UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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, ~~2021~~2022


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

Commission File Number 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 Jersey		07140
(Address of principal executive offices)		(Zip Code)

(800) 522-4167

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	CLBK	The 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 filer

☒

Accelerated filer

☐

Smaller reporting company

☐

Non-accelerated filer

☐

Emerging 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 5, ~~2021,~~2022, there were ~~106,789,198~~110,499,898 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 Number		Page Number

PART I.	Financial Information

Item 1.	Financial Statements
	Consolidated Statements of Financial Condition as of June 30, ~~2021~~2022 (Unaudited) and December 31, ~~2020~~2021	2
	Consolidated Statements of Income for the Three and Six Months Ended June 30, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	4
	Consolidated Statements of Changes in Stockholder's Equity for the Three and Six Months Ended June 30, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	79
	Notes to Unaudited Consolidated Financial Statements	911

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5059
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5766
Item 4.	Controls and Procedures	6170

PART II.	Other Information
	Item 1. Legal Proceedings	6271
	Item 1A. Risk Factors	6271
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	6271
	Item 3. Defaults Upon Senior Securities	6271
	Item 4. Mine Safety Disclosures	6271
	Item 5. Other Information	6271
	Item 6. Exhibits	6271

	Exhibit Index	6372

	SIGNATURES	6473

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(In thousands, except share and per share data)


		June 30,		December 31,			June 30,		December 31,
		2021		2020			2022		2021
Assets	Assets	(Unaudited)				Assets	(Unaudited)

Cash and due from banks	Cash and due from banks	$	387,034	$	422,787	Cash and due from banks	$	109,021	$	70,702
Short-term investments	Short-term investments	197		170		Short-term investments	131		261
Total cash and cash equivalents	Total cash and cash equivalents	387,231		422,957		Total cash and cash equivalents	109,152		70,963

Debt securities available for sale, at fair value	Debt securities available for sale, at fair value	1,642,413		1,316,952		Debt securities available for sale, at fair value	1,490,642		1,703,847
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
Debt securities held to maturity, at amortized cost (fair value of $393,025 and $434,789 at June 30, 2022 and December 31, 2021, respectively)						Debt securities held to maturity, at amortized cost (fair value of $393,025 and $434,789 at June 30, 2022 and December 31, 2021, respectively)	425,884		429,734
Equity securities, at fair value	Equity securities, at fair value	4,053		5,418		Equity securities, at fair value	3,717		2,710
Federal Home Loan Bank stock	Federal Home Loan Bank stock	40,922		43,759		Federal Home Loan Bank stock	26,293		23,141
Loans held-for-sale, at fair value		0		4,146

Loans receivable	Loans receivable	6,017,802		6,181,770		Loans receivable	6,982,796		6,360,601
Less: allowance for loan losses		69,898		74,676
Less: allowance for credit losses (1)						Less: allowance for credit losses (1)	50,583		62,689
Loans receivable, net	Loans receivable, net	5,947,904		6,107,094		Loans receivable, net	6,932,213		6,297,912

Accrued interest receivable	Accrued interest receivable	28,296		29,456		Accrued interest receivable	28,272		28,300

Office properties and equipment, net	Office properties and equipment, net	75,450		75,974		Office properties and equipment, net	83,743		78,708
Bank-owned life insurance ("BOLI")	Bank-owned life insurance ("BOLI")	235,790		232,824		Bank-owned life insurance ("BOLI")	261,586		247,474
Goodwill and intangible assets	Goodwill and intangible assets	86,189		87,384		Goodwill and intangible assets	129,094		91,693
Other assets	Other assets	217,042		209,852		Other assets	260,822		249,615
Total assets	Total assets	$	9,067,435	$	8,798,536	Total assets	$	9,751,418	$	9,224,097

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Liabilities:	Liabilities:					Liabilities:
Deposits	Deposits	$	7,079,276	$	6,778,624	Deposits	$	8,033,064	$	7,570,216
Borrowings	Borrowings	749,683		799,364		Borrowings	419,969		377,309
Advance payments by borrowers for taxes and insurance	Advance payments by borrowers for taxes and insurance	36,155		32,570		Advance payments by borrowers for taxes and insurance	45,869		36,471
Accrued expenses and other liabilities	Accrued expenses and other liabilities	169,275		176,691		Accrued expenses and other liabilities	178,232		161,020
Total liabilities	Total liabilities	8,034,389		7,787,249		Total liabilities	8,677,134		8,145,016

Stockholders' equity:	Stockholders' equity:					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		0		0
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, 2020		1,220		1,220
Preferred stock, $0.01 par value. 10,000,000 shares authorized; none issued and outstanding at June 30, 2022 and December 31, 2021						Preferred stock, $0.01 par value. 10,000,000 shares authorized; none issued and outstanding at June 30, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value. 500,000,000 shares authorized; 130,777,623 shares issued and 111,000,740 shares outstanding at June 30, 2022 and 124,630,738 shares issued and 107,442,453 shares outstanding at December 31, 2021						Common stock, $0.01 par value. 500,000,000 shares authorized; 130,777,623 shares issued and 111,000,740 shares outstanding at June 30, 2022 and 124,630,738 shares issued and 107,442,453 shares outstanding at December 31, 2021	1,308		1,246
Additional paid-in capital	Additional paid-in capital	614,381		609,531		Additional paid-in capital	776,542		667,906
Retained earnings	Retained earnings	720,817		673,084		Retained earnings	814,708		765,133
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(43,267)		(69,625)		Accumulated other comprehensive loss	(155,845)		(45,919)
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)
Treasury stock, at cost; 19,776,883 shares at June 30, 2022 and 17,188,285 shares at December 31, 2021						Treasury stock, at cost; 19,776,883 shares at June 30, 2022 and 17,188,285 shares at December 31, 2021	(325,723)		(271,647)
Common stock held by the Employee Stock Ownership Plan	Common stock held by the Employee Stock Ownership Plan	(38,169)		(39,293)		Common stock held by the Employee Stock Ownership Plan	(35,895)		(37,026)
Stock held by Rabbi Trust	Stock held by Rabbi Trust	(2,205)		(1,875)		Stock held by Rabbi Trust	(2,878)		(2,425)
Deferred compensation obligations	Deferred compensation obligations	1,341		1,260		Deferred compensation obligations	2,067		1,813
Total stockholders' equity	Total stockholders' equity	1,033,046		1,011,287		Total stockholders' equity	1,074,284		1,079,081
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	9,067,435	$	8,798,536	Total liabilities and stockholders' equity	$	9,751,418	$	9,224,097

See accompanying notes to unaudited consolidated financial statements.	See accompanying notes to unaudited consolidated financial statements.					See accompanying notes to unaudited consolidated financial statements.

(1) The Company adopted ASU 2016-13 as of January 1, 2022. Prior year periods have not been restated.						(1) The Company adopted ASU 2016-13 as of January 1, 2022. Prior year periods have not been restated.

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,
2021 2020 2021 2020
Interest income: (Unaudited)
Loans receivable $ 57,683 $ 65,235 $ 116,451 $ 129,253
Debt securities available for sale and equity securities 7,521 7,292 13,899 14,620
Debt securities held to maturity 2,151 1,993 3,903 4,058
Federal funds and interest earning deposits 39 27 143 216
Federal Home Loan Bank stock dividends 487 1,040 1,122 2,130
Total interest income 67,881 75,587 135,518 150,277
Interest expense:
Deposits 7,855 14,911 16,730 31,743
Borrowings 1,946 4,805 3,968 11,961
Total interest expense 9,801 19,716 20,698 43,704
Net interest income 58,080 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 losses 59,841 50,135 117,861 91,269
Non-interest income:
Demand deposit account fees 858 620 1,696 1,919
Bank-owned life insurance 1,497 1,519 2,971 2,936
Title insurance fees 1,503 996 3,123 2,227
Loan fees and service charges 714 533 1,365 1,261
(Loss) gain on securities transactions (281) 0 (281) 370
Change in fair value of equity securities (778) 643 (1,366) 59
Gain on sale of loans 8,524 795 10,674 1,549
Other non-interest income 2,354 1,902 4,804 3,078
Total non-interest income 14,391 7,008 22,986 13,399
Non-interest expense:
Compensation and employee benefits 23,601 25,218 46,994 49,683
Occupancy 4,814 4,701 10,066 9,496
Federal deposit insurance premiums 567 626 1,147 736
Advertising 663 447 1,198 1,591
Professional fees 1,651 1,083 3,441 2,449
Data processing and software expenses 2,612 2,364 5,383 4,594
Merger-related expenses 75 432 75 1,507
Loss on extinguishment of debt 0 0 742 0
Other non-interest expense 3,627 2,572 6,267 5,895
Total non-interest expense 37,610 37,443 75,313 75,951
Income before income tax expense 36,622 19,700 65,534 28,717
Income tax expense 9,934 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 diluted 104,537,656 111,102,306 105,253,661 109,770,239
See accompanying notes to unaudited consolidated financial statements.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Interest income:	(Unaudited)
Loans receivable	$	61,927	$	57,683	$	118,884	$	116,451
Debt securities available for sale and equity securities	8,419		7,521		17,307		13,899
Debt securities held to maturity	2,357		2,151		4,783		3,903
Federal funds and interest-earning deposits	77		39		94		143
Federal Home Loan Bank stock dividends	298		487		745		1,122
Total interest income	73,078		67,881		141,813		135,518
Interest expense:
Deposits	4,671		7,855		9,358		16,730
Borrowings	1,900		1,946		3,222		3,968
Total interest expense	6,571		9,801		12,580		20,698

Net interest income	66,507		58,080		129,233		114,820

Provision for (reversal of) credit losses (1)	1,539		(1,761)		2,998		(3,041)

Net interest income after provision for (reversal of) credit losses	64,968		59,841		126,235		117,861

Non-interest income:
Demand deposit account fees	1,449		858		2,619		1,696
Bank-owned life insurance	2,139		1,497		3,868		2,971
Title insurance fees	1,035		1,503		1,992		3,123
Loan fees and service charges	856		714		1,496		1,365
Gain (loss) on securities transactions	210		(281)		210		(281)
Change in fair value of equity securities	(147)		(778)		(68)		(1,366)
Gain on sale of loans	—		8,524		110		10,674
Other non-interest income	2,127		2,354		4,483		4,804
Total non-interest income	7,669		14,391		14,710		22,986

Non-interest expense:
Compensation and employee benefits	28,871		23,601		54,870		46,994
Occupancy	5,436		4,814		10,865		10,066
Federal deposit insurance premiums	630		567		1,277		1,147
Advertising	795		663		1,444		1,198
Professional fees	1,839		1,651		3,593		3,441
Data processing and software expenses	3,099		2,612		6,366		5,383
Merger-related expenses	1,327		75		1,478		75
Loss on extinguishment of debt	—		—		—		742
Other non-interest expense, net	(277)		3,627		2,576		6,267
Total non-interest expense	41,720		37,610		82,469		75,313

Income before income tax expense	30,917		36,622		58,476		65,534

Income tax expense	7,958		9,934		15,113		17,801

Net income	$	22,959	$	26,688	$	43,363	$	47,733

Earnings per share-basic and diluted	$	0.22	$	0.26	$	0.41	$	0.45

Weighted average shares outstanding-basic	106,204,230		104,537,656		104,684,765		105,253,661
Weighted average shares outstanding-diluted	106,750,557		104,537,656		105,246,304		105,253,661

See accompanying notes to unaudited consolidated financial statements.

(1) The Company adopted ASU 2016-13 as of January 1, 2022. Prior year periods have not been restated.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(Unaudited)									(Unaudited)

Net income	Net income	$	26,688	$	15,097	$	47,733	$	21,862	Net income	$	22,959	$	26,688	$	43,363	$	47,733

Other comprehensive gain (loss) income, net of tax:
Unrealized gain (loss) on debt securities available for sale		4,788		6,352		(12,246)		25,619
Other comprehensive (loss) income, net of tax:										Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on debt securities available for sale										Unrealized (loss) gain on debt securities available for sale	(37,676)		4,788		(95,491)		(12,246)
Accretion of unrealized (loss) gain on debt securities reclassified as held to maturity	Accretion of unrealized (loss) gain on debt securities reclassified as held to maturity	(12)		(2)		2		4		Accretion of unrealized (loss) gain on debt securities reclassified as held to maturity	(3)		(12)		(6)		2
Reclassification adjustment for gain included in net income	Reclassification adjustment for gain included in net income	(202)		0		(202)		289		Reclassification adjustment for gain included in net income	152		(202)		152		(202)
		4,574		6,350		(12,446)		25,912			(37,527)		4,574		(95,345)		(12,446)

Derivatives, net of tax:	Derivatives, net of tax:									Derivatives, net of tax:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges		948		(750)		6,631		(12,099)
Unrealized gain on swap contracts accounted for as cash flow hedges										Unrealized gain on swap contracts accounted for as cash flow hedges	828		948		3,985		6,631
		948		(750)		6,631		(12,099)			828		948		3,985		6,631

Employee benefit plans, net of tax:	Employee benefit plans, net of tax:									Employee benefit plans, net of tax:
Amortization of prior service cost included in net income	Amortization of prior service cost included in net income	(11)		(11)		(20)		(22)		Amortization of prior service cost included in net income	(11)		(11)		(22)		(20)
Reclassification adjustment of actuarial net (loss) gain included in net income		(1,089)		(845)		(2,178)		(1,692)
Reclassification adjustment of actuarial net (loss) included in net income										Reclassification adjustment of actuarial net (loss) included in net income	(244)		(1,089)		(488)		(2,178)
Change in funded status of retirement obligations	Change in funded status of retirement obligations	24,818		1,714		34,371		3,429		Change in funded status of retirement obligations	(18,536)		24,818		(18,056)		34,371
		23,718		858		32,173		1,715			(18,791)		23,718		(18,566)		32,173

Total other comprehensive income		29,240		6,458		26,358		15,528
Total other comprehensive (loss) income										Total other comprehensive (loss) income	(55,490)		29,240		(109,926)		26,358

Total comprehensive income, net of tax		$	55,928	$	21,555	$	74,091	$	37,390
Total comprehensive (loss) income, net of tax										Total comprehensive (loss) income, net of tax	$	(32,531)	$	55,928	$	(66,563)	$	74,091

See accompanying notes to unaudited consolidated financial statements.	See accompanying notes to unaudited consolidated financial statements.									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, ~~2021~~2022 and ~~2020~~2021

(In thousands)

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, 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 MHC 47 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 — 1 — — — — — — 1
Restricted stock forfeitures (128 shares) — 2 — — (2) — — — 0
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.


	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, 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 options	—		1		—		—		—		—		—		—		1
Restricted stock forfeitures (128 shares)	—		2		—		—		(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.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

Three Months Ended June 30, 2022 and 2021

(In thousands)


	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, 2022	$	1,247	$	670,955	$	791,749	$	(100,355)	$	(294,121)	$	(36,461)	$	(2,746)	$	2,219	$	1,032,487


Net income	—		—		22,959		—		—		—		—		—		22,959
Other comprehensive (loss)	—		—		—		(55,490)		—		—		—		—		(55,490)
Issuance of common stock to Columbia Bank MHC	61		102,680		—		—		—		—		—		—		102,741

Stock based compensation	—		2,192		—		—		—		—		—		—		2,192
Purchase of treasury stock (1,523,148 shares)	—		—		—		—		(31,491)		—		—		—		(31,491)
Exercise of stock options (5,412 shares)	—		(10)		—		—		—		—		—		—		(10)
Restricted stock forfeitures (5,182 shares)	—		111		—		—		(111)		—		—		—		—

Employee Stock Ownership Plan shares committed to be released	—		614		—		—		—		566		—		—		1,180
Funding of deferred compensation obligations	—		—		—		—		—		—		(132)		(152)		(284)
Balance at June 30, 2022	$	1,308	$	776,542	$	814,708	$	(155,845)	$	(325,723)	$	(35,895)	$	(2,878)	$	2,067	$	1,074,284

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, ~~2021~~2022 and ~~2020~~2021

(In thousands)


																					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, 2020	Balance at December 31, 2020	$	1,220	$	609,531	$	673,084	$	(69,625)	$	(163,015)	$	(39,293)	$	(1,875)	$	1,260	$	1,011,287	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	Net income	—		—		47,733		—		—		—		—		—		47,733		Net income	—		—		47,733		—		—		—		—		—		47,733
Other comprehensive income	Other comprehensive income	—		—		—		26,358		—		—		—		—		26,358		Other comprehensive income	—		—		—		26,358		—		—		—		—		26,358

Treasury stock allocated to restricted stock award grants	Treasury stock allocated to restricted stock award grants	—		(733)		—		—		733		—		—		—		0		Treasury stock allocated to restricted stock award grants	—		(733)		—		—		733		—		—		—		—
Stock based compensation	Stock based compensation	—		4,540		—		—		—		—		—		—		4,540		Stock based compensation	—		4,540		—		—		—		—		—		—		4,540
Purchase of treasury stock (3,470,040 shares)	Purchase of treasury stock (3,470,040 shares)	—		—		—		—		(58,546)		—		—		—		(58,546)		Purchase of treasury stock (3,470,040 shares)	—		—		—		—		(58,546)		—		—		—		(58,546)
Exercise of stock options		—		1		—		—		—		—		—		—		1
Exercise of stock options (1,661 shares)																				Exercise of stock options (1,661 shares)	—		1		—		—		—		—		—		—		1
Restricted stock forfeitures (13,974 shares)	Restricted stock forfeitures (13,974 shares)	—		244		—		—		(244)		—		—		—		0		Restricted stock forfeitures (13,974 shares)	—		244		—		—		(244)		—		—		—		—

Employee Stock Ownership Plan shares committed to be released	Employee Stock Ownership Plan shares committed to be released	—		798		—		—		—		1,124		—		—		1,922		Employee Stock Ownership Plan shares committed to be released	—		798		—		—		—		1,124		—		—		1,922
Funding of deferred compensation obligations	Funding of deferred compensation obligations	—		—		—		—		—		—		(330)		81		(249)		Funding of deferred compensation obligations	—		—		—		—		—		—		(330)		81		(249)
Balance at June 30, 2021	Balance at June 30, 2021	$	1,220	$	614,381	$	720,817	$	(43,267)	$	(221,072)	$	(38,169)	$	(2,205)	$	1,341	$	1,033,046	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.																				See accompanying notes to unaudited consolidated financial statements.

~~COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES~~

~~Consolidated Statements of Cash Flows~~

Six Months Ended June 30,
2021 2020
(In thousands, unaudited)
Cash flows from operating activities:
Net income $ 47,733 $ 21,862
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of deferred loan costs, fees and purchased premiums and discounts (1,439) 656
Net amortization of premiums and discounts on securities 2,541 854
Net amortization of mortgage servicing rights 129 57
Amortization of intangible assets 520 514
Depreciation and amortization of office properties and equipment 3,362 3,314
Amortization of operating lease right-of-use assets 1,811 1,440
Loss on extinguishment of debt 742 0
(Reversal of) provision for loan losses (3,041) 15,304
Loss (gain) on securities transactions 281 (370)
Change in fair value of equity securities 1,365 (59)
Gain on securitizations (2,259) 0
Gain on sale of loans (8,415) (1,549)
Loss on disposal of office properties and equipment 61 691
Loss on write-down of mortgage servicing rights 0 34
Deferred tax expense 736 7,220
Decrease (increase) in accrued interest receivable 1,160 (5,643)
Decrease (increase) in other assets 23,155 (80,652)
Increase in accrued expenses and other liabilities 592 36,507
Income on bank-owned life insurance (2,971) (2,936)
Employee stock ownership plan expense 1,922 1,695
Stock based compensation 4,540 4,409
(Decrease) in deferred compensation obligations under Rabbi Trust (249) (176)
Net cash provided by operating activities 72,276 3,172
Cash flows from investing activities:
Proceeds from sales of debt securities available for sale 4,719 20,761
Proceeds from paydowns/maturities/calls of debt securities available for sale 169,638 94,758
Proceeds from paydowns/maturities/calls of debt securities held to maturity 20,633 24,971
Purchases of debt securities available for sale (416,106) (111,113)
Purchases of debt securities held to maturity (160,466) 0
Proceeds from sales of loans held-for-sale 274,980 103,992
Proceeds from sales of loans receivable 0 22,876
Purchases of loans receivable (71,590) 0
Net increase in loans receivable (125,022) (409,327)
Proceeds from bank-owned life insurance death benefits 5 0
Proceeds from redemptions of Federal Home Loan Bank stock 7,630 35,660
Purchases of Federal Home Loan Bank stock (4,793) (21,914)
Proceeds from sales of office properties and equipment 685 0
Additions to office properties and equipment (3,584) (2,852)
Net cash acquired in acquisition 0 155,248
Net cash (used in) investing activities $ (303,271) $ (86,940)

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

Six Months Ended June 30, 2022 and 2021

(In thousands)


	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, 2021	$	1,246	$	667,906	$	765,133	$	(45,919)	$	(271,647)	$	(37,026)	$	(2,425)	$	1,813	$	1,079,081
Effect of adopting ASU No. 2016-13 ("CECL")	—		—		6,212		—		—		—				—		6,212
Balance at January 1, 2022	1,246		667,906		771,345		(45,919)		(271,647)		(37,026)		(2,425)		1,813		1,085,293
Net income	—		—		43,363		—		—		—		—		—		43,363
Other comprehensive (loss)	—		—		—		(109,926)		—		—		—		—		(109,926)
Issuance of common stock to Columbia Bank MHC	61		102,680		—		—		—		—		—		—		102,741
Issuance of common stock allocated to restricted stock award grants (51,746 shares)	1		(1)		—		—		—		—		—		—		—

Stock based compensation	—		4,107		—		—		—		—		—		—		4,107
Purchase of treasury stock (2,546,667 shares)	—		—		—		—		(53,176)		—		—		—		(53,176)
Exercise of stock options ( 68,271 shares)	—		(192)		—		—		—		—		—		—		(192)
Restricted stock forfeitures (36,752 shares)	—		787		—		—		(787)		—		—		—		—
Repurchase shares for taxes (5,179 shares)	—		—		—		—		(113)		—		—		—		(113)
Employee Stock Ownership Plan shares committed to be released	—		1,255		—		—		—		1,131		—		—		2,386
Funding of deferred compensation obligations	—		—		—		—		—		—		(453)		254		(199)
Balance at June 30, 2022	$	1,308	$	776,542	$	814,708	$	(155,845)	$	(325,723)	$	(35,895)	$	(2,878)	$	2,067	$	1,074,284

See accompanying notes to unaudited consolidated financial statements.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows


	Six Months Ended June 30,
	2022		2021
	(In thousands, unaudited)
Cash flows from operating activities:
Net income	$	43,363	$	47,733
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred loan costs, fees and purchased premiums and discounts	3,267		(1,439)
Net amortization of premiums and discounts on securities	1,472		2,541
Net amortization of mortgage servicing rights	124		129
Amortization of intangible assets	749		520
Depreciation and amortization of office properties and equipment	3,605		3,362
Amortization of operating lease right-of-use assets	1,905		1,811
Loss on extinguishment of debt	—		742
Provision for (reversal of) credit losses	2,998		(3,041)
(Gain) loss on securities transactions	(210)		281
Change in fair value of equity securities	68		1,365
Gain on securitizations	—		(2,259)
Gain on sale of loans	(110)		(8,415)
Net loss on disposal of office properties and equipment	29		61
Deferred tax expense	2,219		736
Decrease in accrued interest receivable	938		1,160
Decrease in other assets	7,249		23,155
Increase in accrued expenses and other liabilities	4,661		592
Income on bank-owned life insurance	(3,868)		(2,971)
Employee stock ownership plan expense	2,386		1,922
Stock based compensation	4,107		4,540
(Decrease) in deferred compensation obligations under Rabbi Trust	(199)		(249)
Net cash provided by operating activities	74,753		72,276
Cash flows from investing activities:
Proceeds from sales of debt securities available for sale	126,772		4,719

Proceeds from paydowns/maturities/calls of debt securities available for sale	169,220		169,638
Proceeds from paydowns/maturities/calls of debt securities held to maturity	21,919		20,633
Purchases of debt securities available for sale	(137,025)		(416,106)
Purchases of debt securities held to maturity	(18,298)		(160,466)

Proceeds from sales of loans held-for-sale	3,212		274,980
Purchases of loans receivable	—		(71,590)
Net increase in loans receivable	(291,878)		(125,022)
Proceeds from bank-owned life insurance death benefits	774		5
Proceeds from redemptions of Federal Home Loan Bank stock	42,219		7,630
Purchases of Federal Home Loan Bank stock	(44,465)		(4,793)
Proceeds from sales of office properties and equipment	1,009		685
Additions to office properties and equipment	(2,382)		(3,584)
Net cash acquired in acquisition	140,769		—
Net cash provided by (used in) investing activities	$	11,846	$	(303,271)

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (continued)


		Six Months Ended June 30,					Six Months Ended June 30,
		2021		2020			2022		2021
		( In thousands, unaudited)					( In thousands, unaudited)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Net increase in deposits		$	300,652	$	602,033
Net (decrease) increase in deposits						Net (decrease) increase in deposits	$	(39,884)	$	300,652
Proceeds from long-term borrowings	Proceeds from long-term borrowings	37,120		90,000		Proceeds from long-term borrowings	—		37,120
Payments on long-term borrowings	Payments on long-term borrowings	(54,168)		(116,465)		Payments on long-term borrowings	—		(54,168)
Net decrease in short-term borrowings		(33,375)		(288,306)

Net increase (decrease) in short-term borrowings						Net increase (decrease) in short-term borrowings	36,898		(33,375)
Increase in advance payments by borrowers for taxes and insurance	Increase in advance payments by borrowers for taxes and insurance	3,585		217		Increase in advance payments by borrowers for taxes and insurance	8,057		3,585

Exercise of stock options	Exercise of stock options	1		0		Exercise of stock options	(192)		1
Purchase of treasury stock	Purchase of treasury stock	(58,546)		(53,361)		Purchase of treasury stock	(53,176)		(58,546)
Repurchase of shares for taxes						Repurchase of shares for taxes	(113)		—

Restricted stock forfeitures		0		(16)

Net cash provided by financing activities		$	195,269	$	234,102
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	$	(48,410)	$	195,269

Net (decrease) increase in cash and cash equivalents		$	(35,726)	$	150,334
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	$	38,189	$	(35,726)

Cash and cash equivalents at beginning of year	Cash and cash equivalents at beginning of year	422,957		75,547		Cash and cash equivalents at beginning of year	70,963		422,957
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	387,231	$	225,881	Cash and cash equivalents at end of period	$	109,152	$	387,231

Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest on deposits and borrowings	Interest on deposits and borrowings	$	20,892	$	43,801	Interest on deposits and borrowings	$	12,863	$	20,892
Income tax payments, net of (refunds)	Income tax payments, net of (refunds)	$	8,528	$	1,300	Income tax payments, net of (refunds)	$	11,919	$	8,528

Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:

Transfer of loans receivable to loans held-for-sale	Transfer of loans receivable to loans held-for-sale	$	262,419	$	112,219	Transfer of loans receivable to loans held-for-sale	$	3,102	$	262,419
Securitization of loans	Securitization of loans	99,603		0		Securitization of loans	—		99,603
Initial recognition of operating lease right-of-use assets		0		22,218
Initial recognition of operating lease liabilities		0		23,290
Acquisition:	Acquisition:					Acquisition:
Non-cash assets acquired:	Non-cash assets acquired:					Non-cash assets acquired:
Debt securities available for sale	Debt securities available for sale	$	0	$	51,479	Debt securities available for sale	$	79,024	$	—
Debt securities held to maturity		0		13,418

Equity securities	Equity securities	0		1,796		Equity securities	1,075		—
Federal Home Loan Bank stock	Federal Home Loan Bank stock	0		2,010		Federal Home Loan Bank stock	906		—
Loans receivable	Loans receivable	0		171,593		Loans receivable	335,501		—
Accrued interest receivable	Accrued interest receivable	0		679		Accrued interest receivable	910		—
Office properties and equipment, net	Office properties and equipment, net	0		5,774		Office properties and equipment, net	7,296		—
Goodwill and intangibles						Goodwill and intangibles	38,274		—
Deferred tax asset, net						Deferred tax asset, net	3,633		—
Bank-owned life insurance	Bank-owned life insurance	0		17,245		Bank-owned life insurance	13,033		—
Other assets	Other assets	0		2,823		Other assets	2,723		—
Total non-cash assets acquired	Total non-cash assets acquired	$	0	$	266,817	Total non-cash assets acquired	$	482,375	$	—
Liabilities assumed:	Liabilities assumed:					Liabilities assumed:
Deposits	Deposits	$	0	$	333,234	Deposits	$	502,732	$	—
Borrowings	Borrowings	0		37,728		Borrowings	5,762		—
Advance payments by borrowers for taxes and insurance	Advance payments by borrowers for taxes and insurance	0		982		Advance payments by borrowers for taxes and insurance	1,341		—
Accrued expenses and other liabilities	Accrued expenses and other liabilities	0		5,400		Accrued expenses and other liabilities	10,568		—
Total liabilities assumed	Total liabilities assumed	$	0	$	377,344	Total liabilities assumed	$	520,403	$	—
Net non-cash liabilities assumed	Net non-cash liabilities assumed	$	0	$	(110,527)	Net non-cash liabilities assumed	$	(38,028)	$	—
Net cash and cash equivalents acquired in acquisition	Net cash and cash equivalents acquired in acquisition	$	0	$	155,248	Net cash and cash equivalents acquired in acquisition	$	140,769	$	—

See accompanying notes to unaudited consolidated financial statements.	See accompanying notes to unaudited consolidated financial statements.					See accompanying notes to unaudited consolidated financial statements.

810

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. ("Columbia Financial"), its wholly-owned ~~subsidiary~~subsidiaries, Columbia Bank ~~(the "Bank"~~("Columbia"), and ~~the Bank's~~Freehold Bank ("Freehold") and Columbia's wholly-owned subsidiaries, Columbia Investment Services, Inc., 2500 Broadway Corp., 1901 Residential Management Co. LLC, Plaza Financial Services, Inc., First Jersey Title Services, Inc., Real Estate Management Corp. LLC, 1901 Commercial Management Co. LLC, Stewardship Realty LLC, CSB Realty Corp., RSI Insurance Agency, Inc., RSI Investment Corporation, and Highlander Investment Company and Freehold's wholly-owned inactive subsidiary, Freehold S & L Service Corporation (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, ~~2021~~2022 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, ~~2020~~2021 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. 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. There were 0 merger expenses recorded for the three and six months ended June 30, 2021.

~~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 Columbia Financial, with Columbia 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 Roselle acquisition totaled $335,000 and $443,000 during the three and six months ended June 30, 2020. There were 0 merger expenses recorded for the three and six months ended June 30, 2021.

~~The following table sets forth assets acquired and liabilities assumed in the Roselle 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 sale~~	~~51,479~~
~~Debt securities held to maturity~~	~~13,418~~
~~Equity securities~~	~~1,796~~
~~Federal Home Loan Bank stock~~	~~2,010~~
~~Loans receivable~~	~~171,593~~
~~Accrued interest receivable~~	~~679~~
~~Office properties and equipment, net~~	~~5,774~~
~~Bank-owned life insurance~~	~~17,245~~
~~Deferred tax asset, net~~	~~1,334~~

~~Other assets~~	~~1,489~~
~~Total assets acquired~~	$	~~422,065~~

~~Liabilities assumed:~~
~~Deposits~~	$	~~333,234~~
~~Borrowings~~	~~37,728~~
~~Advance payments by borrowers for taxes and insurance~~	~~982~~
~~Accrued expenses and other liabilities~~	~~5,400~~
~~Total liabilities assumed~~	$	~~377,344~~

~~Net assets acquired~~	~~44,721~~
~~Fair market value of stock issued to Columbia Bank MHC for purchase~~	~~68,530~~
~~Goodwill recorded at merger~~	$	~~23,809~~

~~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. During the fourth quarter of 2020, the Company completed all tax returns related to the operation of the acquired entity and its impact on the Company's income taxes, which resulted in a $5.1 million adjustment to deferred income taxes, net, and a decrease in goodwill. During the quarter 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,~~December 1, 2021, the ~~MHC, Columbia Financial, Inc. and the Bank (collectively, “Columbia”), entered into an Agreement and Plan~~Company completed its acquisition of ~~Merger (the “Merger Agreement”) with~~ Freehold Bancorp, MHC, Freehold Bancorp, Inc. and Freehold Bank (collectively, ~~“Freehold”~~the "Freehold Entities")~~, pursuant~~. Pursuant to ~~which Columbia will acquire~~the terms of the Merger Agreement, Freehold Bancorp, MHC merged with ~~Freehold~~and into the MHC, with the MHC as the surviving entity; and Freehold Bancorp, ~~merging~~Inc. merged with and into ~~the MHC and~~ Columbia Financial, ~~respectively. At~~with Columbia Financial as the ~~effective time of these mergers,~~surviving entity. In connection with the merger, Freehold Bank ~~will convert~~converted to a federal savings bank and will operate as a wholly-owned subsidiary of Columbia ~~Financial. As a subsidiary~~Financial for at least two years following the effective time of ~~Columbia Financial, current~~the merger, or no later than December 31, 2023. Under the terms of the merger agreement, depositors of Freehold Bank ~~will become members~~became depositors of the Columbia Bank 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 inat Columbia Bank on the date established at ~~Freehold. As part of the transaction, Columbia Financial will issue additional~~Freehold Bank. The Company issued 2,591,007 shares of its common stock to the MHC, inrepresenting an amount equal to the fair value of the Freehold Entities as determined by an independent ~~appraiser. These shares are expected to be issued immediately prior to completion~~appraiser, at the effective time of the mergers. The Merger Agreement has been unanimously approved by the Boards of Directors of each of Columbia Financial, the MHC and the Bank and the Boards of Directors of each of Freehold MHC, Freehold Bancorp and Freehold Bank. Subject to the receipt of all required regulatory and other approvals, and the satisfaction or waiver of other customary closing conditions, the parties anticipate that the transactions contemplated by the Merger Agreement is anticipated to close in the fourth quarter of 2021.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 Freehold ~~acquisition~~Entities totaled ~~$75,000~~$7,000 during the three and six months ended June 30, ~~2021. There were 0 merger~~2022. Merger expenses recorded ~~for~~during the three and six months ended June 30, ~~2020.~~2021 totaled $75,000.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

2. Acquisitions (continued)

RSI Bank

On May 1, 2022, the Company completed its acquisition of RSI Bancorp, M.H.C., RSI Bancorp, Inc. and RSI Bank (collectively, the “RSI Entities”). Pursuant to the terms of the merger agreement, RSI Bancorp, M.H.C. merged with and into the MHC, with the MHC as the surviving entity; RSI Bancorp, Inc. merged with and into Columbia Financial, with Columbia Financial as the surviving entity; and RSI Bank merged with and into Columbia Bank, with Columbia Bank as the surviving institution. Under the terms of the merger agreement, depositors of RSI Bank became depositors of Columbia Bank and have the same rights and privileges in the MHC as if their accounts had been established at Columbia Bank on the date established at RSI Bank. The Company issued 6,086,314 shares of its common stock to the MHC, representing an amount equal to the discounted fair value of the RSI 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 RSI Entities totaled $1.3 million and $1.5 million, respectively, during the three and six months ended June 30, 2022. There were no related merger expenses associated with the acquisition of the RSI Entities recorded during the three and six months ended June 30, 2021.

The following table sets forth assets acquired and liabilities assumed in the acquisition of the RSI Entities, at their estimated fair values as of the closing date of the transaction:


	May 1, 2022
	(In thousands)
Assets acquired:
Cash and cash equivalents	$	140,769
Debt securities available for sale	79,024
Equity securities	1,075
Federal Home Loan Bank Stock	906
Loans receivable	335,501
Accrued interest receivable	910
Office properties and equipment, net	7,296
Bank-owned life insurance	13,033
Deferred tax asset, net	3,633
Core deposit intangibles	10,271
Other assets	2,723
Total assets acquired	$	595,141

Liabilities assumed:
Deposits	$	502,732
Borrowings	5,762
Advance payments by borrowers for taxes and insurance	1,341
Accrued expenses and other liabilities	10,568
Total liabilities assumed	$	520,403

Net assets acquired	$	74,738
Fair market value of stock issued to Columbia Bank MHC for purchase	102,741
Goodwill recorded at merger	$	28,003

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

2. Acquisitions (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 May 1, 2022, and resulted in the recognition of goodwill of $28.0 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 conditions, and other future events that are highly subjective in nature and subject to change. 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.

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 land 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 from three to fifteen years.

Goodwill. Goodwill is not amortized for book purposes: however, it is reviewed at least annually for impairment and is not deductible for tax purposes.

Core deposit intangibles. Core deposit intangibles ("CDI") are the measure of the value of non-maturity deposits in a business combination. The fair value of the CDI was calculated utilizing the cost savings approach, the expected cost savings attributable to the core deposits funding relative to an alternative source of funding, using a discounted cash flow present value methodology. Key inputs and assumptions utilized in the discounted cash flow present value methodology include core deposit balances and rates paid, the cost of an additional funding source, the aggregate life of deposits and truncation points, non-interest deposit costs, and the immediate deposit outflow assumption.

Deposits. The fair values of deposit liabilities with no stated maturity (i.e., non-interest bearing and interest-bearing demand deposit accounts, money market and savings and club accounts) are equal to the carrying amounts payable on demand. The fair value of certificates of deposit represent contractual cash flows, discounted to present value using interest rates currently offered on deposits with similar characteristics and remaining maturities.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

2. Acquisitions (continued)

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.

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, ~~2021~~2022 and ~~2020:~~2021:

~~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,					For the Three Months Ended June 30,				For the Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(Dollars in thousands, except per share data)									(Dollars in thousands, except per share data)

Net income	Net income	$	26,688	$	15,097	$	47,733	$	21,862	Net income	$	22,959	$	26,688	$	43,363	$	47,733
Shares:	Shares:									Shares:
Weighted average shares outstanding - basic	Weighted average shares outstanding - basic	104,537,656		111,102,306		105,253,661		109,770,239		Weighted average shares outstanding - basic	106,204,230		104,537,656		104,684,765		105,253,661
Weighted average dilutive shares outstanding	Weighted average dilutive shares outstanding	0		0		0		0		Weighted average dilutive shares outstanding	546,327		—		561,539		—
Weighted average shares outstanding - diluted	Weighted average shares outstanding - diluted	104,537,656		111,102,306		105,253,661		109,770,239		Weighted average shares outstanding - diluted	106,750,557		104,537,656		105,246,304		105,253,661
Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	0.26	$	0.14	$	0.45	$	0.20	Basic	$	0.22	$	0.26	$	0.41	$	0.45
Diluted	Diluted	$	0.26	$	0.14	$	0.45	$	0.20	Diluted	$	0.22	$	0.26	$	0.41	$	0.45

During the three and six months ended June 30, 2022, the average number of stock options which could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive totaled 237,110 and 73,753, respectively. During the three and six months ended June 30, 2021, the average number of stock options which ~~were anti-dilutive and~~could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive 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.

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 the 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 5, 2021, the Company completed the repurchases under the second stock repurchase program.

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,~~December 6, 2021, the Company ~~completed~~announced that its Board of Directors authorized the ~~repurchases under~~Company's fourth stock repurchase program to acquire up to 5,000,000 shares, or approximately 4.6%, of the ~~second~~Company's then issued and outstanding common stock, commencing upon the completion of the Company's third stock repurchase program.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

4. Stock Repurchase Program (continued)

During the three and six months ended June 30, 2022, the Company repurchased 1,523,148 shares at a cost of approximately $31.5 million, or $20.67 per share, and 2,546,667 shares at a cost of approximately $53.2 million, or $20.88 per share, respectively, under these programs. 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 these programs. Repurchased shares are held as treasury stock and are available for general corporate purposes.

5. Summary of Significant Accounting Policies

Accounting Pronouncement Adopted in ~~2021~~2022

~~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

~~COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~5. Summary of Significant Accounting Policies~~

~~Accounting Pronouncement Adopted in 2021 (continued)~~

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 Company adopted this ASU effective January 1, 2021. The update will be applied on a retrospective basis to disclosures with regard to employee benefit plans. The adoption of this update did not have a significant impact on the Company's consolidated financial statements.

~~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 iswas 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 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 elected to extend its adoption of CECL in accordance with this legislation, and ~~will adopt~~adopted 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, 2021, we currently expect the adoption of~~The Company adopted ASU 2016-13 ~~will result in a decrease between 15%~~on January 1, 2022 for all financial assets measured at amortized cost and ~~25% in our allowance~~off balance sheet credit exposures. Results for ~~loan losses~~the three months ended March 31, 2022 are presented under Accounting Standards Codification 326, Financial Instruments - Credit Losses, while prior period amounts continue to be reported with previously applicable GAAP and ~~our reserves for unfunded commitments.~~

~~As part of the implementation of the ASU,~~have not been restated. Effective January 1, 2022, 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~~recorded a $12.1 million decrease in the allowance for credit losses on loans (previously allowance for loan losses), established a $353,000 allowance for credit losses on debt securities available for sale, and ~~reserve~~recorded a $5.5 million increase in the liability for ~~unfunded commitments is~~off balance sheet credit exposures, which resulted in a ~~result~~total cumulative effect adjustment of $6.2 million, net of tax, and an increase to retained earnings.

Accounting Pronouncement Not Yet Adopted

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of the ~~change from an incurred loss~~credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model ~~which encompasses allowances~~and enhance the disclosure requirements for loan refinancing and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current ~~known~~period gross write-offs for financing receivables and ~~inherent losses within~~net investment in leases by year of origination in the ~~portfolio, to an expected loss model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore,~~vintage disclosures. For entities that have adopted ASU 2016-13, this ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

1315

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.~~

~~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.~~

6. Debt Securities Available for Sale

Debt securities available for sale at June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized as follows:


		June 30, 2021									June 30, 2022
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
				(In thousands)							(In thousands)

U.S. government and agency obligations	U.S. government and agency obligations	$	39,023	$	913	$	(80)	$	39,856	U.S. government and agency obligations	$	68,236	$	144	$	(1,569)	$	66,811
Mortgage-backed securities and collateralized mortgage obligations	Mortgage-backed securities and collateralized mortgage obligations	1,495,440		28,231		(5,396)		1,518,275		Mortgage-backed securities and collateralized mortgage obligations	1,452,210		482		(117,345)		1,335,347
Municipal obligations	Municipal obligations	19,281		22		0		19,303		Municipal obligations	4,615		5		(123)		4,497
Corporate debt securities	Corporate debt securities	62,705		2,424		(150)		64,979		Corporate debt securities	90,146		1		(6,160)		83,987
											$	1,615,207	$	632	$	(125,197)	$	1,490,642
		$	1,616,449	$	31,590	$	(5,626)	$	1,642,413


		December 31, 2020									December 31, 2021
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
				(In thousands)									(In thousands)

U.S. government and agency obligations	U.S. government and agency obligations	$	24,425	$	1,124	$	0	$	25,549	U.S. government and agency obligations	$	34,711	$	404	$	(236)	$	34,879
Mortgage-backed securities and collateralized mortgage obligations	Mortgage-backed securities and collateralized mortgage obligations	1,163,613		37,343		(562)		1,200,394		Mortgage-backed securities and collateralized mortgage obligations	1,553,491		14,141		(13,273)		1,554,359
Municipal obligations	Municipal obligations	16,845		17		0		16,862		Municipal obligations	4,159		20		—		4,179
Corporate debt securities	Corporate debt securities	67,628		2,264		(415)		69,477		Corporate debt securities	109,018		2,378		(966)		110,430
Trust preferred securities		5,000		0		(330)		4,670
		$	1,277,511	$	40,748	$	(1,307)	$	1,316,952
											$	1,701,379	$	16,943	$	(14,475)	$	1,703,847

The amortized cost and fair value of debt securities available for sale at June 30, ~~2021,~~2022, 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, 2022
	Amortized Cost		Fair Value
	(In thousands)

One year or less	$	915	$	914
More than one year to five years	56,479		54,788
More than five years to ten years	105,603		99,593

	$	162,997	$	155,295
Mortgage-backed securities and collateralized mortgage obligations	1,452,210		1,335,347
	$	1,615,207	$	1,490,642

1416

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

6. Debt Securities Available for Sale (continued)

June 30, 2021
Amortized Cost Fair Value
(In thousands)
One year or less $ 15,118 $ 15,118
More than one year to five years 69,279 71,911
More than five years to ten years 36,612 37,109
$ 121,009 $ 124,138
Mortgage-backed securities and collateralized mortgage obligations 1,495,440 1,518,275
$ 1,616,449 $ 1,642,413

Mortgage-backed securities and collateralized mortgage obligations totaling $1.5 billion at amortized cost, and $1.3 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 and six months ended June 30, 2022, proceeds from the sales of debt securities available for sale totaled $126.8 million, resulting in gross gains of $210,000 and no gross losses. There were no calls or maturities of debt securities available for sale during three and six months ended June 30, 2022.

During the three months ended June 30, 2021, proceeds from the sale of 1 debt security available for sale totaled $4.7 million, resulting in a gross loss of $281,000. ~~There~~During the three months ended June 30, 2021, there were 0no calls or ~~matured~~maturities of debt securities available for ~~sale during the quarter.~~

sale. 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~~proceeds from called debt securities available for sale totaled $5.0 million, ~~resulting in 0 gross gains or losses. Proceeds~~and 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,~~$210,000, resulting in 0no gross gains or 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.

Debt securities available for sale having a carrying value of ~~$626.4~~$637.5 million and ~~$822.2~~$587.7 million, at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, were pledged as security for public funds on deposit at ~~the~~Columbia 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. Debt securities available for sale having a carrying value of $34.4 million and $44.1 million, at June 30, 2022 and December 31, 2021, respectively, were pledged by Freehold Bank for outstanding borrowings at the Federal Home Loan Bank, and 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, ~~2021~~2022 and December 31, ~~2020~~2021 and if the unrealized loss position was continuous for the twelve months prior to those respective dates:


	June 30, 2022
	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	$	46,356	$	(1,135)	$	4,552	$	(434)	$	50,908	$	(1,569)
Mortgage-backed securities and collateralized mortgage obligations	995,720		(79,434)		266,919		(37,911)		1,262,639		(117,345)
Municipal obligations	4,031		(123)		—		—		4,031		(123)
Corporate debt securities	77,334		(5,810)		4,650		(350)		81,984		(6,160)

	$	1,123,441	$	(86,502)	$	276,121	$	(38,695)	$	1,399,562	$	(125,197)


	December 31, 2021
	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	$	14,488	$	(236)	$	—	$	—	$	14,488	$	(236)
Mortgage-backed securities and collateralized mortgage obligations	820,746		(11,892)		62,407		(1,381)		883,153		(13,273)

Corporate debt securities	29,221		(671)		4,705		(295)		33,926		(966)

	$	864,455	$	(12,799)	$	67,112	$	(1,676)	$	931,567	$	(14,475)

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

6. Debt Securities Available for Sale (continued)

The number of securities in an unrealized loss position at June 30, 2022 totaled 405, compared with 219 at December 31, 2021. All temporarily impaired securities were investment grade as of June 30, 2022 and December 31, 2021.

For available for sale securities, the Company assesses whether a loss is from credit or other factors and considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows is less than the amortized cost, a credit loss would be recorded through an allowance for credit losses, limited by the amount that the fair value is less than the amortized cost basis.

The following table presents the activity in the allowance for credit losses on debt securities available for sale for the three and six months ended June 30, 2022:


	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(In thousands)
Allowance for Credit Losses:
Beginning balance	$	1,144	$	—
Impact of adopting ASU 2016-13 (CECL) effective January 1, 2022	—		490
(Reversal of ) provision for credit losses	(1,144)		(490)
Balance at June 30, 2022	$	—	$	—

The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of debt securities available for sale. Accrued interest receivable on debt securities available for sale is reported as a component of accrued interest receivable on the Consolidated Statement of Financial Condition, which totaled $3.1 million at June 30, 2022, and is excluded from the estimate of credit losses.

7. Debt Securities Held to Maturity

Debt securities held to maturity at June 30, 2022 and December 31, 2021 are summarized as follows:


	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Allowance for Credit Losses		Fair Value
	(In thousands)

U.S. government and agency obligations	$	44,870	$	—	$	(5,528)	$	—	$	39,342
Mortgage-backed securities and collateralized mortgage obligations	381,014		—		(27,331)		—		353,683
	$	425,884	$	—	$	(32,859)	$	—	$	393,025

1518

~~COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~6. Debt Securities Available for Sale (continued)~~

June 30, 2021
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 $ 4,902 $ (80) $ 0 $ 0 $ 4,902 $ (80)
Mortgage-backed securities and collateralized mortgage obligations 382,594 (5,006) 21,245 (390) 403,839 (5,396)
Corporate debt securities 0 0 4,850 (150) 4,850 (150)
Trust preferred securities 0 0 0 0 0 0
$ 387,496 $ (5,086) $ 26,095 $ (540) $ 413,591 $ (5,626)

December 31, 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 $ 117,978 $ (481) $ 24,018 $ (81) $ 141,996 $ (562)
Corporate debt securities 9,845 (155) 5,740 (260) 15,585 (415)
Trust preferred securities 0 0 4,670 (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, 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, 2021 totaled 65, compared with 40 at December 31, 2020. All temporarily impaired securities were investment grade as of June 30, 2021 and December 31, 2020.

~~The Company did 0t record an other-than-temporary impairment charge on debt securities available for sale during the three and six months ended June 30, 2021 and 2020.~~

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

7. Debt Securities Held to Maturity (continued)

~~Debt securities held to maturity at June 30, 2021 and December 31, 2020 are summarized as follows:~~

June 30, 2021
Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value
(In thousands)
U.S. government and agency obligations $ 34,870 $ 2 $ (183) $ 34,689
Mortgage-backed securities and collateralized mortgage obligations 367,275 13,280 (211) 380,344
$ 402,145 $ 13,282 $ (394) $ 415,033


		December 31, 2020									December 31, 2021
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
		(In thousands)									(In thousands)

U.S. government and agency obligations	U.S. government and agency obligations	$	5,000	$	1	$	0	$	5,001	U.S. government and agency obligations	$	44,870	$	—	$	(759)	$	44,111
Mortgage-backed securities and collateralized mortgage obligations	Mortgage-backed securities and collateralized mortgage obligations	257,720		14,372		(2)		272,090		Mortgage-backed securities and collateralized mortgage obligations	384,864		6,741		(927)		390,678
		$	262,720	$	14,373	$	(2)	$	277,091		$	429,734	$	6,741	$	(1,686)	$	434,789

The amortized cost and fair value of debt securities held to maturity at June 30, ~~2021,~~2022, 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					June 30, 2022
		Amortized Cost		Fair Value			Amortized Cost		Fair Value
		(In thousands)					(In thousands)

More than one year to five years	More than one year to five years	$	14,875	$	14,877	More than one year to five years	$	14,874	$	13,656
More than five years to ten years	More than five years to ten years	19,995		19,812		More than five years to ten years	19,996		17,590

More than ten years						More than ten years	10,000		8,096
		34,870		34,689			44,870		39,342
Mortgage-backed securities and collateralized mortgage obligations	Mortgage-backed securities and collateralized mortgage obligations	367,275		380,344		Mortgage-backed securities and collateralized mortgage obligations	381,014		353,683
		$	402,145	$	415,033		$	425,884	$	393,025

Mortgage-backed securities and collateralized mortgage obligations totaling ~~$367.3~~$381.0 million at amortized cost, and ~~$380.3~~$353.7 million at fair value at June 30, ~~2021,~~2022, 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, 2022, there were no sales, calls or maturities of debt securities held to maturity.

During the three and six months ended June 30, 2021, there were 0no sales, calls 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 0no 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 0no 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 the three and six months ended June 30, 2020, proceeds from called debt securities held to maturity totaled $20.0 million, resulting in 0 gross gains or losses.

~~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 ~~$187.9~~$237.2 million and ~~$220.5~~$252.4 million, at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, were pledged as security for public funds on deposit at ~~the~~Columbia 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

7. Debt Securities Held to Maturity (continued)


		June 30, 2021													June 30, 2022
		Less Than 12 Months				12 Months or Longer				Total					Less Than 12 Months				12 Months or Longer				Total
		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)			Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)
		(In thousands)													(In thousands)

U.S. government and agency obligations	U.S. government and agency obligations	$	19,812	$	(183)	$	0	$	0	$	19,812	$	(183)	U.S. government and agency obligations	$	21,752	$	(3,122)	$	17,590	$	(2,406)	$	39,342	$	(5,528)
Mortgage-backed securities and collateralized mortgage obligations	Mortgage-backed securities and collateralized mortgage obligations	11,347		(211)		0		0		11,347		(211)		Mortgage-backed securities and collateralized mortgage obligations	337,750		(24,639)		15,849		(2,692)		353,599		(27,331)
		$	31,159	$	(394)	$	0	$	0	$	31,159	$	(394)		$	359,502	$	(27,761)	$	33,439	$	(5,098)	$	392,941	$	(32,859)


	December 31, 2021
	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	$	44,111	$	(759)	$	—	$	—	$	44,111	$	(759)
Mortgage-backed securities and collateralized mortgage obligations	79,036		(927)		—		—		79,036		(927)
	$	123,147	$	(1,686)	$	—	$	—	$	123,147	$	(1,686)

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, 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, ~~2021~~2022 totaled 7,112, compared with 225 at December 31, ~~2020.~~2021. All temporarily impaired securities were investment grade as of June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

For held to maturity securities, management measures expected credit losses on a collective basis by major security type. All of the mortgage-backed securities are issued by U.S. government agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses and, therefore, the expectation of non-payment is zero and the Company is not required to estimate an allowance for credit losses on these securities under the CECL standard. All these securities reflect a credit quality rating of AAA by Moody's Investors Service.

The Company ~~did 0t record~~made an ~~other-than-temporary impairment charge~~accounting policy election to exclude accrued interest receivable from the amortized cost basis of debt held to maturity. Accrued interest receivable on debt securities held to maturity ~~during~~is reported as a component of accrued interest receivable on the ~~three and six months ended~~Consolidated Statement of Financial Condition, which totaled $920,000 at June 30, ~~2021~~2022, and ~~2020.~~is excluded from the estimate of credit losses.

~~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 stock in other financial institutions, a payment technology company, a community bank correspondent services company, ~~and~~ preferred stock in U.S. Government agencies, and a community reinvestment act qualifying bond fund 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, ~~2021~~2022 and December 31, ~~2020~~2021 was ~~$4.1~~$3.7 million and ~~$5.4~~$2.7 million, respectively.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

8. Equity Securities at Fair Value (continued)

The Company recorded a net decrease in the fair value of equity securities of ~~$778,000~~$(147,000) and ~~$1.4 million,~~$(778,000), during the three ~~and six~~ months ended June 30, 2022 and 2021, respectively, as a component of non-interest income. During the ~~three and~~ six months ended June 30, ~~2020,~~2022 and 2021, the Company recorded a net ~~increase~~decrease in the fair value of equity securities of ~~$643,000~~$(68,000) and ~~$59,000,~~$(1.4) million, respectively, as a component of non-interest income.

During the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, there were 0no sales of equity securities.

9. Loans Receivable and Allowance for Credit Losses

On January 1, 2022, the Company adopted CECL (ASC Topic 326), which replaced the historical incurred loss methodology with an expected loss methodology. The loan portfolio segmentation was expanded to seven portfolio segments taking into consideration common loan attributes and risk characteristics, as well as historical reporting metrics and data availability. Disclosures at and for the periods ended December 31, 2021 and June 30, 2021, are presented in accordance with the expanded segmentation adopted in conjunction with CECL, when appropriate. The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans receivable. Accrued interest receivable on loans receivable is reported as a component of accrued interest receivable on the Consolidated Statement of Financial Condition, which totaled $24.1 million at June 30, 2022, and is excluded from the estimate of credit losses.

The allowance for credit losses is a valuation account that reflects management’s evaluation of the current expected credit losses in the loan portfolio. The Company maintains the allowance for credit losses through provisions for credit losses that are charged to income. Charge-offs against the allowance for credit losses are taken on loans where management determines that the collection of loan principal and interest is unlikely. Recoveries made on loans that have been charged-off are credited to the allowance for credit losses.

Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and a reasonable and supportable forecast. Historical credit loss experience for both the Company and peers provides the basis for the estimation of expected credit losses, where observed credit losses are converted to probability of default rate through the use of segment-specific loss given default risk factors that convert default rates to loss severity based on industry-level, observed relationships between the two variables for each segment, primarily due to the nature of the underlying collateral. These risk factors were assessed for reasonableness against the Company’s own loss experience and adjusted in certain cases when the relationship between the Company’s historical default and loss severity deviate from that of the wider industry. The historical probability of default ("PD") curves, together with corresponding economic conditions, establish a quantitative relationship between economic conditions and loan performance through an economic cycle.

Using the historical relationship between economic conditions and loan performance, management’s expectation of future loan performance is incorporated using an externally developed economic forecast. This forecast is applied over a period that management has determined to be reasonable and supportable. Beyond the period over which management can develop or source a reasonable and supportable forecast, the model will revert to long-term average economic conditions using a straight-line, time-based methodology. The Company's current forecast period is six quarters, with a four quarter reversion period to historical average macroeconomic factors.

Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. Management developed segments for estimating loss based on type of borrower and collateral, which is generally based upon federal call report segmentation. The segments have been combined or sub-segmented as needed to ensure loans of similar risk profiles are appropriately pooled.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The allowance for credit losses on loans individually evaluated for impairment is based upon loans that have been identified through the Company’s loan monitoring process. This process includes the review of delinquent, restructured, and charged-off loans.

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, 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 credit losses to total loans at an acceptable level considering the current composition of the loan portfolio.

�� Loans receivable at June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized as follows:


		June 30,		December 31,			June 30,		December 31,
		2021		2020			2022		2021
		(In thousands)					(In thousands)
Real estate loans:	Real estate loans:					Real estate loans:
One-to-four family	One-to-four family	$	1,867,924	$	1,940,327	One-to-four family	$	2,511,715	$	2,092,317
Multifamily and commercial		3,115,054		2,817,965
Multifamily						Multifamily	1,077,459		1,041,108
Commercial real estate						Commercial real estate	2,306,683		2,170,236
Construction	Construction	261,159		328,711		Construction	276,710		295,047
Commercial business loans	Commercial business loans	471,700		752,870		Commercial business loans	474,145		452,232
Consumer loans:	Consumer loans:					Consumer loans:
Home equity loans and advances	Home equity loans and advances	278,078		321,177		Home equity loans and advances	281,590		276,563
Other consumer loans	Other consumer loans	1,158		1,497		Other consumer loans	2,131		1,428
Total gross loans	Total gross loans	5,995,073		6,162,547		Total gross loans	6,930,433		6,328,931
Purchased credit-impaired ("PCI") loans		3,116		6,345
Purchased credit-deteriorated ("PCD") loans						Purchased credit-deteriorated ("PCD") loans	21,353		6,791
Net deferred loan costs, fees and purchased premiums and discounts	Net deferred loan costs, fees and purchased premiums and discounts	19,613		12,878		Net deferred loan costs, fees and purchased premiums and discounts	31,010		24,879
Loans receivable	Loans receivable	$	6,017,802	$	6,181,770	Loans receivable	$	6,982,796	$	6,360,601

The Company had 0no loans held-for-sale at June 30, 2022 and December 31, 2021. ~~The~~During the three months ended June 30, 2022, the Company ~~had $4.1~~sold $589,000 and $424,000 of one-to-four family real estate loans and construction loans held-for-sale, respectively, resulting no gross gains or losses. During the six months ended June 30, 2022, the Company sold $589,000, $1.3 million and $1.3 million, of one-to-four family real estate loans, SBA loans included in commercial business loans, and construction loans held-for-sale, ~~at December 31, 2020.~~ respectively, resulting in gross gains of $110,000 and no gross losses.

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 0no 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, resulting in gross gains of $7.7 million and 0no gross losses. During the three months ended June 30, 2021, the Company also sold a $31,000 construction loan held-for-sale resulting in 0no 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, 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 0no gross losses.

During the three and six months ended June 30, ~~2021, 0~~2022, no loans ~~included in loans receivable~~ were ~~sold~~purchased by the Company. During the three months ended June 30, 2020, the Company sold a construction loan totaling $6.7 million included in loans receivable, resulting in 0 gross 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, resulting in gross gains of $82,000 and $55,000, respectively, and 0 gross losses.

During the three and six months ended June 30, 2021, the Company purchased $71.6 million of ~~multifamily and~~ commercial real estate loans from third parties. ~~During the three and six months ended June 30, 2020, 0 loans were purchased by the Company.~~

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, commercial business loans included ~~$91.1~~$10.6 million and ~~$344.4~~$44.9 million, respectively, in SBA Payroll Protection Program ("PPP") loans and net deferred fees related to these loans totaling ~~$2.3 million~~$269,000 and ~~$6.6~~$1.2 million, respectively.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The Company has entered into guarantor swaps with Freddie Mac which results in improved liquidity. During the three and six months ended June 30, 2022, no loans were exchanged for Freddie Mac mortgage participation certificates. 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 0no 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 0no gross losses. The Company retained the servicing of these loans. ~~During the three and six months ended June 30, 2020, 0 loans were sold.~~

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying value of loans serviced by the Company for investors was ~~$581.0~~$521.7 million and ~~$598.0~~$519.5 million, respectively. These loans are not included in the Consolidated Statements of Financial Condition.

The following tables summarize the aging of loans receivable by portfolio segment, including non-accrual loans and excluding PCD loans at June 30, 2022 and December 31, 2021:


	June 30, 2022
	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	$	4,237	$	1,785	$	666	$	6,688	$	2,267	$	2,505,027	$	2,511,715
Multifamily	—		—		—		—		—		1,077,459		1,077,459
Commercial real estate	3,563		1,607		1,774		6,944		1,774		2,299,739		2,306,683
Construction	—		—		—		—		—		276,710		276,710
Commercial business loans	455		—		250		705		318		473,440		474,145
Consumer loans:
Home equity loans and advances	417		50		136		603		166		280,987		281,590
Other consumer loans	—		—		14		14		—		2,117		2,131
Total loans	$	8,672	$	3,442	$	2,840	$	14,954	$	4,525	$	6,915,479	$	6,930,433


	December 31, 2021
	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	$	3,131	$	1,976	$	373	$	5,480	$	1,416	$	2,086,837	$	2,092,317
Multifamily	—		—		—		—		—		1,041,108		1,041,108
Commercial real estate	2,189		—		1,561		3,750		1,561		2,166,486		2,170,236
Construction	—		—		—		—		—		295,047		295,047
Commercial business loans	412		—		203		615		761		451,617		452,232
Consumer loans:
Home equity loans and advances	108		53		81		242		201		276,321		276,563
Other consumer loans	—		4		—		4		—		1,424		1,428
Total loans	$	5,840	$	2,033	$	2,218	$	10,091	$	3,939	$	6,318,840	$	6,328,931

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

9. Loans Receivable and Allowance for ~~Loan~~Credit 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, 2021 and December 31, 2020:~~

June 30, 2021
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 $ 1,471 $ 957 $ 316 $ 2,744 $ 862 $ 1,864,318 $ 1,867,924
Multifamily and commercial 3,893 392 2,433 6,718 2,433 3,105,903 3,115,054
Construction 0 0 0 0 0 261,159 261,159
Commercial business loans 1,617 434 349 2,400 383 468,917 471,700
Consumer loans:
Home equity loans and advances 355 192 395 942 636 276,500 278,078
Other consumer loans 0 0 0 0 0 1,158 1,158
Total loans $ 7,336 $ 1,975 $ 3,493 $ 12,804 $ 4,314 $ 5,977,955 $ 5,995,073

December 31, 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 $ 3,068 $ 912 $ 1,901 $ 5,881 $ 2,637 $ 1,931,809 $ 1,940,327
Multifamily and commercial 15,645 0 1,238 16,883 1,873 2,799,209 2,817,965
Construction 550 0 0 550 0 328,161 328,711
Commercial business loans 2,343 1,056 2,453 5,852 2,968 744,050 752,870
Consumer loans:
Home equity loans and advances 1,156 696 394 2,246 678 318,253 321,177
Other consumer loans 4 0 0 4 0 1,493 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, ~~2021~~2022 and December 31, ~~2020,~~2021, non-accrual loans totaled ~~$4.3~~$4.5 million and ~~$8.2~~$3.9 million, respectively. Included in non-accrual loans at both June 30, 2022 and December 31, 2021, are 910 loans totaling ~~$821,000~~$1.7 million, respectively, which are ~~less than 90 days in arrears. At December 31, 2020, 19 loans totaling $2.2 million were~~ less than 90 days in arrears.

At June 30, ~~2021 and~~2022 there were no loans past due 90 days or more still accruing interest. At December 31, ~~2020,~~2021, there were 0no loans past due 90 days or more still accruing interest other than COVID-19 related loan forbearance and deferrals. In accordance with the CARES Act, these loans ~~are~~were not included in the aging of loans receivable by portfolio segment in the table above, and the ~~Bank continues~~Company continued 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.~~

~~COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements~~

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

~~PCI~~Purchased credit impaired loans ~~are~~("PCI") were loans acquired at a discount primarily due to deteriorated credit quality. These loans ~~are~~were initially recorded at fair value at acquisition, based upon the present value of expected future cash flows, with no related allowance for ~~loan~~credit losses. In connection with the adoption of CECL on January 1, 2022, all loans considered PCI loans prior to that date were converted to purchase credit-deteriorated ("PCD") loans. Loans acquired in a business combination after January 1, 2022 are recorded in accordance with ASC Topic 326, which requires loans as of the acquisition date, that have experienced a more than insignificant deterioration in credit quality since origination to be classified as PCD loans.

At June 30, 2022 and December 31, 2021, PCD loans acquired in the Stewardship Financial Corporation ("Stewardship") acquisition totaled ~~$2.9~~$2.1 million ~~at June 30, 2021~~ and ~~$6.1~~$2.7 million, ~~at December 31, 2020. PCI~~respectively, PCD loans acquired in the Roselle Bank acquisition totaled ~~$242,000 at~~$185,000 and $184,000, respectively, and PCD loans acquired in the Freehold Bank acquisition totaled $3.8 million and $3.9 million, respectively. At June 30, ~~2021 and $246,000 at December 31, 2020.~~

~~The following table presents changes~~2022, PCD loans acquired in ~~accretable yield for PCI loans for~~ the ~~three and six months ended June 30, 2021 and 2020.~~

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
(In thousands)
Balance at beginning of period $ 408 $ 463 $ 418 $ 511
Acquisition 0 58 0 58
Accretion (32) (49) (64) (98)
Net change in expected cash flows (1) (1) 21 0
Balance at end of period $ 375 $ 471 $ 375 $ 471
RSI Bank acquisition totaled $15.3 million.

We may obtain physical possession of real estate collateralizing a residential mortgage loan via foreclosure or through an in-substance repossession. At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had 0no real estate owned. At both June 30, 2022 and December 31, 2021, we had 1 residential 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 $398,000 collateralized by residential real estate which were 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.

2224

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following tables summarize loans receivable (including ~~PCI~~PCD loans) and allowance for ~~loan~~credit losses by portfolio segment and impairment method at June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


		June 30, 2021															June 30, 2022
		One-to-Four Family		Multifamily and Commercial		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total			One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total
		(In thousands)															(In thousands)
Allowance for loan losses:
Allowance for credit losses:																Allowance for credit losses:
Individually evaluated for impairment	Individually evaluated for impairment	$	274	$	148	$	0	$	14	$	14	$	0	$	450	Individually evaluated for impairment	$	246	$	4	$	97	$	—	$	10	$	28	$	—	$	385
Collectively evaluated for impairment	Collectively evaluated for impairment	16,834		26,108		9,160		15,884		1,457		5		69,448		Collectively evaluated for impairment	10,580		10,928		14,331		5,560		7,269		1,443		10		50,121
Loans acquired with deteriorated credit quality	Loans acquired with deteriorated credit quality	0		0		0		0		0		0		0		Loans acquired with deteriorated credit quality	10		—		52		10		5		—		—		77
Total	Total	$	17,108	$	26,256	$	9,160	$	15,898	$	1,471	$	5	$	69,898	Total	$	10,836	$	10,932	$	14,480	$	5,570	$	7,284	$	1,471	$	10	$	50,583

Total loans:	Total loans:															Total loans:
Individually evaluated for impairment	Individually evaluated for impairment	$	5,668	$	33,995	$	0	$	2,124	$	1,475	$	0	$	43,262	Individually evaluated for impairment	$	4,278	$	720	$	15,337	$	—	$	1,300	$	859	$	—	$	22,494
Collectively evaluated for impairment	Collectively evaluated for impairment	1,862,256		3,081,059		261,159		469,576		276,603		1,158		5,951,811		Collectively evaluated for impairment	2,507,437		1,076,739		2,291,346		276,710		472,845		280,731		2,131		6,907,939
Loans acquired with deteriorated credit quality	Loans acquired with deteriorated credit quality	295		1,797		0		1,024		0		0		3,116		Loans acquired with deteriorated credit quality	3,344		—		16,074		1,040		699		196		—		21,353
Total loans	Total loans	$	1,868,219	$	3,116,851	$	261,159	$	472,724	$	278,078	$	1,158	$	5,998,189	Total loans	$	2,515,059	$	1,077,459	$	2,322,757	$	277,750	$	474,844	$	281,786	$	2,131	$	6,951,786

December 31, 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 $ 391 $ 601 $ 0 $ 84 $ 12 $ 0 $ 1,088
Collectively evaluated for impairment 13,195 30,080 11,271 17,300 1,736 6 73,588
Loans acquired with deteriorated credit quality 0 0 0 0 0 0 0
Total $ 13,586 $ 30,681 $ 11,271 $ 17,384 $ 1,748 $ 6 $ 74,676
Total loans:
Individually evaluated for impairment $ 7,257 $ 32,792 $ 0 $ 3,447 $ 1,651 $ 0 $ 45,147
Collectively evaluated for impairment 1,933,070 2,785,173 328,711 749,423 319,526 1,497 6,117,400
Loans acquired with deteriorated credit quality 309 4,893 0 1,143 0 0 6,345
Total loans $ 1,940,636 $ 2,822,858 $ 328,711 $ 754,013 $ 321,177 $ 1,497 $ 6,168,892

2325

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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


	December 31, 2021
	One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total
	(In thousands)
Allowance for credit losses:
Individually evaluated for impairment	$	258	$	—	$	97	$	—	$	16	$	7	$	—	$	378
Collectively evaluated for impairment	8,540		7,741		16,017		8,943		20,198		866		6		62,311
Loans acquired with deteriorated credit quality	—		—		—		—		—		—		—		—
Total	$	8,798	$	7,741	$	16,114	$	8,943	$	20,214	$	873	$	6	$	62,689

Total loans:
Individually evaluated for impairment	$	5,184	$	762	$	15,830	$	—	$	1,806	$	705	$	—	$	24,287
Collectively evaluated for impairment	2,087,133		1,040,346		2,154,406		295,047		450,426		275,858		1,428		6,304,644
Loans acquired with deteriorated credit quality	431		—		5,426		—		934		—		—		6,791
Total loans	$	2,092,748	$	1,041,108	$	2,175,662	$	295,047	$	453,166	$	276,563	$	1,428	$	6,335,722

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~~allowed 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~~Company 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. These short-term loan modifications were not treated as a troubled debt restructuring during the 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, extended certain provisions of the CARES Act through January 1, 2022, including provisions permitting loan deferral extension requests to not be treated as troubled debt restructurings. Subsequent modifications to these loans are evaluated for troubled debt restructuring accounting treatment.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following tables present the number of loans modified as TDRs during the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, 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 Three Months Ended June 30,											For the Three Months Ended June 30,
		2021					2020						2022					2021
		No. of Loans	Pre-modification Recorded Investment		Post-modification Recorded Investment		No. of Loans	Pre-modification Recorded Investment		Post-modification Recorded Investment			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)											(Dollars in thousands)
Troubled Debt Restructurings	Troubled Debt Restructurings											Troubled Debt Restructurings
Real Estate loans:	Real Estate loans:											Real Estate loans:
One-to-four family	One-to-four family	1	$	221	$	322	0	$	0	$	0	One-to-four family	—	$	—	$	—	1	$	221	$	322
Multifamily and commercial		1	192		211		0	0		0

Commercial												Commercial	—	—		—		1	192		211

Total restructured loans	Total restructured loans	2	$	413	$	533	0	$	0	$	0	Total restructured loans	—	$	—	$	—	2	$	413	$	533

For the Six Months Ended June 30,
2021 2020
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:
One-to-four family 1 $ 221 $ 322 0 $ 0 $ 0
Multifamily and commercial 1 192 211 1 10,212 11,507
Total restructured loans 2 $ 413 $ 533 1 $ 10,212 $ 11,507

~~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, 2021 and 2020 are as follows:~~

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 Total
(In thousands)
2021
Balance at beginning of period $ 19,850 $ 23,849 $ 11,464 $ 14,804 $ 1,931 $ 6 $ 71,904
Provision charged (credited) (2,463) 1,872 (2,304) 1,600 (465) (1) (1,761)
Recoveries 11 931 0 111 34 0 1,087
Charge-offs (290) (396) 0 (617) (29) 0 (1,332)
Balance at end of period $ 17,108 $ 26,256 $ 9,160 $ 15,898 $ 1,471 $ 5 $ 69,898
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
Recoveries 239 2 1 12 9 0 263
Charge-offs (353) 0 0 (2,800) (30) (1) (3,184)
Balance at end of period $ 16,633 $ 27,330 $ 10,217 $ 18,314 $ 1,514 $ 7 $ 74,015

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 Total
(In thousands)
2021
Balance at beginning of period $ 13,586 $ 30,681 $ 11,271 $ 17,384 $ 1,748 $ 6 $ 74,676
Provision charged (credited) 4,014 (4,800) (2,112) 91 (235) 1 (3,041)
Recoveries 14 937 1 127 45 0 1,124
Charge-offs (506) (562) 0 (1,704) (87) (2) (2,861)
Balance at end of period $ 17,108 $ 26,256 $ 9,160 $ 15,898 $ 1,471 $ 5 $ 69,898
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) 0 15,304
Recoveries 242 12 1 83 23 0 361
Charge-offs (439) (1) 0 (2,863) (54) (2) (3,359)
Balance at end of period $ 16,633 $ 27,330 $ 10,217 $ 18,314 $ 1,514 $ 7 $ 74,015

~~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, 2021 and December 31, 2020:~~

At June 30, 2021
Recorded Investment Unpaid Principal Balance Specific Allowance
(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family $ 2,524 $ 3,064 $ —
Multifamily and commercial 16,331 17,147 —
Commercial business loans 632 632 —
Consumer loans:
Home equity loans and advances 530 636 —
20,017 21,479 —
With a specific allowance recorded:
Real estate loans:
One-to-four family 3,144 3,162 274
Multifamily and commercial 17,664 17,667 148
Commercial business loans 1,492 1,491 14
Consumer loans:
Home equity loans and advances 945 945 14
23,245 23,265 450
Total:
Real estate loans:
One-to-four family 5,668 6,226 274
Multifamily and commercial 33,995 34,814 148
Commercial business loans 2,124 2,123 14
Consumer loans:
Home equity loans and advances 1,475 1,581 14
Total loans $ 43,262 $ 44,744 $ 450


	For the Six Months Ended June 30,
	2022					2021
	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:
One-to-four family	—	$	—	$	—	1	$	221	$	322

Commercial	—	—		—		1	192		211

Consumer loans:
Home equity loans and advances	1	$	119	$	119	—	$	—	$	—
Total restructured loans	1	$	119	$	119	2	$	413	$	533

~~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 Investment Unpaid Principal Balance Specific Allowance
(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family $ 3,344 $ 3,898 $ —
Multifamily and commercial 13,058 13,094 —
Commercial business loans 1,945 1,945 —
Consumer loans:
Home equity loans and advances 714 851 —
19,061 19,788 —
With a specific allowance recorded:
Real estate loans:
One-to-four family 3,913 3,919 391
Multifamily and commercial 19,734 20,350 601
Commercial business loans 1,502 1,502 84
Consumer loans:
Home equity loans and advances 937 937 12
26,086 26,708 1,088
Total:
Real estate loans:
One-to-four family 7,257 7,817 391
Multifamily and commercial 32,792 33,444 601
Commercial business loans 3,447 3,447 84
Consumer loans:
Home equity loans and advances 1,651 1,788 12
$ 45,147 $ 46,496 $ 1,088

Specific allocations of the allowance for loan losses attributable to impaired loans totaled $450,000 and $1.1 million at June 30, 2021 and December 31, 2020, respectively. At June 30, 2021 and December 31, 2020, impaired loans for which there was no related allowance for loan losses totaled $20.0 million and $19.1 million, respectively.

The recorded investment in TDRs totaled $40.6 million at June 30, 2021, of which 1 loan with a balance of $409,000 was 60-89 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, 2021. The recorded investment in TDRs totaled $45.4 million at December 31, 2020, of which 1 loan with a balance of $91,000 was over 90 days past due, and 3 loans totaling $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, 2020.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2022 and 2021 are as follows:


	For the Three Months Ended June 30,
	One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Totals
	(In thousands)
2022
Balance at beginning of period	$	8,814	$	11,203	$	13,513	$	4,974	$	7,143	$	1,507	$	8	$	47,162

Initial allowance related to PCD loans	131		—		474		3		19		6		—		633
Provision for (reversal of) credit losses	1,785		(271)		493		593		127		(46)		2		2,683
Recoveries	199		—		—		—		30		4		—		233
Charge-offs	(93)		—		—		—		(35)		—		—		(128)
Balance at end of period	$	10,836	$	10,932	$	14,480	$	5,570	$	7,284	$	1,471	$	10	$	50,583

2021
Balance at beginning of period	$	19,850	$	6,955	$	16,894	$	11,464	$	14,804	$	1,931	$	6	$	71,904
Provision for (reversal of) credit losses	(2,463)		1,783		89		(2,304)		1,600		(465)		(1)		(1,761)
Recoveries	11		—		931		—		111		34		—		1,087
Charge-offs	(290)		(296)		(100)		—		(617)		(29)		—		(1,332)
Balance at end of period	$	17,108	$	8,442	$	17,814	$	9,160	$	15,898	$	1,471	$	5	$	69,898

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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


	For the Six Months Ended June 30,
	One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Totals
	(In thousands)
2022
Balance at beginning of period	$	8,798	$	7,741	$	16,114	$	8,943	$	20,214	$	873	$	6	$	62,689
Effect of adopting ASU No. 2016-13 ("CECL")	(2,308)		(2,030)		(4,227)		(2,346)		(5,302)		(229)		(1)		(16,443)
Initial allowance related to PCD loans	131		—		474		3		19		6		—		633
Provision for (reversal of) credit losses	3,970		5,221		2,119		(1,030)		(7,640)		840		8		3,488
Recoveries	338		—		—		—		55		8		—		401
Charge-offs	(93)		—		—		—		(62)		(27)		(3)		(185)
Balance at end of period	$	10,836	$	10,932	$	14,480	$	5,570	$	7,284	$	1,471	$	10	$	50,583

2021
Balance at beginning of period	$	13,586	$	8,897	$	21,784	$	11,271	$	17,384	$	1,748	$	6	$	74,676
Provision for (reversal of) credit losses	4,014		(159)		(4,641)		(2,112)		91		(235)		1		(3,041)
Recoveries	14		—		937		1		127		45		—		1,124
Charge-offs	(506)		(296)		(266)		—		(1,704)		(87)		(2)		(2,861)
Balance at end of period	$	17,108	$	8,442	$	17,814	$	9,160	$	15,898	$	1,471	$	5	$	69,898

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following tables present loans individually evaluated for impairment by loan segment, excluding PCD loans, at June 30, 2022 and December 31, 2021:


	At June 30, 2022
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	1,146	$	1,494	$	—
Multifamily	64		67		—
Commercial real estate	13,406		14,095		—

Commercial business loans	168		168		—
Consumer loans:
Home equity loans and advances	249		355		—
	15,033		16,179		—
With a specific allowance recorded:
Real estate loans:
One-to-four family	3,132		3,151		246
Multifamily	656		656		4
Commercial real estate	1,931		1,934		97

Commercial business loans	1,132		1,132		10
Consumer loans:
Home equity loans and advances	610		610		28
	7,461		7,483		385
Total:
Real estate loans:
One-to-four family	4,278		4,645		246
Multifamily	720		723		4
Commercial real estate	15,337		16,029		97

Commercial business loans	1,300		1,300		10
Consumer loans:
Home equity loans and advances	859		965		28
Total loans	$	22,494	$	23,662	$	385

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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


	At December 31, 2021
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	1,882	$	2,421	$	—
Multifamily	762		765		—
Commercial real estate	13,861		14,586		—

Commercial business loans	573		573		—
Consumer loans:
Home equity loans and advances	202		308		—
	17,280		18,653		—
With a specific allowance recorded:
Real estate loans:
One-to-four family	3,302		3,321		258

Commercial real estate	1,969		1,971		97

Commercial business loans	1,233		1,233		16
Consumer loans:
Home equity loans and advances	503		503		7
	7,007		7,028		378
Total:
Real estate loans:
One-to-four family	5,184		5,742		258
Multifamily	762		765		—
Commercial real estate	15,830		16,557		97

Commercial business loans	1,806		1,806		16
Consumer loans:
Home equity loans and advances	705		811		7
	$	24,287	$	25,681	$	378

Specific allocations of the allowance for credit losses attributable to impaired loans totaled $385,000 and $378,000 at June 30, 2022 and December 31, 2021, respectively. At June 30, 2022 and December 31, 2021, impaired loans for which there was no related allowance for credit losses totaled $15.0 million and $17.3 million, respectively.

The recorded investment in TDRs totaled $20.8 million at June 30, 2022, of which 1 loan with a balance of $30,000 was 60 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, 2022. The recorded investment in TDRs totaled $22.4 million at December 31, 2021, of which 1 loan with a balance of $36,000 was 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, 2021.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following tables present interest income recognized for loans individually evaluated for impairment, by loan segment, excluding ~~PCI~~PCD loans for the three and six months ended June 30, ~~2021~~2022 and ~~2020:~~2021:


		For the Three Months Ended June 30,									For the Three Months Ended June 30,
		2021				2020					2022				2021
		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized			Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
		(In thousands)									(In thousands)
Real estate loans:	Real estate loans:									Real estate loans:
One-to-four family	One-to-four family	$	6,149	$	102	$	8,647	$	81	One-to-four family	$	4,577	$	46	$	6,149	$	102
Multifamily and commercial		33,264		375		14,960		32
Multifamily										Multifamily	731		11		16,468		177
Commercial real estate										Commercial real estate	16,176		164		25,030		198

Commercial business loans	Commercial business loans	2,295		41		5,871		157		Commercial business loans	1,373		22		2,295		41
Consumer loans:	Consumer loans:									Consumer loans:
Home equity loans and advances	Home equity loans and advances	1,523		18		2,062		29		Home equity loans and advances	873		10		1,523		18
Total loans	Total loans	$	43,231	$	536	$	31,540	$	299	Total loans	$	23,730	$	253	$	51,465	$	536


		For the Six Months Ended June 30,									For the Six Months Ended June 30,
		2021				2020					2022				2021
		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized			Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
		(In thousands)									(In thousands)
Real estate loans:	Real estate loans:									Real estate loans:
One-to-four family	One-to-four family	$	6,518	$	170	$	8,728	$	188	One-to-four family	$	4,779	$	101	$	6,518	$	170
Multifamily and commercial		33,107		811		10,840		198
Multifamily										Multifamily	741		22		16,468		349
Commercial real estate										Commercial real estate	16,061		406		27,617		462

Commercial business loans	Commercial business loans	2,679		70		5,640		224		Commercial business loans	1,517		44		2,679		70
Consumer loans:	Consumer loans:									Consumer loans:
Home equity loans and advances	Home equity loans and advances	1,565		38		2,089		58		Home equity loans and advances	817		21		1,565		38
Total loans	Total loans	$	43,869	$	1,089	$	27,297	$	668	Total loans	$	23,915	$	594	$	54,847	$	1,089

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.

2832

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following ~~tables present~~table summarizes the Company's loans ~~receivable~~ by year of origination and internally assigned credit ~~quality~~ risk ~~indicator and by loan segment,~~rating, excluding ~~PCI~~PCD loans at June 30, ~~2021~~2022 and December 31, ~~2020:~~

June 30, 2021
One-to-Four Family Multifamily and Commercial Construction Commercial Business Home Equity Loans and Advances Other Consumer Loans Total
(In thousands)
Pass $ 1,863,129 $ 3,047,108 $ 261,159 $ 462,592 $ 277,354 $ 1,158 $ 5,912,500
Special mention 393 50,860 0 5,663 0 0 56,916
Substandard 4,402 17,086 0 3,445 724 0 25,657
Doubtful 0 0 0 0 0 0 0
Loss 0 0 0 0 0 0 0
Total $ 1,867,924 $ 3,115,054 $ 261,159 $ 471,700 $ 278,078 $ 1,158 $ 5,995,073
2021:


		December 31, 2020															Loans by Year of Origination at June 30, 2022
		One-to-Four Family		Multifamily and Commercial		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
		(In thousands)															(In thousands)

One-to-Four Family																One-to-Four Family
Pass	Pass	$	1,935,032	$	2,758,905	$	328,711	$	740,010	$	320,092	$	1,497	$	6,084,247	Pass	$	374,154	$	852,583	$	308,495	$	185,900	$	133,938	$	653,327	$	—	$	—	$	2,508,397
Special mention	Special mention	404		40,392		0		6,718		0		0		47,514		Special mention	—		—		—		—		—		195		—		—		195
Substandard	Substandard	4,891		18,668		0		6,142		1,085		0		30,786		Substandard	—		488		—		688		325		1,622		—		—		3,123
Doubtful		0		0		0		0		0		0		0
Loss		0		0		0		0		0		0		0
Total		$	1,940,327	$	2,817,965	$	328,711	$	752,870	$	321,177	$	1,497	$	6,162,547

Total One-to-Four Family																Total One-to-Four Family	374,154		853,071		308,495		186,588		134,263		655,144		—		—		2,511,715

Multifamily																Multifamily
Pass																Pass	103,694		307,293		177,317		209,352		47,552		227,705		—		—		1,072,913
Special mention																Special mention	—		—		—		—		—		4,546		—		—		4,546
Substandard																Substandard	—		—		—		—		—		—		—		—		—

Total Multifamily																Total Multifamily	103,694		307,293		177,317		209,352		47,552		232,251		—		—		1,077,459

Commercial Real Estate																Commercial Real Estate
Pass																Pass	189,253		393,998		178,019		264,387		241,040		964,935		—		—		2,231,632
Special mention																Special mention	—		—		—		1,071		15,853		29,644		—		—		46,568
Substandard																Substandard	—		—		1,286		—		—		27,197		—		—		28,483

Total Commercial Real Estate																Total Commercial Real Estate	189,253		393,998		179,305		265,458		256,893		1,021,776		—		—		2,306,683

Construction																Construction
Pass																Pass	64,943		117,908		40,766		18,216		9,826		25,051		—		—		276,710
Special mention																Special mention	—		—		—		—		—		—		—		—		—
Substandard																Substandard	—		—		—		—		—		—		—		—		—

Total Construction																Total Construction	$	64,943	$	117,908	$	40,766	$	18,216	$	9,826	$	25,051	$	—	$	—	$	276,710

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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


	Loans by Year of Origination at June 30, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
	(In thousands)
Commercial Business
Pass	$	28,615	$	45,700	$	34,306	$	26,367	$	28,320	$	42,923	$	252,220	$	—	$	458,451
Special mention	—		224		62		1,322		1,132		43		3,661		—		6,444
Substandard	—		151		66		212		2,556		486		5,779		—		9,250


Total Commercial Business	28,615		46,075		34,434		27,901		32,008		43,452		261,660		—		474,145

Home Equity Loans and Advances
Pass	18,100		23,603		15,643		14,070		13,078		98,835		97,582		457		281,368
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		186		36		—		222


Total Home Equity Loans and Advances	18,100		23,603		15,643		14,070		13,078		99,021		97,618		457		281,590

Other Consumer Loans
Pass	1,241		107		122		159		45		130		327		—		2,131
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—


Total Other Consumer Loans	1,241		107		122		159		45		130		327		—		2,131

Total Loans	$	780,000	$	1,742,055	$	756,082	$	721,744	$	493,665	$	2,076,825	$	359,605	$	457	$	6,930,433

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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


	Loans by Year of Origination at December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
	(In thousands)
One-to-Four Family
Pass	$	793,848	$	298,815	$	196,244	$	138,215	$	134,811	$	525,615	$	—	$	—	$	2,087,548
Special mention	—		—		—		—		—		203		—		—		203
Substandard	—		—		1,463		1,420		360		1,323		—		—		4,566


Total One-to-Four family	793,848		298,815		197,707		139,635		135,171		527,141		—		—		2,092,317

Multifamily
Pass	312,738		181,285		231,252		47,024		131,169		137,640		—		—		1,041,108
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—


Total Multifamily	312,738		181,285		231,252		47,024		131,169		137,640		—		—		1,041,108

Commercial Real Estate
Pass	381,222		161,136		278,581		241,669		222,752		803,945		—		—		2,089,305
Special mention	—		—		1,303		16,070		1,885		34,788		—		—		54,046
Substandard	—		386		—		1,561		1,276		23,662		—		—		26,885


Total Commercial Real Estate	381,222		161,522		279,884		259,300		225,913		862,395		—		—		2,170,236

Construction
Pass	107,070		77,549		37,498		41,591		28,814		2,418		—		—		294,940
Special mention	—		—		107		—		—		—		—		—		107
Substandard	—		—		—		—		—		—		—		—		—


Total Construction	$	107,070	$	77,549	$	37,605	$	41,591	$	28,814	$	2,418	$	—	$	—	$	295,047

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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


	Loans by Year of Origination at December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
	(In thousands)
Commercial Business
Pass	$	84,113	$	36,115	$	25,156	$	30,670	$	21,762	$	26,515	$	210,597	$	—	$	434,928
Special mention	246		15		1,729		1,369		18		46		3,291		—		6,714
Substandard	192		71		352		1,084		371		609		7,911		—		10,590


Total Commercial Business	84,551		36,201		27,237		33,123		22,151		27,170		221,799		—		452,232

Home Equity Loans and Advances
Pass	22,393		15,977		15,906		13,146		12,023		100,870		95,484		426		276,225
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		246		92		—		338


Total Home Equity Loans and Advances	22,393		15,977		15,906		13,146		12,023		101,116		95,576		426		276,563

Other Consumer Loans
Pass	659		58		284		60		9		5		353		—		1,428
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—


Total Other Consumer Loans	659		58		284		60		9		5		353		—		1,428

Total Loans	$	1,702,481	$	771,407	$	789,875	$	533,879	$	555,250	$	1,657,885	$	317,728	$	426	$	6,328,931

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancellable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. To determine the expected funding rate, the Company uses a historical utilization rate for each segment. The allowance for credit losses on off balance sheet exposures is reported in other liabilities in the Consolidated Statements of Financial Condition. The liability represents an estimate of expected credit losses arising from off balance sheet exposures such as unfunded commitments. At June 30, 2022, the balance of the allowance for credit losses on unfunded commitments, included in other liabilities, totaled $8.4 million. The Company recorded a (reversal of) provision for credit losses on unfunded commitments, included in other non-interest expense in the Consolidated Statements of Income, of $(488,000) and $160,000 during the three and six months ended June 30, 2022.

The following table presents the activity in the allowance for credit losses on off balance sheet exposures for the three and six months ended June 30, 2022:


	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(In thousands)
Allowance for Credit Losses:
Beginning balance	$	8,846	$	524
Impact of adopting ASU 2016-13 ("CECL") effective January 1, 2022	—		7,674
(Reversal of) provision for credit losses	(488)		160
Balance at June 30, 2022	$	8,358	$	8,358

10. Leases

~~Effective January 1, 2020, the Company adopted ASU 2016-02~~ ~~Leases (Topic 842)~~ ~~and all subsequent ASU's that modified Topic 842~~. The Company's leases ~~primarily relate to~~ real estate property for branches and office space. At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 3 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~~2022 and December 31, ~~2020,~~2021, the weighted average remaining lease term for operating leases was ~~7.0~~6.7 years and ~~7.5~~7.0 years, respectively, and the weighted average discount rate used in the measurement of operating lease liabilities was ~~2.17%,~~2.22% and ~~2.26%~~2.13%, respectively.

~~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 months ended June 30, ~~2021~~2022 and ~~2020,~~2021, operating and variable lease expenses totaled approximately ~~$563,000~~$607,000 and ~~$601,000,~~$563,000, respectively. During the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, operating and variable lease expenses totaled approximately ~~$1.2~~$1.3 million and ~~$1.3~~$1.2 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~~2022 and ~~2020.~~2021. At June 30, ~~2021,~~2022, the Company had nonot entered into any leases ~~that~~which had not yet commenced.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

10. Leases (continued)

The following table summarizes lease payment obligations for each of the next five years and thereafter as follows:

At June 30, 2021 Lease Payment Obligations
(In thousands)
2021 $ 2,053
2022 3,971
2023 3,590
2024 2,866
2025 2,194
Thereafter 6,402
Total undiscounted cash flows 21,076
Discount on cash flows (1,736)
Total lease liability $ 19,340


	Lease Payment Obligations at
	June 30, 2022		December 31, 2021
	(In thousands)


One year or less	$	2,150	$	4,198
After one year to two years	4,206		3,950
After two years to three years	3,413		3,150
After three years to four years	2,742		2,479
After four years to five years	2,440		2,177
Thereafter	5,783		5,340
Total undiscounted cash flows	20,734		21,294
Discount on cash flows	(1,648)		(1,709)
Total lease liability	$	19,086	$	19,585

11. Deposits

Deposits at June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized as follows:


		June 30,		December 31,			June 30,		December 31,
		2021		2020			2022		2021
		(In thousands)					(In thousands)

Non-interest-bearing demand	Non-interest-bearing demand	$	1,513,197	$	1,354,605	Non-interest-bearing demand	$	1,788,091	$	1,712,061
Interest-bearing demand	Interest-bearing demand	2,355,819		2,189,164		Interest-bearing demand	2,706,948		2,599,987
Money market accounts	Money market accounts	645,590		588,180		Money market accounts	712,004		657,156
Savings and club deposits	Savings and club deposits	749,531		688,309		Savings and club deposits	984,926		822,833
Certificates of deposit	Certificates of deposit	1,815,139		1,958,366		Certificates of deposit	1,841,095		1,778,179
Total deposits	Total deposits	$	7,079,276	$	6,778,624	Total deposits	$	8,033,064	$	7,570,216

Included in the above ~~balances~~balance at ~~June 30, 2021 and~~ December 31, ~~2020~~2021 are certificates of deposit obtained through brokers totaling ~~$16.2~~$5.0 million ~~and $26.3 million, respectively,~~ that were acquired from Stewardship.

The aggregate amount of certificates of deposit that meet or exceed $100,000 totaled approximately ~~$937.6~~$960.6 million and ~~$1.0 billion~~$932.4 million at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Interest expense on deposits for the three months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$7.9~~$4.7 million and ~~$14.9~~$7.9 million, respectively. Interest expense on deposits for the six months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$16.7~~$9.4 million and ~~$31.7~~$16.7 million, respectively.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

11. Deposits (continued)

Scheduled maturities of certificates of deposit accounts at June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized as follows:


		June 30,		December 31,			June 30,		December 31,
		2021		2020			2022		2021
		(In thousands)					(In thousands)

One year or less	One year or less	$	1,364,245	$	1,494,129	One year or less	$	1,166,258	$	1,087,631
After one year to two years	After one year to two years	277,629		337,579		After one year to two years	394,853		418,515
After two years to three years	After two years to three years	74,863		52,809		After two years to three years	161,556		143,950
After three years to four years	After three years to four years	27,845		23,018		After three years to four years	56,636		36,277
After four years	After four years	70,557		50,831		After four years	61,792		91,806
		$	1,815,139	$	1,958,366		$	1,841,095	$	1,778,179

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, 1,389,570~~At June 30, 2022, there were 835,814 shares ofremaining available for future restricted stock ~~were awarded, with a grant date fair value of $15.60 per share. To fund~~awards and 1,966,728 shares remaining available for future stock option grants under the ~~grant of restricted common stock, the Company issued shares from authorized but unissued shares.~~2019 plan

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.

On March 2, 2022, 51,746 shares of restricted stock were awarded, with a grant date fair value of $21.79 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares.

Restricted shares granted under the 2019 Plan generally vest in equal installments, over performance or service periods ranging from 1 year to 5 years, beginning 1 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 months ended June 30, 2022 and 2021, ~~and 2020,~~ approximately ~~$1.6~~$1.4 million and ~~$1.4~~$1.6 million in expense was recognized in regard to these awards. The expected future compensation expense related to the ~~1,299,398~~1,041,554 non-vested restricted shares outstanding at June 30, ~~2021~~2022 is approximately ~~$12.3~~$6.7 million over a weighted average period of ~~2.5~~1.3 years. During the six months ended June 30, 2022 and 2021, ~~and 2020,~~ approximately ~~$3.0~~$2.5 million and ~~$2.8~~$3.0 million in expense was recognized in regard to these awards.

~~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~~2022 and ~~2020:~~2021:


		Number of Restricted Shares	Weighted Average Grant Date Fair Value			Number of Restricted Shares	Weighted Average Grant Date Fair Value

Non-vested at January 1, 2021		1,263,169	$	15.66
Non-vested at January 1, 2022					Non-vested at January 1, 2022	1,054,335	$	15.78
Grants	Grants	50,203	17.86		Grants	51,746	21.79
Vested					Vested	(27,775)	17.86
Forfeited	Forfeited	(13,846)	15.60		Forfeited	(31,570)	16.91
Non-vested at March 31, 2021		1,299,526	$	15.74
Non-vested at March 31, 2022					Non-vested at March 31, 2022	1,046,736	$	15.98

Forfeited	Forfeited	(128)	15.60		Forfeited	(5,182)	18.34
Non-vested at June 30, 2021		1,299,398	$	15.74
Non-vested at June 30, 2022					Non-vested at June 30, 2022	1,041,554	$	15.97

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Number of Restricted Shares Weighted Average Grant Date Fair Value
Non-vested at January 1, 2020 1,420,012 $ 15.67
Forfeited (881) 15.60
Non-vested at March 31, 2020 1,419,131 $ 15.67
Forfeited (240) 15.60
Non-vested at June 30, 2020 1,418,891 $ 15.67
Notes to Unaudited Consolidated Financial Statements

12. Stock Based Compensation (continued)

On July 23, 2019, options to purchase 3,707,901 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%.

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%.


	Number of Restricted Shares	Weighted Average Grant Date Fair Value

Non-vested at January 1, 2021	1,263,169	$	15.66
Grants	50,203	$	17.86

Forfeited	(13,846)	15.60
Non-vested at March 31, 2021	1,299,526	$	15.74


Forfeited	(128)	15.60
Non-vested at June 30, 2021	1,299,398	$	15.74

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%.

On March 21, 2022, options to purchase 130,951 shares of Company common stock were awarded with a grant date fair value of $6.51 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 $21.79, 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 six years risk-free rate of return of 2.34%, volatility of 25.31%, and a dividend yield of 0.00%.

~~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, 2022 and 2021, approximately $811,000 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 $1.6 million and $1.6 million~~ in expense was recognized in regard to these awards. The expected future compensation expense related to the ~~3,043,454~~2,222,014 non-vested options outstanding at June 30, ~~2021~~2022 is ~~$10.1~~$7.0 million over a weighted average period of ~~3.1~~1.9 years. During the six months ended June 30, 2022 and 2021, approximately $1.6 million and $1.6 million in expense was recognized in regard to these awards.

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 option activity during the three and six months ended June 30, ~~2021~~2022 and ~~2020:~~2021:


		Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value			Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value

Outstanding, January 1, 2021		3,708,628	$	15.66	8.6	$	0
Outstanding, January 1, 2022								Outstanding, January 1, 2022	3,637,542	$	15.78	7.6	$	18,654,905
Granted	Granted	109,654	17.86		—	—		Granted	130,951	21.79		0	—
Expired		(2,029)	15.60		—	—
Forfeited		(30,118)	15.60		—	—
Outstanding, March 31, 2021		3,786,135	$	15.73	8.4	$	6,673,328

Exercised	Exercised	(1,661)	15.60		—	—		Exercised	(62,859)	16.42
Expired	Expired	(7,529)	15.60		—	—		Expired	(1,412)	15.60		0	—
Forfeited	Forfeited	(1,412)	15.60		—	—		Forfeited	(61,961)	16.84		0	—
Outstanding, June 30, 2021		3,775,533	$	15.73	8.1	$	5,700,258
Outstanding, March 31, 2022								Outstanding, March 31, 2022	3,642,261	$	15.92	7.5	$	20,401,381

Exercised								Exercised	(5,412)	15.60		0	—

Forfeited								Forfeited	(21,801)	17.78		0	—
Outstanding, June 30, 2022								Outstanding, June 30, 2022	3,615,048	$	15.91	7.2	$	21,335,939

Options exercisable at June 30, 2021		732,079	$	15.67	8.1	$	1,138,280

Options exercisable at June 30, 2022								Options exercisable at June 30, 2022	1,393,034	$	15.69	7.1	$	8,526,586

Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value
Outstanding, January 1, 2020 3,784,044 $ 15.67 9.6 $ 4,812,490
Forfeited (9,707) 15.60 — —
Outstanding, March 31, 2020 3,774,337 $ 15.67 9.3 $ 0
Forfeited (2,647) 15.60 — —
Outstanding, June 30, 2020 3,771,690 $ 15.67 9.1 $ 0
Options exercisable at June 30, 2020 0 $ 0 — $ —


	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value

Outstanding, January 1, 2021	3,708,628	$	15.66	8.6	$	—
Granted	109,654	17.86		—	—
Expired	(2,029)	15.60		—	—
Forfeited	(30,118)	15.60		—	—
Outstanding, March 31, 2021	3,786,135	$	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, 2021	3,775,533	$	15.73	8.1	$	5,700,258


Options exercisable at June 30, 2021	732,079	$	15.67	8.1	$	1,138,280

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 the three and six months ended June 30, 2022, the aggregate intrinsic value of options exercised was $360,469 and $388,990, respectively. During both the three and six months ended June 30, 2021, the aggregate intrinsic value of options exercised was $3,805. ~~There were 0 stock option exercises during the three and six months ended June 30, 2020.~~

3341

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, and Split-Dollar Life Insurance Plans

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 Columbia 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).

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.

Through the acquisition of the RSI Entities, the Company acquired a funded pension plan, a non-funded post -retirement plan, and a split-dollar life insurance plan which are included in the tables below, based on benefit valuations as of the acquisition date.

Net periodic benefit (income) cost for Pension Plan, RIM Plan, Post-retirement Plan and ~~Split-dollar~~Split-Dollar Life Insurance plan benefits for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, includes the following components:

For the Three Months Ended June 30,
Pension Plan RIM Plan Post-retirement Plan Split-Dollar Life Insurance
2021 2020 2021 2020 2021 2020 2021 2020 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 cost 1,756 2,031 86 102 141 171 125 131 Other non-interest expense
Expected return on plan assets (6,318) (5,737) 0 0 0 0 0 0 Other non-interest expense
Amortization:
Prior service cost 0 0 0 0 0 0 14 14 Other non-interest expense
Net loss 1,000 781 166 99 153 77 191 113 Other non-interest expense
Net periodic (income) benefit cost $ (1,412) $ (988) $ 352 $ 268 $ 424 $ 347 $ 471 $ 378


	For the Three Months Ended June 30,
	Pension Plan				RIM Plan				Post-retirement Plan				Split-Dollar Life Insurance
	2022		2021		2022		2021		2022		2021		2022		2021		Affected Line Item in the Consolidated Statements of Income
	(In thousands)

Service cost	$	1,966	$	2,150	$	93	$	100	$	110	$	130	$	128	$	141	Compensation and employee benefits
Interest cost	2,081		1,756		97		86		173		141		153		125		Other non-interest expense
Expected return on plan assets	(7,633)		(6,318)		—		—		—		—		—		—		Other non-interest expense
Amortization:
Prior service cost	—		—		—		—		—		—		14		14		Other non-interest expense
Net loss	—		1,000		111		166		78		153		151		191		Other non-interest expense
Net periodic (income) benefit cost	$	(3,586)	$	(1,412)	$	301	$	352	$	361	$	424	$	446	$	471

3442

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 Plan RIM Plan Post-retirement Plan Split-Dollar Life Insurance
2021 2020 2021 2020 2021 2020 2021 2020 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 cost 3,512 4,062 172 204 282 342 250 245 Other non-interest expense
Expected return on plan assets (12,636) (11,474) 0 0 0 0 0 0 Other non-interest expense
Amortization:
Prior service cost 0 0 0 0 0 0 28 28 Other non-interest expense
Net loss 2,000 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
(continued)


	For the Six Months Ended June 30,
	Pension Plan				RIM Plan				Post-retirement Plan				Split-Dollar Life Insurance
	2022		2021		2022		2021		2022		2021		2022		2021		Affected Line Item in the Consolidated Statements of Income
	(In thousands)

Service cost	$	3,932	$	4,300	$	186	$	200	$	197	$	260	$	253	$	282	Compensation and employee benefits
Interest cost	4,112		3,512		194		172		323		282		295		250		Other non-interest expense
Expected return on plan assets	(15,192)		(12,636)		—		—		—		—		—		—		Other non-interest expense
Amortization:
Prior service cost	—		—		—		—		—		—		28		28		Other non-interest expense
Net loss	—		2,000		222		332		156		306		302		382		Other non-interest expense
Net periodic (income) benefit cost	$	(7,148)	$	(2,824)	$	602	$	704	$	676	$	848	$	878	$	942

For the three and six months ended June 30, ~~2021, 0 contributions were~~2022, no contribution was made to the Pension Plan. Columbia Bank made a $10.0 million contribution to the Pension Plan in August 2022. The net periodic (income) cost ~~(income)~~ for pension benefits, other post-retirement and split dollar life insurance benefits for the three and six months ended June 30, ~~2021~~2022 were calculated using the most recent available benefit valuations.

Through the acquisition of the Roselle ~~entities,~~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, 2022 and 2021, the Company recorded a net periodic benefit cost of $3,000 and ~~2020,~~$6,000, and $4,000 and $4,000 respectively, in connection with this plan.

Freehold Bank has a non-contributory defined benefit supplemental executive plan with the only participant being the former

president of Freehold Bank. For the three and six months ended June 30, 2022, the Company recorded a net periodic benefit cost of $2,000 and $4,000, respectively, in connection with this plan.

In addition, through the acquisition of the RSI Entities, the Company acquired a non-contributory defined benefit supplemental executive retirement plan with the only participant being a former president of RSI Bank. For both the three and ~~$4,000 and $4,000, respectively,~~six months ended June 30, 2022 , the Company recorded a net periodic benefit cost of $11,000, 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.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14. Fair Value Measurements (continued)

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.

~~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, ~~2021~~2022 and December 31, ~~2020.~~2021.

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, matrix pricing and ~~matrix~~discounted cash flow 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. Discounted cash flows, a Level 3 input, is estimated by discounting the expected future cash flows using the current rates for securities with similar credit ratings and similar remaining maturities. 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. The Company classifies the estimated fair value of its loan portfolio as Level 3.

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 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.

3644

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, ~~2021~~2022 and December 31, ~~2020,~~2021, by level within the fair value hierarchy:


		June 30, 2021									June 30, 2022
				Fair Value Measurements									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)			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)									(In thousands)
Debt securities available for sale:	Debt securities available for sale:									Debt securities available for sale:
U.S. government and agency obligations	U.S. government and agency obligations	$	39,856	$	35,318	$	4,538	$	0	U.S. government and agency obligations	$	66,811	$	57,176	$	9,635	$	—
Mortgage-backed securities and collateralized mortgage obligations	Mortgage-backed securities and collateralized mortgage obligations	1,518,275		0		1,518,275		0		Mortgage-backed securities and collateralized mortgage obligations	1,335,347		—		1,335,347		—
Municipal obligations	Municipal obligations	19,303		0		19,303		0		Municipal obligations	4,497		—		908		3,589
Corporate debt securities	Corporate debt securities	64,979		0		64,979		0		Corporate debt securities	83,987		—		74,037		9,950
Trust preferred securities		0		0		0		0

Total debt securities available for sale	Total debt securities available for sale	1,642,413		35,318		1,607,095		0		Total debt securities available for sale	1,490,642		57,176		1,419,927		13,539
Equity securities	Equity securities	4,053		3,707		346		0		Equity securities	3,717		3,377		340		—
Derivative assets	Derivative assets	12,741		0		12,741		0		Derivative assets	8,642		—		8,642		—
		$	1,659,207	$	39,025	$	1,620,182	$	0		$	1,503,001	$	60,553	$	1,428,909	$	13,539

Derivative liabilities	Derivative liabilities	$	28,347	$	0	$	28,347	$	0	Derivative liabilities	$	9,943	$	—	$	9,943	$	—

December 31, 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 $ 25,549 $ 25,549 $ 0 $ 0
Mortgage-backed securities and collateralized mortgage obligations 1,200,394 0 1,200,394 0
Municipal obligations 16,862 0 16,862 0
Corporate debt securities 69,477 0 69,477 0
Trust preferred securities 4,670 0 4,670 0
Total debt securities available for sale 1,316,952 25,549 1,291,403 0
Equity securities 5,418 5,072 346 0
Derivative assets 19,425 0 19,425 0
$ 1,341,795 $ 30,621 $ 1,311,174 $ 0
Derivative liabilities $ 42,384 $ 0 $ 42,384 $ 0


	December 31, 2021
			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	$	34,879	$	34,879	$	—	$	—
Mortgage-backed securities and collateralized mortgage obligations	1,554,359		—		1,554,359		—
Municipal obligations	4,179		—		4,179		—
Corporate debt securities	110,430		—		110,430		—

Total debt securities available for sale	1,703,847		34,879		1,668,968		—
Equity securities	2,710		2,364		346		0
Derivative assets	9,492		—		9,492		—
	$	1,716,049	$	37,243	$	1,678,806	$	—

Derivative liabilities	$	17,366	$	—	$	17,366	$	—

3745

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14. Fair Value Measurements (continued)

The table below provides activity of assets reported as Level 3 for the period ended June 30, 2022:


	Significant Unobservable Inputs (Level 3)
	(In thousands)
Debt securities available for sale:
Balance of recurring Level 3 assets -December 31, 2021	$	—
Transfers into Level 3 assets	13,539
Balance of recurring Level 3 assets - June 30, 2022	$	13,539

The fair value of investments placed in Level 3 is estimated by discounting the expected future cash flows using reasonably available current rates for comparable new issue securities with similar structure, including original maturity, call date, and assumptions about risk. Discounted cash flow estimated valuations are subsequently validated against comparable structures as an approximation of value.

Expected cash flows were projected based on contractual cash flows. NaN private placement corporate debt securities classified as available for sale and 4 private placement municipal obligations classified as available for sale were transferred from Level 2 to Level 3 during the three and six months ended June 30, 2022.

Private placement debt security cash flows were discounted to a market yield ranging from 5.0% to 8.0% (weighted average is 7.1%), and private placement municipal obligation cash flows were discounted to a market yield ranging from 1.0% to 4.0% (weighted average is 2.2%).

The period end valuations were support by an analysis prepared by an independent third party market participant and approved by management.

There were no Level 3 assets measured at fair value on a recurring basis at ~~June 30, 2021 and~~ December 31, ~~2020.~~2021.

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, ~~2021~~2022 and December 31, ~~2020.~~2021.

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.

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 on a non-recurring basis at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, by level within the fair value hierarchy:

June 30, 2021
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 $ 1,232 $ 0 $ 0 $ 1,232
Mortgage servicing rights 2,319 0 0 2,319
$ 3,551 $ 0 $ 0 $ 3,551


	June 30, 2022
			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	$	2,239	$	—	$	—	$	2,239
	$	2,239	$	—	$	—	$	2,239


	December 31, 2021
			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	$	1,213	$	—	$	—	$	1,213

Mortgage servicing rights	1,906		—		—		1,906
	$	3,119	$	—	$	—	$	3,119

The following table presents information for Level 3 assets measured at fair value on a non-recurring basis at June 30, 2022 and December 31, 2021:

June 30, 2022

Fair Value

Valuation Methodology

Unobservable Inputs

Range of Inputs

Weighted Average

(Dollars in thousands)

Mortgage servicing rights

2,239

Discounted cash flow

Prepayment speeds and discount rates (1)

5.6% - 24.5%

8.0

3847

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, 2021 and December 31, 2020:~~

June 30, 2021
Fair Value Valuation Methodology Unobservable Inputs Range of Inputs Weighted Average
(Dollars in thousands)
Impaired loans $ 1,232 Other Contracted sale price of collateral 0 % 0 %
Mortgage servicing rights 2,319 Discounted cash flow
Prepayment speeds and discount rates (1)
8.1% - 24.3% 11.3 %

December 31, 2020

December 31, 2021

Fair Value

Valuation Methodology

Unobservable Inputs

Range of Inputs

Weighted Average

Fair Value

Valuation Methodology

Unobservable Inputs

Range of Inputs

Weighted Average

(Dollars in thousands)

Impaired loans

1,213

Other

Contracted sales price of collateral

—

Mortgage servicing rights

1,338

Discounted cash flow

Prepayment speeds and discount rates (1)

9.7% - 26.2%

16.7%

Mortgage servicing rights

1,906

Discounted cash flow

Prepayment speeds and discount rates (2)

7.5% - 24.9%

12.7

(1) Value of SBA servicing rights based on a discount rate of 10.25%.

(1) Value of SBA servicing rights based on a discount rate of 11.75%.

(2) 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.

~~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.

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.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14. Fair Value Measurements (continued)

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 significant 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.

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, ~~2021~~2022 and December 31, ~~2020:~~2021:


		June 30, 2021											June 30, 2022
				Fair Value Measurements											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)			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)											(In thousands)
Financial assets:	Financial assets:											Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	387,231	$	387,231	$	387,231	$	0	$	0	Cash and cash equivalents	$	109,152	$	109,152	$	109,152	$	—	$	—
Debt securities available for sale	Debt securities available for sale	1,642,413		1,642,413		35,318		1,607,095		0		Debt securities available for sale	1,490,642		1,490,642		57,176		1,419,927		13,539
Debt securities held to maturity	Debt securities held to maturity	402,145		415,033		0		415,033		0		Debt securities held to maturity	425,884		393,025		—		393,025		—
Equity securities	Equity securities	4,053		4,053		3,707		346		0		Equity securities	3,717		3,717		3,377		340		—
Federal Home Loan Bank stock	Federal Home Loan Bank stock	40,922		40,922		0		40,922		0		Federal Home Loan Bank stock	26,293		26,293		—		26,293		—

Loans receivable, net	Loans receivable, net	5,947,904		6,206,197		0		0		6,206,197		Loans receivable, net	6,932,213		6,416,145		—		—		6,416,145
Derivative assets	Derivative assets	12,741		12,741		0		12,741		0		Derivative assets	8,642		8,642		—		8,642		—

Financial liabilities:	Financial liabilities:											Financial liabilities:
Deposits	Deposits	$	7,079,276	$	7,084,350	$	0	$	7,084,350	$	0	Deposits	$	8,033,064	$	7,987,886	$	—	$	7,987,886	$	—
Borrowings	Borrowings	749,683		755,076		0		755,076		0		Borrowings	419,969		415,715		—		415,715		—
Derivative liabilities	Derivative liabilities	28,347		28,347		0		28,347		0		Derivative liabilities	9,943		9,943		—		9,943		—


		December 31, 2020											December 31, 2021
				Fair Value Measurements											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)			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)											(In thousands)
Financial assets:	Financial assets:											Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	422,957	$	422,957	$	422,957	$	0	$	0	Cash and cash equivalents	$	70,963	$	70,963	$	70,963	$	—	$	—
Debt securities available for sale	Debt securities available for sale	1,316,952		1,316,952		25,549		1,291,403		0		Debt securities available for sale	1,703,847		1,703,847		34,879		1,668,968		—
Debt securities held to maturity	Debt securities held to maturity	262,720		277,091		5,001		272,090		0		Debt securities held to maturity	429,734		434,789		—		434,789		—
Equity securities	Equity securities	5,418		5,418		5,072		346		0		Equity securities	2,710		2,710		2,364		346		—
Federal Home Loan Bank stock	Federal Home Loan Bank stock	43,759		43,759		0		43,759		0		Federal Home Loan Bank stock	23,141		23,141		—		23,141		—

Loans receivable, net	Loans receivable, net	6,107,094		6,394,524		0		0		6,394,524		Loans receivable, net	6,297,912		6,457,766		—		—		6,457,766
Derivative assets	Derivative assets	19,425		19,425		0		19,425		0		Derivative assets	9,492		9,492		—		9,492		—

Financial liabilities:	Financial liabilities:											Financial liabilities:
Deposits	Deposits	$	6,778,624	$	6,793,034	$	0	$	6,793,034	$	0	Deposits	$	7,570,216	$	7,564,210	$	—	$	7,564,210	$	—
Borrowings	Borrowings	799,364		808,853		0		808,853		0		Borrowings	377,309		378,810		—		378,810		—
Derivative liabilities	Derivative liabilities	42,384		42,384		0		42,384		0		Derivative liabilities	17,366		17,366		—		17,366		—

4150

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.

4251

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, ~~2021~~2022 and ~~2020:~~2021:


		For the Three Months Ended June 30,													For the Three Months Ended June 30,
		2021						2020							2022						2021
		Before Tax		Tax Effect		After Tax		Before Tax		Tax Effect		After Tax			Before Tax		Tax Effect		After Tax		Before Tax		Tax Effect		After Tax
		(In thousands)													(In thousands)
Components of other comprehensive income (loss):	Components of other comprehensive income (loss):													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)		5		(12)		(2)		0		(2)
Reclassification adjustment for (loss) included in net income		(281)		79		(202)		0		0		0
Unrealized (loss) on debt securities available for sale:														Unrealized (loss) on debt securities available for sale:	$	(52,246)	$	14,570	$	(37,676)	$	6,645	$	(1,857)	$	4,788
Accretion of unrealized (loss) on debt securities reclassified as held to maturity														Accretion of unrealized (loss) on debt securities reclassified as held to maturity	(4)		1		(3)		(17)		5		(12)
Reclassification adjustment for gain (loss) included in net income														Reclassification adjustment for gain (loss) included in net income	210		(58)		152		(281)		79		(202)
		6,347		(1,773)		4,574		8,039		(1,689)		6,350			(52,040)		14,513		(37,527)		6,347		(1,773)		4,574
Derivatives:	Derivatives:													Derivatives:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges		1,315		(367)		948		(945)		195		(750)
Unrealized gain on swap contracts accounted for as cash flow hedges														Unrealized gain on swap contracts accounted for as cash flow hedges	1,149		(321)		828		1,315		(367)		948
		1,315		(367)		948		(945)		195		(750)			1,149		(321)		828		1,315		(367)		948

Employee benefit plans:	Employee benefit plans:													Employee benefit plans:
Amortization of prior service cost included in net income	Amortization of prior service cost included in net income	(14)		3		(11)		(14)		3		(11)		Amortization of prior service cost included in net income	(14)		3		(11)		(14)		3		(11)
Reclassification adjustment of actuarial net (loss) included in net income	Reclassification adjustment of actuarial net (loss) included in net income	(1,511)		422		(1,089)		(1,071)		226		(845)		Reclassification adjustment of actuarial net (loss) included in net income	(339)		95		(244)		(1,511)		422		(1,089)
Change in funded status of retirement obligations	Change in funded status of retirement obligations	34,441		(9,623)		24,818		2,170		(456)		1,714		Change in funded status of retirement obligations	(25,704)		7,168		(18,536)		34,441		(9,623)		24,818
		32,916		(9,198)		23,718		1,085		(227)		858			(26,057)		7,266		(18,791)		32,916		(9,198)		23,718
Total other comprehensive income (loss)		$	40,578	$	(11,338)	$	29,240	$	8,179	$	(1,721)	$	6,458
Total other comprehensive (loss)														Total other comprehensive (loss)	$	(76,948)	$	21,458	$	(55,490)	$	40,578	$	(11,338)	$	29,240

4352

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

15. Other Comprehensive Income (Loss) (continued)

For the Six Months Ended June 30,
2021 2020
Before Tax Tax Effect After Tax Before Tax Tax Effect After 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 2 5 (1) 4
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 hedges 7,147 (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) 8 (20) (28) 6 (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 obligations 37,491 (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,
	2022						2021
	Before Tax		Tax Effect		After Tax		Before Tax		Tax Effect		After Tax
	(In thousands)
Components of other comprehensive income (loss):
Unrealized (loss) on debt securities available for sale:	$	(132,429)	$	36,938	$	(95,491)	$	(13,196)	$	950	$	(12,246)
Accretion of unrealized (loss) on debt securities reclassified as held to maturity	(8)		2		(6)		(21)		23		2
Reclassification adjustment for gain (loss) included in net income	210		(58)		152		(281)		79		(202)
	(132,227)		36,882		(95,345)		(13,498)		1,052		(12,446)
Derivatives:
Unrealized gain on swap contracts accounted for as cash flow hedges	5,532		(1,547)		3,985		7,147		(516)		6,631
	5,532		(1,547)		3,985		7,147		(516)		6,631

Employee benefit plans:
Amortization of prior service cost included in net income	(28)		6		(22)		(28)		8		(20)
Reclassification adjustment of actuarial net (loss) included in net income	(678)		190		(488)		(3,022)		844		(2,178)
Change in funded status of retirement obligations	(24,997)		6,941		(18,056)		37,491		(3,120)		34,371
	(25,703)		7,137		(18,566)		34,441		(2,268)		32,173
Total other comprehensive (loss)	$	(152,398)	$	42,472	$	(109,926)	$	28,090	$	(1,732)	$	26,358

4453

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, ~~2021~~2022 and ~~2020:~~2021:

For the Three Months Ended June 30,
2021 2020
Unrealized Gains on Debt Securities Available for Sale Unrealized (Losses) on Swaps Employee Benefit Plans Accumulated Other Comprehensive (Loss) Unrealized Gains on Debt Securities Available for Sale Unrealized (Losses) on Swaps Employee Benefit Plans Accumulated 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,
	2022								2021
	Unrealized (Losses) on Debt Securities Available for Sale		Unrealized (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)		Unrealized Gains on Debt Securities Available for Sale		Unrealized (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)
	(In thousands)

Balance at beginning of period	$	(56,174)	$	(1,760)	$	(42,421)	$	(100,355)	$	14,008	$	(11,173)	$	(75,342)	$	(72,507)
Current period changes in other comprehensive (loss) income	(37,527)		828		(18,791)		(55,490)		4,574		948		23,718		29,240
Total other comprehensive (loss) income	$	(93,701)	$	(932)	$	(61,212)	$	(155,845)	$	18,582	$	(10,225)	$	(51,624)	$	(43,267)

For the Six Months Ended June 30,
2021 2020
Unrealized Gains on Debt Securities Available for Sale Unrealized (Losses) on Swaps Employee Benefit Plans Accumulated Other Comprehensive (Loss) Unrealized Gains on Debt Securities Available for Sale Unrealized (Losses) on Swaps Employee Benefit Plans Accumulated 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)


	For the Six Months Ended June 30,
	2022								2021
	Unrealized Gains (Losses) on Debt Securities Available for Sale		Unrealized (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)		Unrealized Gains (Losses) on Debt Securities Available for Sale		Unrealized (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)
	(In thousands)

Balance at beginning of period	$	1,644	$	(4,917)	$	(42,646)	$	(45,919)	$	31,028	$	(16,856)	$	(83,797)	$	(69,625)
Current period changes in other comprehensive (loss) income	(95,345)		3,985		(18,566)		(109,926)		(12,446)		6,631		32,173		26,358
Total other comprehensive (loss) income	$	(93,701)	$	(932)	$	(61,212)	$	(155,845)	$	18,582	$	(10,225)	$	(51,624)	$	(43,267)

4554

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, ~~2021~~2022 and ~~2020:~~2021:


		Accumulated Other Comprehensive Income (Loss) Components						Accumulated Other Comprehensive Income (Loss) Components
		For the Three Months Ended June 30,				Affected Line Items in the Consolidated Statements of Income		For the Three Months Ended June 30,				Affected Line Items in the Consolidated Statements of Income
		2021		2020				2022		2021
		(In thousands)						(In thousands)

Reclassification adjustment for (loss) included in net income		$	(281)	$	0	(Loss) gain on securities transactions
Reclassification adjustment for gain (loss) included in net income							Reclassification adjustment for gain (loss) included in net income	$	210	$	(281)	Gain (loss) on securities transactions
Reclassification adjustment of actuarial net (loss) included in net income	Reclassification adjustment of actuarial net (loss) included in net income	(1,511)		(1,071)		Other non-interest expense	Reclassification adjustment of actuarial net (loss) included in net income	(339)		(1,511)		Other non-interest expense
Total before tax	Total before tax	(1,792)		(1,071)			Total before tax	(129)		(1,792)
Income (tax) benefit		501		226
Income tax benefit							Income tax benefit	37		501
Net of tax	Net of tax	$	(1,291)	$	(845)		Net of tax	$	(92)	$	(1,291)


	Accumulated Other Comprehensive Income (Loss) Components
	For the Six Months Ended June 30,				Affected Line Items in the Consolidated Statements of Income
	2022		2021
	(In thousands)

Reclassification adjustment for gain included in net income	$	210	$	(281)	Gain (loss) on securities transactions
Reclassification adjustment of actuarial net (loss) included in net income	(678)		(3,022)		Other non-interest expense
Total before tax	(468)		(3,303)
Income tax benefit	132		923
Net of tax	$	(336)	$	(2,380)

Accumulated Other Comprehensive Income (Loss) Components
For the Six Months Ended June 30, Affected Line Items in the Consolidated Statements of Income
2021 2020
(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) benefit 923 369
      Net of tax $ (2,380) $ (1,403)

4655

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, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had 0no currency forward contracts in place with commercial banking customers.

Interest Rate Swaps. At both June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had interest rate swaps in place with 4850 and 52 commercial banking customers executed by offsetting interest rate swaps with third parties, with an aggregated notional ~~amount~~amounts of ~~$175.1 million.~~$171.8 million and $183.4 million, respectively. These derivatives are not designated as hedges and are not speculative. These interest rate swaps do not meet hedge accounting requirements.

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had 2812 and 3114 interest rate swaps with notional amounts of ~~$400.0~~$170.0 million and ~~$430.0~~$190.0 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.

At June 30, 2022, the Company had 2 interest rate swaps hedged against pools of floating rate commercial loans with notional amounts totaling $100.0 million. These 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. At December 31, 2021, the Company had no interest rate swaps hedged against pools of floating rate commercial loans.

For the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company did not record any hedge ineffectiveness associated with these contracts.

4756

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, ~~2021~~2022 and December 31, ~~2020:~~2021:

June 30, 2021

June 30, 2022

Asset Derivative

Liability Derivative

Asset Derivative

Liability Derivative

Consolidated Statements of Financial Condition

Fair Value

Consolidated Statements of Financial Condition

Fair Value

Consolidated Statements of Financial Condition

Fair Value

Consolidated Statements of Financial Condition

Fair Value

(In thousands)

Derivatives:

Interest rate swaps

Other Assets

12,741

Other Liabilities

28,347

Interest rate swaps

Other Assets

8,642

Other Liabilities

9,943

Total derivative instruments

12,741

28,347

Total derivative instruments

8,642

9,943

December 31, 2020

December 31, 2021

Asset Derivative

Liability Derivative

Asset Derivative

Liability Derivative

Consolidated Statements of Financial Condition

Fair Value

Consolidated Statements of Financial Condition

Fair Value

Consolidated Statements of Financial Condition

Fair Value

Consolidated Statements of Financial Condition

Fair Value

(In thousands)

Derivatives:

Interest rate swaps

Other Assets

19,425

Other Liabilities

42,384

Interest rate swaps

Other Assets

9,492

Other Liabilities

17,366

Total derivative instruments

19,425

42,384

Total derivative instruments

9,492

17,366

For the three months ended June 30, 2022 and 2021, gains(losses) of $226,000 and ~~2020,~~ losses of ~~$167,000 and $24,000,~~$(167,000), respectively, were recorded for changes in fair value of interest rate swaps with third parties. For the six months ended June 30, 2022 and 2021, gains of $475,000 and ~~2020, (gains)/losses of $(201,000) and $450,000,~~$201,000, respectively, were recorded for changes in fair value of interest rate swaps with third parties.

At ~~both~~ June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, accrued interest was ~~$1.0 million.~~$251,000 and $567,000.

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, ~~2021,~~2022, the termination value of derivatives in a net liability position, which includes accrued interest, was ~~$14.6~~$1.3 million. The Company has collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of ~~$27.9~~$1.8 million against its obligations under these agreements.

17. Revenue Recognition

~~On January 1, 2019,~~The Company's revenue includes net interest income on financial instruments and non-interest income. Most of the ~~Company adopted ASU 2014-09~~ ~~Revenue from Contracts with Customers (Topic 606)~~ ~~and all subsequent ASUs that modified~~Company's revenue is not within the scope of Accounting Standards Codification 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~~606 which 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,~~this guidance are components of non-interest income. These revenue streams can generally be classified as demand deposit account fees, title insurance fees, insurance agency income and other fees.

4857

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, ~~2021~~2022 and ~~2020.~~2021.


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended June 30,				For the Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In thousands)									(In thousands)
Non-interest income	Non-interest income									Non-interest income
In-scope of Topic 606:	In-scope of Topic 606:									In-scope of Topic 606:
Demand deposit account fees	Demand deposit account fees	$	858	$	620	$	1,696	$	1,919	Demand deposit account fees	$	1,449	$	858	$	2,619	$	1,696
Title insurance fees	Title insurance fees	1,503		996		3,123		2,227		Title insurance fees	1,035		1,503		1,992		3,123
Insurance agency income										Insurance agency income	45		—		45		—
Other non-interest income	Other non-interest income	1,956		1,527		3,697		2,944		Other non-interest income	2,106		1,956		4,139		3,697
Total in-scope non-interest income	Total in-scope non-interest income	4,317		3,143		8,516		7,090		Total in-scope non-interest income	4,635		4,317		8,795		8,516
Total out-of-scope non-interest income	Total out-of-scope non-interest income	10,074		3,865		14,470		6,309		Total out-of-scope non-interest income	3,034		10,074		5,915		14,470
Total non-interest income	Total non-interest income	$	14,391	$	7,008	$	22,986	$	13,399	Total non-interest income	$	7,669	$	14,391	$	14,710	$	22,986

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.

RSI Insurance Agency, Inc. performs the function of an insurance intermediary, by introducing the policyholder and insurer for life and health, and property and casualty insurance, and is compensated by a commission fee for placement of an insurance policy. Commission and fees are generally recognized as of the effective date of the insurance policy. Commission revenues related to installment billings are recognized on the invoice date. Subsequent commission adjustments are recognized upon the receipt of notification from insurance companies concerning matters necessitating such adjustments.

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, credit card interchange income, and changes in the fair value of equity securities. None of these revenue streams are subject to the requirements of Topic 606.

18. Subsequent Events

The Company has evaluated events subsequent to June 30, ~~2021~~2022 and through the financial statement issuance date of August 9, ~~2021. The Company has not identified any~~2022, and concluded that no material ~~subsequent~~ events occurred that would require ~~adjustment or disclosure in the consolidated financial statements.~~

disclosure.

4958

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

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, higher inflation and its impact on national and local economic conditions, 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, ~~2021~~2022 and December 31, ~~2020~~2021

Total assets increased ~~$268.9~~$527.3 million, or ~~3.1%~~5.7%, to ~~$9.1~~$9.8 billion at June 30, ~~2021~~2022 from ~~$8.8~~$9.2 billion at December 31, ~~2020.~~2021. The increase in total assets was primarily attributable to ~~increases~~an increase in cash and cash equivalents of $38.2 million, an increase in loans receivable, net of $634.3 million, an increase in bank-owned life insurance of $14.1 million, an increase in goodwill and intangibles of $37.4 million, and an increase in other assets of $11.2 million, partially offset by a decrease in debt securities available for sale of $325.5 million, debt securities held to maturity of $139.4 million, and other assets of $7.2 million, partially offset by decreases of $35.7 million in cash and cash equivalents, and $159.2 million in loans receivable, net.$213.2 million.

Cash and cash equivalents ~~decreased $35.7~~increased $38.2 million, or ~~8.4%~~53.8%, to ~~$387.2~~$109.2 million at June 30, ~~2021~~2022 from ~~$423.0~~$71.0 million at December 31, ~~2020.~~2021. The ~~decrease~~increase was primarily attributable to ~~$576.6~~$140.8 million in cash and cash equivalents acquired in the RSI Bank acquisition, repayments on loans and mortgage-backed securities, and proceeds from the sale $126.8 million of debt securities available for sale, partially offset by $137.0 million in purchases of debt securities available for sale, and ~~held to maturity, $58.5~~$53.2 million in repurchases of common stock under our stock repurchase ~~program, and $56.5 million in prepayments of borrowings, partially offset by an increase in repayments on loans, repayments on mortgage-backed securities, and growth in deposits.~~program.

Debt securities available for sale ~~increased $325.5~~decreased $213.2 million, or ~~24.7%~~12.5%, to ~~$1.6~~$1.5 billion at June 30, ~~2021~~2022 from ~~$1.3~~$1.7 billion at December 31, ~~2020.~~2021. The ~~increase~~decrease was attributable to repayments on securities of $169.2 million, sales of securities of $126.8 million, and a decrease in the gross unrealized gain (loss) of $132.2 million, predominately due to rising interest rates, partially offset by purchases of ~~$416.1~~securities of $137.0 million, ~~of securities~~ primarily consisting of ~~U.S.~~U.S government and agency obligations and mortgage-backed securities and ~~municipal securities, and $99.6~~$79.0 million ~~in purchases~~ of guarantor swaps with Freddie Mac, partially offset by maturities, calls and sales of $9.9 million in U.S. government and agency obligations, corporate debt and municipal securities, and repayments of $164.4 million. The gross unrealized gain (loss) on debt securities available for sale ~~decreased by $13.5 million during~~acquired due to the ~~six months ended June 30, 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.RSI Bank acquisition.

Loans receivable, net, ~~decreased $159.2~~increased $634.3 million, or ~~2.6%~~10.1%, to ~~$5.9~~$6.9 billion at June 30, ~~2021~~2022 from ~~$6.1~~$6.3 billion at December 31, ~~2020. Multi-family and~~2021. One-to-four family real estate loans, multi-family real estate loans, commercial real estate loans, ~~increased $297.1 million, partially offset by decreases in~~ commercial business ~~loans, one-to-four family real estate loans, construction~~ loans, and home equity loans and advances ~~of $281.2~~increased $419.4 million, ~~$72.4~~$36.4 million, ~~$67.6~~$136.4 million, $21.9 million, and ~~$43.1~~$5.0 million, ~~respectively. The increase in multi-family and commercial real estate loans included the purchase of $71.6 million of loan participations in June 2021. The~~respectively, partially offset by a decrease in ~~commercial business~~construction loans ~~was mainly due to the sale~~ of ~~$237.0~~$18.3 million. The Company acquired $335.5 million in loans ~~granted and $255.7 in forgiven PPP loans as part~~from the RSI Bank acquisition during the second quarter of ~~the Small Business Administration PPP.~~2022. The allowance for ~~loan loss balance~~credit losses for loans decreased ~~$4.8~~$12.1 million to ~~$69.9~~$50.6 million at June 30, ~~2021~~2022 from ~~$74.7~~$62.7 million at December 31, ~~2020, which was primarily attributable to a~~2021. A $16.8 million decrease in ~~loan~~the allowance for credit losses for loans was recorded on January 1, 2022 upon adoption of the CECL standard. During the six months ended June 30, 2022, the allowance for credit losses increased $3.0 million, primarily due to an increase in the outstanding balance of loans, including $1.9 million in allowance for credit losses recorded on the loans acquired from RSI Bank. The June 30, 2022 methodology and impact of loss rates and a decrease in the balance of delinquent and non-accrual loans, as well as the consideration of improving economic conditions. The current allowance for loan losses was calculated utilizing the existing incurred loss methodology. The Company elected to defer thequalitative factors remained consistent with those established upon initial adoption of the ~~Current Expected Credit Loss ("CECL") methodology as~~CECL standard.

Bank-owned life insurance increased $14.1 million, or 5.7%, to $261.6 million at June 30, 2022 from $247.5 million at December 31, 2021. The increase was mainly attributable to bank-owned life insurance of $13.0 million acquired due to the RSI Bank acquisition.

5059

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

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

~~originally permitted by~~Goodwill and intangibles increased $37.4 million, or 40.8%, to $129.1 million at June 30, 2022 from $91.7 million at December 31, 2021. The increase consisted of $28.0 million in goodwill and $10.3 million in core deposit intangibles recorded due to 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.~~RSI Bank acquisition.

Other assets increased ~~$7.2~~$11.2 million, or ~~3.4%~~4.5%, to ~~$217.0~~$260.8 million at June 30, ~~2021~~2022 from ~~$209.9~~$249.6 million at December 31, ~~2020.~~2021. The increase in other assets consisted of an increase of ~~$36.2~~$30.5 million in net deferred tax assets, an increase of $5.2 million in a low income housing tax credit asset and an increase of $7.1 million in accounts receivable related to an unsettled investment security sold, partially offset by a decrease of $17.2 million in interest rate swap assets, and a decrease of $18.6 million in the Company's pension plan balance based on a revaluation of the plan, partially offset by a decrease of $13.3 million in the collateral balance related to our swap agreement obligations, a decrease of $6.8 million in interest rate swap assets, a decrease of $6.3 million in federal and state income tax receivables, and a decrease of $2.5 million in deferred taxes.balance.

Total liabilities increased ~~$247.1~~$532.1 million, or ~~3.2%~~6.5%, to ~~$8.0~~$8.7 billion at June 30, ~~2021~~2022 from ~~$7.8~~$8.1 billion at December 31, ~~2020.~~2021. The increase was primarily attributable to an increase in total deposits of ~~$300.7~~$462.8 million, or ~~4.4%~~6.1%, ~~partially offset by a decrease~~an increase in borrowings of ~~$49.7~~$42.7 million, or ~~6.2%~~11.3%, and ~~a decrease~~an increase in accrued expenses and other liabilities of ~~$7.4~~$17.2 million, or ~~4.2%~~10.7%. The increase in total deposits primarily consisted of increases in ~~non-interest-bearing and~~non-interest bearing demand deposits, interest-bearing demand deposits, ~~of $158.6 million and $166.7 million, respectively, and~~ money market accounts, ~~and~~ savings and club deposits, ~~of $57.4 million~~ and ~~$61.2 million, respectively, partially offset by a decrease in~~ certificates of deposit ~~accounts~~ of ~~$143.2 million.~~$76.0 million, $107.0 million, $54.8 million, $162.1 million, and $62.9 million respectively. These increases included $502.7 million in deposits assumed in connection with the RSI Bank acquisition. The ~~decrease~~increase in borrowings was primarily driven by a $20.0 million increase in FHLB overnight borrowings and a $22.8 million increase in FHLB term advances, of which $5.8 million were acquired due to the ~~prepayment of $56.5 million of FHLB borrowings.~~RSI Bank acquisition. The ~~decrease~~increase in accrued expenses and other liabilities primarily consisted of $10.6 million in accrued expenses and other liabilities related to the RSI Bank acquisition, a ~~$14.0~~$5.2 million increase in a low income housing tax credit liability, a $4.4 million increase in outstanding checks, and a $7.8 million increase in allowance for credit losses for unfunded commitments, partially offset by a $6.4 million decrease in interest rate swap liabilities ~~partially offset by~~and a ~~$7.6~~$6.3 million ~~increase~~decrease in ~~balance~~accrued incentive compensation. Upon the initial adoption of ~~outstanding checks.~~the CECL standard on January 1, 2022, an allowance for credit losses for unfunded commitments of $7.7 million was recorded.

Total stockholders’ equity ~~increased $21.8~~decreased $4.8 million, or ~~2.2%~~0.4%, with a balance of ~~$1.0~~$1.1 billion at both June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. The ~~increase~~decrease in equity was primarily attributable to an increase of $109.9 million in unrealized losses on debt securities available for sale and interest rate swap contracts, net of taxes, included in other comprehensive income, ~~of $47.7 million,~~ and ~~a change in the pension obligation of $32.2 million due a revaluation of the plan, partially offset by~~ the repurchase of ~~3,470,040~~2,546,667 shares of common stock totaling ~~$58.5~~$53.2 million, or $20.88 per share, under our stock repurchase ~~program.~~program, partially offset by net income of $43.4 million and an increase in paid in capital of $102.7 million due to the issuance of 6,086,314 shares of Company common stock to Columbia Bank MHC in connection with the RSI Bank acquisition.

Comparison of Results of Operations for the Three ~~months~~Months Ended June 30, ~~2021~~2022 and June 30, ~~2020~~2021

Net income of ~~$26.7~~$23.0 million was recorded for the quarter ended June 30, ~~2021, an increase~~2022, a decrease of ~~$11.6~~$3.7 million, or ~~76.8%~~14.0%, compared to net income of ~~$15.1~~$26.7 million for the quarter ended June 30, ~~2020.~~2021, was partially due to the quarter ended June 30, 2021 including a $7.7 million gain on the sale of commercial business loans granted as part of the Small Business Administration PPP, in addition to recording $1.3 million in merger expenses and $1.8 million in provision for credit losses on the loans acquired from the RSI Bank acquisition during the quarter ended June 30, 2022. The ~~increase~~decrease in net income was primarily attributable to a ~~$2.2~~$3.3 million increase in provision for credit losses, a $6.7 million decrease in non-interest income, and a $4.1 million increase in non-interest expense, partially offset by a $8.4 million increase in net interest income and a ~~$7.5~~$2.0 million decrease ~~in provision for loan losses, and a $7.4 million increase in non-interest income, partially offset by a $5.3 million increase~~ in income tax expense.

Net interest income was $66.5 million for the quarter ended June 30, 2022, an increase of $8.4 million, or 14.5%, from $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.~~2021. The increase in net interest income was primarily attributable to a ~~$9.9~~$3.2 million decrease in interest expense ~~partially offset by~~on deposits and borrowings, coupled with a ~~$7.7~~$5.2 million ~~decrease~~increase in interest income. The decrease in interest expense on deposits was driven by ~~both~~ an ~~inflow of~~increase in lower ~~cost~~costing demand deposits and the repricing of existing deposits at ~~a significantly~~ reduced ~~rate~~rates as a result of athe sustained lower interest rate ~~environment.~~environment until March 2022, when the Federal Reserve announced a 25 basis point increase in the federal funds rate. The ~~decrease~~subsequent 50 basis point increase in interest rates in May 2022 and the 75 basis point increase in interest rates in June 2022, did not significantly impact second quarter interest expense on ~~borrowings was~~deposits, as the ~~result of decreases~~repricing on deposit products lags in ~~both the average balance and average cost of borrowings.~~relation to increases in market interest rates. The ~~decrease~~increase in interest income for the quarter ended June 30, ~~2021~~2022 was ~~largely~~ due to ~~decreases~~an increase in the average ~~yields on~~balance of interest-earning ~~assets.~~assets coupled with the impact of the rise in interest rates during the quarter ended June 30, 2022. Prepayment penalties, which are included in interest income on loans, totaled $1.5 million for the quarter ended June 30, 2022, compared to $1.1 million for the quarter ended June 30, ~~2021, compared to $964,000 for the quarter ended June 30, 2020.~~2021.

The average yield on loans for the quarter ended June 30, ~~2021~~2022 decreased 244 basis points to ~~3.72%~~3.68%, as compared to ~~3.96%~~3.72% for the quarter ended June 30, ~~2020, while the~~2021, but increased 6 basis points since March 31, 2022, as interest income grew due to rising interest rates and loan growth. The average yield on securities for the quarter ended June 30, ~~2021 decreased 63~~2022 increased 21 basis points to ~~1.93%~~2.14%, as compared to ~~2.56%~~1.93% for the quarter ended June 30, ~~2020.~~2021, as $88.4 million of higher yielding securities were purchased, and a number of

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

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

adjustable rate securities tied to various indexes repriced higher during the quarter. The average yield on other interest-earning assets for the quarter ended June 30, ~~2021 decreased 171~~2022 increased 69 basis points to ~~1.24%~~1.93%, as compared to 2.95% for the quarter ended June 30, 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 portfolios1.24% for the quarter ended June 30, 2021, ~~were influenced by the lower interest rate environment~~ as the ~~Federal Reserve reduced interest rates by 150 basis points~~average cash balances in ~~March 2020 in response to~~lower yielding bank accounts decreased for the ~~COVID-19 pandemic.~~quarter ended June 30, 2022.

Total interest expense was $6.6 million for the quarter ended June 30, 2022, a decrease of $3.2 million, or 33.0%, from $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.~~2021. The decrease in interest expense was primarily attributable to a 5826 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~~interest expense on deposits was driven by ~~both~~ an ~~inflow of~~increase in lower ~~cost~~costing demand deposits and the repricing of existing deposits at reduced rates as a result of the sustained lower interest ~~rates.~~rate environment as described above. Interest on borrowings decreased ~~$2.9 million~~$46,000, or 2.4%, due to a decrease in the average ~~balances~~balance of ~~FHLB advances and subordinated notes, coupled with a 59 basis point decrease~~borrowings, partially offset by an increase in the cost of ~~total~~these borrowings.

The Company's net interest margin for the quarter ended June 30, ~~2021~~2022 increased 424 basis points to ~~2.77%~~3.01%, when compared to ~~2.73%~~2.77% for the quarter ended June 30, ~~2020.~~2021. The weighted average yield on interest-earning assets ~~decreased 45~~increased 7 basis points to 3.31% for the quarter ended June 30, 2022 as compared to 3.24% for the quarter ended June 30, ~~2021 as compared~~2021. The average cost of interest-bearing liabilities decreased 22 basis points to ~~3.69%~~0.40% for the quarter ended June 30, ~~2020. Excluding~~2022 as compared to 0.62% for the quarter ended June 30, 2021. The increase in yields for the quarter ended June 30, 2022, were due to the impact of ~~PPP~~the rise in interest rates during the quarter, while the decrease in costs were largely driven by the sustained lower interest rate environment until rates began to rise in March 2022. The net interest margin increased for the quarter ended June 30, 2022, as the repricing of interest-bearing liabilities lags in relation to the repricing of yields on interest-earning assets in a rising rate environment.

The provision for credit losses for the quarter ended June 30, 2022 was $1.5 million, an increase of $3.3 million, from a reversal of provision for loan loss expense of $1.8 million recorded for the quarter ended June 30, 2021. The increase in provision for credit losses during the quarter was primarily attributable to an increase in the balances of loans, including $1.8 million in provision for credit losses recorded on the loans acquired from RSI Bank, and the consideration of economic conditions.

Non-interest income was $7.7 million for the quarter ended June 30, 2022, a decrease of $6.7 million, or 46.7%, from $14.4 million for the quarter ended June 30, 2021. The decrease was primarily attributable to a decrease in income from the gain on the sale of loans of $8.5 million, and a decrease in income from title insurance fees of $468,000, partially offset by an increase in demand deposit fees of $591,000, an increase in BOLI income of $642,000 due to a death benefit claim, and an increase in the fair value of equity securities of $631,000. The quarter ended June 30, 2021 included a $7.7 million gain on the sale of commercial business loans granted as part of the Small Business Administration PPP.

Non-interest expense was $41.7 million for the quarter ended June 30, 2022, an increase of $4.1 million, or 10.9%, from $37.6 million for the quarter ended June 30, 2021. The increase was primarily attributable to an increase in compensation and employee benefits expense of $5.3 million and an increase in merger-related expenses of $1.3 million. The increase in compensation and employee benefits expense was due to an increase in staff levels and related personnel benefit costs, mainly due the acquisitions of Freehold Bank in December 2021 and RSI Bank in May 2022. The increase in merger-related expenses was related to the acquisition of RSI Bank. Other non-interest expense for the quarter ended June 30, 2022 included an increase in the credit for net periodic benefit cost of $2.1 million and a reversal of the provision for credit losses for unfunded commitments of $488,000.

Income tax expense was $8.0 million for the quarter ended June 30, 2022, a decrease of $2.0 million, as compared to $9.9 million for the quarter ended June 30, 2021, mainly due to a decrease in pre-tax income, and to a lesser extent, a decrease in the Company's effective tax rate. The Company's effective tax rate was 25.7% and 27.1% for the quarters ended June 30, 2022 and 2021, respectively.

Comparison of Results of Operations for the Six Months Ended June 30, 2022 and June 30, 2021

Net income of $43.4 million was recorded for the six months ended June 30, 2022, a decrease of $4.4 million, or 9.2%, compared to net income of $47.7 million for the six months ended June 30, 2021. The decrease in net income was primarily attributable to a $6.0 million increase in provision for credit losses, an $8.3 million decrease in non-interest income, and a $7.2 million increase in non-interest expense, partially offset by a $14.4 million increase in net interest income and a $2.7 million decrease in income tax expense.

Net interest income was $129.2 million for the six months ended June 30, 2022, an increase of $14.4 million, or 12.6%, from $114.8 million for the six months ended June 30, 2021. The increase in net interest income was primarily attributable to a $8.1 million decrease in interest expense, resulting from a decrease in interest expense on deposits and borrowings, coupled with a $6.3 million

5161

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

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

deferred fee acceleration for the quarter ended June 30, 2021, the net interest margin would have been 2.66%. The average cost of interest-bearing liabilities decreased 63 basis points to 0.62% for the quarter ended June 30, 2021 as compared to 1.25% for the quarter ended June 30, 2020. The decrease in yields and costs for the quarter ended June 30, 2021 were largely driven by a continued lower interest rate environment. The net interest margin increased for the quarter ended June 30, 2021 as the cost of interest-bearing liabilities continued to reprice lower more rapidly than the yields on interest-earning assets.

The reversal of provision for loan loss recorded for the quarter ended 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, 2021, an~~ increase of $7.4 million, or 105.4%, from $7.0 million for the quarter ended June 30, 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 $1.6 million, and a decrease in merger-related expenses of $357,000. Professional fees included an increase in consulting expenses related to information technology improvements, and the increase in other non-interest expense included $561,000 of branch closure costs.

Income tax expense was $9.9 million for the quarter ended June 30, 2021, an increase of $5.3 million, as compared to $4.6 million for the quarter ended June 30, 2020, mainly due to an increase in pre-tax income, and to a lesser extent, an increase in the Company's effective state income tax rate. The Company's effective tax rate was 27.1% and 23.4% for the quarters ended June 30, 2021 and 2020, respectively.

~~Comparison of Results of Operations for the Six Months Ended June 30, 2021 and June 30, 2020~~

Net income of $47.7 million was recorded for the six months ended June 30, 2021, an increase of $25.9 million, or 118.3%, compared to net income of $21.9 million for the six months ended June 30, 2020. The increase in net income was primarily attributable to an $8.2 million increase in net interest income, an $18.3 million decrease in provision for loan losses, and a $9.6 million increase in non-interest income, partially offset by a $10.9 million increase in income tax expense.

Net interest income was $114.8 million for the six months ended June 30, 2021, an increase of $8.2 million, or 7.7%, from $106.6 million for the six months ended June 30, 2020. The increase in net interest income was primarily attributable to a $23.0 million decrease in interest expense, partially offset by a $14.8 million decrease in interest income. The decrease in interest expense on deposits was driven by ~~both~~ an ~~inflow of~~increase in lower ~~cost~~costing demand deposits and the repricing of existing deposits at ~~a significantly~~ reduced ~~rate~~rates as a result of athe sustained lower interest rate ~~environment.~~environment until March 2022, when the Federal Reserve announced a 25 basis point increase in the federal funds rate. The ~~decrease~~subsequent 50 basis point increase in interest rates in May 2022 and the 75 basis point increase in interest rates in June 2022, did not significantly impact interest expense on ~~borrowings was~~deposits, as the ~~result of decreases~~repricing on deposit products lags 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~~relation to increases in ~~a $742,000 loss on early extinguishment of debt included in non-interest expense.~~market interest rates. The ~~Company has significantly reduced the cost of borrowings over the period by prepaying high rate borrowings. The decrease~~increase in interest income for the six months ended June 30, ~~2021~~2022 was ~~largely~~ due to ~~decreases~~an increase in the average ~~yields on~~balance of interest-earning ~~assets.~~assets coupled with the impact of the rise in interest rates during 2022. Prepayment penalties, which are included in interest income on loans, totaled $2.8 million for the six months ended June 30, 2022, compared to $2.0 million for the six months ended June 30, ~~2021, compared to $1.6 million for the six months ended June 30, 2020.~~2021.

The average yield on loans for the six months ended June 30, ~~2021~~2022 decreased 2614 basis points to ~~3.79%~~3.65%, as compared to ~~4.05%~~3.79% for the six months ended June 30, ~~2020, while the~~2021, but increased 3 basis points since March 31, 2022, as interest income grew due to rising interest rates and loan growth. The average yield on securities for the six months ended June 30, ~~2021 decreased 66~~2022 increased 19 basis points to ~~1.98%~~2.17%, as compared to ~~2.64%~~1.98% for the six months ended June 30, ~~2020.~~2021, as $135.8 million of higher yielding securities were purchased, and a number of adjustable rate securities tied to various indexes repriced higher during the period. The average yield on other interest-earning assets for the six months ended June 30, ~~2021 decreased 299~~2022 increased 151 basis points to ~~0.82%~~2.33%, 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 portfolios0.82% for the six months ended June 30, 2021, ~~were influenced by the lower interest rate environment~~ as the ~~Federal Reserve reduced interest rates~~average cash balances in ~~early 2020 in response to~~lower yielding bank accounts decreased during the ~~COVID-19 pandemic.~~six months ended June 30, 2022.

Total interest expense was $12.6 million for the six months ended June 30, 2022, a decrease of $8.1 million, or 39.2%, from $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.~~2021. The decrease in interest expense was primarily attributable to a 6830 basis point

~~COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES~~

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

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~~interest expense on deposits was driven by ~~both~~ an ~~inflow of~~increase in lower ~~cost~~costing demand deposits and the repricing of existing deposits at reduced rates as a result of the sustained lower interest ~~rates.~~rate environment as described above. Interest on borrowings decreased ~~$8.0 million~~$746,000, or 18.8%, due to a decrease in the average ~~balances~~balance of ~~FHLB advances and subordinated notes, coupled with a 80 basis point decrease~~borrowings, partially offset by an increase in ~~the~~ cost of ~~total~~ borrowings. During the six months ended June 30, 2021, we prepaid $53.5 million of FHLB borrowings with an average rate of 2.64% and original contractual maturities through March 2022, and a $3.0 million FHLB borrowing acquired in our acquisition of Roselle Bank with a rate of 2.74% and an original contractual maturity of March 2024. The prepayments were funded by excess cash liquidity. The transactions were accounted for as early debt extinguishments resulting in a loss of $742,000.

The Company's net interest margin for the six months ended June 30, ~~2021~~2022 increased 1021 basis points to ~~2.79%~~3.00%, when compared to ~~2.69%~~2.79% for the six months ended June 30, ~~2020.~~2021. The weighted average yield on interest-earning assets ~~decreased 51 basis points to~~remained consistent at 3.29% for the six months ended June 30, ~~2021 as compared~~2022 and 2021. The average cost of interest-bearing liabilities decreased 28 basis points to ~~3.80%~~0.39% for the six months ended June 30, 2020. Excluding the impact of PPP loan deferred fee acceleration for the six months ended June 30, 2021, the net interest margin would have been 2.64%. The average cost of interest-bearing liabilities decreased 74 basis points2022 as compared to 0.67% for the six months ended June 30, ~~2021 as compared to 1.41% for the six months ended June 30, 2020.~~2021. The ~~decreases~~decrease in ~~yields and~~ costs for the six months ended June 30, ~~2021~~2022 were largely driven by ~~a continued~~the sustained lower interest rate ~~environment.~~environment until rates began to rise in March 2022. The net interest margin increased for the six months ended June 30, ~~2021~~2022 as the cost of interest-bearing liabilities continued to reprice lower, ~~more rapidly than~~while the total yield on interest-earning assets remained constant. The net interest margin increased for the six months ended June 30, 2022, as the repricing of interest-bearing liabilities lags in relation to the repricing of yields on interest-earning ~~assets.~~assets in a rising rate environment.

On January 1, 2022, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), also known as the Current Expected Credit Loss ("CECL") standard. CECL requires the measurement of all expected credit losses over the life of financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In connection with the adoption of CECL, the Company recognized a cumulative effect adjustment that increased stockholders' equity by $6.2 million, net of tax. At adoption and on a gross basis, the Company decreased its allowance for credit losses ("ACL") by $16.8 million for loans, increased its ACL for unfunded commitments, included in other liabilities, by $7.7 million, and established an ACL for debt securities available for sale of $490,000. The provision for credit losses for the six months ended June 30, 2022 was $3.0 million, an increase of $6.0 million, from a reversal of provision for loan loss of $3.0 million recorded for the six months ended June 30, ~~2021 was $3.0 million, a decrease of $18.3 million, from $15.3 million of~~2021. The increase in provision for ~~loan loss expense recorded~~credit losses during the six months ended June 30, 2022 was primarily attributable to an increase in the balances of loans and the consideration of economic conditions.

Non-interest income was $14.7 million for the six months ended June 30, ~~2020. The comparatively lower level of provision for the 2021 period was primarily attributable to~~2022, 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~~$8.3 million, or 36.0%, from $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.~~2021. The ~~increase~~decrease was primarily attributable to ~~an increase~~a decrease in income from the gain on the sale of loans of ~~$9.1~~$10.6 million and ~~an increase~~a decrease in ~~other non-interest~~ income from title insurance fees of ~~$1.7~~$1.1 million, partially offset by ~~the decrease~~an increase in the change in fair value of equity securities of ~~$1.4 million. The~~$1.3 million and an increase in ~~the~~demand deposit fees of $923,000. The six months ended June 30, 2021 included a $7.7 million 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 $82.5 million for the six months ended June 30, 2022, an increase of $7.2 million, or 9.5%, from $75.3 million for the six months ended June 30, 2021. The increase was primarily attributable to an increase in compensation and employee benefits expense of $7.9 million and an increase in merger-related expenses of $1.4 million. The increase in compensation

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

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

and employee benefits expense was due to an increase in staff levels and related personnel benefit costs, mainly due the acquisitions of Freehold Bank in December 2021 ~~a decrease~~and RSI Bank in May 2022. There was an increase of ~~$638,000, or 0.8%,~~110 full time equivalent employees from ~~$76.0~~June 30, 2021 compared to June 30, 2022. The increase in merger-related expenses was related to the acquisition of RSI Bank.

Income tax expense was $15.1 million for the six months ended June 30, ~~2020. The decrease was primarily attributable to~~2022, 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 attributableas compared 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~~a decrease in pre-tax income, and to a lesser extent, ~~an increase~~a decrease in the Company's effective ~~state income~~ tax rate. The Company's effective tax rate was ~~27.2%~~25.8% and ~~23.9%~~27.2% for the six months ended June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Asset Quality

The Company's non-performing loans at June 30, ~~2021~~2022 totaled ~~$4.3~~$4.5 million, or 0.07% of total gross loans, as compared to ~~$8.2~~$3.9 million, or ~~0.13%~~0.06% of total gross loans, at December 31, ~~2020.~~2021. The ~~$3.8 million decrease~~$586,000 increase in non-performing loans was primarily attributable to ~~decreases~~an increase of ~~$1.8~~$1.3 million in non-performing one-to-four family ~~real estate~~ loans, ~~$2.6 million~~partially offset by decreases of $442,000 and $275,000, respectively, in non-performing commercial business loans and ~~$43,000 in non-performing home equity loans and advances, partially offset by an increase of $560,000 in non-performing multifamily and~~ commercial real estate loans. The ~~decrease~~increase in non-performing one-to-four family ~~real estate~~loans was due to an increase in the number of loans from seven non-performing loans at December 31, 2021 to 13 loans at June 30, 2022. The decrease in non-performing commercial business loans was due to a decrease in the number of loans from 13six non-performing loans at December 31, ~~2020~~2021 to ~~six~~two non-performing loans at June 30, ~~2021. The decrease in~~2022. There was one non-performing commercial ~~business loans was mainly due to charge-offs totaling $1.7 million. The decrease in non-performing home equity loans~~real estate loan at both June 30, 2022 and ~~advances was due to a decrease in the number of loans from 12 non-~~

~~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~~2022 as compared to ~~0.09%~~0.04% at December 31, ~~2020.~~2021.

For the quarter ended June 30, ~~2021,~~2022, net ~~charge-offs~~recoveries totaled ~~$244,000~~$105,000, as compared to ~~$2.9 million~~$245,000 in net charge-offs for the quarter ended June 30, ~~2020.~~2021. For the six months ended June 30, ~~2021,~~2022, net ~~charge-offs~~recoveries totaled ~~$1.7 million~~$216,000, as compared to ~~$3.0~~$1.7 million for the six months ended June 30, ~~2020.~~2021.

The Company's allowance for ~~loan~~credit losses on loans was ~~$69.9~~$50.6 million, or ~~1.17%~~0.73% of total gross loans, at June 30, ~~2021,~~2022, compared to ~~$74.7~~$62.7 million, or ~~1.21%~~0.99% of total gross loans, at December 31, ~~2020.~~2021. The decrease in the allowance for ~~loan~~credit losses for loans was primarily attributable to the impact of the initial adoption of the CECL standard on January 1, 2022, which resulted in a decrease to allowance for credit losses on loans of $16.8 million, partially offset by an increase in ~~loan loss rates, and a decrease~~provision for credit losses of $3.0 million recorded during the six months ended June 30, 2022, due to an increase in the balance of ~~delinquent~~loans and ~~non-accrual loans, as well as the~~ consideration of ~~improving~~ economic conditions.

~~COVID-19~~

Through June 30, 2021, the Company granted commercial loan modification requests with respect to multifamily, commercial, and construction real estate loans with current balances of $705.8 million and consumer-related loan modification requests with respect to one-to-four family real estate loans and home equity loans and advances with current balances of $142.4 million to our customers affected by the COVID-19 pandemic. These short-term loan modifications will be treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears. The Consolidated Appropriations Act, 2021, which was enacted in late December 2020, extended certain provisions of the CARES Act, including provisions permitting loan deferral extension requests to not be treated as troubled debt restructurings. Furthermore, these loans will continue to accrue interest and will not be tested for impairment during the short-term modification period. Commercial loan modification requests include various industries and property types. The following table is a summary of loan modifications that have not begun to remit full payment:

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

~~At June 30, 2021, $37.9 million of the commercial loans in the above table are remitting partial payments and $61.3 million were granted an additional deferral period.~~

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~~credit losses

▪Valuation of deferred tax assets

▪Valuation of retirement and post-retirement benefits

The calculation of the allowance for credit losses is a critical accounting policy of the Company. The allowance for credit losses is a valuation account that reflects management’s evaluation of the current expected credit losses in the loan portfolio. The Company maintains the allowance for credit losses through provisions for credit losses that are charged to income. Charge-offs against the allowance for credit losses are taken on loans where management determines that the collection of loan principal and interest is unlikely. Recoveries made on loans that have been charged-off are credited to the allowance for credit losses.

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

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

collateral. These risk factors were assessed for reasonableness against the Company’s own loss experience and adjusted in certain cases when the relationship between the Company’s historical default and loss severity deviate from that of the wider industry. The ~~calculation~~historical probability of default ("PD") curves, together with corresponding economic conditions, establish a quantitative relationship between economic conditions and loan performance through an economic cycle.

The allowance for credit losses is measured on a collective (pool) basis, with both a quantitative and qualitative analysis that is applied on a quarterly basis, when similar risk characteristics exist. The respective quantitative allowance for each segment is measured using an economic forecast, discounted cash flow modeling methodology in which distinct, segment-specific multi-variate regression models are applied to an external economic forecast. Under the discounted cash flows methodology, expected credit losses are estimated over the effective life of the loans by measuring the difference between the net present value of modeled cash flows and amortized cost basis. Contractual cash flows over the contractual life of the loans are the basis for modeled cash flows, adjusted for modeled defaults and expected prepayments and discounted at the loan-level effective interest rate. The contractual term excludes expected extensions, renewals, and modifications. After quantitative considerations, management applies additional qualitative adjustments so that the allowance for ~~loan losses~~credit loss is ~~a critical accounting policy~~reflective of the ~~Company. The allowance for loan~~estimate of lifetime losses ~~is a valuation account~~ that ~~reflects management’s evaluation of the probable losses~~exist in the loan ~~portfolio. Determining~~portfolio at 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 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 CARES Act. The Company expects to adopt CECL on January 1, 2022.balance sheet date.

~~The Company maintains~~Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for ~~loan losses through provisions~~credit losses. Management developed segments for ~~(reversal of) loan losses~~estimating loss based on type of borrower and collateral, which is generally based upon federal call report segmentation. The segments have been combined or sub-segmented as needed to ensure loans of similar risk profiles are ~~charged to income. Charge-offs against the~~appropriately pooled.

The allowance for ~~loan~~credit losses ~~are taken~~ on loans ~~where management determines that the collection of loan principal~~individually evaluated for impairment is ~~unlikely. Recoveries made on~~based upon loans that have been identified through the Company’s loan monitoring process. This process includes the review of delinquent, restructured, and 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 over 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 risk levels present over the look-back period. The reserves resulting from the application of both the quantitative experiences and qualitative factors are combined to arrive at the allowance for loan losses for loans collectability evaluated for impairment,loans.

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~~credit 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~~credit losses at appropriate levels, ~~additional reserves~~reserve levels may ~~be necessary~~change if future economic, organizational, and ~~other~~portfolio 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~~credit 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~~credit 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. Beginning in March 2020, management established an additional qualitative loss factor solely related to the impact of 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

~~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 impact on their ability to repay their loans, and estimated the probability of default and loss-given-default for the various loan categories 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. Management continues to evaluate the impact of the COVID-19 qualitative loss factor on a 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 projections of future taxable income. These 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. Management believes, based on current facts, that it is 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, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company's net deferred tax assets (liabilities) totaled ~~$4.7~~$19.6 million and ~~$7.2~~$(9.7) million, respectively, which included a valuation allowance totaling ~~$3.7~~$2.0 million ~~and $3.4 million, respectively.~~at both dates. Based upon projections of future taxable income and the ability to carryforward

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

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

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) recognize 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) measure 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) recognizes 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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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.

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 our 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, ~~2021, Columbia Bank's~~2022, the net portfolio value, the estimated changes in ~~our~~the 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 Freehold Bank and its subsidiaries only and does not include any assets of the Company.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


		Twelve Months Net Interest Income						Net Portfolio Value ("NPV")							Twelve Months Net Interest Income						Net Portfolio Value ("NPV")
Change in Interest Rates (Basis Points)	Change in Interest Rates (Basis Points)	Amount		Dollar Change		Percent of Change		Estimated NPV		Present Value Ratio		Percent Change		Change in Interest Rates (Basis Points)	Amount		Dollar Change		Percent of Change		Estimated NPV		Present Value Ratio		Percent Change
						(Dollars in Thousands)													(Dollars in thousands)
+300	+300	$	218,082	$	3,488	1.63	%	$	978,449	11.85	%	(14.60)	%	+300	$	268,863	$	(8,180)	(2.95)	%	$	1,271,466	15.18	%	(21.66)	%
+200	+200	217,317		2,723		1.27		1,043,380		12.25		(8.93)		+200	272,122		(4,921)		(1.78)		1,398,794		16.17		(13.82)
+100	+100	216,123		1,529		0.71		1,098,811		12.50		(4.09)		+100	274,874		(2,169)		(0.78)		1,515,793		16.97		(6.61)
Base	Base	214,594		—		—		1,145,659		12.61		—		Base	277,043		—		—		1,623,062		17.60		—
-100	-100	201,434		(13,160)		(6.13)		1,073,620		11.49		(6.29)		-100	267,735		(9,308)		(3.36)		1,663,307		17.46		2.48

As of June 30, ~~2021,~~2022, based on the scenarios above, net interest income would ~~increase~~decrease by approximately ~~1.27%~~1.78% if rates were to rise 200 basis points, and would decrease by ~~6.13%~~3.36% 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, ~~2021,~~2022, 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 ~~8.93%~~13.82%. If rates were to decrease 100 basis points, the model forecasts a ~~6.29% decrease~~2.48% increase in the NPV.

Overall, our June 30, ~~2021~~2022 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 banks (Columbia Bank and Freehold 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.~~banks. 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 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, ~~2021~~2022 and December 31, ~~2020,~~2021, each of the Company and the ~~Bank~~Banks exceeded all capital adequacy requirements to which it is subject.

The following ~~table~~tables presents the Company's, Columbia Bank's and ~~the~~Freehold Bank's actual capital amounts and ratios at June 30, ~~2021~~2022 and December 31, ~~2020~~2021 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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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


		Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions			Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions
		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount	Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount	Ratio
Company	Company	(In thousands, except ratio data)														Company	(In thousands, except ratio data)
At June 30, 2021:
At June 30, 2022:																At June 30, 2022:
Total capital (to risk-weighted assets)	Total capital (to risk-weighted assets)	$	1,070,270	17.87	%	$	479,253	8.00	%	$	629,019	10.50	%	N/A		Total capital (to risk-weighted assets)	$	1,145,051	16.43	%	$	557,657	8.00	%	$	731,925	10.50	%	N/A
Tier 1 capital (to risk-weighted assets)	Tier 1 capital (to risk-weighted assets)	999,821		16.69		359,440		6.00		509,206		8.50		N/A		Tier 1 capital (to risk-weighted assets)	1,086,231		15.58		418,243		6.00		592,511		8.50		N/A
Common equity tier 1 capital (to risk-weighted assets)	Common equity tier 1 capital (to risk-weighted assets)	992,604		16.57		269,580		4.50		419,346		7.00		N/A		Common equity tier 1 capital (to risk-weighted assets)	1,079,014		15.48		313,682		4.50		487,950		7.00		N/A
Tier 1 capital (to adjusted total assets)	Tier 1 capital (to adjusted total assets)	999,821		11.25		355,349		4.00		355,349		4.00		N/A		Tier 1 capital (to adjusted total assets)	1,086,231		11.36		382,619		4.00		382,619		4.00		N/A

At December 31, 2020:
At December 31, 2021:																At December 31, 2021:
Total capital (to risk-weighted assets)	Total capital (to risk-weighted assets)	$	1,070,361	18.54	%	$	461,766	8.00	%	$	606,068	10.50	%	N/A		Total capital (to risk-weighted assets)	$	1,104,863	17.13	%	$	515,924	8.00	%	$	677,151	10.50	%	N/A
Tier 1 capital (to risk-weighted assets)	Tier 1 capital (to risk-weighted assets)	988,172		17.29		346,325		6.00		490,627		8.50		N/A		Tier 1 capital (to risk-weighted assets)	1,041,650		16.15		386,943		6.00		548,170		8.50		N/A
Common equity tier 1 capital (to risk-weighted assets)	Common equity tier 1 capital (to risk-weighted assets)	980,995		17.17		259,744		4.50		404,046		7.00		N/A		Common equity tier 1 capital (to risk-weighted assets)	1,034,433		16.04		290,207		4.50		451,434		7.00		N/A
Tier 1 capital (to adjusted total assets)	Tier 1 capital (to adjusted total assets)	988,172		11.38		350,923		4.00		350,923		4.00		N/A		Tier 1 capital (to adjusted total assets)	1,041,650		11.23		370,909		4.00		370,909		4.00		N/A

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


		Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions					Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions
		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio			Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Bank		(In thousands, except ratio data)
At June 30, 2021:
Columbia Bank																		Columbia Bank	(In thousands, except ratio data)
At June 30, 2022:																		At June 30, 2022:
Total capital (to risk-weighted assets)	Total capital (to risk-weighted assets)	$	981,541	16.41	%	$	478,609	8.00	%	$	628,175	10.50	%	$	598,262	10.00	%	Total capital (to risk-weighted assets)	$	1,055,048	15.60	%	$	541,217	8.00	%	$	710,347	10.50	%	$	676,521	10.00	%
Tier 1 capital (to risk-weighted assets)	Tier 1 capital (to risk-weighted assets)	911,092		15.23		358,957		6.00		508,522		8.50		478,609		8.00		Tier 1 capital (to risk-weighted assets)	997,900		14.75		405,912		6.00		575,043		8.50		541,217		8.00
Common equity tier 1 capital (to risk-weighted assets)	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		Common equity tier 1 capital (to risk-weighted assets)	997,900		14.75		304,434		4.50		473,565		7.00		439,739		6.50
Tier 1 capital (to adjusted total assets)	Tier 1 capital (to adjusted total assets)	911,092		10.23		356,078		4.00		356,078		4.00		445,098		5.00		Tier 1 capital (to adjusted total assets)	997,900		10.76		371,051		4.00		371,051		4.00		463,814		5.00

At December 31, 2020:
At December 31, 2021:																		At December 31, 2021:
Total capital (to risk-weighted assets)	Total capital (to risk-weighted assets)	$	924,959	16.05	%	$	460,944	8.00	%	$	604,989	10.50	%	$	576,180	10.00	%	Total capital (to risk-weighted assets)	$	962,137	15.39	%	$	500,127	8.00	%	$	656,417	10.50	%	$	625,159	10.00	%
Tier 1 capital (to risk-weighted assets)	Tier 1 capital (to risk-weighted assets)	852,897		14.80		345,708		6.00		489,753		8.50		460,944		8.00		Tier 1 capital (to risk-weighted assets)	898,935		14.38		375,095		6.00		531,385		8.50		500,127		8.00
Common equity tier 1 capital (to risk-weighted assets)	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		Common equity tier 1 capital (to risk-weighted assets)	898,935		14.38		281,322		4.50		437,611		7.00		406,353		6.50
Tier 1 capital (to adjusted total assets)	Tier 1 capital (to adjusted total assets)	852,897		9.72		350,815		4.00		350,815		4.00		438,519		5.00		Tier 1 capital (to adjusted total assets)	898,935		9.80		366,961		4.00		366,961		4.00		458,701		5.00


	Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Freehold Bank	(In thousands, except ratio data)
At June 30, 2022:
Total capital (to risk-weighted assets)	$	43,562	23.08	%	$	15,100	8.00	%	$	19,819	10.50	%	$	18,875	10.00	%
Tier 1 capital (to risk-weighted assets)	41,889		22.19		11,325		6.00		16,044		8.50		15,100		8.00
Common equity tier 1 capital (to risk-weighted assets)	41,889		22.19		8,494		4.50		13,212		7.00		12,269		6.50
Tier 1 capital (to adjusted total assets)	41,889		14.71		11,391		4.00		11,391		4.00		14,238		5.00

At December 31, 2021:
Total capital (to risk-weighted assets)	$	41,549	22.87	%	$	14,534	8.00	%	$	19,076	10.50	%	$	18,168	10.00	%
Tier 1 capital (to risk-weighted assets)	41,537		22.86		10,901		6.00		15,443		8.50		14,534		8.00
Common equity tier 1 capital (to risk-weighted assets)	41,537		22.86		8,176		4.50		12,717		7.00		11,809		6.50
Tier 1 capital (to adjusted total assets)	41,537		13.71		12,118		4.00		12,118		4.00		15,147		5.00

6069

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, ~~2021.~~2022. 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, ~~2021,~~2022, 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.

6170

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, ~~2020~~2021 filed with the Securities and Exchange Commission. As of June 30, ~~2021,~~2022, the risk factors of the Company have not materially changed from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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, ~~2021:~~2022:

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, 2021 326,929 $ 17.90 326,801 3,543,718
May 1 - 31, 2021 400,100 17.68 400,100 3,143,618
June 1 - 30, 2021 744,600 17.17 744,600 2,399,018
Total 1,471,629 $ 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.


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, 2022	292,587	$	21.23	290,855	3,499,565
May 1 - 31, 2022	711,574	20.14		710,900	2,788,665
June 1 - 30, 2022	524,169	21.10		521,393	2,267,272
Total	1,528,330	$	20.68	1,523,148

(1) On December 6, 2021, the Company announced that its Board of Directors authorized a new stock repurchase program to acquire up to 5,000,000 shares, or approximately 4.6%, of the Company's then issued and outstanding common stock, commencing upon the completion of the Company's stock repurchase program announced on February 1, 2021. On December 21, 2021, the Company completed the repurchases under the previous stock repurchase program.
(2) During the three months ended June 30, 2022, 5,182 shares were repurchased pursuant to forfeitures related to the 2019 Equity Incentive Plan and not as part of a share repurchase program.

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.

6271

Exhibit Index


10.1						Employment Agreement between Columbia Financial, Inc., Columbia Bank and Jenifer W. Walden

31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32						Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.0						The following materials from the Company’s Quarterly Report to Stockholders on Form 10-Q for the quarter ended June 30, ~~2021,~~2022, 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 (Loss), (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. INS						The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document

101. SCH						Inline XBRL Taxonomy Extension Schema Document

101. CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101. DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101. LAB						Inline XBRL Taxonomy Extension ~~Labels~~Label Linkbase Document

101. PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover page Interactive Data File (embedded within the Inline XBRL document)

6372

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, ~~2021~~2022

/s/Thomas J. Kemly

Thomas J. Kemly

President and Chief Executive Officer

(Principal Executive Officer)

Date:

August 9, ~~2021~~2022

/s/Dennis E. Gibney

Dennis E. Gibney

Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

6473


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In thousands)

Balance at beginning of period	$	408	$	463	$	418	$	511
Acquisition	0		58		0		58
Accretion	(32)		(49)		(64)		(98)
Net change in expected cash flows	(1)		(1)		21		0
Balance at end of period	$	375	$	471	$	375	$	471


	At June 30, 2021
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	2,524	$	3,064	$	—
Multifamily and commercial	16,331		17,147		—

Commercial business loans	632		632		—
Consumer loans:
Home equity loans and advances	530		636		—
	20,017		21,479		—
With a specific allowance recorded:
Real estate loans:
One-to-four family	3,144		3,162		274
Multifamily and commercial	17,664		17,667		148

Commercial business loans	1,492		1,491		14
Consumer loans:
Home equity loans and advances	945		945		14
	23,245		23,265		450
Total:
Real estate loans:
One-to-four family	5,668		6,226		274
Multifamily and commercial	33,995		34,814		148

Commercial business loans	2,124		2,123		14
Consumer loans:
Home equity loans and advances	1,475		1,581		14
Total loans	$	43,262	$	44,744	$	450


	At December 31, 2020
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	3,344	$	3,898	$	—
Multifamily and commercial	13,058		13,094		—

Commercial business loans	1,945		1,945		—
Consumer loans:
Home equity loans and advances	714		851		—
	19,061		19,788		—
With a specific allowance recorded:
Real estate loans:
One-to-four family	3,913		3,919		391
Multifamily and commercial	19,734		20,350		601

Commercial business loans	1,502		1,502		84
Consumer loans:
Home equity loans and advances	937		937		12
	26,086		26,708		1,088
Total:
Real estate loans:
One-to-four family	7,257		7,817		391
Multifamily and commercial	32,792		33,444		601

Commercial business loans	3,447		3,447		84
Consumer loans:
Home equity loans and advances	1,651		1,788		12
	$	45,147	$	46,496	$	1,088


At June 30, 2021	Lease Payment Obligations
	(In thousands)


2021	$	2,053
2022	3,971
2023	3,590
2024	2,866
2025	2,194
Thereafter	6,402
Total undiscounted cash flows	21,076
Discount on cash flows	(1,736)
Total lease liability	$	19,340


	Number of Restricted Shares	Weighted Average Grant Date Fair Value

Non-vested at January 1, 2020	1,420,012	$	15.67


Forfeited	(881)	15.60
Non-vested at March 31, 2020	1,419,131	$	15.67


Forfeited	(240)	15.60
Non-vested at June 30, 2020	1,418,891	$	15.67


	Balance at December 31, 2020		Percent of Total Loans at December 31, 2020		Balance at June 30, 2021		Percent of Total Loans at June 30, 2021		Balance at July 22, 2021		Percent of Total Loans at July 22, 2021
	(Dollars in thousands)
Real estate loans:
One-to-four family	$	6,770	0.35	%	$	2,459	0.13	%	$	2,105	0.11	%
Multifamily and commercial	71,348		2.53		55,617		1.79		27,173		0.88
Construction	3,312		1.01		3,337		1.28		2,537		0.98
Commercial business loans	3,397		0.45		2,301		0.49		1,457		0.31

Home equity loans and advances	314		0.10		57		0.02		57		0.02

Total loans	$	85,141	1.38	%	$	63,771	1.06	%	$	33,329	0.56	%