified loans and other loans that management may have concerns about collectability. At June 30, 20202021 and December 31, 2019,2020, non-accrual loans totaled $13.5$4.3 million and $6.7$8.2 million, respectively. Included in non-accrual loans at June 30, 2020,2021, are 219 loans totaling $4.2 million$821,000 which are less than 90 days in arrears. At December 31, 2019, 82020, 19 loans totaling $1.5$2.2 million were less than 90 days in arrears.

At June 30, 20202021 and December 31, 2019,2020, there were 0 loans past due 90 days or more and still accruing interest.interest other than COVID-19 related loan forbearance and deferrals. In accordance with the CARES Act, these loans are not included in the aging of loans receivable by portfolio segment in the table above, and the Bank continues to accrue interest income during the forbearance or deferral period. If adverse information indicating that the borrower's capability of repaying all amounts due is unlikely, the interest accrual will cease.



21

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
9.    Loans Receivable and Allowance for Loan Losses (continued)

PCI loans are loans acquired at a discount primarily due to deteriorated credit quality. These loans are accounted forinitially recorded at fair value at acquisition, based upon the present value of expected future cash flows, with no related allowance for loan losses. PCI loans acquired in the Stewardship acquisition totaled $6.9$2.9 million at both June 30, 20202021 and $6.1 million at December 31, 2019.2020. PCI loans acquired in the Roselle acquisition totaled $226,000$242,000 at June 30, 2021 and $246,000 at December 31, 2020.



COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.     Loans Receivable and Allowance for Loan Losses (continued)

The following table presents changes in accretable yield for PCI loans for the three and six months ended June 30, 2020. There were no PCI loans outstanding for the three2021 and six months ended June 30, 2019.2020.
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
(In thousands)
Balance at beginning of period$408 $463 $418 $511 
Acquisition58 58 
Accretion(32)(49)(64)(98)
Net change in expected cash flows(1)(1)21 
Balance at end of period$375 $471 $375 $471 
 Three Months Ended June 30, 2020 Six Months Ended June 30, 2020
 (In thousands)
    
Balance at beginning of period$463
 $511
Acquisition58
 58
Accretion(49) (98)
Net change in expected cash flows(1) 
Balance at end of period$471
 $471


We may obtain physical possession of real estate collateralizing a residential mortgage loan via foreclosure or through an in-substance repossession. At June 30, 20202021 and December 31, 2019,2020, the Company had 0 real estate owned. At June 30, 2020 and December 31, 20192021 we had 1 and 4residential mortgage loan with a carrying value of $87,000 collateralized by residential real estate which was in the process of foreclosure. At December 31, 2020 we had 2 residential mortgage loans with carrying values totaling $180,000 and $522,000, respectively,$398,000 collateralized by residential real estate which arewere in the process of foreclosure. The states of New Jersey, New York and Pennsylvania issued executive orders which declared moratoriums on removing individuals from a residential property until at least two months after the COVID health crisis had ended. In response to these orders, in March 2020, the Company temporarily suspended residential property foreclosure sales and evictions. These moratoriums expire in these states beginning on August 31, 2021 through January 1, 2022.



























22

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
9.    Loans Receivable and Allowance for Loan Losses (continued)

The following tables summarize loans receivable (including PCI loans) and allowance for loan losses by portfolio segment and impairment method at June 30, 20202021 and December 31, 2019:2020:
June 30, 2021
One-to-Four FamilyMultifamily and CommercialConstructionCommercial BusinessHome Equity Loans and AdvancesOther Consumer LoansTotal
(In thousands)
Allowance for loan losses:
Individually evaluated for impairment$274 $148 $$14 $14 $$450 
Collectively evaluated for impairment16,834 26,108 9,160 15,884 1,457 69,448 
Loans acquired with deteriorated credit quality
Total$17,108 $26,256 $9,160 $15,898 $1,471 $$69,898 
Total loans:
Individually evaluated for impairment$5,668 $33,995 $$2,124 $1,475 $$43,262 
Collectively evaluated for impairment1,862,256 3,081,059 261,159 469,576 276,603 1,158 5,951,811 
Loans acquired with deteriorated credit quality295 1,797 1,024 3,116 
Total loans$1,868,219 $3,116,851 $261,159 $472,724 $278,078 $1,158 $5,998,189 

December 31, 2020
One-to-Four FamilyMultifamily and CommercialConstructionCommercial BusinessHome Equity Loans and AdvancesOther Consumer LoansTotal
(In thousands)
Allowance for loan losses:
Individually evaluated for impairment$391 $601 $$84 $12 $$1,088 
Collectively evaluated for impairment13,195 30,080 11,271 17,300 1,736 73,588 
Loans acquired with deteriorated credit quality
Total$13,586 $30,681 $11,271 $17,384 $1,748 $$74,676 
Total loans:
Individually evaluated for impairment$7,257 $32,792 $$3,447 $1,651 $$45,147 
Collectively evaluated for impairment1,933,070 2,785,173 328,711 749,423 319,526 1,497 6,117,400 
Loans acquired with deteriorated credit quality309 4,893 1,143 6,345 
Total loans$1,940,636 $2,822,858 $328,711 $754,013 $321,177 $1,497 $6,168,892 
23
 June 30, 2020
 One-to-Four Family Multifamily and Commercial Construction Commercial Business Home Equity Loans and Advances Other Consumer Loans Total
 (In thousands)
Allowance for loan losses:             
Individually evaluated for impairment$434
 $584
 $
 $1,100
 $11
 $
 $2,129
Collectively evaluated for impairment16,199
 26,746
 10,217
 17,214
 1,503
 7
 71,886
Loans acquired with deteriorated credit quality
 
 
 
 
 
 
Total$16,633
 $27,330
 $10,217
 $18,314
 $1,514
 $7
 $74,015
              
Total loans:             
Individually evaluated for impairment$8,810
 $14,960
 $
 $5,293
 $2,008
 $
 $31,071
Collectively evaluated for impairment2,155,375
 2,859,059
 326,343
 894,213
 357,805
 1,600
 6,594,395
Loans acquired with deteriorated credit quality297
 4,946
 
 1,638
 
 
 6,881
Total loans$2,164,482
 $2,878,965
 $326,343
 $901,144
 $359,813
 $1,600
 $6,632,347









COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.    Loans Receivable and Allowance for Loan Losses (continued)

 December 31, 2019
 One-to-Four Family Multifamily and Commercial Construction Commercial Business Home Equity Loans and Advances Other Consumer Loans Total
 (In thousands)
Allowance for loan losses:             
Individually evaluated for impairment$484
 $2
 $
 $1,121
 $14
 $
 $1,621
Collectively evaluated for impairment13,296
 22,978
 7,435
 14,715
 1,655
 9
 60,088
Loans acquired with deteriorated credit quality
 
 
 
 
 
 
Total$13,780
 $22,980
 $7,435
 $15,836
 $1,669
 $9
 $61,709
              
Total loans:             
Individually evaluated for impairment$8,891
 $2,599
 $
 $5,178
 $2,143
 $
 $18,811
Collectively evaluated for impairment2,068,188
 2,917,386
 298,942
 478,037
 385,984
 1,960
 6,150,497
Loans acquired with deteriorated credit quality429
 4,866
 
 1,726
 
 
 7,021
Total loans$2,077,508
 $2,924,851
 $298,942
 $484,941
 $388,127
 $1,960
 $6,176,329


Loan modifications to borrowers experiencing financial difficulties that are considered troubled debt restructurings ("TDRs") primarily involve the lowering of the monthly payments on such loans through either a reduction in interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods. These modifications generally do not result in the forgiveness of principal or accrued interest. In addition, the Company attempts to obtain additional collateral or guarantor support when modifying such loans. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

Section 4013 of the CARES Act, “Temporary Relief from Troubled Debt Restructurings,” allows banks to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time to account for the effects of COVID-19. The Bank elected to account for modifications on certain loans under Section 4013 of the CARES Act or, if the loan modification was not eligible under Section 4013, used the criteria in the COVID-19 guidance to determine when the loan modification was not a TDR in accordance with ASC 310-40. Guidance noted that modification or deferral programs mandated by the federal or a state government related to COVID-19 would not be in the scope of ASC 310-40, such as a state program that requires all institutions within that state to suspend mortgage payments for a specified period.














COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.     Loans Receivable and Allowance for Loan Losses (continued)

There These short-term loan modifications were no loans modifiednot treated as a troubled debt restructuring during the three months ended June 30,short-term modification period if the loan was not in arrears at December 31, 2019. Furthermore, based on current evaluations, generally, we have continued the accrual of interest on these loans during the short-term modification period. The Consolidated Appropriations Act, 2021, which was enacted in late December 2020, and 2019.extended certain provisions of the CARES Act, including provisions permitting loan deferral extension requests to not be treated as troubled debt restructurings.

    The following table presentstables present the number of loans modified as TDRs during the three and six months ended June 30, 20202021 and 2019,2020, along with their balances immediately prior to the modification date and post-modification. Post-modification recorded investment represents the net book balance immediately following modification.
 For the Six Months Ended June 30,
 2020 2019
 No. of Loans Pre-modification Recorded Investment Post-modification Recorded Investment No. of Loans Pre-modification Recorded Investment Post-modification Recorded Investment
 (Dollars in thousands)
Troubled Debt Restructurings           
Real Estate loans:           
Multifamily and commercial1
 $10,212
 $11,507
 1
 $4,095
 $4,095
Total restructured loans1
 $10,212
 $11,507
 1
 $4,095
 $4,095

 For the Three Months Ended June 30,
20212020
No. of LoansPre-modification Recorded InvestmentPost-modification Recorded InvestmentNo. of LoansPre-modification Recorded InvestmentPost-modification Recorded Investment
(Dollars in thousands)
Troubled Debt Restructurings
Real Estate loans:
One-to-four family$221 $322 $$
Multifamily and commercial192 211 
Total restructured loans$413 $533 $$

For the Six Months Ended June 30,
20212020
No. of LoansPre-modification Recorded InvestmentPost-modification Recorded InvestmentNo. of LoansPre-modification Recorded InvestmentPost-modification Recorded Investment
(Dollars in thousands)
Troubled Debt Restructurings
Real Estate loans:
One-to-four family$221 $322 $$
Multifamily and commercial192 211 10,212 11,507 
Total restructured loans$413 $533 $10,212 $11,507 



24

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
9.    Loans Receivable and Allowance for Loan Losses (continued)

The activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 20202021 and 20192020 are as follows:
 For the Three Months Ended June 30,
One-to-Four FamilyMultifamily and CommercialConstructionCommercial BusinessHome Equity Loans and AdvancesOther Consumer LoansTotal
(In thousands)
2021
Balance at beginning of period$19,850 $23,849 $11,464 $14,804 $1,931 $$71,904 
Provision charged (credited)(2,463)1,872 (2,304)1,600 (465)(1)(1,761)
Recoveries11 931 111 34 1,087 
Charge-offs(290)(396)(617)(29)(1,332)
Balance at end of period$17,108 $26,256 $9,160 $15,898 $1,471 $$69,898 
2020
Balance at beginning of period$16,798 $26,085 $9,399 $17,191 $1,718 $$71,200 
Provision charged (credited)(51)1,243 817 3,911 (183)(1)5,736 
Recoveries239 12 263 
Charge-offs(353)(2,800)(30)(1)(3,184)
Balance at end of period$16,633 $27,330 $10,217 $18,314 $1,514 $$74,015 

For the Six Months Ended June 30,
One-to-Four FamilyMultifamily and CommercialConstructionCommercial BusinessHome Equity Loans and AdvancesOther Consumer LoansTotal
(In thousands)
2021
Balance at beginning of period$13,586 $30,681 $11,271 $17,384 $1,748 $$74,676 
Provision charged (credited)4,014 (4,800)(2,112)91 (235)(3,041)
Recoveries14 937 127 45 1,124 
Charge-offs(506)(562)(1,704)(87)(2)(2,861)
Balance at end of period$17,108 $26,256 $9,160 $15,898 $1,471 $$69,898 
2020
Balance at beginning of period$13,780 $22,980 $7,435 $15,836 $1,669 $$61,709 
Provision charged (credited)3,050 4,339 2,781 5,258 (124)15,304 
Recoveries242 12 83 23 361 
Charge-offs(439)(1)(2,863)(54)(2)(3,359)
Balance at end of period$16,633 $27,330 $10,217 $18,314 $1,514 $$74,015 



25
 For the Three Months Ended June 30,
 One-to-Four Family Multifamily and Commercial Construction Commercial Business Home Equity Loans and Advances Other Consumer Loans Unallocated Total
 (In thousands)
2020               
Balance at beginning of period$16,798
 $26,085
 $9,399
 $17,191
 $1,718
 $9
 $
 $71,200
Provision charged (credited)(51) 1,243
 817
 3,911
 (183) (1) 
 5,736
Recoveries239
 2
 1
 12
 9
 
 
 263
Charge-offs(353) 
 
 (2,800) (30) (1) 
 (3,184)
Balance at end of period$16,633
 $27,330
 $10,217
 $18,314
 $1,514
 $7
 $
 $74,015
                
2019               
Balance at beginning of period$17,375
 $20,986
 $9,033
 $12,225
 $3,146
 $6
 $
 $62,771
Provision charged (credited)(1,254) 1,693
 (228) 441
 (542) 2
 
 112
Recoveries4
 
 1
 53
 
 
 
 58
Charge-offs(515) 
 
 (1) (21) (1) 
 (538)
Balance at end of period$15,610
 $22,679
 $8,806
 $12,718
 $2,583
 $7
 $
 $62,403








COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.    Loans Receivable and Allowance for Loan Losses (continued)

 For the Six Months Ended June 30,
 One-to-Four Family Multifamily and Commercial Construction Commercial Business Home Equity Loans and Advances Other Consumer Loans Unallocated Total
 (In thousands)
2020               
Balance at beginning of period$13,780
 $22,980
 $7,435
 $15,836
 $1,669
 $9
 $
 $61,709
Provision charged (credited)3,050
 4,339
 2,781
 5,258
 (124) 
 
 15,304
Recoveries242
 12
 1
 83
 23
 
 
 361
Charge-offs(439) (1) 
 (2,863) (54) (2) 
 (3,359)
Balance at end of period$16,633
 $27,330
 $10,217
 $18,314
 $1,514
 $7
 $
 $74,015
                
2019               
Balance at beginning of period$15,232
 $23,251
 $7,217
 $14,176
 $2,458
 $8
 $
 $62,342
Provision charged (credited)868
 (572) 1,588
 (1,555) 219
 
 
 548
Recoveries25
 
 1
 366
 7
 
 
 399
Charge-offs(515) 
 
 (269) (101) (1) 
 (886)
Balance at end of period$15,610
 $22,679
 $8,806
 $12,718
 $2,583
 $7
 $
 $62,403
























COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.     Loans Receivable and Allowance for Loan Losses (continued)

The following tables present loans individually evaluated for impairment by loan segment, excluding PCI loans, at June 30, 20202021 and December 31, 2019:2020:
At June 30, 2021
Recorded InvestmentUnpaid Principal BalanceSpecific Allowance
(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family$2,524 $3,064 $— 
Multifamily and commercial16,331 17,147 — 
Commercial business loans632 632 — 
Consumer loans:
Home equity loans and advances530 636 — 
20,017 21,479 — 
With a specific allowance recorded:
Real estate loans:
One-to-four family3,144 3,162 274 
Multifamily and commercial17,664 17,667 148 
Commercial business loans1,492 1,491 14 
Consumer loans:
Home equity loans and advances945 945 14 
23,245 23,265 450 
Total:
Real estate loans:
One-to-four family5,668 6,226 274 
Multifamily and commercial33,995 34,814 148 
Commercial business loans2,124 2,123 14 
Consumer loans:
Home equity loans and advances1,475 1,581 14 
Total loans$43,262 $44,744 $450 
















26
 At June 30, 2020
 Recorded Investment Unpaid Principal Balance Specific Allowance
 (In thousands)
With no allowance recorded:     
Real estate loans:     
One-to-four family$4,418
 $5,301
 $
Multifamily and commercial735
 771
 
Commercial business loans4,016
 4,204
 
Consumer loans:     
Home equity loans and advances1,052
 1,189
 
 10,221
 11,465
 
With a specific allowance recorded:     
Real estate loans:     
One-to-four family4,392
 4,475
 434
Multifamily and commercial14,225
 14,928
 584
Commercial business loans1,277
 4,264
 1,100
Consumer loans:     
Home equity loans and advances956
 956
 11
 20,850
 24,623
 2,129
Total:     
Real estate loans:     
One-to-four family8,810
 9,776
 434
Multifamily and commercial14,960
 15,699
 584
Commercial business loans5,293
 8,468
 1,100
Consumer loans:     
Home equity loans and advances2,008
 2,145
 11
Total loans$31,071
 $36,088
 $2,129

















COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.    Loans Receivable and Allowance for Loan Losses (continued)

At December 31, 2020
Recorded InvestmentUnpaid Principal BalanceSpecific Allowance
(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family$3,344 $3,898 $— 
Multifamily and commercial13,058 13,094 — 
Commercial business loans1,945 1,945 — 
Consumer loans:
Home equity loans and advances714 851 — 
19,061 19,788 — 
With a specific allowance recorded:
Real estate loans:
One-to-four family3,913 3,919 391 
Multifamily and commercial19,734 20,350 601 
Commercial business loans1,502 1,502 84 
Consumer loans:
Home equity loans and advances937 937 12 
26,086 26,708 1,088 
Total:
Real estate loans:
One-to-four family7,257 7,817 391 
Multifamily and commercial32,792 33,444 601 
Commercial business loans3,447 3,447 84 
Consumer loans:
Home equity loans and advances1,651 1,788 12 
$45,147 $46,496 $1,088 
 At December 31, 2019
 Recorded Investment Unpaid Principal Balance Specific Allowance
 (In thousands)
With no allowance recorded:     
Real estate loans:     
One-to-four family$4,314
 $5,473
 $
Multifamily and commercial1,494
 2,191
 
Commercial business loans3,859
 4,048
 
Consumer loans:     
Home equity loans and advances1,080
 1,217
 
 10,747
 12,929
 
With a specific allowance recorded:     
Real estate loans:     
One-to-four family4,577
 4,613
 484
Multifamily and commercial1,105
 1,105
 2
Commercial business loans1,319
 4,307
 1,121
Consumer loans:     
Home equity loans and advances1,063
 1,063
 14
 8,064
 11,088
 1,621
Total:     
Real estate loans:     
One-to-four family8,891
 10,086
 484
Multifamily and commercial2,599
 3,296
 2
Commercial business loans5,178
 8,355
 1,121
Consumer loans:     
Home equity loans and advances2,143
 2,280
 14
 $18,811
 $24,017
 $1,621


Specific allocations of the allowance for loan losses attributable to impaired loans totaled $2.1$450,000 and $1.1 million and $1.6 million at June 30, 20202021 and December 31, 2019,2020, respectively. At June 30, 20202021 and December 31, 2019,2020, impaired loans for which there was no related allowance for loan losses totaled $10.2$20.0 million and $10.7$19.1 million, respectively.


The recorded investment in TDRs totaled $31.3$40.6 million at June 30, 2020,2021, of which 3 loans totaling $603,000 were 30-59 days past due, 2 loans totaling $364,000 were1 loan with a balance of $409,000 was 60-89 days past due, and 6 loans totaling $1.6 million were 90 days past due. The remaining loans modified were current at the time of restructuring and have complied with the terms of their restructure agreement at June 30, 2020.2021. The recorded investment in TDRs totaled $20.0$45.4 million at December 31, 2019,2020, of which there were 0 loans1 loan with a balance of $91,000 was over 90 days past due, and 3 loans totaling $660,000$11.9 million were 30-59 days past due. The remaining loans modified were current at the time of restructuring and have complied with the terms of their restructure agreement at December 31, 2019.2020.












27

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.    Loans Receivable and Allowance for Loan Losses (continued)

The following tables present interest income recognized for loans individually evaluated for impairment, by loan segment, excluding PCI loans for the three and six months ended June 30, 20202021 and 2019:2020:
 For the Three Months Ended June 30,
20212020
Average Recorded InvestmentInterest Income RecognizedAverage Recorded InvestmentInterest Income Recognized
(In thousands)
Real estate loans:
One-to-four family$6,149 $102 $8,647 $81 
Multifamily and commercial33,264 375 14,960 32 
Commercial business loans2,295 41 5,871 157 
Consumer loans:
Home equity loans and advances1,523 18 2,062 29 
Total loans$43,231 $536 $31,540 $299 
 For the Three Months Ended June 30,
 2020 2019
 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized
 (In thousands)
Real estate loans:       
One-to-four family$8,647
 $81
 $8,611
 $108
Multifamily and commercial14,960
 32
 2,666
 37
Construction
 
 1,700
 
Commercial business loans5,871
 157
 6,616
 98
Consumer loans:       
Home equity loans and advances2,062
 29
 2,699
 47
Total loans$31,540
 $299
 $22,292
 $290

For the Six Months Ended June 30,
20212020
Average Recorded InvestmentInterest Income RecognizedAverage Recorded InvestmentInterest Income Recognized
(In thousands)
Real estate loans:
One-to-four family$6,518 $170 $8,728 $188 
Multifamily and commercial33,107 811 10,840 198 
Commercial business loans2,679 70 5,640 224 
Consumer loans:
Home equity loans and advances1,565 38 2,089 58 
Total loans$43,869 $1,089 $27,297 $668 
 For the Six Months Ended June 30,
 2020 2019
 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized
 (In thousands)
Real estate loans:       
One-to-four family$8,728
 $188
 $9,149
 $214
Multifamily and commercial10,840
 198
 2,681
 74
Construction
 
 1,133
 25
Commercial business loans5,640
 224
 5,430
 178
Consumer loans:       
Home equity loans and advances2,089
 58
 2,920
 99
Total loans$27,297
 $668
 $21,313
 $590


The Company utilizes an eight-point risk rating system to summarize its loan portfolio into categories with similar risk characteristics. Loans deemed to be “acceptable quality” are rated 1 through 4 (Pass), with a rating of 1 established for loans with minimal risk. Loans that are deemed to be of “questionable quality” are rated 5 (Special Mention) or 6 (Substandard). Loans with adverse classifications are rated 7 (Doubtful) or 8 (Loss). The risk ratings are also confirmed through periodic loan review examinations which are currently performed by both an independent third-party and the Company's credit risk review department. The Company requires an annual review be performed above certain dollar thresholds, depending on loan type, to help determine the appropriate risk ratings. Results from examinations are presented to the Audit Committee of the Board of Directors.













28

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

9.    Loans Receivable and Allowance for Loan Losses (continued)

The following tables present loans receivable by credit quality risk indicator and by loan segment, excluding PCI loans at June 30, 20202021 and December 31, 2019:2020:
June 30, 2021
One-to-Four FamilyMultifamily and CommercialConstructionCommercial BusinessHome Equity Loans and AdvancesOther Consumer LoansTotal
(In thousands)
Pass$1,863,129 $3,047,108 $261,159 $462,592 $277,354 $1,158 $5,912,500 
Special mention393 50,860 5,663 56,916 
Substandard4,402 17,086 3,445 724 25,657 
Doubtful
Loss
Total$1,867,924 $3,115,054 $261,159 $471,700 $278,078 $1,158 $5,995,073 
 June 30, 2020
 One-to-Four Family Multifamily and Commercial Construction Commercial Business Home Equity Loans and Advances Other Consumer Loans Total
 (In thousands)
              
Pass$2,157,351
 $2,850,202
 $326,343
 $877,804
 $358,526
 $1,600
 $6,571,826
Special mention411
 4,507
 
 13,102
 
 
 18,020
Substandard6,423
 19,310
 
 8,600
 1,287
 
 35,620
Doubtful
 
 
 
 
 
 
Loss
 
 
 
 
 
 
Total$2,164,185
 $2,874,019
 $326,343
 $899,506
 $359,813
 $1,600
 $6,625,466
 December 31, 2019
 One-to-Four Family Multifamily and Commercial Construction Commercial Business Home Equity Loans and Advances Other Consumer Loans Total
 (In thousands)
              
Pass$2,072,878
 $2,900,286
 $298,942
 $454,183
 $387,251
 $1,960
 $6,115,500
Special mention419
 4,724
 
 20,170
 
 
 25,313
Substandard3,782
 14,975
 
 8,862
 876
 
 28,495
Doubtful
 
 
 
 
 
 
Loss
 
 
 
 
 
 
Total$2,077,079
 $2,919,985
 $298,942
 $483,215
 $388,127
 $1,960
 $6,169,308


December 31, 2020
One-to-Four FamilyMultifamily and CommercialConstructionCommercial BusinessHome Equity Loans and AdvancesOther Consumer LoansTotal
(In thousands)
Pass$1,935,032 $2,758,905 $328,711 $740,010 $320,092 $1,497 $6,084,247 
Special mention404 40,392 6,718 47,514 
Substandard4,891 18,668 6,142 1,085 30,786 
Doubtful
Loss
Total$1,940,327 $2,817,965 $328,711 $752,870 $321,177 $1,497 $6,162,547 

10.    Leases

Effective January 1, 2020, the Company adopted ASU 2016-02 Leases (Topic 842) and all subsequent ASU's that modified Topic 842 as explained in note 5, Summary of Significant Accounting Policies, Accounting Pronouncements Adopted.. The Company's leases primarily relate to real estate property for branches and office space. At June 30, 2021 and December 31, 2020, all of the Company's leases are classified as operating leases.

The Company determines if an arrangement is a lease at inception. Topic 842 requires lessees to recognize a right-of-use asset and a lease liability, measured at the present value of the future minimum lease payments, at the lease commencement date. At the time of adoption, an operating lease right-of-use asset of $22.2 million and operating lease liabilities of $23.3 million were recorded in other assets and other liabilities, respectively on our Consolidated Statements of Financial Condition. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of minimum lease payments. As the Company's leases do not provide an implicit rate, the discount rate used in determining the lease liability for each individual lease was the Company's incremental borrowing rate at the time of adoption of ASU 2016-02, on a collateralized basis, over a similar term. Certain leases include options to renew, with one or more renewal terms usually ranging from 53 years to 10 years. For each lease, these extension options were evaluated, and those which were considered reasonably certain of renewal were included in the lease term.
At June 30, 2021 and December 31, 2020, the weighted average remaining lease term for operating leases was 7.87.0 years and 7.5 years, respectively, and the weighted average discount rate used in the measurement of operating lease liabilities was 2.17%, and 2.26%., respectively.



29

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

10.    Leases (continued)

The Company elected to account for the lease and non-lease components separately since such amounts are readily determinable under the Company's lease contracts. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Variable lease payments include common area maintenance charges, real estate taxes, repairs and maintenance costs and utilities. Operating and variable lease expenses are recorded in occupancy expense in the Consolidated Statements of Income. During the three and six months ended June 30, 2021 and 2020, operating and variable lease expenses totaled approximately $563,000 and $601,000, respectively. During the six months ended June 30, 2021 and 2020, operating and variable lease expenses totaled approximately $1.2 million and $1.3 million, respectively.

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three and six months ended June 30, 2021 and 2020. At June 30, 2020,2021, the Company had no leases that had not yet commenced.

The following table summarizes lease payment obligations for each of the next five years and thereafter as follows:
At June 30, 2021Lease Payment Obligations
(In thousands)
2021$2,053 
20223,971 
20233,590 
20242,866 
20252,194 
Thereafter6,402 
Total undiscounted cash flows21,076 
Discount on cash flows(1,736)
Total lease liability$19,340 
At June 30, 2020 Lease Payment Obligations
  (In thousands)
   
2020 $2,076
2021 3,940
2022 3,636
2023 3,322
2024 2,597
Thereafter 8,548
Total undiscounted cash flows 24,119
Discount on cash flows (2,227)
Total lease liability $21,892


At December 31, 2019, operating lease commitments under lessee arrangements were $4.9 million, $4.5 million, $4.0 million, $3.5 million and $2.7 million for 2020 through 2024, respectively, and $5.0 million in aggregate for all years thereafter.

11.    Deposits

Deposits at June 30, 20202021 and December 31, 20192020 are summarized as follows:
June 30,December 31,
20212020
(In thousands)
Non-interest-bearing demand$1,513,197 $1,354,605 
Interest-bearing demand2,355,819 2,189,164 
Money market accounts645,590 588,180 
Savings and club deposits749,531 688,309 
Certificates of deposit1,815,139 1,958,366 
          Total deposits$7,079,276 $6,778,624 
 June 30, December 31,
 2020 2019
 (In thousands)
    
Non-interest-bearing demand$1,316,539
 $958,442
Interest-bearing demand1,926,019
 1,720,383
Money market accounts501,954
 410,392
Savings and club deposits652,555
 543,480
Certificates of deposit2,184,042
 2,013,145
          Total deposits$6,581,109
 $5,645,842


Included in the above balances at June 30, 20202021 and December 31, 20192020 are certificates of deposit obtained through brokers, totaling $26.4$16.2 million and $31.6$26.3 million, respectively, that were acquired from Stewardship.

The aggregate amount of certificates of deposit that meet or exceed $100,000 totaled approximately $1.2$937.6 million and $1.0 billion and $1.1 billion, respectively, at June 30, 20202021 and December 31, 2019.2020, respectively. Interest expense on deposits for the three months ended June 30, 2021 and 2020 totaled $7.9 million and $14.9 million, respectively. Interest expense on deposits for the six months ended June 30, 2021 and 2020 and 2019 totaled $14.9 million and $15.3$16.7 million and $31.7 million, and $28.9 million, respectively.

30

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

11.    Deposits (continued)

Scheduled maturities of certificates of deposit accounts at June 30, 20202021 and December 31, 20192020 are summarized as follows:
June 30,December 31,
20212020
(In thousands)
One year or less$1,364,245 $1,494,129 
After one year to two years277,629 337,579 
After two years to three years74,863 52,809 
After three years to four years27,845 23,018 
After four years70,557 50,831 
$1,815,139 $1,958,366 
 June 30, December 31,
 2020 2019
 (In thousands)
    
One year or less$1,572,328
 $1,293,613
After one year to two years478,820
 548,995
After two years to three years61,513
 142,458
After three years to four years27,502
 11,362
After four years43,879
 16,717
 $2,184,042
 $2,013,145


12.    Stock Based Compensation

At the Company's annual meeting of stockholders held on June 6, 2019, stockholders approved the Columbia Financial, Inc. 2019 Equity Incentive Plan ("2019 Plan") which provides for the issuance of up to 7,949,996 shares (2,271,427 restricted stock awards and 5,678,569 stock options) of common stock.
    
On July 23, 2019, 1,419,1311,389,570 shares of restricted stock were awarded, with a grant date fair value of $15.60 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares.

On December 16, 2019, 74,673 shares of restricted stock were awarded, with a grant date fair value of $17.00 per share. To fund the grant of restricted common stock, the Company reissued shares from treasury stock.

On December 14, 2020, 33,160 shares of restricted stock were awarded, with a grant date fair value of $15.08 per share. To fund the grant of restricted common stock, the Company reissued shares from treasury stock.

On March 22, 2021, 50,203 shares of restricted stock were awarded, with a grant date fair value of $17.86 per share. To fund the grant of restricted common stock, the Company reissued shares from treasury stock.

Restricted shares granted under the 2019 Plan generally vest in equal installments, over performance or service periods ranging from three1 year to five5 years, beginning one1 year from the date of grant. A portion of restricted shares awarded are performance vesting awards, which may or may not vest depending upon the attainment of certain corporate financial targets. Management recognizes compensation expense for the fair value of restricted shares on a straight line basis over the requisite performance or service period. During the three and six months ended June 30, 2021 and 2020, approximately $1.4$1.6 million and $2.8$1.4 million respectively, in expense was recognized in regard to these awards. There was 0 restricted stock expense recorded during the three and six months ended June 30, 2019. The expected future compensation expense related to the 1,418,8911,299,398 non-vested restricted shares outstanding at June 30, 20202021 is approximately $17.1$12.3 million over a weighted average period of 3.62.5 years. During the six months ended June 30, 2021 and 2020, approximately $3.0 million and $2.8 million in expense was recognized in regard to these awards.















31

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
12.    Stock Based Compensation (continued)

The following is a summary of the Company's restricted stock activity during the three and six months ended June 30, 2021 and 2020:
Number of Restricted SharesWeighted Average Grant Date Fair Value
Non-vested at January 1, 20211,263,169 $15.66 
  Grants50,203 17.86 
  Forfeited(13,846)15.60 
Non-vested at March 31, 20211,299,526 $15.74 
 Forfeited(128)15.60 
Non-vested at June 30, 20211,299,398 $15.74 
 Number of Restricted Shares Weighted Average Grant Date Fair Value
    
Outstanding, January 1, 20201,420,012
 $15.67
 Forfeited(881) 16.60
Outstanding, March 31, 20201,419,131
 $15.67
 Forfeited(240) 15.60
Outstanding, June 30, 20201,418,891
 $15.67
Number of Restricted SharesWeighted Average Grant Date Fair Value
Non-vested at January 1, 20201,420,012 $15.67 
 Forfeited(881)15.60 
Non-vested at March 31, 20201,419,131 $15.67 
Forfeited(240)15.60 
Non-vested at June 30, 20201,418,891 $15.67 

On July 23, 2019, options to purchase 3,589,9593,707,901 shares of Company common stock were awarded with a grant date fair value of $4.25 per option. Stock options granted under the 2019 Plan vest in equal installments over the service period of five years beginning one year from the date of grant. Stock options were granted at an exercise price of $15.60, which represents the fair value of the Company's common stock price on the grant date based on the closing market price, and have an expiration period of 10 years. The fair value of stock options granted was estimated utilizing the Black-Scholes option pricing model using the following assumptions: expected life of 6.5 years, risk-free rate of return of 1.90%, volatility of 22.12%, and a dividend yield of 0.00%.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

12.    Stock Based Compensation (Continued)

On December 16, 2019, options to purchase 184,378 shares of Company common stock were awarded with a grant date fair value of $4.59 per option. Stock options granted under the 2019 Plan generally vest in equal installments over the service period of five years beginning one year from the date of grant. Stock options were granted at an exercise price of $17.00, which represents the fair value of the Company's common stock price on the grant date based on the closing market price, and have an expiration period of approximately 10 years. The fair value of stock options granted was estimated utilizing the Black-Scholes option pricing model using the following assumptions: expected life of 6.5 years, risk-free rate of return of 1.79%, volatility of 22.23%, and a dividend yield of 0.00%.

On March 22, 2021, options to purchase 109,654 shares of Company common stock were awarded with a grant date fair value of $4.91 per option. Stock options granted under the 2019 Plan vest in equal installments over the service period of three years beginning one year from the date of grant. Stock options were granted at an exercise price of $17.86, which represents the fair value of the Company's common stock price on the grant date based on the closing market price, and have an expiration period of approximately 10 years. The fair value of stock options granted was estimated utilizing the Black-Scholes option pricing model using the following assumptions: expected life of 6.0 years, risk-free rate of return of 1.11%, volatility of 25.98%, and a dividend yield of 0.00%.







32

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
12.    Stock Based Compensation (continued)

The expected life of the options represents the period of time that stock options are expected to be outstanding and is estimated using the simplified approach, which assumes that all outstanding options will be exercised at the midpoint of the vesting date and full contractual term. The risk-free rate of return is based on the rates on the grant date of a U.S. Treasury Note with a term equal to the expected option life. Since the Company recently became a public company and does not have sufficient historical price data, the expected volatility is based on the historical daily stock prices of Company stock plus a peer group of similar entities based on factors such as industry, stage of life cycle, size and financial leverage. The Company has not paid any cash dividends on its common stock.

Management recognizes expense for the fair value of these awards on a straight line basis over the requisite service period. During the three months ended June 30, 2021 and 2020, approximately $822,000 and $804,000 in expense was recognized in regard to these awards. During the six months ended June 30, 2021 and 2020, approximately $804,200$1.6 million and $1.6 million in expense was recognized in regard to these awards. There was 0 stock option expense recorded for the three and six months ended June 30, 2019. The expected future compensation expense related to the 3,771,6903,043,454 non-vested options outstanding at June 30, 20202021 is $13.1$10.1 million over a weighted average period of 4.13.1 years.

The following is a summary of the Company's option activity during the three and six months ended June 30, 2021 and 2020:
Number of Stock Options Weighted Average Exercise PriceWeighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value
Outstanding, January 1, 20213,708,628 $15.66 8.6$
 Granted109,654 17.86 — — 
 Expired(2,029)15.60 — — 
 Forfeited(30,118)15.60 — — 
Outstanding, March 31, 20213,786,135 $15.73 8.4$6,673,328 
 Exercised(1,661)15.60 — — 
 Expired(7,529)15.60 — — 
 Forfeited(1,412)15.60 — — 
Outstanding, June 30, 20213,775,533 $15.73 8.1$5,700,258 
Options exercisable at June 30, 2021732,079 $15.67 8.1$1,138,280 
 Number of Stock Options  Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years)  Aggregate Intrinsic Value
        
Outstanding, January 1, 20203,784,044
 15.67
 9.6
 $4,812,490
 Forfeited(9,707) 15.60
 
 
Outstanding, March 31, 20203,774,337
 15.67
 9.3
 $
 Forfeited(2,647) 15.60
 
 
Outstanding, June 30, 20203,771,690
 15.67
 9.1
 $
Options exercisable at June 30, 2020
 $
 
 $


Number of Stock Options Weighted Average Exercise PriceWeighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value
Outstanding, January 1, 20203,784,044 $15.67 9.6$4,812,490 
 Forfeited(9,707)15.60 — — 
Outstanding, March 31, 20203,774,337 $15.67 9.3$
Forfeited(2,647)15.60 — — 
Outstanding, June 30, 20203,771,690 $15.67 9.1$
Options exercisable at June 30, 2020$— $— 

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value, the difference between the Company's closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options.

    During both the three and six months ended June 30, 2021, the aggregate intrinsic value of options exercised was $3,805. There were no0 stock option exercises during the three and six months ended June 30, 2020 and 2019.2020.


33

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
13.    Components of Net Periodic Benefit Cost

Pension Plan, Retirement Income Maintenance Plan (the "RIM Plan") and Post-retirement Plan

The Company maintains a single employer, tax-qualified defined benefit pension plan (the "Pension Plan") which covers full-time employees that satisfy the Pension Plan's eligibility requirements. The benefits are based on years of service and the employee's average compensation for the highest five consecutive years of employment. Effective October 1, 2018, employees hired by the Bank are not eligible to participate in the Bank's Pension Plan as the plan has been closed to new employees as of that date.
    
The Company also has a Retirement Income Maintenance Plan (the "RIM "Plan) which is a non-qualified defined benefit plan which provides benefits to all employees of the Company if their benefits under the Pension Plan are limited by Internal Revenue Code 415 and 401(a)(17).    



COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

13.    Components of Net Periodic Benefit Cost (continued)
    
In addition, the Company provides certain health care and life insurance benefits to eligible retired employees under a Post-retirement Plan. The Company accrues the cost of retiree health care and other benefits during the employees’ period of active service. Effective January 1, 2019, the Post-retirement Plan has been closed to new hires. The Company also provides life insurance benefits to eligible employees under an endorsement split-dollar life insurance program.

Net periodic benefit (income) cost for Pension Plan, RIM Plan, Post-retirement Plan and split-dollar life insurance arrangementSplit-dollar Life Insurance plan benefits for the three and six months ended June 30, 20202021 and 2019,2020, includes the following components:
 For the Three Months Ended June 30,  
 Pension Plan RIM Plan Post-retirement Plan Split-Dollar Life Insurance  
 2020 2019 2020 2019 2020 2019 2020 2019  Affected Line Item in the Consolidated Statements of Income
 (In thousands)  
                  
Service cost$1,937
 $1,501
 $67
 $53
 $99
 $84
 $120
 $88
 Compensation and employee benefits
Interest cost2,031
 2,194
 102
 116
 171
 207
 131
 114
 Other non-interest expense
Expected return on plan assets(5,737) (4,727) 
 
 
 
 
 
 Other non-interest expense
Amortization:                 
Prior service cost
 
 
 
 
 
 14
 14
 Other non-interest expense
Net loss781
 765
 99
 61
 77
 37
 113
 62
 Other non-interest expense
Net periodic (income) benefit cost$(988) $(267) $268
 $230
 $347
 $328
 $378
 $278
  
 For the Six Months Ended June 30,  
 Pension Plan RIM Plan Post-retirement Plan Split-Dollar Life Insurance  
 2020 2019 2020 2019 2020 2019 2020 2019  Affected Line Item in the Consolidated Statements of Income
 (In thousands)  
                  
Service cost$3,874
 $3,002
 $134
 $106
 $198
 $168
 $226
 $176
 Compensation and employee benefits
Interest cost4,062
 4,388
 204
 232
 342
 414
 245
 228
 Other non-interest expense
Expected return on plan assets(11,474) (9,454) 
 
 
 
 
 
 Other non-interest expense
Amortization:                 
Prior service cost
 
 
 
 
 
 28
 28
 Other non-interest expense
Net loss1,562
 1,530
 198
 122
 154
 74
 226
 124
 Other non-interest expense
Net periodic (income) benefit cost$(1,976) $(534) $536
 $460
 $694
 $656
 $725
 $556
  

 For the Three Months Ended June 30,
Pension PlanRIM PlanPost-retirement PlanSplit-Dollar Life Insurance
20212020202120202021202020212020 Affected Line Item in the Consolidated Statements of Income
(In thousands)
Service cost$2,150 $1,937 $100 $67 $130 $99 $141 $120 Compensation and employee benefits
Interest cost1,756 2,031 86 102 141 171 125 131 Other non-interest expense
Expected return on plan assets(6,318)(5,737)Other non-interest expense
Amortization:
Prior service cost14 14 Other non-interest expense
Net loss1,000 781 166 99 153 77 191 113 Other non-interest expense
Net periodic (income) benefit cost$(1,412)$(988)$352 $268 $424 $347 $471 $378 















34

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
13.    Components of Net Periodic Benefit Cost
For the Six Months Ended June 30,
Pension PlanRIM PlanPost-retirement PlanSplit-Dollar Life Insurance
20212020202120202021202020212020 Affected Line Item in the Consolidated Statements of Income
(In thousands)
Service cost$4,300 $3,874 $200 $134 $260 $198 $282 $226 Compensation and employee benefits
Interest cost3,512 4,062 172 204 282 342 250 245 Other non-interest expense
Expected return on plan assets(12,636)(11,474)Other non-interest expense
Amortization:
Prior service cost28 28 Other non-interest expense
Net loss2,000 1,562 332 198 306 154 382 226 Other non-interest expense
Net periodic (income) benefit cost$(2,824)$(1,976)$704 $536 $848 $694 $942 $725 

For the three and six months ended June 30, 2020,2021, 0 contributions were made to the Pension Plan. The net periodic cost (income) for pension benefits, other post-retirement and split dollar life insurance benefits for the three and six months ended June 30, 20202021 were calculated using the most recent available benefit valuations.
    
COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

13.    Components of Net Periodic Benefit Cost (continued)

Through the acquisition of the Roselle entities, the Company acquired a non-contributory defined benefit supplemental executive retirement plan with the only participant being a former president of Roselle Bank. For the three and six months ended June 30, 2021 and 2020, the Company recorded a net periodic benefit cost of $2,000 and $4,000, and $4,000 and $4,000, respectively, in connection with this plan.

14.    Fair Value Measurements

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. Where quoted market values in an active market are not readily available, the Company utilizes various valuation techniques to estimate fair value.

In January 2016, the FASB issued ASU 2016-01- "Financial Instruments". This guidance amended existing guidance to improve accounting standards for financial instruments including clarification and simplification of the accounting and disclosure requirements and the requirement to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The Company adopted the guidance effective January 1, 2019, and the fair value of the Company's loan portfolio is now presented using an exit price method.
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access on the measurement date.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar instruments in markets that are active or not active, or inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
35

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
14.    Fair Value Measurements (continued)

Level 3: Prices or valuation techniques that require unobservable inputs that are both significant to the fair value measurement and unobservable (i.e., supported by minimal or no market activity). Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The methods described below were used to measure fair value of financial instruments as reflected in the tables below on a recurring basis at June 30, 20202021 and December 31, 2019.2020.















COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

Debt Securities Available for Sale, at Fair Value

For debt securities available for sale, fair value was estimated using a market approach. The majority of these securities are fixed income instruments that are not quoted on an exchange, but are traded in active markets. Prices for these instruments are obtained through third-party data service providers or dealer market participants with which the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing, a Level 2 input, is a mathematical technique used principally to value certain securities to a benchmark or to comparable securities. The Company evaluates the quality of Level 2 matrix pricing through comparison to similar assets with greater liquidity and evaluation of projected cash flows. As the Company is responsible for the determination of fair value, it performs quarterly analysis on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, the Company compares the prices received from the pricing service to a secondary pricing source. Additionally, the Company compares changes in the reported market values and returns to relevant market indices to assess the reasonableness of the reported prices. The Company’s internal price verification procedures and review of fair value methodology documentation provided by independent pricing services has not historically resulted in an adjustment in the prices obtained from the pricing service. The Company may hold debt instruments issued by the U.S. government and U.S. government-sponsored agencies that are traded in active markets with readily accessible quoted market prices that are considered Level 1 inputs.

Equity Securities, at Fair Value

The Company holds equity securities that are traded in active markets with readily accessible quoted market prices that are considered Level 1 inputs. A trust preferred security that is not traded in an active market and Federal Home Loan Mortgage Corporation ("FHLMC") and Federal National Mortgage Association ("FNMA") preferred stock are considered Level 2 instruments. In addition, Level 2 instruments include Atlantic Community Bankers Bank ("ACCB") stock, which is based on redemption at par value and can only be sold to the issuing ACBB or another institution that holds ACBB or another institution that holds ACBB stock.

Derivatives

The Company records all derivatives included in other assets and liabilities on the Consolidated Statements of Financial Condition at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. See note 16 for disclosures related to the accounting treatment for derivatives.

The fair value of the Company's derivatives is determined using discounted cash flow analysis using observable market-based inputs, which are considered Level 2 inputs.





36

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
14.    Fair Value Measurements (continued)

The following tables present the assets and liabilities reported on the Consolidated Statements of Financial Condition at their fair values at June 30, 20202021 and December 31, 2019,2020, by level within the fair value hierarchy:


June 30, 2021
                     Fair Value Measurements
Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
(In thousands)
Debt securities available for sale:
U.S. government and agency obligations$39,856 $35,318 $4,538 $
Mortgage-backed securities and collateralized mortgage obligations1,518,275 1,518,275 
Municipal obligations19,303 19,303 
Corporate debt securities64,979 64,979 
Trust preferred securities
Total debt securities available for sale1,642,413 35,318 1,607,095 
Equity securities4,053 3,707 346 
Derivative assets12,741 12,741 
$1,659,207 $39,025 $1,620,182 $
Derivative liabilities$28,347 $$28,347 $


December 31, 2020
Fair Value Measurements
Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
(In thousands)
Debt securities available for sale:
U.S. government and agency obligations$25,549 $25,549 $$
Mortgage-backed securities and collateralized mortgage obligations1,200,394 1,200,394 
Municipal obligations16,862 16,862 
Corporate debt securities69,477 69,477 
Trust preferred securities4,670 4,670 
Total debt securities available for sale1,316,952 25,549 1,291,403 
Equity securities5,418 5,072 346 0
Derivative assets19,425 19,425 
$1,341,795 $30,621 $1,311,174 $
Derivative liabilities$42,384 $$42,384 $



37













COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

 June 30, 2020
                        Fair Value Measurements
 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
 (In thousands)
Debt securities available for sale:       
U.S. government and agency obligations$36,671
 $36,671
 $
 $
Mortgage-backed securities and collateralized mortgage obligations1,056,228
 
 1,056,228
 
Municipal obligations1,887
 
 1,887
 
Corporate debt securities78,840
 
 78,840
 
Trust preferred securities4,299
 
 4,299
 
Total debt securities available for sale1,177,925
 36,671
 1,141,254
 
Equity securities4,710
 4,385
 325
 
Derivative assets
 
 
 
 $1,182,635
 $41,056
 $1,141,579
 $
        
Derivative liabilities$27,626
 $
 $27,626
 $

 December 31, 2019
   Fair Value Measurements
 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
 (In thousands)
Debt securities available for sale:       
U.S. government and agency obligations$42,386
 $42,386
 $
 $
Mortgage-backed securities and collateralized mortgage obligations979,881
 
 979,881
 
Municipal obligations2,284
 
 2,284
 
Corporate debt securities69,180
 
 69,180
 
Trust preferred securities4,605
 
 4,605
 
Total debt securities available for sale1,098,336
 42,386
 1,055,950
 
Equity securities2,855
 2,587
 268
 


Derivative assets185
 
 185
 
 $1,101,376
 $44,973
 $1,056,403
 $
        
Derivative liabilities$11,546
 $
 $11,546
 $


There were no Level 3 assets measured at fair value on a recurring basis at June 30, 20202021 and December 31, 2019.2020.




COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

Assets Measured at Fair Value on a Non-Recurring Basis

The valuation techniques described below were used to estimate fair value of financial instruments measured on a non-recurring basis at June 30, 20202021 and December 31, 2019.2020.

Collateral Dependent Impaired Loans

Loans which meet certain criteria are evaluated individually for impairment. Loan impairment is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. For loans measured for impairment based on the fair value of the underlying collateral, fair value was estimated using a market approach. The Company measures the fair value of collateral underlying impaired loans primarily through obtaining independent appraisals that rely upon quoted market prices for similar assets in active markets. These appraisals include adjustments, on an individual case-by-case basis, to comparable assets based on the appraisers’ market knowledge and experience, as well as adjustments for estimated costs to sell between 6.0% and 8.0%. The Company classifies these loans as Level 3 within the fair value hierarchy.

Mortgage Servicing Rights, Net ("MSR's")
    
Mortgage servicing rights are carried at the lower of cost or estimated fair value. The estimated fair value of MSRs is obtained through an analysis of future cash flows, incorporating assumptions that market participants would use in determining fair value including market discount rates, prepayments speeds, servicing income, servicing costs, default rates and other market driven data, including the market's perception of future interest rate movements. The prepayment speed and the discount rate are considered two of the most significant inputs in the model. A significant degree of judgment is involved in valuing the mortgage servicing rights using Level 3 inputs. The use of different assumptions could have a significant effect on this fair value estimate.

The following tables present the assets and liabilities reported on the Consolidated Statements of Financial Condition at their fair values on a non-recurring basis at June 30, 20202021 and December 31, 2019,2020, by level within the fair value hierarchy:
June 30, 2021
Fair Value Measurements
Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
(In thousands)
Impaired loans$1,232 $$$1,232 
Mortgage servicing rights2,319 2,319 
$3,551 $$$3,551 
 June 30, 2020
   Fair Value Measurements
 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
 (In thousands)
        
Mortgage servicing rights$443
 $
 $
 $443
 $443
 $
 $
 $443
December 31, 2020
Fair Value Measurements
Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
(In thousands)
Mortgage servicing rights1,338 1,338 
$1,338 $$$1,338 
 December 31, 2019
   Fair Value Measurements
 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
 (In thousands)
        
Impaired loans$1,063
 $
 $
 $1,063
Mortgage servicing rights681
 
 
 681
 $1,744
 $
 $
 $1,744
38


At June 30, 2020, there were no impaired loans or real estate owned measured at fair value on a non-recurring basis.




COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

The following table presents information for Level 3 assets measured at fair value on a non-recurring basis at June 30, 20202021 and December 31, 2019:2020:
June 30, 2021
Fair ValueValuation MethodologyUnobservable InputsRange of InputsWeighted Average
(Dollars in thousands)
Impaired loans$1,232 OtherContracted sale price of collateral%%
Mortgage servicing rights2,319 Discounted cash flow
Prepayment speeds and discount rates (1)
8.1% - 24.3%11.3 %
 June 30, 2020
 Fair Value Valuation Methodology Unobservable Inputs Range of Inputs Weighted Average
 (Dollars in thousands)
          
Mortgage servicing rights$443
 Estimated cash flow 
Prepayment speeds and discount rates(3)
 9.1% - 29.3% 17.4%

 December 31, 2019
 Fair Value Valuation Methodology Unobservable Inputs Range of Inputs Weighted Average
 (Dollars in thousands)
          
Impaired loans$1,063
 Estimated cash flow 
Expected value of future cash flows (1)
 —% —%
Mortgage servicing rights681
 Estimated cash flow 
Prepayment speeds and discount rates (2)
 3.6% - 24.0% 12.7%
          
(1) Value based on management's estimate of expected future cash flows.
(2) Value of SBA servicing rights based on a discount rate of 11.75%.
(3) Value of SBA servicing rights based on a discount rate of 10.25%.

December 31, 2020
Fair ValueValuation MethodologyUnobservable InputsRange of InputsWeighted Average
(Dollars in thousands)
Mortgage servicing rights1,338 Discounted cash flow
Prepayment speeds and discount rates (1)
9.7% - 26.2%16.7%
(1) Value of SBA servicing rights based on a discount rate of 10.25%.

Other Fair Value Disclosures

The Company is required to disclose estimated fair value of financial instruments, both assets and liabilities on and off the balance sheet, for which it is practicable to estimate fair value. A description of the valuation methodologies used for those assets and liabilities not recorded at fair value on a recurring or non-recurring basis are set forth below.

Cash and Cash Equivalents

For cash and due from banks, federal funds sold and short-term investments, the carrying amount approximates fair value due to their nature and short-term maturities.

Debt Securities Held to Maturity

For debt securities held to maturity, fair value was estimated using a market approach. The majority of the Company’s securities are fixed income instruments that are not quoted on an exchange, but are traded in active markets. Prices for these instruments are obtained through third-party data service providers or dealer market participants with which the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing, a Level 2 input, is a mathematical technique used principally to value certain securities to a benchmark or to comparable securities. The Company evaluates the quality of Level 2 matrix pricing through comparison to similar assets with greater liquidity and evaluation of projected cash flows. As the Company is responsible for the determination of fair value, it performs quarterly analysis on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, the Company compares the prices received from the pricing service to a secondary pricing source. Additionally, the Company compares changes in the reported market values and returns to relevant market indices to assess the reasonableness of the reported prices. The Company’s internal price verification procedures and review of fair value methodology documentation provided by independent pricing services has not historically resulted in an adjustment in the prices obtained from the pricing service.





39

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
14.    Fair Value Measurements (continued)

The Company also holds debt instruments issued by the U.S. government and U.S. government-sponsored agencies that are traded in active markets with readily accessible quoted market prices that are considered Level 1 inputs within the fair value hierarchy.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

Federal Home Loan Bank Stock ("FHLB")

The fair value of FHLB stock is based on redemption at par value and can only be sold to the issuing FHLB, to other FHLBs, or to other member banks. As such, the Company's FHLB stock is recorded at cost, or par value, and is evaluated for impairment each reporting period by considering the ultimate recoverability of the investment rather than temporary declines in value. The Company classifies the estimated fair value as Level 2 within the fair value hierarchy.

Loans Receivable

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial mortgage, residential mortgage, commercial, construction, and consumer and other. Each loan category is further segmented into fixed and adjustable rate interest terms and into performing and non-performing categories.

The fair value of performing loans was estimated using a combination of techniques, including a discounted cash flow model that utilizes a discount rate that reflects the Company's current pricing for loans with similar characteristics and remaining maturity, adjusted by an amount for estimated credit losses inherent in the portfolio at the balance sheet date. The rates take into account the expected yield curve, as well as an adjustment for prepayment risk, when applicable. The Company classifies the estimated fair value of its loan portfolio as Level 3.

The fair value for non-performing loans deemed significant was based on recent external appraisals of collateral securing such loans, adjusted for the timing of anticipated cash flows. The Company classifies the estimated fair value of its non-performing loan portfolio as Level 3.
    
Deposits

The fair value of deposits with no stated maturity, such as demand, money market, and savings and club deposits are payable on demand at each reporting date and classified as Level 2. The estimated fair value of certificates of deposit was based on the discounted value of contractual cash flows. The discount rate was estimated using the Company’s current rates offered for deposits with similar remaining maturities. The Company classifies the estimated fair value of its certificates of deposit portfolio as Level 2.

Borrowings

The fair value of borrowings was estimated by discounting future cash flows using rates available for debt with similar terms and maturities and is classified by the Company as Level 2 within the fair value hierarchy.

Commitments to Extend Credit and Letters of Credit

The fair value of commitments to extend credit and letters of credit was estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counter-parties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value estimates of commitments to extend credit and letters of credit are deemed immaterial.











40



COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

The following tables present the assets and liabilities reported on the Consolidated Statements of Financial Condition at their fair values at June 30, 20202021 and December 31, 2019:2020:
June 30, 2021
                          Fair Value Measurements
Carrying ValueTotal Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
(In thousands)
Financial assets:
Cash and cash equivalents$387,231 $387,231 $387,231 $$
Debt securities available for sale1,642,413 1,642,413 35,318 1,607,095 
Debt securities held to maturity402,145 415,033 415,033 
Equity securities4,053 4,053 3,707 346 
Federal Home Loan Bank stock40,922 40,922 40,922 
Loans receivable, net5,947,904 6,206,197 6,206,197 
Derivative assets12,741 12,741 12,741 
Financial liabilities:
Deposits$7,079,276 $7,084,350 $$7,084,350 $
Borrowings749,683 755,076 755,076 
Derivative liabilities28,347 28,347 28,347 
 June 30, 2020
                             Fair Value Measurements
 Carrying Value Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
 (In thousands)
Financial assets:         
Cash and cash equivalents$225,881
 $225,881
 $225,881
 $
 $
Debt securities available for sale1,177,925
 1,177,925
 36,671
 1,141,254
 
Debt securities held to maturity273,997
 289,836
 
 289,836
 
Equity securities4,710
 4,710
 4,385
 325
 
Federal Home Loan Bank stock57,843
 57,843
 
 57,843
 
Loans receivable, net6,565,859
 6,737,316
 
 
 6,737,316
          
Financial liabilities:  
      
Deposits$6,581,109
 $6,605,444
 $
 $6,605,444
 $
Borrowings1,129,979
 1,143,380
 
 1,143,380
 
Derivative liabilities27,626
 27,626
 
 27,626
 
 December 31, 2019
                              Fair Value Measurements
 Carrying Value Total Fair Value Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3)
 (In thousands)
Financial assets:         
Cash and cash equivalents$75,547
 $75,547
 $75,547
 $
 $
Debt securities available for sale1,098,336
 1,098,336
 42,386
 1,055,950
 
Debt securities held to maturity285,756
 289,505
 19,960
 269,545
 
Equity securities2,855
 2,855
 2,587
 268
 
Federal Home Loan Bank stock69,579
 69,579
 
 69,579
 
Loans receivable, net6,135,857
 6,219,008
 
 
 6,219,008
Derivative assets185
 185
 
 185
 
          
Financial liabilities:         
Deposits$5,645,842
 $5,654,075
 $
 $5,654,075
 $
Borrowings1,407,022
 1,411,962
 
 1,411,962
 
Derivative liabilities11,546
 11,546
 
 11,546
 


December 31, 2020
                           Fair Value Measurements
Carrying ValueTotal Fair ValueQuoted prices in active markets for identical assets (Level 1)Significant other observable inputs (Level 2)Significant unobservable inputs (Level 3)
(In thousands)
Financial assets:
Cash and cash equivalents$422,957 $422,957 $422,957 $$
Debt securities available for sale1,316,952 1,316,952 25,549 1,291,403 
Debt securities held to maturity262,720 277,091 5,001 272,090 
Equity securities5,418 5,418 5,072 346 
Federal Home Loan Bank stock43,759 43,759 43,759 
Loans receivable, net6,107,094 6,394,524 6,394,524 
Derivative assets19,425 19,425 19,425 
Financial liabilities:
Deposits$6,778,624 $6,793,034 $$6,793,034 $
Borrowings799,364 808,853 808,853 
Derivative liabilities42,384 42,384 42,384 




41

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because limited markets exist for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets or liabilities include goodwill and intangibles assets, deferred tax assets, office properties and equipment, and bank-owned life insurance.

    
        
42

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss)

The following tables present the components of other comprehensive income (loss), both gross and net of tax, for the three and six months ended June 30, 20202021 and 2019:2020:
 For the Three Months Ended June 30,
20212020
Before TaxTax EffectAfter TaxBefore TaxTax EffectAfter Tax
(In thousands)
Components of other comprehensive income (loss):
Unrealized gains on debt securities available for sale:$6,645 $(1,857)$4,788 $8,041 $(1,689)$6,352 
Accretion of unrealized gain on debt securities reclassified as held to maturity(17)(12)(2)(2)
Reclassification adjustment for (loss) included in net income(281)79 (202)
6,347 (1,773)4,574 8,039 (1,689)6,350 
Derivatives:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges1,315 (367)948 (945)195 (750)
1,315 (367)948 (945)195 (750)
Employee benefit plans:
Amortization of prior service cost included in net income(14)(11)(14)(11)
Reclassification adjustment of actuarial net (loss) included in net income(1,511)422 (1,089)(1,071)226 (845)
Change in funded status of retirement obligations34,441 (9,623)24,818 2,170 (456)1,714 
32,916 (9,198)23,718 1,085 (227)858 
Total other comprehensive income (loss)$40,578 $(11,338)$29,240 $8,179 $(1,721)$6,458 
 For the Three Months Ended June 30,
 2020 2019
 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax
 (In thousands)
Components of other comprehensive income (loss):           
Unrealized gains on debt securities available for sale:$8,041
 $(1,689) $6,352
 $17,829
 $(3,737) $14,092
Accretion of unrealized gain on debt securities reclassified as held to maturity(2) 
 (2) (2) 
 (2)
Reclassification adjustment for gains included in net income
 
 
 339
 (79) 260
 8,039
 (1,689) 6,350
 18,166
 (3,816) 14,350
Derivatives:           
Unrealized (loss) on swap contracts accounted for as cash flow hedges(945) 195
 (750) (5,920) 1,244
 (4,676)
 (945) 195
 (750) (5,920) 1,244
 (4,676)
            
Employee benefit plans:           
Amortization of prior service cost included in net income(14) 3
 (11) (14) 3
 (11)
Reclassification adjustment of actuarial net gain included in net income(1,071) 226
 (845) (925) 194
 (731)
Change in funded status of retirement obligations2,170
 (456) 1,714
 (5,610) 1,179
 (4,431)
 1,085
 (227) 858
 (6,549) 1,376
 (5,173)
Total other comprehensive income$8,179
 $(1,721) $6,458
 $5,697
 $(1,196) $4,501











43




COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss) (continued)

For the Six Months Ended June 30,
20212020
Before TaxTax EffectAfter TaxBefore TaxTax EffectAfter Tax
(In thousands)
Components of other comprehensive income (loss):
Unrealized (loss) gains on debt securities available for sale:$(13,196)$950 $(12,246)$32,425 $(6,806)$25,619 
Accretion of unrealized (loss) gain on debt securities reclassified as held to maturity(21)23 (1)
Reclassification adjustment for (loss) gain included in net income(281)79 (202)370 (81)289 
(13,498)1,052 (12,446)32,800 (6,888)25,912 
Derivatives:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges7,147 (516)6,631 (15,306)3,207 (12,099)
7,147 (516)6,631 (15,306)3,207 (12,099)
Employee benefit plans:
Amortization of prior service cost included in net income(28)(20)(28)(22)
Reclassification adjustment of actuarial net (loss) included in net income(3,022)844 (2,178)(2,142)450 (1,692)
Change in funded status of retirement obligations37,491 (3,120)34,371 4,340 (911)3,429 
34,441 (2,268)32,173 2,170 (455)1,715 
Total other comprehensive income (loss)$28,090 $(1,732)$26,358 $19,664 $(4,136)$15,528 
 For the Six Months Ended June 30,
 2020 2019
 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax
 (In thousands)
Components of other comprehensive income (loss):           
Unrealized gains on debt securities available for sale:$32,425
 $(6,806) $25,619
 $29,595
 $(6,208) $23,387
Accretion of unrealized gain on debt securities reclassified as held to maturity5
 (1) 4
 11
 (3) 8
Reclassification adjustment for gains included in net income370
 (81) 289
 465
 (105) 360
 32,800
 (6,888) 25,912
 30,071
 (6,316) 23,755
Derivatives:           
Unrealized (loss) on swap contracts accounted for as cash flow hedges(15,306) 3,207
 (12,099) (9,440) 1,984
 (7,456)
 (15,306) 3,207
 (12,099) (9,440) 1,984
 (7,456)
 
 
 
      
Employee benefit plans:           
Amortization of prior service cost included in net income(28) 6
 (22) (28) 6
 (22)
Reclassification adjustment of actuarial net (loss) included in net income(2,142) 450
 (1,692) (1,849) 388
 (1,461)
Change in funded status of retirement obligations4,340
 (911) 3,429
 (4,672) 982
 (3,690)
 2,170
 (455) 1,715
 (6,549) 1,376
 (5,173)
Total other comprehensive income$19,664
 $(4,136) $15,528
 $14,082
 $(2,956) $11,126















44

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss) (continued)

The following tables present the changes in the components of accumulated other comprehensive income (loss), net of tax, for the three and six months ended June 30, 20202021 and 2019:2020:
 For the Three Months Ended June 30,
20212020
Unrealized Gains on Debt Securities Available for SaleUnrealized (Losses) on SwapsEmployee Benefit PlansAccumulated Other Comprehensive (Loss)Unrealized Gains on Debt Securities Available for SaleUnrealized (Losses) on SwapsEmployee Benefit PlansAccumulated Other Comprehensive (Loss)
(In thousands)
Balance at beginning of period$14,008 $(11,173)$(75,342)$(72,507)$28,875 $(19,823)$(68,717)$(59,665)
Current period changes in other comprehensive income (loss)4,574 948 23,718 29,240 6,350 (750)858 6,458 
Total other comprehensive income (loss)$18,582 $(10,225)$(51,624)$(43,267)$35,225 $(20,573)$(67,859)$(53,207)
 For the Three Months Ended June 30,
 2020 2019
 Unrealized Gains on Debt Securities Available for Sale Unrealized (Losses) on Swaps Employee Benefit Plans Accumulated Other Comprehensive (Loss) Unrealized (Losses) Gains on Debt Securities Available for Sale Unrealized Gains on Swaps Employee Benefit Plans Accumulated Other Comprehensive (Loss)
 (In thousands)
                
Balance at beginning of period$28,875
 $(19,823) $(68,717) $(59,665) $(4,369) $(4,786) $(56,665) $(65,820)
Current period changes in other comprehensive income (loss)6,350
 (750) 858
 6,458
 14,350
 (4,676) (5,173) 4,501
Total other comprehensive income (loss)$35,225
 $(20,573) $(67,859) $(53,207) $9,981

$(9,462)
$(61,838) $(61,319)
 For the Six Months Ended June 30,
 2020 2019
 Unrealized Gains on Debt Securities Available for Sale Unrealized (Losses) on Swaps Employee Benefit Plans Accumulated Other Comprehensive (Loss) Unrealized (Losses) Gains on Debt Securities Available for Sale Unrealized Gains on Swaps Employee Benefit Plans Accumulated Other Comprehensive (Loss)
 (In thousands)
                
Balance at beginning of period$9,313
 $(8,474) $(69,574) $(68,735) $(13,226) $(2,006) $(56,665) $(71,897)
Effect of adoption of ASU 2016-01
 
 
 
 (548) 
 
 (548)
Balance at January 1,9,313
 (8,474) (69,574) (68,735) (13,774) (2,006) (56,665) (72,445)
Current period changes in other comprehensive income (loss)25,912
 (12,099) 1,715
 15,528
 23,755
 (7,456) (5,173) 11,126
Total other comprehensive income (loss)$35,225
 $(20,573) $(67,859) $(53,207) $9,981
 $(9,462) $(61,838) $(61,319)


For the Six Months Ended June 30,
20212020
Unrealized Gains on Debt Securities Available for SaleUnrealized (Losses) on SwapsEmployee Benefit PlansAccumulated Other Comprehensive (Loss)Unrealized Gains on Debt Securities Available for SaleUnrealized (Losses) on SwapsEmployee Benefit PlansAccumulated Other Comprehensive (Loss)
(In thousands)
Balance at beginning of period$31,028 $(16,856)$(83,797)$(69,625)$9,313 $(8,474)$(69,574)$(68,735)
Current period changes in other comprehensive income (loss)(12,446)6,631 32,173 26,358 25,912 (12,099)1,715 15,528 
Total other comprehensive income (loss)$18,582 $(10,225)$(51,624)$(43,267)$35,225 $(20,573)$(67,859)$(53,207)






45

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss) (continued)

The following tables reflect amounts reclassified from accumulated other comprehensive income (loss) to the Consolidated Statements of Income and the affected line item in the statement where net income is presented for the three and six months ended June 30, 20202021 and 2019:2020:
Accumulated Other Comprehensive Income (Loss) Components
 For the Three Months Ended June 30,Affected Line Items in the Consolidated Statements of Income
20212020
(In thousands)
Reclassification adjustment for (loss) included in net income$(281)$(Loss) gain on securities transactions
Reclassification adjustment of actuarial net (loss) included in net income(1,511)(1,071)Other non-interest expense
      Total before tax(1,792)(1,071)
      Income (tax) benefit501 226 
      Net of tax$(1,291)$(845)
  Accumulated Other Comprehensive Income (Loss) Components  
  For the Three Months Ended June 30, Affected Line Items in the Consolidated Statements of Income
  2020 2019  
  (In thousands)  
       
Reclassification adjustment for gains included in net income $
 $339
 
Gain on securities transactions

Reclassification adjustment of actuarial net (loss) included in net income (1,071) (925) Other non-interest expense
      Total before tax (1,071) (586)  
      Income (tax) benefit 226
 115
  
      Net of tax $(845) $(471)  
  Accumulated Other Comprehensive Income (Loss) Components  
  For the Six Months Ended June 30, Affected Line Items in the Consolidated Statements of Income
  2020 2019  
  (In thousands)  
       
Reclassification adjustment for gains included in net income $370
 $465
 Gain on securities transactions
Reclassification adjustment of actuarial net (loss) included in net income (2,142) (1,849) Other non-interest expense
      Total before tax (1,772) (1,384)  
      Income (tax) benefit 369
 283
  
      Net of tax $(1,403) $(1,101)  


Accumulated Other Comprehensive Income (Loss) Components
For the Six Months Ended June 30,Affected Line Items in the Consolidated Statements of Income
20212020
(In thousands)
Reclassification adjustment for (loss) gain included in net income$(281)$370 (Loss) gain on securities transactions
Reclassification adjustment of actuarial net (loss) included in net income(3,022)(2,142)Other non-interest expense
      Total before tax(3,303)(1,772)
      Income (tax) benefit923 369 
      Net of tax$(2,380)$(1,403)
46

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

16.    Derivatives and Hedging Activities

The Company uses derivative financial instruments as components of its market risk management, principally to manage interest rate risk. Certain derivatives are entered into in connection with transactions with commercial customers. Derivatives are not used for speculative purposes. All derivatives are recognized as either assets or liabilities in the Consolidated Statements of Financial Condition, reported at fair value and presented on a gross basis. Until a derivative is settled, a favorable change in fair value results in an unrealized gain that is recognized as an asset, while an unfavorable change in fair value results in an unrealized loss that is recognized as a liability. 

The Company generally applies hedge accounting to its derivatives used for market risk management purposes. Hedge accounting is permitted only if specific criteria are met, including a requirement that a highly effective relationship exists between the derivative instrument and the hedged item, both at inception of the hedge and on an ongoing basis. Changes in the fair value of effective fair value hedges are recognized in current earnings (with the change in fair value of the hedged asset or liability also recognized in earnings). Changes in the fair value of effective cash flow hedges are recognized in other comprehensive income (loss) until earnings are affected by the variability in cash flows of the designated hedged item. Ineffective portions of hedge results are recognized in current earnings. Changes in the fair value of derivatives for which hedge accounting is not applied are recognized in current earnings.

The Company formally documents at inception all relationships between the derivative instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. This process includes linking all derivatives that are designated as hedges to specific assets and liabilities, or to specific firm commitments. The Company also formally assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair values or cash flows of the hedged items. If it is determined that a derivative is not highly effective or has ceased to be a highly effective hedge, the Company would discontinue hedge accounting prospectively. Gains or losses resulting from the termination of a derivative accounted for as a cash flow hedge remain in other comprehensive income (loss) and is (accreted) amortized to earnings over the remaining period of the former hedging relationship.

Certain derivative financial instruments are offered to certain commercial banking customers to manage their risk of exposure and risk management strategies. These derivative instruments consist primarily of currency forward contracts and interest rate swap contracts. The risk associated with these transactions is mitigated by simultaneously entering into similar transactions having essentially offsetting terms with a third party. In addition, the Company executes interest rate swaps with third parties in order to hedge the interest rate risk of short-term FHLB advances.

Currency Forward Contracts. At June 30, 20202021 and December 31, 2019,2020, the Company had 0 currency forward contracts in place with commercial banking customers.

Interest Rate Swaps. At both June 30, 2021 and December 31, 2020, the Company had interest rate swaps in place with 2348 commercial banking customers executed by offsetting interest rate swaps with third parties, with an aggregated notional amount of $171.3 million. At December 31, 2019, the Company had interest rate swaps in place with 22 commercial banking customers executed by offsetting interest rate swaps with third parties, with an aggregated notional amount of $169.9$175.1 million. These derivatives are not designated as hedges and are not speculative. These interest rate swaps do not meet hedge accounting requirements.
    
At June 30, 20202021 and December 31, 2019,2020, the Company had 3428 and 2931 interest rate swaps with notional amounts of $475.0$400.0 million and $410.0$430.0 million, respectively, hedging certain FHLB advances. These interest rate swaps meet the cash flow hedge accounting requirements.

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counter-party in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For the three and six months ended June 30, 20202021 and 2019,2020, the Company did not record any hedge ineffectiveness associated with these contracts.
    







47

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

16.    Derivatives and Hedging Activities (continued)

The tables below present the fair value of the Company’s derivative financial instruments as well as their classification in the Consolidated Statements of Financial Condition at June 30, 20202021 and December 31, 2019:2020:
June 30, 2021
Asset DerivativeLiability Derivative
Consolidated Statements of Financial ConditionFair ValueConsolidated Statements of Financial ConditionFair Value
(In thousands)
Derivatives:
Interest rate swapsOther Assets$12,741 Other Liabilities$28,347 
Total derivative instruments$12,741 $28,347 
 June 30, 2020
 Asset Derivative Liability Derivative
 Consolidated Statements of Financial Condition Fair Value Consolidated Statements of Financial Condition Fair Value
   (In thousands)  
Derivatives:       
Interest rate swapsOther Assets $
 Other Liabilities $27,626
Total derivative instruments  $
   $27,626

December 31, 2020
Asset DerivativeLiability Derivative
Consolidated Statements of Financial ConditionFair ValueConsolidated Statements of Financial ConditionFair Value
(In thousands)
Derivatives:
Interest rate swapsOther Assets$19,425 Other Liabilities$42,384 
Total derivative instruments$19,425 $42,384 
 December 31, 2019
 Asset Derivative Liability Derivative
 Consolidated Statements of Financial Condition Fair Value Consolidated Statements of Financial Condition Fair Value
   (In thousands)  
Derivatives:       
Interest rate swapsOther Assets $185
 Other Liabilities $11,546
Total derivative instruments  $185
   $11,546


For the three months ended June 30, 20202021 and 2019,2020, losses of $24,000$167,000 and $146,000,$24,000, respectively, were recorded for changes in fair value of interest rate swaps with third parties. For the six months ended June 30, 2021 and 2020, and 2019, (gains)/losses of $450,000$(201,000) and $213,000,$450,000, respectively, were recorded for changes in fair value of interest rate swaps with third parties.

At both June 30, 20202021 and December 31, 2019,2020, accrued interest was $846,000 and $344,000, respectively.$1.0 million.

The Company has agreements with counterparties that contain a provision that if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of its derivative obligations.

At June 30, 2020,2021, the termination value of derivatives in a net liability position, which includes accrued interest, was $28.5$14.6 million. The Company has collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of $49.9$27.9 million against its obligations under these agreements.

17.    Revenue Recognition

On January 1, 2019, the Company adopted ASU 2014-09 Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified Topic 606. The Company performed a review and assessment of all revenue streams, the related contracts with customers, and the underlying performance obligations in those contracts. This guidance does not apply to revenue associated with financial instruments, including interest income on loans and securities, which comprise the majority of the Company's revenue. Revenue-generating activities that are within the scope of Topic 606, are components of non-interest income. These revenue streams can generally be classified as demand deposit account fees, title insurance fees and other fees.
The Company, using a modified retrospective transition approach, determined that there was no cumulative effect adjustment to retained earnings as a result of adopting the new standard, nor did the standard have a material impact on our consolidated financial statements including the timing or amounts of revenue recognized.    
    




48

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

17.     Revenue Recognition (continued)

The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 20202021 and 2019.2020.
 For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
(In thousands)
Non-interest income
In-scope of Topic 606:
Demand deposit account fees$858 $620 $1,696 $1,919 
Title insurance fees1,503 996 3,123 2,227 
Other non-interest income1,956 1,527 3,697 2,944 
Total in-scope non-interest income4,317 3,143 8,516 7,090 
Total out-of-scope non-interest income10,074 3,865 14,470 6,309 
Total non-interest income$14,391 $7,008 $22,986 $13,399 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands)
Non-interest income       
In-scope of Topic 606:       
Demand deposit account fees$620
 $1,051
 $1,919
 $2,010
Title insurance fees996
 1,099
 2,227
 2,140
Other non-interest income1,527
 1,214
 2,944
 2,274
Total in-scope non-interest income3,143
 3,364
 7,090
 6,424
Total out-of-scope non-interest income3,865
 3,411
 6,309
 6,388
Total non-interest income$7,008
 $6,775
 $13,399
 $12,812


Demand deposit account fees include monthly maintenance fees and service charges. These fees are generally derived as a result of either transaction-based or serviced-based services. The Company's performance obligation for these services is generally satisfied, and revenue recognized, at the time the transaction is completed or the service rendered. Fees for these services are generally received from the customer either at the time of the transaction or monthly.

Title insurance fees are generally recognized at the time the transaction closes or when the service is rendered.

Other non-interest income includes check printing fees, traveler's check fees, gift card fees, branch service fees, overdraft fees, account analysis fees, other deposit related fees, wealth management related fee income which includes annuity fees, brokerage commissions, and asset management fees. Wealth management related fee income represent fees earned from customers as consideration for asset management and investment advisory services provided by a third party. The Company's performance obligation is generally satisfied monthly and the resulting fees are recognized monthly based upon the month-end market value of the assets under management and the applicable fee rate. The Company does not earn performance-based incentives. The Company's performance obligation for these transaction-based services are generally satisfied, and related revenue recognized, at the time the transaction closes or when the service is rendered or a point in time when the service is completed.

Also included in other fees are debit card and ATM fees which are transaction-based. Debit card revenue is primarily comprised of interchange fees earned when a customer's Company card is processed through a card payment network. ATM fees are largely generated when a Company cardholder uses a non-Company ATM, or a non-Company cardholder uses a Company ATM. The Company's performance obligation for these services is satisfied when the service is rendered. Payment is generally received at time of transaction or monthly.

Out-of-scope non-interest income primarily consists of income from bank-owned life insurance, loan prepayment and servicing fees, net fees on loan level interest rate swaps, gains and losses on the sale of loans and securities, and changes in the fair value of equity securities. None of these revenue streams are subject to the requirements of Topic 606.

19.18.    Subsequent Events

The Company has evaluated events subsequent to June 30, 20202021 and through the financial statement issuance date of August 10, 2020.9, 2021. The Company has not identified any material subsequent events that would require adjustment or disclosure in the consolidated financial statements.

The COVID-19 pandemic has disrupted and adversely affected the Bank’s business and results of operations, and the ultimate impacts of the pandemic on the Bank’s business, financial condition and results of operations will depend on future developments and other factors that are highly uncertain and will be impacted by the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements contained herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” "project," "intend," “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risk factors and uncertainties, including, but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K as supplemented by its Quarterly Reports on Form 10-Q, and those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, as well as its impact on fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, the Company's ability to successfully implement its business strategy, including the consummation of its pending acquisition of Freehold Bank, acquisitions and the integration of acquired businesses, credit risk management, the effect of the COVID-19 pandemic (including its impact on our borrowers and their ability to repay their loans, and on the local and national economies), asset-liability management, the financial and securities markets, and the availability of and costs associated with sources of liquidity.

The Company cautions readers not to place undue reliance on any such forward-looking statements which speak only as of the date made. The Company also advises readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not have any obligation to update any forward-looking statements to reflect any subsequent events or circumstances after the date of this statement.

Comparison of Financial Condition at June 30, 20202021 and December 31, 20192020

Total assets increased $774.5$268.9 million, or 9.5%3.1%, to $9.0$9.1 billion at June 30, 20202021 from $8.2$8.8 billion at December 31, 2019.2020. The increase in total assets was primarily attributable to increases in cash and cash equivalents of $150.3 million, debt securities available for sale of $79.6$325.5 million, loans receivable, net,debt securities held to maturity of $430.0 million, bank-owned life insurance of $20.2 million, goodwill and intangible assets of $24.1$139.4 million, and other assets of $71.4 million.$7.2 million, partially offset by decreases of $35.7 million in cash and cash equivalents, and $159.2 million in loans receivable, net.

Cash and cash equivalents increased $150.3decreased $35.7 million, or 199.0%8.4%, to $225.9$387.2 million at June 30, 20202021 from $75.5$423.0 million at December 31, 2019.2020. The increasedecrease was primarily attributable to $155.2$576.6 million in cash acquired duepurchases of debt securities available for sale and held to the Roselle merger, higher prepayments of loans and strong growth in deposits, partially offset by $53.4maturity, $58.5 million in repurchases of common stock under our stock repurchase program.program, and $56.5 million in prepayments of borrowings, partially offset by an increase in repayments on loans, repayments on mortgage-backed securities, and growth in deposits.

Debt securities available for sale increased $79.6$325.5 million, or 7.2%24.7%, to $1.2$1.6 billion at June 30, 20202021 from $1.1$1.3 billion at December 31, 2019.2020. The increase was attributable to $51.5purchases of $416.1 million of investments acquiredsecurities primarily consisting of U.S. government and agency obligations, mortgage-backed securities and municipal securities, and $99.6 million in the Roselle merger, purchases of $111.1 million in mortgage-backed securities,guarantor swaps with Freddie Mac, partially offset by maturities, calls and callssales of $12.4$9.9 million in U.S. government and agency obligations, corporate debt and municipal securities, and repayments of $82.4 million, and sales of $20.8$164.4 million. The gross unrealized gain (loss) on debt securities available for sale increaseddecreased by $32.8$13.5 million during the six months ended June 30, 2020.2021.

Debt securities held to maturity increased $139.4 million, or 53.1%, to $402.1 million at June 30, 2021 from $262.7 million at December 31, 2020. The increase was primarily attributable to purchases of $160.5 million of securities primarily consisting of U.S. agency obligations and mortgage-backed securities, partially offset by the call of a $5.0 million U.S. agency obligation and repayments of $15.5 million.

Loans receivable, net, increased $430.0decreased $159.2 million, or 7.0%2.6%, to $6.6$5.9 billion at June 30, 20202021 from $6.1 billion at December 31, 2019. The increase included $171.6 million of loans which were acquired due to the Roselle merger mainly consisting of one-to-four family2020. Multi-family and commercial real estate loans. The increasesloans increased $297.1 million, partially offset by decreases in commercial business loans, one-to-four family real estate loans, construction and commercial business loans, of $87.1 million, $27.4 million, and $416.3 million, respectively, were partially offset by decreases in multifamily and commercial real estate and home equity loans and advances of $46.0$281.2 million, $72.4 million, $67.6 million and $28.3$43.1 million, respectively. A significant portionThe increase in multi-family and commercial real estate loans included the purchase of the increase$71.6 million of loan participations in June 2021. The decrease in commercial business loans includedwas mainly due to the sale of $237.0 million in loans granted and $255.7 in forgiven PPP loans as part of the SBA Paycheck Protection Program, which totaled $467.0 million at June 30, 2020.Small Business Administration PPP. The allowance for loan loss balance increased $12.3decreased $4.8 million to $74.0$69.9 million at June 30, 20202021 from $61.7$74.7 million at December 31, 2019,2020, 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 the deterioration ofimproving economic conditions and loan performance due to the ongoing COVID-19 pandemic, resulting from increases to qualitative factors.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
50
Bank-owned life insurance increased $20.2 million, or 9.5%, to $231.6 million at June 30, 2020 from $211.4 million at December 31, 2019. The increase was primarily attributable to $17.2 million acquired in connection with the Roselle merger.
Goodwill and intangible assets increased $24.1 million, or 35.1%, to $92.6 million at June 30, 2020 from $68.6 million at December 31, 2019. The increase was primarily attributable to $23.8 million in goodwill recorded in connection with the Roselle merger.


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

originally permitted by the CARES Act and the Consolidated Appropriations Act, 2021, which, when enacted, extended certain provisions of the CARES Act. The Company expects to adopt CECL on January 1, 2022.
Other assets increased $71.4$7.2 million, or 49.0%3.4%, to $217.1$217.0 million at June 30, 20202021 from $145.7$209.9 million at December 31, 2019.2020. The increase in other assets consisted of an increase of $36.2 million in the Company's pension plan balance based on a $20.8revaluation of the plan, partially offset by a decrease of $13.3 million balance of a right-of-use asset recognized in connection with the adoption of Accounting Standards Update ("ASU") 2016-02-Leases, a $31.5 million increase in the collateral balance related to our swap agreement obligations, and a $17.2decrease of $6.8 million increase in interest rate swap fair value adjustments.

assets, a decrease of $6.3 million in federal and state income tax receivables, and a decrease of $2.5 million in deferred taxes.
Total liabilities increased $716.0$247.1 million, or 9.9%3.2%, to $7.9$8.0 billion at June 30, 20202021 from $7.2$7.8 billion at December 31, 2019.2020. The increase was primarily attributable to an increase in total deposits of $935.3$300.7 million, or 16.6%, and an increase in accrued expenses and other liabilities of $56.6 million, or 48.0%4.4%, partially offset by a decrease in borrowings of $277.0$49.7 million, or 19.7%6.2%, and a decrease in accrued expenses and other liabilities of $7.4 million, or 4.2%. The increase in total deposits was primarily driven by $333.2 million in deposits assumed due to the Roselle merger andconsisted of increases in non-interest-bearing and interest-bearing demand deposits of $358.1$158.6 million and $205.6$166.7 million, respectively, which were mainly related to borrowers depositing funds received from SBA PPP loans into their business accounts. Moneyand money market accounts and savings and club deposits of $57.4 million and $61.2 million, respectively, partially offset by a decrease in certificates of deposits also increased $91.6deposit accounts of $143.2 million. The decrease in borrowings was primarily driven by the prepayment of $56.5 million $109.1 million and $170.9 million, respectively, during the period.of FHLB borrowings. The increasedecrease in accrued expenses and other liabilities consisted of a $21.9$14.0 million balance of the lease liability recognized in connection with the adoption of ASU 2016-02-Leases, and a $32.9 million increasedecrease in interest rate swap liabilities. The decrease in borrowings was primarily driven by maturing long-term borrowings of $116.5 million and a net decrease in short-term borrowings of $287.8 million,liabilities, partially offset by new long-term borrowingsa $7.6 million increase in balance of $90.0 million and $ 37.7 million in borrowings assumed from Roselle.

outstanding checks.
Total stockholders’ equity increased $58.5$21.8 million, or 6.0%2.2%, towith a balance of $1.0 billion at both June 30, 2020 from $982.5 million at2021 and December 31, 2019.2020. The net increase was primarily attributable to net income of $21.9$47.7 million, an increaseand a change in additional capitalthe pension obligation of $68.5$32.2 million due toa revaluation of the issuance of 4,759,048 shares of Company common stock to Columbia Bank MHC related to the Roselle merger, and improved fair values on debt securities within our available for sale portfolio of $25.9 million,plan, partially offset by the repurchase of approximately 3,456,2003,470,040 shares of common stock totaling $53.4$58.5 million under our stock repurchase program. The repurchases under the stock repurchase program were completed in April 2020.


Comparison of Results of Operations for the QuarterThree months Ended June 30, 20202021 and June 30, 20192020

Net income of $15.1$26.7 million was recorded for the quarter ended June 30, 2020,2021, an increase of $3.1$11.6 million, or 25.5%76.8%, compared to net income of $12.0$15.1 million for the quarter ended June 30, 2019.2020. The increase in net income was primarily attributable to a $15.0$2.2 million increase in net interest income, a $7.5 million decrease in provision for loan losses, and a $233,000$7.4 million increase in non-interest income, partially offset by a $5.6$5.3 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 $58.1 million for the quarter ended June 30, 2021, an increase of $2.2 million, or 4.0%, from $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, 2019.2020. The increase in net interest income was primarily attributable to a $12.9 million increase in interest income coupled with a $2.2$9.9 million decrease in interest expense.expense, partially offset by a $7.7 million decrease in interest income. The increasedecrease in interest expense on deposits was driven by both an inflow of lower cost deposits and the repricing of existing deposits at a significantly reduced rate as a result of a lower interest rate environment. The decrease in interest expense on borrowings was the result of decreases in both the average balance and average cost of borrowings. The decrease in interest income for the quarter ended June 30, 20202021 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 theseinterest-earning assets. Prepayment penalties, which are included in interest income on loans, totaled $1.1 million for the quarter ended June 30, 2021, compared to $964,000 for the quarter ended June 30, 2020 compared to $155,000 for the quarter ended June 30, 2019.2020.

The average yield on loans for the quarter ended June 30, 20202021 decreased 1824 basis points to 3.96%3.72%, as compared to 4.14%3.96% for the quarter ended June 30, 2019,2020, while the average yield on securities for the quarter ended June 30, 20202021 decreased 3363 basis points to 2.56%1.93%, as compared to 2.89%2.56% for the quarter ended June 30, 2019.2020. The average yield on other interest-earning assets for the quarter ended June 30, 20202021 decreased 324171 basis points to 2.95%1.24%, as compared to 6.19%2.95% for the quarter ended June 30, 2019.2020, as there were substantially higher cash balances in low yielding bank accounts for the quarter ended June 30, 2021. Decreases in the average yields on these portfolios for the quarter ended June 30, 20202021 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 2020.2020 in response to the COVID-19 pandemic.

Total interest expense was $9.8 million for the quarter ended June 30, 2021, a decrease of $9.9 million, or 50.3%, from $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, 2019.2020. The decrease in interest expense was primarily attributable to a 4158 basis point decrease in the average cost of interest-bearing deposits which more thanwas partially offset by the impact fromof the increase in the average balance of deposits. The decrease in the cost of deposits was driven by both an inflow of lower costingcost deposits and the repricing of existing deposits at a significantly reduced rate.lower interest rates. Interest on borrowings decreased $1.8$2.9 million due to a decrease in the average balancebalances of borrowingsFHLB advances and subordinated notes, coupled with an 84a 59 basis point decrease in the cost of these borrowings due to a lower interest rate environment.
total borrowings.
The Company's net interest margin for the quarter ended June 30, 20202021 increased 204 basis points to 2.73%2.77%, when compared to 2.53%2.73% for the quarter ended June 30, 2019.2020. The weighted average yield on interest-earning assets decreased 2045 basis points to 3.24% for the quarter ended June 30, 2021 as compared to 3.69% for the quarter ended June 30, 2020 as compared to 3.89% for2020. Excluding the quarter ended June 30, 2019. The average costimpact of interest-bearing liabilitiesPPP loan
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deferred fee acceleration for the quarter ended June 30, 2021, the net interest margin would have been 2.66%. The average cost of interest-bearing liabilities decreased 5163 basis points to 0.62% for the quarter ended June 30, 2021 as compared to 1.25% for the quarter ended June 30, 2020 as compared to 1.76% for the quarter ended June 30, 2019.2020. The decrease in yields and costs for the quarter ended June 30, 20202021 were largely driven by a continued lower interest rate environment. The net interest margin increased for the quarter ended June 30, 2021 as the cost of interest-bearing liabilities repricedcontinued to reprice lower more rapidly than the yields on interest-earning assets.

The reversal of provision for loan lossesloss recorded for the quarter ended June 30, 2021 was $1.8 million, a decrease of $7.5 million, from $5.7 million of provision for loan loss expense recorded for the quarter ended June 30, 2020. The comparatively lower level of provision for the 2021 period was primarily attributable to a decrease in the average balance of loans, a decrease in loan loss rates, a decrease in the balances of delinquent and non-accrual loans, and the consideration of the improving economic environment.
Non-interest income was $14.4 million for the quarter ended June 30, 2020,2021, an increase of $5.6$7.4 million, or 105.4%, 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, 2019.2020. The increase was primarily attributable to an increase in income from a $7.7 million gain on the sale of $237.0 million of commercial business loans granted as part of the Small Business Administration PPP, and an increase in title insurance fees of $507,000, partially offset by the decrease in the fair value of equity securities of $1.4 million.
Non-interest expense was $37.6 million for the quarter ended June 30, 2021, an increase of $167,000, or 0.4%, from $37.4 million for the quarter ended June 30, 2020. The increase was primarily attributable to an increase in data processing and software expenses of $248,000, professional fees of $568,000, and other non-interest expenses of $1.1 million, partially offset by a decrease in compensation and employee benefits expense of $4.9$1.6 million, and a decrease in merger-related expenses of $357,000. Professional fees included an increase in occupancy expense of $877,000consulting expenses related to information technology improvements, and anthe increase in other non-interest expense included $561,000 of $860,000, partially offset by a decrease of $943,000 in advertising expense. The increase in compensation and employee benefitsbranch closure costs.
Income tax expense was primarily attributable to an increase of $2.2$9.9 million in expense recorded in connection with grants made under the Company's 2019 Equity Incentive Plan and an increase in expense due to a larger number of employees in the 2020 period, which included continuing employees of Stewardship and Roselle. Duringfor the quarter ended June 30, 2020, the Bank implemented a Voluntary Early Retirement Program which offers early retirement incentives for qualified employees. Employees may elect to retire during the third quarter of 2020 if they meet criteria established under the existing Columbia Bank Retirement Plan, with additional incentives under the program. There have been no expenses related to this program recorded through June 30, 2020, although management anticipates approximately $3.0 million in additional compensation and employee benefits expense related to this program in the third quarter. The increase in occupancy expense was primarily the result of2021, an increase in the number of branch offices acquired from Stewardship and Roselle. In light of our focus during the pandemic of delivering our services digitally, the Bank plans$5.3 million, as compared to temporarily suspend de novo branching activities with an increased focus of enhancing digital capabilities. The increase in other non-interest expense includes $1.3 million related to interest rate swap transactions.
Income tax expense was $4.6 million for the quarter ended June 30, 2020, mainly due to an increase of $1.0 million, as comparedin pre-tax income, and to $3.6 million for the quarter ended June 30, 2019. Thea lesser extent, an increase in the Company's effective state income tax expense is attributable to higher pretax income during the quarter.rate. The Company's effective tax rate was 23.4%27.1% and 23.2%23.4% for the quarters ended June 30, 20202021 and 2019,2020, respectively.

Comparison of Results of Operations for the Six Months Ended June 30, 20202021 and June 30, 20192020

Net income of $21.9$47.7 million was recorded for the six months ended June 30, 2020, a decrease2021, an increase of $5.1$25.9 million, or 18.9%118.3%, compared to net income of $27.0$21.9 million for the six months ended June 30, 2019.2020. The decreaseincrease in net income was primarily attributable to a $14.8an $8.2 million increase in net interest income, an $18.3 million decrease in provision for loan losses, and a $14.6$9.6 million increase in non-interest expense,income, partially offset by a $23.3$10.9 million increase in net interest income and a $587,000 increase in non-interest income.tax expense.

Net interest income was $114.8 million for the six months ended June 30, 2021, an increase of $8.2 million, or 7.7%, from $106.6 million for the six months ended June 30, 2020, an increase of $23.3 million, or 28.1%, from $83.2 million for the six months ended June 30, 2019.2020. The increase in net interest income was primarily attributable to a $24.7$23.0 million increasedecrease in interest income andexpense, partially offset by a $1.3$14.8 million increasedecrease in interest income. The decrease in interest expense on deposits was driven by both an inflow of lower cost deposits and the repricing of existing deposits at a significantly reduced rate as a result of a lower interest rate environment. The decrease in interest expense on borrowings was the result of decreases in both the average balance and average cost of borrowings. During the six months ended June 30, 2021, $56.5 million of Federal Home Loan Bank of New York ("FHLB") borrowings were prepaid, resulting in a $742,000 loss on early extinguishment of debt included in non-interest expense. The increaseCompany has significantly reduced the cost of borrowings over the period by prepaying high rate borrowings. The decrease in interest income for the six months ended June 30, 20202021 was largely due to increases in the average balances on loans, securities and other interest-earning assets, which were the result of internal growth and the acquisitions of Stewardship and Roselle, partially offset by decreases in the average yields on theseinterest-earning assets. Prepayment penalties, which are included in interest income on loans, totaled $2.0 million for the six months ended June 30, 2021, compared to $1.6 million for the six months ended June 30, 2020 compared to $877,000 for the six months ended June 30, 2019.2020.

The average yield on loans for the six months ended June 30, 20202021 decreased 1526 basis points to 4.05%3.79%, as compared to 4.20%4.05% for the six months ended June 30, 2019,2020, while the average yield on securities for the six months ended June 30, 20202021 decreased 2766 basis points to 2.64%1.98%, as compared to 2.91%2.64% for the six months ended June 30, 2019.2020. The average yield on other interest-earning assets for the six months ended June 30, 2021 decreased 299 basis points to 0.82%, as compared to 3.81% for the six months ended June 30, 2020, as there were substantially higher cash balances in low yielding bank accounts for the six months ended June 30, 2021. Decreases in the average yields on these portfolios for the six months ended June 30, 2021 were influenced by the lower interest rate environment as the Federal Reserve reduced interest rates in early 2020 in response to the COVID-19 pandemic.

Total interest expense was $20.7 million for the six months ended June 30, 2021, a decrease of $23.0 million, or 52.6%, from $43.7 million for the six months ended June 30, 2020. The decrease in interest expense was primarily attributable to a 68 basis point
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the six months ended June 30, 2020 decreased 259 basis points to 3.81%, as compared to 6.40% for the six months ended June 30, 2019. Decreases in the average yields on these portfolios for the six months ended June 30, 2020 were influenced by the lower interest rate environment.

Total interest expense was $43.7 million for the six months ended June 30, 2020, an increase of $1.3 million, or 3.09%, from $42.4 million for the six months ended June 30, 2019. The increase in interest expense on interest-bearing deposits was primarily attributable to a $1.1 billion increase in average balances, partially offset by a 22 basis point decrease in the average cost of interest-bearing deposits 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 costingcost deposits and the repricing of existing deposits at a significantly reduced rate.lower interest rates. Interest on borrowings decreased $1.5$8.0 million due to a 60decrease in the average balances of FHLB advances and subordinated notes, coupled with a 80 basis point decrease in the cost of thesetotal borrowings. During the six months ended June 30, 2021, we prepaid $53.5 million of FHLB borrowings due towith an average rate of 2.64% and original contractual maturities through March 2022, and a lower interest$3.0 million FHLB borrowing acquired in our acquisition of Roselle Bank with a rate environment, which was partially offsetof 2.74% and an original contractual maturity of March 2024. The prepayments were funded by an increaseexcess cash liquidity. The transactions were accounted for as early debt extinguishments resulting in the average balancea loss of borrowings.

$742,000.
The Company's net interest margin for the six months ended June 30, 20202021 increased 810 basis points to 2.69%2.79%, when compared to 2.61%2.69% for the six months ended June 30, 2019.2020. The weighted average yield on interest-earning assets decreased 1551 basis points to 3.29% for the six months ended June 30, 2021 as compared to 3.80% for the six months ended June 30, 2020 as compared to 3.95%2020. Excluding the impact of PPP loan deferred fee acceleration for the six months ended June 30, 2019.2021, the net interest margin would have been 2.64%. The average cost of interest-bearing liabilities decreased 3174 basis points to 0.67% for the six months ended June 30, 2021 as compared to 1.41% for the six months ended June 30, 2020 as compared to 1.72% for the six months ended June 30, 2019.2020. The decreasedecreases in yields and costs for the six months ended June 30, 20202021 were largely driven by a continued lower interest rate environment. The net interest margin increased for the six months ended June 30, 20202021 as the cost of interest-bearing liabilities repricedcontinued to reprice lower more rapidly than the yields on interest-earning assets.

The reversal of provision for loan lossesloss recorded for the six months ended June 30, 2021 was $3.0 million, a decrease of $18.3 million, from $15.3 million of provision for loan loss expense recorded for the six months ended June 30, 2020. The comparatively lower level of provision for the 2021 period was primarily attributable to a decrease in the average balance of loans, a decrease in loan loss rates, a decrease in the balances of delinquent and non-accrual loans, and the consideration of the improving economic environment.
Non-interest income was $23.0 million for the six months ended June 30, 2021, an increase of $9.6 million, or 71.6%, from $13.4 million for the six months ended June 30, 2020. The increase was primarily attributable to an increase in income from the gain on the sale of loans of $9.1 million and an increase in other non-interest income of $1.7 million, partially offset by the decrease in the fair value of equity securities of $1.4 million. The increase in the gain on sale of loans was primarily attributable to a gain of $7.7 million resulting from the sale of $237.0 million of commercial business loans granted as part of the Small Business Administration PPP. Other non-interest income included increases of $755,000 from debit card transactions and $651,000 from swap transactions.

Non-interest expense was $75.3 million for the six months ended June 30, 2021, a decrease of $638,000, or 0.8%, from $76.0 million for the six months ended June 30, 2020. The decrease was primarily attributable to a decrease in compensation and employee benefits expense of $2.7 million, and a decrease in merger-related expenses of $1.4 million, partially offset by an increase in professional fees of $992,000, an increase in data processing and software expenses of $789,000, and the loss on the extinguishment of debt of $742,000. The decrease in compensation and employee benefits was primarily attributable to an increase in amounts deferred as direct loan origination costs as a result of an increase in originations. Merger-related expenses recorded in the 2020 period related to the acquisitions of Stewardship Financial Corporation and Roselle Bank. Professional fees included an increase in consulting expenses related to information technology, and the increase in data processing and software expenses was attributable to the purchase and implementation of several digital banking and other Fintech solutions, as well as the amortization of software costs related to a digital small business lending solution. As noted above, during the six months ended June 30, 2021, the Company utilized excess liquidity to prepay long-term borrowings which resulted in a $742,000 loss on the early extinguishment of debt.
Income tax expense was $17.8 million for the six months ended June 30, 2021, an increase of $10.9 million, as compared to $6.9 million for the six months ended June 30, 2020, mainly due to an increase of $14.8 million, from $548,000in pre-tax income, and to a lesser extent, an increase in the Company's effective state income tax rate. The Company's effective tax rate was 27.2% and 23.9% for the six months ended June 30, 2019. The increase was primarily attributable to consideration of the deterioration of economic conditions2021 and loan performance due to the ongoing COVID-19 pandemic, which resulted in increases to qualitative factors.

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

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

Asset Quality

The Company's non-performing loans at June 30, 20202021 totaled $13.5$4.3 million, or 0.20%0.07% of total gross loans, as compared to $6.7$8.2 million, or 0.11%0.13% of total gross loans, at December 31, 2019.2020. The $6.8$3.8 million increasedecrease in non-performing loans was primarily attributable to increasesdecreases of $3.4$1.8 million in non-performing one-to-four family real estate loans, $1.7$2.6 million in non-performing commercial business loans, and $43,000 in non-performing home equity loans and advances, partially offset by an increase of $560,000 in non-performing multifamily and commercial real estate loans and $1.8 million in commercial business loans. The increasedecrease in non-performing one-to-four family real estate loans was due to an increasea decrease in the number of loans from 1013 non-performing loans at December 31, 20192020 to 27six non-performing loans at June 30, 2020.2021. The increasedecrease in multifamilynon-performing commercial business loans was mainly due to charge-offs totaling $1.7 million. The decrease in non-performing home equity loans and commercial real estate loansadvances was due to an increasea decrease in the number of loans from seven non-performing loans at December 31, 2019 to 12 non-performing loans at June 30, 2020. The increase in non-performing commercial business loans included the addition of a $1.1 million commercial loan during the period. Non-performing assets as a percentage of total assets totaled 0.15% at June 30, 2020 as compared to 0.08% at December 31, 2019.non-

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
performing loans at December 31, 2020 to eight non-performing loans at June 30, 2021. Non-performing assets as a percentage of total assets totaled 0.05% at June 30, 2021 as compared to 0.09% at December 31, 2020.

For the quarter ended June 30, 2020,2021, net charge-offs totaled $2.9 million$244,000 as compared to $480,000$2.9 million for the quarter ended June 30, 2019.2020. For the six months ended June 30, 2020,2021, net charge-offs totaled $3.0$1.7 million as compared to $487,000$3.0 million for the six months ended June 30, 2019. The increase in net charge-offs during the three and six month periods was primarily attributable to a $2.8 million charge-off of one commercial business loan.

2020.
The Company's allowance for loan losses was $74.0$69.9 million, or 1.12%1.17% of total loans, at June 30, 2020,2021, compared to $61.7$74.7 million, or 1.00%1.21% of total loans, at December 31, 2019.2020. The increasedecrease in the allowance for loan losses iswas 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 and loan performance due to the ongoing COVID-19 pandemic which resulted in increases to qualitative factors and, to a lesser extent, due to the growth in the Bank's loan portfolio.

conditions.
COVID-19
Through June 30, 2020,2021, the Company granted $768.0 million of commercial loan modification requests with respect to multifamily, commercial, and construction real estate loans and $195.0with current balances of $705.8 million ofand consumer-related loan modification requests with respect to one-to-four family real estate loans and home equity loans and advances fromwith current balances of $142.4 million to our customers affected by the COVID-19 pandemic. These short-term loan modifications will be treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears atarrears. The Consolidated Appropriations Act, 2021, which was enacted in late December 31, 2019.2020, extended certain provisions of the CARES Act, including provisions permitting loan deferral extension requests to not be treated as troubled debt restructurings. Furthermore, these loans will continue to accrue interest and will not be tested for impairment during the short-term modification period. Commercial loan modification requests include various industries and property types. The following table is a summary of loan modifications that have not begun to remit full payment as of July 21, 2020:payment:
 Balance at July 21, 2020 Percent of Total Loans at June 30, 2020Balance at December 31, 2020Percent of Total Loans at December 31, 2020 Balance at June 30, 2021Percent of Total Loans at June 30, 2021Balance at July 22, 2021Percent of Total Loans at July 22, 2021
(Dollars in thousands)  (Dollars in thousands)
Real estate loans:   Real estate loans:
One-to-four family$73,502
 3.40%One-to-four family$6,770 0.35 %$2,459 0.13 %$2,105 0.11 %
Multifamily and commercial447,925
 15.59%Multifamily and commercial71,348 2.53 55,617 1.79 27,173 0.88 
Construction13,525
 4.14%Construction3,312 1.01 3,337 1.28 2,537 0.98 
Commercial business loans34,059
 3.79%Commercial business loans3,397 0.45 2,301 0.49 1,457 0.31 
Home equity loans and advances8,427
 2.34%Home equity loans and advances314 0.10 57 0.02 57 0.02 
Total loans$577,438
 8.72%Total loans$85,141 1.38 %$63,771 1.06 %$33,329 0.56 %
At July 21, 2020, $248.0June 30, 2021, $37.9 million of the commercial loans in the above table are remitting partial payments and $162.0$61.3 million were granted an additional deferral period.

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

Critical Accounting Policies

The Company considers certain accounting policies to be critically important to the fair presentation of its Consolidated Statements of Financial Condition and Consolidated Statements of Income. These policies require management to make significant judgments on matters which by their nature have elements of uncertainty. The sensitivity of the Company’s consolidated financial statements to these critical accounting policies, and the assumptions and estimates applied, could have a significant impact on its financial condition and results of operations. These assumptions, estimates and judgments made by management can be influenced by a number of factors, including the general economic environment. The Company has identified the following as critical accounting policies:

Adequacy of the allowance for loan losses
Valuation of deferred tax assets
Valuation of retirement and post-retirement benefits

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The calculation of the allowance for loan losses is a critical accounting policy of the Company. The allowance for loan losses is a valuation account that reflects management’s evaluation of the probable losses in the loan portfolio. Determining the amount of the allowance for loan losses involves a high degree of judgment. Estimates required to establish the allowance include: the overall economic environment, value of collateral, strength of guarantors, loss exposure in the event of default, the amount and timing of future cash flows on impaired loans, and determination of loss factors applied to the portfolio segments. These estimates are susceptible to significant
COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

change. Management regularly reviews loss experience within the portfolio and monitors current economic conditions and other factors related to the collectability of the loan portfolio. As previously mentioned, the Company elected to defer the adoption of the CECL methodology as permitted by the recently enacted CARES Act. The Company willexpects to adopt CECL at the earlier of December 31, 2020 or when the national emergency concerning the COVID-19 outbreak has concluded.on January 1, 2022.

The Company maintains the allowance for loan losses through provisions for (reversal of) loan losses which are charged to income. Charge-offs against the allowance for loan losses are taken on loans where management determines that the collection of loan principal is unlikely. Recoveries made on loans that have been charged-off are credited to the allowance for loan losses.

As part of the evaluation of the adequacy of the allowance for loan losses, management prepares an analysis each quarter that categorizes the loan portfolio by certain risk characteristics such as loan type (residential mortgage, commercial mortgage, construction, commercial business, etc.) and loan risk rating.

When assigning a risk rating to a loan, management utilizes an eight-point internal risk rating system. Loans deemed to be “acceptable quality” are rated 1 through 4, with a rating of 1 established for loans with minimal risk. Loans deemed to be of “questionable quality” are rated 5 (Special Mention) or 6 (Substandard). Loans with adverse classifications are rated 7 (Doubtful) or 8 (Loss). The risk ratings are also confirmed through periodic loan review examinations, which are currently performed by both an independent third-party and the Company's internal loan review department. The Company requires an annual review be performed above certain dollar thresholds, depending on loan type, to help determine the appropriate risk rating. Results are presented to the Audit Committee of the Board of Directors.

Management estimates the allowance for loans collectively evaluated for impairment by applying quantitative loss factors to the loan segments by risk rating and determining qualitative adjustments to each loan segment at an overall level. Quantitative loss factors give consideration to historical loss experience and migration experience by loan type based on an appropriateover a look-back period, adjusted for a loss emergence period.

Qualitative adjustments give consideration to other qualitative or environmental factors such as trends and levels of delinquencies, impaired loans, charge-offs, recoveries and loan volumes, as well as national and local economic trends and conditions.

Qualitative adjustments reflect risks in the loan portfolio not captured by the quantitative loss factors and, as such, are evaluated relative to the risk levels present over the look-back period. The reserves resulting from the application of both the quantitative experienceexperiences and qualitative factors are combined to arrive at the allowance for loan losses for loans collectivelycollectability evaluated for impairment.impairment,

Management believes the primary risks inherent in the portfolio are a general decline in the economy, a decline in real estate market values, rising unemployment, elevated unemployment, increasing vacancy rates, and increases in interest rates in the absence of economic improvement. Any one or a combination of these events may adversely affect a borrower's ability to repay its loan, resulting in increased delinquencies and loan losses. Accordingly, the Company has recorded loan losses at a level which is estimated to represent the current risk in its loan portfolio. Management considers it important to maintain the ratio of the allowance for loan losses to total loans at an acceptable level considering the current composition of the loan portfolio.

Although management believes that the Company has established and maintained the allowance for loan losses at appropriate levels, additional reserves may be necessary if future economic and other conditions differ substantially from the current operating environment. Management evaluates its estimates and assumptions on an ongoing basis and the estimates and assumptions are adjusted when facts and circumstances necessitate a re-valuation of the estimate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. In addition, regulatory agencies periodically review the adequacy of the Company’s allowance for loan losses as an integral part of their examination process. Such agencies may require the Company to recognize additions to the allowance or additional write-downs based on their judgments about information available to them at the time of their examination. Although management uses the best information available, the level of the allowance for loan losses remains an estimate that is subject to significant judgment.

We assessed the impact of the pandemic on the Company’s financial condition, including its determination of the allowance for loan losses aslosses. Beginning in March 2020, management established an additional qualitative loss factor solely related to the impact of June 30, 2020.COVID-19 in the calculation. As part of that assessment, the Company considered the effects of the pandemic on economic conditions such as increasing unemployment rates and the shut-down of all non-essential businesses. The Company also analyzed the impact of COVID-19 on its primary market as well as the impact on the Company’s market sectors and its specific customers. As part of its
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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
estimation of an adjustment to the allowance due to COVID-19, the Company identified those market sectors or industries that were more likely to be affected, such as hospitality, transportation and outpatient care centers. To determine the potential impact on the Company’s customers, management considered significant revenue declines in a borrower’s business as well as reductions in its operating cash flows and the
COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

impact on their ability to repay their loans, and estimated the probability of default and loss-given-default for the various loan categories at June 30, 2020 and assigned a weighting to each scenario. Based on this analysis, management estimated the potential impact resulting from COVID-19, and the adjustment to the allowance that was necessary asnecessary. Management continues to evaluate the impact of June 30, 2020. During March 2020, management also established an additionalthe COVID-19 qualitative loss factor solely related to the impact of COVID-19 in the calculation. Ason a result of management’s assessments, the Bank recorded an additional loan loss provision of $5.7 million for the quarter ended June 30, 2020. However, during this period of great uncertainty, the full impact of COVID-19 on the Company’s borrowers is likely to be felt over the next several quarters. As such, future adjustments to the allowance may be required.quarterly basis.

The determination of whether deferred tax assets will be realizable is predicated on the reversal of existing deferred tax liabilities, utilization against carry-back years, and estimatesprojections of future taxable income. SuchThese estimates are subject to management’s judgment. A valuation allowance is established when management is unable to conclude that it is more likely than not that it will realize deferred tax assets based on the nature and timing of these items. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period enacted. BasedManagement believes, based on all available evidence, a valuation allowance was established for the portion of the state tax benefitcurrent facts, that it is not more likely than not that there will be sufficient taxable income in future years to realize federal deferred tax assets and that it is more likely than not that the benefits from certain state temporary differences will not be realized. At June 30, 20202021 and December 31, 2019,2020, the Company's net deferred tax assets totaled $8.4$4.7 million and $10.4$7.2 million, respectively, which included a valuation allowance totaling $7.3$3.7 million and $7.4$3.4 million, respectively. Based upon projections of future taxable income and the ability to carryforward operating losses indefinitely, management believes it is more likely than not the Company will realize the remaining deferred tax assets.

The Company provides certain health care and life insurance benefits, along with a split dollar BOLI death benefit, to eligible retired employees. The cost of retiree health care and other benefits during the employees' period of active service are accrued monthly. The accounting guidance requires the following: a) recognizingrecognize in the statement of financial position the over funded or underfunded status of a defined benefit post-retirement plan measured as the difference between the fair value of plan assets and the benefit obligations; b) measuringmeasure a plan's assets and its obligations that determine its funded status as of the end of the Company's fiscal year (with limited exceptions); and c) recognizing asrecognizes a component of other comprehensive income (loss), net of tax, the actuarial gain and losses and the prior service costs and credits that arise during the period. These assets and liabilities and expenses are based upon actuarial assumptions including interest rates, rates of increase in compensation, expected rate of return on plan assets and the length of time we will have to provide those benefits. Actual results may differ from these assumptions. These assumptions are reviewed and updated at least annually and management believes the estimates are reasonable.
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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Qualitative Analysis. Interest rate risk is defined as the exposure of a Company's current and future earnings and capital arising from movements in market interest rates. The guidelines of the Company’s interest rate risk policy seek to limit the exposure to changes in interest rates that affect the underlying economic value of assets, liabilities, earnings and capital.

The Asset/Liability Committee meets regularly to review the impact of interest rate changes on net interest income, net interest margin, net income, and the economic value of equity. The Asset/Liability Committee reviews a variety of strategies that project changes in asset or liability mix and the impact of those changes on projected net interest income and net income.

The Company’s strategy for liabilities has been to maintain a stable funding base by focusing on core deposit accounts. The Company’s ability to retain maturing time deposit accounts is the result of its strategy to remain competitively priced within its marketplace. The Company’s pricing strategy may vary depending upon current funding needs and the ability of the Company to fund operations through alternative sources.

Quantitative Analysis. Current and future sensitivity to changes in interest rates are measured through the use of balance sheet and income simulation models. The analysis captures changes in net interest income using flat rates as a base and rising and declining interest rate forecasts. Changes in net interest income and net income for the forecast period, generally twelve to twenty-four months, are measured and compared to policy limits for acceptable changes. The Company periodically reviews historical deposit re-pricing activity and makes modifications to certain assumptions used in its balance sheet and income simulation models regarding the interest rate sensitivity of deposits. These modifications are made to more closely reflect the most likely results under the various interest rate change scenarios. Since it is inherently difficult to predict the sensitivity of interest-bearing deposits to changes in interest rates, the changes in net interest income due to changes in interest rates cannot be precisely predicted. There are a variety of reasons that may cause actual results to vary considerably from the predictions presented below which include, but are not limited to, the timing, magnitude, and frequency of changes in interest rates, interest rate spreads, prepayments, and actions taken in response to such changes.

Assumptions used in the simulation model may include but are not limited to:
Securities pricing from third parties;
Loan pricing indications from third parties;
Loan and depository spread assumptions based upon the Company's product offerings;
Securities and borrowing spreads based upon third party indications; and
Prepayment assumptions derived from the Company's actual results and third party surveys.

Certain shortcomings are inherent in the methodologies used in the interest rate risk measurements. Modeling changes in net interest income requires the use of certain assumptions regarding prepayment and deposit repricing, which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. While management believes such assumptions are reasonable, there can be no assurance that assumed prepayment rates and repricing rates will approximate actual future asset prepayment and liability repricing activity.

Moreover, net    The table below sets forth an approximation of our interest rate exposure. Net interest income assumes that the composition of interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the net interest income table provides an indication of the Company’sour interest rate risk exposure at a particular point in time, such measurement is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual.

The table below sets forth, as of June 30, 2020,2021, Columbia Bank's net portfolio value, the estimated changes in our net portfolio value, and the net interest income that would result from the designated instantaneous parallel changes in market interest rates. This data is for Columbia Bank and its subsidiaries only and does not include any assets of the Company.

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Twelve Months Net Interest IncomeNet Portfolio Value ("NPV")
Change in Interest Rates (Basis Points)Change in Interest Rates (Basis Points)AmountDollar ChangePercent of ChangeEstimated NPVPresent Value RatioPercent Change
Twelve Months Net Interest Income Net Portfolio Value ("NPV")      (Dollars in Thousands)
(Dollars in thousands)Amount Dollar Change Percent of Change Estimated NPV Present Value Ratio Percent Change
Change in Interest Rates (Basis Points)           
+300$221,423
 $7,832
 3.67 % $990,657
 11.81% (9.84)%+300$218,082 $3,488 1.63 %$978,449 11.85 %(14.60)%
+200219,784
 6,193
 2.90
 1,047,184
 12.12
 (4.69)+200217,317 2,723 1.27 1,043,380 12.25 (8.93)
+100216,647
 3,056
 1.43
 1,083,445
 12.18
 (1.39)+100216,123 1,529 0.71 1,098,811 12.50 (4.09)
Base213,591
 
 
 1,098,769
 12.00
 
Base214,594 — — 1,145,659 12.61 — 
-100206,649
 (6,942) (3.25) 1,059,439
 11.28
 (3.58)-100201,434 (13,160)(6.13)1,073,620 11.49 (6.29)
    
As of June 30, 2020,2021, based on the scenarios above, net interest income would increase by approximately 2.90%1.27% if rates were to rise 200 basis points, and would decrease by 3.25%6.13% if rates were to decrease 100 basis points over a one-year time horizon.

Another measure of interest rate sensitivity is to model changes in net portfolio value through the use of immediate and sustained interest rate shocks. As of June 30, 2020,2021, based on the scenarios above, in the event of an immediate and sustained 200 basis point increase in interest rates, the NPV is projected to decrease 4.69%8.93%. If rates were to decrease 100 basis points, the model forecasts a 3.58%6.29% decrease in the NPV.

Overall, our June 30, 20202021 results indicate that we are adequately positioned with an acceptable net interest income and economic value at risk in all scenarios and that all interest rate risk results continue to be within our policy guidelines.

Liquidity Management and Capital Resources:

Liquidity Management. Liquidity refers to the Company's ability to generate adequate amounts of cash to meet financial obligations of a short-term and long-term nature. Sources of funds consist of deposit inflows, loan repayments and maturities, maturities and sales of securities, and the ability to execute new borrowings. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows, calls of debt securities, and prepayments on loans and mortgage-backed securities are influenced by economic conditions, competition, and interest rate movements.

The Company's cash flows are identified as cash flows from operating activities, investing activities and financing activities. Refer to the Consolidated Statements of Cash Flows for further details of the cash inflows and outflows of the Company.

Capital Resources. The Company and its subsidiary Bank are subject to various regulatory capital requirements administered by the federal banking regulators, including a risk-based capital measure. The Federal Reserve establishes capital requirements, including well capitalized standards, for the consolidated financial holding company, and the Office of the Comptroller of the Currency (the "OCC") has similar requirements for the Company's subsidiary bank. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's Consolidated Statements of Financial Condition.
Federal regulators require federally insured depository institutions to meet several minimum capital standards: (1) total capital to risk-weighted assets of 8.0%; (2) tier 1 capital to risk-weighted assets of 6.0%; (3) common equity tier 1 capital to risk-weighted assets of 4.5%; and (4) tier 1 capital to adjusted total assets of 4.0%. In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements. The capital conservation buffer capital requirement was fully phased in on January 1, 2019. The regulators established a framework for the classification of savings institutions into five categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Generally, an institution is considered well capitalized if it has: a total capital to risk-weighted assets ratio of at least 10.0%, a tier 1 capital to risk-weighted assets ratio of at least 8.0%, a common tier 1 capital to risk-weighted assets ratio of at least 6.5%, and a tier 1 capital to adjusted total assets ratio of at least 5.0%. As of June 30, 20202021 and December 31, 2019,2020, each of the Company and the Bank exceeded all capital adequacy requirements to which it is subject.


The following table presents the Company's and the Bank's actual capital amounts and ratios as ofat June 30, 20202021 and December 31, 20192020 compared to the Federal Reserve Bank minimum capital adequacy requirements and the Federal Reserve Bank requirements for classification as a well-capitalized institution:

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ActualMinimum Capital Adequacy RequirementsMinimum Capital Adequacy Requirements with Capital Conservation BufferTo be Well Capitalized Under Prompt Corrective Action Provisions
AmountRatioAmountRatioAmountRatioAmountRatio
Company(In thousands, except ratio data)
At June 30, 2021:
Total capital (to risk-weighted assets)$1,070,270 17.87 %$479,253 8.00 %$629,019 10.50 %N/AN/A
Tier 1 capital (to risk-weighted assets)999,821 16.69 359,440 6.00 509,206 8.50 N/AN/A
Common equity tier 1 capital (to risk-weighted assets)992,604 16.57 269,580 4.50 419,346 7.00 N/AN/A
Tier 1 capital (to adjusted total assets)999,821 11.25 355,349 4.00 355,349 4.00 N/AN/A
At December 31, 2020:
Total capital (to risk-weighted assets)$1,070,361 18.54 %$461,766 8.00 %$606,068 10.50 %N/AN/A
Tier 1 capital (to risk-weighted assets)988,172 17.29 346,325 6.00 490,627 8.50 N/AN/A
Common equity tier 1 capital (to risk-weighted assets)980,995 17.17 259,744 4.50 404,046 7.00 N/AN/A
Tier 1 capital (to adjusted total assets)988,172 11.38 350,923 4.00 350,923 4.00 N/AN/A






59
 Actual Minimum Capital Adequacy Requirements Minimum Capital Adequacy Requirements with Capital Conservation Buffer To be Well Capitalized Under Prompt Corrective Action Provisions
 AmountRatio AmountRatio AmountRatio AmountRatio
Company(In thousands, except ratio data)   
At June 30, 2020:           
Total capital (to risk-weighted assets)$1,092,838
18.22% $479,760
8.00% $629,685
10.50% N/AN/A
Tier 1 capital (to risk-weighted assets)1,006,951
16.79% 359,820
6.00% 509,745
8.50% N/AN/A
Common equity tier 1 capital (to risk-weighted assets)999,734
16.67% 269,865
4.50% 419,790
7.00% N/AN/A
Tier 1 capital (to adjusted total assets)1,006,951
11.56% 348,535
4.00% 348,535
4.00% N/AN/A
            
At December 31, 2019:           
Total capital (to risk-weighted assets)$1,061,555
17.25% $492,438
8.00% $646,324
10.50% N/AN/A
Tier 1 capital (to risk-weighted assets)988,172
16.05
 369,328
6.00
 523,215
8.50
 N/AN/A
Common equity tier 1 capital (to risk-weighted assets)980,995
15.94
 276,996
4.50
 430,883
7.00
 N/AN/A
Tier 1 capital (to adjusted total assets)988,172
12.92
 305,824
4.00
 305,824
4.00
 N/AN/A








COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


ActualMinimum Capital Adequacy RequirementsMinimum Capital Adequacy Requirements with Capital Conservation BufferTo be Well Capitalized Under Prompt Corrective Action Provisions
AmountRatioAmountRatioAmountRatioAmountRatio
Bank(In thousands, except ratio data)
At June 30, 2021:
Total capital (to risk-weighted assets)$981,541 16.41 %$478,609 8.00 %$628,175 10.50 %$598,262 10.00 %
Tier 1 capital (to risk-weighted assets)911,092 15.23 358,957 6.00 508,522 8.50 478,609 8.00 
Common equity tier 1 capital (to risk-weighted assets)911,092 15.23 269,218 4.50 418,783 7.00 388,870 6.50 
Tier 1 capital (to adjusted total assets)911,092 10.23 356,078 4.00 356,078 4.00 445,098 5.00 
At December 31, 2020:
Total capital (to risk-weighted assets)$924,959 16.05 %$460,944 8.00 %$604,989 10.50 %$576,180 10.00 %
Tier 1 capital (to risk-weighted assets)852,897 14.80 345,708 6.00 489,753 8.50 460,944 8.00 
Common equity tier 1 capital (to risk-weighted assets)852,897 14.80 259,281 4.50 403,326 7.00 374,517 6.50 
Tier 1 capital (to adjusted total assets)852,897 9.72 350,815 4.00 350,815 4.00 438,519 5.00 
 Actual Minimum Capital Adequacy Requirements Minimum Capital Adequacy Requirements with Capital Conservation Buffer To be Well Capitalized Under Prompt Corrective Action Provisions
 AmountRatio AmountRatio AmountRatio AmountRatio
Bank(In thousands, except ratio data)
At June 30, 2020:           
Total capital (to risk-weighted assets)$926,380
15.58% $475,689
8.00% $624,342
10.50% $594,611
10.00%
Tier 1 capital (to risk-weighted assets)852,093
14.33
 356,767
6.00
 505,420
8.50
 475,689
8.00
Common equity tier 1 capital (to risk-weighted assets)852,093
14.33
 267,575
4.50
 416,228
7.00
 386,497
6.50
Tier 1 capital (to adjusted total assets)852,093
9.79
 348,116
4.00
 348,116
4.00
 435,145
5.00
            
At December 31, 2019:           
Total capital (to risk-weighted assets)$844,664
14.25% $474,125
8.00% $622,290
10.50% $592,657
10.00%
Tier 1 capital (to risk-weighted assets)782,881
13.21
 355,594
6.00
 503,758
8.50
 474,125
8.00
Common equity tier 1 capital (to risk-weighted assets)782,881
13.21
 266,696
4.50
 414,860
7.00
 385,227
6.50
Tier 1 capital (to adjusted total assets)782,881
10.25
 305,423
4.00
 305,423
4.00
 381,779
5.00

    

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Item 4. CONTROLS AND PROCEDURES


An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of June 30, 2020.2021. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well-designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

During the quarter ended June 30, 2020,2021, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.



61


PART II – OTHER INFORMATION

Item 1.     Legal Proceedings
    
The Company is involved in various legal actions and claims arising in the normal course of business. In the opinion of management, these legal actions and claims are not expected to have a material adverse impact on the Company’s financial condition.


Item 1A.     Risk Factors

For information regarding the Company’s risk factors, refer to the Risk Factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 20192020 filed with the Securities and Exchange Commission. Except as set forth below, asAs of June 30, 20202021, the risk factors of the Company have not materially changed from those disclosed in the Company's Annual Report on Form 10-K.10-K for the year ended December 31, 2020.

The widespread outbreak of the novel coronavirus ("COVID-19") has adversely affected, and will likely continue to adversely affect, our business, financial condition, and results of operations. Moreover, the longer the pandemic persists, the more material the ultimate effects are likely to be.

The COVID-19 pandemic is negatively impacting economic and commercial activity and financial markets, both globally and within the United States. In our market area, stay-at-home orders and travel restrictions - and similar orders imposed across the United States to restrict the spread of COVID-19 - resulted in significant business and operational disruptions, including business closures, supply chain disruptions, and mass layoffs and furloughs. Local jurisdictions have subsequently lifted stay-at-home orders and moved to phased reopening of businesses, although capacity restrictions and health and safety recommendations that encourage continued physical distancing and teleworking have limited the ability of businesses to return to pre-pandemic levels of activity.

We have implemented business continuity plans and continue to provide financial services to clients, while taking health and safety measures such as transitioning most in-person customer transactions to our drive-thru facilities and limiting access to the interior of our facilities, frequent cleaning of our facilities, and using a remote workforce where possible. Despite these safeguards, we may nonetheless experience business disruptions.

The COVID-19 pandemic has negatively affected our business and is likely to continue to do so. However, the extent to which COVID-19 will negatively affect our business is unknown and will depend on the geographic spread of the virus, the overall severity of the disease, the duration of the pandemic, the actions undertaken by national, state and local governments and health officials to contain the virus or treat its effects, and how quickly and to what extent economic conditions improve and normal business and operating conditions resume. The longer the pandemic persists, the more material the ultimate effects are likely to be.

The continued spread of COVID-19 and the efforts to contain the virus, including stay-at-home orders and travel restrictions, could:
cause changes in consumer and business spending, borrowing and savings habits, which may affect the demand for loans and other products and services we offer, as well as the creditworthiness of potential and current borrowers;
cause our borrowers to be unable to meet existing payment obligations, particularly those borrowers that may be disproportionately affected by business shut downs and travel restrictions, such as those operating in the travel, lodging, retail, and entertainment industries, resulting in increases in loan delinquencies, problem assets, and foreclosures;
cause the value of collateral for loans, especially real estate, to decline in value;
reduce the availability and productivity of our employees;
require us to increase our allowance for loan losses;
cause our vendors and counterparties to be unable to meet existing obligations to us;
negatively impact the business and operations of third party service providers that perform critical services for our business;
impede our ability to close mortgage loans, if appraisers and title companies are unable to perform their functions;
cause the value of our securities portfolio to decline; and
cause the net worth and liquidity of loan guarantors to decline, impairing their ability to honor commitments to us.

Any one or a combination of the above events could have a material, adverse effect on our business, financial condition, and results of operations.



Moreover, our success and profitability is substantially dependent upon the management skills of our executive officers, many of whom have held officer positions with us for many years. The unanticipated loss or unavailability of key employees due to COVID-19 could harm our ability to operate our business or execute our business strategy. We may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.

Certain actions taken by U.S. or other governmental authorities, including the Federal Reserve, that are intended to ameliorate the macroeconomic effects of COVID-19 may cause additional harm to our business. Decreases in short-term interest rates, such as those announced by the Federal Reserve during the first fiscal quarter of 2020, have a negative impact on our results, as we have certain assets and liabilities that are sensitive to changes in interest rates.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

The following table reports information regarding repurchases of the Company's common stock during the quarter ended June 30, 2020:2021:
Period Total Number of Shares (3) Average Price Paid per Share 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2)
 Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 - 30, 2020 899,314
 $14.46
 899,074
 
May 1 - 31, 2020 
 
 
 
June 1 - 30, 2020 
 
 
 
Total 899,314
 14.46 899,074
  
         
(1) On June 11, 2019, the Company announced that the Company's Board of Directors authorized a stock repurchase program for up to 4,000,000 shares of the Company's issued and outstanding common stock, commencing on June 13, 2019.
(2) On December 5, 2019, the Company announced that its Board of Directors had expanded its stock repurchase program to acquire an additional 3,000,000 shares of the Company's outstanding common stock in addition to the shares remaining under the repurchase program announced on June 11, 2019.
(3) During the three months ended June 30, 2020, 240 shares were repurchased pursuant to forfeitures related to the 2019 Equity Incentive Plan and not as part of our share repurchase program.
Period
Total Number of Shares (2)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 - 30, 2021326,929 $17.90 326,801 3,543,718 
May 1 - 31, 2021400,100 17.68 400,100 3,143,618 
June 1 - 30, 2021744,600 17.17 744,600 2,399,018 
Total1,471,629 $17.47 1,471,501 
(1) On February 1, 2021, the Company announced that its Board of Directors authorized a new stock repurchase program to acquire up to 5,000,000 shares of the Company's then issued and outstanding common stock, commencing upon the completion of the repurchase of the remaining shares under the Company's existing stock repurchase program that was approved in September 2020. On February 5, 2021, the Company completed the repurchases under the previous stock repurchase program.
(2) During the three months ended June 30, 2021, 128 shares were repurchased pursuant to forfeitures related to the 2019 Equity Incentive Plan and not as part of a share repurchase program.
    
On April 23, 2020 the Company completed the repurchases under the stock repurchase programs.

Item 3.     Defaults Upon Senior Securities
    
Not Applicable.

Item 4.     Mine Safety Disclosures

Not Applicable.

Item 5.     Other Information

None.

Item 6.     Exhibits

The exhibits listed in the Exhibit Index (following the signatures section of this report) are included in, or incorporated by reference into this Quarterly Report on Form 10-Q.

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Exhibit Index
31.1
31.2
32
101.101.0The following materials from the Company’s Quarterly Report to Stockholders on Form 10-Q for the quarter ended June 30, 2020,2021, formatted in inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements.
101. INSThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101. SCHInline XBRL Taxonomy Extension Schema Document
101. CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101. DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101. LABInline XBRL Taxonomy Extension Labels Linkbase Document
101. PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover page Interactive Data File (embedded within the Inline XBRL document)


63


SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized.
Columbia Financial, Inc.
Date:August 9, 2021Columbia Financial, Inc.
Date:August 10, 2020/s/Thomas J. Kemly
Thomas J. Kemly
President and Chief Executive Officer
(Principal Executive Officer)
Date:August 10, 20209, 2021/s/Dennis E. Gibney
Dennis E. Gibney
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)



64