S-1/A

As filed with the Securities and Exchange Commission on February 1, 2017

Registration No. 333-215052

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

PCSB Financial Corporation

PCSB Bank 401(k) Savings Plan

(Exact Name of Registrant as Specified in Its Charter)

Maryland	6036	81-4710738
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

2651 Strang Blvd., Suite 100

Yorktown Heights, NY 10598

(914) 248-7272

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Joseph D. Roberto

President and Chief Executive Officer

PCSB Financial Corporation

2651 Strang Blvd., Suite 100

Yorktown Heights, NY 10598

(914) 248-7272

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Kip A. Weissman, Esq.

Victor L. Cangelosi, Esq.

Luse Gorman, PC

5335 Wisconsin Avenue, N.W., Suite 780

Washington, D.C. 20015

(202) 274-2000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ☒

If this Form is filed to register additional shares for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒  (Do not check if a smaller reporting company)	Smaller reporting company	☐

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per share	Proposed maximum aggregate offering price	Amount of registration fee
Common Stock, $0.01 par value per share	23,583,481 shares	$10.00	$235,834,810 (1)	$27,334 (2)
Participation Interests	1,437,734 (3)			(3)

(1) Estimated solely for the purpose of calculating the registration fee.

(2) A filing fee of $25,040 was previously paid.

(3) The securities to be purchased by the PCSB Bank 401(k) Savings Plan are included in the amount shown for the common stock. Accordingly, no separate fee is required for the participation interests.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Prospectus Supplement

Interests in

PCSB BANK 401(k) SAVINGS PLAN

Offering of Participation Interests in up to 1,437,734 Shares of

PCSB FINANCIAL CORPORATION

Common Stock

In connection with the conversion of PCSB Bank, a New York mutual savings bank headquartered in Yorktown Heights, New York, from the mutual to the stock form of organization, PCSB Financial Corporation, a newly formed Maryland corporation and holding company of PCSB Bank (“PCSB Financial”), is offering shares of common stock for sale at $10.00. Accordingly, in connection with the conversion, PCSB Financial is allowing participants in the PCSB Bank 401(k) Savings Plan (the “401(k) Plan”) to invest all or a portion of their 401(k) Plan accounts in the common stock of PCSB Financial (the “Common Stock”). Based upon the value of the 401(k) Plan assets at September 30, 2016, the trustee of the 401(k) Plan trustee could purchase up to 1,437,734 shares of PCSB Financial Common Stock, at the purchase price of $10.00 per share. This prospectus supplement relates to the election of 401(k) Plan participants to direct the trustee of the 401(k) Plan to invest all or a portion of their 401(k) Plan accounts in PCSB Financial Common Stock at the time of the stock offering.

Before you consider investing, you should read the prospectus of PCSB Financial dated             , 2016, which is provided with this prospectus supplement. It contains detailed information regarding the conversion, the stock offering of PCSB Financial and the financial condition, results of operations and business of PCSB Bank. This prospectus supplement provides information regarding the 401(k) Plan. You should read this prospectus supplement together with the prospectus and keep both for future reference.

For a discussion of risks that you should consider, see “Risk Factors” beginning on page      of the prospectus.

The interests in the 401(k) Plan and the offering of the shares of PCSB Financial Common Stock have not been approved or disapproved by the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission or any other federal or state agency. Any representation to the contrary is a criminal offense.

The securities offered in this prospectus supplement are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

This prospectus supplement may be used only in connection with offers and sales by PCSB Financial, in the stock offering, of PCSB Financial Common Stock acquired by the 401(k) Plan. No one may use this prospectus supplement to reoffer or resell interests in shares of PCSB Financial Common Stock acquired through the 401(k) Plan.

You should rely only on the information contained in this prospectus supplement and the prospectus. PCSB Financial, PCSB Bank and the 401(k) Plan have not authorized anyone to provide you with information that is different.

This prospectus supplement does not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make an offer or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the prospectus nor any sale of PCSB Financial Common Stock shall under any circumstances imply that there has been no change in the affairs of PCSB Financial, PCSB Bank, or the 401(k) Plan since the date of this prospectus supplement, or that the information contained in this prospectus supplement or incorporated by reference is correct as of any time after the date of this prospectus supplement.

The date of this prospectus supplement is             , 2017.

TABLE OF CONTENTS

THE OFFERING	S-1
Securities Offered	S-1
Election to Purchase Common Stock	S-2
Purchase Priorities	S-2
Purchase in the Offering and Oversubscriptions	S-3
Minimum and Maximum Investment	S-4
Value of 401(k) Plan Assets	S-5
How to Order Common Stock in the Offering	S-5
Special Investment Election Form Delivery Deadline	S-6
Irrevocability of Transfer Direction	S-6
Future Direction to Purchase and Sell Common Stock	S-6
Voting Rights of Common Stock	S-7
DESCRIPTION OF THE 401(K) PLAN	S-8
Introduction	S-8
Eligibility and Participation	S-8
Contributions under the 401(k) Plan	S-9
Limitations on Contributions	S-9
Benefits under the 401(k) Plan	S-10
Withdrawals and Distributions from the 401(k) Plan	S-10
Investment of Contributions and Account Balances	S-11
Performance History and Description of Funds	S-12
Administration of the 401(k) Plan	S-14
Amendment and Termination	S-15
Merger, Consolidation or Transfer	S-15
Federal Income Tax Consequences	S-15
Before Making a Decision to Invest, Please Review Your Rights Concerning Employer Securities and The Importance of Diversification	S-17
Additional ERISA Considerations	S-17
Securities and Exchange Commission Reporting and Short-Swing Profit Liability	S-18
Financial Information Regarding 401(k) Plan Assets	S-19
LEGAL OPINION	S-19

THE OFFERING

Securities Offered PCSB Financial is offering participants in the 401(k) Plan the opportunity to purchase common stock of PCSB Financial. Based on the fair market value of the 401(k) Plan’s assets as of September 30, 2016, at the purchase price of $10.00 per share, the 401(k) Plan may acquire up to 1,437,734 shares of PCSB Financial Common Stock in the stock offering.   Only employees of PCSB Bank may become participants in the 401(k) Plan and only participants, including former employees of PCSB Bank with an account balance in the 401(k) Plan, may purchase participation interests in shares of PCSB Financial Common Stock. All references to the purchase of PCSB Financial Common Stock contained in this document refer to participation interests in PCSB Financial Common Stock. A participation interest represents indirect ownership of PCSB Financial Common Stock. The interest is indirect since the PCSB Financial Common Stock will be held in the 401(k) Plan.   Your investment in shares of PCSB Financial Common Stock in connection with the stock offering is subject to the purchase priorities listed below under “Purchase Priorities.”   Information with regard to the 401(k) Plan and your opportunity to invest in shares of PCSB Financial Common Stock is contained in this prospectus supplement and information with regard to the financial condition, results of operations and business of PCSB Banorp and PCSB Bank is contained in the accompanying prospectus. The address of the principal executive office of PCSB Financial and PCSB Bank is 2651 Strang Blvd., Yorktown Heights, New York 10598. PCSB Bank’s telephone number at this address is (914) 248-7272.   All questions about this prospectus supplement should be addressed to Ruth Leser, Senior Vice President/Director of Human Resources at PCSB Bank; telephone number: (914) 248-7272; fax number: (914) 248-4311; email: RLeser@mypcsb.com.   Questions about the stock offering, the prospectus, or obtaining a stock order form to purchase stock in the offering outside the 401(k) Plan may be directed to the Stock Information Center at (___) ___-____. The Stock Information Center will be open beginning ________, 2017 between __:00 a.m. and __:00 p.m., Eastern Time, on Monday through Friday. The Stock Information Center will be closed on weekends and bank holidays.  

Election to Purchase Common Stock

In connection with the stock offering, you may elect to transfer all or a part of your account balances in the 401(k) Plan to be used to purchase PCSB Financial Common Stock in the stock offering at $10.00 per share. The trustee of the 401(k) Plan will purchase PCSB Financial Common Stock at $10.00 per share, in accordance with your directions. However, such directions are subject to purchase priorities and purchase limitations, as described below. Following the stock offering, the shares of PCSB Financial Common Stock acquired by the trustee in the stock offering will held in an account in the 401(k) Plan titled the “PCSB Financial Stock Fund.”

Purchase Priorities

All 401(k) Plan participants are eligible to purchase PCSB Financial Common Stock in the offering. However, such directions are subject to the purchase priorities in the Plan of Conversion of PCSB Bank, which provides for a subscription offering, a community offering and a firm commitment underwritten offering. In the offering, purchase priorities, in descending order, are as follows and apply in case more shares of PCSB Financial Common Stock are ordered than are available for sale (an “oversubscription”): Subscription Offering: (1)    Depositors of PCSB Bank with aggregate account balances of at least $100 as of the close of business on September 30, 2015, get first priority. (2)    PCSB Bank’s tax-qualified plans, including the employee stock ownership plan and the 401(k) plan get second priority. (3)    Depositors of PCSB Bank with aggregate account balances of at least $100 as of the close of business on [SERD] get third priority. Community Offering, if held: (4)    Shares of PCSB Financial Common Stock not purchased in the subscription offering may be offered for sale to the general public in a “community offering,” with a preference given first to natural persons residing in the New York counties of Dutchess, Putnam, Rockland and Westchester. Firm Commitment Underwritten Offering: (5)    Shares of Common Stock not purchased in the subscription offering may be offered for sale in a syndicated or a firm commitment underwritten offering, subject to such terms, conditions and procedures as PCSB Financial may determine, in a manner that will achieve wide distribution of PCSB Financial Common Stock.

S-2

If you fall into subscription offering categories (1) or (3), you have subscription rights to purchase PCSB Financial Common Stock in the subscription offering. If you are not eligible in the subscription offering, you may be eligible to purchase in the community offering, if shares remain available for sale in the community offering. You may use funds in the 401(k) Plan to pay for the shares of PCSB Financial Common Stock. You may also be able to purchase shares of PCSB Financial Common Stock in the subscription offering even though you are ineligible to purchase through subscription offering categories (1) or (3) through subscription offering category (2), reserved for its tax-qualified employee plans. You may place an order for the purchase of shares of PCSB Financial Common Stock by using the enclosed Special Investment Election Form, to be completed and submitted in the manner described below under “How to Order Common Stock in the Stock Offering through the 401(k) Plan.” If your stock order cannot be filled through subscription offering category (2), your order will be treated as a community offering order. Subscription offering orders will have preference over community offering orders in the event of oversubscription. The above-listed purchase priorities will also apply to any purchase of PCSB Financial Common Stock outside the 401(k) Plan. If you are eligible to purchase shares of PCSB Financial Common Stock in the subscription offering, as listed above, you will separately receive an offering materials package in the mail, including a stock order form. You may use the stock order form to subscribe for shares outside the 401(k) Plan. Please refer to the offering prospectus for information on how to make such purchases. If you wish to subscribe for shares of PCSB Financial outside the 401(k) Plan and you are not eligible to participate in the subscription offering, you may request offering materials by calling our Stock Information Center, toll-free, at (___) ___-____. Your order would be placed in the community offering, if held. Orders received in the subscription offering take precedence over the community offering orders in the event the stock offering is oversubscribed.

Purchase in the Offering and Oversubscriptions

The trustee of the 401(k) Plan will purchase shares of PCSB Financial Common Stock in the stock offering in accordance with your directions set forth in the Special Investment Election Form. At the conclusion of the “401(k) Offering Period” (as defined below in the Section on “How to Order Common Stock in the Offering”), the amount that you designate to be used to purchase shares of

S-3

PCSB Financial Common Stock will be sold from your existing investment funds held in the 401(k) Plan and the proceeds transferred to a separate account maintained by the 401(k) Plan (the “PCSB Financial Stock Fund”). The proceeds transferred to the PCSB Financial Stock Fund will be held separately from your other 401(k) Plan assets, pending the formal completion of the stock offering several weeks later. Prior to the completion of the stock offering, we will determine whether all or any portion of your order will be filled (if the offering is oversubscribed, you may not receive any, or all of, your order, depending on your purchase priority, as described above). The amount that can be used toward your order will be applied to the purchase of shares of PCSB Financial Common Stock. In the event the offering is oversubscribed, i.e., there are more orders for PCSB Financial Common Stock than shares available for sale in the stock offering, and the trustee is unable to use the full amount allocated by you to purchase PCSB Financial Common Stock in the offering, the amount that cannot be invested in PCSB Financial Common Stock and any interest earned on such amount will be transferred from the separate account maintained by the 401(k) Plan and reinvested in the existing investment funds of the 401(k) Plan, in accordance with your then-existing investment elections (in proportion to your investment direction for future contributions). The prospectus describes the allocation procedures in the event of an oversubscription. If you choose not to direct the investment of your 401(k) Plan account balances towards the purchase of PCSB Financial Common Stock in the offering, your account balances will remain in the investment funds of the 401(k) Plan as previously directed by you.

Minimum and Maximum Investment

In connection with the stock offering, the 401(k) Plan will permit you to direct the trustee to transfer all or a part of your 401(k) Plan account balance (excluding any investment in the current PCSB Financial Stock Fund) to be used to purchase PCSB Financial Common Stock in the offering, subject to the maximum purchase limits for investors set forth in the prospectus. The trustee of the 401(k) Plan will then subscribe for shares of the PCSB Financial Common Stock offered for sale in the offering, in accordance with each participant’s direction. The trustee will pay $10.00 per share, which will be the same price paid by all other persons who purchase shares in the subscription and community offerings. In order to purchase PCSB Financial Common Stock through the 401(k) Plan, the minimum investment is $250, which will purchase 25 shares. The prospectus describes further the maximum purchase limits for investors in the stock offering.

S-4

Value of 401(k) Plan Assets

As of September 30, 2016, the market value of the assets of the 401(k) Plan was approximately $14,377,348.

How to Order Common Stock in the Offering

Enclosed is a Special Investment Election Form on which you can elect to purchase PCSB Financial Common Stock in the offering. This is done by following the procedures described below. Please note the following stipulations concerning this election: •    You can elect to transfer all or a percentage of your current 401(k) Plan account on your Special Investment Election Form to purchase PCSB Financial Common Stock. •    Your election is subject to a minimum purchase of 25 shares, which equals $250. •    Your election, plus any order you placed outside the 401(k) Plan, are together subject to a maximum purchase of 20,000 shares, which equals $200,000. Please see the Prospectus of PCSB Financial for additional purchase limitations. •    The election period for the 401(k) Plan purchases ends at 5:00 p.m., Eastern Time, on _____________, 2017 (the “401(k) Plan Offering Period”). •    After your election is accepted, funds will be transferred from each of your designated accounts and the transferred amount will remain in an interest-bearing account until the conversion closes. At that time, the shares of Common Stock purchased based on your election will be transferred to the PCSB Financial Stock Fund and any remaining funds will be transferred out of the interest-bearing account for investment in other funds under the Plan, based on your election currently on file for future contributions. If you do not have an election on file for future contributions, any remaining funds will be transferred to the Pentegra Adv Conservative Asset Allocation Strategy to be reinvested in your discretion. •    The amount transferred to the interest-bearing account needs to be segregated and held until the conversion closes. Therefore, this money is not available for distributions, loans or withdrawals. •    During the offering period, however, you will continue to have the ability to transfer amounts not invested in the PCSB Financial Stock Fund among all the other investment funds on a daily basis.

S-5

	If you wish to use all or a portion of your account balance in the 401(k) Plan to purchase PCSB Financial Common Stock in the stock offering, you should indicate that decision on your Special Investment Election Form. If you do not wish to make an election, you should check the box at the bottom of the Special Investment Election Form. You may return the form in one of several ways: (1) by using the enclosed self-addressed envelope, (2) by faxing it to (973) 439-3943, (3) by delivering it in person, (4) by email at rleser@mypcsb.com, or (5) by interoffice mail to Ruth Leser, Senior Vice President/Director of Human Resources at PCSB Bank, 2651 Strang Blvd., Yorktown Heights, New York 10598, to be received no later than 5:00 p.m., Eastern Time, on _____________, 2017.
Special Investment Election Form Delivery Deadline	If you wish to purchase shares of PCSB Financial Common Stock through the 401(k) Plan, you must return your Special Investment Election Form to Ruth Leser, Senior Vice President/Director of Human Resources at PCSB Bank, 2651 Strang Blvd., Yorktown Heights, New York 10598 or by faxing it to (914) 248-4311, to be received no later than __:00 p.m., Eastern Time, on __________, 2017. You may return your Special Investment Election Form by hand delivery, mail, using the self-addressed pre-paid envelope, email (sending it to Ruth Leser, Senior Vice President/Director of Human Resources), or faxing it, so long as it is returned by the time specified.
Irrevocability of Transfer Direction	Once you make an election to purchase shares of PCSB Financial Common Stock in the stock offering through the 401(k) Plan, you may not change your election. Your election is irrevocable.
Future Direction to Purchase and Sell Common Stock	You will be able to purchase or sell shares of PCSB Financial Common Stock through the 401(k) Plan after the stock offering. In accordance with the 401(k) Plan procedures, you may direct that your future contributions or all or a portion of your account balance in the 401(k) Plan (excluding any investment in the current PCSB Financial Stock Fund) be transferred to the PCSB Financial Stock Fund to be used to purchase shares of PCSB Financial Common Stock. After the stock offering, to the extent that shares are available, the trustee of the 401(k) Plan will acquire shares of PCSB Financial Common Stock at your election in open market transactions at the prevailing price, which may be less than or more than $10.00 per share. You may change your investment allocation on a daily basis.

S-6

Special restrictions may apply to purchasing shares of PCSB Financial Common Stock by the participants who are subject to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to the purchase and sale of securities by officers, directors and principal stockholders of PCSB Financial. Please note that if you are an officer of PCSB Bank that is restricted by the regulations of the Board of Governors of the Federal Reserve System from selling shares of PCSB Financial Common Stock acquired in the stock offering for one year, the PCSB Financial Common Stock that you purchased in the stock offering will not be tradable until the one-year trading restriction has lapsed.

Voting Rights of Common Stock

Each participant or beneficiary who has an interest in the PCSB Financial Stock Fund shall be entitled to direct the trustee of the 401(k) Plan or its agent with respect to the voting of the shares of PCSB Financial Common Stock allocated to his or her account in the PCSB Financial Stock Fund. If a participant with an interest in shares of PCSB Financial Common Stock in the PCSB Financial Stock Fund fails to vote the shares allocated to his or her account, then the trustee shall vote the shares allocated to the participants account for whom no timely voting instructions have been received in the same proportion as those shares of PCSB Financial Common Stock for which instructions were timely received by the trustee.

S-7

DESCRIPTION OF THE 401(K) PLAN

Introduction

PCSB Bank (formerly, “Putnam County Savings Bank, and hereafter referred to as the “Bank”) originally adopted the 401(k) Plan effective as of April 1, 1991, and subsequently amended and restated the 401(k) Plan on several occasions, most recently, as of May 1, 2015. The 401(k) Plan is a tax-qualified plan established in accordance with the requirements under Section 401(a) and Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”).

The Bank intends that the 401(k) Plan, in form and operation, will comply with the requirements under Section 401(a) and Section 401(k) of the Code. The Bank will adopt any amendments to the 401(k) Plan that may be necessary to ensure the continuing qualified status of the 401(k) Plan under the Code and applicable Treasury Regulations.

Employee Retirement Income Security Act (“ERISA”). The 401(k) Plan is an “individual account plan” other than a “money purchase pension plan” within the meaning of ERISA. As such, the 401(k) Plan is subject to all of the provisions of Title I (Protection of Employee Benefit Rights) and Title II (Amendments to the Code Relating to Retirement Plans) of ERISA, except for the funding requirements contained in Part 3 of Title I of ERISA which by their terms do not apply to an individual account plan (other than a money purchase plan). The 401(k) Plan is not subject to Title IV (Plan Termination Insurance) of ERISA. The funding requirements contained in Title IV of ERISA are not applicable to participants or beneficiaries under the 401(k) Plan.

Reference to Full Text of 401(k) Plan. The following portions of this prospectus supplement summarize certain provisions of the 401(k) Plan. They are not complete and are qualified in their entirety by the full text of the 401(k) Plan and the Summary Plan Description. Copies of the 401(k) Plan and the Summary Plan Description are available to all employees by filing a request with the 401(k) Plan administrator at PCSB Bank, 2651 Strang Blvd., Yorktown Heights, New York 10598. You are urged to read carefully the full text of the 401(k) Plan.

Eligibility and Participation

Employees who are at least age 21 and complete twelve months of service (a “period of service”) are eligible to participate in the 401(k) Plan on the first day of the payroll period following the date the employee satisfies the eligibility requirements.

As of September 30, 2016, there were approximately 170 employees and former employees eligible to participate in the 401(k) Plan and 139 employees were actually participating in the 401(k) by making deferrals. The 401(k) Plan Year is January 1 to December 31.

S-8

Contributions under the 401(k) Plan

Salary Deferrals. You are permitted to defer, on a pre-tax basis, a specific percentage or dollar amount of your compensation, subject to certain restrictions imposed by the Code, and to have that amount contributed to the 401(k) Plan on your behalf. The 401(k) Plan imposes a limit on your deferrals, which is no less than 1% and no more than 25% of your compensation each year up to the tax law limit on elective deferrals, which for 2017, is $18,000. For purposes of the 401(k) Plan, “compensation” generally means your total compensation that is subject to income tax and paid to you during the plan year. In accordance with Internal Revenue Service (the “IRS”) limitations, the annual compensation of each participant taken into account under the 401(k) Plan, for 2017, is limited to $270,000 (and as may be increased annually by the IRS). You may change the contribution rate of your pre-tax deferrals four times per year.

Matching Employer Contributions. The Bank will make a matching employer contribution equal to 75% of a participant’s elective deferrals (including employee catch-up contributions), on up to 6% of a participant’s compensation.

Employer Profit Sharing Contribution. Effective for employees hired on or after October 1, 2012 who become participants in the 401(k) Plan, the Bank will make a profit sharing contribution equal to 5% of the compensation of all participants eligible to share in allocations.

Limitations on Contributions

Limitations on Employee Salary Deferrals. For the 401(k) Plan Year beginning January 1, 2017, the amount of your before-tax contributions may not exceed $18,000 per calendar year. In addition, if you are at least 50 years old in 2017, you will be able to make a “catch-up” contribution of up to $6,000 in addition to the $18,000 limit. The “catch-up” contribution limit may be adjusted periodically by law, based on changes in the cost of living. Contributions in excess of these limits, as applicable to you, are known as excess deferrals. If you defer amounts in excess of these limitations, as applicable to you, your gross income for federal income tax purposes will include the excess in the year of the deferral. In addition, unless the excess deferral is distributed before April 15 of the following year, it will be taxed again in the year distributed. Income on the excess deferral distributed by April 15 of the immediately succeeding year will be treated, for federal income tax purposes, as earned and received by you in the tax year in which the contribution is made.

Contribution Limit. Generally, the law imposes a maximum limit on the amount of contributions you may receive under the 401(k) Plan. This limit applies to all contributions to the 401(k) Plan, including your salary deferrals and all other employer contributions made on your behalf during the year, excluding earnings and any transfers/rollovers. For the 401(k) Plan Year beginning January 1, 2017, this total cannot exceed the lesser of $54,000 or 100% of your annual compensation.

S-9

Benefits under the 401(k) Plan

Vesting. At all times, you have a fully vested, nonforfeitable interest in the salary deferrals you have made to the 401(k) Plan. In addition, rollover contributions and actual earnings thereon are 100% vested at all times.

Employer profit sharing contributions and matching contributions are subject to the following vesting schedule:

Vesting Schedule
Profit Sharing and/or Matching Contributions
Period of Service	Vested Percentage
Less than 2 years	0
2	20
3	40
4	60
5	80
6	100

You will be credited with a “period of service” for each twelve-month period from your date of employment until the date you terminate employment, however, periods of service prior to age 18 will not count nor will periods during which you have terminated employment. You will also become fully vested in your accounts if you attain your early retirement date (the first day of the month after you attain age 60) or if you attain your normal retirement date (the first day of the month coinciding with or following your attainment of age 65) or if you die or become disabled.

Withdrawals and Distributions from the 401(k) Plan

Applicable federal law requires the 401(k) Plan to impose substantial restrictions on the right of a 401(k) Plan participant to withdraw amounts held for his or her benefit under the 401(k) Plan prior to the participant’s termination of employment with the employer.

In-Service Withdrawals. In-service withdrawals are permitted with respect to employee pre-tax elective deferrals and the earnings thereon, and are limited to two per year. In-service withdrawals of employee rollover contribution and earnings, and employer matching contributions and earnings are permitted only in the event of hardship or attainment of age 59 1/2.

Withdrawals upon Termination. You may request a distribution from your account following your termination of employment. Following your termination, you may elect to leave your account balance in the 401(k) Plan and defer commencement of receipt of your vested balance until no later than April 1 of the calendar year following the calendar year in which you attain age 70 ¹⁄₂, except to the extent your vested account balance as of the date of termination is less than $1,000, in which case your interest in the 401(k) Plan will be cashed out. You may make withdrawals from your account at any time after terminating employment and may continue to change investment instructions with respect to your remaining account balance.

S-10

Disability. In the event you become disabled in accordance with the definition of disability under the 401(k) Plan, you will be entitled to the same withdrawal rights as if terminating employment.

Form of Distribution. Your benefits under the 401(k) Plan will be distributed to you or your beneficiary in one of the following forms: (i) a single lump-sum payment; or (ii) substantially equal installments not to exceed 10 years. Notwithstanding the foregoing, if your account balance does not exceed $5,000 your vested account balance can only be distributed to you in a single lump-sum payment.

Pre-Retirement Death. In the event of your death, the value of your account will be payable to your beneficiary. Payment will be made in a lump sum, unless the payment would exceed $5000. If the payment exceeds $5,000, then your beneficiary may elect to receive the benefit in either a lump sum or in annual installments over a period not to exceed 10 years.

Loans. Loans will be permitted from your account under the 401(k) Plan, subject to certain restrictions. Loans will not be made in an amount less than $1,000 or greater than $50,000.

Investment of Contributions and Account Balances

All amounts credited to your accounts under the 401(k) Plan are held in the 401(k) Plan trust (the “Trust”) which is administered by the trustee appointed by the Bank’s board of directors. Prior to the effective date of the offering, you were provided the opportunity to direct the investment of your account into one of the following investment options:

1. American Beacon Large Cap Value Fund

2. American Funds EuroPacific Growth Fund

3. DFA U.S. Small Cap Portfolio

4. Fidelity 500 Index Fund (Inv)

5. Pentegra Adv. Aggressive Asset Allocation Strategy (O)

6. Pentegra Adv Conservative Asset Allocation Strategy (O)

7. Pentegra Adv Moderate Asset Allocation Strategy (O)

8. Pentegra Adv Moderate Aggressive Allocation Strategy (O)

9. Pentegra Adv Moderate Conservative Asset Allocation Strategy (O)

10. T. Rowe Price Blue Chip Growth Fund

11. Vanguard Mid-Cap Index Fund (Adm)

12. Vanguard Total Bond Market Fund (Adm)

13. Wells Fargo Stable Value Fund (J)

14. PCSB Financial Stock Fund

S-11

Performance History and Description of Funds

The following provides performance data with respect to the investment options available under the 401(k) Plan:

Fund	Performance as of September 30, 2016
	Last 3-Months			Last 12 Months			Trail 3 Year Annualized			Trail 5 Year Annualized			Trail 10 Year Annualized
American Beacon Large Cap Value Fund		5.73	%		10.99	%		6.79	%		14.85	%		5.46	%
American Funds EuroPacific Growth Fund		8.23	%		8.52	%		3.34	%		9.11	%		4.19	%
DFA U.S. Small Cap Portfolio		7.00	%		13.82	%		7.28	%		16.84	%		8.21	%
Fidelity 500 Index Fund (Inv)		3.84	%		15.34	%		11.07	%		16.28	%		7.17	%
Pentegra Adv. Aggressive Asset Allocation Strategy (O)		3.89	%		10.64	%		N/A			N/A			4.92	%*
Pentegra Adv Conservative Asset Allocation Strategy (O)		1.60	%		5.89	%		N/A			N/A			3.23	%*
Pentegra Adv Moderate Asset Allocation Strategy (O)		2.87	%		8.70	%		N/A			N/A			4.49	%*
Pentegra Adv Moderate Aggressive Allocation Strategy (O)		3.42	%		9.70	%		N/A			N/A			4.80	%*
Pentegra Adv Moderate Conservative Asset Allocation Strategy (O)		2.32	%		7.60	%		N/A			N/A			4.18	%
T. Rowe Price Blue Chip Growth Fund		7.52	%		11.34	%		11.56	%		17.86	%		9.11	%
Vanguard Mid-Cap Index Fund (Adm)		5.18	%		12.64	%		9.90	%		16.52	%		8.20	%
Vanguard Total Bond Market Fund (Adm)		0.41	%		5.31	%		3.98	%		3.00	%		4.77	%
Wells Fargo Stable Value Fund (J)		0.24	%		0.91	%		0.80	%		0.94	%		1.95	%
PCSB Financial Stock Fund		N/A			N/A			N/A			N/A			N/A	**

* Since fund inception.

** The fund is effective             , 2017 and therefore it does not have an investment history.

The following is a description of each of the 401(k) Plan’s investment funds and other investments:

American Beacon Large Cap Value Fund. The Fund seeks long-term capital appreciation and current Income. The Fund invests primarily in equity securities of large-cap U.S. companies. The assets of the Fund are allocated among different sub-advisors who typically seek to invest in companies believed to be undervalued at the time of purchase

American Funds EuroPacific Growth Fund. The Fund seeks long-term growth of capital. The Funds invests primarily in common stocks of issuers in Europe and the Pacific Basin that the investment adviser believes have the potential for growth. Growth stocks are stocks that the investment adviser believes have the potential for above-average capital appreciation. The Fund may invest a portion of its assets in common stocks and other securities of companies in emerging markets.

DFA U.S. Small Cap Portfolio. The Fund seeks long-term capital appreciation. The Fund purchases a broad and diverse group of readily marketable securities of U.S. small cap companies. The Fund may use derivatives to adjust market exposure based on actual or expected cash inflows to or outflows from the Fund.

S-12

Fidelity 500 Index Fund (Inv). The Fund seeks investment results that correspond to the total return performance of common stocks publicly traded in the United States. The Fund normally invests primarily in common stocks included in the S&P 500 Index, which broadly represents the performance of common stocks publicly traded in the U.S.

Pentegra Adv. Aggressive Asset Allocation Strategy (O). The Fund seeks a total return through capital appreciation. The Fund is a “fund of funds” that invests primarily in a diversified portfolio of equity, fixed-income and cash equivalents funds that meets the Fund’s investment criteria. The Fund targets 80% to equity funds and 20% to fixed income and cash equivalents funds. The Sub-Adviser combines both qualitative and quantitative factors in its analysis of potential and selected investment strategies for the Funds.

Pentegra Adv Conservative Asset Allocation Strategy (O). The Fund seeks a combination of current income and capital appreciation. The Fund is a “fund of funds” that invests primarily in a diversified portfolio of equity, fixed-income and cash equivalents funds that meets the Fund’s investment criteria. The Fund targets 20% to equity funds and 80% to fixed income and cash equivalents funds. The Sub-Adviser combines both qualitative and quantitative factors in its analysis of potential and selected investment strategies for the Funds.

Pentegra Adv Moderate Asset Allocation Strategy (O). The Fund seeks a combination of capital appreciation and current income. The Fund is a “fund of funds” that invests primarily in a diversified portfolio of equity, fixed-income and cash equivalents funds that meets the Fund’s investment criteria. The Fund targets 50% to equity funds and 50% to fixed income and cash equivalents funds. The Sub-Adviser combines both qualitative and quantitative factors in its analysis of potential and selected investment strategies for the Funds.

Pentegra Adv Moderate Aggressive Allocation Strategy (O). The Fund seeks a total return, consisting of capital appreciation and current income. The Fund is a “fund of funds” that invests primarily in a diversified portfolio of equity, fixed-income and cash equivalents funds that meets the Fund’s investment criteria. The Fund targets 65% to equity funds and 35% to fixed income and cash equivalents funds. The Sub-Adviser combines both qualitative and quantitative factors in its analysis of potential and selected investment strategies for the Funds.

Pentegra Adv Moderate Conservative Asset Allocation Strategy (O). The Fund seeks a combination of current income and capital appreciation. The Fund is a “fund of funds” that invests primarily in a diversified portfolio of equity, fixed-income and cash equivalents funds that meets the Fund’s investment criteria. The Fund targets 35% to equity funds and 65% to fixed income and cash equivalents funds. The Sub-Adviser combines both qualitative and quantitative factors in its analysis of potential and selected investment strategies for the Funds.

T. Rowe Price Blue Chip Growth Fund. The Fund seeks long-term capital growth; income is a secondary objective. The Fund will normally invest primarily in the common stocks of large- and medium-sized blue chip growth companies. It focuses on companies with leading market positions, seasoned management, and strong financial fundamentals. The Fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising oppurtunities.

S-13

Vanguard Mid-Cap Index Fund (Adm). The Fund seeks to track the performance of the CRSP US Mid Cap Index, a broadly diversified index of stocks of mid-size U.S. companies. The Fund invests all, or substantially all, of its assets in the stocks that make up the Index, holding each stock in approximately the same proportion as its weighting in the Index.

Vanguard Total Bond Market Fund (Adm). The Fund seeks to track the performance of the Barclays U.S. Aggregate Float Adjusted Index, which represents a wide spectrum of public, investment-grade, taxable, fixed income securities in the U.S. The Fund invests by sampling the Index, holding a broadly diversified collection of securities that, in the aggregate, approximates the full Index.

Wells Fargo Stable Value Fund (J). The Wells Fargo Stable Value Fund is managed to protect principal while providing the potential for higher rates of return than other conservative investments, such as money market funds. The Fund invests in a diversified pool of investment contracts issued by high quality financial institutions. These assets include guaranteed investment contracts (GICs), bank investment contracts (BICs), and security backed contracts.

PCSB Financial Stock Fund. In connection with the stock offering, you may, in the manner described earlier, direct the trustee to invest all or a portion of your 401(k) Plan account in PCSB Financial Common Stock (excluding any investment in the current PCSB Financial Stock Fund). The trustee will use all amounts elected by participants to acquire shares of PCSB Financial Common Stock in the conversion and common stock offering, subject to the purchase priorities described herein. After the offering, you may elect to invest all or a portion of your payroll deduction contributions or employer contributions in PCSB Financial Common Stock. You may also elect to invest in PCSB Financial Common Stock with all or a portion of your accounts currently invested in other funds under the 401(k) Plan. It is expected that all purchases will be made at prevailing market prices. Pending investment in PCSB Financial Common Stock, amounts allocated towards the purchase of shares in the offering will be held in a separate account maintained by the 401(k) Plan. In the event of an oversubscription, any earnings that result therefrom will be reinvested among the other funds of the 401(k) Plan in accordance with your then existing investment election. For a discussion of material risks of investing in PCSB Financial Common Stock, you should read the “Risk Factors” section of the accompanying prospectus and the section of the prospectus supplement called “Your Rights Concerning Employer Securities” (see below).

An investment in any of the investment options listed above is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any investment option, there is always a risk that you may lose money on your investment in any of the investment options listed above.

Administration of the 401(k) Plan

The Trustee and Custodian. The trustee of the 401(k) Plan assets, including the PCSB Financial Stock Fund, is Pentegra Trust Company. Reliance Trust Company serves as the custodian of all 401(k) Plan assets, including the PCSB Financial Stock Fund.

S-14

401(k) Plan Administrator. Pursuant to the terms of the 401(k) Plan, the 401(k) Plan is administered by the 401(k) Plan administrator, PCSB Bank. The address of the 401(k) Plan administrator is 2651 Strang Blvd., Yorktown Heights, New York 10598, telephone number (914) 248-7272. The 401(k) Plan administrator is responsible for the administration of the 401(k) Plan, interpretation of the provisions of the 401(k) Plan, prescribing procedures for filing applications for benefits, preparation and distribution of information explaining the 401(k) Plan, maintenance of 401(k) Plan records, books of account and all other data necessary for the proper administration of the 401(k) Plan, preparation and filing of all returns and reports relating to the 401(k) Plan which are required to be filed with the U.S. Department of Labor and the Internal Revenue Service, and for all disclosures required to be made to participants, beneficiaries and others under Sections 104 and 105 of ERISA.

Reports to 401(k) Plan Participants. The 401(k) Plan administrator will provide access to your statement at least quarterly showing the balance in your account as of the end of that period, the amount of contributions allocated to your account for that period, and any adjustments to your account to reflect earnings or losses (if any).

Amendment and Termination

It is the intention of the Bank to continue the 401(k) Plan indefinitely. Nevertheless, the Bank may terminate the 401(k) Plan at any time. If the 401(k) Plan is terminated in whole or in part, then regardless of other provisions in the 401(k) Plan, you will have a fully vested interest in your accounts. The Bank reserves the right to make any amendment or amendments to the 401(k) Plan which do not cause any part of the trust to be used for, or diverted to, any purpose other than the exclusive benefit of participants or their beneficiaries; provided, however, that the Bank may make any amendment it determines necessary or desirable, with or without retroactive effect, to comply with ERISA.

Merger, Consolidation or Transfer

In the event of the merger or consolidation of the 401(k) Plan with another plan, or the transfer of the trust assets to another plan, the 401(k) Plan requires that you would, if either the 401(k) Plan or the other plan terminates, receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit you would have been entitled to receive immediately before the merger, consolidation or transfer, if the 401(k) Plan had then terminated.

Federal Income Tax Consequences

The following is a brief summary of the material federal income tax aspects of the 401(k) Plan. You should not rely on this summary as a complete or definitive description of the material federal income tax consequences relating to the 401(k) Plan. Statutory provisions change, as do their interpretations, and their application may vary in individual circumstances. Finally, the consequences under applicable state and local income tax laws may not be the same as under the federal income tax laws. Please consult your tax advisor with respect to any distribution from the 401(k) Plan and transactions involving the 401(k) Plan.

S-15

As a “tax-qualified retirement plan,” the Code affords the 401(k) Plan special tax treatment, including:

(1) the sponsoring employer is allowed an immediate tax deduction for the amount contributed to the 401(k) Plan each year;

(2) participants pay no current income tax on amounts contributed by the employer on their behalf; and

(3) earnings of the 401(k) Plan are tax-deferred, thereby permitting the tax-free accumulation of income and gains on investments.

The Bank will administer the 401(k) Plan to comply with the requirements of the Code as of the applicable effective date of any change in the law.

Lump-Sum Distribution. A distribution from the 401(k) Plan to a participant or the beneficiary of a participant will qualify as a lump-sum distribution if it is made within one taxable year, on account of the participant’s death, disability or separation from service, or after the participant attains age 59 ¹⁄₂, and consists of the balance credited to participants under the 401(k) Plan and all other profit sharing plans, if any, maintained by the Bank. The portion of any lump-sum distribution required to be included in your taxable income for federal income tax purposes consists of the entire amount of the lump-sum distribution, less the amount of after-tax contributions, if any, you have made to this 401(k) Plan and any other profit sharing plans maintained by the Bank, which is included in the distribution.

PCSB Financial Common Stock Included in Lump-Sum Distribution. If a lump-sum distribution includes PCSB Financial Common Stock, the distribution generally will be taxed in the manner described above, except that the total taxable amount may be reduced by the amount of any net unrealized appreciation with respect to PCSB Financial Common Stock; that is, the excess of the value of PCSB Financial Common Stock at the time of the distribution over its cost or other basis of the securities to the trust. The tax basis of PCSB Financial Common Stock, for purposes of computing gain or loss on its subsequent sale, equals the value of PCSB Financial Common Stock at the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent sale or other taxable disposition of PCSB Financial Common Stock, to the extent of the amount of net unrealized appreciation at the time of distribution, will constitute long-term capital gain, regardless of the holding period of PCSB Financial Common Stock. Any gain on a subsequent sale or other taxable disposition of PCSB Financial Common Stock, in excess of the amount of net unrealized appreciation at the time of distribution, will be considered long-term capital gain. The recipient of a distribution may elect to include the amount of any net unrealized appreciation in the total taxable amount of the distribution, to the extent allowed by regulations to be issued by the Internal Revenue Service.

Distributions: Rollovers and Direct Transfers to Another Qualified Plan or to an IRA. You may roll over virtually all distributions from the 401(k) Plan to another qualified plan or to an individual retirement account in accordance with the terms of the other plan or account.

S-16

Before Making a Decision to Invest, Please Review Your Rights Concerning Employer Securities and The Importance of Diversification

Federal law provides specific rights concerning investments in employer securities. Because you may in the future have investments in PCSB Financial Common Stock under the 401(k) Plan, you should take the time to read the following information carefully.

Your Rights Concerning Employer Securities. The 401(k) Plan allows you to elect to move any portion of your account that is invested in PCSB Financial Common Stock from that investment into other investment alternatives under the 401(k) Plan. You may contact the 401(k) Plan administrator shown above for specific information regarding this right, including how to make this election. In deciding whether to exercise this right, you will want to give careful consideration to the information below that describes the importance of diversification. All of the investment options under the 401(k) Plan are available to you if you decide to diversify out of your investment in PCSB Financial Common Stock.

The Importance of Diversifying Your Retirement Savings. To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk.

In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the 401(k) Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerance for risk. Therefore, you should carefully consider the rights described here and how these rights affect the amount of money that you invest in employer common stock through the 401(k) Plan.

It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the 401(k) Plan to help ensure that your retirement savings will meet your retirement goals.

Additional ERISA Considerations

As noted above, the 401(k) Plan is subject to certain provisions of ERISA, including special provisions relating to control over the 401(k) Plan’s assets by participants and beneficiaries. The 401(k) Plan’s feature that allows you to direct the investment of your account balances is intended to satisfy the requirements of Section 404(c) of ERISA relating to control over 401(k) Plan assets by a participant or beneficiary. The effect of this is two-fold. First, you will not be deemed a “fiduciary” because of your exercise of investment discretion. Second, no person who otherwise is a fiduciary, such as the Bank, the 401(k) Plan administrator, or the 401(k) Plan’s trustee is liable under the fiduciary responsibility provisions of ERISA for any loss which results from your exercise of control over the assets in your 401(k) Plan account.

S-17

Because you will be entitled to invest all or a portion of your account balance in the 401(k) Plan in PCSB Financial Common Stock, the regulations under Section 404(c) of the ERISA require that the 401(k) Plan establish procedures that ensure the confidentiality of your decision to purchase, hold, or sell employer securities, except to the extent that disclosure of such information is necessary to comply with federal or state laws not preempted by ERISA. These regulations also require that your exercise of voting and similar rights with respect to PCSB Financial Common Stock be conducted in a way that ensures the confidentiality of your exercise of these rights.

Securities and Exchange Commission Reporting and Short-Swing Profit Liability

Section 16 of the Exchange Act imposes reporting and liability requirements on officers, directors, and persons beneficially owning more than 10% of publicly traded companies, such as PCSB Financial. Section 16(a) of the Securities Exchange Act of 1934 requires the filing of reports of beneficial ownership. Within 10 days of becoming an officer, director or person beneficially owning more than 10% of the shares of PCSB Financial, a Form 3 reporting initial beneficial ownership must be filed with the Securities and Exchange Commission. Changes in beneficial ownership, such as purchases, sales and gifts generally must be reported periodically, either on a Form 4 within two business days after the change occurs, or annually on a Form 5 within 45 days after the close of PCSB Financial’s fiscal year. Discretionary transactions in and beneficial ownership of PCSB Financial Common Stock by officers, directors and persons beneficially owning more than 10% of PCSB Financial Common Stock generally must be reported to the Securities and Exchange Commission by such individuals.

In addition to the reporting requirements described above, Section 16(b) of the Exchange Act provides for the recovery by PCSB Financial of profits realized by an officer, director or any person beneficially owning more than 10% of PCSB Financial Common Stock resulting from non-exempt purchases and sales of PCSB Financial Common Stock within any six-month period.

The Securities and Exchange Commission has adopted rules that provide exemptions from the profit recovery provisions of Section 16(b) for all transactions in employer securities within an employee benefit plan, provided certain requirements are met. These requirements generally involve restrictions upon the timing of elections to acquire or dispose of employer securities for the accounts of Section 16(b) persons.

Except for distributions of PCSB Financial Common Stock due to death, disability, retirement, termination of employment or under a qualified domestic relations order, persons affected by Section 16(b) are required to hold shares of PCSB Financial Common Stock distributed from the 401(k) Plan for six months following such distribution and are prohibited from directing additional purchases of PCSB Financial Common Stock for six months after receiving such a distribution.

S-18

Financial Information Regarding 401(k) Plan Assets

Financial information representing the net assets available for 401(k) Plan benefits and the change in net assets available for 401(k) Plan benefits at December  31, 2016, is available upon written request to the 401(k) Plan administrator at the address shown above.

LEGAL OPINION

The validity of the issuance of PCSB Financial Common Stock has been passed upon by Luse Gorman, PC, Washington, D.C., which firm is acting as special counsel to PCSB Bank in connection with PCSB Financial’s stock offering.

S-19

Special Investment Election Form

PCSB Bank 401(k) Profit Sharing Plan (the “401(k) Plan”)

THIS IS A SPECIAL, ONE-TIME INVESTMENT ELECTION FORM TO BE USED IN CONNECTION WITH THE PCSB FINANCIAL CORPORATION STOCK OFFERING.

IF YOU WISH TO PLACE A STOCK ORDER THROUGH THE 401(k) PLAN, PLEASE RETURN THIS FORM TO RUTH LESER, AT PCSB BANK, BY HAND DELIVERY, REGULAR MAIL OR FACSIMILE, TO BE RECEIVED NO LATER THAN          P.M., EASTERN TIME, ON                     , 2017.

SECTION A: NAME / SOCIAL SECURITY #

				-             -
PLEASE PRINT:	Last Name	First Name	Middle	Social Security #

SECTION B: SPECIAL ONE-TIME INVESTMENT ELECTION

Participants with existing 401(k) plan account balances may invest all or a portion of their account in PCSB Financial Corporation common stock in connection with the initial public offering. The purchase price of the common stock in the offering is $10 per share. You must purchase a minimum of 25 shares ($250) and your combined orders for stock in the offering inside and outside the 401(k) Plan cannot exceed 20,000 shares ($200,000). Participants may transfer a portion of any current investment fund to the “PCSB Financial Stock Fund” in the 401(k) Plan, which will be held in a short-term interest bearing account for several weeks until it is invested in common stock at the completion of the reorganization. The amount transferred will be rounded down to the nearest whole $10 value.

Indicate the percentage(s), in multiples of not less than 1%, of each existing investment option that you want to be transferred from your current plan investments to the PCSB Financial Stock Fund.

Source of Funds to be Transferred	Amount to be Transferred
American Beacon Large Cap Value Fund		%
American Funds EuroPacific Growth Fund		%
DFA U.S. Small Cap Portfolio		%
Fidelity 500 Index Fund (Inv)		%
Pentegra Adv. Aggressive Asset Allocation Strategy (O)		%
Pentegra Adv Conservative Asset Allocation Strategy (O)		%
Pentegra Adv Moderate Asset Allocation Strategy (O)		%
Pentegra Adv Moderate Aggressive Allocation Strategy (O)		%
Pentegra Adv Moderate Conservative Asset Allocation Strategy (O)		%
T. Rowe Price Blue Chip Growth Fund		%
Vanguard Mid-Cap Index Fund (Adm)		%
Vanguard Total Bond Market Fund (Adm)		%
Wells Fargo Stable Value Fund (J)		%

SECTION C: IMPORTANT CONSIDERATIONS

If, at the time your election is processed, your election would result in the transfer of less than $250 to the PCSB Financial Stock Fund for the purchase of PCSB Financial Corporation common stock, your election will not be processed, and the funds will be reinvested in the other investment options in accordance with your then existing investment election for future contributions.

Please note that your election to invest all or a portion of your account in the PCSB Financial Stock Fund will be IRREVOCABLE. As you know, you are permitted to change your investment election among the various investment funds in the 401(k) Plan on a daily basis. However, you will not be permitted to change your investment election with respect to that portion of your account that you indicated above will be invested in the PCSB Financial Stock Fund in the stock offering. After this form has been submitted and processed, the dollar amount transferred in accordance with Section B above will be transferred to an interest-bearing cash account, pending the completion of

the reorganization. You will not have access to the amounts placed in the interest-bearing cash account during the offering. Following the completion of the reorganization and offering, you will be permitted to change your investment elections, including diversifying out of the investment in common stock. If some or all of the amount that you direct to be invested in the PCSB Financial Stock Fund cannot be used to purchase stock in the offering because the offering is oversubscribed, following the conclusion of the stock offering, the trustee will reinvest unused funds in the other investment funds in accordance with your then existing investment election for future contributions. Following the stock offering, you will have the opportunity to purchase additional shares of PCSB Financial Corporation (with your Plan assets), and you will be able to direct the Plan trustee to sell your shares of PCSB Financial Corporation

SECTION D: PURCHASER INFORMATION

☐ Eligible Account Holder—Check here if you were a depositor with at least $100 on deposit with PCSB Bank as of September 30, 2015. Enter information below for all deposit accounts that you had an interest in (IRA, individual, joint) at PCSB Bank on September 30, 2015.

☐ Supplemental Eligible Account Holder (but not eligible for Priority One)—Check here if were a depositor with at least $100 on deposit with PCSB Bank as of                     , 201__. Enter information below for all deposit accounts that you had an interest in (IRA, individual, joint) at PCSB Bank on                    , 201__.

☐ No Priority. I do not have a priority in my individual capacity in the subscription offering, but wish to place an order through the 401(k) Plan.

☐ No Election – I do not wish to make an election to purchase stock in the offering through my 401(k) Plan account.

Please Note: Failure to list all of your accounts may result in the loss of part or all of your stock allocation in the event of oversubscription.

Account Title (Names on Accounts) Account Number

SECTION E: PARTICIPANT AUTHORIZATION

I certify that I received a copy of the Prospectus of PCSB Financial Corporation which provides detailed information with respect to the offering of PCSB Financial Corporation common stock and the accompanying Prospectus Supplement relating to the election to direct investments under the 401(k) Plan to common stock. I understand that the value of the investments may fluctuate over time and that risks are associated with investing in the investment options I have selected. Furthermore, I authorize the Plan Administrator to execute my directions as set forth above. I understand these directions are irrevocable.

Participant Signature                                                                                                    Date                                     

IMPORTANT: PLEASE KEEP A COPY OF YOUR COMPLETED FORM FOR YOUR RECORDS

2

PROSPECTUS

PCSB FINANCIAL CORPORATION

(Proposed Holding Company for PCSB Bank)

Up to 20,125,000 Shares of Common Stock

(Subject to increase to up to 23,143,750 Shares)

We are offering shares of common stock for sale in connection with the conversion of PCSB Bank from the mutual to stock form of organization. In addition to the shares that we will sell in the offering, we intend to establish a charitable foundation in connection with the conversion and contribute to it shares of common stock equal to 1.9% of the shares sold in the offering plus an amount of cash so that the total contribution will equal $5.0 million. Currently, there is no established trading market for our common stock. We expect to list our common stock on the Nasdaq Capital Market under the symbol “PCSB.” We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

The shares of common stock are first being offered in a subscription offering to eligible depositors of PCSB Bank and to PCSB Bank’s tax-qualified employee benefit plans. Shares not purchased in the subscription offering may be offered for sale to the general public in a community offering, with a preference given to residents of the communities served by PCSB Bank. Any shares of common stock not purchased in the subscription or community offerings may be offered for sale to the public in a syndicated offering through a syndicate of broker-dealers or in a separate firm commitment offering. The syndicated offering and the firm commitment offering may commence before the subscription and community offerings (including any extensions) have expired. However, shares purchased in the subscription offering or the community offering will not be issued until the completion of any syndicated offering or firm commitment offering. The subscription, community, syndicated community and firm commitment offerings are collectively referred to as the “offerings.”

We may sell up to 23,143,750 shares of common stock as a result of demand for the shares of common stock or changes in market conditions, without resoliciting subscribers. We must sell a minimum of 14,875,000 shares in order to complete the offering.

The minimum order is 25 shares of common stock. Generally, no individual may purchase more than 20,000 shares of common stock, and no individual or other person, along with their associates and those with whom they are acting in concert, may purchase more than 30,000 shares of common stock. The subscription and community offerings are expected to expire at 5:00 p.m., Eastern Time, on             , 2017. We may extend this expiration time and date, without notice to you, until             , 2017. Once submitted, stock orders are irrevocable unless the subscription and community offerings are terminated or extended, with regulatory approval, beyond             , 2017, or the number of shares of common stock offered for sale is increased to more than 23,143,750 shares or decreased to less than 14,875,000 shares. If the subscription and community offerings are extended beyond             , 2017, we will notify all subscribers and give them an opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest or cancel your deposit account withdrawal authorization. If the number of shares to be sold in the offering is increased to more than 23,143,750 shares or decreased to less than 14,875,000 shares, we will resolicit subscribers, and all funds delivered to us to purchase shares of common stock in the subscription and community offerings will be returned promptly with interest. Funds received in the subscription and the community offerings will be held in a segregated account at PCSB Bank and will earn interest at 0.10% per annum until completion or termination of the offering.

We expect our trustees and executive officers, together with their associates, to subscribe for an aggregate of 250,500 shares of common stock. They will pay the same $10.00 per share offering price as paid by all other persons who purchase shares in the offering.

Sandler O’Neill & Partners, L.P. is assisting us in selling the shares on a best efforts basis in the subscription and community offerings, and will serve as sole manager for any syndicated offering and firm commitment offering. Sandler O’Neill & Partners, L.P. is not required to purchase any shares of common stock that are sold in the subscription offering, community offering or syndicated community offering.

OFFERING SUMMARY

Price: $10.00 per Share

	Minimum		Midpoint		Maximum		Adjusted Maximum
Number of shares		14,875,000		17,500,000		20,125,000		23,143,750
Gross offering proceeds	$	148,750,000	$	175,000,000	$	201,250,000	$	231,437,500
Estimated offering expenses, excluding selling agent fees and expenses	$	1,721,000	$	1,721,000	$	1,721,000	$	1,721,000
Selling agent fees and expenses (1)	$	1,317,070	$	1,534,061	$	1,751,052	$	2,000,591
Estimated net proceeds	$	145,711,930	$	171,744,939	$	197,777,948	$	227,715,909
Estimated net proceeds per share	$	9.80	$	9.81	$	9.83	$	9.84

(1) Assumes all shares are sold in the subscription and community offerings with a selling agent fee of 0.90% payable on all shares other than those purchased by our insiders and by our employee stock ownership plan, for which no fee will be payable. A fee of 5.0% will be payable on any shares sold in a syndicated offering or firm commitment offering. See “Pro Forma Data” and “The Conversion and Offering—Plan of Distribution; Selling Agent Compensation” for information regarding compensation to be received by Sandler O’Neill & Partners, L.P. in the subscription and community offerings and the compensation to be received by Sandler O’Neill & Partners, L.P. and other participating broker-dealers in the syndicated offering or firm commitment offering. If all shares are sold in the syndicated offering or firm commitment offering, excluding those purchased by our insiders and by our employee stock ownership plan, for which no selling agent fee will be paid, the selling agent fees and expenses would be approximately $6.8 million, $8.0 million, $9.2 million and $10.6 million at the minimum, midpoint, maximum, and adjusted maximum of the offering range, respectively.

This investment involves a degree of risk, including the possible loss of principal.

See “Risk Factors” beginning on page 14.

Shares of our common stock are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or by any other government agency. Neither the Securities and Exchange Commission, the New York State Department of Financial Services, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

Sandler O’Neill + Partners, L.P.

For assistance, please contact the Stock Information Center at (        )             .

The date of this prospectus is             , 2017.

TABLE OF CONTENTS

	Page
SUMMARY		1
RISK FACTORS		14
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA		25
RECENT DEVELOPMENTS		28
FORWARD-LOOKING STATEMENTS		34
HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING		35
OUR DIVIDEND POLICY		37
MARKET FOR THE COMMON STOCK		37
HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE		38
CAPITALIZATION		40
PRO FORMA DATA		42
COMPARISON OF VALUATION AND PRO FORMA INFORMATION WITH AND WITHOUT THE CHARITABLE FOUNDATION		49
BUSINESS OF PCSB FINANCIAL CORPORATION		51
BUSINESS OF PCSB BANK		51
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		59
SUPERVISION AND REGULATION		90
TAXATION		102
MANAGEMENT		103
SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS		120
THE CONVERSION AND OFFERING		121
PCSB COMMUNITY FOUNDATION		139
RESTRICTIONS ON ACQUISITION OF PCSB FINANCIAL		142
DESCRIPTION OF CAPITAL STOCK OF PCSB FINANCIAL		148
TRANSFER AGENT		149
EXPERTS		149
LEGAL MATTERS		149
WHERE YOU CAN FIND ADDITIONAL INFORMATION		150
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF PCSB BANK		151

i

SUMMARY

The following summary explains material information in this prospectus, but it may not contain all of the information that is important to you. Before making an investment decision, you should read carefully this entire document, including the consolidated financial statements and the notes thereto and the section entitled “Risk Factors.” The terms “we,” “our,” and “us” refer to PCSB Financial and PCSB Bank, unless the context indicates another meaning.

PCSB Financial Corporation

PCSB Financial Corporation, a Maryland corporation, was incorporated in December 2016. The offering of common stock by means of this prospectus is being made by PCSB Financial in connection with the conversion of PCSB Bank from a mutual savings bank to a stock savings bank. Upon completion of the conversion, PCSB Financial will become the bank holding company for PCSB Bank by owning all of the outstanding shares of capital stock of PCSB Bank, and will be regulated by the Federal Reserve Board and the New York State Department of Financial Services (the “NYSDFS”). To date, PCSB Financial has engaged in organizational activities only. Following the conversion, PCSB Financial’s primary business activity will relate to owning all of the outstanding shares of capital stock of PCSB Bank.

PCSB Bank

PCSB Bank is a New York-chartered mutual savings bank that serves the banking needs of customers in the Lower Hudson Valley of New York State. We operate from our executive offices/headquarters and 15 banking offices located in Dutchess (3 offices), Putnam (3 offices), Rockland (1 office) and Westchester (8 offices) Counties, New York. Our primary business activity is attracting deposits from the general public and using those funds primarily to originate and purchase commercial real estate and business loans, originate one-to four-family loans and purchase investment securities. We are subject to comprehensive regulation and examination by the NYSDFS and by the Federal Deposit Insurance Corporation.

At September 30, 2016, we had consolidated total assets of $1.25 billion, total deposits of $1.12 billion and equity of $111.5 million. Our executive offices/headquarters are located at 2651 Strang Blvd., Suite 100, Yorktown Heights, NY 10598 and our main banking office is located at 2477 Route 6, Brewster, NY 10509. Our website address is www.pcsb.com. Information on our website is not and should not be considered a part of this prospectus.

From our founding in 1871 until 2012, we operated as a traditional savings bank. In 2012, we promoted Joseph D. Roberto to President and Chief Executive Officer. Under his leadership, we significantly upgraded our operations, controls and management and began to broaden our focus to serve businesses as well as individuals in our primary market area. Among other things, we have enhanced our commercial real estate and commercial business lending infrastructure and increased our commercial real estate and commercial business lending team from five to eleven individuals and our commercial credit review team from three to ten individuals.

Since 2012, we have assembled an experienced executive management team. In addition to the appointment of Mr. Roberto as President and Chief Executive Officer, we hired Scott Nogles as Chief Financial Officer, Richard Petrone as Chief Credit Officer and Michael Goldrick as Chief Loan Officer. In addition, in 2016, we hired Clifford Weber, an experienced banking lawyer, as General Counsel and Chief Risk Officer.

In April 2015, we acquired the former CMS Bank in White Plains, NY. At acquisition, CMS Bank had $267.1 million in total assets, operated five offices in southern Westchester County and maintained significant portfolios of commercial real estate and commercial business loans. Westchester County’s southern border is contiguous to the Bronx, which is the northern most borough of New York City. This acquisition expanded our geographical footprint into populous and economically vibrant areas of southern Westchester County, which offer significant opportunities for growth.

1

Our Current and Proposed Organizational Structures

The following diagram illustrates our current pre-conversion organizational structure:

The following diagram illustrates our proposed post-conversion organizational structure:

Business Strategy

Based on an extensive review of the current opportunities in our principal market area as well as our resources and capabilities, the Board has adopted the following business strategy:

• Focus on commercial lending. We believe that commercial lending offers an opportunity to enhance our profitability while managing credit, interest rate and operational risk. We intend to continue to expand our originations and, to a lesser extent, purchases of commercial real estate and commercial business loans in our primary market area. We anticipate that a majority of our commercial real estate loan originations will range in size from $500,000 to $10.0 million while a majority of our commercial business loan originations will range in size from $100,000 to $5.0 million.

• Expand banking activities in Southern Westchester County. Southern Westchester County is one of the more populous and economically vibrant areas of New York State. We intend to use our four offices in Southern Westchester County to expand both our commercial and retail activities in this market area. At the same time, we will remain committed to our other market areas and maintain a strong level of banking activities in these areas.

2

• Increase core deposits, including demand deposits. Deposits are our primary source of funds for lending and investment. We intend to focus on core deposits (which we define as all deposits except for certificates of deposit and municipal deposits), particularly non-interest bearing demand deposits, because they are the lowest cost funds and are less sensitive to withdrawal when interest rates fluctuate. Core deposits represented 67.0% of our total deposits at September 30, 2016. Going forward, we will seek to increase our core deposits through enhancing our commercial activities and deepening our relationships with our retail customers.

• Manage credit risk to maintain a low level of non-performing assets. We believe that strong asset quality is a key to long-term financial success. Our strategy for credit risk management focuses on an experienced team of credit professionals, well-defined credit policies and procedures, appropriate loan underwriting criteria and active credit monitoring. Our non-performing loans to total loans ratio was 1.14% at September 30, 2016.

• Balance Sheet Growth. As a result of our efforts to build our management and infrastructure, and given our attractive market area, we believe we are well-positioned to increase the size of our balance sheet without a proportional increase in overhead expense or operating risk. Accordingly, we intend to increase, on a managed basis, our assets and liabilities, particularly loans and deposits.

Reasons for the Conversion

Our primary reasons for converting and raising additional capital through the offering are to:

• Enhance our capital base to support continued growth on a prudent basis. We intend to continue to grow our franchise, both organically and through strategic transactions as opportunities arise, on a prudent basis. While we currently exceed all regulatory capital requirements, the offering proceeds will strengthen our capital position and support our planned growth. In addition, the offering proceeds will enhance our lending capacity by increasing our legal lending limit and we intend to increase our internal lending limits. We believe this increased capacity will improve our competitive position relative to the many larger banks operating in our market area.

• Offer our depositors, employees and trustees an equity ownership interest in PCSB Bank. We believe that offering stock to our depositors will provide them with an economic interest in our future success should they decide to invest. The offering will also further enable us to attract and retain trustees, management and employees through various stock-based benefit plans, including an employee stock ownership plan and one or more equity incentive plans.

• Support our local communities through establishing and funding a charitable foundation. The contribution to the charitable foundation will complement our existing charitable activities, and should enable the communities that we serve to share in our long-term growth.

• Facilitate future mergers and acquisitions, if available, on a prudent basis. Although we do not currently have any understandings or agreements regarding any specific transactions, the additional capital raised in the offering may be used to finance mergers with, and acquisitions of, other financial institutions, asset portfolios and branch offices when and if attractive opportunities arise.

Terms of the Offering

We are offering between 14,875,000 and 20,125,000 shares of common stock in a subscription offering to eligible depositors of PCSB Bank and to our tax-qualified employee benefit plans, and, to the extent shares remain

3

available, to the general public in a community offering. If necessary, we will also offer shares to the general public in a syndicated offering or a firm commitment offering. The number of shares of common stock to be sold may be increased to up to 23,143,750 shares as a result of demand for the shares of common stock in the offering or changes in market conditions. Unless the number of shares of common stock to be offered is increased to more than 23,143,750 shares or decreased to fewer than 14,875,000 shares, or the subscription and community offerings are extended beyond             , 2017, subscribers will not have the opportunity to change or cancel their stock orders once submitted. If the subscription and community offerings are extended past             , 2017, all subscribers will be notified and given an opportunity to confirm, change or cancel their orders. If you do not respond to this notice, your order will be cancelled and we will promptly return your funds with interest at 0.10% per annum or cancel your deposit account withdrawal authorization. If the number of shares to be sold is increased to more than 23,143,750 shares or decreased to less than 14,875,000 shares, all subscribers’ stock orders will be canceled, all withdrawal authorizations will be canceled and funds delivered to us to purchase shares of common stock in the subscription and community offerings will be returned promptly with interest at the same rate. We will then resolicit subscribers, giving them an opportunity to place new orders for a period of time. No shares purchased in the subscription offering and community offering will be issued until the completion of any syndicated offering or firm commitment offering.

The purchase price of each share of common stock offered for sale in the offering is $10.00. All investors will pay the same purchase price per share, regardless of whether the shares are purchased in the subscription offering, the community offering, the syndicated offering or the firm commitment offering. Investors will not be charged a commission to purchase shares of common stock in the offering. Sandler O’Neill & Partners, L.P., our marketing agent in the subscription and community offerings, will use its best efforts to assist us in selling shares of our common stock in the subscription and community offerings but is not obligated to purchase any shares of common stock in the subscription and community offerings.

How We Determined the Offering Range and the $10.00 per Share Offering Price

The amount of common stock we are offering for sale is based on an independent appraisal of the estimated market value of PCSB Financial, assuming the offering has been completed and the charitable foundation has been established and the contribution of shares of common stock and cash to it has been made. RP Financial, LC., our independent appraiser, has estimated that, at November 11, 2016 and as updated as of January 20, 2017, and assuming we were undertaking the offering, this market value, including the shares to be issued to the charitable foundation, was $178.3 million. Based on applicable regulations, this market value forms the midpoint of a valuation range with a minimum of $151.6 million and a maximum of $205.1 million. Based on this valuation range and the offering price of $10.00 per share, PCSB Financial is offering for sale a range of shares of common stock, from 14,875,000 shares to 20,125,000 shares. The $10.00 per share price was selected primarily because it is the price most commonly used in mutual-to-stock conversion transactions undertaken by financial institutions. If demand for shares or market conditions warrant, the appraisal can be increased by up to 15%, which would result in an appraised value of $235.8 million, and we may sell up to 23,143,750 shares of common stock.

RP Financial advised the board of directors that the appraisal was prepared in conformance with the regulatory appraisal methodology, which requires a valuation based on an analysis of the trading prices of comparable public companies whose stock have traded for at least one year prior to the valuation date. RP Financial selected a group of 10 comparable public companies for this analysis.

RP Financial considered adjustments to the pro forma market value based on a comparison of PCSB Financial with the peer group. RP Financial advised the board of directors that the valuation conclusion took into consideration that relative to the peer group slight upward adjustments were applied for: (i) financial condition; and (ii) primary market area. RP Financial made a moderate downward adjustment for profitability growth and viability of earnings, and made no adjustments for: (i) asset growth; (ii) dividends; (iii) liquidity of the shares; (iv) marketing of the issue; (v) management; and (vi) effect of government regulations and regulatory reform.

4

The appraisal is based in part on PCSB Bank’s financial condition and results of operations, the pro forma effect of the additional capital raised by the sale of shares of common stock in the offering, and an analysis of a peer group of 10 publicly-traded bank holding companies and savings and loan holding companies that RP Financial considers comparable to PCSB Financial. The appraisal peer group consists of the following companies, all of which are traded on the Nasdaq Stock Market.

Company Name	Ticker Symbol	Headquarters	Total Assets at September 30, 2016
			(In millions)
BSB Bancorp, Inc.	BLMT	Belmont, MA	$	2,074
Clifton Bancorp, Inc.	CSBK	Clifton, NJ	$	1,312
ESSA Bancorp, Inc.	ESSA	Stroudsburg, PA	$	1,772
First Capital, Inc.	FCAP	Corydon, IN	$	742
HMN Financial, Inc.	HMNF	Rochester, MN	$	686
Malvern Bancorp, Inc.	MLVF	Paoli, PA	$	821
Pathfinder Bancorp, Inc.	PBHC	Oswego, NY	$	717
SI Financial Group, Inc.	SIFI	Willimantic, CT	$	1,538
Waterstone Financial, Inc.	WSBF	Wauwatosa, WI	$	1,795
Wellesley Bancorp, Inc.	WEBK	Wellesley, MA	$	666

The following table presents a summary of selected pricing ratios for PCSB Financial (on a pro forma basis) at and for the 12-months ended December 31, 2016, and for the peer group companies based on earnings and other information at and for the 12-months ended September 30, 2016, with stock prices at January 20, 2017, as reflected in the appraisal report. Compared to the average pricing of the peer group, our pro forma pricing ratios at the midpoint of the offering range indicated a discount of 44.8% on a price-to-book value basis, a discount of 45.6% on a price-to-tangible book value basis and a premium of 306.5% on a price-to-earnings basis.

	Price-to-earnings multiple (1)			Price-to-book value ratio			Price-to-tangible book value ratio
PCSB Financial (pro forma assuming completion of offering) (2)
Adjusted Maximum		128.83	x		75.30	%		76.92	%
Maximum		100.96	x		71.58	%		73.31	%
Midpoint		80.85	x		67.75	%		69.54	%
Minimum		63.68	x		63.21	%		65.02	%
Valuation of peer group companies (historical)
Averages		19.89	x		122.77	%		127.76	%
Medians		21.34	x		121.20	%		124.13	%

(1) Price-to-earnings multiples calculated by RP Financial are based on an estimate of “core” or recurring earnings. These ratios are different than those presented in “Pro Forma Data.”

(2) Pro forma pricing rates for PCSB Financial are based on pro forma data at and for the 12-months ended December 31, 2016, and are different than the pro forma pricing ratios presented in “Pro Forma Data”.

The pro forma calculations for PCSB Financial are based on the following assumptions:

• A number of shares equal to 8% of the shares sold in the offering and contributed to the charitable foundation are purchased by the employee stock ownership plan, with the expense to be amortized over 15 years;

• A number of shares equal to 4% of the shares sold in the offering and contributed to the charitable foundation are purchased by a stock-based benefit plan, with the expense to be amortized over five years; and

5

• A number of options equal to 10% of the shares sold in the offering and contributed to the charitable foundation are granted under a stock-based benefit plan, with option expense of $2.34 per option amortized over five years.

The independent appraisal does not indicate trading market value. Do not assume or expect that our valuation as indicated in the appraisal means that after the offering the shares of our common stock will trade at or above the $10.00 per share price. Furthermore, RP Financial used the pricing ratios presented in the appraisal to estimate our pro forma appraised value for regulatory purposes and not to compare the relative value of shares of our common stock with the value of the capital stock of the peer group. The value of the capital stock of a particular company may be affected by a number of factors such as financial performance, asset size and market location.

For a more complete discussion of the amount of common stock we are offering for sale and the independent appraisal, see “The Conversion and Offering—Stock Pricing and Number of Shares to be Issued.”

How We Intend to Use the Proceeds from the Offering

We intend to invest at least 50% of the net proceeds from the offering in PCSB Bank, fund the loan to our employee stock ownership plan to finance its purchase of shares of common stock in the offering, contribute up to $2.2 million to the charitable foundation and retain the remainder of the net proceeds at PCSB Financial.

Assuming we sell 17,500,000 shares of common stock in the offering at the midpoint of the offering range, resulting in estimated net proceeds of $171.7 million, we intend to invest $85.9 million in PCSB Bank, lend $14.3 million to our employee stock ownership plan to fund its purchase of shares of common stock (which may include, subject to market conditions, open market purchases after the completion of the conversion and offering if the employee stock ownership plan is unable to purchase its shares in the subscription offering due to an oversubscription by our eligible account holders), use approximately $1.7 million of the net proceeds to fund the cash contribution to the charitable foundation and retain the remaining $69.9 million of the net proceeds at PCSB Financial. Assuming we sell 23,143,750 shares of common stock in the offering at the adjusted maximum of the offering range, resulting in estimated net proceeds of $227.7 million, we intend to invest $113.9 million in PCSB Bank, lend $18.9 million to our employee stock ownership plan to fund its purchase of shares of common stock, use approximately $603,000 of the net proceeds to fund the cash contribution to the charitable foundation and retain the remaining $94.4 million of the net proceeds at PCSB Financial.

PCSB Financial may use the funds it retains for investment, to repurchase shares of common stock, to acquire other financial institutions or financial services companies, to pay cash dividends and for other general corporate purposes. PCSB Bank may use the proceeds it receives to support increased lending and investment or to acquire other financial institutions or financial services companies. We do not currently have any agreement or understanding regarding any acquisition transaction.

See “How We Intend to Use the Proceeds from the Offering” for more information on the proposed use of the proceeds from the offering.

Persons Who May Order Shares of Common Stock in the Offering

We are offering the shares of common stock in a subscription offering in the following descending order of priority:

(i) To depositors with deposit account(s) at PCSB Bank with aggregate balances of at least $100.00 at the close of business on September 30, 2015.

(ii) To our tax-qualified employee benefit plans (including PCSB Bank’s employee stock ownership plan and its 401(k) plan), which may subscribe for, in the aggregate, up to 10% of the shares of common stock sold in the offering and contributed to the charitable foundation. We expect our employee stock ownership plan to purchase 8% of the shares of common stock sold in the offering and contributed to the charitable foundation.

6

(iii) To depositors (other than officers and trustees of PCSB Bank, and their associates) with deposit account(s) at PCSB Bank with aggregate balances of at least $100.00 at the close of business on             , 2016, who are not eligible in the first priority.

Shares of common stock not purchased in the subscription offering may be offered for sale to the general public in a community offering, with a preference given first to natural persons residing in Dutchess, Putnam, Rockland and Westchester Counties in New York. The community offering may begin concurrently with, during or promptly after the subscription offering. We also may offer for sale shares of common stock not purchased in the subscription offering and the community offering through a syndicated offering or a firm commitment offering. Sandler O’Neill & Partners, L.P. will act as sole manager for the syndicated offering or firm commitment offering. We have the right to accept or reject, in our sole discretion and reasonably consistent with achieving a reasonably wide distribution of the common stock, orders received in the community offering or syndicated offering, and our interpretation of the terms and conditions of the plan of conversion will be final. Any determination to accept or reject stock orders in the community offering or syndicated offering will be based on the facts and circumstances then available to us.

If we receive orders for more shares than we are offering, we may not be able to fully or partially fill your order. See “The Conversion and Offering” for a detailed description of the subscription offering, the community offering, the syndicated offering and the firm commitment offering, as well as a discussion regarding allocation procedures.

Limits on How Much Common Stock You May Purchase

The minimum number of shares of common stock that may be purchased is 25 shares.

Generally, no individual may purchase more than 20,000 shares ($200,000) of common stock. If any of the following persons purchase shares of common stock, their purchases, in all categories of the offering, when combined with your purchases, cannot exceed 30,000 shares ($300,000) of common stock:

• most companies, trusts or other entities in which you are a senior officer, partner, trustee or have a substantial beneficial interest; or

• your spouse or any relative of you or your spouse living in your house or who is a director, trustee, or officer of PCSB Financial or PCSB Bank; or

• other persons who may be your associates or persons acting in concert with you.

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying deposit accounts registered to the same address will be subject to the overall purchase limitation of 30,000 shares ($300,000).

Subject to regulatory approval, we may increase or decrease the purchase limitations at any time. See “The Conversion and Offering—Additional Limitations on Common Stock Purchases.”

7

How You May Purchase Shares of Common Stock in the Subscription Offering and the Community Offering

In the subscription offering and community offering, you may pay for your shares only by:

(i) personal check, bank check or money order made payable to PCSB Financial Corporation; or

(ii) authorizing us to withdraw available funds from your deposit account(s) at PCSB Bank.

PCSB Bank is prohibited from lending funds to anyone to purchase shares of common stock in the offering. Additionally, you may not use a line of credit check from PCSB Bank or any type of third party check (such as a check payable to you and endorsed over to PCSB Financial) to pay for shares of common stock. Do not submit cash. No wire transfer will be accepted without our prior approval. You may not authorize direct withdrawal from an individual retirement account (“IRA”) at PCSB Bank. See “—Using Individual Retirement Account Funds to Purchase Shares of Common Stock.”

You may subscribe for shares of common stock in the subscription and community offerings by delivering a signed and completed original stock order form, together with full payment payable to PCSB Financial Corporation or authorization to withdraw funds from one or more of your deposit accounts at PCSB Bank, provided that we receive your stock order form before 5:00 p.m., Eastern Time, on             , 2017, which is the end of the subscription offering period. You may submit your stock order form and payment by mail using the stock order reply envelope provided or by overnight delivery to our Stock Information Center, which is located at 2651 Strang Blvd., Suite 100, Yorktown Heights, NY 10598. You may also hand-deliver stock order forms to the Stock Information Center. We will accept hand-delivered stock order forms only at this location. We will not accept stock order forms at our banking offices. Do not mail stock order forms to any of PCSB Bank’s banking offices.

See “The Conversion and Offering—Procedure for Purchasing Shares in Subscription and Community Offerings—Payment for Shares” for a complete description of how to purchase shares in the subscription and community offerings.

Using IRA Funds to Purchase Shares of Common Stock

You may be able to subscribe for shares of common stock using funds in your IRA. If you wish to use some or all of the funds in an IRA at PCSB Bank, the applicable funds must be transferred to a self-directed account maintained by an independent trustee, such as a brokerage firm, and the purchase must be made through that account. If you do not have such an account, you will need to establish one before placing your stock order. A one-time and/or annual administrative fee may be payable to the independent trustee. Because individual circumstances differ and the processing of retirement fund orders takes additional time, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the             , 2017 offering deadline, for assistance with purchases using your IRA or other retirement account you may have at PCSB Bank or elsewhere. Whether you may use such funds to purchase shares in the offering may depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

See “The Conversion and Offering—Procedure for Purchasing Shares in Subscription and Community Offerings—Payment for Shares” and “—Using Individual Retirement Account Funds.”

Market for Common Stock

We expect that our common stock will be traded on the Nasdaq Capital Market under the symbol “PCSB.” Sandler O’Neill & Partners, L.P. has advised us that it intends to make a market in our common stock following the offering, but is not obligated to do so.

8

Our Dividend Policy

Following completion of the conversion and offering, our board of directors will have the authority to declare dividends on our shares of common stock, subject to statutory and regulatory requirements. We currently intend to pay quarterly cash dividends but have not determined the amount or when payment would start. For information regarding our proposed dividend policy, see “Our Dividend Policy.”

Stock Purchases by Trustees and Executive Officers

We expect our trustees and executive officers, together with their associates, to subscribe for 250,500 shares of common stock in the offering, representing 1.7% of shares to be outstanding at the minimum of the offering range and 1.2% of shares to be sold in the offering at the maximum of the offering range. They will pay the same $10.00 per share price that will be paid by all other persons who purchase shares of common stock in the offering. See “Subscriptions by Directors and Executive Officers.”

Deadline for Orders of Shares of Common Stock in the Subscription and Community Offerings

The deadline for ordering shares of common stock in the subscription and community offerings is 5:00 p.m., Eastern Time, on             , 2017, unless we extend this deadline. If you wish to order shares of common stock, a properly completed and signed original stock order form, together with full payment, must be received (not postmarked) by this time.

Although we will make reasonable attempts to provide this prospectus and offering materials to holders of subscription rights, the subscription offering and all subscription rights will expire at 5:00 p.m., Eastern Time, on             , 2017, whether or not we have been able to locate each person entitled to subscription rights.

See “The Conversion and Offering— Procedure for Purchasing Shares in Subscription and Community Offerings—Expiration Date” for a complete description of the deadline for ordering shares in the offering.

You May Not Sell or Transfer Your Subscription Rights

Applicable regulations prohibit you from transferring your subscription rights. If you order shares of common stock in the subscription offering, you must sign a written certification that you are purchasing the common stock for yourself and that you have no agreement or understanding to sell or transfer your subscription rights or the shares that you are purchasing. We intend to take legal action, including reporting persons to federal or state agencies, against anyone who we believe has sold or transferred his or her subscription rights. We will not accept your order if we have reason to believe that you have sold or transferred your subscription rights. On the order form, you cannot add the names of other individuals for joint stock registration unless they are also named on the qualifying deposit account, and you cannot delete names of other individuals except in the case of certain orders placed through an IRA, Keogh, 401(k) or similar plan or unless a named eligible depositor has died. Doing so may jeopardize your subscription rights. In addition, the stock order form requires that you list all deposit accounts, giving all names on each account and the account number at the applicable eligibility date. Failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your share allocation if there is an oversubscription.

Delivery of Shares of Common Stock

All shares of common stock sold will be issued in book entry form. Stock certificates will not be issued. A statement reflecting ownership of shares of common stock issued in the subscription and community offerings will be mailed by our transfer agent to the persons entitled thereto at the registration address noted by them on their stock order forms as soon as practicable following consummation of the offering. We expect trading in the stock to begin on the day of completion of the offering or the next business day. The offering is expected to be completed as soon as practicable following satisfaction of the conditions described below in “—Conditions to Completion of the Conversion.” Until a statement reflecting ownership of shares of common stock is available and delivered to

9

purchasers, purchasers might not be able to sell the shares of common stock that they purchased, even though the common stock will have begun trading. Your ability to sell your shares of common stock before receiving your statement will depend on arrangements you may make with a brokerage firm.

Conditions to Completion of the Conversion

We cannot complete the conversion and offering unless:

• The plan of conversion is approved by the required votes of the depositors of PCSB Bank at a special meeting of depositors to be held on             , 2017;

• We receive orders for at least the minimum number of shares of common stock offered in the offering;

• We receive final regulatory approval from the NYSDFS, the Federal Reserve Board and the Federal Deposit Insurance Corporation to complete the conversion and offering.

Steps We May Take if We Do Not Receive Orders for the Minimum Number of Shares

If we do not receive orders for at least 14,875,000 shares of common stock, we may take several steps in order to sell the minimum number of shares of common stock in the offering range. Specifically, we may:

(i) increase the purchase and ownership limitations; and/or

(ii) seek regulatory approval to extend the offering beyond             , 2017, so long as we resolicit subscribers who previously submitted subscriptions in the offering.

If we extend the offering past             , 2017, all subscribers will be notified and given an opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will cancel your stock order and promptly return your funds with interest at 0.10% per annum for funds received in the subscription and community offering or cancel your deposit account withdrawal authorization. If one or more purchase limitations are increased, subscribers in the subscription offering who ordered the maximum amount will be given the opportunity to increase their subscriptions up to the then-applicable limit.

Possible Change in the Offering Range

RP Financial will update its appraisal before we complete the offering. If, as a result of demand for the shares or changes in market conditions, RP Financial determines that our pro forma market value has increased, we may sell up to 23,143,750 shares in the offering without further notice to you. If, however, the updated appraisal indicates our pro forma market value is either below $151.6 million or above $235.8 million, then, after consulting with the Federal Deposit Insurance Corporation and the NYSDFS, we may:

• terminate the offering and promptly return all funds (with interest paid on funds received in the subscription and community offerings);

• set a new offering range; or

• take such other actions as may be permitted by the Federal Deposit Insurance Corporation, the NYSDFS and the Securities and Exchange Commission.

If we set a new offering range, we will promptly return funds, with interest at 0.10% per annum for funds received for purchases in the subscription and community offerings, and cancel any authorization to withdraw funds from deposit accounts for the purchase of shares of common stock. We will then resolicit subscribers, allowing them to place a new stock order for a period of time.

10

Possible Termination of the Offering

We may terminate the offering at any time with regulatory approval. If we terminate the offering, we will promptly return your funds with interest at 0.10% per annum, and we will cancel deposit account withdrawal authorizations.

Our Contribution of Shares of Common Stock to the Charitable Foundation

To further our commitment to our local community, we intend to establish and fund a charitable foundation as part of the conversion and offering. Assuming we receive regulatory approval, we intend to contribute to the charitable foundation a number of shares of our common stock equal to 1.9% of the shares sold in the offering and an amount of cash so that the total contribution will equal $5.0 million, based on the offering price of $10.00 per share. At the minimum, midpoint, maximum and adjusted maximum of the offering range, we would contribute to the charitable foundation 282,625, 332,500, 382,375 and 439,731 shares of common stock and approximately $2.2 million, $1.7 million, $1.2 million and $603,000 in cash, respectively. As a result of the contribution, we expect to record an after-tax expense of approximately $3.3 million during the quarter in which the conversion and offering is completed.

The charitable foundation will be dedicated exclusively to supporting charitable causes and community development activities in the communities in which we operate. The contribution of common stock and cash to the charitable foundation will:

• with respect to the contribution of shares of common stock, dilute the voting interests of purchasers of shares of our common stock in the offering; and

• result in an expense, and a reduction in capital, during the quarter in which the contribution is made, equal to the full amount of the contribution to the charitable foundation, offset in part by a corresponding tax benefit.

The amount of common stock that we would offer for sale would be greater if the offering were to be completed without the establishment and funding of the charitable foundation. For a further discussion of the financial impact of the charitable foundation, including its effect on those who purchase shares in the offering, see “Risk Factors—The contribution to the charitable foundation will dilute your ownership interest and adversely affect net income in 2017”, “Risk Factors—Our contribution to the charitable foundation may not be tax deductible, which could reduce our profits”, “Comparison of Valuation and Pro Forma Information With and Without the Charitable Foundation” and “PCSB Community Foundation.”

Benefits to Management and Potential Dilution to Shareholders Resulting from the Offering

We expect our employee stock ownership plan, which is a tax-qualified retirement plan for the benefit of all employees of PCSB Bank, to purchase up to 8% of the shares of common stock we sell in the offering. If market conditions warrant, in the judgment of its trustees, the employee stock ownership plan’s subscription order will not be filled and the employee stock ownership plan may elect to purchase shares in the open market following the completion of the offering, subject to the approval of the NYSDFS and the Federal Deposit Insurance Corporation.

We intend to implement one or more new stock-based benefit plans no earlier than six months after completion of the offering. Shareholder approval of these plans would be required. We have not determined whether we will adopt the plans within 12 months following the completion of the offering or more than 12 months following the completion of the offering. If we implement stock-based benefit plans within 12 months following the completion of the offering, the stock-based benefit plans would reserve a number of shares (i) up to 4% of the shares of common stock sold in the offering and contributed to the charitable foundation, for awards of restricted stock to

11

key employees and directors, at no cost to the recipients, and (ii) up to 10% of the shares of common stock sold in the offering and contributed to the charitable foundation, for issuance pursuant to the exercise of stock options by key employees and directors. These percentage limitations are required by Federal Deposit Insurance Corporation regulations and NYSDFS regulations. If the stock-based benefit plans are adopted more than 12 months after the completion of the offering, they would not be subject to the percentage limitations set forth above.

The following table summarizes the number of shares of common stock and the aggregate dollar value of grants that are available under one or more stock-based benefit plans if such plans reserve for restricted stock awards and stock options, respectively, a number of shares of common stock equal to 4% and 10% of the shares sold in the offering and contributed to our charitable foundation. The table shows the dilution to shareholders if all such shares are issued from authorized but unissued shares, instead of shares purchased in the open market. The table also sets forth the number of shares of common stock to be acquired by the employee stock ownership plan for allocation to all qualifying employees.

	Number of Shares to be Granted or Purchased													Value of Grants (In thousands) (1)
	At Minimum of Offering Range		At Adjusted Maximum of Offering Range		As a Percentage of Common Stock to be Sold in the Offering and Contributed to the Charitable Foundation			As a Percentage of Common Stock to be Outstanding			Dilution Resulting From Issuance of Shares for Stock-Based Benefit Plans			At Minimum of Offering Range		At Adjusted Maximum of Offering Range
Employee stock ownership plan		1,212,610		1,886,679		8.00	%		8.00	%		0.00	%	$	12,126	$	18,867
Restricted stock awards		606,305		943,339		4.00			4.00			3.85	%		6,063		9,433
Stock options		1,515,763		2,358,348		10.00			10.00			9.09	%		3,547		5,519
Total		3,334,678		5,188,366		22.00	%		22.00	%		12.28	%	$	21,736	$	33,819

(1) The actual value of restricted stock awards will be determined based on their fair value at the date of grant. For purposes of this table, fair value for stock awards is assumed to be the same as the offering price of $10.00 per share. The fair value of stock options has been estimated at $2.34 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option exercise price of $10.00; an expected option term of 10 years; no dividend yield; a risk-free rate of return of 1.60%; and expected volatility of 12.81%. The actual value of option grants will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used and the option pricing model ultimately adopted.

(2) No dilution is reflected for the employee stock ownership plan because such shares are assumed to be purchased in the offering.

Tax Consequences

PCSB Financial and PCSB Bank have received an opinion of counsel, Luse Gorman, PC, regarding the material federal income tax consequences, and have received the opinion of Crowe Horwath LLP regarding the material New York State income tax consequences, of the conversion and offering. As a general matter, the conversion and offering will not be a taxable transaction for purposes of federal or state income taxes to PCSB Financial, PCSB Bank or persons eligible to subscribe for shares of stock in the subscription offering.

Emerging Growth Company Status

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012. For as long as we so qualify we exempt ourselves from various reporting requirements applicable to other public companies but not to emerging growth companies. See “Risk Factors—We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors” and “Supervision and Regulation—Emerging Growth Company Status.”

An emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. We have instead elected to comply with new or amended accounting pronouncements in the same manner as a public company.

12

How You Can Obtain Additional Information—Stock Information Center

Our banking personnel may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the conversion and offering, call our Stock Information Center at (        )             . The Stock Information Center is open Monday through Friday between 10:00 a.m. and 4:00 p.m., Eastern Time. The Stock Information Center will be closed on weekends and bank holidays.

13

RISK FACTORS

You should consider carefully the following risk factors in evaluating an investment in the shares of our common stock.

Risks Related to Our Business

Our emphasis on commercial real estate and commercial business lending involves risks that could adversely affect our financial condition and results of operations.

We intend to continue to originate and purchase commercial real estate and commercial business loans. At September 30, 2016, our commercial real estate and commercial business loans totaled $458.5 million, or 59.8% of our loan portfolio. While these types of loans are potentially more profitable than residential mortgage loans, they are generally more sensitive to regional and local economic conditions, making loss levels more difficult to predict. These loans also generally have relatively large balances to single borrowers or related groups of borrowers. Accordingly, any charge-offs may be larger on a per loan basis than those incurred with our residential or consumer loan portfolios. See “Business of PCSB Bank—Loan Underwriting Risks.”

The level of our commercial real estate loan portfolio subjects us to additional regulatory scrutiny.

The Federal Deposit Insurance Corporation and the other federal bank regulatory agencies have promulgated joint guidance on sound risk management practices for financial institutions with concentrations in commercial real estate lending. Under the guidance, a financial institution that, like us, is actively involved in commercial real estate lending should perform a risk assessment to identify concentrations. A financial institution may have a concentration in commercial real estate lending if, among other factors, (i) total reported loans for construction, land acquisition and development, and other land represent 100% or more of total risk-based capital, or (ii) total reported loans secured by multi-family and non-owner occupied, non-farm, non-residential properties, loans for construction, land acquisition and development and other land, and loans otherwise sensitive to the general commercial real estate market, including loans to commercial real estate related entities, represent 300% or more of total risk-based capital. Based on these factors we have a concentration in loans of the type described in (ii), above, which represents 321% of our total risk-based capital at September 30, 2016. The purpose of the guidance is to assist banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. The guidance states that management should employ heightened risk management practices including board and management oversight and strategic planning, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing. Our bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance that may result in additional costs to us or that may result in a curtailment of our multi-family and commercial real estate lending and/or the requirement that we maintain higher levels of regulatory capital, either of which would adversely affect our loan originations and profitability.

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

We maintain an allowance for loan losses, which is established through a provision for loan losses that represents management’s best estimate of probable incurred losses within the existing portfolio of loans. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. In determining the adequacy of the allowance for loan losses, we rely on our experience and our evaluation of economic conditions. If our assumptions prove to be incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio and adjustment may be necessary to allow for different economic conditions or adverse developments in our loan portfolio. Consequently, a problem with one or more loans could require us to significantly increase the level of our provision for loan losses. In addition, federal and state regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs. Material additions to the allowance would materially decrease our net income.

14

A worsening of economic conditions could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could have an adverse effect on our results of operations.

Unlike larger financial institutions that are more geographically diversified, our profitability depends primarily on the general economic conditions in our primary market area. Local economic conditions have a significant impact on our residential real estate, commercial real estate, construction and consumer loans, the ability of the borrowers to repay these loans and the value of the collateral securing these loans.

Deterioration in economic conditions could result in the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations:

• demand for our products and services may decline;

• loan delinquencies, problem assets and foreclosures may increase;

• collateral for loans, especially real estate, may decline in value, in turn reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans;

• the value of our securities portfolio may decline; and

• the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.

Moreover, a significant decline in general economic conditions, caused by inflation, recession, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, unemployment or other factors beyond our control could further impact these local economic conditions and could further negatively affect the financial results of our banking operations. In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.

A continuation of the historically low interest rate environment may hurt our net interest income and operating results.

During the past seven years it has been the policy of the Federal Reserve Board to maintain interest rates at historically low levels through its targeted federal funds rate and the purchase of mortgage-backed securities. As a result, market rates on the loans we have originated and the yields on securities we have purchased have been at lower levels than available before 2008. As a general matter, our interest-bearing liabilities reprice or mature more quickly than our interest-earning assets, which can lower interest expense as interest rates decrease. However, our ability to lower our interest expense will be limited at these interest rate levels while the average yield on our interest-earning assets may continue to decrease. Although the Federal Reserve Board has increased interest rates recently, market interest rates are still at historically low levels. A continuation of a low interest rate environment may adversely affect our net interest income, which in turn would likely have an adverse effect on our profitability.

Changes in interest rates could hurt our profits.

Our profitability, like that of most financial institutions, depends to a large extent upon our net interest income, which is the difference between our interest income on interest-earning assets, such as loans and securities, and our interest expense on interest-bearing liabilities, such as deposits and borrowed funds. Accordingly, our results of operations depend largely on movements in market interest rates and our ability to manage our interest-rate-sensitive assets and liabilities in response to these movements. Factors such as inflation, recession and instability in financial markets, among other factors beyond our control, may affect interest rates.

15

If interest rates rise, and if rates on our deposits reprice upwards faster than the rates on our long-term loans and investments, we would experience compression of our interest rate spread, which would have a negative effect on our profitability. Furthermore, increases in interest rates may adversely affect the ability of our borrowers to make loan repayments on adjustable-rate loans, as the interest owed on such loans would increase as interest rates increase. Conversely, decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce their borrowing costs. Under these circumstances, we are subject to reinvestment risk as we may have to redeploy such loan or securities proceeds into lower-yielding assets, which might also negatively impact our income. If interest rates rise, we expect that our net portfolio value of equity would decrease. Net portfolio value of equity represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. At September 30, 2016, and assuming a 400 basis point increase in market interest rates, we estimate that our net portfolio value of equity would decrease by $45.7 million, or 28.92%. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk—Net Portfolio Value Simulation.”

Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. While we pursue an asset/liability strategy designed to mitigate our risk from changes in interest rates, changes in interest rates can still have a material adverse effect on our financial condition and results of operations. Changes in the level of interest rates also may negatively affect our ability to originate real estate loans, the value of our assets and our ability to realize gains from the sale of our assets, all of which ultimately affect our earnings. Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our balance sheet or projected operating results. For further discussion of how changes in interest rates could impact us, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk.”

Changes in the valuation of our securities portfolio could hurt our profits and reduce our capital levels.

Our securities portfolio may be impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. Management evaluates securities for other-than-temporary impairment on a quarterly basis, with more frequent evaluation for selected issues. In analyzing a debt issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reports and, to a lesser extent given the relatively insignificant levels of depreciation in our debt portfolio, spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates. In analyzing an equity issuer’s financial condition, management considers industry analysts’ reports, financial performance and projected target prices of investment analysts within a one-year time frame. If this evaluation shows impairment to the actual or projected cash flows associated with one or more securities, a potential loss to earnings may occur. Changes in interest rates can also have an adverse effect on our financial condition, as our available-for-sale securities are reported at their estimated fair value, and therefore are impacted by fluctuations in interest rates. We increase or decrease our shareholders’ equity by the amount of change in the estimated fair value of the available-for-sale securities, net of taxes. Declines in market value could result in other-than-temporary impairments of these assets, which would lead to accounting charges that could have a material adverse effect on our net income and capital levels. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Securities Portfolio.”

Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations.

We are subject to extensive regulation, supervision and examination by our banking regulators. Such regulation and supervision governs the activities in which an institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of PCSB Bank rather than for holders of our common stock. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and

16

determination of the level of our allowance for loan losses. These regulations, along with the currently existing tax, accounting, securities, deposit insurance, monetary laws, rules, standards, policies, and interpretations control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations. Further, changes in accounting standards can be both difficult to predict and involve judgment and discretion in their interpretation by us and our independent accounting firms. These changes could materially impact, potentially retroactively, how we report our financial condition and results of operations as could our interpretation of those changes.

Strong competition within our market area could hurt our profits and slow growth.

We face intense competition in making loans and attracting deposits. Price competition for loans and deposits sometimes results in us charging lower interest rates on our loans and paying higher interest rates on our deposits and may reduce our net interest income. Competition also makes it more difficult and costly to attract and retain qualified employees. Many of the institutions with which we compete have substantially greater resources and lending limits than we have and may offer services that we do not provide. Our competitors often aggressively price loan and deposit products when they enter into new lines of business or new market areas. If we are not able to effectively compete in our market area, our profitability may be negatively affected. The greater resources and broader offering of deposit and loan products of some of our competitors may also limit our ability to increase our interest-earning assets. For more information about our market area and the competition we face, see “Business of PCSB Bank—Market Area” and “—Competition.”

We have become subject to more stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares.

In July 2013, the federal banking agencies approved a new rule that has substantially amended regulatory risk-based capital rules. The final rule implements the regulatory capital reforms from the Basel Committee on Banking Supervision (“Basel III”) and changes required by the Dodd-Frank Act.

The final rule includes new minimum risk-based capital and leverage ratios, which were effective for us on January 1, 2015, and refines the definition of what constitutes “capital” for purposes of calculating these ratios. The new minimum capital requirements are: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from prior rules); and (iv) a Tier 1 leverage ratio of 4%. The final rule also requires unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt-out is exercised. We have elected to exercise our one-time option to opt-out of the requirement under the final rule to include certain “available-for-sale” securities holdings for purposes of calculating our regulatory capital requirements. The final rule also establishes a “capital conservation buffer” of 2.5%, and, when fully phased in, will result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 to risk-based assets capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement has been phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase each year until fully implemented in January 2019. An institution will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations will establish a maximum percentage of eligible retained income that can be utilized for such actions.

We have analyzed the effects of these new capital requirements, and we believe that, upon completion of the offering, we would meet all of these new requirements, including the full 2.5% capital conservation buffer, as if these new requirements had been in effect since September 30, 2016.

The application of more stringent capital requirements could, among other things, result in lower returns on equity, require the raising of additional capital, and result in regulatory actions if we were to be unable to comply with such requirements. Furthermore, the imposition of liquidity requirements in connection with the implementation of Basel III could result in our having to lengthen the term of our funding, restructure our business

17

models, and/or increase our holdings of liquid assets. Implementation of changes to asset risk weightings for risk-based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy, and could limit our ability to make distributions, including paying out dividends or buying back shares. See “Supervision and Regulation—Federal Bank Regulation—Capital Requirements.”

Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.

The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions, including restrictions on conducting acquisitions or establishing new branches. During the last year, several banking institutions have received large fines for non-compliance with these laws and regulations. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations.

Legal and regulatory proceedings and related matters could adversely affect us or the financial services industry in general.

We, and other participants in the financial services industry upon whom we rely to operate, have been and may in the future become involved in legal and regulatory proceedings. Most of the proceedings we consider to be in the normal course of our business or typical for the industry; however, it is inherently difficult to assess the outcome of these matters, and other participants in the financial services industry or we may not prevail in any proceeding or litigation. There could be substantial cost and management diversion in such litigation and proceedings, and any adverse determination could have a materially adverse effect on our business, brand or image, or our financial condition and results of our operations.

Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.

We must maintain sufficient funds to respond to the needs of depositors and borrowers. As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. These additional sources consist primarily of advances from the Federal Home Loan Bank. As we continue to grow, we are likely to become more dependent on these sources. Adverse operating results or changes in industry conditions could lead to difficulty or an inability in accessing these additional funding sources. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates. If we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In this case, our operating margins and profitability would be adversely affected.

Our success depends on retaining certain key personnel.

Our performance largely depends on the talents and efforts of highly skilled individuals who comprise our senior management team. We rely on key personnel to manage and operate our business, including major revenue generating functions such as loan and deposit generation. The loss of key staff may adversely affect our ability to maintain and manage these functions effectively, which could negatively affect our revenues. In addition, loss of key personnel could result in increased recruiting and hiring expenses, which could cause a decrease in our net income. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees.

18

System failure or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities.

The computer systems and network infrastructure we and our third-party service providers use could be vulnerable to unforeseen problems. Our operations are dependent upon our ability to protect our computer equipment against damage from physical theft, fire, power loss, telecommunications failure or a similar catastrophic event, as well as from security breaches, denial of service attacks, viruses, worms and other disruptive problems caused by hackers. Any damage or failure that causes an interruption in our operations could have a material adverse effect on our financial condition and results of operations. Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us. Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures designed to prevent such damage, our security measures may not be successful. In addition, advances in computer capabilities, new discoveries in the field of cryptography or other developments could result in a compromise or breach of the algorithms we and our third-party service providers use to encrypt and protect customer transaction data. A failure of such security measures could have a material adverse effect on our financial condition and results of operations.

It is possible that a significant amount of time and money may be spent to rectify the harm caused by a breach or hack. While we have general liability insurance, there are limitations on coverage as well as dollar amount. Furthermore, cyber incidents carry a greater risk of injury to our reputation. Finally, depending on the type of incident, banking regulators can impose restrictions on our business and consumer laws may require reimbursement of customer losses.

Our business may be adversely affected by fraud and other financial crimes.

Our loans to businesses and individuals and our deposit relationships and related transactions are subject to exposure to the risk of loss due to fraud and other financial crimes. While we have policies and procedures designed to prevent such losses, losses may still occur.

Managing reputational risk is important to attracting and maintaining customers, investors and employees.

Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, and questionable or fraudulent activities of our customers. We have policies and procedures in place to protect our reputation and promote ethical conduct, but these policies and procedures may not be fully effective. Negative publicity regarding our business, employees, or customers, with or without merit, may result in the loss of customers and employees, costly litigation and increased governmental regulation, all of which could adversely affect our operating results.

Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results.

In preparing this prospectus as well as periodic reports we will be required to file under the Securities Exchange Act of 1934, including our consolidated financial statements, our management is and will be required under applicable rules and regulations to make estimates and assumptions at a specified date. These estimates and assumptions are based on management’s best estimates and experience at that date and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known. Areas requiring significant estimates and assumptions by management include our valuation of investment securities, our determination of our income tax provision, our determination of goodwill impairment, and our evaluation of the adequacy of our allowance for loan losses.

19

Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses.

Our risk management framework is designed to minimize risk and loss to us. We seek to identify, measure, monitor, report and control our exposure to risk, including strategic, market, liquidity, compliance and operational risks. While we use a broad and diversified set of risk monitoring and mitigation techniques, these techniques are inherently limited because they cannot anticipate the existence or future development of currently unanticipated or unknown risks. Recent economic conditions and heightened legislative and regulatory scrutiny of the financial services industry, among other developments, have increased our level of risk. Accordingly, we could suffer losses as a result of our failure to properly anticipate and manage these risks.

We are subject to environmental liability risk associated with lending activities.

A significant portion of our loan portfolio is secured by real estate, and we could become subject to environmental liabilities with respect to one or more of these properties. During the ordinary course of business, we may foreclose on and take title to properties securing defaulted loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous conditions or toxic substances are found on these properties, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property. Environmental laws may require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Although we have policies and procedures to perform an environmental review before initiating any foreclosure action on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us.

Risks Related to the Offering

The future price of our shares of common stock may be less than the $10.00 offering price per share.

If you purchase shares of common stock in the offering, you may not be able to sell them later at or above the $10.00 offering price. In many cases, shares of common stock issued by newly converted savings institutions have traded below the initial offering price. The aggregate purchase price of the shares of common stock sold in the offering will be based on an independent appraisal. The independent appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. The independent appraisal is based on certain estimates, assumptions and projections, all of which are subject to change from time to time. After the shares begin trading, the trading price of our common stock will be determined by the marketplace, and may be influenced by many factors, including prevailing interest rates, the overall performance of the economy, changes in federal tax laws, new regulations, investor perceptions of PCSB Financial and the outlook for the financial services industry in general. Price fluctuations in our common stock may be unrelated to our operating performance.

Our failure to effectively deploy the net proceeds may have an adverse effect on our financial performance.

We intend to invest between $72.9 million and $98.9 million of the net proceeds of the offering (or $113.9 million at the adjusted maximum of the offering range) in PCSB Bank. We may use the remaining net proceeds to invest in short-term investments and for general corporate purposes, including, subject to regulatory limitations, the repurchase of shares of common stock and the payment of dividends. We also expect to use a portion of the net proceeds we retain to fund a loan to our employee stock ownership plan to purchase shares of common stock in the offering. PCSB Bank may use the net proceeds it receives to fund new loans, expand its retail banking franchise by establishing or acquiring new branches or by acquiring other financial institutions or other financial services companies, or for other general corporate purposes. However, except for funding the loan to the employee stock ownership plan and funding the charitable foundation, we have not allocated specific amounts of the net proceeds for any of these purposes. Therefore, we will have significant flexibility in determining the amount of the net proceeds we apply to different uses and when we apply or reinvest such proceeds. Also, certain of these uses, such as opening new branches or acquiring other financial institutions, may require prior regulatory approval. We have

20

not established a timetable for reinvesting the net proceeds, and we cannot predict how long it will take to reinvest the net proceeds. Our failure to utilize these funds effectively and timely would reduce our profitability and may adversely affect the value of our common stock.

Our return on equity may be low following the offering and this could negatively affect the trading price of our shares of common stock.

Net income divided by average shareholders’ equity, known as “return on equity,” is a ratio many investors use to compare the performance of financial institutions. Our return on equity may be low until we are able to leverage the additional capital we receive from the offering. Our return on equity will be negatively affected by added expenses associated with our employee stock ownership plan and the stock-based benefit plans we intend to adopt. Until we can increase our net interest income and non-interest income and deploy the capital raised in the offering, we expect our return on equity to be low, which may reduce the market price of our shares of common stock. At the midpoint of the offering range, PCSB Financial’s pro forma consolidated return on equity for the three months ended September 30, 2016 would have equaled 1.76% (annualized), compared to PCSB Bank’s return on equity for the three months ended September 30, 2016 of 5.24% (annualized).

We are an emerging growth company, and any decision by us to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As an emerging growth company, we also will not be subject to Section 404(b) of the Sarbanes-Oxley Act of 2002, which would require that our independent auditors review and attest as to the effectiveness of our internal control over financial reporting. We could be an emerging growth company for up to five years following the completion of this offering. We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of this offering, (ii) the first fiscal year after our annual gross revenues are $1.0 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million at the end of the second quarter of that fiscal year. Investors may find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.

We will need to implement additional financial and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements.

Upon completion of the conversion and offering, we will become a public reporting company. The federal securities laws and regulations of the Securities and Exchange Commission require that we file annual, quarterly and current reports, and that we maintain effective disclosure controls and procedures and internal controls over financial reporting. We expect that the obligations of being a public company, including substantial public reporting obligations, will require significant expenditures and place additional demands on our management team. These obligations will increase our operating expenses and could divert management’s attention from our banking operations.

Our stock-based benefit plans will increase our expenses and reduce our income.

We intend to adopt one or more new stock-based benefit plans after the conversion and offering, subject to shareholder approval, which will increase our annual compensation and benefit expenses related to the stock options

21

and stock awards granted to participants under the new stock-based benefit plans. The actual amount of these new stock-related compensation and benefit expenses will depend on the number of options and stock awards actually granted under the plans, the fair market value of our stock or options on the date of grant, the vesting period, and other factors that we cannot predict at this time. If we adopt stock-based benefit plans within 12 months following the offering, the total shares of common stock reserved for issuance pursuant to awards of restricted stock and grants of options under such plans would be limited to 4% and 10%, respectively, of the total shares of our common stock sold in the offering and contributed to the charitable foundation. If we award restricted shares of common stock or grant options in excess of these amounts under stock-based benefit plans adopted more than 12 months after the completion of the offering, our costs would increase further.

In addition, we will recognize expense for our employee stock ownership plan when shares are committed to be released to participants’ accounts, and we will recognize expense for restricted stock awards and stock options over the vesting period of awards made to recipients. The expense in the first year following the offering for shares purchased in the offering and for our new stock-based benefit plans has been estimated to be approximately $4.2 million ($3.1 million after tax) at the adjusted maximum of the offering range as set forth in the pro forma financial information under “Pro Forma Data,” assuming the $10.00 per share offering price as fair market value. Actual expense may be higher if the price of our common stock at the time the shares are allocated or awarded is greater than $10.00 per share. For further discussion of our proposed stock-based plans, see “Management—Benefits to be Considered Following Completion of the Offering.”

The implementation of stock-based benefit plans may dilute your ownership interest. Historically, shareholders have approved these stock-based benefit plans.

We intend to adopt one or more new stock-based benefit plans following the offering. These plans may be funded either through open market purchases or from the issuance of authorized but unissued shares of common stock. Our ability to repurchase shares of common stock to fund these plans will be subject to many factors, including applicable regulatory restrictions on common stock repurchases, the availability of stock in the market, the trading price of the stock, our capital levels, alternative uses for our capital and our financial performance. While our intention is to fund the new stock-based benefit plans through open market purchases, shareholders would experience a 12.3% dilution in ownership interest if newly issued shares of our common stock are used to fund stock options and shares of restricted common stock in amounts equal to 10% and 4%, respectively, of the shares sold in the offering and contributed to the charitable foundation. If we adopt the plans more than 12 months following the offering, new stock-based benefit plans would not be subject to these limitations and shareholders could experience greater dilution.

Although the implementation of new stock-based benefit plans would be subject to shareholder approval, historically, the overwhelming majority of stock-based benefit plans adopted by savings institutions and their holding companies following mutual-to-stock conversions have been approved by shareholders.

We have not determined when we will adopt one or more new stock-based benefit plans. Stock-based benefit plans adopted more than 12 months following the completion of the offering may exceed regulatory restrictions on the size of stock-based benefit plans adopted within 12 months, which would further increase our costs.

If we adopt stock-based benefit plans more than 12 months following the completion of the offering, then grants of shares of common stock or stock options under our existing and proposed stock-based benefit plans may exceed 4% and 10%, respectively, of shares of common stock sold in the offering and contributed to the charitable foundation. Stock-based benefit plans that provide for awards in excess of these amounts would increase our costs beyond the amounts estimated in “—Our stock-based benefit plans will increase our expenses and reduce our income.” Stock-based benefit plans that provide for awards in excess of these amounts could also result in dilution to shareholders in excess of that described in “—The implementation of stock-based benefit plans may dilute your ownership interest. Historically, shareholders have approved these stock-based benefit plans.” Although the implementation of stock-based benefit plans would be subject to shareholder approval, the timing of the implementation of such plans will be at the discretion of our board of directors.

22

Various factors may make takeover attempts more difficult to achieve.

Certain provisions of our articles of incorporation and bylaws and state and federal banking laws, including regulatory approval requirements, could make it more difficult for a third party to acquire control of PCSB Financial without our board of directors’ prior approval.

Under Federal Reserve Board regulations, for a period of three years following completion of the conversion and offering, no person may directly or indirectly acquire or offer to acquire beneficial ownership of more than 10% of our common stock without prior approval of the Federal Reserve Board. Under federal law, subject to certain exemptions, a person, entity or group must notify the Federal Reserve Board before acquiring control of a bank holding company. Acquisition of 10% or more of any class of voting stock of a bank holding company creates a rebuttable presumption that the acquirer “controls” the bank holding company. Also, a bank holding company must obtain the prior approval of the Federal Reserve Board and the NYSDFS before, among other things, acquiring direct or indirect ownership or control of more than 5% of any class of voting shares of any bank, including PCSB Bank.

There also are provisions in our articles of organization that may be used to delay or block a takeover attempt, including a provision that prohibits any person from voting more than 10% of the shares of common stock outstanding. Furthermore, shares of restricted stock and stock options that we have granted or may grant to employees and directors, stock ownership by our management and directors, employment agreements that we have entered into with our executive officers and other factors may make it more difficult for companies or persons to acquire control of PCSB Financial without the consent of our board of directors. Taken as a whole, these statutory provisions and provisions in our articles of incorporation could result in our being less attractive to a potential acquirer and thus could adversely affect the market price of our common stock.

For additional information, see “Restrictions on Acquisition of PCSB Financial Corporation,” “Management—Employment Agreements” and “—Benefits to be Considered Following Completion of the Offering.”

Our stock value may be negatively affected by applicable regulations that restrict stock repurchases.

Applicable regulations restrict us from repurchasing any of our shares of common stock during the first year following the offering and limit us from repurchasing our shares of common stock during the second and third years following the offering, unless we obtain prior approval from the NYSDFS that relieves us from these restrictions and limitations. Stock repurchases are a capital management tool that can enhance the value of a company’s stock, and our inability to repurchase any of our shares of common stock during the first year following the offering and limitations on our ability to repurchase our shares of common stock during the second and third years following the offering may negatively affect our stock price.

We have never issued common stock to the public, and there is no guarantee that a liquid market will develop.

We have never issued common stock to the public and there is no established market for our common stock. We expect that our common stock will be listed for trading on the Nasdaq Capital Market under the symbol “PCSB”, subject to completion of the offering and compliance with certain conditions, including the presence of at least three registered and active market makers. Sandler O’Neill & Partners, L.P. has advised us that it intends to make a market in shares of our common stock following the offering, but it is not obligated to do so or to continue to do so once it begins. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in shares of our common stock, we may not be able to obtain such commitments. This would result in our common stock not being listed for trading on the Nasdaq Capital Market, which could reduce the liquidity of our common stock.

23

You may not revoke your order to purchase common stock in the subscription or community offerings after you send us your order form.

Funds submitted or automatic withdrawals authorized in connection with the purchase of shares of common stock in the subscription and community offerings will be held by us until the completion or termination of the offering, including any extension of the expiration date and consummation of a syndicated offering or firm commitment offering. Because completion of the offering will be subject to regulatory approvals and an update of the independent appraisal prepared by RP Financial, among other factors, there may be one or more delays in completing the offering. Orders submitted in the subscription and community offerings are irrevocable, and purchasers will have no access to their funds unless the offering is terminated, or extended beyond             , 2017, or the number of shares to be sold in the offering is increased to more than 23,143,750 shares or decreased to fewer than 14,875,000 shares.

The distribution of subscription rights could have adverse income tax consequences.

If the subscription rights granted to eligible current or former depositors of PCSB Bank are deemed to have an ascertainable value, receipt of the rights may be taxable in an amount equal to the ascertained value. Whether subscription rights are considered to have ascertainable value is an inherently factual determination. We have received an opinion of counsel, Luse Gorman, PC, that it is more likely than not that subscription rights have no ascertainable value; however, the opinion is not binding on the Internal Revenue Service.

Risks Related to the Charitable Foundation

The contribution to the charitable foundation will dilute your ownership interest and adversely affect net income in 2017.

We intend to establish and fund a new charitable foundation in connection with the conversion and offering. We intend to contribute shares of our common stock equal to 1.9% of the shares sold in the offering and an amount of cash so that the total contribution equals $5.0 million. At the minimum, midpoint, maximum and adjusted maximum of the offering range, we will contribute to the charitable foundation 282,625, 332,500, 382,375 and 439,731 shares of common stock and approximately $2.2 million, $1.7 million, $1.2 million and $603,000 in cash, respectively. The contribution will have an adverse effect on our net income for the quarter and year in which we make the issuance and contribution to the charitable foundation. The after-tax expense of the contribution is expected to reduce net income in fiscal 2017 by approximately $3.3 million. Our fiscal 2016 net income was $2.9 million. In addition, persons purchasing shares in the offering will have their ownership and voting interests in PCSB Financial diluted by up to 1.9% due to the contribution of shares of common stock to the charitable foundation.

Our contribution to the charitable foundation may not be tax deductible, which could reduce our profits.

We may not have sufficient profits to be able to fully use the tax deduction from our contribution to the charitable foundation. Under the Internal Revenue Code, an entity is permitted to deduct up to 10% of its taxable income (generally income before federal income taxes and charitable contributions expense) in any one year for charitable contributions. Any contribution in excess of the 10% limit may be deducted for federal income tax purposes over each of the five years following the year in which the charitable contribution is made. Accordingly, a charitable contribution could, if necessary, be deducted over a six-year period.

24

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth selected consolidated historical financial and other data for PCSB Bank at the dates and for the periods indicated. It is only a summary and it should be read in conjunction with the business and financial information contained elsewhere in this prospectus, including the consolidated financial statements beginning on page F-1. The information at September 30, 2016 and for the three months ended September 30, 2016 and 2015 is not audited but, in the opinion of management, includes all adjustments necessary for a fair presentation. All adjustments are normal and recurring. The results of operations for the three months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the entire year. The information at June 30, 2016 and 2015 and for the years ended June 30, 2016 and 2015 is derived in part from the audited consolidated financial statements appearing in this prospectus. The information at June 30, 2014, 2013 and 2012 and for the years ended June 30, 2014, 2013 and 2012 is derived in part from audited consolidated financial statements not appearing in this prospectus.

	At September 30,		At June 30,
	2016		2016		2015		2014		2013		2012
	(Dollars in thousands)
Selected Financial Condition Data:
Total assets	$	1,254,444	$	1,262,071	$	1,200,750	$	976,630	$	969,433	$	975,643
Cash and cash equivalents		60,423		41,578		77,761		105,250		147,166		138,776
Securities held-to-maturity		265,071		270,679		269,913		267,146		260,629		266,540
Securities available-for-sale		109,591		112,351		84,943		72,109		88,015		86,818
Loans receivable, net		763,915		782,336		727,134		507,161		449,577		466,231
Goodwill and other intangibles		6,772		6,808		6,703		—		—		—
Total liabilities		1,142,938		1,152,122		1,090,479		864,991		860,058		870,583
Deposits		1,116,837		1,112,695		1,060,505		856,518		851,540		857,697
Federal Home Loan Bank advances		11,051		20,081		14,000		—		—		—
Total equity		111,506		109,949		110,271		111,639		109,375		105,060

	For the Three Months Ended September 30,				For the Year Ended June 30,
	2016		2015		2016		2015		2014		2013		2012
	(Dollars in thousands)
Selected Operating Data:
Interest and dividend income	$	10,109	$	9,663	$	39,044	$	28,827	$	25,864	$	26,273	$	30,468
Interest expense		1,334		1,179		4,812		3,884		3,634		4,306		6,238
Net interest income		8,775		8,484		34,232		24,943		22,230		21,967		24,230
Provision for loan losses		26		41		1,859		1,326		903		741		1,923
Net interest income after provision for loan losses		8,749		8,443		32,373		23,617		21,327		21,226		22,307
Non-interest income		552		428		1,951		1,567		1,650		1,298		1,244
Non-interest expense (1)		7,198		7,047		30,265		23,974		20,651		20,306		19,769
Income before income tax expense		2,103		1,824		4,059		1,210		2,326		2,218		3,782
Income tax expense		647		568		1,133		702		699		732		1,304
Net income	$	1,456	$	1,256	$	2,926	$	508	$	1,627	$	1,486	$	2,478

(1) Non-interest expense for the three months ended September 30, 2015 and the years ended June 30, 2016 and 2015 include merger expenses of $122,000, $790,000 and $1.1 million, respectively.

25

	At or For the Three Months Ended September 30,						At or For the Year Ended June 30,
	2016			2015			2016			2015			2014			2013			2012
Selected Financial Ratios (1):
Return on average assets (2)		0.46	%		0.41	%		0.24	%		0.05	%		0.17	%		0.15	%		0.26	%
Return on average equity (3)		5.24			4.50			2.59			0.45			1.47			1.39			2.33
Non-interest income to average assets		0.17			0.14			0.16			0.15			0.17			0.14			0.13
Non-interest expense to average assets		2.27			2.33			2.48			2.34			2.14			2.11			2.07
Net interest margin (4)		2.89			2.90			2.92			2.50			2.30			2.29			2.53
Efficiency ratio (5)		77.39			79.44			88.17			95.20			89.88			90.15			83.94
Average interest-earning assets to average interest-bearing liabilities		120.00			120.35			120.01			122.55			125.00			125.35			125.23
Loans to deposits		68.40			69.59			70.31			68.56			59.21			52.80			54.36
Equity to assets (6)		8.76			9.22			9.27			11.03			11.47			11.11			11.09
Tangible equity to tangible assets (7)		8.27			8.72			8.77			10.93			11.47			11.11			11.09
Capital Ratios:
Tier 1 capital (to adjusted total assets)		8.85			9.09			8.92			8.88			11.73			11.64			11.51
Tier I capital (to risk-weighted assets)		13.89			14.62			13.47			15.47			22.49			23.68			22.74
Total capital (to risk-weighted assets)		14.39			15.14			13.96			16.03			23.29			24.52			23.75
Common equity Tier 1 capital (to risk- weighted assets)		13.89			14.62			13.47			15.47			22.49			23.68			22.74
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans		0.53			0.54			0.51			0.54	(8)		0.80			0.88			1.05
Allowance for loan losses as a percent of non-performing loans		46.50			25.73			32.17			18.69			22.70			17.91			28.31
Net charge-offs to average outstanding loans during the period		—			0.01			0.23			0.27			0.17			0.37			1.11
Non-performing loans as a percent of total loans		1.14			2.08			1.60			2.87			3.51			4.92			3.72
Non-performing assets as a percent of total assets		0.78			1.32			1.07			1.78			1.85			2.35			1.90
Other Data:
Number of full-service offices		15			15			15			15			10			9			9
Number of full-time equivalent employees		171			173			169			174			138			133			133

(1) Ratios for the three months ended September 30, 2016 and 2015 are annualized.

(2) Represents net income divided by average total assets.

(3) Represents net income divided by average equity.

(4) Represents net interest income as a percent of average interest-earning assets.

(5) Represents non-interest expense divided by the sum of net interest income and non-interest income.

(6) Represents average equity divided by average total assets.

26

(7) Average tangible equity to average tangible assets is a non-GAAP financial measure and represents average tangible equity calculated as a percentage of average tangible assets for the period presented. We believe that a disclosure of tangible equity to tangible assets may be helpful for those investors who seek to evaluate our equity without giving effect to goodwill and other intangible assets. The following table presents a reconciliation of average tangible equity to average tangible assets for the periods presented:

	For the Three Months Ended September 30,						For the Year Ended June 30,
	2016			2015			2016			2015			2014			2013			2012
	(Dollars in thousands)
Average equity	$	111,235		$	111,722		$	112,955		$	112,760		$	110,671		$	106,812		$	106,201
Less: Goodwill and other intangibles		6,796			6,713			6,663			1,158			—			—			—
Average tangible equity	$	104,439		$	105,009		$	106,292		$	111,602		$	110,671		$	106,812		$	106,201
Average assets	$	1,269,707		$	1,211,435		$	1,218,073		$	1,022,363		$	964,700		$	961,024		$	957,329
Less: Goodwill and other intangibles		6,796			6,713			6,663			1,158			—			—			—
Average tangible assets	$	1,262,911		$	1,204,722		$	1,211,410		$	1,021,205		$	964,700		$	961,024		$	957,329
Tangible equity to tangible assets		8.27	%		8.72	%		8.77	%		10.93	%		11.47	%		11.11	%		11.09	%

(8) Loans acquired in the CMS Bancorp, Inc./CMS Bank acquisition were recorded at their estimated fair value at the acquisition date and did not include a carry-over of the related pre-acquisition allowance for loan losses.

27

RECENT DEVELOPMENTS

The following tables set forth selected consolidated historical financial and other data of PCSB Bank at the dates and for the periods indicated. This is only a summary and should be read in conjunction with the business and financial information contained elsewhere in this prospectus. The information at June 30, 2016 is derived in part from the audited consolidated financial statements that appear in this prospectus. The information at December 31, 2016 and for the three months and six months ended December 31, 2016 and 2015 is not audited but, in the opinion of management, includes all adjustments necessary for a fair presentation. All adjustments are normal and recurring. The results of operations for the three months and six months ended December 31, 2016 are not necessarily indicative of the results that may be expected for the entire year.

	At December 31, 2016		At June 30, 2016
	(Dollars in thousands)
Selected Financial Condition:
Total assets	$	1,240,883	$	1,262,071
Cash and cash equivalents		48,327		41,578
Securities held-to-maturity		272,591		270,679
Securities available-for-sale		95,363		112,351
Loans receivable, net		766,681		782,336
Goodwill and other intangibles		6,735		6,808
Total liabilities		1,128,126		1,152,122
Deposits		1,107,720		1,112,695
Federal Home Loan Bank advances		4,022		20,081
Total equity		112,757		109,949

	Three Months Ended December 31,				Six Months Ended December 31,
	2016		2015		2016		2015
	(In thousands, except per share data)
Selected Operating Data:
Interest and dividend income	$	9,850	$	9,558	$	19,959	$	19,221
Interest expense		1,323		1,187		2,657		2,366
Net interest income		8,527		8,371		17,302		16,855
Provision for loan losses		562		356		588		397
Net interest income after provision for loan losses		7,965		8,015		16,714		16,458
Non-interest income		2,259		470		2,811		898
Non-interest expense (1)		7,794		7,480		14,992		14,527
Income before income taxes		2,430		1,005		4,533		2,829
Income tax expense		758		278		1,405		846
Net income	$	1,672	$	727	$	3,128	$	1,983

(1) Non-interest expense for the three and six months ended December 31, 2015 include merger expenses of $39,000 and $161,000, respectively.

28

	At or For the Three Months Ended December 31,						At or For the Six Months Ended December 31,
	2016			2015			2016			2015
Selected Financial Ratios (1):
Return on average assets (2)		0.54	%		0.24	%		0.50	%		0.33	%
Return on average equity (3)		5.95			2.59			5.59			3.54
Non-interest income to average assets		0.73			0.16			0.45			0.15
Non-interest expense to average assets		2.51			2.49			2.39			2.41
Net interest margin (4)		2.89			2.88			2.89			2.89
Efficiency ratio (5)		76.23			88.16			76.78			83.70
Average interest-earning assets to average interest-bearing liabilities		119.42			120.69			119.71			120.52
Loans to deposits		69.21			69.54			69.21			69.54
Equity to assets (6)		9.07			9.35			8.91			9.29
Tangible equity to tangible assets (7)		8.57			8.85			8.42			8.78
Capital Ratios:
Tier 1 capital (to adjusted total assets)		9.28			9.30			9.28			9.30
Tier I capital (to risk-weighted assets)		14.05			14.40			14.05			14.40
Total capital (to risk-weighted assets)		14.62			14.93			14.62			14.93
Common equity Tier 1 capital (to risk- weighted assets)		14.05			14.40			14.05			14.40
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans		0.60			0.56			0.60			0.56
Allowance for loan losses as a percent of non-performing loans		53.41			25.23			53.41			25.23
Net charge-offs to average outstanding loans during the period		0.07			0.11			0.03			0.05
Non-performing loans as a percent of total loans		1.12			2.21			1.12			2.21
Non-performing assets as a percent of total assets		0.88			1.46			0.88			1.46
Other Data:
Number of full-service offices		15			15			15			15
Number of full-time equivalent employees		169			168			169			168

(1) Ratios for the three months and six months ended December 31, 2016 and 2015 are annualized.

(2) Represents net income divided by average total assets.

(3) Represents net income divided by average equity.

(4) Represents net interest income as a percent of average interest-earning assets.

(5) Represents non-interest expense divided by the sum of net interest income and non-interest income.

(6) Represents average equity divided by average total assets.

29

(7) Average tangible equity to average tangible assets is a non-GAAP financial measure and represents average tangible equity calculated as a percentage of average tangible assets for the period presented. We believe that a disclosure of tangible equity to tangible assets may be helpful for those investors who seek to evaluate our equity without giving effect to goodwill and other intangible assets. The following table presents a reconciliation of average tangible equity to average tangible assets for the periods presented:

	For the Three Months Ended December 31,						For the Six Months Ended December 31,
	2016			2015			2016			2015
Average equity	$	112,494		$	112,456		$	111,865		$	112,089
Less: Goodwill and other intangibles		6,759			6,671			6,778			6,692
Average tangible equity	$	105,735		$	105,785		$	105,087		$	105,397
Average assets	$	1,240,141		$	1,202,466		$	1,254,924		$	1,206,949
Less: Goodwill and other intangibles		6,759			6,671			6,778			6,692
Average tangible assets	$	1,233,382		$	1,195,795		$	1,248,146		$	1,200,257
Tangible equity to tangible assets		8.57	%		8.85	%		8.42	%		8.78	%

(8) Loans acquired in the CMS Bancorp, Inc./CMS Bank acquisition were recorded at their estimated fair value at the acquisition date and did not include a carry-over of the related pre-acquisition allowance for loan losses.

Comparison of Financial Condition at December 31, 2016 and June 30, 2016

Total Assets. Total assets decreased $21.2 million, or 1.7%, to $1.2 billion at December 31, 2016 from $1.3 billion at June 30, 2016. The decrease is primarily the result of decreases of $15.7 million in net loans and $15.1 million in securities, partially offset by an increase of $6.7 million in cash and equivalents.

Cash and Cash Equivalents. Cash and cash equivalents increased $6.7 million, or 16.2%, to $48.3 million at December 31, 2016 from $41.6 million at June 30, 2016. The increase is due primarily to the proceeds from a $15.7 million decrease in net loans and a $15.1 million decrease in securities, partially offset by a $5.0 million decrease in deposits and $16.1 million in maturing Federal Home Loan Bank advances.

Securities Held-to-Maturity. Total securities held to maturity increased $1.9 million, or 0.7%, to $272.6 million at December 31, 2016 from $270.7 million at June 30, 2016. This increase was primarily caused by $7.4 million of net purchases of mortgage and asset-backed securities and $1.0 million of net purchases of municipal securities, partially offset by $6.5 million of net maturities of U.S. government and agency obligations.

Securities Available for Sale. Total securities available-for-sale decreased $17.0 million, or 15.1%, to $95.4 million at December 31, 2016 from $112.4 million at June 30, 2016. This decline was primarily due to $15.6 million of net maturities of U.S. government and agency obligations.

Net Loans. Net loans decreased $15.7 million, or 2.0%, to $766.7 million at December 31, 2016 from $782.3 million at June 30, 2016. The decrease is primarily due to net repayments of $13.9 million, or 15.3%, in commercial loans, $6.5 million, or 2.9%, in residential mortgages, $1.5 million, or 9.0%, in other loans and $1.0 million, or 2.5%, in home equity lines of credit, partially offset by net originations of $8.0 million, or 32.1%, in construction loans.

Deposits. Total deposits decreased $5.0 million, or 0.4%, to $1.1 billion at December 31, 2016 from $1.1 billion at June 30, 2016. This decrease primarily reflects a $17.0 million decrease in certificates of deposit, partially offset by an $8.4 million increase in demand accounts and a $3.9 million increase in savings accounts. The $12.3 million increase in demand and savings accounts reflects our strategy of raising low cost core deposits.

Federal Home Loan Bank Advances. Federal Home Loan Bank advances decreased $16.1 million, or 80.0%, to $4.0 million at December 31, 2016 from $20.1 million at June 30, 2016. The decrease was due to the maturity of advances used to fund a leveraging strategy initiated two years ago, which has been completed as of December 31, 2016.

Total Equity. Total equity increased $2.8 million, or 2.6%, to $112.7 million at December 31, 2016 from $109.9 million at June 30, 2016 as a result of net income of $3.1 million, partially offset by an increase in accumulated other comprehensive loss of $320,000.

30

Comparison of Operating Results for the Three Months Ended December 31, 2016 and 2015

General. Net income increased $945,000, or 130.3%, to $1.7 million for the three months ended December 31, 2016 compared to $727,000 for the three months ended December 31, 2015. The increase was primarily due to a $156,000 increase in net interest income and a $1.8 million increase in non-interest income, partially offset by a $314,000 increase in non-interest expense, a $205,000 increase in the provision for loan losses and a $480,000 increase in income tax expense.

Net Interest Income. Net interest income increased $156,000, or 1.9%, to $8.5 million for the three months ended December 31, 2016 compared to $8.4 million for the three months ended December 31, 2015. The increase primarily reflects a one basis point increase in the net interest margin to 2.89% from 2.88% for the three months ended December 31, 2016, partially offset by a $6.9 million decrease in net interest-earning assets as growth in interest-bearing liabilities outpaced growth in interest-earning assets.

Interest and Dividend Income. Interest and dividend income increased $292,000, or 3.1%, to $9.9 million at December 31, 2016 compared to $9.6 million at December 31, 2015. The increase primarily reflects a $20.2 million increase in the average balance on interest-earning assets and a four basis point increase in the average yield to 3.33% from 3.29% for the three months ended December 31, 2015 primarily due to an increase in the average balance of higher yielding loans.

Interest income on loans increased $196,000 primarily due to a $24.9 million increase in the average balance to $762.5 million for the three months ended December 31, 2016 from $737 .6 million for the three months ended December 31, 2015, partially offset by a four basis point decrease in the average yield on loans to 4.32% from 4.36% for the same period last year.

Interest income on other interest-earning assets increased $16,000 primarily due to a 17 basis point increase in the average yield on other interest-earning assets to 0.58% for the three months ended December 31, 2016 from 0.41% for the three months ended December 31, 2015 primarily due to an increase in market interest rates, partially offset by an $8.5 million decrease in the average balance on other interest-earning assets.

Interest income on securities increased $80,000 primarily due to a $3.9 million increase in the average balance of securities to $363.0 million for the three months ended December 31, 2016 from $359.1 million for the three months ended December 31, 2015 and an eight basis point increase in the average yield on securities to 1.69% for the current-year period primarily due to an increase in market interest rates.

Interest Expense. Interest expense increased $136,000, or 11.5%, to $1.3 million for the three months ended December 31, 2016 compared to $1.2 million for the three months ended December 31, 2015. The increase primarily reflects a $27.2 million increase in the average balance on interest-bearing liabilities and a four basis point increase in the average cost to 0.53% from 0.49% for the three months ended December 31, 2015, due to growth in medium-term and long-term time certificates of deposit.

Interest expense on interest-bearing deposits increased $150,000 primarily due to a $45.1 million increase in the average balance to $983.1 million for the three months ended December 31, 2016 from $938.0 million for the three months ended December 31, 2015 and a four basis point increase in the average rate paid on interest-bearing deposits to 0.52% from 0.48% for the three months ended December 31, 2015, due to growth in medium-term and long-term certificates of deposit.

Interest expense on Federal Home Loan Bank advances decreased $14,000 primarily due to a $17.8 million decrease in the average balance to $6.4 million for the three months ended December 31, 2016 from $24.2 million for the three months ended December 31, 2015, due to the maturities of advances, partially offset by a 124 basis point increase in the average cost to l.96% for the three months ended December 31, 2016 from 0.73% for the same period last year primarily due to maturities of lower cost advances.

31

Provision for Loan Losses. We recorded provision for loan losses of $562,000 for the three months ended December 31, 2016, primarily as a result of an increase in specific reserves on impaired loans. We recorded provision for loan losses of $356,000 for the three months ended December 31, 2015 primarily reflecting charge-offs on residential loans, as well as growth in the overall loan portfolio.

Non-Interest Income. Non-interest income increased $1.8 million to $2.3 million for the three months ended December 31, 2016 compared to $470,000 for the three months ended December 31, 2015. The increase was caused primarily by the receipt of $1.6 million in settlement of a loan charged-off by CMS Bank before the 2015 merger.

Non-Interest Expense. Non-interest expense increased $314,000, or 4.2%, to $7.8 million for the three months ended December 31, 2016 compared to $7.5 million for the three months ended December 31, 2015.

Income Tax Expense. Income tax expense increased $480,000, or 172.7%, to $758,000 for the three months ended December 31, 2016 from $278,000 for the three months ended December 31, 2015. The increase was caused primarily by a $1.4 million, or 141.8%, increase in pre-tax income. The effective tax rate was 31.2% and 27.7% for the three months ended December 31, 2016 and 2015, respectively.

Comparison of Operating Results for the Six Months Ended December 31, 2016 and 2015

General. Net income increased $1.1 million, or 57.7%, to $3.1 million for the six months ended December 31, 2016 compared to $2.0 million for the six months ended December 31, 2015. The increase was primarily due to a $447,000 increase in net interest income and a $1.9 million increase in non-interest income, partially offset by a $465,000 increase in non-interest expense, a $559,000 increase in income tax expense and a $191,000 increase in provision for loan losses.

Net Interest Income. Net interest income increased $447,000, or 2.7%, to $17.3 million for the six months ended December 31, 2016 from $16.9 million for the six months ended December 31, 2015. The increase primarily reflects a $738,000 increase in interest and dividend income, partially offset by a $291,000 increase in interest expense.

Interest and Dividend Income. Interest and dividend income increased $738,000, or 3.8%, to $20.0 million for the six months ended December 31, 2016 from $19.2 million for the six months ended December 31, 2015. The increase primarily reflects a $31.3 million increase in the average balance on interest-earning assets and a four basis point increase in the average yield to 3.33% from 3.29% for the six months ended December 31, 2015 primarily due to an increase in the average balance of higher yielding loans.

Interest income on loans increased $563,000 primarily due to a $34.1 million increase in the average balance to $769.3 million for the six months ended December 31, 2016 from $735.2 million for the six months ended December 31, 2015, partially offset by a five basis point decrease in the average yield on loans to 4.35% from 4.40% for the same period last year.

Interest income on other interest-earning assets increased $62,000 primarily due to a 24 basis point increase in the average yield on other interest-earning assets to 0.62% for the six months ended December 31, 2016 from 0.38% for the six months ended December 31, 2015 primarily due to an increase in market interest rates, partially offset by a $5.1 million decrease in the average balance on other interest-earning assets.

Interest income on securities increased $113,000 primarily due to a $2.3 million increase in the average balance of securities to $368.9 million for the six months ended December 31, 2016 from $366.6 million for the six months ended December 31, 2015 and a five basis point increase in the average yield on securities to l.63% for the current year period primarily due to an increase in market interest rates.

Interest Expense. Interest expense increased $291,000, or 12.3%, to $2.7 million for the six months ended December 31, 2016 from $2.4 million for the six months ended December 31, 2015. The increase primarily reflects

32

a $32.7 million increase in the average balance on interest-bearing liabilities and a five basis point increase in the average cost to 0.53% from 0.48% for the six months ended December 31, 2015, due to growth in medium-term and long-term certificates of deposit.

Interest expense on interest-bearing deposits increased $303,000 primarily due to a $48.2 million increase in the average balance to $989.8 million for the six months ended December 31, 2016 from $941.6 million for the six months ended December 31, 2015 and a four basis point increase in the average rate paid on interest-bearing deposits to 0.52% from 0.48% for the six months ended December 31, 2015, due to growth in medium-term and long-term certificates of deposit.

Interest expense on Federal Home Loan Bank advances decreased $12,000 primarily due to a $15.5 million decrease in the average balance to $10.9 million for the six months ended December 31, 2016 from $26.4 million for the six months ended December 31, 2015, due to the maturities of advances, partially offset by a 78 basis point increase in the average cost to 1.48% for the six months ended December 31, 2016 from 0.70% for the same period last year primarily due to the maturities of lower cost advances.

Provision for Loan Losses. We recorded a provision for loan losses of $588,000 and $397,000 for the six months ended December 31, 2016 and 2015, respectively. The increase was caused primarily by an increase in specific reserves on impaired loans in the current year period.

Non-Interest Income. Non-interest income increased $1.9 million to $2.8 million for the six months ended December 31, 2016 compared to $898,000 for the six months ended December 31, 2015. The increase was caused primarily by the receipt of $1.6 million in settlement on a loan charged-off by CMS Bank before the 2015 merger.

Non-Interest Expense. Non-interest expense increased $465,000, or 3.2%, to $15.0 million for the six months ended December 31, 2016 compared to $14.5 million for the six months ended December 31, 2015.

Income Tax Expense. Income tax expense increased $559,000, or 66.1%, to $1.4 million for the six months ended December 31, 2016 from $846,000 for the six months ended December 31, 2015. The increase was caused primarily by a $1.7 million, or 60.2%, increase in pre-tax income. The effective tax rate was 31.0% and 29.9% for the six months ended December 31, 2016 and 2015, respectively.

33

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• general economic conditions, either nationally or in our market areas, that are worse than expected;

• changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses;

• our ability to access cost-effective funding;

• fluctuations in real estate values and both residential and commercial real estate market conditions;

• demand for loans and deposits in our market area;

• our ability to continue to implement our business strategies;

• competition among depository and other financial institutions;

• inflation and changes in the interest rate environment that reduce our margins and yields, reduce the fair value of financial instruments or reduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondary markets;

• adverse changes in the securities markets;

• changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, including as a result of Basel III;

• our ability to manage market risk, credit risk and operational risk in the current economic conditions;

34

• our ability to enter new markets successfully and capitalize on growth opportunities;

• our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;

• changes in consumer spending, borrowing and savings habits;

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

• our ability to retain key employees;

• our compensation expense associated with equity allocated or awarded to our employees; and

• changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. See “Risk Factors” beginning on page 14.

HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING

Although we cannot determine what the actual net offering proceeds will be until the offering is completed, we estimate that the net proceeds will be between $145.7 million and $197.8 million, or $227.7 million if the offering range is increased by 15%.

We intend to distribute the net proceeds as follows:

	Based Upon the Sale at $10.00 Per Share of
	14,875,000 Shares					17,500,000 Shares					20,125,000 Shares					23,143,750 Shares (1)
	Amount		Percent of Net Proceeds			Amount		Percent of Net Proceeds			Amount		Percent of Net Proceeds			Amount		Percent of Net Proceeds
	(Dollars in thousands)
Gross offering proceeds	$	148,750				$	175,000				$	201,250				$	231,438
Less: offering expenses		3,038					3,255					3,472					3,722
Net offering proceeds	$	145,712		100.0	%	$	171,745		100.0	%	$	197,778		100.0	%	$	227,716		100.0	%
Distribution of net proceeds:
Proceeds contributed to PCSB Bank	$	72,856		50.0	%	$	85,872		50.0	%	$	98,889		50.0	%	$	113,858		50.0	%
Loan to employee stock ownership plan	$	12,126		8.3	%	$	14,266		8.3	%	$	16,406		8.3	%	$	18,867		8.3	%
Cash contribution to the charitable foundation	$	2,174		1.5	%	$	1,675		1.0	%	$	1,176		0.6	%	$	603		0.3	%
Proceeds retained by PCSB Financial	$	58,556		40.2	%	$	69,932		40.7	%	$	81,307		41.1	%	$	94,388		41.4	%

(1) As adjusted to give effect to an increase in the number of shares, which increase could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

Payments for shares of common stock made through withdrawals from existing deposit accounts will not result in the receipt of new funds for investment but will reduce PCSB Bank’s deposits. The net proceeds may vary because total expenses relating to the offering may be more or less than our estimates. For example, our expenses would increase if fewer shares were sold in the subscription and community offerings and more in the syndicated offering than we have assumed.

35

PCSB Financial may use the proceeds it retains from the offering:

• to invest in securities;

• to repurchase shares of our common stock, including repurchases to fund stock-based benefit plans;

• to finance the potential acquisition of financial institutions or financial services companies, although we do not currently have any agreements or understandings regarding any specific acquisition transaction;

• to pay cash dividends to shareholders; and

• for other general corporate purposes.

See “Our Dividend Policy” for a discussion of our expected dividend policy following the completion of the offering. Under NYSDFS regulations, we may not repurchase shares of our common stock during the first year following the completion of the conversion and, in the second and third years, we may not repurchase more than 5% of our then-outstanding shares of common stock in each of those years without the prior approval of the NYSDFS.

PCSB Bank may use the net proceeds it receives from the offering:

• to fund new loans;

• to invest in securities;

• to expand its retail banking franchise by establishing or acquiring new branches or by acquiring other financial institutions or other financial services companies as opportunities arise, although we do not currently have any understandings or agreements to acquire a financial institution or other entity; and

• for other general corporate purposes.

Initially, a substantial portion of the net proceeds will be invested in short-term investment securities of the type currently held by PCSB Bank. We have not determined specific amounts of the net proceeds that would be used for the purposes described above. The use of the proceeds outlined above may change based on many factors, including, but not limited to, changes in interest rates, equity markets, laws and regulations affecting the financial services industry, the attractiveness of potential acquisitions to expand our operations, and overall market conditions.

We expect our return on equity to be low until we are able to effectively deploy the additional capital raised in the offering. See “Risk Factors—Risks Related to the Offering—Our failure to effectively deploy the net proceeds may have an adverse effect on our financial performance.”

36

OUR DIVIDEND POLICY

Following completion of the conversion, our board of directors will have the authority to declare dividends on our shares of common stock, subject to statutory and regulatory requirements. We currently intend to pay quarterly cash dividends but have not determined the amount or when payment would start. The payment and amount of dividends would depend upon a number of factors, including: regulatory capital requirements; our financial condition and results of operations; our other uses of funds for the long-term value of stockholders; tax considerations; statutory and regulatory limitations; and general economic conditions. No assurances can be given that any dividends will be paid or that, if paid, they will not be reduced or eliminated in the future. Special cash dividends, stock dividends or returns of capital, to the extent permitted by applicable law, regulations and policy, may be paid in addition to, or in lieu of, regular cash dividends.

We will file a consolidated federal tax return with PCSB Bank. Accordingly, it is anticipated that any cash distributions that we make to our stockholders would be treated as cash dividends and not as a non-taxable return of capital for federal and state tax purposes. Additionally, pursuant to applicable regulations, during the three-year period following the offering, we will not take any action to declare an extraordinary dividend to stockholders that would be treated by recipients as a tax-free return of capital for federal income tax purposes.

Pursuant to our articles of incorporation, we are authorized to issue preferred stock. If we issue preferred stock, the holders thereof may have a priority over the holders of our shares of common stock with respect to the payment of dividends. For a further discussion concerning the payment of dividends on our shares of common stock, see “Description of Capital Stock of PCSB Financial—Common Stock.” Dividends we can declare and pay will depend, in part, upon receipt of dividends from PCSB Bank, because initially we will have no source of income other than dividend income from PCSB Bank and earnings from the investment of the net proceeds from the sale of shares of common stock retained by us and interest payments received in connection with the loan to the employee stock ownership plan. New York banking law imposes limitations on capital distributions (including dividends) by PCSB Bank. See “Supervision and Regulation—New York Banking Laws and Supervision—Dividends.”

Any payment of dividends by PCSB Bank to us that would be deemed to be drawn out of PCSB Bank’s bad debt reserves, if any, would require a payment of taxes at the then-current tax rate by PCSB Bank on the amount of earnings deemed to be removed from the reserves for such distribution. PCSB Bank does not intend to make any distribution to us that would create such a federal tax liability.

MARKET FOR THE COMMON STOCK

We have never issued capital stock and there is no established market for our shares of common stock. We expect that our shares of common stock will be listed for trading on the Nasdaq Capital Market under the symbol “PCSB”, subject to completion of the conversion and compliance with certain listing conditions, including the presence of at least three registered and active market makers. Sandler O’Neill & Partners, L.P. has advised us that it intends to make a market in shares of our common stock following the offering, but it is not obligated to do so or to continue to do so once it begins. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in shares of our common stock, there can be no assurance that we will be successful in obtaining such commitments.

The development and maintenance of a public market, having the desirable characteristics of depth, liquidity and orderliness, depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of shares of our common stock at any particular time may be limited, which may have an adverse effect on the price at which shares of our common stock can be sold. There can be no assurance that persons purchasing the shares of common stock will be able to sell their shares at or above the $10.00 offering purchase price per share.

37

HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE

At September 30, 2016, PCSB Bank exceeded all applicable regulatory capital requirements and was considered “well capitalized.” The table below sets forth, at September 30, 2016, the historical equity capital and regulatory capital and the pro forma equity capital and regulatory capital of PCSB Bank after giving effect to the sale of shares of common stock at $10.00 per share. The tabular data assumes the receipt by PCSB Bank of 50% of the net offering proceeds. See “How We Intend to Use the Proceeds from the Offering.”

	PCSB Bank Historical at September 30, 2016					Pro Forma at September 30, 2016 Based Upon the Sale in the Offering of:
						14,875,000 Shares						17,500,000 Shares						20,125,000 Shares						23,143,750 Shares (1)
	Amount		Percent of Assets (2)			Amount			Percent of Assets (2)			Amount			Percent of Assets (2)			Amount			Percent of Assets (2)			Amount			Percent of Assets (2)
	(Dollars in thousands)
Equity capital	$	111,506		8.89	%	$	166,173			12.52	%	$	175,979			13.13	%	$	185,786			13.73	%	$	197,063			14.40	%
Tier 1 leverage capital	$	112,246		8.85	%	$	166,913			12.44	%	$	176,719			13.05	%	$	186,526			13.64	%	$	197,803			14.31	%
Tier 1 leverage requirement		63,430		5.00	%		67,073			5.00	%		67,724			5.00	%		68,375			5.00	%		69,123			5.00	%
Excess	$	48,816		3.85	%	$	99,840			7.44	%	$	108,995			8.05	%	$	118,151			8.64	%	$	128,680			9.31	%
Tier 1 risk-based capital (3)	$	112,246		13.89	%	$	166,913			20.29	%	$	176,719			21.41	%	$	186,526			22.53	%	$	197,803			23.80	%
Tier 1 risk-based requirement		64,660		8.00	%		65,826			8.00	%		66,034			8.00	%		66,243			8.00	%		66,482			8.00	%
Excess	$	47,586		5.89	%	$	101,087			12.29	%	$	110,685			13.41	%	$	120,283			14.53	%	$	131,321			15.80	%
Total risk-based capital (3)	$	116,311		14.39	%	$	170,978			20.78	%	$	180,784			21.90	%	$	190,591			23.02	%	$	201,868			24.29	%
Total risk-based requirement		80,825		10.00	%		82,283			10.00	%		82,543			10.00	%		82,803			10.00	%		83,103			10.00	%
Excess	$	35,486		4.39	%	$	88,695			10.78	%	$	98,241			11.90	%	$	107,788			13.02	%	$	118,765			14.29	%
Common equity tier 1 capital	$	112,246		13.89	%	$	166,913			20.29	%	$	176,719			21.41	%	$	186,526			22.53	%	$	197,803			23.80	%
Common equity tier 1 requirement		52,537		6.50	%		53,484			6.50	%		53,653			6.50	%		53,822			6.50	%		54,017			6.50	%
Excess	$	59,709		7.39	%	$	113,429			13.79	%	$	123,066			14.91	%	$	132,704			16.03	%	$	143,786			17.30	%
Reconciliation:
Net proceeds infused into PCSB Bank						$	72,856					$	85,872					$	98,889					$	113,858
Less: Common stock acquired by employee stock ownership plan						$	(12,126	)				$	(14,266	)				$	(16,406	)				$	(18,867	)
Less: Common stock acquired by stock-based benefit plan						$	(6,063	)				$	(7,133	)				$	(8,203	)				$	(9,433	)
Pro forma increase in tier 1 and risk-based capital						$	54,667					$	64,473					$	74,280					$	85,558

(1) As adjusted to give effect to an increase in the number of shares, which increase could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2) Equity and Tier 1 leverage capital levels are shown as a percentage of total average assets. Risk-based capital levels are shown as a percentage of risk-weighted assets.

(3) Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20% risk weighting.

38

If, at September 30, 2016, PCSB Financial had been subject to the consolidated regulatory capital requirements applicable to bank holding companies, which are identical to the regulatory capital requirements applicable to PCSB Bank, PCSB Financial would have exceeded all applicable consolidated regulatory capital requirements and would have been considered “well capitalized.” The table below sets forth, at September 30, 2016, the historical equity capital and regulatory capital of PCSB Bank and the pro forma consolidated equity capital and regulatory capital of PCSB Financial after giving effect to the sale of shares of common stock at $10.00 per share. The tabular data assumes that PCSB Financial will invest 50% of the net offering proceeds in PCSB Bank, lend a portion of net offering proceeds to our employee stock ownership plan, and retain the remaining net offering proceeds. See “How We Intend to Use the Proceeds from the Offering.”

	PCSB Bank Historical at September 30, 2016					Pro Forma at September 30, 2016 Based Upon the Sale in the Offering of:
						14,875,000 Shares						17,500,000 Shares						20,125,000 Shares						23,143,750 Shares (1)
	Amount		Percent of Assets (2)			Amount			Percent of Assets (2)			Amount			Percent of Assets (2)			Amount			Percent of Assets (2)			Amount			Percent of Assets (2)
	(Dollars in thousands)
Equity capital	$	111,506		8.89	%	$	238,555			17.27	%	$	261,877			18.64	%	$	285,199			19.97	%	$	312,019			21.45	%
Tier 1 leverage capital	$	112,246		8.85	%	$	239,295			17.15	%	$	262,617			18.51	%	$	285,939			19.83	%	$	312,759			21.29	%
Tier 1 leverage requirement		63,430		5.00			69,783			5.00			70,949			5.00			72,115			5.00			73,456			5.00
Excess	$	48,816		3.85	%	$	169,512			12.15	%	$	191,668			13.51	%	$	213,824			14.83	%	$	239,303			16.29	%
Tier 1 risk-based capital (3)	$	112,246		13.89	%	$	239,295			28.70	%	$	262,617			31.33	%	$	285,939			33.92	%	$	312,759			36.87	%
Tier 1 risk-based requirement		64,660		8.00			66,693			8.00			67,066			8.00			67,439			8.00			67,869			8.00
Excess	$	47,586		5.89	%	$	172,602			20.70	%	$	195,551			23.33	%	$	218,500			25.92	%	$	244,890			28.87	%
Total risk-based capital (3)	$	116,311		14.39	%	$	243,360			29.19	%	$	266,682			31.81	%	$	290,004			34.40	%	$	316,824			37.35	%
Total risk-based requirement		80,825		10.00			83,366			10.00			83,833			10.00			84,299			10.00			84,836			10.00
Excess	$	35,486		4.39	%	$	159,994			19.19	%	$	182,849			21.81	%	$	205,705			24.40	%	$	231,988			27.35	%
Common equity tier 1 capital	$	112,246		13.89	%	$	239,295			28.70	%	$	262,617			31.33	%	$	285,939			33.92	%	$	312,759			36.87	%
Common equity tier 1 requirement		64,660		8.00			66,693			8.00			67,066			8.00			67,439			8.00			67,869			8.00
Excess	$	47,586		5.89	%	$	172,602			20.70	%	$	195,551			23.33	%	$	218,500			25.92	%	$	244,890			28.87	%
Reconciliation:
Net proceeds infused from the offering						$	145,712					$	171,745					$	197,778					$	227,716
Plus: Tax benefit of contribution to charitable foundation						$	1,700					$	1,700					$	1,700					$	1,700
Less: Cash contribution to charitable foundation						$	(2,174	)				$	(1,675	)				$	(1,176	)				$	(603	)
Less: Common stock acquired by employee stock ownership plan						$	(12,126	)				$	(14,266	)				$	(16,406	)				$	(18,867	)
Less: Common stock acquired by stock-based benefit plan						$	(6,063	)				$	(7,133	)				$	(8,203	)				$	(9,433	)
Pro forma increase in tier 1 and risk-based capital						$	127,049					$	150,371					$	173,693					$	200,513

(1) As adjusted to give effect to an increase in the number of shares, which increase could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2) Equity and Tier 1 leverage capital levels are shown as a percentage of total average assets. Risk-based capital levels are shown as a percentage of risk-weighted assets.

(3) Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20% risk weighting.

39

CAPITALIZATION

The following table presents, at September 30, 2016, the historical consolidated capitalization of PCSB Bank and the pro forma consolidated capitalization of PCSB Financial after giving effect to the conversion and offering based upon the assumptions set forth under “Pro Forma Data.”

	PCSB Bank Historical at September 30, 2016			PCSB Financial Pro Forma at September 30, 2016 Based upon the Sale in the Offering at $10.00 per Share of:
				14,875,000 Shares			17,500,000 Shares			20,125,000 Shares			23,143,750 Shares (1)
	(Dollars in thousands)
Deposits (2)	$	1,116,837		$	1,116,837		$	1,116,837		$	1,116,837		$	1,116,837
Borrowings		11,051			11,051			11,051			11,051			11,051
Total deposits and borrowed funds	$	1,127,888		$	1,127,888		$	1,127,888		$	1,127,888		$	1,127,888
Shareholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized		—			—			—			—			—
Common stock, $0.01 par value, 200,000,000 shares authorized; shares to be issued as reflected (3)		—			152			178			205			236
Additional paid-in capital		—			148,386			174,892			201,397			231,877
Tax benefit of contribution to the charitable foundation		—			1,700			1,700			1,700			1,700
Retained earnings (4)		119,375			119,375			119,375			119,375			119,375
Accumulated other comprehensive income		(7,869	)		(7,869	)		(7,869	)		(7,869	)		(7,869	)
Less:
Expense of contribution to the charitable foundation		—			(5,000	)		(5,000	)		(5,000	)		(5,000	)
Common stock to be acquired by employee stock ownership plan (5)		—			(12,126	)		(14,266	)		(16,406	)		(18,867	)
Common stock to be acquired by stock-based benefit plan (6)		—			(6,063	)		(7,133	)		(8,203	)		(9,433	)
Total shareholders’ equity	$	111,506		$	238,555		$	261,877		$	285,199		$	312,019
Pro Forma Shares Outstanding
Total shares issued		—			15,157,625			17,832,500			20,507,375			23,583,481
Shares issued to charitable foundation		—			285,625			332,500			382,375			439,731
Shares sold in the offering		—			14,875,000			17,500,000			20,125,000			23,143,750
Total shareholders’ equity as a percentage of total assets		8.89	%		17.27	%		18.64	%		19.97	%		21.45	%
Tangible equity as a percentage of tangible assets (7)		8.39	%		16.86	%		18.25	%		19.59	%		21.08	%

(1) As adjusted to give effect to an increase in the number of shares, which increase could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2) Does not reflect withdrawals from deposit accounts at PCSB Bank for the purchase of shares of common stock. These withdrawals would reduce pro forma deposits and assets by the amount of the withdrawals.

(3) No effect has been given to the issuance of additional shares of common stock pursuant to the exercise of options under one or more stock-based benefit plans. If the plans are implemented within the first year after the closing of the offering, an amount up to 10% of the shares of common stock sold in the offering and contributed to the charitable foundation will be reserved for issuance upon the exercise of options under the plans. See “Management.”

(4) The retained earnings of PCSB Bank will be substantially restricted after the offering. See “Supervision and Regulation—New York Banking Laws and Supervision—Dividends.”

(5) Assumes that 8% of the shares sold in the offering and contributed to the charitable foundation will be acquired by the employee stock ownership plan financed by a loan from PCSB Financial. The loan will be repaid principally from PCSB Bank’s contributions to the employee stock ownership plan. Since PCSB Financial will finance the employee stock ownership plan debt, this debt will be eliminated through consolidation and no liability will be reflected on PCSB Financial’s consolidated balance sheet. Accordingly, the amount of shares of common stock acquired by the employee stock ownership plan is shown in this table as a reduction of total shareholders’ equity.

40

(6) Assumes a number of shares of common stock equal to 4% of the shares of common stock to be sold in the offering and contributed to the charitable foundation will be purchased for grant by one or more stock-based benefit plans. The funds to be used by such plans to purchase the shares will be provided by PCSB Financial. The dollar amount of common stock to be purchased is based on the $10.00 per share offering price and represents unearned compensation. This amount does not reflect possible increases or decreases in the value of common stock relative to the offering price. PCSB Financial will accrue compensation expense to reflect the vesting of shares pursuant to such stock-based benefit plans and will credit capital in an amount equal to the charge to operations. Implementation of such plans will require shareholder approval.

(7) At September 30, 2016, intangible assets totaled $6.8 million.

41

PRO FORMA DATA

The following tables summarize historical and pro forma data of PCSB Financial at and for the three months ended September 30, 2016 and at and for the year ended June 30, 2016. This information is based on assumptions set forth below and in the table, and should not be used as a basis for projections of market value of the shares of common stock following the offering.

The net proceeds in the table are based upon the following assumptions:

(i) all shares of common stock will be sold in the subscription and community offerings;

(ii) our trustees, executive officers, and their associates will purchase 250,500 shares of common stock;

(iii) our employee stock ownership plan will purchase 8% of the shares of common stock sold in the offering and contributed to the charitable foundation with the proceeds of a loan from PCSB Financial. The loan will be repaid in substantially equal payments of principal and interest (at the prime rate of interest, calculated at the date of the loan origination) over a 15-year period. Interest income that we earn on the loan will offset the interest paid by PCSB Bank;

(iv) PCSB Financial will contribute $2.2 million, $1.7 million, $1.2 million and $603,000 in cash to the charitable foundation at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively;

(v) we will pay Sandler O’Neill & Partners, L.P. a fee equal to 0.90% of the aggregate amount of common stock sold in the subscription and community offerings;

(vi) no fee will be paid with respect to shares of common stock purchased by our tax-qualified and non-qualified employee stock benefit plans, or stock purchased by our officers, trustees and employees, and their immediate families; and

(vii) total expenses of the offering, other than the fees and commissions to be paid to Sandler O’Neill & Partners, L.P. and other broker-dealers, will be $1.7 million.

We calculated pro forma consolidated net income for the three months ended September 30, 2016 and the year ended June 30, 2016 as if the estimated net proceeds had been invested at the beginning of the period at an assumed interest rate of 1.14% (0.75% after-tax). This rate represents the yield on the five-year U.S. Treasury Note at September 30, 2016, which, in light of current market interest rates, we consider to more accurately reflect the pro forma reinvestment rate than the arithmetic average of the weighted average yield earned on our interest earning assets and the weighted average rate paid on our deposits, which is the reinvestment rate generally required by applicable regulations.

We further believe that the reinvestment rate is factually supportable because:

• the yield on the U.S Treasury Note can be determined and/or estimated from third-party sources; and

• we believe that U.S. Treasury securities are not subject to credit losses due to a U.S. Government guarantee of payment of principal and interest.

We calculated historical and pro forma per share amounts by dividing historical and pro forma amounts of consolidated net income and shareholders’ equity by the indicated number of shares of common stock. For purposes of pro forma earnings per share calculations, we adjusted these figures to give effect to the shares of common stock purchased by the employee stock ownership plan. We computed per share amounts as if the shares of common stock were outstanding at the beginning of the year, but we did not adjust per share historical or pro forma shareholders’ equity to reflect the earnings on the estimated net proceeds.

42

The pro forma tables give effect to the implementation of one or more stock-based benefit plans. Subject to the receipt of shareholder approval, we have assumed that stock-based benefit plans will acquire for restricted stock awards a number of shares of common stock equal to 4% of the shares of common stock sold in the offering and contributed to the charitable foundation at the same price for which they were sold in the offering. We assume that awards of common stock granted under such plans vest over a five-year period.

We have also assumed that options will be granted under stock-based benefit plans to acquire shares of common stock equal to 10% of the shares of common stock sold in the offering and contributed to the charitable foundation. In preparing the table below, we assumed that shareholder approval was obtained, that the exercise price of the stock options and the market price of the stock at the date of grant were $10.00 per share and that the stock options had a term of ten years and vested over five years. We applied the Black-Scholes option pricing model to estimate a grant-date fair value of $2.34 for each option. In addition to the terms of the options described above, the Black-Scholes option pricing model assumed an estimated volatility rate of 12.81% for the shares of common stock, no dividend yield, an expected option term of 10 years and a risk-free rate of return of 1.60%.

We may grant options and award shares of common stock under one or more stock-based benefit plans in excess of 10% and 4%, respectively, of the shares of common stock sold in the offering and contributed to the charitable foundation and that vest sooner than over a 5-year period if the stock-based benefit plans are adopted more than one year following the offering.

As discussed under “How We Intend to Use the Proceeds from the Offering,” we intend to contribute 50% of the net offering proceeds to PCSB Bank, and we will retain the remainder of the net offering proceeds. We will use a portion of the proceeds we retain for the purpose of funding a loan to the employee stock ownership plan and retain the rest of the proceeds for future use.

The pro forma table does not give effect to:

• withdrawals from deposit accounts at PCSB Bank to purchase shares of common stock in the offering;

• our results of operations after the offering;

• increased fees that we would pay Sandler O’Neill & Partners, L.P. and other broker-dealers if we would have to conduct a syndicated offering; or

• changes in the market price of the shares of common stock after the offering.

The following pro forma information may not be representative of the financial effects of the offering at the dates on which the offering actually occurs, and should not be taken as indicative of future results of operations. Pro forma consolidated shareholders’ equity represents the difference between the stated amounts of our assets and liabilities. The pro forma shareholders’ equity is not intended to represent the fair market value of the shares of common stock and may be different than the amounts that would be available for distribution to shareholders if we liquidated. Moreover, pro forma shareholders’ equity per share does not give effect to the liquidation account to be established by PCSB Bank or, in the unlikely event of a liquidation of PCSB Bank, to the tax effect of the recapture of the bad debt reserve.

43

	At or for the Three Months Ended September 30, 2016 Based Upon the Sale at $10.00 Per Share of:
	14,875,000 Shares			17,500,000 Shares			20,125,000 Shares			23,143,750 Shares (1)
	(Dollars in thousands, except per share amounts)
Gross proceeds of stock offering	$	148,750		$	175,000		$	201,250		$	231,438
Plus: market value of shares issued to charitable foundation		2,826			3,325			3,824			4,397
Pro forma market capitalization	$	151,576		$	178,325		$	205,074		$	235,835
Gross proceeds of stock offering	$	148,750		$	175,000		$	201,250		$	231,438
Less: expenses		3,038			3,255			3,472			3,722
Estimated net proceeds		145,712			171,745			197,778			227,716
Less: Cash contribution to charitable foundation		(2,174	)		(1,675	)		(1,176	)		(603	)
Less: Common stock purchased by employee stock ownership plan		(12,126	)		(14,266	)		(16,406	)		(18,867	)
Less: Common stock purchased by stock-based benefit plans		(6,063	)		(7,133	)		(8,203	)		(9,433	)
Estimated net proceeds, as adjusted	$	125,349		$	148,671		$	171,993		$	198,813
For the Three Months Ended September 30, 2016
Consolidated net earnings:
Historical	$	1,456		$	1,456		$	1,456		$	1,456
Pro forma income on net proceeds		236			280			324			374
Pro forma employee stock ownership plan adjustment (2)		(133	)		(157	)		(180	)		(208	)
Pro forma stock award adjustment (3)		(200	)		(235	)		(271	)		(311	)
Pro forma stock option plan adjustment (4)		(162	)		(191	)		(220	)		(252	)
Pro forma net income (5)(6)	$	1,197		$	1,153		$	1,109		$	1,059
Per share net income:
Historical	$	0.10		$	0.08		$	0.07		$	0.06
Pro forma income on net proceeds		0.02			0.02			0.02			0.02
Pro forma employee stock ownership plan adjustment (2)		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Pro forma stock award adjustment (3)		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Pro forma stock option plan adjustment(4)		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Pro forma earnings per share (5)(6)	$	0.09		$	0.07		$	0.06		$	0.05
Stock price as a multiple of pro forma earnings per share		27.78	x		35.71	x		41.67	x		50.00	x
Shares used for calculating pro forma earnings per share		13,965,225			16,429,677			18,894,128			21,728,247
At September 30, 2016
Shareholders’ equity:
Historical	$	111,506		$	111,506		$	111,506		$	111,506
Estimated net proceeds		145,712			171,745			197,778			227,716
Plus: market value of shares issued to charitable foundation		2,826			3,325			3,824			4,397
Plus: tax benefit of contribution to charitable foundation		1,700			1,700			1,700			1,700
Less: expense of contribution to charitable foundation		(5,000	)		(5,000	)		(5,000	)		(5,000	)
Less: common stock acquired by employee stock ownership plan (2)		(12,126	)		(14,266	)		(16,406	)		(18,867	)
Less: common stock acquired by stock-based benefit plans (3)		(6,063	)		(7,133	)		(8,203	)		(9,433	)
Pro forma shareholders’ equity (7)(8)		238,555			261,877			285,199			312,019
Intangible assets		(6,772	)		(6,772	)		(6,772	)		(6,772	)
Pro forma tangible shareholders’ equity	$	231,783		$	255,105		$	278,427		$	305,247
Shareholders’ equity per share:
Historical	$	7.36		$	6.25		$	5.44		$	4.72
Estimated net proceeds		9.61			9.63			9.64			9.66
Plus: market value of shares issued to charitable foundation		0.19			0.19			0.19			0.19
Plus: tax benefit of contribution to charitable foundation		0.11			0.10			0.08			0.07
Less: tax expense of stock contribution to charitable foundation		(0.33	)		(0.28	)		(0.24	)		(0.21	)
Less: common stock acquired by employee stock ownership plan (2)		(0.80	)		(0.80	)		(0.80	)		(0.80	)
Less: common stock acquired by stock-based benefit plans (3)		(0.40	)		(0.40	)		(0.40	)		(0.40	)
Pro forma shareholders’ equity per share (7)(8)		15.74			14.69			13.91			13.23
Intangible assets		(0.45	)		(0.38	)		(0.33	)		(0.29	)
Pro forma shareholders’ equity per share	$	15.29		$	14.31		$	13.58		$	12.94
Offering price as percentage of equity per share (8)		63.53	%		68.07	%		71.89	%		75.59	%
Offering price as percentage of tangible equity per share		65.40	%		69.88	%		73.64	%		77.28	%
Shares used for pro forma shareholders’ equity per share		15,157,625			17,832,500			20,507,375			23,583,481

(footnotes begin on following page)

44

(1) As adjusted to give effect to an increase in the number of shares, which increase could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2) Assumes that 8% of the shares of common stock sold in the offering and contributed to the charitable foundation will be purchased by the employee stock ownership plan. For purposes of this table, the funds used to acquire these shares are assumed to have been borrowed by the employee stock ownership plan from PCSB Financial. PCSB Bank intends to make annual contributions to the employee stock ownership plan in an amount at least equal to the required principal and interest payments on the debt. PCSB Bank’s total annual payments on the employee stock ownership plan debt are based upon 15 equal annual installments of principal and interest. ASC 718-40 requires that an employer record compensation expense in an amount equal to the fair value of the shares committed to be released to employees. The pro forma adjustments assume that the employee stock ownership plan shares are allocated in equal annual installments based on the number of loan repayment installments assumed to be paid by PCSB Bank, the fair value of the common stock remains equal to the subscription price and the employee stock ownership plan expense reflects an effective combined federal and state tax rate of 34.0%. The unallocated employee stock ownership plan shares are reflected as a reduction of shareholders’ equity. No reinvestment is assumed on proceeds contributed to fund the employee stock ownership plan. The pro forma net income further assumes that 20,210, 23,777, 27,343 and 31,445 shares were committed to be released during the period at the minimum, midpoint, maximum, and adjusted maximum of the offering range, respectively, and according to ASC 718-40, only the employee stock ownership plan shares committed to be released during the period were considered outstanding for purposes of net income per share calculations.

(3) Assumes that one or more stock-based benefit plans purchase an aggregate number of shares of common stock equal to 4% of the shares to be sold in the offering and contributed to the charitable foundation. Shareholder approval of the plans and purchases by the plans may not occur earlier than six months after the completion of the offering. The shares may be acquired directly from PCSB Financial or through open market purchases. Shares in the stock-based benefit plan are assumed to vest over a period of five years. The funds to be used to purchase the shares will be provided by PCSB Financial. The table assumes that (i) the stock-based benefit plan acquires the shares through open market purchases at $10.00 per share, (ii) 5.0% of the amount contributed to the plan is amortized as an expense during the three months ended September 30, 2016, and (iii) the plan expense reflects an effective combined federal and state tax rate of 34.0%. The issuance of authorized but unissued shares of common stock to fund these awards would dilute shareholders’ ownership and voting interests by approximately 3.8%.

(4) Assumes that options are granted under one or more stock-based benefit plans to acquire an aggregate number of shares of common stock equal to 10% of the shares to be sold in the offering and contributed to the charitable foundation. Shareholder approval of the plans may not occur earlier than six months after the completion of the offering. In calculating the pro forma effect of the stock-based benefit plans, it is assumed that the exercise price of the stock options and the trading price of the common stock at the date of grant were $10.00 per share, the estimated grant-date fair value determined using the Black-Scholes option pricing model was $2.34 for each option, the aggregate grant-date fair value of the stock options was amortized to expense on a straight-line basis over a 5-year vesting period of the options, and that 25% of the amortization expense (or the assumed portion relating to options granted to directors) resulted in a tax benefit using an assumed tax rate of 34.0%. The actual expense will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used and the option pricing model ultimately adopted. Under the above assumptions, the adoption of the stock-based benefit plans will result in no additional shares under the treasury stock method for purposes of calculating earnings per share. There can be no assurance that the actual exercise price of the stock options will be equal to the $10.00 price per share. If a portion of the shares used to satisfy the exercise of options comes from authorized but unissued shares, our net income per share and shareholders’ equity per share would decrease. The issuance of authorized but unissued shares of common stock pursuant to the exercise of options under such plan would dilute shareholders’ ownership and voting interests by approximately 9.1%.

(5) Net income per share computations are determined by taking the number of shares assumed to be sold in the offering and contributed to the charitable foundation and, according to ASC 718-40, subtracting the employee stock ownership plan shares which have not been committed for release during the year. See footnote 1 above. The number of shares of common stock actually sold and the corresponding number of outstanding shares may be more or less than the assumed amounts.

(6) Does not give effect to the non-recurring expense that will be recognized during fiscal 2017 as a result of the contribution to the charitable foundation. The following table shows the estimated after-tax expense associated with the contribution to the charitable foundation, as well as pro forma net income and pro forma net income per share assuming the contribution to the charitable foundation had been expensed during the three months ended September 30, 2016.

	For the Three Months Ended September 30, 2016 Based upon the Sale at $10.00  Per Share of:
	14,875,000 Shares			17,500,000 Shares			20,125,000 Shares			23,143,750 Shares
	(In thousands, except per share amounts)
After-tax expense of stock and cash contribution to charitable foundation	$	3,300		$	3,300		$	3,300		$	3,300
Pro forma net income, adjusted for foundation contribution		(2,103	)		(2,147	)		(2,191	)		(2,241	)
Pro forma net income (loss) per share		(0.15	)		(0.13	)		(0.12	)		(0.10	)

The pro forma data assume that we will realize 100% of the income tax benefit as a result of the contribution to the charitable foundation based on a 34.0% combined federal and state tax rate. The realization of the tax benefit is generally limited annually to 10% of our annual taxable income. However, for federal and state tax purposes, we can carry forward any unused portion of the deduction for five years following the year in which the contribution is made.

(7) The retained earnings of PCSB Bank will be substantially restricted after the offering. See “Our Dividend Policy,” and “Supervision and Regulation—New York Banking Laws and Supervision—Dividends.”

(8) At September 30, 2016, intangible assets totaled $6.8 million.

45

	At or for the Year Ended June 30, 2016 Based upon the Sale at $10.00  Per Share of:
	14,875,000 Shares			17,500,000 Shares			20,125,000 Shares			23,143,750 Shares (1)
	(Dollars in thousands, except per share amounts)
Gross proceeds of stock offering	$	148,750		$	175,000		$	201,250		$	231,438
Plus: market value of shares issued to charitable foundation		2,826			3,325			3,824			4,397
Pro forma market capitalization	$	151,576		$	178,325		$	205,074		$	235,835
Gross proceeds of stock offering	$	148,750		$	175,000		$	201,250		$	231,438
Less: expenses		3,038			3,255			3,472			3,722
Estimated net proceeds		145,712			171,745			197,778			227,716
Less: cash contribution to charitable foundation		(2,174	)		(1,675	)		(1,176	)		(603	)
Less: common stock purchased by employee stock ownership plan		(12,126	)		(14,266	)		(16,406	)		(18,867	)
Less: common stock purchased by stock-based benefit plans		(6,063	)		(7,133	)		(8,203	)		(9,433	)
Estimated net proceeds, as adjusted	$	125,349		$	148,671		$	171,993		$	198,813
For the Year Ended June 30, 2016
Consolidated net earnings:
Historical	$	2,926		$	2,926		$	2,926		$	2,926
Pro forma income on net proceeds		943			1,119			1,294			1,4966
Pro forma employee stock ownership plan adjustment (2)		(534	)		(628	)		(722	)		(830	)
Pro forma stock award adjustment (3)		(800	)		(942	)		(1,083	)		(1,245	)
Pro forma stock option plan adjustment (4)		(649	)		(764	)		(878	)		(1,010	)
Pro forma net income (5)(6)	$	1,886		$	1,711		$	1,537		$	1,337
Per share net income:
Historical	$	0.21		$	0.18		$	0.16		$	0.14
Pro forma income on net proceeds		0.07			0.07			0.07			0.07
Pro forma employee stock ownership plan adjustment (2)		(0.04	)		(0.04	)		(0.04	)		(0.04	)
Pro forma stock award adjustment (3)		(0.06	)		(0.06	)		(0.06	)		(0.06	)
Pro forma stock option plan adjustment (4)		(0.05	)		(0.05	)		(0.05	)		(0.05	)
Pro forma net income per share (5)(6)	$	0.13		$	0.10		$	0.08		$	0.06
Stock price as a multiple of pro forma earnings per share		76.92	x		100.00	x		125.00	x		166.67	x
Shares used for calculating pro forma earnings per share		14,025,856			16,501,007			18,976,158			21,822,581
At June 30, 2016
Shareholders’ equity:
Historical	$	109,949		$	109,949		$	109,949		$	109,949
Estimated net proceeds		145,712			171,745			197,778			227,716
Plus: market value of shares issued to charitable foundation		2,826			3,325			3,824			4,397
Plus: tax benefit of contribution to charitable foundation		1,700			1,700			1,700			1,700
Less: expense of contribution to charitable foundation		(5,000	)		(5,000	)		(5,000	)		(5,000	)
Less: common stock acquired by employee stock ownership plan (2)		(12,126	)		(14,266	)		(16,406	)		(18,867	)
Less: common stock acquired by stock-based benefit plans (3)		(6,063	)		(7,133	)		(8,203	)		(9,433	)
Pro forma shareholders’ equity (7)(8)		236,998			260,320			283,642			310,462
Intangible assets		(6,808	)		(6,808	)		(6,808	)		(6,808	)
Pro forma tangible shareholders equity	$	230,190		$	253,512		$	276,834		$	303,654
Shareholders’ equity per share:
Historical	$	7.26		$	6.16		$	5.36		$	4.65
Estimated net proceeds		9.61			9.63			9.64			9.66
Plus: market value of shares issued to charitable foundation		0.19			0.19			0.19			0.19
Plus: tax benefit of contribution to charitable foundation		0.11			0.10			0.08			0.07
Less: expense of contribution to charitable foundation		(0.33	)		(0.28	)		(0.24	)		(0.21	)
Less: common stock acquired by employee stock ownership plan (2)		(0.80	)		(0.80	)		(0.80	)		(0.80	)
Less: common stock acquired by stock-based benefit plans (3)		(0.40	)		(0.40	)		(0.40	)		(0.40	)
Pro forma shareholders’ equity per share (7)(8)		15.64			14.60			13.83			13.16
Intangible assets		(0.45	)		(0.38	)		(0.33	)		(0.29	)
Pro forma tangible shareholders equity per share	$	15.19		$	14.22		$	13.50		$	12.87
Offering price as percentage of equity per share (8)		63.94	%		68.49	%		72.31	%		75.99	%
Offering price as percentage of tangible equity per share (8)		65.83	%		70.32	%		74.07	%		77.70	%
Shares used for pro forma shareholders’ equity per share		15,157,625			17,832,500			20,507,375			23,583,481

(footnotes begin on following page)

46

(1) As adjusted to give effect to an increase in the number of shares, which increase could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2) Assumes that 8% of the shares of common stock sold in the offering and contributed to the charitable foundation will be purchased by the employee stock ownership plan. For purposes of this table, the funds used to acquire these shares are assumed to have been borrowed by the employee stock ownership plan from PCSB Financial. PCSB Bank intends to make annual contributions to the employee stock ownership plan in an amount at least equal to the required principal and interest payments on the debt. PCSB Bank’s total annual payments on the employee stock ownership plan debt are based upon 15 equal annual installments of principal and interest. Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 718-40, “Compensation—Stock Compensation—Employee Stock Ownership Plans” (“ASC 718-40”) requires that an employer record compensation expense in an amount equal to the fair value of the shares committed to be released to employees. The pro forma adjustments assume that the employee stock ownership plan shares are allocated in equal annual installments based on the number of loan repayment installments assumed to be paid by PCSB Bank, the fair value of the common stock remains equal to the offering price and the employee stock ownership plan expense reflects an effective combined federal and state tax rate of 34.0%. The unallocated employee stock ownership plan shares are reflected as a reduction of shareholders’ equity. No reinvestment is assumed on proceeds contributed to fund the employee stock ownership plan. The pro forma net income further assumes that 80,841, 95,107, 109,373 and 125,779 shares were committed to be released during the year at the minimum, midpoint, maximum, and adjusted maximum of the offering range, respectively, and according to ASC 718-40, only the employee stock ownership plan shares committed to be released during the period were considered outstanding for purposes of net income per share calculations.

(3) Assumes that one or more stock-based benefit plans purchase an aggregate number of shares of common stock equal to 4% of the shares to be sold in the offering and contributed to the charitable foundation. Shareholder approval of the plans and purchases by the plans may not occur earlier than six months after the completion of the offering. The shares may be acquired directly from PCSB Financial or through open market purchases. Shares in the stock-based benefit plan are assumed to vest over a period of five years. The funds to be used to purchase the shares will be provided by PCSB Financial. The table assumes that (i) the stock-based benefit plan acquires the shares through open market purchases at $10.00 per share, (ii) 20% of the amount contributed to the plan is amortized as an expense during the year ended June 30, 2016, and (iii) the plan expense reflects an effective combined federal and state tax rate of 34.0%. The issuance of authorized but unissued shares of common stock to fund these awards would dilute shareholders’ ownership and voting interests by approximately 3.8%.

(4) Assumes that options are granted under one or more stock-based benefit plans to acquire an aggregate number of shares of common stock equal to 10% of the shares to be sold in the offering and contributed to the charitable foundation. Shareholder approval of the plans may not occur earlier than six months after the completion of the offering. In calculating the pro forma effect of the stock-based benefit plans, it is assumed that the exercise price of the stock options and the trading price of the common stock at the date of grant were $10.00 per share, the estimated grant-date fair value determined using the Black-Scholes option pricing model was $2.34 for each option, the aggregate grant-date fair value of the stock options was amortized to expense on a straight-line basis over a 5-year vesting period of the options, and that 25% of the amortization expense (or the assumed portion relating to options granted to directors) resulted in a tax benefit using an assumed combined federal and state tax rate of 34.0%. The actual expense will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used and the option pricing model ultimately adopted. Under the above assumptions, the adoption of the stock-based benefit plans will result in no additional shares under the treasury stock method for purposes of calculating earnings per share. There can be no assurance that the actual exercise price of the stock options will be equal to the $10.00 price per share. If a portion of the shares used to satisfy the exercise of options comes from authorized but unissued shares, our net income per share and shareholders’ equity per share would decrease. The issuance of authorized but unissued shares of common stock pursuant to the exercise of options under such plan would dilute shareholders’ ownership and voting interests by approximately 9.1%.

(5) Net income per share computations are determined by taking the number of shares assumed to be sold in the offering and contributed to the charitable foundation and, according to ASC 718-40, subtracting the employee stock ownership plan shares which have not been committed for release during the year. See footnote 1 above. The number of shares of common stock actually sold and the corresponding number of outstanding shares may be more or less than the assumed amounts.

(footnotes continue on following page)

47

(continued from previous page)

(6) Does not give effect to the non-recurring expense that will be recognized during fiscal 2017 as a result of the contribution to the charitable foundation. The following table shows the estimated after-tax expense associated with the contribution to the charitable foundation, as well as pro forma net income and pro forma net income per share assuming the contribution to the charitable foundation had been expensed during the year ended June 30, 2016.

	For the Year Ended June 30, 2016 Based upon the Sale at $10.00 Per Share  of:
	14,875,000 Shares			17,500,000 Shares			20,125,000 Shares			23,143,750 Shares
	(In thousands, except per share amounts)
After-tax expense of stock and cash contribution to charitable foundation	$	3,300		$	3,300		$	3,300		$	3,300
Pro forma net income, adjusted for foundation contribution		(1,414	)		(1,589	)		(1,763	)		(1,963	)
Pro forma net income (loss) per share		(0.10	)		(0.10	)		(0.09	)		(0.09	)

The pro forma data assume that we will realize 100% of the income tax benefit as a result of the contribution to the charitable foundation based on a combined federal and state tax rate of 34.0%. The realization of the tax benefit is generally limited annually to 10% of our annual taxable income. However, for federal and state tax purposes, we can carry forward any unused portion of the deduction for five years following the year in which the contribution is made.

(7) The retained earnings of PCSB Bank will be substantially restricted after the offering. See “Our Dividend Policy,” and “Supervision and Regulation—New York Banking Laws and Supervision—Dividends.”

(8) At June 30, 2016, intangible assets totaled $6.8 million.

48

COMPARISON OF VALUATION AND PRO FORMA INFORMATION

WITH AND WITHOUT THE CHARITABLE FOUNDATION

As reflected in the table below, if the charitable foundation is not established and funded in connection with the conversion and offering, RP Financial estimates that our pro forma valuation would be greater and, as a result, a greater number of shares of common stock would be issued in the offering. At the minimum, midpoint, maximum, and adjusted maximum of the valuation range, our pro forma valuation is $151.6 million, $178.3 million, $205.1 million and $235.8 million, respectively, with the charitable foundation, as compared to $155.6 million, $183.0 million, $210.5 million and $242.0 million, respectively, without the charitable foundation. There is no assurance that if the charitable foundation were not formed, the appraisal prepared at that time would conclude that our pro forma market value would be the same as that estimated in the table below. Any appraisal prepared at that time would be based on the facts and circumstances existing at that time, including, among other things, market and economic conditions.

For comparative purposes only, set forth below are certain pricing ratios, financial data and ratios at and for the three months ended September 30, 2016 at the minimum, midpoint, maximum, and adjusted maximum of the offering range, assuming the offering was completed at the beginning of the period, with and without the charitable foundation.

	Minimum of Offering Range						Midpoint of Offering Range						Maximum of Offering Range						Adjusted Maximum of Offering Range
	With Foundation			Without Foundation			With Foundation			Without Foundation			With Foundation			Without Foundation			With Foundation			Without Foundation
	(Dollars in thousands, except per share amounts)
Estimated offering amount	$	148,750		$	155,550		$	175,000		$	183,000		$	201,250		$	210,450		$	231,438		$	242,018
Pro forma market capitalization		151,576			155,550			178,325			183,000			205,074			210,450			235,835			242,018
Total assets		1,381,493			1,388,232			1,404,815			1,412,160			1,428,137			1,436,089			1,454,957			1,463,607
Total liabilities		1,142,938			1,142,938			1,142,938			1,142,938			1,142,938			1,142,938			1,142,938			1,142,938
Pro forma shareholders’ equity		238,555			245,294			261,877			269,222			285,199			293,151			312,019			320,669
Pro forma net income (1)		1,197			1,199			1,153			1,154			1,109			1,110			1,059			1,058
Pro forma shareholders’ equity per share		15.74			15.77			14.69			14.71			13.91			13.93			13.23			13.25
Pro forma net income per share		0.09			0.08			0.07			0.07			0.06			0.06			0.05			0.05
Pro forma pricing ratios:
Offering price as a percentage of pro forma shareholders’ equity per share		63.53	%		63.41	%		68.07	%		67.98	%		71.89	%		71.79	%		75.59	%		75.47	%
Offering price to pro forma net income per share		27.78	x		31.25	x		35.71	x		35.71	x		41.67	x		41.67	x		50.00	x		50.00	x
Pro forma financial ratios:
Return on assets (annualized)		0.35	%		0.35	%		0.33			0.33	%		0.31	%		0.31	%		0.29	%		0.29	%
Return on equity (annualized)		2.01	%		1.96	%		1.76	%		1.71	%		1.56	%		1.51	%		1.36	%		1.32	%
Equity to assets		17.27	%		17.67	%		18.64	%		19.06	%		19.97	%		20.41	%		21.45	%		21.91	%
Total shares issued		15,157,625			15,555,000			17,832,500			18,300,000			20,507,375			21,045,000			23,583,481			24,201,750

(footnotes on following page)

49

(1) The following table shows the estimated after-tax expense associated with the contribution to the charitable foundation, as well as pro forma net income, pro forma net income per share, pro forma return on assets and pro forma return on shareholders’ equity assuming the contribution to the charitable foundation was expensed during the three months ended September 30, 2016.

	Minimum of Offering Range			Midpoint of Offering Range			Maximum of Offering Range			Adjusted Maximum of Offering Range
	(Dollars in thousands, except per share amounts)
After-tax expense of stock and cash contribution to foundation	$	3,300		$	3,300		$	3,300		$	3,300
Pro forma net income (loss)	$	(2,103	)	$	(2,147	)	$	(2,191	)	$	(2,241	)
Pro forma net income (loss) per share	$	(0.15	)	$	(0.13	)	$	(0.12	)	$	(0.10	)
Offering price to pro forma net income (loss) per share		*			*			*			*
Pro forma return on assets (annualized)		(0.61	)%		(0.61	)%		(0.61	)%		(0.62	)%
Pro forma return on equity (annualized)		(3.53	)%		(3.28	)%		(3.07	)%		(2.87	)%

* Not meaningful.

50

BUSINESS OF PCSB FINANCIAL CORPORATION

PCSB Financial is a Maryland corporation and has not engaged in any business to date, other than organizational activities. Upon completion of the conversion and offering, PCSB Financial will own all of the issued and outstanding capital stock of PCSB Bank. We intend to contribute at least 50% of the net offering proceeds to PCSB Bank. PCSB Financial will retain the remainder of the net offering proceeds. We intend to use and invest those proceeds as discussed under “How We Intend to Use the Proceeds from the Offering.” PCSB Financial’s executive offices/headquarters are located at 2651 Strang Blvd., Suite 100, Yorktown Heights, NY 10598, and its telephone number is (914) 248-7272.

After the conversion and the offering are completed, PCSB Financial, as the holding company of PCSB Bank, will be authorized to pursue other business activities permitted by applicable laws and regulations, which may include the acquisition of banking and financial services companies. We currently have no understandings or agreements to acquire other financial institutions or financial services companies, although we may determine to do so in the future.

Following the conversion and offering, our cash flow will depend on earnings from the investment of the net offering proceeds and from any dividends we receive from PCSB Bank. PCSB Bank is subject to regulatory limitations on the amount of dividends that it may pay. Initially, PCSB Financial will not own or lease any property, but instead will pay a fee to PCSB Bank for the use of its premises, furniture and equipment. Presently, we intend to employ as officers of PCSB Financial only persons who are officers of PCSB Bank. We will use, however, the support staff of PCSB Bank from time to time. We will pay a fee to PCSB Bank for the time devoted to PCSB Financial by employees of PCSB Bank; however, these individuals will not be separately compensated by PCSB Financial. PCSB Financial may hire additional employees, as appropriate, to the extent it expands its business in the future.

BUSINESS OF PCSB BANK

Founded in 1871, PCSB Bank is a New York-chartered savings bank that operates 15 banking offices located in Dutchess, Putnam, Rockland and Westchester Counties in New York. We consider these four counties, and the surrounding areas, as our primary market area for our business operations. We attract deposits from the general public and use those funds primarily to originate and purchase residential real estate, commercial real estate and business loans, and to purchase investment securities. At September 30, 2016, we had consolidated total assets of $1.25 billion, total deposits of $1.12 billion and equity of $111.5 million. PCSB Bank is subject to comprehensive regulation and examination by the NYSDFS and the Federal Deposit Insurance Corporation. Our website address is www.pcsb.com. Information on this website is not and should not be considered a part of this prospectus.

Market Area

Our primary market area encompasses Dutchess, Putnam, Rockland and Westchester Counties in New York, which are the counties in which our offices are located, and the surrounding areas. We view Westchester County, which borders the Bronx (New York City’s northern most borough) and is more populous than the other counties, as a primary area for growth, particularly for commercial lending and deposit opportunities. Westchester County includes a high concentration of office, medical, retail, industrial, mixed use and multi-family real estate buildings and businesses. Our primary focus in this marketplace is small to middle market businesses in these segments. Rising real estate values and lack of available commercial space in Brooklyn and Manhattan has caused businesses to migrate to central and lower Westchester County, which has increased the demand for flex-industrial and multi-family loans in our market area. Dutchess, Putnam and Rockland Counties offer similar commercial opportunities to Westchester County, but on a significantly smaller scale, and provide greater opportunities in residential mortgage lending and consumer lending and in retail deposit gathering. The close proximity of Bronx County, New York City, Fairfield County, Connecticut, and Bergen County, New Jersey, to our market area also creates a secondary area of opportunity for office, industrial and multi-family property loans.

51

Based on published statistics, the U.S. unemployment rate and the New York State unemployment rate were both 5.0% in September 2016. The four counties in our primary market area each had a lower unemployment rate (Dutchess County, 4.2%; Putnam County, 4.1%; Rockland County, 4.3%; and Westchester County, 4.4%). Likewise, median household income in each county exceeds both the U.S. and the New York State figures. Based on published statistics, median household income is $72,471 in Dutchess County, $96,262 in Putnam County, $85,808 in Rockland County and $83,422 in Westchester County, compared to $56,516 in the U.S. and $58,005 in New York State. Based on published statistics, the 2015 estimated population was 295,754 in Dutchess County, 99,042 in Putnam County, 326,037 in Rockland County and 976,396 in Westchester County.

Competition

We face significant competition for deposits and loans. Our most direct competition for deposits has historically come from the many financial institutions operating in our market area, many of which are significantly larger than we are and, therefore, have greater resources. We compete with these larger institutions particularly in our Westchester County market area. We also face competition for investors’ funds from other financial service companies such as brokerage firms, money market funds, mutual funds and other corporate and government securities. Based on data from the Federal Deposit Insurance Corporation at June 30, 2016 (the latest date for which information is available), we had 2.24% of the Federal Deposit Insurance Corporation-insured deposit market share in Dutchess County among the 19 institutions with offices in the county, 22.91% in Putnam County among the 11 institutions with offices in the county, 0.12% in Rockland County among the 15 institutions with offices in the county, and 0.64% in Westchester County among the 36 institutions with offices in the county. In all four counties, the top three institutions were either New York City money center banks (i.e., JP Morgan Chase, NA, Morgan Stanley Private Bank, NA and Citibank, NA) or large regional banks (i.e., Manufacturers and Traders Trust Company, Citizens Bank, NA and Sterling Bank). This market share data excludes deposits held by credit unions because their deposits are not insured by the Federal Deposit Insurance Corporation.

Competition for loans comes primarily from the many financial institutions operating in our market area. Our experience in recent years has been that many financial institutions in our market area, especially community banks seeking to expand their commercial loan portfolios and institutions located in highly competitive Westchester County, have been willing to price commercial loans aggressively in order to gain market share.

Lending Activities

Commercial Real Estate Loans. At September 30, 2016, commercial real estate loans were $375.9 million, or 49.0%, of our total loan portfolio. Our commercial real estate loans are generally secured by properties used for business purposes such as office buildings, industrial facilities and retail facilities, and multi-family properties. At September 30, 2016 multi-family residential real estate loans, which are described below, totaled $70.4 million. Excluding multi-family loans, $77.2 million of our commercial real estate portfolio was owner occupied real estate and $228.3 million was secured by income producing, or non-owner occupied real estate.

At September 30, 2016, substantially all of our commercial real estate loans were secured by properties located in the lower Hudson Valley; however, we will originate commercial real estate loans on properties located outside this area based on an established relationship with a strong borrower. We intend to continue to grow our commercial real estate loan portfolio while maintaining prudent underwriting standards. In addition to originating these loans, we also purchase and participate in commercial real estate loans with other financial institutions. Such loans are independently underwritten according to our policies and require satisfactory documentation review by our legal counsel before we will purchase or participate in such loans.

We originate a variety of adjustable-rate commercial real estate loans with terms and amortization periods generally up to 25 years, which may include balloon loans. Interest rates and payments on our adjustable-rate loans adjust every five, seven or ten years and generally are indexed to the prime rate or the corresponding Treasury rate, plus a margin. We generally include pre-payment penalties on commercial real estate loans we originate.

52

In underwriting commercial real estate loans we consider a number of factors, which include the projected net cash flow to the loan’s debt service requirement (generally requiring a minimum of 120%), the age and condition of the collateral, the financial resources and income level of the borrower and the borrower’s experience in owning or managing similar properties. Commercial real estate loans are generally originated in amounts up to 75% of the appraised value or the purchase price of the property securing the loan, whichever is lower. When circumstances warrant, guarantees are obtained from commercial real estate customers. In addition, the borrower’s and guarantor’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates.

If we foreclose on a commercial real estate loan, the marketing and liquidation period to convert the real estate asset to cash can be a lengthy process with substantial holding costs. In addition, vacancies, deferred maintenance, repairs and market stigma can result in prospective buyers expecting sale price concessions to offset their real or perceived economic losses for the time it takes them to return the property to profitability. Depending on the individual circumstances, initial charge-offs and subsequent losses on commercial real estate loans can be unpredictable and substantial.

At September 30, 2016, our largest commercial real estate loan had an outstanding balance of $10.1 million and is secured by a non-owner occupied industrial property. At September 30, 2016, this loan was performing according to its original terms.

Multi-Family Residential Real Estate Loans. At September 30, 2016, multi-family real estate loans were $70.4 million, or 9.2%, of our total loan portfolio. Our multi-family real estate loans are generally secured by properties consisting of five to 100 rental units in our market area. In addition to originating these loans, we also purchase and participate in multi-family residential real estate loans with other financial institutions. Such loans are independently underwritten according to our policies and require satisfactory documentation review by our legal counsel before we will purchase or participate in such loans.

We originate a variety of adjustable-rate multi-family residential real estate loans with terms and amortization periods generally up to 30 years, which may include balloon loans. Interest rates and payments on our adjustable-rate loans adjust every five, seven or ten years and generally are indexed to the prime rate or the corresponding Treasury rate, plus a margin. We generally include pre-payment penalties on multi-family residential real estate loans we originate.

In underwriting multi-family residential real estate loans we consider a number of factors, which include the projected net cash flow to the loan’s debt service requirement (generally requiring a minimum of 120%), the age and condition of the collateral, the financial resources and income level of the borrower and the borrower’s experience in owning or managing similar properties. Multi-family residential real estate loans are generally originated in amounts up to 75% of the appraised value or the purchase price of the property securing the loan, whichever is lower. When circumstances warrant, guarantees are obtained from multi-family residential real estate customers. In addition, the borrower’s and guarantor’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates.

If we foreclose on a multi-family real estate loan, the marketing and liquidation period to convert the real estate asset to cash can be a lengthy process with substantial holding costs. In addition, vacancies, deferred maintenance, repairs and market stigma can result in prospective buyers expecting sale price concessions to offset their real or perceived economic losses for the time it takes them to return the property to profitability. Depending on the individual circumstances, initial charge-offs and subsequent losses on commercial real estate loans can be unpredictable and substantial.

At September 30, 2016, our largest multi-family residential real estate loan had an outstanding balance of $7.5 million and is secured by a 208-unit apartment complex. At September 30, 2016, this loan was performing according to its original terms.

53

Commercial Business Loans. We originate commercial term loans and variable lines of credit to a variety of small and medium sized businesses in our market area. These loans are generally secured by business assets, and we may support this collateral with junior liens on real property. At September 30, 2016, commercial business loans were $82.6 million, or 10.8% of our total loan portfolio. We intend to increase the amount of commercial business loans that we originate. Customers for these loans include professional businesses, multi-generational family-owned businesses, and not for profit businesses. We encourage our commercial business borrowers to maintain their primary deposit accounts with us, which enhances our interest rate spread and overall profitability.

The commercial business loans we offer include term loans and revolving lines of credit. Commercial loans and lines of credit are made with either variable or fixed rates of interest. Variable rates are based on the prime rate, plus a margin. Commercial business loans typically have shorter terms to maturity and higher interest rates than commercial real estate loans, but may involve more credit risk because of the type and nature of the collateral.

When making commercial loans, we consider the financial statements of the borrower, our lending history with the borrower, the debt service capabilities and global cash flows of the borrower and other guarantors, the projected cash flows of the business and the value of the collateral, accounts receivable, inventory and equipment. Depending on the collateral used to secure the loans, commercial loans are made in amounts of up to 75% of the value of the collateral securing the loan. All of these loans are secured by assets of the respective borrowers.

At September 30, 2016, $17.3 million of business loans are to developers to purchase land. These loans are underwritten for projects with appropriate construction or development approvals already in place, have variable rates of interest and terms up to 3 years. Additionally, these loans are made in amounts up to 50% of the land value.

At September 30, 2016, our largest commercial business loan had an outstanding balance of $7.0 million and is secured by a commercial condominium property. At September 30, 2016, this loan was performing according to its original terms.

Construction Loans. We originate loans to established local developers to finance the construction of one- to four-family residential properties, and commercial and multi-family properties. At September 30, 2016, construction and land development loans were $28.8 million, or 3.76% of our total loan portfolio, consisting of $5.3 million of one- to four-family residential construction loans and $23.5 million of commercial and multi-family real estate construction loans. The majority of these loans are secured by properties located in our primary market area. PCSB will occasionally, through a local nonprofit, fund the construction of low-income multi-family properties.

Most of our construction loans are interest-only loans that provide for the payment of interest during the construction phase, which is usually up to 12 to 24 months. Interest is generally a variable rate based on the prime rate, plus a margin. At the end of the construction phase, the loan may convert to a permanent mortgage loan or the loan may be payable in full. Loans generally can be made with a maximum loan-to-value ratio of 75% of the appraised market value upon completion of the project. Before making a commitment to fund a construction loan, we generally require an appraisal of the property by an independent licensed appraiser for construction and land development loans. We also generally require an inspection of the property before disbursement of funds during the term of the construction loan. Loan proceeds are disbursed periodically in increments as construction progresses and as inspection by our approved inspectors warrant.

At September 30, 2016, our largest construction and land development loan had an outstanding balance of $5.4 million and is secured by an 82-unit senior and work-force housing project. At September 30, 2016, this loan was performing according to its original terms.

Residential Mortgage Loans. Our one- to four-family residential loan portfolio consists of mortgage loans that enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the owner. At September 30, 2016, one- to four-family residential real estate loans were $222.8 million, or 29.05% of our total loan portfolio, consisting of $190.9 million of fixed-rate loans and $31.9 million of adjustable-rate loans.

54

We offer fixed-rate and adjustable-rate residential mortgage loans with maturities up to 30 years. Some of the properties include two- to four-unit properties, all of which are classified as residential mortgage loans. Our one- to four-family residential mortgage loans that we originate or purchase are generally underwritten according to Fannie Mae and Freddie Mac guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed- and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency. We also originate loans above the conforming limits, which are referred to as “jumbo loans.” We generally underwrite jumbo loans, whether originated or purchased, in a manner similar to conforming loans. Jumbo loans are common in our market area. We generally retain one- to four-family residential mortgage loans in our portfolio.

We originate our adjustable-rate one- to four-family residential mortgage loans with initial interest rate adjustment periods of one, three, five, seven or ten years, based on changes in a designated market index. These loans are limited to a 200 basis point initial increase in their interest rate, a 200 basis point increase in their interest rate annually after the initial adjustment, and a maximum upward adjustment of 400 to 600 basis points over the life of the loan. We determine whether a borrower qualifies for an adjustable-rate mortgage loan in conformance with the underwriting guidelines set forth by Fannie Mae and Freddie Mac in the secondary mortgage market. In particular, we determine whether a borrower qualifies for an adjustable-rate mortgage loan with an initial fixed-rate period of five years or less based on the ability to repay both principal and interest using an interest rate which is 2.0% above the initial interest rate, including a reasonable estimate of real estate taxes and insurance, and taking into account the maximum debt-to-income ratio stipulated in the underwriting guidelines in the secondary mortgage market. The qualification for an adjustable-rate mortgage loan with an initial fixed-rate period exceeding five years is based on the borrower’s ability to repay at the initial fixed interest rate.

We will originate one- to four-family residential mortgage loans with loan-to-value ratios up to 80% without private mortgage insurance. We will originate loans with loan-to-value ratios of up to 95% with private mortgage insurance and where the borrower’s debt does not exceed 45% of the borrower’s monthly cash flow. To encourage lending to low- and moderate-income home buyers, we have several in-house developed programs which can include low down payments, a lower than market interest rate, or a grant to be used towards closing costs.

We generally do not offer “interest only” mortgage loans on one- to four-family residential properties. We do not offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. Additionally, outside of the loan programs mentioned previously, we do not offer “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation).

Home Equity Lines of Credit. At September 30, 2016, the outstanding balance owed on home equity lines of credit was $40.4 million, or 5.27% of our total loan portfolio. Home equity lines of credit have adjustable rates of interest that are indexed to the prime rate, plus a margin.

The procedures for underwriting home equity lines of credit include an assessment of the applicant’s payment history on other debts and ability to meet existing obligations and payments on the proposed loan. Although the applicant’s creditworthiness is a primary consideration, the underwriting process also includes a comparison of the value of the collateral to the proposed loan amount.

The home equity lines of credit that we originate are revolving lines of credit which generally have a term of 25 years, with draws available for the first ten years. Our 25-year lines of credit are interest only during the first ten years, and amortize on a fifteen year basis thereafter. We generally originate home equity lines of credit with loan-to-value ratios of up to 75% when combined with the principal balance of the existing first mortgage loan, although loan-to-value ratios may occasionally exceed 75% on a case-by-case basis. Maximum loan-to-value ratios are determined based on an applicant’s credit score, property value, loan amount and debt-to-income ratio. Rates are adjusted monthly based on changes in a designated market index.

55

Other Loans. We offer consumer and business installment loans. At September 30, 2016, other loans were $16.4 million, or 2.14% of total loans, and included $322,000 of personal loans and $16.1 million of business installment loans. The procedures for underwriting consumer and installment loans include an assessment of the applicant’s and guarantor’s, if applicable, payment history on other debts and ability to meet existing obligations and payments on the proposed loan.

Loan Underwriting Risks

Commercial and Multi-Family Real Estate Loans. Loans secured by commercial and multi-family real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential mortgage loans. Of primary concern in commercial and multi-family real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy. To monitor cash flows on income properties, we require borrowers and loan guarantors, if any, to provide annual financial statements on commercial and multi-family real estate loans. In reaching a decision on whether to make a commercial or multi-family real estate loan, we consider and review a global cash flow analysis of the borrower and consider the net operating income of the property, the borrower’s expertise, credit history and profitability and the value of the underlying property. We have generally required that the properties securing these real estate loans have debt service coverage ratios (the ratio of earnings before debt service to debt service) of at least 1.20x. An environmental phase one report is obtained when the possibility exists that hazardous materials may have existed on the site, or the site may have been impacted by adjoining properties that handled hazardous materials.

Construction Loans. Our construction loans are based upon estimates of costs and values associated with the completed project. Underwriting is focused on the borrowers’ financial strength, credit history and demonstrated ability to produce a quality product and effectively market and manage their operations. All construction loans for which the builder does not have a binding purchase agreement must be approved by senior loan officers.

Construction lending involves additional risks when compared with permanent residential lending because funds are advanced upon the security of the project, which is of uncertain value before its completion. Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio. This type of lending also typically involves higher loan principal amounts and is often concentrated with a small number of builders. In addition, generally during the term of a construction loan, interest may be funded by the borrower or disbursed from an interest reserve set aside from the construction loan budget. These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest. If the appraised value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. A discounted cash flow analysis is utilized for determining the value of any construction project of five or more units. Our ability to continue to originate a significant amount of construction loans is dependent on the strength of the housing market in our market areas.

Commercial Business Loans. Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business and the collateral securing these loans may fluctuate in value. Our commercial business loans are originated primarily based on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. Most often, this collateral consists of real estate, accounts receivable, inventory or equipment. Credit support provided by the borrower for most of these loans and the probability of repayment is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any. As a result, the

56

availability of funds for the repayment of commercial business loans may depend substantially on the success of the business itself. Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value.

Adjustable-Rate Loans. While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate loans, an increased monthly payment required of adjustable-rate loan borrowers in a rising interest rate environment could cause an increase in delinquencies and defaults. The marketability of the underlying property also may be adversely affected in a high interest rate environment. In addition, although adjustable-rate loans make our asset base more responsive to changes in interest rates, the extent of this interest sensitivity is somewhat limited by the annual and lifetime interest rate adjustment limits on residential loans.

Consumer Loans. Consumer loans may entail greater risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as motor vehicles. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower. Consumer loan collections depend on the borrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Loan Approval Procedures and Authority

Our lending activities follow written, non-discriminatory, underwriting standards and loan origination procedures established by our board of trustees and management. The board of trustees has granted loan approval authority to certain senior officers up to prescribed limits not exceeding $2.0 million depending on the officer’s experience. Loans approved under these officer authorities require dual signatures of the loan officer assigned to the loan and the officer with the appropriate approval authority. Loans in excess of $2.0 million require approval of the Loan Committee of the board of trustees, as do any extensions of credit to classified borrowers or extensions of credit in excess of $1.0 million. Loans that involve exceptions to policy, including loans in excess of our internal loans-to-one borrower limitation, must be authorized by the Loan Committee of the board of trustees. Exceptions are reported to the board of trustees monthly.

Loans-to-One Borrower

Under New York banking law, our total loans or extensions of credit to a single borrower or group of related borrowers cannot exceed, with specified exceptions, 15% of our capital stock, surplus fund and undivided profits. We may lend additional amounts up to 10% if the loans or extensions of credit are fully secured by readily-marketable collateral. At September 30, 2016, our regulatory limit on loans-to-one borrower was $17.4 million and our internal loans-to-one borrower limit was $11.0 million. Both our regulatory and internal limits will increase following completion of the offering. We expect to increase our post-conversion internal limit to $20.0 million.

At September 30, 2016, our largest lending relationship consisted of 2 loans aggregating $10.8 million, secured by two non-owner occupied multi-purpose flex office, warehouse and retail properties. At September 30, 2016, each loan in this relationship was performing according to its original repayment terms. At September 30, 2016, we had two additional lending relationships with loan balances outstanding and available credit limits greater than $10.0 million, which were performing according to their original terms.

Investment Activities

We have legal authority to invest in various types of investment securities and liquid assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises, residential mortgage-backed securities and municipal government securities, deposits at the Federal Home Loan Bank of New York, certificates of deposit of federally insured institutions, investment grade corporate bonds. We also are required to maintain an investment

57

in Federal Home Loan Bank of New York stock, which investment is based on the level of our Federal Home Loan Bank borrowings. Although we have the authority under applicable law to invest in derivative securities, we had no investments in derivative securities at September 30, 2016. At September 30, 2016, our investment portfolio had a fair value of $377.8 million and consisted primarily of U.S. Government securities, U.S. Government agency securities, including residential and collateralized mortgage-backed securities, and investment grade corporate bonds.

Our investment objectives are to provide and maintain liquidity, to establish an acceptable level of interest rate and credit risk, to provide a use of funds when demand for loans is weak and to generate a favorable return. Our board of trustees has the overall responsibility for the investment portfolio, including approval of our investment policy. Our management is responsible for implementation of the investment policy and monitoring our investment performance. The board of trustees reviews the status of our investment portfolio monthly. See Note 2 to Notes to Consolidated Financial Statements.

Sources of Funds

General. Deposits have traditionally been our primary source of funds for our lending and investment activities. We also use borrowings, primarily Federal Home Loan Bank of New York advances, to supplement cash flow needs, as needed. In addition, funds are derived from scheduled loan payments, investment maturities, loan prepayments, retained earnings and income on earning assets. While scheduled loan payments and income on earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition.

Deposit Accounts. The substantial majority of our deposits are from depositors who reside in our primary market area. Deposits are attracted through the offering of a broad selection of deposit instruments for both individuals and businesses. At September 30, 2016, our deposits totaled $1.12 billion and included $44.2 million of municipal deposits held by our commercial bank subsidiary, PCSB Commercial Bank.

Deposit account terms vary according to the minimum balance required, the time period that funds must remain on deposit, and the interest rate, among other factors. In determining the terms of our deposit accounts, we consider the rates offered by our competition, our liquidity needs, profitability, and customer preferences and concerns. We generally review our deposit mix and pricing on a weekly basis. Our deposit pricing strategy has generally been to offer competitive rates and services and to periodically offer special rates in order to attract deposits of a specific type or term.

Borrowings. We primarily utilize advances from the Federal Home Loan Bank of New York to supplement our supply of investable funds. The Federal Home Loan Bank functions as a central reserve bank providing credit for its member financial institutions. As a member, we are required to own capital stock in the Federal Home Loan Bank and are authorized to apply for advances on the security of such stock and certain of our whole first mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met. Advances are made under several different programs, each having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are based either on a fixed percentage of an institution’s net worth or on the Federal Home Loan Bank’s assessment of the institution’s creditworthiness. At September 30, 2016, we had $202.3 million of available borrowing capacity with the Federal Home Loan Bank of New York and had $11.1 million in advances outstanding. All of our borrowings from the Federal Home Loan Bank are secured by investment securities. At September 30, 2016, we also had an available line of credit with the Federal Reserve Bank of New York’s discount window program of $80.8 million, none of which was outstanding at that date.

Personnel

At September 30, 2016, we had 155 full-time and 22 part-time employees, none of whom is represented by a collective bargaining unit. We believe we have a good working relationship with our employees.

58

Subsidiaries

Upon completion of the conversion and offering, PCSB Bank will be the sole and wholly-owned subsidiary of PCSB Financial. PCSB Bank has three wholly-owned subsidiaries: PCSB Commercial Bank, PCSB Funding Corp. and PCSB Realty Ltd. PCSB Commercial Bank, a New York-chartered commercial bank, is authorized to accept deposits from New York municipalities. PCSB Funding Corp., a Delaware corporation, is a real estate investment trust that holds certain mortgage assets. PCSB Realty Ltd., a New York corporation, holds title to real estate properties foreclosed upon by PCSB Bank.

Legal Proceedings

Periodically, there have been various claims and lawsuits against us, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our business. We are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows.

Properties

At September 30, 2016, we conducted business through our administrative/headquarters office in Yorktown Heights and our 15 banking offices located in Brewster (main banking office), Eastchester, Fishkill, Greenburgh, Jefferson Valley, Kent, Mahopac, Mount Kisco, Mount Vernon, New City, Pawling (2 branch offices), East White Plains, Somers, and Yorktown Heights, all of which are located in New York. We own four and lease 12 of our properties. At September 30, 2016, the net book value of our land, buildings, furniture, fixtures and equipment was $10.8 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

This discussion and analysis reflects our consolidated financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived in part from the audited financial statements that appear beginning on page F-1 of this prospectus and other audited financial statements that are not included herein. You should read the information in this section in conjunction with the business and financial information regarding PCSB Financial and PCSB Bank and the consolidated financial statements appearing in this prospectus.

Overview

Income. Our primary source of income is net interest and dividend income. Net interest and dividend income is the difference between interest and dividend income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Other sources of income include earnings from customer service fees (mostly from service charges on deposit accounts), bank-owned life insurance and gains on the sale of securities.

Provision for Loan Losses. The allowance for loan losses is maintained at a level representing management’s best estimate of probable incurred losses in the loan portfolio, based upon management’s evaluation of the portfolio’s collectibility. The allowance is established through the provision for loan losses, which is charged against income. Charge-offs are charged to the allowance. Subsequent recoveries, if any, are credited to the allowance. Allocation of the allowance may be made for specific loans or pools of loans, but the entire allowance is available for the entire loan portfolio.

Expenses. The noninterest expenses we incur in operating our business consist of salaries and employee benefits, occupancy and equipment, data processing, federal deposit insurance and other general and administrative expenses. Following the offering, our noninterest expenses are likely to increase as a result of operating as a public company. These additional expenses will consist primarily of legal and accounting fees, expenses of stockholder communications and meetings and stock exchange listing fees.

59

Salaries and employee benefits consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for health insurance, retirement plans and other employee benefits. Following the conversion and offering, we will recognize additional annual employee compensation expenses stemming from the adoption of new equity benefit plans. We cannot determine the actual amount of these new stock-related compensation and benefit expenses at this time because applicable accounting practices require that they be based on the fair market value of the shares of common stock or stock options at specific points in the future. For an illustration of these expenses, see “Pro Forma Data.”

Occupancy and equipment expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of depreciation charges, rental expenses, furniture and equipment expenses, maintenance, real estate taxes and costs of utilities. Depreciation of premises and equipment is computed using a straight-line method based on the estimated useful lives of the related assets or the expected lease terms, if shorter. Data processing expenses are the fees we pay to third parties for the use of their software and for processing customer information, deposits and loans.

Federal deposit insurance premiums are payments we make to the Federal Deposit Insurance Corporation for insurance of our deposit accounts.

Other expenses include expenses for professional services, advertising, office supplies, postage, telephone, insurance and other miscellaneous operating expenses.

Business Strategy

Based on an extensive review of the current opportunities in our principal market area as well as our resources and capabilities, the Board has adopted the following business strategy:

• Focus on commercial lending. We believe that commercial lending offers an opportunity to enhance our profitability while managing credit, interest rate and operational risk. We intend to continue to expand our originations and, to a lesser extent, purchases of commercial real estate and commercial business loans in our primary market area. We anticipate that a majority of our commercial real estate loan originations will range in size from $500,000 to $10.0 million while a majority of our commercial business loan originations will range in size from $100,000 to $5.0 million.

• Expand banking activities in Southern Westchester County. Southern Westchester County is one of the more populous and economically vibrant areas of New York State. We intend to use our four offices in Southern Westchester County to expand both our commercial and retail activities in this market area. At the same time, we will remain committed to our other market areas and maintain a strong level of banking activities in these areas.

• Increase core deposits, including demand deposits. Deposits are our primary source of funds for lending and investment. We intend to focus on core deposits (which we define as all deposits except for certificates of deposit and municipal deposits), particularly non-interest bearing demand deposits, because they are the lowest cost funds and are less sensitive to withdrawal when interest rates fluctuate. Core deposits represented 68.4% of our total deposits at September 30, 2016. Going forward, we will seek to increase our core deposits through enhancing our commercial activities and deepening our relationships with our retail customers.

• Manage credit risk to maintain a low level of non-performing assets. We believe that strong asset quality is a key to long-term financial success. Our strategy for credit risk management focuses on an experienced team of credit professionals, well-defined credit policies and procedures, appropriate loan underwriting criteria and active credit monitoring. Our non-performing loans to total loans ratio was 1.14% at September 30, 2016.

60

• Balance Sheet Growth. As a result of our efforts to build our management and infrastructure, and given our attractive market area, we believe we are well-positioned to increase the size of our balance sheet without a proportional increase in overhead expense or operating risk. Accordingly, we intend to increase, on a managed basis, our assets and liabilities, particularly loans and deposits.

Critical Accounting Policies

A summary of our accounting policies is described in Note 1 to Notes to Consolidated Financial Statements. Critical accounting estimates are necessary in the application of certain accounting policies and procedures and are particularly susceptible to significant change. Critical accounting policies are defined as those involving significant judgments and assumptions by management that could have a material impact on the carrying value of certain assets or on income under different assumptions or conditions. Management believes that the most critical accounting policies, which involve the most complex or subjective decisions or assessments, are as follows:

Allowance for Loan Losses. The allowance for loan losses is established as probable losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. See Note 1 to Notes to Consolidated Financial Statements for a complete discussion of the allowance for loan losses.

Income Taxes. We recognize income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are established for the temporary differences between the accounting basis and the tax basis of our assets and liabilities at enacted tax rates expected to be in effect when the amounts related to such temporary differences are realized or settled. See Note 9 to Notes to Consolidated Financial Statements for a complete discussion of income taxes.

Goodwill. Goodwill resulting from business combination transactions is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. We recognized goodwill in connection with our acquisition of CMS Bancorp, Inc and CMS Bank. See Notes 1 and 8 to Notes to Consolidated Financial Statements for a complete discussion of our accounting for goodwill and the goodwill created in connection with the acquisition of CMS Bancorp, Inc. and CMS Bank.

Loan Portfolio

General. Loans are our primary interest-earning asset. At September 30, 2016, net loans represented 60.9% of our total assets. The following tables set forth certain information about our loan portfolio.

61

Loan Portfolio Analysis. The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated.

	At September 30, 2016						At June 30,
							2016						2015						2014						2013						2012
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent
	(Dollars in thousands)
Mortgage Loans:
Residential	$	222,750			29.05	%	$	226,073			28.79	%	$	240,448			32.93	%	$	161,740			31.74	%	$	117,924			26.07	%	$	120,223			25.58
Commercial		375,896			49.01			385,827			49.14			324,574			44.47			188,741			37.03			163,807			36.20			165,647			35.26
Construction		28,802			3.76			25,050			3.19			11,886			1.63			19,517			3.83			20,292			4.49			21,618			4.60
Total		627,448			81.82			636,950			81.12			576,908			79.03			369,998			72.60			302,023			66.76			307,488			65.44
Commercial business		82,604			10.77			90,600			11.54			99,699			13.66			96,349			18.91			103,931			22.97			114,410			24.35
Home equity lines of credit		40,396			5.27			41,180			5.24			40,605			5.56			33,952			6.66			38,089			8.42			39,163			8.33
Other loans		16,407			2.14			16,476			2.10			12,858			1.76			9,307			1.83			8,349			1.85			8,847			1.88
Total loans receivable		766,855			100.00	%		785,206			100.00	%		730,070			100.00	%		509,606			100.00	%		452,392			100.00	%		469,908			100.00	%
Plus: net deferred loan origination costs and fees		1,125						1,172						985						1,612						1,170						1,268
Less: allowance for loan losses		(4,065	)					(4,042	)					(3,921	)					(4,057	)					(3,985	)					(4,945	)
Loans receivable, net	$	763,915					$	782,336					$	727,134					$	507,161					$	449,577					$	466,231

62

Loan Maturity. The following tables set forth certain information at September 30, 2016 and June 30, 2016 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of prepayments that significantly shorten the average loan life and may cause actual repayment experience to differ from that shown below. Demand loans, which are loans having no stated repayment schedule or no stated maturity, are reported as due in one year or less.

	At September 30, 2016
	Residential Mortgage Loans		Commercial Real Estate Loans		Construction Loans		Commercial Business Loans		Home Equity Lines of Credit		Other Loans		Total Loans
	(Dollars in thousands)
Amounts due in:
One year or less	$	1,193	$	6,498	$	16,444	$	42,714		—	$	447	$	67,296
More than one year through two years		1,089		4,166		12,113		8,535		6		741		26,650
More than two years through three years		1,285		8,309		245		10,220		—		1,034		21,093
More than three years through five years		1,600		14,567		—		3,847		20		3,442		23,476
More than five years through ten years		8,208		112,199		—		9,656		378		10,611		141,052
More than ten years through fifteen years		39,408		67,953		—		3,793		2,848		—		114,002
More than fifteen years		169,967		162,204		—		3,839		37,144		132		373,286
Total	$	222,750	$	375,896	$	28,802	$	82,604	$	40,396	$	16,407	$	766,855

	At June 30, 2016
	Residential Mortgage Loans		Commercial Real Estate Loans		Construction Loans		Commercial Business Loans		Home Equity Lines of Credit		Other Loans		Total Loans
	(Dollars in thousands)
Amounts due in:
One year or less	$	1,226	$	10,888	$	11,600	$	52,702		—	$	456	$	76,872
More than one year through two years		769		4,063		11,527		4,275		9		990		21,633
More than two years through three years		1,832		8,311		1,923		14,510		—		1,202		27,778
More than three years through five years		1,827		15,417		—		954		32		3,089		21,319
More than five years through ten years		9,422		113,754		—		11,052		105		10,713		145,046
More than ten years through fifteen years		39,393		70,102		—		3,842		3,298		—		116,635
More than fifteen years		171,604		163,292		—		3,265		37,736		26		375,923
Total	$	226,073	$	385,827	$	25,050	$	90,600	$	41,180	$	16,476	$	785,206

The following table sets forth the dollar amount of all loans at September 30, 2016 that are due after September 30, 2017 and have either fixed interest rates or floating or adjustable interest rates. The amounts shown below exclude unamortized purchase premiums and discounts.

	Fixed Rates		%			Floating or Adjustable Rates		%			Total
	(Dollars in thousands)
Residential mortgage loans	$	189,552		85.61	%	$	31,872		14.39	%	$	221,424
Commercial mortgage loans		73,424		19.90			295,616		80.10			369,040
Construction loans		1,895		15.33			10,463		84.67			12,358
Commercial business loans		33,552		84.32			6,240		15.68			39,792
Home equity lines of credit		192		0.48			40,203		99.52			40,395
Other loans		15,635		97.96			326		2.04			15,961
Total	$	314,250		44.96	%	$	384,720		55.04	%	$	698,970

63

The following table sets forth the dollar amount of all loans at June 30, 2016 that are due after June 30, 2017 and have either fixed interest rates or floating or adjustable interest rates. The amounts shown below exclude unamortized purchase premiums and discounts.

	Fixed Rates		%			Floating or Adjustable Rates		%			Total
	(Dollars in thousands)
Residential mortgage loans	$	192,197		85.53	%	$	32,522		14.47	%	$	224,719
Commercial mortgage loans		77,232		20.62			297,329		79.38			374,561
Construction loans		280		2.08			13,170		97.92			13,450
Commercial business loans		31,052		82.20			6,723		17.80			37,775
Home equity lines of credit		219		0.53			40,961		99.47			41,180
Other loans		15,745		98.29			274		1.71			16,019
Total	$	316,725		44.75	%	$	390,979		55.25	%	$	707,704

Loan Originations, Purchases and Sales. Loan originations come from a variety of sources. The primary sources of loan originations are current customers, business development by our relationship managers, walk-in traffic, referrals from customers, and brokers. We generally originate loans for our portfolio rather than for sale in the secondary market.

We occasionally purchase whole loans and loan participation interests from other financial institutions. In 2014, we purchased a $48.3 million residential loan portfolio from a New Jersey bank, consisting primarily of jumbo, adjustable rate mortgage loans secured by properties located in New Jersey. At September 30, 2016, this portfolio had an outstanding balance of $27.8 million. Purchased loan participation interests primarily consist of participation interests in commercial real estate loans and multi-family mortgage loans in our primary market area. At September 30, 2016, we had $27.2 million in purchased participation interests.

64

The following table sets forth our loan origination, purchase and sale activity for the periods indicated.

	Three Months Ended September 30,						Year Ended June 30,
	2016			2015			2016			2015			2014
	(In thousands)
Total loans at beginning of period	$	785,206		$	730,070		$	730,070		$	509,606		$	452,392
Loans originated:
Residential mortgage loans		6,005			8,682			22,377			24,319			15,497
Commercial mortgage loans		9,091			15,971			74,764			62,998			58,975
Construction loans		4,439			4,063			12,732			6,632			4,579
Commercial business loans		8,589			12,504			35,488			44,679			36,181
Home equity lines of credit		1,704			1,756			6,587			10,916			4,858
Other loans		903			1,168			7,818			6,644			4,211
Total loans originated		30,731			44,144			159,766			156,188			124,301
Loans purchased:
Residential mortgage loans		—			—			—			—			48,933
Commercial mortgage loans		—			7,644			35,043			2,075			4,511
Construction loans		—			—			8,938			1,563			3,778
Commercial business loans		—			—			—			—			—
Home equity lines of credit		—			—			—			—			—
Other loans		—			—			—			—			200
Total loans purchased		—			7,644			43,981			3,638			57,422
Loans acquired by merger:
Residential mortgage loans		—			—			—			86,564			—
Commercial mortgage loans		—			—			—			111,118			—
Construction loans		—			—			—			326			—
Commercial business loans		—			—			—			7,834			—
Home equity lines of credit		—			—			—			9,099			—
Other loans		—			—			—			—			—
Total loans acquired by merger		—			—			—			214,941			—
Less:
Loan principal repayments		(45,386	)		(44,299	)		(148,611	)		(152,417	)		(123,571	)
Loan sales		(3,696	)		—			—			(1,886	)		(938	)
Net loan activity		(18,351	)		7,489			55,136			220,464			57,214
Total loans at end of period	$	766,855		$	737,559		$	785,206		$	730,070		$	509,606

Asset Quality

Credit Risk Management. Our strategy for credit risk management focuses on having well-defined credit policies and uniform underwriting criteria and providing prompt attention to potential problem loans. Management of asset quality is accomplished by internal controls, monitoring and reporting of key risk indicators, and both internal and independent third-party loan reviews. The primary objective of our loan review process is to measure borrower performance and assess risk for the purpose of identifying loan weakness in order to minimize loan loss exposure. From the time of loan origination through final repayment, commercial real estate, construction and land development and commercial business loans are assigned a risk rating based on pre-determined criteria and levels of risk. The risk rating is monitored annually for most loans; however, it may change during the life of the loan as appropriate.

Internal and independent third-party loan reviews vary by loan type, as well as the nature and complexity of the loan. Depending on the size and complexity of the loan, some loans may warrant detailed individual review, while other loans may have less risk based upon size, or be of a homogeneous nature reducing the need for detailed individual analysis. Assets with these characteristics, such as consumer loans and loans secured by residential real estate, may be reviewed on the basis of risk indicators such as delinquency or credit rating. In cases of significant concern, a total re-evaluation of the loan and associated risks are documented by completing a loan risk assessment and action plan. Some loans may be re-evaluated in terms of their fair market value or net realizable value in order to determine the likelihood of potential loss exposure and, consequently, the adequacy of specific and general loan loss reserves.

65

When a borrower fails to make a required loan payment, we take a number of steps to have the borrower cure the delinquency and restore the loan to current status, including contacting the borrower by letter and phone at regular intervals. When the borrower is in default, we may commence collection proceedings. If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure sale, the real property securing the loan generally is sold at foreclosure. Management informs the board of directors monthly of the amount of loans delinquent more than 30 days.

66

Delinquent Loans. The following tables set forth our loan delinquencies, including non-accrual loans, by type and amount at the dates indicated.

	At September 30, 2016								At June 30, 2016
	30-89 Days				90 Days or More				30-89 Days				90 Days or More
	Number of Loans		Principal Balance		Number of Loans		Principal Balance		Number of Loans		Principal Balance		Number of Loans		Principal Balance
	(In thousands)
Residential mortgage loans		1	$	208		13	$	3,890		4	$	1,735		12	$	3,305
Commercial mortgage loans		—		—		2		827		1		—		2		820
Construction loans		—		—		2		144		—		—		2		144
Commercial business loans		—		—		3		102		1		760		7		1,715
Home equity lines of credit		—		—		3		419		1		296		3		310
Other loans		1		1		4		354		1		5		10		589
Total		2	$	209		27	$	5,736		7	$	2,796		36	$	6,883

	At June 30,
	2015								2014
	30-89 Days				90 Days or More				30-89 Days				90 Days or More
	Number of Loans		Principal Balance		Number of Loans		Principal Balance		Number of Loans		Principal Balance		Number of Loans		Principal Balance
	(In thousands)
Residential mortgage loans		3	$	553		14	$	5,539		2	$	69		13	$	3,185
Commercial mortgage loans		1		498		6		1,195		1		414		8		1,427
Construction loans		—		—		5		2,020		—		—		7		5,951
Commercial business loans		1		1,474		11		2,355		—		—		17		1,888
Home equity lines of credit		—		—		4		424		—		—		2		132
Other loans		8		259		10		118		1		1		—		—
Total		13	$	2,784		50	$	11,651		4	$	484		47	$	12,583

67

Non-performing Assets. Non-performing assets include loans that are 90 or more days past due or on non-accrual status, including troubled debt restructurings on non-accrual status, and real estate and other loan collateral acquired through foreclosure and repossession. Troubled debt restructurings include loans for which either a portion of interest or principal has been forgiven, or loans modified at interest rates materially less than current market rates. Loans 90 days or greater past due may remain on an accrual basis if adequately collateralized and in the process of collection. For non-accrual loans, interest previously accrued but not collected is reversed and charged against income at the time a loan is placed on non-accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as foreclosed real estate until it is sold. When property is acquired, it is initially recorded at the fair value less costs to sell at the date of foreclosure, establishing a new cost basis. Holding costs and declines in fair value after acquisition of the property result in charges against income.

The following table sets forth information regarding our non-performing assets at the dates indicated.

	At September 30, 2016			At June 30,
				2016			2015			2014			2013			2012
	(Dollars in thousands)
Non-accrual loans and troubled debt restructurings:
Residential mortgage loans	$	4,505		$	5,881		$	4,389		$	3,659		$	3,745		$	2,894
Commercial mortgage loans		307			300			6,308			2,562			7,385			2,502
Construction loans		144			144			2,020			5,951			2,748			3,431
Commercial business loans		2,768			5,048			7,011			5,361			5,809			8,060
Home equity lines of credit		662			602			424			132			204			171
Other loans		356			584			310			—			—			—
Total		8,742			12,559			20,462			17,665			19,891			17,058
Accruing loans past due 90 days or more:
Residential mortgage loans		—			—			—			—			18			410
Commercial mortgage loans		—			—			—			—			95			—
Construction loans		—			—			—			—			2,067			—
Commercial business loans		—			—			514			204			175			—
Home equity lines of credit		—			—			—			—			—			—
Other loans		—			4			4			—			—			—
		—			4			518			204			2,355			410
		8,742			12,563			20,980			17,869			22,246			17,468
Real estate owned		1,059			905			368			211			571			1,024
Total non-performing assets	$	9,801		$	13,468		$	21,384		$	18,080		$	22,817		$	18,492
Troubled debt restructurings (accruing):
Residential mortgage loans	$	371		$	378		$	2,319		$	423		$	—		$	—
Commercial mortgage loans		5,140			8,977			1,388			1,394			1,403			—
Construction loans		—			—			—			—			3,207			3,707
Commercial business loans		3,848			3,909			7,901			7,113			8,144			2,823
Home equity lines of credit		11			11			—			—			—			—
Other loans		—			—			72			2,040			—			—
Total troubled debt restructurings (accruing)	$	9,370		$	13,275		$	11,680		$	10,970		$	12,754		$	6,530
Total troubled debt restructurings (accruing) and total non-performing assets	$	19,171		$	26,743		$	33,028		$	29,050		$	35,571		$	25,002
Total non-performing loans to total loans		1.14	%		1.60	%		2.87	%		3.51	%		4.92	%		3.72	%
Total non-performing loans to total assets		0.70			1.00			1.75			1.83			2.29			1.79
Total non-performing assets and troubled debt restructurings (accruing) to total assets		1.53			2.12			2.75			2.97			3.67			2.56

68

Interest income that would have been recorded for the three months ended September 30, 2016 had non-accruing loans been current according to their original terms, amounted to $178,000. We did not recognize any interest income on these loans for the three months ended September 30, 2016.

Interest income that would have been recorded for the year ended June 30, 2016 had non-accruing loans been current according to their original terms, amounted to $872,000. We did not recognize any interest income on these loans for the year ended June 30, 2016.

Potential Problem Loans. Certain loans are identified during our loan review process that are currently performing according to their contractual terms and we expect to receive payment in full of principal and interest, but it is deemed probable that we will be unable to collect all the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. This may result from deteriorating conditions such as cash flows, collateral values or creditworthiness of the borrower. These loans are classified as impaired but are not accounted for on a non-accrual basis.

Other potential problem loans are those loans that are currently performing, but where known information about possible credit problems of the borrowers causes us to have concerns as to the ability of such borrowers to comply with contractual loan repayment terms. At September 30, 2016, other potential problem loans totaled loans totaled $11.1 million.

Classified Assets. The following table sets forth information regarding our classified assets, as defined under applicable regulatory standards, at the dates indicated.

	At September 30, 2016		At June 30,
			2016		2015		2014
	(In thousands)
Special mention	$	4,275	$	5,368	$	8,550	$	23,768
Substandard		27,703		35,265		41,866		34,988
Doubtful		349		349		—		—
Loss		—		—		—		—
Total	$	32,327	$	40,982	$	50,416	$	58,756

Allowance for Loan Losses. The allowance for loan losses is maintained at levels considered adequate by management to provide for probable incurred loan losses inherent in the loan portfolio at the consolidated balance sheet reporting dates. The allowance for loan losses is based on management’s assessment of various factors affecting the loan portfolio, including portfolio composition, delinquent and non-accrual loans, national and local business conditions and loss experience and an overall evaluation of the quality of the underlying collateral.

69

The following table sets forth activity in our allowance for loan losses for the years indicated.

	Three Months Ended September 30,						Year Ended June 30,
	2016			2015			2016			2015			2014			2013			2012
	(Dollars in thousands)
Allowance for loan losses at beginning of period	$	4,042		$	3,921		$	3,921		$	4,057		$	3,985		$	4,945		$	8,445
Provision for loan losses		26			41			1,859			1,326			903			741			1,923
Charge-offs:
Residential mortgage loans		38			—			400			175			105			217			293
Commercial mortgage loans		—			—			10			361			—			122			300
Construction loans		—			—			—			327			—			446			1,342
Commercial business loans		324			188			1,668			1,181			743			857			3,236
Home equity lines of credit		—			—			24			43			—			76			—
Other loans		—			14			31			104			28			4			281
Total charge-offs		362			202			2,133			2,191			876			1,722			5,452
Recoveries:
Residential mortgage loans		70			—			—			5			16			—			—
Commercial mortgage loans		18			—			178			8			10			5			—
Construction loans		—			192			192			—			—			—			—
Commercial business loans		271			—			—			710			3			6			1
Home equity lines of credit		—			—			—			6			—			—			—
Other loans		—			—			25			—			16			10			28
Total recoveries		359			192			395			729			45			21			29
Net charge-offs		3			10			1,738			1,462			831			1,701			5,423
Allowance for loan losses at end of period	$	4,065		$	3,952		$	4,042		$	3,921		$	4,057		$	3,985		$	4,945
Allowance for loan losses to non-performing loans at end of period		46.50	%		25.73	%		32.17	%		18.69	%		22.70	%		17.91	%		28.31	%
Allowance for loan losses to total loans outstanding at end of period		0.53			0.54			0.51			0.54	(1)		0.80			0.88			1.05
Net charge-offs to average loans outstanding during period		—			0.01			0.23			0.27			0.17			0.37			1.11

(1) Loans acquired in the CMS Bancorp, Inc./CMS Bank acquisition were recorded at their estimated fair value at the acquisition date and did not include a carry-over of the related pre-acquisition allowance for loan losses.

70

Allocation of Allowance for Loan Losses. The following tables set forth the allowance for loan losses allocated by loan category. The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.

	At September 30, 2016								At June 30,
									2016								2015
	Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category to Total Loans			Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category to Total Loans			Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category to Total Loans
	(Dollars in thousands)
Residential mortgage loans	$	238		5.85	%		29.05	%	$	237		5.86	%		28.79	%	$	193		4.92	%		32.93	%
Commercial mortgage loans		2,121		52.18			49.02			2,149		53.17			49.14			1,766		45.04			44.46
Construction loans		302		7.43			3.76			269		6.66			3.19			100		2.55			1.63
Commercial business loans		920		22.63			10.77			1,001		24.76			11.54			1,682		42.90			13.66
Home equity lines of credit		70		1.72			5.27			73		1.81			5.24			69		1.76			5.56
Other loans		414		10.18			2.14			313		7.74			2.10			111		2.83			1.76
Total	$	4,065		100.00	%		100.00	%	$	4,042		100.00	%		100.00	%	$	3,921		100.00	%		100.00	%

	At June 30,
	2014								2013								2012
	Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category to Total Loans			Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category to Total Loans			Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category to Total Loans
	(Dollars in thousands)
Residential mortgage loans	$	219		5.40	%		31.74	%	$	196		4.92	%		26.07	%	$	165		3.34	%		25.58	%
Commercial mortgage loans		1,622		39.98			37.04			1,409		35.36			36.21			1,549		31.32			35.25
Construction loans		828		20.41			3.83			601		15.08			4.49			259		5.24			4.60
Commercial business loans		1,080		26.62			18.91			1,512		37.94			22.97			2,685		54.30			24.35
Home equity lines of credit		186		4.58			6.66			161		4.04			8.42			200		4.04			8.33
Other loans		122		3.01			1.83			106		2.66			1.85			87		1.76			1.88
Total	$	4,057		100.00	%		100.00	%	$	3,985		100.00	%		100.00	%	$	4,945		100.00	%		100.00	%

71

See Note 1 to Notes to Consolidated Financial Statements for a complete discussion of the allowance for loan losses. Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan losses may be necessary and our results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. Furthermore, while we believe we have established our allowance for loan losses in conformity with generally accepted accounting principles in the United States of America, there can be no assurance that regulators, in reviewing our loan portfolio, will not require us to increase our allowance for loan losses. In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses may adversely affect our financial condition and results of operations.

72

Securities Portfolio

The following table sets forth the amortized cost and estimated fair value of our available-for-sale securities portfolio at the dates indicated.

	At September 30,				At June 30,
	2016				2016				2015				2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Securities held-to-maturity:
U.S. government and agency obligations	$	139,572	$	139,856	$	145,896	$	146,202	$	169,027	$	169,067	$	202,842	$	202,527
Corporate and other debt securities		—		—		—		—		226		227		450		455
Mortgage-backed securities – residential		71,052		72,715		72,842		74,139		59,675		59,818		42,994		43,410
Mortgage-backed securities – collateralized mortgage obligations		32,856		33,196		30,268		30,580		21,150		21,098		7,341		7,294
Mortgage-backed securities – commercial		21,591		22,480		21,673		22,396		19,835		19,967		13,519		13,536
Total	$	265,071	$	268,247	$	270,679	$	273,317	$	269,913	$	270,177	$	267,146	$	267,222
Securities available-for-sale:
U.S. government and agency obligations	$	60,408	$	60,595	$	65,953	$	66,132	$	47,036	$	46,917	$	42,060	$	41,735
Corporate and other debt securities		8,500		8,720		8,514		8,646		4,530		4,409		305		306
Mortgage-backed securities – residential		39,688		40,227		37,043		37,524		32,791		33,568		28,998		30,018
Equity securities		49		49		49		49		49		49		50		50
Total	$	108,645	$	109,591	$	111,559	$	112,351	$	84,406	$	84,943	$	71,413	$	72,109

At September 30, 2016, we had no investments in a single issuer, other than securities issued by the U.S. government and government agency, which had an aggregate book value in excess of 10% of our equity.

73

Securities Portfolio Maturities and Yields. The following tables set forth the stated maturities and weighted average yields of investment securities at September 30, 2016 and June 30, 2016. Certain mortgage-backed securities have adjustable interest rates and will reprice annually within the various maturity ranges. These repricing schedules are not reflected in the table below. Weighted average yield calculations on investment securities available for sale do not give effect to changes in fair value that are reflected as a component of equity. At September 30, 2016 and June 30, 2016, we did not have any investments in any private-label collateralized mortgage obligations.

At September 30, 2016:

	One Year or Less					More than One Year to Five Years					More than Five Years to Ten Years					More than Ten Years					Total
	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
	(Dollars in thousands)
Securities held-to-maturity:
U.S. government and agency obligations	$	25,484		0.87	%	$	104,035		1.21	%	$	2,000		1.60	%	$	8,053		2.33	%	$	139,572	$	139,856		1.22	%
Mortgage-backed securities – residential		6		4.23			2,082		2.87			12,628		1.87			56,336		2.30			71,052		72,715		2.24
Mortgage-backed securities – collateralized mortgage obligations		—		—			2,014		1.68			2,034		2.35			28,808		1.93			32,856		33,196		1.94
Mortgage-backed securities – commercial		—		—			5,441		2.17			14,227		2.63			1,923		3.42			21,591		22,480		2.59
Total	$	25,490		0.87		$	113,572		1.30		$	30,889		2.23		$	95,120		2.21		$	265,071	$	268,247		1.69
Securities available-for-sale:
U.S. government and agency obligations	$	20,999		0.63	%	$	36,531		1.25	%		—		—	%	$	2,878		1.03	%	$	60,408	$	60,595		1.02	%
Corporate and other debt securities		—		—			3,378		2.39		$	5,122		2.53			—		—			8,500		8,720		2.47
Mortgage-backed securities – residential		—		—			—		—			2,808		2.22			36,880		1.89			39,688		40,227		1.91
Equity securities		—		—			—		—			—		—			49		—			49		49		—
Total	$	20,999		0.63		$	39,909		1.34		$	7,930		2.42		$	39,807		1.82		$	108,645	$	109,591		1.46

74

At June 30, 2016:

	One Year or Less					More than One Year to Five Years					More than Five Years to Ten Years					More than Ten Years					Total
	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
	(Dollars in thousands)
Securities held-to-maturity:
U.S. government and agency obligations	$	22,005		0.72	%	$	118,947		1.22	%	$	632		1.46	%	$	4,312		2.66	%	$	145,896	$	146,202		1.19	%
Mortgage-backed securities – residential		10		4.86			263		4.47			15,205		1.93			57,364		2.28			72,842		74,139		2.21
Mortgage-backed securities – collateralized mortgage obligations		—		—			2,019		1.68			2,036		2.35			26,213		1.94			30,268		30,580		1.95
Mortgage-backed securities – commercial		—		—			5,481		2.17			14,271		2.63			1,921		3.43			21,673		22,396		2.58
Total	$	22,015		0.72		$	126,710		1.27		$	32,144		2.26		$	89,810		2.22		$	270,679	$	273,317		1.66
Securities available-for-sale:
U.S. government and agency obligations	$	19,490		0.49	%	$	43,516		1.18	%		—		—	%	$	2,947		1.03	%	$	65,953	$	66,132		0.97	%
Corporate and other debt securities		—		—			3,386		2.39		$	5,128		2.52			—		—			8,514		8,646		2.47
Mortgage-backed securities – residential		—		—			—		—			2,823		2.22			34,220		1.81			37,043		37,524		1.84
Equity securities		—		—			—		—			—		—			49		—			49		49		—
Total	$	19,490		0.49		$	46,902		1.26		$	7,951		2.42		$	37,216		1.75		$	111,559	$	112,351		1.37

75

Each reporting period, we evaluate all securities with a decline in fair value below the amortized cost of the investment to determine whether or not the impairment is deemed to be other-than-temporary. Other-than-temporary impairment (“OTTI”) is required to be recognized if (1) we intend to sell the security; (2) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or (3) for debt securities, the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. Marketable equity securities are evaluated for OTTI based on the severity and duration of the impairment and, if deemed to be other than temporary, the declines in fair value are reflected in earnings as realized losses. For impaired debt securities that we intend to sell, or more likely than not will be required to sell, the full amount of the depreciation is recognized as OTTI, resulting in a realized loss that is a charged to earnings through a reduction in our noninterest income. For all other impaired debt securities, credit-related OTTI is recognized through earnings and non-credit related OTTI is recognized in other comprehensive income/loss, net of applicable taxes. We did not recognize any OTTI during the three months ended September 30, 2016 and the years ended June 30, 2016 and 2015.

Deposits

Deposits have traditionally been our primary source of funds for our lending and investment activities. The substantial majority of our deposits are from depositors who reside in our primary market area. Deposits are attracted through the offering of a broad selection of deposit instruments for both individuals and businesses. The following table sets forth the distribution of total deposits by account type at the dates indicated.

	At September 30,					At June 30,
	2016					2016					2015					2014
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	(In thousands)
Non-interest bearing demand accounts	$	135,756		12.16	%	$	122,740		11.03	%	$	129,520		12.21	%	$	94,873		11.08	%
NOW accounts		107,595		9.63			111,455		10.02			82,890		7.82			70,066		8.18
Money market accounts		32,149		2.88			31,194		2.80			33,109		3.12			11,114		1.30
Savings accounts		520,128		46.57			516,249		46.40			500,470		47.19			455,011		53.12
Certificates of deposit:
Less than $100,000		176,652		15.82			181,827		16.34			185,103		17.45			150,509		17.57
Greater than or equal to $100,000		144,557		12.94			149,230		13.41			128,542		12.12			74,945		8.75
Total	$	1,116,837		100.00	%	$	1,112,695		100.00	%	$	1,060,505		100.00	%	$	856,518		100.00	%

At September 30, 2016, and June 30, 2016, 2015 and 2014, we had municipal deposits of $44.2 million, $49.4 million, $35.2 million and $29.0 million, respectively. Municipal deposits are held by our commercial bank subsidiary, PCSB Commercial Bank.

The following tables indicate the amount of jumbo certificates of deposit by time remaining until maturity at September 30, 2016 and June 30, 2016. Jumbo certificates of deposit require minimum deposits of $100,000.

Maturity Period	Dollar Amount
	(In thousands)
At September 30, 2016:
Three months or less	$	20,198
Over three through six months		17,544
Over six through twelve months		23,188
Over twelve months		83,627
Total	$	144,557
At June 30, 2016:
Three months or less	$	28,203
Over three through six months		20,019
Over six through twelve months		29,006
Over twelve months		72,002
Total	$	149,230

76

The following tables set forth time deposit accounts classified by rate and maturity at September 30, 2016 and June 30, 2016.

At September 30, 2016:

	Amount Due
	Less Than One Year		More Than One Year to Two Years		More Than Two Years to Three Years		More Than Three Years		Total		Percent of Total Time Deposit Accounts
	(Dollars in thousands)
0.00 - 1.00%	$	94,025	$	22,479	$	3,604	$	5,594	$	125,702		39.14	%
1.01 – 2.00%		42,545		27,047		77,392		38,848		185,832		57.87
2.01 – 3.00%		7,505		—		—		2,091		9,596		2.99
3.01% and above		—		—		—		—		—		—
Total	$	144,705	$	49,526	$	80,996	$	46,533	$	321,130		100.00	%

At June 30, 2016:

	Amount Due
	Less Than One Year		More Than One Year to Two Years		More Than Two Years to Three Years		More Than Three Years		Total		Percent of Total Time Deposit Accounts
	(Dollars in thousands)
0.00 - 1.00%	$	102,584	$	19,906	$	6,234	$	1,079	$	129,803		39.23	%
1.01 - 2.00%		54,583		25,259		41,426		66,302		187,570		56.68
2.01 - 3.00%		11,456		—		2,080		—		13,536		4.09
3.01% and above		—		—		—		—		—		—
Total	$	168,623	$	45,165	$	49,740	$	67,381	$	330,909		100.00	%

Borrowings

We primarily utilize advances from the Federal Home Loan Bank of New York to supplement our supply of investable funds. At September 30, 2016, we had $202.3 million of available borrowing capacity with the Federal Home Loan Bank of New York and had $11.1 million in advances outstanding. At September 30, 2016, we also had an available line of credit with the Federal Reserve Bank of New York’s discount window program of $80.8 million, none of which was outstanding at that date. The following table sets forth information concerning our borrowings at the dates and for the periods indicated.

	Three Months Ended September 30,						Year Ended June 30,
	2016			2015			2016			2015			2014
	(In thousands)
Maximum balance outstanding at any month-end during period:
Federal Home Loan Bank advances	$	20,071		$	34,000		$	34,000		$	54,050			—
Average balance outstanding during period:
Federal Home Loan Bank advances		15,474			28,680			23,974			14,902			—
Weighted average interest rate during period:
Federal Home Loan Bank advances		1.29	%		0.67	%		0.83	%		0.48	%		—
Balance outstanding at end of period:
Federal Home Loan Bank advances	$	11,051		$	27,000		$	20,081		$	14,000			—
Weighted average interest rate at end of period:
Federal Home Loan Bank advances		1.50	%		0.71	%		1.16	%		0.52	%		—

77

Average Balance Sheets and Related Yields and Rates

The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances have been calculated using daily balances. Nonaccrual loans are included in average balances only. Loan fees are included in interest income on loans and are not material.

	Three Months Ended September 30,
	2016								2015
	Average Balance			Interest and Dividends		Yield/Cost			Average Balance			Interest and Dividends		Yield/Cost
	(Dollars in thousands)
Assets:
Loans	$	776,142		$	8,525		4.39	%	$	732,817		$	8,158		4.45	%
Securities		372,866			1,480		1.59			371,619			1,447		1.56
Other interest-earning assets		65,444			104		0.63			67,633			58		0.34
Total interest-earning assets		1,214,452			10,109		3.33			1,172,069			9,663		3.30
Non-interest-earning assets		55,255								39,366
Total assets	$	1,269,707							$	1,211,435
Liabilities and equity:
NOW accounts	$	109,959		$	44		0.16		$	84,167		$	34		0.16
Money market accounts		31,410			21		0.27			34,145			23		0.27
Savings accounts		529,381			327		0.25			513,149			397		0.31
Certificates of deposit		325,793			892		1.09			313,740			677		0.86
Total interest-bearing deposits		996,543			1,284		0.51			945,201			1,131		0.48
Federal Home Loan Bank advances		15,474			50		1.29			28,680			48		0.67
Total interest-bearing liabilities		1,012,017			1,334		0.52			973,881			1,179		0.48
Non-interest-bearing deposits		130,768								117,577
Other non-interest-bearing liabilities		15,687								8,225
Total liabilities		1,158,472								1,099,713
Total equity		111,235								111,722
Total liabilities and equity	$	1,269,707							$	1,211,435
Net interest income				$	8,775							$	8,484
Interest rate spread							2.80								2.81
Net interest margin							2.89								2.90
Average interest-earning assets to average interest-bearing liabilities		120.00	%							120.35	%

78

	Year Ended June 30,
	2016								2015								2014
	Average Balance			Interest and Dividends		Yield/Cost			Average Balance			Interest and Dividends		Yield/Cost			Average Balance			Interest and Dividends		Yield/Cost
	(Dollars in thousands)
Assets:
Loans	$	743,995		$	32,832		4.41	%	$	550,281		$	23,245		4.23	%	$	488,572		$	21,237		4.35	%
Securities		365,593			5,897		1.61			376,716			5,360		1.42			340,849			4,340		1.27
Other interest-earning assets		62,034			315		0.51			70,319			222		0.32			107,979			287		0.27
Total interest-earning assets		1,171,622			39,044		3.33			997,316			28,827		2.89			937,400			25,864		2.76
Non-interest-earning assets		46,451								25,047								27,301
Total assets	$	1,218,073							$	1,022,363							$	964,701
Liabilities and equity:
NOW accounts	$	92,165		$	146		0.16		$	72,549		$	106		0.15		$	46,951		$	62		0.13
Money market accounts		32,770			89		0.27			16,272			39		0.24			12,327			24		0.20
Savings accounts		512,321			1,487		0.29			465,951			1,442		0.31			465,565			1,471		0.32
Certificates of deposit		315,028			2,891		0.92			244,159			2,225		0.91			225,062			2,077		0.92
Total interest-bearing deposits		952,284			4,613		0.49			798,931			3,812		0.48			749,905			3,634		0.48
Federal Home Loan Bank advances		23,974			199		0.83			14,902			72		0.49			—			—		—
Total interest-bearing liabilities		976,258			4,812		0.49			813,833			3,884		0.48			749,905			3,634		0.48
Non-interest-bearing deposits		118,871								88,103								95,894
Other non-interest-bearing liabilities		9,989								7,667								8,230
Total liabilities		1,105,118								909,603								854,029
Total equity		112,955								112,760								110,671
Total liabilities and equity	$	1,218,073							$	1,022,363							$	964,700
Net interest income				$	34,232							$	24,943							$	22,230
Interest rate spread							2.84								2.41								2.27
Net interest margin							2.92								2.50								2.30
Average interest-earning assets to average interest-bearing liabilities		120.01	%							122.55	%							125.00	%

79

Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.

	Three Months Ended September 30, 2016 Compared to Three Months Ended September 30, 2015									Year Ended June 30, 2016 Compared to Year Ended June 30, 2015								Year Ended June 30, 2015 Compared to Year Ended June 30, 2014
	Increase (Decrease) Due to									Increase (Decrease) Due to								Increase (Decrease) Due to
	Rate			Volume			Net			Rate			Volume			Net		Rate			Volume			Net
	(In thousands)
Interest income:
Loans receivable	$	(175	)	$	542		$	367		$	819		$	8,768		$	9,587	$	(911	)	$	2,919		$	2,008
Securities		(15	)		48			33			320			217			537		257			831			1,088
Other interest-earning assets		49			(3	)		46			125			(32	)		93		(34	)		(99	)		(113	)
Total interest-earning assets		(141	)		587			446			1,264			8,953			10,217		(688	)		3,651			2,963
Interest expense:
NOW accounts		—			10			10			10			30			40		8			36			44
Money market accounts		(1	)		(1	)		(2	)		6			44			50		5			10			15
Savings accounts		(82	)		12			(70	)		(41	)		86			45		(21	)		(8	)		(29	)
Certificates of deposit		189			26			215			16			650			666		(23	)		171			148
Federal Home Loan Bank advances		31			(29	)		2			69			58			127		—			72			72
Total interest-bearing liabilities		137			18			155			60			868			928		(31	)		281			250
Net increase (decrease) in net interest income	$	(278	)	$	569		$	291			$1,204		$	8,085		$	9,289	$	(657	)	$	3,370		$	2,713

80

Comparison of Financial Condition at September 30, 2016 and June 30, 2016

Total Assets. Total assets decreased $7.6 million or 0.6% to $1.3 billion at September 30, 2016 from $1.3 billion at June 30, 2016. The decrease is primarily the result of decreases of $18.4 million in net loans and $8.4 million in securities held-to-maturity and securities held-for-sale, partially offset by an increase of $18.8 million in cash and cash equivalents.

Cash and Cash Equivalents. Cash and cash equivalents increased $18.8 million, or 45.3% to $60.4 million at September 30, 2016 from $41.6 million at June 30, 2016. The increase is due primarily to the proceeds from an $18.4 million decrease in net loans and an $8.4 million decrease in securities held-to-maturity and securities held-for-sale, and a $4.1 million increase in deposits, partially offset by $9.0 million in maturing advances.

Securities Held-to-Maturity. Total securities held to maturity decreased $5.6 million, or 2.1% to $265.1 million at September 30, 2016 from $270.7 million at June 30, 2016. This decline was primarily caused by a $6.3 million decrease in US government and agency obligations.

Securities-Available-for-Sale. Total securities available-for-sale decreased $2.8 million, or 2.5%, to $109.6 million at September 30, 2016 from $112.4 million at June 30, 2016. This decline was caused by a decrease of $5.5 million in US government and agency obligations, partially offset by an increase of $2.7 million in residential mortgage-backed securities.

Net Loans. Net loans decreased $18.4 million, or 2.4% to $763.9 million at September 30, 2016 from $782.3 million at June 30, 2016. The decrease is primarily due to decreases of $9.9 million, or 2.6% in commercial mortgage loans, $8.0 million, or 8.8% in commercial loans, and $3.3 million, or 1.5% in residential mortgage loans, partially offset by a $3.8 million, or 15.0% increase in construction loans. The $21.3 million decrease in commercial mortgage loans, commercial loans, and residential mortgage loans primarily reflects net repayments which include a $6.9 million decrease in impaired loans. The $3.8 million increase in construction loans primarily reflects new originations and advances on existing loans.

Deposits. Total deposits increased $4.1 million or 0.4% to $1.1 billion at September 30, 2016 from $1.1 billion at June 30, 2016. The growth in deposits reflects increases of $13.0 million in demand accounts, $3.9 million in savings accounts and $1.0 million in money market accounts, partially offset by decreases of $9.8 million in certificates of deposit and $3.9 million in NOW accounts. The overall $17.9 million increase in demand, savings and money market accounts reflects the Banks strategy of raising low cost core deposits.

Federal Home Loan Bank Advances. Federal Home Loan Bank advances decreased $9.0 million, or 45.0%, to $11.1 million at September 30, 2016 from $20.1 million at June 30, 2016. The decrease was due to the maturity of advances used to fund a leveraging strategy initiated two years ago.

Total Equity. Total equity increased $1.6 million, or 1.4%, to $111.5 million at September 30, 2016 from $109.9 million at June 30, 2016. The increase was caused by net income of $1.5 million and a decrease in accumulated other comprehensive loss of $101,000.

Comparison of Financial Condition at June 30, 2016 and June 30, 2015

Total Assets. Total assets increased $61.3 million, or 5.1%, to $1.3 billion at June 30, 2016 from $1.2 billion at June 30, 2015. The increase was primarily due to increases of $55.2 million, or 7.6% in net loans, and $27.4 million, or 32.3% in securities available for sale, partially offset by a $36.2 million, or 46.5%, decrease in cash and cash equivalents.

Cash and Cash Equivalents. Total cash and cash equivalents decreased $36.2 million, or 46.5%, to $41.6 million at June 30, 2016 from $77.8 million at June 30, 2015. This decrease primarily reflects the strategy of repositioning the balance sheet away from lower yielding short-term investments and into higher yielding loans.

81

Securities Available for Sale. Total securities available-for-sale increased $27.4 million, or 32.3%, to $112.4 million at June 30, 2016 from $84.9 million at June 30, 2015. The increase was primarily due to additional purchases of securities used to collateralize a $14.2 million increase in municipal deposits held at PCSB Bank’s commercial bank subsidiary, PCSB Commercial Bank.

Net Loans. Net loans increased $55.2 million, or 7.6%, to $782.3 million at June 30, 1026 from $727.1 million at June 30, 2015. The increase is primarily due to increases of $61.3 million, or 18.9% in commercial mortgage loans and $13.2 million, or 110.8%, in construction loans, partially offset by decreases of $14.4 million, or 6.0%, in residential loans and $9.0 million, or 9.1%, in commercial business loans. The overall increase in net loans is part of the strategy to diversify the balance sheet into higher-yielding loans.

Deposits. Total deposits increased $52.2 million, or 4.9%, to $1.1 billion at June 30, 2016 from $1.1 billion at June 30, 2015. The growth in deposits reflects increases of $28.6 million, or 34.5% in NOW accounts, $16.5 million, or 5.3%, in certificates of deposit, and a $15.8 million, or 3.2% in savings accounts, partially offset by decreases of $6.8 million, or 5.2% in demand accounts and $1.9 million, or 5.8% in money market accounts. The $44.3 million increase in Now and savings accounts reflect the Bank’s strategy of raising low cost core deposits.

Federal Home Loan Bank Advances. Federal Home Loan Bank advances increased $6.1 million, or 43.4%, to $20.1 million at June 30, 2016 from $14.0 million at June 30, 2015. The increase was due to additional advances taken to fund part of a leveraging strategy employed during the period.

Total Equity. Total equity decreased $322,000, or 0.3%, to $109.9 million at June 30, 2016 from $110.3 million at June 30, 2015. The decrease was caused by a $3.2 million increase in accumulated other comprehensive loss, partially offset by $2.9 million of net income for the year ended June 30, 2016.

Comparison of Operating Results for the Three Months Ended September 30, 2016 and September 30, 2015

General. Net income increased by $200,000, or 15.9%, to $1.5 million for the three months ended September 30, 2016 compared to $1.3 million for the three months ended September 30, 2015. The increase was primarily due to a $291,000 increase in net interest income and a $124,000 increase in non-interest income, partially offset by a $151,000 increase in noninterest expense and a $79,000 increase in income tax expense.

Net Interest Income. Net interest income increased $291,000 to $8.8 million for the three months ended September 30, 2016 from $8.5 million for the three months ended September 30, 2015. The increase primarily reflects a $4.2 million increase in average net interest-earning assets as growth in interest-earning assets outpaced growth in interest-bearing liabilities, partially offset by a one basis point decrease in the interest rate spread to 2.80% from 2.81% for the three months ended September 30, 2015.

Interest and Dividend Income. Interest and dividend income increased $446,000, or 4.6%, to $10.1 million for the three months ended September 30, 2016 from $9.7 million for the three months ended September 30, 2015. The increase primarily reflects a $42.4 million increase in the average balance on interest-earning assets and a 3 basis point increase in average yield to 3.33% from 3.30% for the three months ended September 30, 2015.

Interest income on loans increased $367,000 primarily due to a $43.3 million increase in the average balance to $776.1 million for the three months ended September 30, 2016 from $732.8 million for the three months ended September 30, 2015, partially offset by a 6 basis point decrease in the average yield on loans to 4.39% from 4.45% for the same period.

Interest income on other interest-earning assets increased $46,000 primarily due to a 29 basis point increase in the average yield on other interest-earning assets to 0.49% for the three months ended September 30, 2016 from 0.34% for the three months ended September 30, 2015, partially offset by a $2.2 million decrease in the average balance on other interest-earning assets for the same period.

82

Interest income on securities increased $33,000 primarily due to a $1.3 million increase in the average balance of securities to $372.9 million for the three months ended September 30, 2016 from $371.6 million for the three months ended September 30, 2015 and a 3 basis point increase in the average yield on securities to 1.59% for the same period.

Interest Expense. Interest expense increased $155,000, or 13.2%, to $1.3 million for the three months ended September 30, 2016 from $1.2 million for the three months ended September 30, 2015. The increase primarily reflects a $38.1 million increase in the average balance on interest-bearing liabilities and a 4 basis point increase in the average cost to 0.52% from 0.48% for the three months ended September 30, 2015.

Interest expense on interest-bearing deposits increased $153,000 primarily due to a $51.3 million increase in the average balance to $996.5 million for the three months ended September 30, 2016 from $945.2 million for the three months ended September 30, 2015 and a 3 basis point increase in the average rate paid on interest-bearing deposits to 0.51% from 0.48% for the same period.

Interest expense on Federal Home Loan Bank advances increased $2,000 primarily due to a 62 basis points increase in the average cost to 1.29% for the three months ended September 30, 2016 from 0.67% for the three months ended September 30, 2015, partially offset by a $13.2 million decrease in the average balance to $15.5 million from $28.7 million for the same period.

Provision for Loan Losses. We recorded provisions for loan losses of $26,000 and $41,000 for the three months ended September 30, 2016 and 2015, respectively.

Noninterest Income. Noninterest income increased $124,000, or 29.0%, to $552,000 for the three months ended September 30, 2016 from $428,000 for the three months ended September 30, 2015. The increase was caused primarily by a $92,000 increase in the cash surrender value of bank owned life insurance, due to the $11.3 million additional investment during fiscal 2016.

Noninterest Expense. Noninterest expense increased $151,000, or 2.1%, to $7.2 million for the three months ended September 30, 2016 from $7.0 million for the three months ended September 30, 2015. The $151,000 increase was caused primarily by a $196,000 increase in occupancy and equipment expense and a $133,000 increase in salaries and employee benefits expense, partially offset by a $122,000 decrease in merger-related expenses. The $196,000 increase in occupancy and equipment costs was driven primarily by increased expenses for our new headquarters which was completed in December 2015 and additional expenses for the Pawling branch which was completed in June 2016. The $133,000 increase in salaries and employee benefits was caused by a $112,000 increase in retirement expense due to the updated valuation analysis for fiscal 2017. The $122,000 decrease in merger-related expenses was caused by data conversion expenses recorded in the three month period ended September 30, 2015.

Income Tax Expense. Income tax expense increased $79,000, or 13.9%, to $647,000 for the three months ended September 30, 2016 compared to $568,000 for the three months ended September 30, 2015. The increase was caused by a $279,000, or 15.3%, increase in pre-tax income. The effective tax rate was 30.8% and 31.1% for the three months ended September 30, 2016 and 2015, respectively.

Comparison of Operating Results for the Years Ended June 30, 2016 and June 30, 2015

General. Net income increased by $2.4 million, or 476.0%, to $2.9 million for the year ended June 30, 2016 from $508,000 for the year ended June 30, 2015. The increase was primarily due to a $9.3 million increase in net interest income and a $384,000 increase in noninterest income, partially offset by a $6.3 million increase in noninterest expense, a $533,000 increase in provision for loan losses and a $431,000 increase in income tax expense. The comparison of operating results between 2016 and 2015 are affected significantly by the fact that the year ended June 30, 2016 contains the full 12 months of operating results from the CMS Bank acquisition, compared to only 2 months for the year ended June 30, 2015.

83

Net Interest Income. Net interest income increased $9.3 million, or 37.2%, to $34.2 million for the year ended June 30, 2016 compared to $24.9 million for the year ended June 30, 2015. The increase reflects an $11.9 million increase in average net interest-earning assets to $195.4 million for the year ended June 30, 2016 from $183.5 million for the year ended June 30, 2015 and a 43 basis point increase in the interest rate spread to 2.84% for the year ended June 30, 2016 from 2.41% for the year ended June 30, 2015.

Interest and Dividend Income. Interest and dividend income increased $10.2 million, or 35.4%, to $39.0 million for the year ended June 30, 2016, compared to $28.8 million for the year ended June 30, 2015. The increase primarily reflects a $174.3 million increase in the average balance on interest-earning assets and a 44 basis point increase in the average yield to 3.33% from 2.89% for the year ended June 30, 2015.

Interest on loans increased $9.6 million primarily due to a $193.7 million increase in the average balance to $744.0 million for the year ended June 30, 2016 from $550.3 million for the year ended June 30, 2015 and an 18 basis point increase in the average yield to 4.41% from 4.23% for the same period.

Interest income on securities increased $537,000 primarily due to a 19 basis point increase in the average yield to 1.61% for the year ended June 30, 2016 from 1.42% for the year ended June 30, 2015, partially offset by a $11.1 million decrease in the average balance to $365.6 million from $376.7 million for the same period.

Interest Expense. Interest expense increased $928,000, or 23.9%, to $4.8 million for the year ended June 30, 2016 from $3.9 million for the year ended June 30, 2015. The increase primarily reflects a $162.4 million increase in the average balance on interest-bearing liabilities and a 1 basis point increase in the average cost to 0.49% from 0.48% for the year ended June 30, 2016.

Interest expense on interest-bearing deposits increased $801,000, or 21.0%, primarily due to a $153.4 million increase in the average balance to $952.3 million for the year ended June 30, 2016 from $798.9 million for the year ended June 30, 2015 and a 1 basis point increase in the average rate paid on interest-bearing deposits to 0.49% from 0.48% for the same period.

Interest expense on Federal Home Loan Bank advances increased $127,000, primarily due to a $9.1 million increase in the average balance to $24.0 million for the year ended June 30, 2016 from $14.9 million for the year ended June 30, 2015 and a 34 basis point increase in the average cost to 0.83% from 0.49% for the same period.

Provision for Loan Losses. We recorded a provision for loan losses of $1.9 million for the year ended June 30, 2016 compared to $1.3 million for the year ended June 30, 2015. The growth in the provision reflected management’s assessment of the risks inherent in our loan portfolio and was necessary so that the allowance for loan losses could keep pace with the growth in the loan portfolio for the year ended June 30, 2016.

Noninterest Income. Noninterest income increased $384,000, or 24.5%, to $2.0 million for the year ended June 30, 2016 from $1.6 million for the year ended June 30, 2015. The increase was caused by a $161,000 increase in the cash value of bank owned life insurance, a $125,000 increase in other noninterest income and a $98,000 increase in fees and service charges. The increase in cash value of bank owned life insurance was due to the $11.3 million additional investment in bank owned life insurance during the year ended June 30, 2016. The increase in other non-interest income and fees and service charges was due to increased income from the higher amount of loan and deposit accounts resulting from the CMS Bancorp acquisition.

Noninterest Expense. Noninterest expense increased $6.3 million, or 26.2%, to $30.3 million for the year ended June 30, 2016 from $24.0 million for the year ended June 30, 2015. The increase is due primarily to the year ended June 30, 2016 containing a full year of expenses related to the CMS Bancorp acquisition. The $6.3 million increase is primarily comprised of a $3.3 million increase in salaries and employee benefits, a $1.1 million increase in occupancy and equipment expenses, a $994,000 increase in other operating expenses and a $668,000 increase in professional fees.

84

Income Tax Expense. Income tax expense increased $431,000, or 61.40%, to $1.1 million for the year ended June 30, 2016 from $702,000 for the year ended June 30, 2015. The increase was caused primarily by the $2.8 million increase in pre-tax income, partially offset by a reduction of non-deductible merger expenses in the year ended June 30, 2016 compared to June 30, 2015. The effective tax rate was 27.9% and 58.0% for the years ended June 30, 2016 and 2015, respectively, primarily as a result of the reduction in non-deductible merger expenses.

Management of Market Risk

General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of loans, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage our exposure to changes in market interest rates. Accordingly, we have established a management-level Asset/Liability Management Committee, which takes initial responsibility for developing an asset/liability management process and related procedures, establishing and monitoring reporting systems and developing asset/liability strategies. On at least a quarterly basis, the Asset/Liability Management Committee reviews asset/liability management with the Investment Asset/Liability Committee that has been established by the board of directors. This committee also reviews any changes in strategies as well as the performance of any specific asset/liability management actions that have been implemented previously. On a quarterly basis, an outside consulting firm provides us with detailed information and analysis as to asset/liability management, including our interest rate risk profile. Ultimate responsibility for effective asset/liability management rests with our board of directors.

We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates. We have implemented the following strategies to manage our interest rate risk: originating loans with adjustable interest rates; promoting core deposit products; and adjusting the interest rates and maturities of funding sources, as necessary. By following these strategies, we believe that we are better positioned to react to changes in market interest rates.

Net Portfolio Value Simulation. We analyze our sensitivity to changes in interest rates through a net portfolio value of equity (“NPV”) model. NPV represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. The NPV ratio represents the dollar amount of our NPV divided by the present value of our total assets for a given interest rate scenario. NPV attempts to quantify our economic value using a discounted cash flow methodology while the NPV ratio reflects that value as a form of capital ratio. We estimate what our NPV would be at a specific date. We then calculate what the NPV would be at the same date throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve. We currently calculate NPV under the assumptions that interest rates increase 100, 200, 300 and 400 basis points from current market rates and that interest rates decrease 100 basis points from current market rates.

The following table presents the estimated changes in our NPV that would result from changes in market interest rates at September 30, 2016. All estimated changes presented in the table are within the policy limits approved by our Board of Trustees.

	NPV								NPV as Percent of Portfolio Value of Assets
	(Dollars in thousands)
Basis Point Change in Interest Rates	Dollar Amount		Dollar Change			Percent Change			NPV Ratio			Change
400	$	112,206	$	(45,655	)		(28.92	)%		9.75	%		(2.64	)%
300		126,448		(31,413	)		(19.90	)		10.70			(1.69	)
200		140,169		(17,692	)		(11.21	)		11.56			(0.83	)
100		152,578		(5,283	)		(3.35	)		12.26			(0.13	)
0		157,861		—			—			12.39			—
(100)		165,145		7,284			4.61			12.71			0.32

85

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes requires making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The above table assumes that the composition of our interest-sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our NPV and will differ from actual results.

Liquidity and Capital Resources

Liquidity. Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments and maturities and sales of securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

We regularly review the need to adjust our investments in liquid assets based upon our assessment of: (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities, and (4) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits and short- and intermediate-term securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At September 30, 2016, cash and cash equivalents totaled $60.4 million. Securities classified as available-for-sale, which provide an additional source of liquidity, totaled $109.6 million at September 30. 2016.

At September 30, 2016, we had the ability to borrow up to $202.3 million from the Federal Home Loan Bank of New York, $11.1 million of which was outstanding. At September 30, 2016, we also had an available line of credit with the Federal Reserve Bank of New York’s discount window program of $80.8 million, none of which was outstanding at that date.

We have no material commitments or demands that are likely to affect our liquidity other than as set forth below. If loan demand were to increase faster than expected, or any unforeseen demand or commitment were to occur, we could access our borrowing capacity with the Federal Home Loan Bank of New York or the Federal Reserve Bank of New York.

At September 30, 2016, we had $92.1 million of loan commitments outstanding and $53.3 million of approved, but unadvanced, funds to borrowers. We also had $742,000 in outstanding letters of credit at September 30, 2016.

Certificates of deposit due within one year of September 30, 2016 totaled $144.1 million. If these deposits do not remain with us, we will be required to seek other sources of funds, including other certificates of deposit and Federal Home Loan Bank of New York advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit at September 30, 2016. We believe, however, based on past experience that a significant portion of our certificates of deposit will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

86

Liquidity is needed for financing and investing activities. The following table sets forth our investing and financing activities for the periods presented.

	Three Months Ended September 30,						Year Ended June 30,
	2016			2015			2016			2015			2014
	(In thousands)
Investing activities:
Loan purchases	$	—		$	(7,644	)	$	(43,981	)	$	(3,638	)	$	(57,422	)
Loan originations		(30,731	)		(44,144	)		(159,766	)		(156,188	)		(124,301	)
Loan principal repayments		45,386			44,299			148,611			152,417			123,571
Loan sales		3,696			—			—			1,886			938
Proceeds from maturities and calls of securities held-to-maturity		27,805			33,911			107,656			97,971			93,953
Proceeds from maturities and calls of securities available-for-sale		13,109			5,986			33,058			21,295			23,996
Proceeds from sales of securities available-for-sale		—			—			—			23,701			—
Purchases of securities held-to-maturity		(22,334	)		(27,985	)		(112,896	)		(94,178	)		(100,606	)
Purchases of securities available for sale		(10,269	)		(15,997	)		(56,420	)		(25,952	)		(8,024	)
Financing activities:
Net increase (decrease) in deposits	$	4,212		$	(4,869	)	$	52,778		$	(4,274	)	$	4,978
Increase (decrease) in Federal Home Loan Bank advances		(9,030	)		13,000			6,081			(22,050	)		—

Capital Resources. PCSB Bank is subject to various regulatory capital requirements administered by NYSDFS and the Federal Deposit Insurance Corporation. At September 30, 2016, PCSB Bank exceeded all applicable regulatory capital requirements, and was considered “well capitalized” under regulatory guidelines. See “Historical and Pro Forma Regulatory Capital Compliance” and Note 11 of Notes to the Consolidated Financial Statements.

The net offering proceeds will significantly increase our liquidity and capital resources. Over time, the initial level of liquidity will be reduced as net offering proceeds are used for general corporate purposes, including the funding of loans. Our financial condition and results of operations will be enhanced by the net offering proceeds, resulting in increased net interest-earning assets and net interest income. However, due to the increase in equity resulting from the net offering proceeds, as well as other factors associated with the offering, our return on equity will be adversely affected following the offering. See “Risk Factors—Our return on equity may be low following the offering. This could negatively affect the trading price of our shares of common stock.”

87

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. The following tables present our contractual obligations at September 30, 2016 and June 30, 2016.

			Payments Due by Period
Contractual Obligations	Total		Less Than One Year		One to Three Years		Three to Five Years		More Than Five Years
	(In thousands)
At September 30, 2016:
Federal Home Loan Bank advances	$	11,051	$	7,119	$	247	$	261	$	3,424
Operating lease obligations		16,522		2,444		3,697		2,468		7,913
Total	$	27,573	$	9,563	$	3,944	$	2,729	$	11,337
At June 30, 2016:
Federal Home Loan Bank advances	$	20,081	$	16,118	$	246	$	259	$	3,458
Operating lease obligations		17,160		2,501		3,900		2,570		8,189
Total	$	37,241	$	18,619	$	4,146	$	2,829	$	11,647

Off-Balance Sheet Arrangements. We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to originate loans, unused lines of credit and standby letters of credit, which involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. Our exposure to credit loss is represented by the contractual amount of the instruments. We use the same credit policies in making commitments as we do for on-balance sheet instruments. See Note 13 of Notes to the Consolidated Financial Statements.

Recent Accounting Pronouncements

The pronouncements discussed below are not intended to be an all-inclusive list, but rather only those pronouncements that could potentially have an impact on our financial position, results of operations or disclosures.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers.” The amendments in ASU 2014-09 provide a comprehensive framework for addressing revenue recognition issues that can be applied to all contracts with customers. While the guidance in ASU 2014-09 supersedes most existing industry-specific revenue recognition accounting guidance, much of PCSB Bank’s revenue comes from financial instruments such as debt securities and loans that are outside the scope of the guidance. The amendments in ASU 2014-09 also include improved disclosures to enable users of financial statements to better understand the nature, amount, timing and uncertainty of revenue that is recognized. For public entities, ASU 2014-09, as amended, is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2016. Management is currently evaluating the impact that the amendments in ASU 2014-09 could have on PCSB Bank’s consolidated financial position, results of operations and disclosures.

In January 2016, the FASB issued ASU 2016-01 “Financial Instruments – Overall.” The amendments in ASU 2016-01 are intended to improve the recognition, measurement, presentation and disclosure of financial assets and liabilities to provide users of financial statements with information that is more useful for decision-making purposes. Among other changes, ASU 2016-01 would require equity securities to be measured at fair value with changes in fair value recognized through net income, but would allow equity securities that do not have readily determinable fair values to be re-measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments would simplify the impairment assessment of such equity securities and would require enhanced disclosure about these investments. ASU 2016-01 would also require separate presentation of financial assets and liabilities by measurement category and type of instrument, such as securities or loans, on the balance sheet or in the notes, and would eliminate certain other disclosures relating to the methods and

88

assumptions used to estimate fair value. For public entities, the amendments in ASU 2016-01 are effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is not permitted. ASU 2016-01 is not expected to have a material impact on PCSB Bank’s consolidated financial position, results of operations or disclosures.

In February 2016, the FASB issued ASU 2016-02 “Leases.” ASU 2016-02 affects any entity that enters into a lease and is intended to increase the transparency and comparability of financial statements among organizations. The ASU requires, among other changes, a lessee to recognize on its balance sheet a lease asset and a lease liability for those leases previously classified as operating leases. The lease asset would represent the right to use the underlying asset for the lease term and the lease liability would represent the discounted value of the required lease payments to the lessor. The ASU would also require entities to disclose key information about leasing arrangements. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management is currently evaluating the impact that ASU 2016-02 will have on PCSB Bank’s consolidated financial position, results of operations and disclosures.

In March 2016, the FASB issued ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 affects any entity that issues share-based payment awards to its employees. The ASU involves the simplification of several aspects of the accounting for employee share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. ASU 2016-09 is not expected to have a material impact on PCSB Bank’s consolidated financial position, results of operations or disclosures.

In June 2016, the FASB issued ASU 2016-13 “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 affects entities holding financial assets that are not accounted for at fair value through net income, including loans, debt securities, and other financial assets. The ASU requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected by recording an allowance for current expected credit losses. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years. Management is currently evaluating the impact that ASU 2016-13 will have on PCSB Bank’s consolidated financial position, results of operations and disclosures.

In August 2016, the FASB issued ASU 2016-15 “Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 affects all entities that are required to present a statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics, addressing eight specific cash flow issues with the objective of reducing diversity in practice. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-15 is not expected to have a material impact on PCSB Bank’s consolidated financial position, results of operations or disclosures.

Effect of Inflation and Changing Prices

The consolidated financial statements and related financial data included in this prospectus have been prepared according to generally accepted accounting principles in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates generally have a more significant impact on a financial institution’s performance than do general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

89

SUPERVISION AND REGULATION

General

PCSB Bank is a New York-chartered savings bank. Its deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation. PCSB Bank is subject to extensive regulation by the NYSDFS, as its chartering agency, and by the Federal Deposit Insurance Corporation, as its deposit insurer. PCSB Bank is required to file reports with, and is periodically examined by, the Federal Deposit Insurance Corporation and the NYSDFS concerning its activities and financial condition and must obtain regulatory approvals before entering into certain transactions, including, but not limited to, mergers with or acquisitions of other financial institutions. PCSB Bank is a member of the Federal Home Loan Bank of New York.

The regulation and supervision of PCSB Bank establish a comprehensive framework of activities in which an institution can engage and are intended primarily for the protection of depositors and borrowers and, for purposes of the Federal Deposit Insurance Corporation, the protection of the insurance fund. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes.

PCSB Financial will be required to comply with the rules and regulations of the Federal Reserve Board and NYSDFS. It will be required to file certain reports with the Federal Reserve Board and will be subject to examination by and the enforcement authority of the Federal Reserve Board and the NYSDFS. PCSB Financial will also be subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

The Dodd-Frank Act made extensive changes in the regulation of depository institutions and their holding companies. The Dodd-Frank Act created a new Consumer Financial Protection Bureau as an independent bureau of the Federal Reserve Board. The Consumer Financial Protection Bureau is responsible for the implementation of the federal financial consumer protection and fair lending laws and regulations, a function previously assigned to prudential regulators, and now has the authority to impose new requirements. However, institutions of less than $10 billion in assets, such as PCSB Bank, continue to be examined for compliance with consumer protection and fair lending laws and regulations by, and be subject to the enforcement authority of, their federal prudential regulator, although the Consumer Financial Protection Bureau has back-up authority to examine and enforce consumer protection laws against all institutions, including institutions with less than $10 billion in assets.

In addition to creating the Consumer Financial Protection Bureau, the Dodd-Frank Act, among other things, directed changes in the way that institutions are assessed for deposit insurance, mandated the imposition of tougher consolidated capital requirements on holding companies, required the issuance of regulations requiring originators of securitized loans to retain a percentage of the risk for the transferred loans, imposed regulatory rate-setting for certain debit card interchange fees, repealed restrictions on the payment of interest on commercial demand deposits and contained a number of reforms related to mortgage originations. Many of the provisions of the Dodd-Frank Act are subject to delayed effective dates and/or still require the issuance of implementing regulations. Their impact on operations cannot yet be fully assessed. However, there is significant possibility that the Dodd-Frank Act will, at a minimum, result in increased regulatory burden, compliance costs and interest expense for PCSB Bank and PCSB Financial.

The Dodd-Frank Act contained the so-called “Volcker Rule,” which generally prohibits banking organizations from engaging in proprietary trading and from investing in, sponsoring or having certain relationships with hedge or private equity funds (“covered funds”). The federal agencies have issued a final rule implementing the Volcker Rule which, among other things, requires banking organizations to restructure and limit certain of their investments in and relationships with covered funds.

90

Any change in applicable laws or regulations, whether by the NYSDFS, the Federal Deposit Insurance Corporation, the Federal Reserve Board, New York State or the U.S. Congress, could have a material adverse impact on the operations and financial performance of PCSB Financial and PCSB Bank. In addition, PCSB Financial and PCSB Bank will be affected by the monetary and fiscal policies of various agencies of the United States Government, including the Federal Reserve Board. In view of changing conditions in the national economy and in the money markets, it is impossible for management to accurately predict future changes in monetary policy or the effect of such changes on the business or financial condition of PCSB Financial and PCSB Bank.

Set forth below is a brief description of material regulatory requirements that are or will be applicable to PCSB Bank and PCSB Financial. The description is limited to certain material aspects of the statutes and regulations that are addressed, and is not intended to be a complete description of such statutes and regulations and their effects on PCSB Bank and PCSB Financial.

New York Banking Laws and Supervision

PCSB Bank, as a New York savings bank, is regulated and supervised by the NYSDFS. The NYSDFS is required to regularly examine each state-chartered bank. The approval of the NYSDFS is required to establish or close branches, to merge with another bank, to issue stock and to undertake many other activities. Any New York savings bank that does not operate according to the regulations, policies and directives of the NYSDFS may be sanctioned. The NYSDFS may suspend or remove directors or officers of a savings bank who have violated the law, conducted a bank’s business in a manner that is unsafe, unsound or contrary to the depositors’ interests, or been negligent in the performance of their duties. In addition, the NYSDFS has the authority to appoint a receiver or conservator if it is determined that the savings bank is conducting its business in an unsafe or unauthorized manner, and under certain other circumstances.

The powers that New York-chartered savings banks can exercise under these laws include, but are not limited to, the following:

Lending Activities. A New York-chartered savings bank may make a wide variety of mortgage loans including fixed-rate loans, adjustable-rate loans, variable-rate loans, participation loans, graduated payment loans, construction and development loans, condominium and co-operative loans, second mortgage loans and other types of loans that may be made according to applicable regulations. Commercial loans may be made to corporations and other commercial enterprises with or without security. Consumer and personal loans may also be made with or without security.

Investment Activities. In general, PCSB Bank may invest in certain types of debt securities (including certain corporate debt securities, and obligations of federal, state, and local governments and agencies), certain types of corporate equity securities, and certain other assets. However, these investment authorities are constrained by federal law. See “—Federal Bank Regulation—Investment Activities” for such federal restrictions.

Loans to One Borrower Limitations. Under the New York Banking Law, PCSB Bank’s total loans or extensions of credit to a single borrower or group of related borrowers cannot exceed, with specified exceptions, 15% of its capital stock, surplus fund and undivided profits. PCSB Bank may lend additional amounts up to 10% if the loans or extensions of credit are fully secured by readily-marketable collateral. At September 30, 2016, PCSB Bank complied with these loans-to-one-borrower limitations. At September 30, 2016, PCSB Bank’s largest aggregate amount of loans to one borrower was $10.8 million.

Dividends. Under New York banking law, PCSB Bank, following the completion of the conversion, will be permitted to declare and pay dividends out of its net profits, unless there is an impairment of capital. Additionally, the approval of the NYSDFS is required if the total of all dividends declared in a calendar year would exceed the total of its net profits for that year combined with its retained net profits of the preceding two years, subject to certain adjustments provided for in the applicable law.

91

Loans to Trustees and Executive Officers. Under applicable NYSDFS regulations (which are substantially similar to applicable federal banking regulations), PCSB Bank generally may not make a loan or other extension of credit to any of its executive officers or trustees unless the loan or other extension of credit (i) is made on terms, including interest rate and collateral, that are not more favorable to the executive officer or trustee than those customarily offered by PCSB Bank to persons who are not executive officers or trustees and who are not employed by PCSB Bank, and (ii) does not involve more than the normal risk of repayment or present other unfavorable features. Depending on the size of the loan or other extension of credit, prior approval of PSCB Bank’s board of trustees (with the interested party, if a trustee, abstaining from participating directly or indirectly in the voting) may be required.

Assessments. As a New York state-chartered savings bank, PCSB Bank is required to pay to the NYSDFS a general assessment fee in connection with the NYSDFS’ regulation and supervision (including examination) of PCSB Bank. Each state institution is billed five times per each fiscal year, with four estimated quarterly assessments set as approximately 25% of the annual amount based on the NYSDFS’ estimated annual budget at the time of the billing, and a final assessment, or “true-up,” based on the NYSDFS’ actual expenses for the fiscal year. The Federal Deposit Insurance Corporation does not charge a state bank for supervision, although as discussed below, it charges all insured depository institutions deposit insurance assessments in connection with its administration of the Deposit Insurance Fund.

Regulatory Enforcement Authority. Any New York bank that does not operate according to the regulations, policies and directives of the NYSDFS may be subject to sanctions for non-compliance, including seizure of the property and business of the savings bank and suspension or revocation of its charter. The NYSDFS may, under certain circumstances, suspend or remove officers or directors who have violated the law, conducted the savings bank’s business in a manner which is unsafe, unsound or contrary to the depositors interests or been negligent in the performance of their duties. In addition, upon finding that a bank has engaged in an unfair or deceptive act or practice, the NYSDFS may issue an order to cease and desist and impose a fine on the savings bank concerned. New York consumer protection and civil rights statutes applicable to PCSB Bank permit private individual and class action law suits and provide for the rescission of consumer transactions, including loans, and the recovery of statutory and punitive damage and attorney’s fees in the case of certain violations of those statutes.

Recent New York Legislative and Regulatory Developments. The NYSDFS has adopted and proposed new laws and regulations and issued new guidance in a number of areas affecting PCSB Bank’s operations. These include:

• In June 2016, the New York Legislature enacted legislation to address “zombie properties”, meaning residential property abandoned by a homeowner after the initiation, but prior to the completion of, a foreclosure proceeding. Under this law, a mortgagee bank has a duty to maintain and secure a residential real property where there is a reasonable basis to believe it is vacant and abandoned, and faces civil penalties up to $500 per violation, per property, per day for failing to do so. As enacted, the legislation does not apply to PCSB Bank because we originate, own, service and maintain our own mortgages and we originate less than 0.3 percent of one- to four-family real property mortgages in New York. However, there can be no assurance that any future amendments to this law will not include us.

• In June 2016, the NYSDFS adopted a regulation that requires New York chartered banks to maintain programs to monitor and filter transactions for potential Bank Secrecy Act and anti-money laundering violations and prevent transactions with sanctioned entities. The regulation requires regulated institutions annually to submit a board resolution or senior officer compliance finding confirming steps taken to ascertain compliance with the regulation. Under the new regulation, which will be effective January 1, 2017, banks are required to review their transaction-monitoring and filtering programs and ensure that they are reasonably designed to comply with risk-based safeguards. The institutions also must adopt (at the institution’s option) an annual board resolution or senior officer compliance finding to certify compliance with the regulation beginning April 15, 2018. The resolution or finding must state that documents, reports, certifications and

92

opinions of officers and other relevant parties have been reviewed by the board of directors or senior official to certify compliance with the regulation. We are assessing the extent to which the new regulation duplicates the federal Bank Secrecy Act compliance requirements and whether it will require us to augment our compliance resources.

• In September 2016, the NYSDFS proposed a new regulation to require New York chartered banks to establish and maintain a cybersecurity program designed to protect consumers and ensure the safety and soundness of the savings bank. The regulation, which is similar to guidance issued by the federal bank regulators, requires regulated financial institutions to establish a cybersecurity program; adopt a written cybersecurity policy; designate a Chief Information Security Officer responsible for implementing, overseeing and enforcing its new program and policy; and have policies and procedures designed to ensure the security of information systems and nonpublic information accessible to, or held by, third-parties, along with a variety of other requirements to protect the confidentiality, integrity and availability of information systems. We believe that our cybersecurity policies and procedures will comply with the new regulation if it is adopted as proposed.

• In October 2016, the NYSDFS issued guidance regarding incentive compensation. The guidance prohibits the payment by New York chartered banks of incentive compensation tied to employee performance indicators, such as the number of accounts opened, or the number of products sold per customer, without effective risk management, oversight and control. Banks considering the adoption of such incentive compensation plans must balance between risks and rewards, emplace effective controls and risk management and have strong corporate governance, including active and effective oversight by the board of directors. We will ensure that any incentive compensation plan we adopt will conform to this guidance. See “Executive Compensation-Proposed Short-Term Incentive Plan”.

New York has other statutes and regulations that are similar to the federal provisions discussed below.

Federal Bank Regulation

Capital Requirements. Under Federal Deposit Insurance Corporation regulations, federally insured state-chartered banks that are not members of the Federal Reserve System (“state non-member banks”), such as PCSB Bank, are required to comply with minimum leverage capital requirements. The minimum capital leverage requirement is a ratio of Tier 1 capital to total assets that is not less than 4.0%. Tier 1 capital consists of “CET1” and “Additional Tier 1 capital” instruments meeting specified requirements. CET1 is defined as common stock, plus related surplus, and retained earnings plus limited amounts of minority interest in the form of common stock, less the majority of the regulatory deductions.

The Federal Deposit Insurance Corporation regulations require state non-member banks to maintain certain levels of regulatory capital in relation to regulatory risk-weighted assets. The ratio of regulatory capital to regulatory risk-weighted assets is referred to as a bank’s “risk-based capital ratio.” Risk-based capital ratios are determined by allocating assets and specified off-balance sheet items (including recourse obligations, direct credit substitutes and residual interests) to risk-weighted categories ranging from 0.0% to 200.0%, with higher levels of capital being required for the categories perceived as representing greater risk.

State non-member banks must maintain a minimum ratio of total capital to risk-weighted assets of at least 8.0%, of which at least one-half must be Tier 1 capital. Total capital consists of Tier 1 capital and Tier 2 capital. Tier 1 capital consists of common stock, plus related surplus and retained earnings. Under the new capital rules, for most banking organizations, the most common form of Additional Tier 1 capital is noncumulative perpetual preferred stock and the most common form of Tier 2 capital is subordinated notes and a portion of the allowance for loan and lease losses, in each case, subject to the new capital rules’ specific requirements. Banks that engage in specified levels of trading activities are subject to adjustments in their risk based capital calculation to ensure the maintenance of sufficient capital to support market risk.

93

In July 2013, the Federal Deposit Insurance Corporation and the other federal bank regulatory agencies issued a final rule that has revised their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. Among other things, the rule establishes a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), increases the minimum Tier 1 capital to risk-based assets requirement (from 4% to 6% of risk-weighted assets), sets the leverage ratio at a uniform 4% of total assets and assigns a higher risk weight (150%) to exposures that are more than 90 days past due or are on non-accrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The final rule also requires unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt-out is exercised. PCSB Bank has elected to exercise its one-time option to opt-out of the requirement under the final rule to include certain “available-for-sale” securities holdings for purposes of calculating its regulatory capital requirements. The rule limits a banking organization’s capital distributions and certain discretionary bonus payments to executive officers if the banking organization does not hold a “capital conservation buffer” which, when fully phased in, will consist of 2.5% of common equity Tier 1 capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements. The final rule became effective on January 1, 2015. The “capital conservation buffer” will be phased in from January 1, 2016 to January 1, 2019, when the full capital conservation buffer will be effective.

The Federal Deposit Insurance Corporation Improvement Act required each federal banking agency to revise its risk-based capital standards for insured institutions to ensure that those standards take adequate account of interest-rate risk, concentration of credit risk, and the risk of nontraditional activities, as well as to reflect the actual performance and expected risk of loss on multi-family residential loans. The Federal Deposit Insurance Corporation, along with the other federal banking agencies, adopted a regulation providing that the agencies will take into account the exposure of a bank’s capital and economic value to changes in interest rate risk in assessing a bank’s capital adequacy. The Federal Deposit Insurance Corporation also has authority to establish individual minimum capital requirements in appropriate cases upon determination that an institution’s capital level is, or is likely to become, inadequate in light of the particular circumstances.

Standards for Safety and Soundness. As required by statute, the federal banking agencies adopted final regulations and Interagency Guidelines Establishing Standards for Safety and Soundness to implement safety and soundness standards. The guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. The guidelines address internal controls and information systems, internal audit system, credit underwriting, loan documentation, interest rate exposure, asset growth, asset quality, earnings and compensation, fees and benefits. The agencies have also established standards for safeguarding customer information. If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard.

Investment Activities. All state-chartered Federal Deposit Insurance Corporation-insured banks, including savings banks, are generally limited in their investment activities to principal and equity investments of the type and in the amount authorized for national banks, notwithstanding state law, subject to certain exceptions. For example, state chartered banks may, with Federal Deposit Insurance Corporation approval, continue to exercise state authority to invest in common or preferred stocks listed on a national securities exchange or the Nasdaq Global Market and in the shares of an investment company registered under the Investment Company Act of 1940. The maximum permissible investment is 100% of Tier 1 Capital, as specified by the Federal Deposit Insurance Corporation’s regulations, or the maximum amount permitted by New York law, whichever is less.

In addition, the Federal Deposit Insurance Corporation is authorized to permit such a state bank to engage in state-authorized activities or investments not permissible for national banks (other than non-subsidiary equity investments) if it meets all applicable capital requirements and it is determined that such activities or investments do not pose a significant risk to the Deposit Insurance Fund. The Federal Deposit Insurance Corporation has adopted procedures for institutions seeking approval to engage in such activities or investments. In addition, a nonmember bank may control a subsidiary that engages in activities as principal that would only be permitted for a national bank to conduct in a “financial subsidiary” if a bank meets specified conditions and deducts its investment in the subsidiary for regulatory capital purposes.

94

Interstate Banking and Branching. Federal law permits well capitalized and well managed bank holding companies to acquire banks in any state, subject to Federal Reserve Board approval, certain concentration limits and other specified conditions. Interstate mergers of banks are also authorized, subject to regulatory approval and other specified conditions. In addition, among other things, recent amendments made by the Dodd-Frank Act permit banks to establish de novo branches on an interstate basis provided that branching is authorized by the law of the host state for the banks chartered by that state.

Prompt Corrective Regulatory Action. Federal law requires, among other things, that federal bank regulatory authorities take “prompt corrective action” with respect to banks that do not meet minimum capital requirements. For these purposes, the law establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.

The Federal Deposit Insurance Corporation has adopted regulations to implement the prompt corrective action legislation. An institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater. An institution is “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 ratio of 4.5% or greater. An institution is “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 ratio of less than 4.5%. An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 ratio of less than 3.0%. An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%. At September 30, 2016, PCSB Bank was classified as a “well capitalized” institution.

At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions on payment of dividends, and restrictions on the acceptance of brokered deposits. Furthermore, if an insured depository institution is classified in one of the undercapitalized categories, it is required to submit a capital restoration plan to the appropriate federal banking agency, and the holding company must guarantee the performance of that plan. Based upon its capital levels, a bank that is classified as well-capitalized, adequately capitalized, or undercapitalized may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition, or an unsafe or unsound practice, warrants such treatment. An undercapitalized bank’s compliance with a capital restoration plan is required to be guaranteed by any company that controls the undercapitalized institution in an amount equal to the lesser of 5.0% of the institution’s total assets when deemed undercapitalized or the amount necessary to achieve the status of adequately capitalized. If an “undercapitalized” bank fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” “Significantly undercapitalized” banks must comply with one or more of a number of additional restrictions, including but not limited to an order by the Federal Deposit Insurance Corporation to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, cease receipt of deposits from correspondent banks or dismiss directors or officers, and restrictions on interest rates paid on deposits, compensation of executive officers and capital distributions by the parent holding company. “Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after it obtains such status.

Transaction with Affiliates and Regulation W of the Federal Reserve Regulations. Transactions between banks and their affiliates are governed by federal law. An affiliate of a bank is any company or entity that controls, is controlled by or is under common control with the bank. In a holding company context, the parent bank holding company and any companies which are controlled by such parent holding company are affiliates of the bank (although subsidiaries of the bank itself, except financial subsidiaries, are generally not considered affiliates). Generally, Section 23A of the Federal Reserve Act and the Federal Reserve Board’s Regulation W limit the extent

95

to which the bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10.0% of such institution’s capital stock and surplus, and with all such transactions with all affiliates to an amount equal to 20.0% of such institution’s capital stock and surplus. Section 23B applies to “covered transactions” as well as to certain other transactions and requires that all such transactions be on terms substantially the same, or at least as favorable, to the institution or subsidiary as those provided to a non-affiliate. The term “covered transaction” includes the making of loans to, purchase of assets from, and issuance of a guarantee to an affiliate, and other similar transactions. Section 23B transactions also include the provision of services and the sale of assets by a bank to an affiliate. In addition, loans or other extensions of credit by the financial institution to the affiliate are required to be collateralized according to the requirements set forth in Section 23A of the Federal Reserve Act.

Sections 22(h) and (g) of the Federal Reserve Act place restrictions on loans to a bank’s insiders, i.e., executive officers, directors and principal shareholders. Under Section 22(h) of the Federal Reserve Act, loans to a director, an executive officer and to a greater than 10.0% shareholder of a financial institution, and certain affiliated interests of these, together with all other outstanding loans to such person and affiliated interests, may not exceed specified limits. Section 22(h) of the Federal Reserve Act also requires that loans to directors, executive officers and principal shareholders be made on terms substantially the same as offered in comparable transactions to other persons and also requires prior board approval for certain loans. In addition, the aggregate amount of extensions of credit by a financial institution to insiders cannot exceed the institution’s unimpaired capital and surplus. Section 22(g) of the Federal Reserve Act places additional restrictions on loans to executive officers.

Enforcement. The Federal Deposit Insurance Corporation has extensive enforcement authority over insured state savings banks, including PCSB Bank. The enforcement authority includes, among other things, the ability to assess civil money penalties, issue cease and desist orders and remove directors and officers. In general, these enforcement actions may be initiated in response to violations of laws and regulations, breaches of fiduciary duty and unsafe or unsound practices. The Federal Deposit Insurance Corporation is required, with certain exceptions, to appoint a receiver or conservator for an insured state non-member bank if that bank was “critically undercapitalized” on average during the calendar quarter beginning 270 days after the date on which the institution became “critically undercapitalized.” It may also appoint itself as conservator or receiver for an insured state non-member bank under specified circumstances, including: (1) insolvency; (2) substantial dissipation of assets or earnings through violations of law or unsafe or unsound practices; (3) existence of an unsafe or unsound condition to transact business; (4) insufficient capital; or (5) the incurrence of losses that will deplete substantially all of the institution’s capital with no reasonable prospect of replenishment without federal assistance.

Federal Insurance of Deposit Accounts. PCSB Bank is a member of the Deposit Insurance Fund, which is administered by the Federal Deposit Insurance Corporation. Deposit accounts in PCSB Bank are insured up to a maximum of $250,000 for each separately insured depositor.

The Federal Deposit Insurance Corporation imposes an assessment for deposit insurance on all depository institutions. Under its risk-based assessment system, insured institutions are assigned to risk categories based on supervisory evaluations, regulatory capital levels and certain other factors. An institution’s assessment rate depends upon the category to which it is assigned and certain adjustments specified by regulation, with less risky institutions paying lower rates. Assessment rates (inclusive of possible adjustments) currently range from 2 ¹/₂ to 45 basis points of each institution’s total assets less tangible capital. The Federal Deposit Insurance Corporation may increase or decrease the scale uniformly, except that no adjustment can deviate more than two basis points from the base scale without notice and comment rulemaking. The Federal Deposit Insurance Corporation’s current system represents a change, required by the Dodd-Frank Act, from its prior practice of basing the assessment on an institution’s volume of deposits.

The Dodd-Frank Act increased the minimum target Deposit Insurance Fund ratio from 1.15% of estimated insured deposits to 1.35% of estimated insured deposits. The Federal Deposit Insurance Corporation must seek to achieve the 1.35% ratio by September 30, 2020. Insured institutions with assets of $10 billion or more are supposed to fund the increase. The Dodd-Frank Act eliminated the 1.5% maximum fund ratio, instead leaving it to the discretion of the Federal Deposit Insurance Corporation. It has recently exercised that discretion by establishing a long range fund ratio of 2%.

96

The Federal Deposit Insurance Corporation has authority to increase insurance assessments. A significant increase in insurance premiums would likely have an adverse effect on the operating expenses and results of operations of PCSB Bank. Future insurance assessment rates cannot be predicted.

Insurance of deposits may be terminated by the Federal Deposit Insurance Corporation upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule order or regulatory condition imposed in writing. We do not know of any practice, condition or violation that might lead to termination of PCSB Bank’s deposit insurance.

In addition to the Federal Deposit Insurance Corporation assessments, the Financing Corporation (“FICO”) is authorized to impose and collect, with the approval of the Federal Deposit Insurance Corporation, assessments for anticipated payments, issuance costs and custodial fees on bonds issued by the FICO in the 1980s to recapitalize the former Federal Savings and Loan Insurance Corporation. The bonds issued by the FICO are due to mature in 2017 through 2019.

Privacy Regulations. Federal Deposit Insurance Corporation regulations generally require that PCSB Bank disclose its privacy policy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship and annually thereafter. In addition, PCSB Bank is required to provide its customers with the ability to “opt-out” of having their personal information shared with unaffiliated third parties and not to disclose account numbers or access codes to non-affiliated third parties for marketing purposes. PCSB Bank currently has a privacy protection policy in place and believes that such policy is in compliance with the regulations.

Community Reinvestment Act. Under the Community Reinvestment Act, or CRA, as implemented by Federal Deposit Insurance Corporation, a state non-member bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. The CRA requires the Federal Deposit Insurance Corporation, in connection with its examination of a state non-member bank, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution, including applications to acquire branches and other financial institutions. The CRA requires the Federal Deposit Insurance Corporation to provide a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system. PCSB Bank’s latest Federal Deposit Insurance Corporation CRA rating was “Satisfactory.”

New York has its own statutory counterpart to the CRA, which is applicable to PCSB Bank. New York law requires the NYSDFS to consider a bank’s record of performance under New York law in considering any application by the bank to establish a branch or other deposit-taking facility, to relocate an office or to merge or consolidate with or acquire the assets and assume the liabilities of any other banking institution. PCSB Bank’s most recent rating under New York law was “Satisfactory.”

Consumer Protection and Fair Lending Regulations. New York savings banks are subject to a variety of federal and New York statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit. These statutes and regulations provide for a range of sanctions for non-compliance with their terms, including imposition of administrative fines and remedial orders, and referral to the Attorney General for prosecution of a civil action for actual and punitive damages and injunctive relief. Certain of these statutes, including Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts and practices against consumers, authorize private individual and class action lawsuits and the award of actual, statutory and punitive damages and attorneys’ fees for certain types of violations. New York’s Attorney General has vigorously enforced fair lending and other consumer protection laws. The Dodd Frank Act added a new statute that prohibits unfair, deceptive or abusive acts practices against consumers, which can be enforced by the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation and state Attorneys General.

97

USA Patriot Act. PCSB Bank is subject to the USA PATRIOT Act, which gave federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements. By way of amendments to the Bank Secrecy Act, Title III of the USA PATRIOT Act provided measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies. Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions, including banks, thrifts, brokers, dealers, credit unions, money transfer agents, and parties registered under the Commodity Exchange Act.

Other Regulations

Interest and other charges collected or contracted for by PCSB Bank are subject to state usury laws and federal laws concerning interest rates. Loan operations are also subject to state and federal laws applicable to credit transactions, such as the:

• Truth in Lending Act, which requires lenders to disclose the terms and conditions of consumer credit;

• Real Estate Settlement Procedures Act, which requires lenders to disclose the nature and costs of the real estate settlement process and prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts;

• Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;

• Equal Credit Opportunity Act and the New York Executive Law, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;

• Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies; and

• Rules and regulations of the various federal and state agencies charged with the responsibility of implementing such federal and state laws.

The deposit operations of PCSB Bank also are subject to, among others, the:

• Truth in Savings Act, which requires financial institutions to disclose the terms and conditions of their deposit accounts;

• Expedited Funds Availability Act, which requires banks to make funds deposited in transaction accounts available to their customers within specified time frames;

• Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;

• Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check;

98

• Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; and

• New York banking laws and regulations, which governs deposit powers.

Federal Reserve System

Federal Reserve Board regulations require depository institutions to maintain non-interest-earning reserves against their transaction accounts (primarily NOW and regular checking accounts). The regulations generally require that reserves be maintained against aggregate transaction accounts as follows: for that portion of transaction accounts aggregating $115.1 million or less (which may be adjusted by the Federal Reserve Board) the reserve requirement is 3.0% and the amounts greater than $115.1 million require a 10.0% reserve (which may be adjusted annually by the Federal Reserve Board between 8.0% and 14.0%). The first $15.5 million of otherwise reservable balances (which may be adjusted by the Federal Reserve Board) are exempted from the reserve requirements. PCSB Bank is in compliance with these requirements.

Federal Home Loan Bank System

PCSB Bank is a member of the Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank provides a central credit facility primarily for member institutions. Members of the Federal Home Loan Bank are required to acquire and hold shares of capital stock in the Federal Home Loan Bank. PCSB Bank complied with this requirement at September 30, 2016. Based on redemption provisions of the Federal Home Loan Bank of New York, the stock has no quoted market value and is carried at cost. PCSB Bank reviews for impairment based on the ultimate recoverability of the cost basis of the Federal Home Loan Bank of New York stock. At September 30, 2016, no impairment has been recognized.

At its discretion, the Federal Home Loan Bank of New York may declare dividends on the stock. The Federal Home Loan Banks are required to provide funds for certain purposes including the resolution of insolvent thrifts in the late 1980s and to contributing funds for affordable housing programs. These requirements could reduce the amount of dividends that the Federal Home Loan Banks pay to their members and result in the Federal Home Loan Banks imposing a higher rate of interest on advances to their members. There can be no assurance that such dividends will continue in the future. Further, there can be no assurance that the impact of recent or future legislation on the Federal Home Loan Banks also will not cause a decrease in the value of the Federal Home Loan Bank of New York stock held by PCSB Bank.

Holding Company Regulation

Upon completion of the conversion, PCSB Financial will be a bank holding company within the meaning of Bank Holding Company of 1956, as amended. As such, PCSB Financial will be registered with the Federal Reserve Board and be subject to regulations, examinations, supervision and reporting requirements applicable to bank holding companies. In addition, the Federal Reserve Board has enforcement authority over PCSB Financial and its non-savings bank subsidiaries. Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings bank.

A bank holding company is generally prohibited from engaging in non-banking activities, or acquiring direct or indirect control of more than 5% of the voting securities of any company engaged in non-banking activities. One of the principal exceptions to this prohibition is for activities found by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. Some of the principal activities that the Federal Reserve Board has determined by regulation to be so closely related to banking are: (i) making or servicing loans; (ii) performing certain data processing services; (iii) providing discount brokerage services; (iv) acting as fiduciary, investment or financial advisor; (v) leasing personal or real property; (vi) making investments in corporations or projects designed primarily to promote community welfare; and (vii) acquiring a savings and loan association whose direct and indirect activities are limited to those permitted for bank holding companies.

99

The Gramm-Leach-Bliley Act of 1999 authorized a bank holding company that meets specified conditions, including being “well capitalized” and “well managed,” to opt to become a “financial holding company” and thereby engage in a broader array of financial activities than previously permitted. Such activities can include insurance underwriting and investment banking.

PCSB Financial will be subject to the Federal Reserve Board’s capital adequacy guidelines for bank holding companies (on a consolidated basis), which have historically been similar to, though less stringent than, those of the Federal Deposit Insurance Corporation for PCSB Bank. The Dodd-Frank Act, however, required the Federal Reserve Board to promulgate consolidated capital requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to institutions themselves. Instruments such as cumulative preferred stock and trust preferred securities would no longer be includable as Tier 1 capital, as is currently the case with bank holding companies, subject to certain grandfathering rules. The previously discussed final rule regarding regulatory capital requirements implements the Dodd-Frank Act as to bank holding company capital standards. Consolidated regulatory capital requirements identical to those applicable to the subsidiary banks apply to bank holding companies (with greater than $1.0 billion of assets) at January 1, 2015. As is the case with institutions themselves, the capital conservation buffer will be phased in between 2016 and 2019.

A bank holding company is generally required to give the Federal Reserve Board prior written notice of any purchase or redemption of then outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of the company’s consolidated net worth. The Federal Reserve Board may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe and unsound practice, or would violate any law, regulation, Federal Reserve Board order or directive, or any condition imposed by, or written agreement with, the Federal Reserve Board. There is an exception to this approval requirement for well-capitalized bank holding companies that meet certain other conditions.

The Federal Reserve Board has issued a policy statement regarding capital distributions, including dividends, by bank holding companies. In general, the policies provide that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. The policies also require that a bank holding company serve as a source of financial strength to its subsidiary banks by standing ready to use available resources to provide adequate capital funds to those banks during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where necessary. The Dodd-Frank Act codified the source of strength doctrine. Under the prompt corrective action laws, the ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. These regulatory policies could affect the ability of PCSB Financial to pay dividends or otherwise engage in capital distributions.

Under the Federal Deposit Insurance Act, depository institutions are liable to the Federal Deposit Insurance Corporation for losses suffered or anticipated by the Federal Deposit Insurance Corporation in connection with the default of a commonly controlled depository institution or any assistance provided by the Federal Deposit Insurance Corporation to such an institution in danger of default.

The status of PCSB Financial as a registered bank holding company under the Bank Holding Company Act of 1956 will not exempt it from certain federal and state laws and regulations applicable to corporations generally, including, without limitation, certain provisions of the federal securities laws.

New York Holding Company Regulation. Upon completion of the conversion, PCSB Financial will be subject to regulation under New York banking law. Among other requirements, PCSB Financial will have to receive the approval of the NYSDFS before acquiring 10% or more of the voting stock of another banking institution, or to otherwise acquire a banking institution by merger or purchase.

100

Federal Securities Laws

PCSB Financial’s common stock will be registered with the Securities and Exchange Commission after the offering. PCSB Financial will be subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.

The registration under the Securities Act of 1933 of shares of common stock issued in the offering does not cover the resale of those shares. Shares of common stock purchased by persons who are not affiliates of PCSB Financial may be resold without registration. Shares purchased by an affiliate of PCSB Financial will be subject to the resale restrictions of Rule 144 under the Securities Act of 1933. If PCSB Financial meets the current public information requirements of Rule 144 under the Securities Act of 1933, each affiliate that complies with the other conditions of Rule 144, including those that require the affiliate’s sale to be aggregated with those of other persons, would be able to sell in the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of the outstanding shares of PCSB Financial, or the average weekly volume of trading in the shares during the preceding four calendar weeks.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act (the “JOBS Act”), which was enacted in April 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.0 billion during its most recently completed fiscal year qualifies as an “emerging growth company.” PCSB Financial qualifies as an emerging growth company under the JOBS Act.

An “emerging growth company” may choose not to hold shareholder votes to approve annual executive compensation (more frequently referred to as “say-on-pay” votes) or executive compensation payable in connection with a merger (more frequently referred to as “say-on-golden parachute” votes). An emerging growth company also is not subject to the requirement that its auditors attest to the effectiveness of the company’s internal control over financial reporting, and can provide scaled disclosure regarding executive compensation. Finally, an emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. PCSB Financial has elected to comply with new or amended accounting pronouncements in the same manner as a public company.

A company loses emerging growth company status on the earlier of: (i) the last day of the fiscal year of the company during which it had total annual gross revenues of $1.0 billion or more; (ii) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the company pursuant to an effective registration statement under the Securities Act of 1933; (iii) the date on which such company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which such company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. Upon completion of the conversion, PCSB Financial will have in place policies, procedures and systems designed to comply with these regulations, and PCSB Financial will review and document such policies, procedures and systems to ensure continued compliance with these regulations.

101

Change in Control Regulations

Under the Change in Bank Control Act, no person, or group of persons acting in concert, may acquire control of a bank holding company, such as PCSB Financial, unless the Federal Reserve Board has been given 60 days’ prior written notice and not disapproved the proposed acquisition. The Federal Reserve Board considers several factors in evaluating a notice, including the financial and managerial resources of the acquirer and competitive effects. Control, as defined under the applicable regulations, means the power, directly or indirectly, to direct the management or policies of the company or to vote 25% or more of any class of voting securities of the company. Acquisition of more than 10% of any class of a bank holding company’s voting securities constitutes a rebuttable presumption of control under certain circumstances, including where, as will be the case with PCSB Financial, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934.

In addition, federal regulations provide that no company may acquire control (as defined in the Bank Holding Company Act) of a bank holding company without the prior approval of the Federal Reserve Board. Any company that acquires such control becomes a “bank holding company” subject to registration, examination and regulation by the Federal Reserve Board.

TAXATION

Federal Taxation

General. PCSB Financial and PCSB Bank are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize material federal income tax matters and is not a comprehensive description of the tax rules applicable to PCSB Financial and PCSB Bank.

Method of Accounting. For federal income tax purposes, PCSB Bank currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31 for filing its federal income tax returns.

Minimum Tax. The Internal Revenue Code of 1986, as amended, imposes an alternative minimum tax at a rate of 20% on a base of regular taxable income plus certain tax preferences, less an exemption amount, referred to as “alternative minimum taxable income.” The alternative minimum tax is payable to the extent tax computed this way exceeds tax computed by applying the regular tax rates to regular taxable income. Net operating losses can, in general, offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. At September 30, 2016, PCSB Bank had $32,000 of alternative minimum tax credit carryforwards.

Net Operating Loss Carryovers. Generally, a financial institution may carry back net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. See Note 9 to Notes to Consolidated Financial Statements for additional information.

Capital Loss Carryovers. Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years. Any capital loss carryback or carryover is treated as a short-term capital loss for the year to which it is carried. As such, it is grouped with any other capital losses for the year to which carried and is used to offset any capital gains. Any undeducted loss remaining after the five year carryover period is not deductible. At September 30, 2016, PCSB Bank had no capital loss carryovers.

Corporate Dividends. We may generally exclude from our income 100% of dividends received from PCSB Bank as a member of the same affiliated group of corporations.

Audit of Tax Returns. PCSB Bank’s federal income tax returns and New York State income tax returns have not been audited in the last three years.

102

State Taxation

In March 2014, tax legislation was enacted that changed the manner in which financial institutions and their affiliates are taxed in New York State. Taxable income is apportioned to New York State based on the location of the taxpayer’s customers, with special rules for income from certain financial transactions. The location of the taxpayer’s offices and branches are not relevant to the determination of income apportioned to New York State. The statutory tax rate is currently 6.5%. An alternative tax of 0.15% on apportioned capital is imposed to the extent that it exceeds the tax on apportioned income. The New York State alternative tax is capped at $5 million for a tax year and is gradually phased out over a six-year period. Thrift institutions that maintain a qualified residential loan portfolio are entitled to a specially computed modification that reduces the income taxable to New York State.

MANAGEMENT

Shared Management Structure

The directors of PCSB Financial are the same persons who are the trustees of PCSB Bank. In addition, each executive officer of PCSB Financial is also an executive officer of PCSB Bank. PCSB Financial and PCSB Bank expect to maintain this shared management structure until there is a business reason to establish separate management structures.

Our Directors

Directors of PCSB Financial serve three-year staggered terms so that approximately one-third of the directors are elected at each annual meeting. The trustees of PCSB Bank are elected annually. The following table sets forth for each director of PCSB Financial, his name, his age at September 30, 2016, the year in which he began serving as a trustee of PCSB Bank and the year when his current term as a director of PCSB Financial expires.

Name (1)	Position(s)	Age	Director Since	Current Term Expires
William L. Cuddy, Jr.	Director	58	2015	2019
Kevin B. Dwyer	Director	55	2013	2019
Willard I. Hill, Jr.	Director	61	2017	2019
Jeffrey Kellogg	Director	67	2011	2018
Robert Lusardi	Director	62	2012	2018
Matthew G. McCrosson	Director	66	2015	2018
Joseph D. Roberto	Chairman of the Board, President and Chief Executive Officer	64	2012	2019
Karl A. Thimm	Director	69	2008	2017
Michael T. Weber	Director	61	2005	2017
Richard F. Weiss	Vice Chairman of the Board and Lead Independent Director	71	2004	2017

(1) The mailing address for each individual is 2651 Strang Blvd., Suite 100, Yorktown Height, NY 10598.

The business experience for the past five years of each director of PCSB Financial is set forth below. Each individual’s biography also contains information regarding his experience, qualifications, attributes or skills that caused the board of directors to determine that he should serve as a director. Unless otherwise indicated, each individual has held his position for the past five years.

William L. Cuddy, Jr. serves as Executive Vice President of CBRE, Inc. providing commercial real estate consulting and brokerage services to corporations and other institutions for over 30 years. He leads a team of professionals in providing corporate real estate services including tenant representation (regional and national), as well as agency sales and leasing. CBRE, Inc. has recognized Mr. Cuddy as its top producing broker numerous times and he was awarded the NAIOP Deal of the Year six times for various sales and lease transactions.

103

Mr. Cuddy’s present and past leadership positions have included serving as a director of The Burke Hospital Foundation since 2009; director of the Burke Research Institute since 2006; and Director (2001-2009) and Past President of The Burke Rehabilitation Hospital (2007-2009). Member, Board of Stewards and Past President (2007) with the Friendly Sons of St. Patrick in Westchester County; Board member at Mercy College (1996-2005); and Director of the Westchester County Association since 2010.

Before joining the PCSB Bank Board of Trustees Mr. Cuddy had been a Director at CMS Bank which was acquired by PCSB Bank in 2015. The Board of Trustees values the depth of Mr. Cuddy’s background and expertise in real estate matters. In particular, he provides the board of directors and PCSB Bank with an extensive knowledge of the regional commercial real estate market, and provides valuable assistance in fostering relationships with owners, investors, developers and the corporate community. Mr. Cuddy is also valued for his marketing and transaction skills.

Kevin B. Dwyer is the owner of Dwyer Agency, LLC, a real estate agency, and of Dwyer Agency of Mahopac LLC an insurance agency. Dwyer Agency, LLC has been providing the Putnam and surrounding communities with residential and commercial real estate and insurance opportunities since 1927.

Mr. Dwyer is actively involved in many community organizations serving on the Board of Putnam Hospital Center Foundation, St. John’s Parish Mahopac Finance Committee, Friendly Sons of St. Patrick, Lake Mahopac Rotary and Mahopac Chamber of Commerce. His professional organizations include NY State Commercial Association of Realtors, Hudson Valley Commercial Association of Realtors, NYS and National Association of Realtors, International Council of Shopping Centers and Independent Insurance Agents of NY State.

Mr. Dwyer’s real estate and insurance expertise provides the board of directors and PCSB Bank with valuable insight into the local real estate market and into the insurance needs of the Bank.

Willard I. Hill, Jr., now retired, is an attorney who served as Managing Director, Chief Marketing and Communications Officer and Head of Government Relations for MBIA Inc., a major financial guarantee insurance company. He previously served on MBIA’s executive management team as global Chief Compliance Officer, and separately as Head of Investor Relations. Mr. Hill retired from MBIA in 2013. Earlier in his career, he was president of the government deferred compensation business at ING US Financial Services (now Voya Financial) and he held senior executive positions in the legal and business divisions at Aetna, Inc.

Mr. Hill earned his MBA from the University of Connecticut School of Business in 1991. He earned a Juris Doctor from Howard University School of Law in 1979 and a B.A. from Fisk University in 1976. He is a member of the bar in several states, including New York. Mr. Hill serves on the Board of Directors on the Council for Economic Education and of the Food Bank for Westchester.

Mr. Hill’s deep expertise in corporate, insurance and financial services law, government relations and strategic communications and his leadership experience as a senior executive with public companies will be a significant strategic resource for the Company and the Bank.

Jeffrey Kellogg, now retired, served as the Senior Vice President of Development and Community affairs at Putnam Hospital Center and as Executive Director of the Putnam Hospital Center Foundation. In this capacity, for 21 years, Mr. Kellogg was responsible for all fund raising initiatives as well as the hospital’s marketing and communications, public relations, volunteer/auxiliary program, community outreach and guest services department. Professionally, in 2005 he was recognized as a Fellow of the Association for Philanthropy, which is the highest level of achievement in the field of health care philanthropy.

Before his positions with Putnam Hospital Center, Mr. Kellogg began his business career building and managing a chain of a dozen area sporting goods stores throughout Westchester, Dutchess, Putnam and New

104

Fairfield Ct. Counties. Throughout his career Mr. Kellogg has been active in the community and has served on many boards and held numerous leadership positions. These include positions and membership with the Putnam County Economic Development Corporation, the American Heart Association, Cornell Cooperative Extension, Grace Lutheran Church of Yorktown, the Putnam Alliance and Boy Scouts of America. Most recently, Mr. Kellogg has joined the board of Putnam Family and Community Services which services clients throughout the Hudson Valley.

Mr. Kellogg holds a bachelor’s degree in Economics from St. Lawrence University and a master’s degree in Health Care Administration from Western Connecticut State University. His strong leadership skills and extensive community involvement provides the Board of Directors and PCSB Bank with valuable insight the needs of the Bank’s local communities.

Robert Lusardi, Esq. is a partner in the law firm of Daniels, Porco and Lusardi LLP located in Carmel, N.Y. He practices primarily in the areas of Real Estate and Zoning Litigation, Civil Litigation, Mortgage Foreclosure and Commercial Litigation. Mr. Lusardi is admitted to practice in New York, Connecticut and the U.S. District Courts for the Southern and Eastern Districts of New York. He has served as Assistant District Attorney, Putnam County, NY, Village Attorney, Village of Nelsonville Assistant Town Attorney, Town of Phillipstown, and Special Litigation Counsel, Town of Putnam County. Mr. Lusardi is a member of the Zoning Board of Appeals of the Town of Putnam Valley NY, a member of Preserve Putnam, a local charity, the Carmel-Mahopac Chamber of Commerce, and the Putnam County and New York State Bar Associations.

Mr. Lusardi attended The College of Holy Cross where he received his B.A. and Syracuse University College of Law where he received his J.D. His more than 35 years of experience in commercial and real estate litigation provides the board of directors with valuable experience in real estate litigation matters as well as other legal matters.

Matthew G. McCrosson is a partner with the accounting and advisory firm of PKF O’Connor Davies, LLP where he has been employed since 2000. Mr. McCrosson provides performance improvement based advisory services in addition to organizational and operational reviews. He has assisted many clients in reviewing their technology platforms in terms of alternative systems and system selection and implementation coordination.

Before joining PKF O’Connor Davies, LLP in 2000, Mr. McCrosson was with KPMG Consulting, in the firm’s Public Services line of business. Earlier in his career, Mr. McCrosson served as chief financial officer and chief operation officer of several national and regional not-for-profit organizations. He serves on the Boards of the Business Council of Westchester and Westchester Community College Foundation. He is a past Chairman of the Westchester Community Foundation.

Before joining the PCSB Bank Board Mr. McCrosson had been a Director at CMS Bank which had been acquired by PCSB Bank in 2015. The Board of Trustees values Mr. McCrosson’s unique combination of financial and accounting expertise and knowledge of technology matters along with his designation as an “audit committee financial expert,” as that term is defined by Securities and Exchange Commission regulations.

Joseph D. Roberto has served as President and Chief Executive Officer of PCSB Bank since January 2012 and as its Chairman of the Board since January 2012. He served as Chief Financial Officer of PCSB Bank from October 2005 to December 2011. Mr. Roberto’s banking career spans more than 40 years serving in various financial management and executive positions for other financial institutions. Before joining PCSB Bank, Mr. Roberto began his career at Yonkers Savings and Loan Association and served as Chief Financial Officer for both Yonkers Financial Corporation and Yonkers Savings and Loan Association, a public community bank, from 1996 to 2002. In 2004 and 2005 he served as Executive Vice President and Chief Financial Officer of Empire State Bank, a public commercial bank.

Mr. Roberto is actively involved in various organizations in both Putnam and Westchester Counties, currently serving on the boards of the Putnam Economic Development Committee, as its Chairman, the Putnam Hospital Center Foundation and the Westchester County Association. Mr. Roberto is also actively involved with the American Heart Association and its Putnam Heart Walk leading PCSB Bank’s efforts in fund raising and heart healthy awareness.

105

Mr. Roberto’s extensive knowledge of the banking industry and strong leadership skills provide PCSB Bank with invaluable insight and guidance into the business and regulatory requirements of today’s banking environment.

Karl A. Thimm is the President, owner and founder of Karlen Inc. DBA Appliance Sales Plus, a leading Westchester based retail and commercial appliance provider located in Somers NY. He also sits on the Executive Board of Intercounty Appliance Corporation, a retail appliance co-op in Medford, NY. Prior to starting Karlen Incorporated, Mr. Thimm was in the appliance sales division of General Electric Company where he maintained relationships with many retail companies. He sits on the board of the Putnam Hospital Center.

Mr. Thimm’s entrepreneurship and over 40 years of business experience provide PCSB Bank with insight and guidance with its small business lending and account relationships.

Michael T. Weber was the Chief Executive Officer of Health Quest a multi-hospital healthcare system located in the lower Hudson Valley until his retirement in 2013. Prior to retiring, he grew the system to a $700 million operation with multiple healthcare related entities including home care agencies, urgent care centers, a nursing home and physician practices, which helped in making Health Quest the leader it is today.

Before his position as CEO of Health Quest in 2007, Mr. Weber began his career in Buffalo, NY and from 1979 to 1986 he was Director of Fiscal Services at a local hospital. In 1986 he accepted the position of Chief Financial Officer at Putnam Hospital Center, in Carmel, NY. During that time Mr. Weber earned a Masters in Healthcare Administration from Western Connecticut State University and was promoted to the hospital’s Chief Executive Officer. Over the next seven years he successfully improved the hospital’s financial position, completed several major building projects, enlarged the medical staff and enhanced the reputation of the hospital.

During his years in healthcare administration, Mr. Weber was involved in many community activities including Chairman of the American Heart Association, committee membership with both the American Hospital Association and the NYS Healthcare Association and Chairman of the Northern Metropolitan Hospital Association. Mr. Weber’s administration and financial background provides the board with valuable insight into PCSB Bank’s strategic planning goals.

Richard F. Weiss, having been in the financial services industry for over 40 years, is a Certified Public Accountant and a Certified Financial Planner with an emphasis on Estate and Trust planning. Currently, he works as a consultant to Weiss Financial Group and Weiss Advisory Group LLC firms specializing in tax compliance and personal financial, estate and trust planning and compliance.

Before his current position, Mr. Weiss began his career working for several leading CPA firms in New York City, including the prestigious firm S.D. Leidesdorf & Co. which subsequently merged with the current firm of Ernst & Young. Before establishing his private practice in Mahopac, he was partner at the firm of Kamerman, Shapiro, Jacobs & Weiss, a boutique New York City based firm specializing in international and domestic corporate taxation, estate, trust and individual planning and taxation.

Mr. Weiss is a firm believer in giving back to the community and, toward that end, he serves as a board member and Treasurer of the Putnam County Housing Corp. and a board member of the Putnam Economic Development Committee. He also enjoys volunteering as a local broadcast television announcer for Mahopac High School sporting events.

Mr. Weiss’s extensive tax and financial expertise is an invaluable resource to PCSB Bank and is designated as an “audit committee financial expert” as that term is defined by Securities and Exchange Commission regulations. Mr. Weiss also serves as our lead independent director.

106

Executive Officers Who Are Not Directors

Carol Bray, age 52, is Senior Vice President and Chief Information Officer, a position she has held since January 2016. Previously, she was PCSB Bank’s Information Technology Manager beginning in December 2001. With over 25 years of experience, Ms. Bray is responsible for the security of customer information and oversees the Information Technology and Systems Operations Departments. Before joining PCSB Bank, she spent 13 years as Vice President and Systems Operations Manager at Premier Bank, a $1.6 billion community financial institution.

Robert Farrier, age 45, is Senior Vice President and Retail Banking Officer, a position he has held since January 2006. Before joining PCSB Bank, Mr. Farrier has held various positions in the retail banking sector since 1996 where he began his career at Marine Midland Bank and graduated from their Officer’s Development Program. Throughout his career he has worked at several large banking institutions such as Bank of New York, First Union, and Fleet Bank (Bank of America), in which he has held positions in the retail sector from Branch Manager to District Manager of a twenty branch region. Mr. Farrier holds an MBA from Marist College.

Michael P. Goldrick, age 51, is Executive Vice President and Chief Lending Officer, a position he has held since October 2012. Before joining PCSB Bank, Mr. Goldrick has held various management and executive positions in the banking industry since 1987 where he began his career at North Fork Bank & Trust Company as a loan officer. From 2001 to 2005, Mr. Goldrick was Vice President, Commercial Loans, M&T Bank, specializing in middle market loans. From 2005 to 2008 he was Executive Vice President, for Business and Professional Banking at Hudson Valley Bank an executive position accountable for direct and indirect management of a $1.5 billion loan and $1.7 billion deposit portfolio. From 2008 to 2012 Mr. Goldrick was a Senior Vice President, Team Leader Commercial Banking for Provident Bank responsible for loan expansion into Westchester, Putnam, Bronx and Fairfield Ct. Mr. Goldrick holds an MBA in Finance from Fordham University.

Ruth Leser, age 52, is Senior Vice President and has been Director of Human Resources since January 1996. During her time with PCSB Bank, Ms. Leser has administered PCSB Bank’s growth from 99 employees to the current number of 177. Prior to joining PCSB Bank, she spent 9 years as a Human Resources Officer at First Union Bank, formerly Union Trust Bank in Connecticut. Ms. Leser holds a BBA in Human Resources Management.

David McNamara, age 46, is Senior Vice President Compliance and CRA Officer, a position he has held since June 2014. From March 2003 until June 2014, Mr. McNamara was Vice President, Compliance and CRA for Newtown Savings Bank. From January 1997 until March 2003, he was a consultant for RSM McGladrey, Inc. in their Financial Services Practice, specializing in Bank Regulatory Compliance for Community Banks. Mr. McNamara is also an attorney admitted in the State of Connecticut since August 1999.

Scott Nogles, age 47, is Executive Vice President and Chief Financial Officer, a position he has held since October 2011. Before joining PCSB Bank, Mr. Nogles has held various financial management and executive positions for other financial institutions. He began his career in 1993 at KPMG, a big four accounting firm, and specialized in auditing community and regional banks. From 2004 to 2011 Mr. Nogles was Executive Vice President and Chief Financial officer of New England Bank, a $700 million public community bank in Enfield CT. Mr. Nogles holds an MBA from the University of Connecticut and is a former CPA.

Richard Petrone, age 58, is Senior Vice President and Chief Credit Officer, a position he has held since August 2012. Before joining PCSB Bank, Mr. Petrone has held various credit administrative positions for other financial institutions since 1982 where he began his banking career at North Houston Bank, in Houston Texas. From 1992 to 2007 Mr. Petrone was a Vice President and Business Banking Risk Manager for Wachovia Bank responsible for credit structuring, underwriting, originating, renewing and credit grading of business banking clients from $5.0 million to $50.0 million. From 2007 to 2012 he was a Vice President and Commercial Credit Manager for TD Bank, NA responsible for managing an underwriting team of four in support of a Westchester Commercial/Middle market lending team.

107

Clifford S. Weber, age 66, is Senior Vice President, Chief Risk Officer and General Counsel, a position he has held since January 2016. Mr. Weber brings more than twenty five years representing banks, bank and thrift holding companies and other financial service providers in regulatory, corporate, securities and transactional matters. He has spent his career advising senior management and governing boards of community banks and their holding companies on strategic issues, transactions, corporate structure, investments and activities. In addition, Mr. Weber was General Counsel to the Community Bankers Association of New York State, Chairman of the New York Bar Association Banking Law Committee and Counsel to the New York Assembly Insurance Committee. From 2000 to 2015, Mr. Weber was a partner with Hinman, Howard & Kattell LLP, a law firm specializing in banking and financial services regulation. Mr. Weber earned his law degree from Brooklyn Law School. He is a director of the Food Bank for Westchester and the Town of Yorktown Industrial and Commercial Board.

Board Independence

The board of directors has determined that each of our directors, except for Messrs. Lusardi and Roberto, is “independent” as defined in, and for purposes of satisfying the listing standards of, the Nasdaq Stock Market. Mr. Roberto is not considered independent because he is an executive officer of PCSB Financial and PCSB Bank. Mr. Lusardi is not considered independent because of the aggregate amount of legal fees paid by PCSB Bank and by borrowers of PCSB Bank to his law firm during the fiscal year ended June 30, 2016 for legal services rendered to or on behalf of PCSB Bank.

In determining the independence of our directors, the board of directors considered the following relationships between PCSB Bank and our directors and officers, which is not required to be reported under “ —Transactions With Certain Related Persons” below. Daniels, Porco and Lusardi LLP, the law firm in which Mr. Lusardi is a partner, received from PCSB Bank legal fees of $247,000 for the year ended June 30, 2016 and $33,000 for the three months ended September 30, 2016. Mr. Thimm acts as a guarantor on a residential mortgage loan to an affiliated party. Mr. Weiss acts as a guarantor on a residential mortgage loan to a family member.

Transactions With Certain Related Persons

Federal law generally prohibits publicly traded companies from making loans to their executive officers and directors, but it contains a specific exemption from the prohibition for loans made by federally insured financial institutions, such as PCSB Bank, to their executive officers and directors in compliance with federal banking regulations. At September 30, 2016, all of our loans to directors and executive officers were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to PCSB Bank, and did not involve more than the normal risk of collectability or present other unfavorable features. These loans were performing according to their original terms at September 30, 2016, and were made in compliance with federal banking regulations.

Committees of the Board of Directors

We conduct business through meetings of our board of directors and its committees. The board of directors of PCSB Financial has established standing committees, including a Compensation Committee, an Audit Committee and a Nominating/Corporate Governance Committee. Each of these committees operates under a written charter, which governs its composition, responsibilities and operations. PCSB Bank also has standing committees of its Board of Trustees.

108

The table below sets forth the directors of each of the listed standing committees. The board of directors of PCSB Financial has designated both Messrs. McCrosson and Weiss as an “audit committee financial expert,” as that term is defined by the rules and regulations of the Securities and Exchange Commission.

Compensation Committee	Audit Committee	Nominating/Corporate Governance Committee
William V. Cuddy, Jr.	Willard I. Hill, Jr.	William V. Cuddy, Jr.
Jeffrey D. Kellogg	Jeffrey D. Kellogg	Kevin Dwyer
Karl Thimm (Chair)	Matthew McCrosson	Willard I. Hill, Jr.
Michael Weber	Karl Thimm	Jeffrey Kellogg (Chair)
Richard Weiss	Richard Weiss (Chair)	Karl Thimm

Executive Compensation – Summary Compensation Table

The following table sets forth for the year ended June 30, 2016, certain information as to the total remuneration paid by PCSB Bank to Joseph D. Roberto, Scott D. Nogles and Michael P. Goldrick (referred to as our “Named Executive Officers”).

	Fiscal Year Ended June 30, 2016
Name and principal position	Salary ($)		Bonus ($)		Non-equity incentive plan compensation ($)		Nonqualified deferred compensation earnings ($)		All other compensation ($)		Total ($)
Joseph D. Roberto
Chairman, President and Chief Executive Officer		529,231		60,000		—		—		37,094		626,325
Scott D. Nogles
Executive Vice President and Chief Financial Officer		290,616		40,000		—		—		22,064		352,860
Michael P. Goldrick
Executive Vice President and Chief Lending Officer		250,925		16,000		—		—		34,556		301,481

(1) Consists of the following payments:

Officer	Year Ended	Automobile ($)		Golf Club Membership ($)		401(k) ($)		Split Dollar ($)		Total ($)
Joseph D. Roberto	June 30, 2016		8,400		10,825		11,338		6,531		37,094
Scott D. Nogles	June 30, 2016		8,400		—		13,448		216		22,064
Michael P. Goldrick	June 30, 2016		8,400		—		26,156		—		34,556

Benefit Plans

Proposed Employment Agreements. PCSB Financial and PCSB Bank (the “employers”) intend to enter into employment agreements (“agreements”) with Messrs. Roberto, Nogles and Goldrick. The agreements will be entered into in connection with the conversion and stock offering and will have a term that initially ends on December 31, 2019, in the case of Mr. Roberto’s agreement and December 31, 2018 in the case of Messrs. Nogles and Goldrick’s agreements. Each agreement will extend automatically for one additional year on January 1 of each year beginning January 1, 2018 unless either the employers or the applicable executive gives notice no later than 90 days before such anniversary date that an agreement will not be renewed.

109

Each agreement specifies the executive’s base salary, which initially will be $560,000 for Mr. Roberto, $295,920 for Mr. Nogles and $255,505 for Mr. Goldrick. The base salary will be reviewed not less frequently than once every twelve months and may be increased in the board’s discretion. In addition to the base salary, the agreements provide that the executives shall be eligible to participate in short-term and long-term incentive compensation, determined and payable at the discretion of the Compensation Committee. The executives shall also be entitled to continue participation in any fringe benefit arrangements in which he was participating on the effective date of the employment agreement. In addition, the agreements provide for reimbursement of reasonable travel and other business expenses incurred in connection with the performance of the executive’s duties. The agreement for Mr. Roberto provides that he will be entitled to a personal benefits allotment of $30,000 annually which will be used by him, in his sole discretion, towards a car allowance, country club membership, tax or financial advice or such other perquisites as he deems to be appropriate. Each executive will also be entitled to reimbursement of reasonable attorney’s fees incurred in the review and negotiation of the agreement.

If the executive’s employment is terminated by PCSB Bank without cause, including a resignation for good reason (as defined in the agreement) during the term of the agreement, but excluding termination for cause or due to death, disability, retirement or following a change in control, the executive would be entitled to a payment equal to a multiple (i.e., three times for Mr. Roberto, two times for Mr. Nogles and one times for Mr. Goldrick) of the sum of: (i) his average base salary (or, in the case of Mr. Goldrick, his current base salary)plus (ii) his average annual incentive cash compensation awarded during the three (in the case of Mr. Roberto) and two (in the case of Messrs. Nogles and Goldrick) most recent fiscal years ending before the executive’s termination. The severance payment shall be paid to the executive within 30 days (or 60 days in certain circumstances) of the termination date, subject to the receipt of a signed release of claims from the executive within the time frame set forth in the agreement. In the case of Mr. Roberto, the payment shall also include a sum equal to three times his personal benefits allotment and a cash lump sum payment equal to the applicable co-payment percentage that PCSB Bank pays for his continuing life, medical and dental coverage, based on the costs of such coverage on the effective date of Mr. Roberto’s termination. Assuming Messrs. Nogles and Goldrick elect continued medical and dental coverage under COBRA, PCSB Bank and/or PCSB Financial will pay the applicable employer co-pay percentage for a period of 18 months, in the case of Mr. Nogles, and 12 months, in the case of Mr. Goldrick. Such coverage will be paid on a pre-tax basis, if providing such coverage did not result in excise taxes or penalties to PCSB Bank or PCSB Financial, otherwise such coverage would be provided on an after-tax basis. In addition, if Mr. Nogles elected continued COBRA coverage, PCSB Bank would also provide Mr. Nogles with a cash lump sum payment equal to the applicable employer co-pay percentage of such coverage for a period of an additional six months (based on the cost of such coverage at his termination date). PCSB Bank will also provide each executive with a cash lump sum payment equal to the cost of 24 months of life insurance premiums under the PCSB Bank-sponsored life insurance arrangements, in the case of Mr. Nogles, and 12 months, in the case of Mr. Goldrick (based on the cost of such coverage at the executive’s termination date). In addition, each executive would fully vest in any benefits under any nonqualified deferred compensation plans in which such executive is participating.

If the executive’s employment is terminated during the term of the agreement by PCSB Bank without cause, including a resignation for good reason (as defined in the agreements) within 24 months after a change in control (as also defined in the agreements), the executive would be entitled to a payment equal a multiple (i.e., three times for Messrs. Roberto and Nogles and two times for Mr. Goldrick) of the sum of: (i) his current base salary (or his base salary in effect immediately before the change in control, if higher) plus (ii) his highest annual incentive cash compensation awarded during the three (in the case of Messrs. Roberto and Nogles) and two (in the case of Mr. Goldrick) most recent fiscal years ending before the executive’s termination. The severance payment shall be paid to the executive within five business days of the termination date. In the case of Mr. Roberto, the payment shall also include a sum equal to three times his personal benefits allotment and a cash lump sum payment equal to the cost of providing continued life, medical and dental coverage for 36 months following termination, at no cost to the executive, based on the costs of such coverage on the effective date of Mr. Roberto’s date of termination. Assuming Messrs. Nogles and Goldrick elect continued medical and dental coverage under COBRA, the employers will pay the entire cost of such coverage for a period of 18 months. Such coverage will be paid on a pre-tax basis, if

110

possible, or if providing such coverage does not result in excise taxes or penalties to PCSB Bank or PCSB Financial, otherwise such coverage would be provided on an after-tax basis. In addition, if Messrs. Nogles and Goldrick elect continued COBRA coverage, the employers will also provide the executive with a cash lump sum payment equal to the cost of such coverage for a period of an additional 18 months, in the case of Mr. Nogles, and six months, in the case of Mr. Goldrick (based on the cost of such coverage at his termination date). The employers will also provide each executive with a cash lump sum payment equal to 36 months of life insurance coverage, in the case of Mr. Nogles, and 24 months, in the case of Mr. Goldrick (based on the cost of such coverage at the executive’s termination date). In addition, Messrs. Roberto and Nogles would fully vest in any benefits under any nonqualified deferred compensation plans in which such executive is participating.

For purposes of the executive’s ability to resign and receive a payment under the agreement, “good reason” would include the occurrence of any of the following events: (i) a failure of the employers to continue the executive in the executive’s position or, in the case of Messrs. Roberto and Nogles, the issuance by the employers of a notice to the executive that the term of the employment agreement will not be extended; (ii) a material adverse change in the nature or scope of executive’s responsibilities, title, authorities, powers, functions or duties or the duties normally exercised by someone in his executive position, without his consent, (iii) an involuntary reduction in his base salary, except in connection with an across-the-board salary reduction affecting substantially all management employees and based on the employer’s financial performance, (iv) an involuntary relocation of executive’s principal place of employment by more than 35 miles driving distance from such office as determined at the date of the agreement, or (v) a material breach by the employers of the compensation provisions or any other provision of the agreement which continues for more than 10 days following notice given by the executive. If an event constituting “good reason” occurs, the executive is required to give the employers notice within 60 days and the employers will have 30 days to correct the good reason, however, the 30 day period may be waived by the employers.

If the payments to the executives under their employment agreements with the employers made in connection with a change in control would result in an excise tax under Sections 280G and 4999 of the Internal Revenue Code, the severance amounts payable to Messrs. Nogles and Goldrick would be reduced to avoid an excess parachute payment. The employment agreements with Mr. Roberto are silent with respect to any reduction.

If an executive’s employment is terminated for a reason entitling him to a severance payment under the employment agreement before the occurrence of a change in control, he would receive an aggregate cash severance payment of approximately $1.6 million, in the case of Mr. Roberto, $970,000, in the case of Mr. Nogles, and $269,000, in the case of Mr. Goldrick, assuming the event of termination occurs in 2017, based on current levels of compensation. If the termination occurs following a change in control in 2017, based upon current levels of compensation and without regard to the possible reduction to avoid an excess parachute payment, the cash severance payment would be approximately $2.0 million, in the case of Mr. Roberto, $1.1 million, in the case of Mr. Nogles, and $565,000, in the case of Mr. Goldrick.

Under the employment agreements, if the executive is terminated due to disability (as defined in his employment agreement), the employment agreement will terminate. For these purposes, disability is defined as any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months and that renders the executive unable to engage in any substantial gainful activity. If the executive dies while employed, the employers will continue to provide his base salary to his designated beneficiary for three months following his death.

Upon retirement of an executive according to any retirement policy established by the employers’ boards and consented to by the executive, the executive will be entitled to benefits under any retirement plans to which he is a party but shall not be entitled to any amount or benefits under the employment agreement.

The employment agreements require the executives not to compete with PCSB Bank for a period of one year following a termination of employment for which the executive receives severance payments as the result of an involuntary termination or resignation for good reason (other than a termination of employment following a change in control). The employment agreements further require that the executives not solicit business, customers or employees of PCSB Bank or PCSB Financial for a 12 month period following termination (other than a termination of employment following a change in control) and require the executives to maintain confidential information.

111

The employment agreements with PCSB Financial make clear that there will be no obligation of payment or benefits paid under the PCSB Bank and PCSB Financial employment agreements. To the extent that a payment is made or a benefit is received from PCSB Bank, the same payment or benefit will not be paid or received from PCSB Financial.

Proposed Change in Control Agreements. PCSB Financial and PCSB Bank (collectively, the “employers”) intend to enter into change in control agreements with six senior officers. Although all change in control agreements have a term of two years, two of the agreements provide a payment equal to two years’ base salary and average bonus if a covered termination (as described below) occurs following a change in control and four of the agreements provide a payment equal to one year’s base salary and average bonus if a covered termination occurs following a change in control, as specified below. Commencing on the first anniversary of the effective date of the agreements, the agreements may be renewed by the boards of the employers for an additional 12 months, such that the continuing terms shall be for 24 months. If the boards determine not to renew a change in control agreement, the employers must give the covered executive notice at least 30 days before such anniversary date that the agreement will not be renewed. In such event, the change in control agreement will terminate at the end of the then term. Notwithstanding the foregoing, if the change in control agreement is in effect on the effective date of a change in control, the agreement will automatically renew on such date and will expire 24 months following the change in control.

If a change in control (as defined in the agreement) occurs and is followed by the senior officer’s involuntary termination of employment (other than for cause, death or disability) or his resignation for good reason (as defined in the agreement), the executive will receive a cash severance payment equal to two times, in the case of two senior officers, and one times, in the case of four senior officers, the sum of: (i) the officer’s highest rate of base salary paid during the current or two prior calendar years and (ii) the average annual cash incentive compensation received during the current and two immediately preceding calendar years. In addition, the employers will maintain the executive’s medical and dental insurance coverage in effect following their date of termination, at the sole expense of the employer, for a period of 18 months, or 12 months, depending on the particular agreement. If providing such medical and dental coverage on a pre-tax basis would result in an excise tax or penalties to the employers, the employer would provide such benefits on an after-tax basis.

The change in control agreements with PCSB Financial make clear that there will be no obligation of payment or benefits paid under the PCSB Bank and PCSB Financial change in control agreements. To the extent that a payment is made or a benefit is received from PCSB Bank, the same payment or benefit will not be paid or received from PCSB Financial.

Proposed Short-Term Incentive Plan and Clawback Policy. PCSB Bank intends to adopt an annual incentive compensation plan for the benefit of its officers and employees for the year ending June 30, 2018, including its named executive officers. Under the incentive compensation plan, the named executive officers can achieve a bonus based on a percentage of salary, depending on whether the performance goals are achieved at a threshold, target or maximum level. In addition, an employee is expected to achieve goals that are weighted between bank-level goals and individual goals. For the plan to be funded, a net income threshold, determined by the Compensation Committee each year, must be achieved. In conjunction with PCSB Bank’s adoption of a short-term incentive plan, PCSB Financial intends to adopt a clawback policy providing for the right to clawback incentive compensation from certain officers if the Compensation Committee determines that the material non-compliance with any financial reporting requirement under the securities laws requires PCSB Financial to prepare an accounting restatement. PCSB Bank has not previously adopted a clawback policy because PCSB Bank has not previously paid incentive compensation.

Supplemental Executive Retirement Plan for Joseph D. Roberto. In 2012, PCSB Bank adopted a Supplemental Executive Retirement Plan for Mr. Joseph D. Roberto. Under the Supplemental Executive Retirement Plan, which is a nonqualified deferred compensation plan subject to Section 409A of the Internal Revenue Code,

112

Mr. Roberto will be entitled to a normal retirement benefit if he separates from service after his normal retirement age of 68. The normal retirement benefit payable at age 68 is calculated as an annuity of $223,642 per year, payable in monthly installments for his lifetime with 15 years certain. If Mr. Roberto has a separation from service before his normal retirement age (other than for cause or due to his death), his benefit will be reduced by 12.5% per year, for each year before his normal retirement age in which his separation occurs. If Mr. Roberto works beyond his normal retirement age, his normal retirement benefit will be increased by multiplying the number of years beyond his normal retirement age that he works by 3% (i.e., retirement occurring five years beyond normal retirement age would result in a benefit equal to 115% of the normal retirement benefit). If PCSB Bank has a change in control (as defined in the Supplemental Executive Retirement Plan), Mr. Roberto’s benefit becomes fully vested. Upon Mr. Roberto’s separation from service, Mr. Roberto will be entitled to a benefit equal to the normal retirement benefit. If Mr. Roberto’s becomes disabled before attainment of his normal retirement age, Mr. Roberto’s disability benefit would be equal to the benefit payable at his normal retirement age, payable in the form of a life annuity. If he is terminated for cause (as defined in the plan), Mr. Roberto forfeits his right to any benefit under the Supplemental Executive Retirement Plan. Mr. Roberto’s right to a benefit under the Supplemental Executive Retirement Plan is conditioned on his agreement that for a period of one year following his termination of employment, he agrees not to solicit employees or customers of PCSB Bank to terminate their relationship with the bank, and further agrees not to otherwise compete with PCSB Bank within a 15 mile radius of the location in which PCSB Bank or its affiliates has business operations or has filed an application for regulatory approval to establish an office as of the date of Mr. Roberto’s termination, provided that the requirement not to compete will not apply if Mr. Roberto’s termination occurs following a change in control.

Contemporaneously with the adoption of the Supplemental Executive Retirement Plan, PCSB Bank purchased bank-owned life insurance and entered into a Supplemental Life Insurance Agreement (described below) with Mr. Roberto which would pay a death benefit to Mr. Roberto’s beneficiary if he dies while employed at PCSB Bank. If Mr. Roberto dies before retirement, his beneficiaries will receive a benefit under the life insurance agreement in lieu of any benefit under the Supplemental Executive Retirement Plan.

In connection with the adoption of the Supplemental Executive Retirement Plan, Mr. Roberto entered into a participation agreement with PCSB Bank confirming his participation in the plan. The participation agreement permitted Mr. Roberto to elect to receive his benefits under the plan in a lump sum payment rather than in a life annuity with 15 years certain. Mr. Roberto elected to receive a lump sum payment under each payment alternative set forth above.

Supplemental Life Insurance Agreement for Joseph D. Roberto. In conjunction with the adoption of the Supplemental Executive Retirement Plan for Mr. Roberto, PCSB Bank also entered into a Supplemental Life Insurance Agreement with Mr. Roberto. In connection with the adoption of the Supplemental Life Insurance Agreement, PCSB Bank acquired one or more life insurance policies on Mr. Roberto’s life. PCSB Bank is the owner of the policy or policies and has entered into an endorsement form with Mr. Roberto to endorse a portion of the death benefits to Mr. Roberto or his beneficiary (such arrangements are referred to as “split dollar agreements”). If Mr. Roberto dies before the payment of his retirement benefit commences under the Supplemental Executive Retirement Plan, his beneficiary would be entitled to a cash lump sum payment from the Supplemental Life Insurance Agreement, in lieu of any benefit under the Supplemental Executive Retirement Plan, equal to the lesser of (i) $2,517,841 or (ii) the net death proceeds available under the Supplemental Life Insurance Agreement. For these purposes, the “net death proceeds” are defined as the total death proceeds in the policy or policies on Mr. Roberto’s life, minus the greater of (i) the cash surrender value of the policy or (ii) the aggregate premiums paid by PCSB Bank on the policy or policies. If Mr. Roberto dies after his retirement benefits have commenced under the Supplemental Executive Retirement Plan, his beneficiary will be entitled to receive a benefit under the Supplemental Life Insurance Agreement equal to the lesser of (i) the present value of the remaining retirement benefits that would have been paid to him under the Supplemental Executive Retirement Plan had he lived for 15 years after retirement, using a 5% discount rate (or such other reasonable rate as the board determines) and (ii) the net death proceeds. Since Mr. Roberto elected to receive his retirement benefit under the Supplemental Executive Retirement Plan in a lump sum payment following his separation from service, it is expected that no further benefit would be payable to him under this plan following his retirement.

113

Supplemental Retirement Plan for Senior Executives. In 2016, PCSB Bank adopted a Supplemental Retirement Plan for Senior Executives, effective January 1, 2017. Mr. Nogles and Mr. Goldrick are the only participants in the Supplemental Retirement Plan for Senior Executives. Each executive will be required to enter into a participation agreement evidencing his participation in the plan.

Under the Supplemental Retirement Plan for Senior Executives, which is a nonqualified deferred compensation plan subject to Section 409A of the Internal Revenue Code, the participating executive will be entitled to a yearly benefit amount for 15 years if he separates from service after reaching the benefit age of age 65. The “yearly benefit amount” for Mr. Nogles and for Mr. Goldrick is $75,000 and $50,000, respectively. The benefit will be paid in a single lump sum payment equal of the present value of the yearly benefit amount unless the executive makes a timely election to be paid in installments. If the executive has a separation from service before reaching the benefit age (other than due to death, disability, the occurrence of a change in control or for cause), the executive will be entitled to the yearly benefit amount multiplied by his applicable vested percentage.

If the executive dies prior to attaining his benefit age while employed at PCSB Bank, the executive will be in entitled to the yearly benefit amount and payment will commence on the first day of the second month following the executive’s death. If the executive dies following separation from service and after becoming vested in any portion of the yearly benefit amount but prior to commencement of benefit payments, the executive will be entitled to the amount otherwise payable to the executive and payment will commence on the first day of the second month following the executive’s death.

If the executive becomes disabled prior to separation from service and prior to reaching the benefit age, the executive will receive the yearly benefit as if the executive had reached his benefit age prior to disability. The payment will be made in a lump sum within 30 days of the disability determination, unless the executive timely elected to receive the disability benefit at his benefit age.

If PCSB Bank has a change in control (as defined in the Supplemental Retirement Plan for Senior Executives) and the executive’s employment is involuntary terminated (including a good reason termination by the executive) following the change in control, the executive will be entitled to the yearly benefit amount. If the executive’s employment is involuntarily terminated within two years following the change in control, the executive’s benefit will be the present value of the yearly benefit amount paid in a lump sum. If the executive’s employment terminates more than two years following the change in control (other than due to death or disability), the executive will be entitled to the yearly benefit amount, present valued and paid in a lump sum, or if a timely election was made by the executive, paid in installments over 15 years. If the change in control occurs after the executive commences receiving the yearly benefit amount paid in the form of installment payments and the executive has made an election in the participation agreement to receive a lump sum payment of the remaining amounts due following a change in control, the present value of the remaining payments will be determined and made payable no later than 30 days after the occurrence of the change in control.

If the executive is terminated for cause, he forfeits his rights to any benefit under the Supplemental Retirement Plan for Senior Executives. The benefits provided under the Supplemental Retirement Plan for Senior Executives are conditioned on the executive’s covenant that for a period of one year following the executive’s termination of employment (other than following a change in control), the executive will not compete with PCSB Bank in any city, town, or county in which the executive’s normal business office is located and PCSB Bank or the Company has an office or has filed an application for a regulatory approval to establish an office. In addition, the executive shall not hire or attempt to hire any employee of PCSB Bank or solicit any business from any customer of PCSB Bank or their subsidiaries.

Supplemental Life Insurance Plan. PCSB Bank maintains a Supplemental Life Insurance Plan for the benefit of certain executives, other than Mr. Roberto, who have been selected to participate in the plan. Both of Messrs. Nogles and Goldrick are participants in the Supplemental Life Insurance Plan. The plan provides for a death benefit payment equal to the lesser of: (i) one and one-half times a participant’s highest rate of base salary, as in existence in the 2012 calendar year, or (ii) the executive’s net death proceeds if he dies while employed with PCSB Bank. For these purposes, the “net death proceeds” are defined as the total death proceeds in the officer’s policy

114

minus the greater of the cash surrender value of the policy or the aggregate premiums paid by PCSB Bank on the policy. An officer’s participation in the Supplemental Life Insurance Plan will terminate: (i) if any regulatory agency requires PCSB Bank to sever its relationship with the executive; (ii) if PCSB Bank is subjected to regulatory restrictions limiting its ability to pay the compensation under the plan; (iii) in the event of insolvency, receivership or dissolution of PCSB Bank, (iv) upon termination of the executive’s employment, or (v) as otherwise may be determined by the board in good faith.

Tax-Qualified Plans

Pension Plan. PCSB Bank maintains a Retirement Plan in RSI Retirement Trust, a qualified noncontributory defined benefit plan (the “pension plan”) for employees. PCSB Bank froze participation in the pension plan to persons hired after October 1, 2012 (i.e., a “soft freeze”). Employees of PCSB Bank before October 1, 2012, who completed one year of service, attained age 21, and were not in one of the excluded classifications were (and remain) eligible to accrue benefits under the pension plan. Contributions to the Plan are made in order to satisfy the actuarially determined minimum funding requirements according to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). A participant will become 100% vested in his or her accrued benefit under the plan after five years of service with PCSB Bank.

Upon attainment of normal retirement age (age 65) or upon termination after early retirement age (age 60), a participant who is not married and has accrued benefits in excess of $1,000 will receive a life annuity for the participant’s life, unless the participant elects another form of payment. If the participant is married and the present lump sum value of his accrued benefit exceeds $1,000, the normal form of payment will be a joint and survivor annuity, with a percentage of the participant’s benefit continuing to the participant’s spouse upon the participant’s death. In the even the participant’s vested account balance is $1,000 or less, the participant will receive a cash distribution as soon as practicable. A participant’s accrued benefit will become fully vested upon the participant’s death. If a participant dies while the participant is still employed by PCSB Bank or if the participant dies after he retires or terminates employment but before benefit payments start, the surviving spouse will be entitled to a life annuity based on the value of the participant’s vested accrued benefit.

The basic normal retirement benefit is calculated by multiplying the participant’s average of his highest three consecutive years of service by 2% for each year of credited service, up to a maximum of 30 years. A reduced benefit is payable upon early retirement at or after age 60. In the event of late retirement, the late retirement benefit will be the actuarial equivalent of the basic normal retirement benefit plus credit for accruals after attainment of normal retirement age.

PCSB Bank intends to freeze participation in the pension plan to all employees in early 2017 (i.e., a “hard freeze”). After the hard freeze, no further benefits will accrue to the benefit of participants under the pension plan.

401(k) Plan. PCSB Bank maintains a 401(k) Plan, which is a qualified, tax-exempt profit sharing plan with a salary deferral feature under Section 401(k) of the Code (the “401(k) Plan”). All employees except for union employees, leased employees, and employees compensated on an hourly basis or commission basis are eligible to participate in the plan with respect to making elective salary deferrals, provided the employee has attained age 21 and completed one year of service with PCSB Bank. Employees are permitted to make elective salary deferrals in an amount no less than one percent of compensation and up to the lesser of 25% of compensation (as defined by the 401(k) Plan) or $18,000 (as indexed annually). An employee may also contribute rollover contributions to the plan from another eligible retirement plan. Employees who have attained age 50 before the end of a plan year are also eligible to make catch-up contributions during the year in an amount not to exceed $6,000 (as indexed annually). All employee elective salary deferrals, catch-up contributions and “rollover” contributions are fully and immediately vested.

In addition, PCSB Bank will make an employer matching contribution equal to 75% of up to 6% of a participant’s compensation that the participant defers to the plan as an elective salary deferral. In addition, employees who were hired on or after October 1, 2012, who are not eligible to participate in the pension plan due to its “soft freeze,” receive a profit sharing contribution equal to 5% of their compensation. After the “hard freeze,”

115

PCSB Bank intends to discontinue this 5% profit sharing contribution. Profit sharing contributions and employer matching contributions are subject to a six year vesting schedule, such that the participant is not vested in such contributions for the first two years, and thereafter, a participant vests in 20% of his or her account attributable to profit sharing and employer matching contributions each year until fully vested after six years. Generally, a participant is not entitled to an in-service distribution of his or her salary deferrals until the participant attains age 59-1/2. However, a participant may withdraw salary deferrals if the participant suffers a financial hardship, subject to certain limitations. After age 59-1/2, a participant may receive no more than two in-service distributions per year from certain accounts. In addition, the 401(k) Plan permits loans to participants within the limits set forth in the Internal Revenue Code and according to loan procedures established by PCSB Bank. Participants are entitled to benefit payments upon termination of employment due to normal retirement at or after age 65, early retirement at or after age 60, disability or death. Benefits will be distributed in the form of lump sum, which is the normal form of distribution, or installment payments at the election of the participant. PCSB Bank has established an employer stock fund in the 401(k) Plan so that participants can acquire an interest in the common stock of PCSB Financial through their accounts in the 401(k) Plan.

Employee Stock Ownership Plan. PCSB Bank expects to adopt an employee stock ownership plan for eligible employees, effective as of January 1, 2017, in connection with the stock offering. Eligible employees who have attained age 21 and have completed one year of service on or before the closing date of the offering, will begin participation in the employee stock ownership plan, retroactively, as of January 1, 2017, the plan’s effective date. All employees except for union employees, leased employees, nonresident aliens and employees compensated on an hourly basis or commission basis are eligible to participate in the employee stock ownership plan. Employees who do not satisfy the eligibility requirements on the closing date of the offering will become eligible to enter the plan on the first entry date commencing on or after both attainment of age 21 and completion of one year of service.

The employee stock ownership plan trustee is expected to purchase, on behalf of the employee stock ownership plan, 8% of the total number of shares of PCSB Financial common stock issued in the offering (including shares contributed to the Foundation). We anticipate that the employee stock ownership plan will fund its stock purchase with a loan from PCSB Financial equal to the aggregate purchase price of the common stock. The loan will be repaid principally through PCSB Bank’s contribution to the employee stock ownership plan and dividends payable on common stock held by the employee stock ownership plan over the anticipated 15-year term of the loan. The interest rate for the employee stock ownership plan loan is expected to be an adjustable-rate equal to the prime rate, as published in The Wall Street Journal, on the closing date of the offering. Thereafter the interest rate will adjust annually and will be the prime rate on the first business day of the calendar year, retroactive to January 1 of such year.

The trustee will hold the shares purchased by the employee stock ownership plan in an unallocated suspense account. Shares will be released from the suspense account on a pro-rata basis as the employee stock ownership plan repays the loan. The trustee will allocate the shares released among participants on the basis of each participant’s proportional share of compensation relative to all participants. Participants will become 100% vested in their benefit after six years of credited service. Participants who were employed by PCSB Bank immediately before the offering will receive credit for vesting purposes for years of service before adoption of the employee stock ownership plan. Participants also will become fully vested upon normal retirement, death or disability, a change in control, or termination of the employee stock ownership plan. Generally, participants will receive distributions from the employee stock ownership plan after severance from employment. The employee stock ownership plan reallocates any unvested shares forfeited upon termination of employment among the remaining participants.

The employee stock ownership plan permits participants to direct the trustee as to how to vote the shares of common stock allocated to their accounts. The trustee votes unallocated shares and allocated shares for which participants do not provide instructions on any matter in the same ratio as those shares for which participants provide instructions, subject to fulfillment of the trustee’s fiduciary responsibilities.

Under applicable accounting requirements, PCSB Bank will record a compensation expense for the employee stock ownership plan at the fair market value of the shares as they are committed to be released from the

116

unallocated suspense account to participants’ accounts. The compensation expense resulting from the release of the common stock from the suspense account and allocation to plan participants will result in a corresponding reduction in PCSB Financial’s earnings.

Trustees’ Compensation

The following table sets forth for the year ended June 30, 2016 certain information as to the total remuneration paid by PCSB Bank to trustees other than Mr. Roberto, who receives no compensation for being a trustee. No additional fees are earned for service to PCSB Financial. Mr. Hill is excluded from the following table because his service as a trustee began in January 2017.

Fiscal Year Ended June 30, 2016
Name	Fees earned or paid in cash ($)(1)		Nonqualified deferred compensation earnings ($) (2)		All Other Compensation ($)		Total ($)
Weiss, Richard F		74,000		—		—		74,000
Cuddy, William V		74,000		30		—		74,030
Dwyer, Kevin B		74,000		—		—		74,000
Kellogg, Jeffrey D		74,000		—		—		74,000
Lusardi, Robert C		74,000		6		—		74,006
McCrosson, Matthew G		74,000		5		—		74,005
Thimm, Karl A		74,000		—		—		74,000
Weber, Michael T		74,000		—		—		74,000

(1) The amounts in this column represent, with respect to each trustee, a $50,000 annual retainer and $2,000 per month for a period of 12 months (i.e., $24,000 in total) for attendance at monthly board meetings. Mr. Cuddy defers all, and Messrs. Lusardi and McCrosson defer a portion, of their compensation into the Trustee Fee Deferral Plan.

(2) The amounts reflected in this column represent the above market interest earned by the applicable trustee under the Trustee Fee Deferral Plan for the fiscal year ended June 30, 2016.

Trustee Fee Deferral Plan. PCSB Bank maintains the Trustee Fee Deferral Plan for non-employee members of the board of PCSB Bank. The Trustee Fee Deferral Plan is a non-qualified deferred compensation plan subject to the requirements of Section 409A of the Internal Revenue Code. A participant in the plan is eligible to defer a fixed percentage of the periodic fees the participant would be entitled to receive by entering into an election form and submitting such form to PCSB Bank before initial participation, and thereafter, if desired, before the beginning of each plan year. As of the last day of each plan year, PCSB Bank will credit each participant’s account with interest equal to the prime rate as reported in The Wall Street Journal on the first business day of the plan year, compounded annually, provided, that the crediting rate will not be less than 3% nor greater than 10%. The participant’s deferred fees and earnings will be held by PCSB Bank until distributed to the participant. The participants account balances will remain subject to the claims of PCSB Bank’s creditors in the event of PCSB Bank’s insolvency until distributed to the participants.

Each participant is entitled to elect, by filing a timely election form, whether to receive payment of the participant’s account balance on either of: (i) separation from service or (ii) a specified date. In addition, the participant may elect to receive payment in installments or in a lump sum distribution. If the participant fails to make an election, the participant’s account will be distributed in a lump sum distribution at the appropriate time. In addition, if a participant dies, becomes disabled or upon the occurrence of a change in control of PCSB Bank, the participant’s benefit will be distributed in a lump sum distribution.

Trustee Supplemental Life Insurance Plan. In 2016, PCSB Bank adopted a Trustee Supplemental Life Insurance Plan for non-employee trustees of PCSB Bank. Eligible trustees participating in the Trustee Supplemental Life Insurance Plan include Jeffrey Kellogg, Matthew McCrosson, William Cuddy, Robert Lusardi, Karl Thimm, Kevin Dwyer, and Richard Weiss.

117

The Trustee Supplemental Insurance Plan provides for a death benefit to the beneficiaries if the trustee was in service with PCSB Bank at the time of his death. During a trustee’s period of coverage, the trustee is entitled to designate the beneficiary of his death benefit under the Trustee Supplemental Insurance Plan. The death benefit will be the lesser of (i) $100,000 or (ii) the net death benefit. For these purposes, the “net death benefit” is defined as the net amount at risk under the policy or policies, i.e., the difference between the cash surrender value of the policy and the total proceeds payable under the policy at the death of the insured as of a given date. PCSB Bank is the sole owner of the policies covering the trustees and has entered into split dollar endorsements with each trustee endorsing the applicable amount of death benefit to the trustee’s beneficiaries in the event of the trustee’s death. A trustee’s participation in the Trustee Supplemental Life Insurance Plan will terminate if: (i) the trustee’s service with PCSB Bank is terminated for reasons other than death or (ii) the Trustee Supplemental Life Insurance Plan is terminated.

Death Benefit Only Plan. Trustee Michael T. Weber is a participant in a separate Death Benefit Only Plan with PCSB and does not participate in the Trustee Supplemental Life Insurance Plan. Under the Death Benefit Only Plan, in the event of Mr. Weber’s pre-retirement death, his beneficiary is entitled to a death benefit equal to $153,850. The death benefit will be paid to his beneficiary in a single lump sum within 90 days following his death. Mr. Weber’s participation in the Death Benefit Only Plan will terminate in the event of his termination of service or in the event the Death Benefit Only Plan is terminated. During his service, Mr. Weber is entitled to designate his beneficiary or to substitute another beneficiary on written notice to PCSB Bank.

Benefits to be Considered Following Completion of the Stock Offering

Following the stock offering, we intend to adopt a stock-based benefit plan that will provide for grants of stock options and restricted common stock awards. According to applicable regulations, if adopted within the first year after the offering, we anticipate that the plan will authorize a number of stock options and a number of shares of restricted stock, not to exceed 10% and 4%, respectively, of the shares issued in the offering, including shares contributed to the Foundation. These limitations will not apply if the plan is implemented more than one year after the consummation date of the conversion.

The stock-based benefit plan will not be established sooner than six months after the conversion is completed and, if adopted within one year after the conversion, would require the approval by stockholders owning a majority of the outstanding shares of common stock of PCSB Financial. If the stock-based benefit plan is established after one year after the conversion, it would require the approval of our stockholders by a majority of votes cast.

The following additional restrictions would apply to our stock-based benefit plan only if the plan is adopted within one year after the completion of the conversion:

• equity awards must vest at a rate not to exceed 20% per year, except in the case of death, disability or a change in control;

• non-employee trustees/directors in the aggregate may not receive more than 30% of the options and restricted stock awards authorized under the plan;

• any non-employee trustee/director may not receive more than 5% of the options and restricted stock awards authorized under the plan; and

• any officer or employee may not receive more than 25% of the options and restricted stock awards authorized under the plan.

These restrictions do not apply to plans adopted after one year following the completion of the stock offering.

The actual value of restricted stock grants will be determined based on their fair value (the closing market price of shares of common stock of PCSB Financial) as of the date grants are made. The following table presents the total value of all shares to be available for awards of restricted stock under the stock-based benefit plan, assuming the shares for the plan are purchased or issued in a range of market prices from $8.00 per share to $14.00 per share at the time of grant.

118

Exercise Price		Shares at Minimum of Offering Range		Shares at Midpoint of Offering Range		Shares at Maximum of Offering Range		Shares at Adjusted Maximum of Offering Range
(In thousands, except exercise price and fair value per option information)
	$            8.00	$	4,850	$	5,706	$	6,562	$	7,547
	10.00		6,063		7,133		8,203		9,433
	12.00		7,276		8,560		9,844		11,320
	14.00		8,488		9,986		11,484		13,207

The grant-date fair value of the stock options granted under the stock-based benefit plans will be based, in part, on the closing price of shares of common stock of PCSB Financial on the date the options are granted. The fair value will also depend on the various assumptions utilized in the option-pricing model ultimately adopted. The following table presents the total estimated value of the stock options to be available for grant under the stock-based benefit plans, assuming the range of market prices for the shares is $8.00 per share to $14.00 per share at the time of grant.

Share Price	Grant-Date Fair Value Per Option		Options Awarded at Minimum of Offering Range		Options Awarded at Midpoint of Offering Range		Options Awarded at Maximum of Offering Range		Options Awarded at Adjusted Maximum of Offering Range
(In thousands, except share price information)
$            8.00	$	1.87	$	2,834	$	3,335	$	3,835	$	4,410
10.00		2.34		3,547		4,173		4,799		5,519
12.00		2.81		4,259		5,011		5,763		6,627
14.00		3.28		4,972		5,849		6,726		7,735

The tables presented above are provided for informational purposes only. There can be no assurance that our stock price will not trade below the offering price of $10.00 per share. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the section entitled “Risk Factors.”

119

SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth, for each of PCSB Financial’s and PCSB Bank’s directors, trustees and executive officers, including their associates, and for all of these individuals as a group, the proposed purchases of subscription shares. There can be no assurance that any listed individual, or the directors and executive officers as a group, will purchase any specific number of shares of our common stock. If the individual maximum purchase limitation is increased, persons subscribing for the maximum amount may increase their purchase order. See “The Conversion and Offering—Additional Limitations on Common Stock Purchases.” Directors, trustees and officers will purchase shares of common stock at the same $10.00 purchase price per share and on the same terms as other purchasers in the offering. This table excludes shares of common stock to be purchased by the employee stock ownership plan, as well as any stock awards or stock option grants that may be made no earlier than six months after the completion of the offering. Federal and state regulations prohibit our trustees and officers from selling the shares they purchase in the offering for one year after the date of purchase. Subscriptions by management through our 401(k) plan are included in the proposed purchases set forth below and will be counted as part of the maximum number of shares such individuals may subscribe for in the offering and as part of the maximum number of shares trustees and officers may purchase in the offering.

Name of Beneficial Owner	Number of Shares		Aggregate Purchase Price		Percentage of Shares Outstanding at Minimum of Offering Range (1)
Directors/Trustees:
William L. Cuddy, Jr.		20,000	$	200,000		*
Kevin B. Dwyer		6,500		65,000		*
Willard I. Hill, Jr. (2)		—		—		*
Jeffrey Kellogg.		10,000		100,000		*
Robert Lusardi.		20,000		200,000		*
Matthew G. McCrosson		15,000		150,000		*
Joseph D. Roberto		30,000		300,000		*
Karl A. Thimm		7,500		75,000		*
Michael T. Weber		10,000		100,000		*
Richard F. Weiss		10,000		100,000		*
Executive Officers:
Carol Bray		20,000		200,000		*
Robert Farrier		4,500		45,000		*
Michael P. Goldrick		20,000		200,000		*
Ruth Leser		20,000		200,000		*
David McNamara		20,000		200,000		*
Scott Nogles		20,000		200,000		*
Richard J. Petrone		2,000		20,000		*
Clifford S. Weber		15,000		150,000		*
Total for Directors/Trustees and Executive Officers		250,500	$	2,505,000		1.8	%

* Less than 1%.

(1) At the adjusted maximum of the offering range, trustees and executive officers would beneficially own 1.2% of our outstanding shares of common stock.

(2) Mr. Hill did not have a qualifying deposit account at either the September 30, 2015 eligibility record date or the             , 2016 supplemental eligibility record date.

120

THE CONVERSION AND OFFERING

PCSB Bank’s board of trustees has unanimously approved the plan of conversion. PCSB Bank has filed its conversion application with the NYSDFS and a notice of intent to convert with the Federal Deposit Insurance Corporation. These agencies have permitted us to commence the offering. However, the final approval of the NYSDFS and the final non-objection of the Federal Deposit Insurance Corporation are required before we can consummate the conversion and issue shares of common stock. The Federal Deposit Insurance Corporation has issued its written intent to issue a letter of non-objection to the conversion, subject to certain conditions. The Federal Reserve Board has issued its approval required in connection with the conversion. However, these approvals and non-objections do not constitute a recommendation or endorsement of the plan of conversion by any of these regulatory agencies.

General

The board of trustees of PCSB Bank unanimously adopted the plan of conversion on December 7, 2016. Pursuant to the plan of conversion, PCSB Bank will convert from the mutual form of organization to the stock form of organization. In connection with the conversion, PCSB Bank has organized a new Maryland stock holding company named PCSB Financial Corporation, which will sell shares of common stock to the public in this offering. When the conversion and offering are completed, all of the outstanding capital stock of PCSB Bank will be owned by PCSB Financial, and all of the common stock of PCSB Financial will be owned by stockholders. PCSB Bank also intends to form a charitable foundation, PCSB Community Foundation, and fund it with shares of PCSB Financial common stock equal to 2.1% of the shares sold in the offering and an amount of cash so that the total contribution will equal $5.0 million, based on the offering price of $10.00 per share.

Pursuant to the plan of conversion, we will offer shares of common stock for sale in the subscription offering to our eligible account holders and our tax-qualified employee benefit plans, including our employee stock ownership plan and 401(k) plans. To the extent shares remain available for sale, we may offer common stock for sale in a community offering to members of the general public, with a preference given to natural persons residing in Dutchess, Putnam, Rockland and Westchester Counties in New York.

We have the right to accept or reject, in whole or in part, any orders to purchase shares of the common stock received in the community offering. The community offering may begin concurrently with, during or promptly after the subscription offering and must be completed within 45 days after the completion of the subscription offering unless otherwise extended by the NYSDFS. See “—Community Offering.”

We also may offer for sale shares of common stock not purchased in the subscription or community offerings through a syndicated offering or a firm commitment offering in which Sandler O’Neill & Partners, L.P. will be sole manager. See “—Syndicated Offering.”

We intend to retain between $58.6 million and $81.3 million of the net proceeds of the offering (or $94.4 million at the adjusted maximum of the offering range) and to invest between $72.9 million and $98.9 million of the net proceeds in PCSB Bank (or $113.9 million at the adjusted maximum of the offering range). The offering will be consummated only upon the issuance of at least the minimum number of shares of our common stock offered pursuant to the plan of conversion.

We determined the number of shares of common stock to be offered in the offering based upon an independent valuation of the estimated pro forma market value of PCSB Financial. All shares of common stock to be sold in the offering will be sold at $10.00 per share. Investors will not be charged a commission to purchase shares of common stock. The independent valuation will be updated and the final number of the shares of common stock to be issued in the offering will be determined at the completion of the offering. See “—Stock Pricing and Number of Shares to be Issued” for more information as to the determination of the estimated pro forma market value of the common stock.

121

The following is a brief summary of the plan of conversion and is qualified in its entirety by reference to the provisions of the plan of conversion. The plan of conversion should be consulted for further information about the conversion and offering. A copy of the plan of conversion is available for inspection at each office of PCSB Bank. The plan of conversion is also filed as an exhibit to PCSB Bank’s conversion application, of which this prospectus is a part, copies of which may be obtained from the NYSDFS, and as an exhibit to PCSB Bank’s notice of intent to convert, of which this prospectus is a part, copies of which may be obtained from the Federal Deposit Insurance Corporation. The plan of conversion is also filed as an exhibit to the registration statement we have filed with the Securities and Exchange Commission, of which this prospectus is a part, copies of which may be obtained from the Securities and Exchange Commission or online at the Securities and Exchange Commission’s website, www.sec.gov. See “Where You Can Find Additional Information.” A copy of the plan of conversion is also included as an appendix to the proxy statement for PCSB Bank’s special meeting of depositors.

Reasons for the Conversion

Our primary reasons for converting and raising additional capital through the offering are to:

• Enhance our capital base to support continued growth on a prudent basis. We intend to continue to grow our franchise, both organically and through strategic transactions as opportunities arise, on a prudent basis. While we currently exceed all regulatory capital requirements, the offering proceeds will strengthen our capital position and support our planned growth. In addition, the offering proceeds will enhance our lending capacity by increasing our legal lending limits and we intend to increase our internal lending limits. We believe this increased capacity will improve our competitive position relative to the many larger banks operating in our market area.

• Offer our depositors, employees and trustees an equity ownership interest in PCSB Bank. We believe that offering stock to our depositors will provide them with an economic interest in our future success should they decide to invest. The offering will also further enable us to attract and retain trustees, management and employees through various stock-based benefit plans, including an employee stock ownership plan and one or more equity incentive plans.

• Support our local communities through establishing and funding a charitable foundation. The contribution to the charitable foundation will complement our existing charitable activities, and should enable the communities that we serve to share in our long-term growth.

• Facilitate future mergers and acquisitions, if available, on a prudent basis. Although we do not currently have any understandings or agreements regarding any specific transactions, the additional capital raised in the offering may be used to finance mergers with, and acquisitions of, other financial institutions, asset portfolios and branch offices when and if attractive opportunities arise.

Approvals Required

The affirmative vote of (i) 75% of the total amount of deposit liabilities of PCSB Bank, and (ii) a majority of the total votes eligible to be cast by the depositors of PCSB Bank, in each case represented in person or by proxy, are required to approve the plan of conversion. A special meeting of depositors to consider and vote upon the plan of conversion has been called for             , 2017. The plan of conversion also must be approved by the NYSDFS, which issued its conditional approval of the plan of conversion on             , 2017. The Federal Deposit Insurance Corporation must also issue its intent not to object to the plan of conversion. The Federal Deposit Insurance Corporation issued its intent not to object on             , 2017. Additionally, on             , 2017 the Federal Reserve Board conditionally approved our holding company application. We cannot consummate the conversion and offering without satisfying the conditions contained in these approvals and non-objections.

122

Effects of Conversion on Depositors and Borrowers

Continuity. While the conversion is being accomplished, our normal business of accepting deposits and making loans will continue without interruption. After the conversion, we will continue to offer existing services to depositors, borrowers and other customers. The trustees serving PCSB Bank at the time of the conversion will be the directors of PCSB Bank and of PCSB Financial after the conversion. The officers of PCSB Bank at the time of the conversion will retain their positions after the conversion.

Effect on Deposit Accounts. Pursuant to the plan of conversion, each depositor of PCSB Bank at the time of the conversion will automatically continue as a depositor after the conversion, and the deposit balance, interest rate and other terms of such deposit accounts will not change as a result of the conversion. Each such account will be insured by the Federal Deposit Insurance Corporation, without interruption, to the same extent as before the conversion. Depositors will continue to hold their existing certificates, passbooks and other evidences of their accounts.

Effect on Loans. No loan outstanding from PCSB Bank will be affected by the conversion, and the amount, interest rate, maturity and security for each loan will remain as it was contractually fixed before the conversion.

Effect on Voting Rights of Depositors. In its current mutual form, voting rights and control of PCSB Bank are vested exclusively in its board of trustees. Upon completion of the conversion, direction of PCSB Bank will be under the control of its board of directors and all voting rights in PCSB Bank will be vested in PCSB Financial as the sole stockholder of PCSB Bank. After the conversion, the stockholders of PCSB Financial will possess exclusive voting rights with respect to PCSB Financial common stock.

Tax Effects. We have received opinions of counsel and our tax advisors with regard to the federal and state income tax consequences of the conversion to the effect that the conversion will not be taxable for federal or state income tax purposes to PCSB Bank or its depositors. See “—Material Income Tax Consequences.”

Effect on Liquidation Rights. Each depositor of PCSB Bank has both a deposit account in PCSB Bank and a pro rata ownership interest in the net worth of PCSB Bank based upon the deposit balance in his or her account. This ownership interest is tied to the depositor’s account and has no tangible market value separate from the deposit account. This interest may only be realized upon a complete liquidation of PCSB Bank. Any depositor who opens a deposit account obtains a pro rata ownership interest in PCSB Bank without any additional payment beyond the amount of the deposit. A depositor who reduces or closes his or her account receives a portion or all, respectively, of the balance in the deposit account but nothing for his or her ownership interest in the net worth of PCSB Bank, which is lost to the extent that the balance in the account is reduced or closed. Consequently, depositors in a mutual savings bank normally have no way of realizing the value of their ownership interest, which has realizable value only in the unlikely event that the institution is completely liquidated. If this occurs, the depositors of record at that time, as owners, would share pro rata in any residual surplus and reserves of PCSB Bank after other claims, including claims of depositors to the amounts of their deposits, are paid.

In the unlikely event that PCSB Bank were to liquidate after the conversion, all claims of creditors, including those of depositors, also would be paid first, followed by distribution of a “liquidation account” to depositors at September 30, 2015 and             , 2016, who continue to maintain their deposit accounts at the date of liquidation, with any assets remaining thereafter distributed to PCSB Financial as the holder of PCSB Bank’s capital stock. See “—Liquidation Rights.”

Stock Pricing and Number of Shares to be Issued

The plan of conversion and applicable regulations require that the aggregate purchase price of the common stock sold in the offering must be based on the appraised pro forma market value of the common stock, as determined by an independent valuation. We have retained RP Financial to prepare an independent valuation. For its services in preparing the initial valuation, RP Financial will receive a fee of $110,000, as well as payment for

123

reimbursable expenses and an additional $10,000 for each updated valuation prepared. We have paid RP Financial no other fees during the previous three years. We have agreed to indemnify RP Financial and its employees and affiliates against specified losses, including any losses in connection with claims under the federal securities laws, arising out of its services as independent appraiser, except where such liability results from RP Financial’s bad faith or negligence.

The independent valuation was prepared by RP Financial in reliance upon the information contained in this prospectus, including the consolidated financial statements of PCSB Bank. RP Financial also considered the following factors, among others:

• the present results and financial condition of PCSB Bank and the projected consolidated results and financial condition of PCSB Financial;

• the economic and demographic conditions in PCSB Bank’s existing market area;

• certain historical, financial and other information relating to PCSB Bank;

• a comparative evaluation of the operating and financial characteristics of PCSB Bank with those of other publicly traded savings institutions;

• the effect of the offering on our shareholders’ equity and earnings potential;

• the proposed dividend policy of PCSB Financial; and

• the trading market for securities of comparable institutions and general conditions in the market for such securities.

The independent valuation is also based on an analysis of a peer group of publicly traded bank holding companies and savings and loan holding companies that RP Financial considered comparable to PCSB Financial under regulatory guidelines applicable to the independent valuation. Under these guidelines, a minimum of ten peer group companies are selected from the universe of all publicly-traded financial institutions with relatively comparable resources, strategies and financial and other operating characteristics. Such companies must also be traded on an exchange (such as Nasdaq or the New York Stock Exchange). The peer group companies selected for PCSB Financial also consisted of fully-converted stock institutions that were not subject to an actual or rumored acquisition and that had been in fully-converted form for at least one year. In addition, RP Financial limited the peer group companies to the following three selection criteria: (i) institutions located in the Mid-Atlantic with assets between $650 million and $2 billion, tangible equity-to-assets ratios of greater than 7.5%, positive core earnings, and core return on average equity ratios of less than 10.0%; (ii) institutions located in the Northeast with assets between $650 million and $2 billion, tangible equity-to-assets ratios of greater than 7.5%, positive core earnings, and core return on average equity ratios of less than 10.0%; and (iii) institutions located in the Midwest with assets between $650 million and $2 billion, tangible equity-to-assets ratios of greater than 7.5%, positive core earnings, and core return on average equity ratios of less than 10.0%.

The independent valuation considered the pro forma effect of the offering. Consistent with regulatory appraisal guidelines, the appraisal applied three primary methodologies: (i) the pro forma price-to-book value approach applied to both reported book value and tangible book value; (ii) the pro forma price-to-earnings approach applied to reported and core earnings; and (iii) the pro forma price-to-assets approach. The market value ratios applied in the three methodologies were based on the current market valuations of the peer group companies. RP Financial placed the greatest emphasis on the price-to-earnings and price-to-book approaches in estimating pro forma market value. RP Financial did not consider a pro forma price-to-assets approach to be as meaningful in preparing the appraisal, as this approach is more meaningful when a company has low equity or earnings. The price-to-assets approach is less meaningful for a company like us, as we have equity in excess of regulatory capital requirements and positive reported and core earnings.

124

In applying each of the valuation methods, RP Financial considered adjustments to the pro forma market value based on a comparison of PCSB Financial with the peer group. RP Financial made slight upward adjustments for: (i) financial condition; and (ii) primary market area. RP Financial made a moderate downward adjustment for profitability growth and viability of earnings, and made no adjustments for: (i) dividends; (ii) liquidity of the shares; (iii) marketing of the issue; (iv) management; and (v) effect of government regulations and regulatory reform. The slight upward adjustment applied for financial condition was due to PCSB Financial’s more favorable balance sheet liquidity, more favorable funding composition and stronger pro forma capital position. The slight upward adjustment applied for primary market area took into consideration Westchester County’s relatively favorable demographic measures with respect to population growth and income levels compared to the peer group’s primary market area counties. The moderate downward adjustment applied for profitability, growth and viability of earnings took into consideration PCSB Financial’s less favorable efficiency ratio, higher implied credit risk exposure, and lower pro forma returns as a percent of assets and equity relative to the comparable peer group measures.

Included in RP Financial’s independent valuation were certain assumptions as to the pro forma earnings of PCSB Financial after the offering used in determining the appraised value. These assumptions included estimated expenses, an assumed after-tax rate of return of 0.75% at September 30, 2016 on the net offering proceeds and purchases in the open market of common stock by the stock-based benefit plan at the $10.00 per share purchase price. See “Pro Forma Data” for additional information concerning assumptions included in the independent valuation and used in preparing pro forma data. The use of different assumptions may yield different results.

The independent valuation states that at November 11, 2016, as updated as of January 20, 2017, the estimated pro forma market value of PCSB Financial was $178.3 million (inclusive of the shares to be contributed to PCSB Charitable Foundation). Based on applicable regulations, this market value forms the midpoint of a range with a minimum of $151.6 million and a maximum of $205.1 million. The aggregate offering price of the shares will be equal to the valuation range multiplied by offering price of $10.00 per share. The number of shares offered will be equal to the aggregate offering price of the shares divided by the $10.00 price per share. Based on the valuation range and the $10.00 offering price per share, the minimum of the offering range is 14,875,000 shares, the midpoint of the offering range is 17,500,000 shares and the maximum of the offering range is 20,125,000 shares.

Following commencement of the subscription offering, the maximum of the valuation range may be increased by up to 15%, or up to $235.8 million, without resoliciting subscribers, which will result in a corresponding increase of up to 15% in the maximum of the offering range, to up to 23,143,750 shares, to reflect changes in the market and financial conditions or demand for the shares. We will not decrease the minimum of the valuation range and the minimum of the offering range without a resolicitation of subscribers. The offering price of $10.00 per share will remain fixed. See “—Additional Limitations on Common Stock Purchases” as to the method of distribution of additional shares to be issued upon an increase in the offering range to up to 23,143,750 shares.

The board of trustees of PCSB Bank reviewed the independent valuation and, in particular, considered the following:

• PCSB Bank’s financial condition and results of operations;

• a comparison of financial performance ratios of PCSB Bank to those of other financial institutions of similar size; and

• market conditions generally and in particular for financial institutions.

All of these factors are set forth in the independent valuation. The board of trustees also reviewed the methodology and the assumptions used by RP Financial to prepare the independent valuation and believes that such assumptions were reasonable. The offering range may be amended with the approval of the NYSDFS and the Federal Deposit Insurance Corporation, if required, as a result of subsequent developments in the financial condition of PCSB Bank or market conditions generally. If the independent valuation is updated to amend the pro forma market value of PCSB Financial to less than $151.6 million or to more than $235.8 million, the appraisal will be filed with the Securities and Exchange Commission by a post-effective amendment to PCSB Financial’s registration statement.

125

The following table presents a summary of selected pricing ratios for PCSB Financial (on a pro forma basis) at and for the 12-months ended December 31, 2016, and for the peer group companies based on earnings and other information at and for the 12-months ended September 30, 2016, with stock prices at January 20, 2017, as reflected in the appraisal report. Compared to the average pricing of the peer group, our pro forma pricing ratios at the midpoint of the offering range indicated a discount of 44.8% on a price-to-book value basis, a discount of 45.6% on a price-to-tangible book value basis and a premium of 306.5% on a price-to-earnings basis. Our board of trustees, in reviewing and approving the appraisal, considered the range of price-to-earnings multiples and the range of price-to-book value and price-to-tangible book value ratios at the different amounts of shares to be sold in the offering. The appraisal did not consider one valuation approach to be more important than the other. The estimated appraised value and the resulting premium/discount took into consideration the potential financial effect of the offering.

	Price-to-earnings multiple (1)			Price-to-book value ratio			Price-to-tangible book value ratio
PCSB Financial (on a pro forma basis, assuming completion of the offering) (2)
Adjusted Maximum		128.83	X		75.30	%		76.92	%
Maximum		100.96	X		71.58	%		73.31	%
Midpoint		80.85	X		67.75	%		69.54	%
Minimum		63.68	X		63.21	%		65.02	%
Valuation of peer group companies, all of which are fully converted (on an historical basis)
Averages		19.89	X		122.77	%		127.76	%
Medians		21.34	X		121.20	%		124.13	%

(1) Price-to-earnings multiples calculated by RP Financial are based on an estimate of “core,” or recurring, earnings. These ratios are different than those presented in “Pro Forma Data.”

(2) Pro forma pricing ratios for PCSB Financial are based on pro forma data at and for the 12-months ended December 31, 2016, and are different than the pro forma pricing ratios presented in “Pro Forma Data.”

The independent valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing our shares of common stock. RP Financial did not independently verify our consolidated financial statements and other information that we provided to them, nor did RP Financial independently value our assets or liabilities. The independent valuation considers PCSB Bank as a going concern and should not be considered as an indication of the liquidation value of PCSB Bank. Moreover, because the valuation is necessarily based upon estimates and projections of a number of matters, all of which may change from time to time, no assurance can be given that persons purchasing our common stock in the offering will thereafter be able to sell their shares at prices at or above the $10.00 price per share.

If the update to the independent valuation at the conclusion of the offering results in an increase in the maximum of the valuation range to more than $235.8 million and a corresponding increase in the offering range to more than 23,143,750 shares, or a decrease in the minimum of the valuation range to less than $151.6 million and a corresponding decrease in the offering range to less than 14,875,000 shares, then we will promptly return with interest at 0.10% per annum all funds previously delivered to us to purchase shares of common stock in the subscription and community offerings and cancel deposit account withdrawal authorizations and, after consulting with the Federal Deposit Insurance Corporation and receiving the approval of the NYSDFS, we may terminate the plan of conversion. Alternatively, we may establish a new offering range, extend the offering period and commence a resolicitation of purchasers or take other actions as permitted by the NYSDFS and the Federal Deposit Insurance Corporation in order to complete the offering. If we extend the offering and conduct a resolicitation due to a change in the independent valuation, we will notify subscribers of the extension of time and of the rights of subscribers to place a new stock order for a specified period of time. Any single offering extension will not exceed 60 days and aggregate extensions may not conclude beyond             , 2019, which is two years after the date on which the NYSDFS approved the plan of conversion.

126

An increase in the number of shares to be issued in the offering would decrease both a subscriber’s ownership interest and PCSB Financial’s pro forma earnings and shareholders’ equity on a per share basis while increasing shareholders’ equity on an aggregate basis. A decrease in the number of shares to be issued in the offering would increase both a subscriber’s ownership interest and PCSB Financial’s pro forma earnings and shareholders’ equity on a per share basis, while decreasing shareholders’ equity on an aggregate basis.

A copy of the independent valuation report of RP Financial, together with the detailed memorandum setting forth the method and assumptions used in the appraisal report, is filed as an exhibit to each of the documents specified under “Where You Can Find Additional Information.”

Subscription Offering and Subscription Rights

According to the plan of conversion, rights to subscribe for shares of common stock in the subscription offering have been granted in the following descending order of priority. The filling of all subscriptions that we receive will depend on the availability of common stock after satisfaction of all subscriptions of all persons having prior rights in the subscription offering and on the purchase and ownership limitations set forth in the plan of conversion and as described below under “—Additional Limitations on Common Stock Purchases.”

Priority 1: Eligible Account Holders. Each depositor of PCSB Bank with aggregate deposit account balances of $100.00 or more (a “Qualifying Deposit”) at the close of business on September 30, 2015 (an “Eligible Account Holder”) will receive, without payment, nontransferable subscription rights to purchase, subject to the overall purchase limitations, up to the greater of $200,000 (20,000 shares) of our common stock, 0.10% of the total number of shares of common stock issued in the offering, or 15 times the product of the number of subscription shares offered multiplied by a fraction of which the numerator is the aggregate Qualifying Deposit account balances of the Eligible Account Holder and the denominator is the aggregate Qualifying Deposit account balances of all Eligible Account Holders. See “—Additional Limitations on Common Stock Purchases.” If there are not sufficient shares available to satisfy all subscriptions, shares will first be allocated so as to permit each Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of 100 shares or the number of shares for which he or she subscribed. Thereafter, any remaining unallocated shares will be allocated to each remaining Eligible Account Holder whose subscription remains unfilled in same the proportion that the amount of his or her Qualifying Deposit bears to the total amount of Qualifying Deposits of all subscribing Eligible Account Holders whose subscriptions remain unfilled. If an amount so allocated exceeds the amount subscribed for by any one or more Eligible Account Holders, the excess shall be reallocated among those Eligible Account Holders whose subscriptions are not fully satisfied until all available shares have been allocated.

To ensure proper allocation of our shares of common stock, each Eligible Account Holder must list on his or her stock order form all deposit accounts in which he or she has an ownership interest on September 30, 2015. If there is an oversubscription, failure to list an account could result in fewer shares being allocated than if all accounts had been disclosed. If there is an oversubscription, the subscription rights of Eligible Account Holders who are also trustees or officers of PCSB Bank or who are associates of such persons will be subordinated to the subscription rights of other Eligible Account Holders to the extent attributable to their increased deposits in the 12 months preceding September 30, 2015.

Priority 2: Tax-Qualified Plans. Our tax-qualified employee plans, including PCSB Bank’s employee stock ownership plan and 401(k) plan, will receive, without payment, nontransferable subscription rights to purchase in the aggregate up to 10% of the shares of common stock sold in the offering and contributed to the charitable foundation, although our employee stock ownership plan intends to purchase 8% of the shares of common stock sold in the offering and contributed to the foundation. If market conditions warrant, in the judgment of its trustees, the employee stock ownership plan may instead elect to purchase shares in the open market following the completion of the offering, subject to the approval of the NYSDFS and the Federal Deposit Insurance Corporation. The amount of the subscription requests by the 401(k) plan will be determined by its participants, who will have the right to invest all or a portion of their 401(k) plan accounts in our common stock, subject to the maximum purchase limitations.

127

Priority 3: Supplemental Eligible Account Holders. To the extent that there are sufficient shares of common stock remaining after satisfaction of subscriptions by Eligible Account Holders and by tax-qualified plans, each depositor of PCSB Bank (other than trustees and officers of PCSB Bank, and their associates) with a Qualifying Deposit at the close of business on             , 2016, who is not an Eligible Account Holder (a “Supplemental Eligible Account Holder”) will receive, without payment, nontransferable subscription rights to purchase, subject to the overall purchase limitations, up to the greater of $200,000 (20,000 shares) of our common stock, 0.10% of the total number of shares of common stock issued in the offering, or 15 times the product of the number of subscription shares offered multiplied by a fraction of which the numerator is the aggregate Qualifying Deposit account balances of the Supplemental Eligible Account Holder and the denominator is the aggregate Qualifying Deposit account balances of all Supplemental Eligible Account Holders. See “—Additional Limitations on Common Stock Purchases.” If there are not sufficient shares available to satisfy all subscriptions, shares will first be allocated so as to permit each Supplemental Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of 100 shares or the number of shares for which he or she subscribed. Thereafter, any remaining unallocated shares will be allocated to each remaining Supplemental Eligible Account Holder whose subscription remains unfilled in same the proportion that the amount of his or her Qualifying Deposit bears to the total amount of Qualifying Deposits of all subscribing Supplemental Eligible Account Holders whose subscriptions remain unfilled. If an amount so allocated exceeds the amount subscribed for by any one or more Supplemental Eligible Account Holders, the excess shall be reallocated among those Supplemental Eligible Account Holders whose subscriptions are not fully satisfied until all available shares have been allocated.

To ensure proper allocation of our shares of common stock, each Supplemental Eligible Account Holder must list on his or her stock order form all deposit accounts in which he or she has an ownership interest on             , 2016. If there is an oversubscription, failure to list an account could result in fewer shares being allocated than if all accounts had been disclosed.

Expiration Date. The subscription offering will expire at 5:00 p.m., Eastern Time, on             , 2017, unless extended by us for up to 45 days or such additional periods with the approval of the NYSDFS and, if necessary, the Federal Deposit Insurance Corporation. Subscription rights will expire whether or not each eligible depositor can be located. We may decide to extend the expiration date of the subscription offering for any reason, whether or not subscriptions have been received for shares at the minimum, midpoint, maximum or adjusted maximum of the offering range. Subscription rights which have not been exercised before the expiration date will become void.

We will not execute orders until at least the minimum number of shares of common stock has been sold in the offering. If at least 14,875,000 shares have not been sold in the offering by             , 2017 and the NYSDFS and the Federal Deposit Insurance Corporation, if necessary, have not consented to an extension, all funds delivered to us to purchase shares of common stock in the offering will be returned promptly, with interest at 0.10% per annum for funds received in the subscription and community offerings, and all deposit account withdrawal authorizations will be canceled. If an extension beyond             , 2017 is necessary and granted by the NYSDFS and, if necessary, by the Federal Deposit Insurance Corporation, we will resolicit purchasers in the offering as described under “—Procedure for Purchasing Shares in Subscription and Community Offerings—Expiration Date.”

Community Offering

To the extent that shares of common stock remain available for purchase after satisfaction of all subscriptions by Eligible Account Holders, by our tax-qualified employee stock benefit plans and by Supplemental Eligible Account Holders, we will offer shares pursuant to the plan of conversion to members of the general public in a community offering. Shares will be offered in the community offering with the following preferences:

(i) Natural persons residing in Dutchess, Putnam, Rockland and Westchester Counties in New York; and

(ii) Other members of the general public.

128

Subscribers in the community offering may purchase up to $200,000 (20,000 shares) of common stock, subject to the overall purchase limitations. See “—Additional Limitations on Common Stock Purchases.” The opportunity to purchase shares of common stock in the community offering category is subject to our right, in our sole discretion and reasonably consistent with achieving a reasonably wide distribution of the common stock, to accept or reject any such orders in whole or in part either at the time of receipt of an order or as soon as practicable following the expiration date of the offering.

If we do not have sufficient shares of common stock available to fill the orders of natural persons residing in Dutchess, Putnam, Rockland and Westchester Counties in New York, we will allocate the available shares among those persons in a manner that permits each of them, to the extent possible, to purchase the lesser of 100 shares or the number of shares subscribed for by such person. Thereafter, unallocated shares will be allocated among natural persons residing in that geographical area whose orders remain unsatisfied on an equal number of shares basis per order. In connection with the allocation process, orders received for shares of common stock in the community offering will first be filled up to a maximum of 2% of the shares sold in the offering, and thereafter any remaining shares will be allocated on an equal number of shares basis per order until all shares have been allocated.

The term “residing” or “resident” as used in this prospectus with respect to Dutchess, Putnam, Rockland and Westchester Counties in New York means any Person who occupies a dwelling within the local community, has a present intent to remain within the local community for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within the local community together with an indication that such presence within the local community is something other than merely transitory in nature. We may utilize deposit or loan records or other evidence provided to us to determine whether a person is a resident. In all cases, however, the determination shall be in our sole discretion.

Expiration Date. The community offering may begin concurrently with, during or promptly after the subscription offering, and is currently expected to terminate at the same time as the subscription offering, and must terminate no more than 45 days following the subscription offering, unless extended with the approval of the NYSDFS. We may decide to extend the community offering for any reason and are not required to give purchasers notice of any such extension unless such period extends beyond             , 2017, in which event we will resolicit purchasers.

Syndicated Offering and Firm Commitment Offering

If feasible, our board of directors may decide to offer for sale shares of common stock not subscribed for or purchased in the subscription and community offerings in a syndicated offering or a firm commitment offering, subject to such terms, conditions and procedures as we may determine, subject to any approvals required from the NYSDFS or the Federal Deposit Insurance Corporation, in a manner that will achieve a wide distribution of our shares of common stock.

If a syndicated offering or firm commitment offering is held, Sandler O’Neill & Partners, L.P. will serve as sole manager. If shares of common stock are sold in a syndicated offering or firm commitment offering, we will pay fees of 5.0% of the aggregate amount of common stock sold in the syndicated offering or firm commitment offering to Sandler O’Neill & Partners, L.P. and any other broker-dealers included in the syndicated offering or firm commitment offering. The shares of common stock will be sold at the same price per share ($10.00 per share) that the shares are sold in the subscription offering and the community offering.

If there is a syndicated offering, it is currently expected that investors would follow the same general procedures applicable to purchasing shares in the subscription and community offerings (the use of order forms and the submission of funds directly to PCSB Financial for the payment of the purchase price of the shares ordered) except that payment must be in immediately available funds (bank checks, money orders, deposit account withdrawals from accounts at PCSB Bank or wire transfers). See “—Procedure for Purchasing Shares in Subscription and Community Offerings.” “Sweep” arrangements and delivery versus payment settlement will only be used in a syndicated offering to the extent consistent with Rules 10b-9 and 15c2-4 under the Securities Exchange Act of 1934 and then-existing guidance and interpretations thereof of the Securities and Exchange Commission regarding the conduct of “min/max” offerings.

129

If there is a firm commitment offering, the proposed underwriting agreement will not be entered into with Sandler O’Neill & Partners, L.P. and any other underwriters named in the underwriting agreement and PCSB Financial until immediately before the completion of the firm commitment offering. At that time, Sandler O’Neill & Partners, L.P. and any other underwriters included in the firm commitment offering will represent that they have received sufficient indications of interest to complete the firm commitment offering. Pursuant to the terms of the underwriting agreement, and subject to certain customary provisions and conditions to closing, upon execution of the underwriting agreement, Sandler O’Neill & Partners, L.P. and any other underwriters named in the underwriting agreement will be obligated to purchase all the shares subject to the firm commitment offering.

If for any reason we cannot undertake a syndicated offering or firm commitment offering of shares of common stock not purchased in the subscription and community offerings, or if there are an insignificant number of shares remaining unsold after such offerings, we will try to make other arrangements for the sale of unsubscribed shares. The Federal Deposit Insurance Corporation, the NYSDFS and the Financial Industry Regulatory Authority must approve any such arrangements.

Additional Limitations on Common Stock Purchases

The plan of conversion includes the following additional limitations on the number of shares of common stock that may be purchased in the offering:

• No individual, or group of individuals exercising subscription rights through a single qualifying deposit account held jointly, may purchase more than $200,000 (20,000 shares) in the offering;

• Except for the employee stock ownership plan and the 401(k) plan, as described above, no person or entity, together with associates or persons acting in concert with such person or entity, may purchase more than $300,000 (30,000 shares) of common stock in all categories of the offering combined;

• Tax qualified employee benefit plans, including our employee stock ownership plan and 401(k) plan, may purchase in the aggregate up to 10% of the shares of common stock sold in the offering and contributed to the charitable foundation, including shares issued upon an increase in the offering range of up to 15%;

• No person may purchase fewer than 25 shares of common stock, to the extent those shares are available for purchase; and

• The aggregate number of shares of common stock that may be purchased in all categories of the offering by officers, directors and trustees of PCSB Financial and PCSB Bank and their associates may not exceed 25% of the total shares sold in the offering.

Depending upon market or financial conditions, our board of directors, with regulatory approval and without further approval of the depositors of PCSB Bank, may decrease or increase the purchase limitations. If a purchase limitation is increased, subscribers in the subscription offering who ordered the maximum amount will be given the opportunity to increase their orders up to the then applicable limit. The effect of this type of resolicitation will be an increase in the number of shares of common stock owned by persons who choose to increase their orders.

If there is an increase in the offering range to up to 23,143,750 shares of common stock, shares will be allocated in the following order of priority according to the plan of conversion:

(i) if there is an oversubscription at the Eligible Account Holder level, to fill unfilled subscriptions of these subscribers according to their respective priorities;

130

(ii) to fill the subscriptions of our tax-qualified employee benefit plans, specifically our employee stock ownership plan and our 401(k) plan, for up to 10% of the total number of shares of common stock sold in the offering and contributed to the charitable foundation;

(iii) if there is an oversubscription at the Supplemental Eligible Account Holder level, to fill unfilled subscriptions of these subscribers according to their respective priorities; and

(iv) to fill unfilled subscriptions in the community offering, with preference given first to natural persons residing in Dutchess, Putnam, Rockland and Westchester Counties in New York, and then to members of the general public.

The term “associate” of a person means:

(i) any corporation or organization (other than PCSB Bank, PCSB Financial or a majority-owned subsidiary of any of those entities) of which the person is a senior officer, partner or, directly or indirectly, 10% beneficial shareholder;

(ii) any trust or other estate in which the person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary capacity; and

(iii) any relative or spouse of such person, or any relative of such spouse, who either has the same home as the person or who is a director, trustee or officer of PCSB Bank or PCSB Financial.

The term “acting in concert” means persons seeking to combine or pool their voting or other interests in the securities of an issuer for a common purpose, pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. When persons act together for such purpose, their group is deemed to have acquired their stock. The determination of whether a group is acting in concert shall be made solely by us and may be based on any evidence upon which we choose to rely, including, without limitation, joint account relationships or the fact that such persons have filed joint Schedules 13D with the Securities and Exchange Commission with respect to other companies; provided, however, that the determination of whether a group is acting in concert remains subject to review by the NYSDFS. Persons with the same address, whether or not related, and persons exercising subscription rights through qualifying deposit accounts registered to the same address will be deemed to be acting in concert unless we determine otherwise. Our directors and trustees are not treated as associates of each other solely because of their membership on the boards of directors or trustees.

Common stock purchased in the offering will be freely transferable except for shares purchased by directors and certain officers of PCSB Financial or PCSB Bank and except as described below. Any purchases made by any associate of PCSB Financial or PCSB Bank for the explicit purpose of meeting the minimum number of shares of common stock required to be sold in order to complete the offering shall be made for investment purposes only and not with a view toward redistribution. In addition, under Financial Industry Regulatory Authority guidelines, members of the Financial Industry Regulatory Authority and their associates are subject to certain restrictions on transfer of securities purchased according to subscription rights and to certain reporting requirements upon purchase of these securities. For a further discussion of limitations on purchases of our shares of common stock at the time of offering and thereafter, see “—Certain Restrictions on Purchase or Transfer of Our Shares After the Offering” and “Restrictions on Acquisition of PCSB Financial Corporation.”

131

Plan of Distribution; Selling Agent and Underwriting Compensation

Subscription and Community Offerings. To assist in the marketing of our shares of common stock in the subscription and community offerings, we have retained Sandler O’Neill & Partners, L.P., which is a broker-dealer registered with the Financial Industry Regulatory Authority. Sandler O’Neill & Partners, L.P. will assist us on a best efforts basis in the subscription and community offerings by:

• consulting as to the marketing implications of the plan of conversion;

• reviewing with the boards the financial impact of the offering on us, based upon the independent appraiser’s appraisal of the common stock;

• reviewing all offering documents, including the prospectus, stock order forms and related marketing materials;

• assisting us in the design and implementation of a marketing strategy for the offering;

• assisting our management in scheduling and preparing for meetings with potential investors and/or other broker-dealers in connection with the offering; and

• providing such other general advice and assistance as may be requested to promote the successful completion of the offering.

For these services, Sandler O’Neill & Partners, L.P. will receive a fee of 0.90% of the aggregate dollar amount of all shares of common stock sold in the subscription and community offerings. No fee will be payable to Sandler O’Neill & Partners, L.P. with respect to shares purchased by directors, trustees, officers, employees or their immediate families and their personal trusts, shares purchased by our employee benefit plans or trusts established for the benefit of our directors, officers and employees, and shares issued to the charitable foundation.

Syndicated Offering or Firm Commitment Offering. If shares of common stock are sold in a syndicated offering or firm commitment offering, we will pay fees of 5.0% of the aggregate dollar amount of common stock sold in the syndicated offering or firm commitment offering to Sandler O’Neill & Partners, L.P. and any other broker-dealers included in the syndicated offering or firm commitment offering.

Expenses. Sandler O’Neill & Partners, L.P. also will be reimbursed for reasonable out-of-pocket accountable expenses, including legal fees, in an amount not to exceed $110,000 (or up to $125,000 if there is a syndicated offering or a firm commitment offering). Sandler O’Neill & Partners, L.P. will reimburse any amounts paid or advanced by us in excess of their actual reasonable out-of-pocket accountable expenses. If the plan of conversion is terminated or if Sandler O’Neill & Partners, L.P.’s engagement is terminated according to the provisions of the agency agreement, Sandler O’Neill & Partners, L.P. will only receive reimbursement of its reasonable out-of-pocket expenses. We have separately agreed to pay Sandler O’Neill & Partners, L.P. up to $55,000 in fees and expenses for serving as records agent, as described below.

Records Management

We have also engaged Sandler O’Neill & Partners, L.P. as records agent in connection with the subscription and community offerings. In its role as records agent, Sandler O’Neill & Partners, L.P., will assist us in the offering by:

• consolidating deposit accounts and depositor vote calculation;

• assisting in designing and preparing stock order forms and depositor proxy forms;

132

• organizing and supervising our Stock Information Center;

• coordinating proxy solicitation and vote tabulation; and

• providing subscription services.

Sandler O’Neill & Partners, L.P. will receive fees of $30,000 for these services, all of which will be due and payable upon the mailing of the proxy solicitation and stock offering materials to depositors. Sandler O’Neill & Partners, L.P. also will be reimbursed for reasonable out-of-pocket accountable expenses in an amount not to exceed $25,000 (plus an additional $20,000 if there is a material delay in the offering). Sandler O’Neill & Partners, L.P. will reimburse any amounts paid or advanced by us in excess of their actual reasonable out-of-pocket accountable expenses.

Indemnity

We will indemnify Sandler O’Neill & Partners, L.P. against liabilities and expenses, including legal fees, incurred in connection with certain claims or litigation arising out of or based upon untrue statements or omissions contained in the offering materials for the common stock, including liabilities under the Securities Act of 1933, as well as certain other claims and litigation arising out of Sandler O’Neill & Partners, L.P.’s engagement with respect to the offering.

Solicitation of Offers by Officers and Directors

Some of our directors and executive officers may participate in the solicitation of offers to purchase common stock in the subscription and community offerings. These persons will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation, which out-of-pocket expenses, if any, are expected to be insignificant. Other regular employees of PCSB Bank may assist in the offering, but only in ministerial capacities, and may provide clerical work in effecting a sales transaction. No offers or sales may be made by tellers or at the teller counters. Investment-related questions of prospective purchasers will be directed to executive officers or registered representatives of Sandler O’Neill & Partners, L.P. Our other employees have been instructed not to solicit offers to purchase shares of common stock or provide advice regarding the purchase of common stock. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, and sales of common stock will be conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of common stock. None of our officers, directors or employees will be compensated in connection with their participation in the offering.

Procedure for Purchasing Shares in Subscription and Community Offerings

Expiration Date. The subscription and community offerings will expire at 5:00 p.m., Eastern Time, on             , 2017, unless we extend one or both for up to 45 days, with the approval of the NYSDFS. This extension may be approved by us, in our sole discretion, without notice to purchasers in the offering. Any extension of the subscription and/or community offering beyond             , 2017 would require the NYSDFS’s approval. If the offering is so extended, all subscribers will be notified and given an opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest at 0.10% per annum or cancel your deposit account withdrawal authorization. If the offering range is decreased below the minimum of the offering range or is increased above the adjusted maximum of the offering range, all subscribers’ stock orders will be cancelled, their deposit account withdrawal authorizations will be cancelled, and funds submitted to us will be returned promptly, with interest at 0.10% per annum for funds received in the subscription and community offerings. We will then resolicit the subscribers, giving them an opportunity to place a new stock order for a period of time.

We reserve the right in our sole discretion to terminate the offering at any time and for any reason (subject to any required regulatory approvals), in which case we will cancel any deposit account withdrawal authorizations and promptly return all funds submitted, with interest at 0.10% per annum from the date of receipt as described above.

133

Use of Order Forms in the Subscription and Community Offerings. In order to purchase shares of common stock in the subscription and community offerings, you must properly complete an original stock order form and remit full payment. We are not required to accept orders submitted on photocopied or facsimiled order forms. All order forms must be received (not postmarked) before 5:00 p.m., Eastern Time, on             , 2017. We are not required to accept order forms that are not received by that time, are not signed or are otherwise executed defectively or are received without full payment or without appropriate deposit account withdrawal instructions. We are not required to notify subscribers of incomplete or improperly executed order forms, and we have the right to waive or permit the correction of incomplete or improperly executed order forms. We do not represent, however, that we will do so and we have no affirmative duty to notify any prospective subscriber of any such defects. You may submit your order form and payment by mail using the stock order return envelope provided, or by overnight delivery to our Stock Information Center, which will be located at our administrative office, 2651 Strang Blvd., Suite 100, Yorktown Heights, New York 10598. You may also hand-deliver stock order forms to the Stock Information Center. Hand-delivered stock order forms will only be accepted at this location. We will not accept stock order forms at our other banking offices. Please do not mail stock order forms to PCSB Bank’s other offices.

Once tendered, an order form cannot be modified or revoked without our consent. We reserve the absolute right, in our sole discretion and reasonably consistent with achieving a reasonably wide distribution of the common stock, to reject orders received in the community offering, in whole or in part, at the time of receipt or at any time before completion of the offering. If you are ordering shares in the subscription offering, you must represent that you are purchasing shares for your own account and that you have no agreement or understanding with any person for the sale or transfer of the shares. We have the right to reject any order submitted in the offering by a person who we believe is making false representations or who we otherwise believe, either alone or acting in concert with others, is violating, evading, circumventing, or intends to violate, evade or circumvent the terms and conditions of the plan of conversion. Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the order forms will be final.

By signing the order form, you will be acknowledging that the common stock is not a deposit or savings account and is not federally insured or otherwise guaranteed by PCSB Bank, the Federal Deposit Insurance Corporation or any other government agency, and that you received a copy of this prospectus. However, signing the order form will not result in you waiving your rights under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Payment for Shares. Payment for all shares of common stock must accompany all completed order forms for the purchase to be valid. Payment for shares in the subscription and community offerings may be made by:

(i) personal check, bank check or money order, made payable to PCSB Financial Corporation; or

(ii) authorization of withdrawal of available funds from your PCSB Bank deposit accounts.

Appropriate means for designating withdrawals from deposit accounts at PCSB Bank are provided on the order form. The funds designated must be available in the account(s) at the time the order form is received. A hold will be placed on these funds, making them unavailable to the depositor. Funds authorized for withdrawal will continue to earn interest within the account at the contractual rate until the offering is completed, at which time the designated withdrawal will be made. Interest penalties for early withdrawal applicable to certificate accounts will not apply to withdrawals authorized for the purchase of shares of common stock; however, if a withdrawal results in a certificate account with a balance less than the applicable minimum balance requirement, the certificate will be canceled at the time of withdrawal without penalty and the remaining balance will earn interest at the current passbook rate after the withdrawal. In the case of payments made by personal check, these funds must be available in the account(s). Checks and money orders received in the subscription and community offerings will be immediately cashed and placed in a segregated account at PCSB Bank and will earn interest at 0.10% per annum from the date payment is processed until the offering is completed or terminated.

You may not remit cash, PCSB Bank line of credit checks or any type of third-party checks (including those payable to you and endorsed over to PCSB Financial). You may not designate on your stock order form direct

134

withdrawal from a retirement account held at PCSB Bank. See “—Using Individual Retirement Account Funds.” If permitted by the NYSDFS, if we resolicit large purchasers, as described above in “—Additional Limitations on Common Stock Purchases,” such purchasers who wish to increase their purchases will not be able to use personal checks to pay for the additional shares, but instead must pay for the additional shares using immediately available funds. We may accept wire transfers at our sole discretion.

Once we receive your executed stock order form, it may not be modified, amended or rescinded without our consent, unless the offering is not completed by             , 2017. If the subscription and community offerings are extended past             , 2017, all subscribers will be notified and given an opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest at 0.10% per annum or cancel your deposit account withdrawal authorization. We may resolicit purchasers for a specified period of time.

NYSDFS regulations prohibit PCSB Bank from lending funds or extending credit to any persons to purchase shares of common stock in the offering.

We shall have the right, in our sole discretion, to permit institutional investors to submit irrevocable orders together with the legally binding commitment for payment and to thereafter pay for the shares of common stock for which they subscribe in the community offering at any time before 48 hours before the completion of the offering. This payment may be made by wire transfer.

If our employee stock ownership plan purchases shares in the offering, it will not be required to pay for such shares until completion of the offering, provided that there is a loan commitment from an unrelated financial institution or PCSB Financial to lend to the employee stock ownership plan the necessary amount to fund the purchase. In addition, if our 401(k) plan purchases shares in the offering, it will not be required to pay for such shares until completion of the offering.

Using Individual Retirement Account Funds. If you are interested in using funds in your individual retirement account or other retirement account to purchase shares of common stock, you must do so through a self-directed retirement account. By regulation, PCSB Bank’s retirement accounts are not self-directed, so they cannot be invested in our shares of common stock. Therefore, if you wish to use funds that are currently in a retirement account held at PCSB Bank, you may not designate on the order form that you wish funds to be withdrawn from the account for the purchase of common stock. The funds you wish to use for the purchase of common stock will instead have to be transferred to an independent trustee or custodian, such as a brokerage firm, offering self-directed retirement accounts. The purchase must be made through that account. If you do not have such an account, you will need to establish one before placing a stock order. A one-time and/or annual administrative fee may be payable to the independent trustee or custodian. There will be no early withdrawal or Internal Revenue Service interest penalties for these transfers. Individuals interested in using funds in an individual retirement account or any other retirement account, whether held at PCSB Bank or elsewhere, to purchase shares of common stock should contact our Stock Information Center for guidance as soon as possible, preferably at least two weeks before the             , 2017 offering deadline. Processing such transactions takes additional time, and whether such funds can be used may depend on limitations imposed by the institutions where such funds are currently held. We cannot guarantee that you will be able to use such funds.

Delivery of Shares of Common Stock. All shares of common stock sold will be issued in book entry form. Stock certificates will not be issued. A statement reflecting ownership of shares of common stock issued in the subscription and community offerings will be mailed by our transfer agent to the persons entitled thereto at the registration address noted by them on their stock order forms as soon as practicable following consummation of the offering. We expect trading in the stock to begin on the day of completion of the offering or the next business day. Until a statement reflecting ownership of shares of common stock is available and delivered to purchasers, purchasers might not be able to sell the shares of common stock that they ordered, even though the shares of common stock will have begun trading. Your ability to sell the shares of common stock before receiving your statement will depend on arrangements you may make with a brokerage firm.

135

Other Restrictions. Notwithstanding any other provision of the plan of conversion, no person is entitled to purchase any shares of common stock to the extent the purchase would be illegal under any federal or state law or regulation, including state “blue sky” regulations, or would violate regulations or policies of the Financial Industry Regulatory Authority, particularly those regarding free riding and withholding. We may ask for an acceptable legal opinion from any purchaser as to the legality of his or her purchase and we may refuse to honor any purchase order if an opinion is not timely furnished. In addition, we are not required to offer shares of common stock to any person who resides in a foreign country, or in a State of the United States with respect to which any of the following apply:

(i) a small number of persons otherwise eligible to subscribe for shares under the plan of conversion reside in such state;

(ii) the offer or sale of shares of common stock to such persons would require us or our employees to register, under the securities laws of such state, as a broker or dealer or to register or otherwise qualify our securities for sale in such state; or

(iii) such registration or qualification would be impracticable for reasons of cost or otherwise.

Restrictions on Transfer of Subscription Rights and Shares

Applicable banking regulations prohibit any person with subscription rights, including the Eligible Account Holders and Supplemental Eligible Account Holders, from transferring or entering into any agreement or understanding to transfer the legal or beneficial ownership of the subscription rights issued under the plan of conversion or the shares of common stock to be issued upon their exercise. These rights may be exercised only by the person to whom they are granted and only for his or her account. When registering your stock purchase on the order form, you cannot add the name(s) of others for joint stock registration unless they are also named on the qualifying deposit account, and you cannot delete names of others except for certain orders placed through an IRA, Keogh, 401(k) or similar plan and for the death of the named eligible depositor. Doing so may jeopardize your subscription rights. Each person exercising subscription rights will be required to certify that he or she is purchasing shares solely for his or her own account and that he or she has no agreement or understanding regarding the sale or transfer of such shares. The regulations also prohibit any person from offering or making an announcement of an offer or intent to make an offer to purchase subscription rights or shares of common stock to be issued upon their exercise before completion of the offering.

We will pursue any and all legal and equitable remedies if we become aware of the transfer of subscription rights, and we will not honor orders that we believe involve the transfer of subscription rights.

Stock Information Center

Our banking office personnel may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the offering, please call our Stock Information Center. The telephone number is (        )             . The Stock Information Center is open Monday through Friday between 10:00 a.m. and 4:00 p.m., Eastern Time. The Stock Information Center will be closed on weekends and bank holidays.

Liquidation Rights

In the unlikely event of a complete liquidation of PCSB Bank before the conversion, all claims of creditors of PCSB Bank, including those of its depositors (to the extent of their deposit balances), would be paid first, with any remaining assets distributed to PCSB Bank’s depositors. In the unlikely event that PCSB Bank were to liquidate after the conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution of the “liquidation account” to certain depositors, with any assets remaining thereafter distributed to PCSB Financial as the sole holder of PCSB Bank capital stock.

136

The plan of conversion provides for the establishment, upon the completion of the conversion, of a special “liquidation account” for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders in an amount equal to the total equity of PCSB Bank at the date of its latest balance sheet contained in this prospectus. The purpose of the liquidation account is to provide Eligible Account Holders and Supplemental Eligible Account Holders who maintain their deposit accounts with PCSB Bank after the conversion with a liquidation interest in the unlikely event of the complete liquidation of PCSB Bank after the conversion. Each Eligible Account Holder and Supplemental Eligible Account Holder that continues to maintain his or her deposit account at PCSB Bank, would be entitled, on a complete liquidation of PCSB Bank after the conversion, to an interest in the liquidation account before any payment to the stockholders of PCSB Financial. Each Eligible Account Holder would have an initial interest in the liquidation account for each deposit account, including savings accounts, transaction accounts such as negotiable order of withdrawal accounts, money market deposit accounts, and certificates of deposit, with a balance of $100 or more held in PCSB Bank on September 30, 2015. Each Eligible Account Holder would have a pro rata interest in the total liquidation account for each such deposit account, based on the proportion that the balance of each such deposit account on September 30, 2015 bears to the balance of all such deposit accounts in PCSB Bank on such date. Each Supplemental Eligible Account Holder would have an initial interest in the liquidation account for each deposit account, including savings accounts, transaction accounts such as negotiable order of withdrawal accounts, money market deposit accounts, and certificates of deposit, with a balance of $100 or more held in PCSB Bank on             , 201  . Each Supplemental Eligible Account Holder would have a pro rata interest in the total liquidation account for each such deposit account, based on the proportion that the balance of each such deposit account on             , 201   bears to the balance of all such deposit accounts in PCSB Bank on such date.

If, however, on any June 30 annual closing date commencing on or after the effective date of the conversion, the amount in any such deposit account is less than the amount in the deposit account on September 30, 2015 or             , 201  , respectively, or any other annual closing date, then the interest in the liquidation account relating to such deposit account would be reduced from time to time by the proportion of any such reduction, and such interest will cease to exist if such deposit account is closed. In addition, no interest in the liquidation account would ever be increased despite any subsequent increase in the related deposit account. Payment pursuant to liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders would be separate and apart from the payment of any insured deposit accounts to such depositor. Any assets remaining after the above liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders are satisfied would be distributed to PCSB Financial, as the sole stockholder of PCSB Bank.

Material Income Tax Consequences

Consummation of the conversion is subject to the prior receipt of an opinion of counsel or tax advisor with respect to federal and state income taxation that the conversion will not be a taxable transaction to PCSB Bank, PCSB Financial, Eligible Account Holders and Supplemental Eligible Account Holders. Unlike private letter rulings, opinions of counsel or tax advisors are not binding on the Internal Revenue Service or any state taxing authority, and such authorities may disagree with such opinions. If there is such disagreement, there can be no assurance that PCSB Bank or PCSB Financial would prevail in a judicial proceeding.

PCSB Financial and PCSB bank have received an opinion of counsel, Luse Gorman, PC, regarding all of the material federal income tax consequences of the conversion, which includes the following:

1. The conversion of PCSB Bank to a New York-chartered stock savings bank will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code.

2. PCSB Bank will not recognize any gain or loss upon the receipt of money from PCSB Financial in exchange for shares of common stock of PCSB Bank.

3. The basis and holding period of the assets received by PCSB Bank, in stock form, from PCSB Bank, in mutual form, will be the same as the basis and holding period in such assets immediately before the conversion.

137

4. No gain or loss will be recognized by account holders of PCSB Bank, including Eligible Account Holders and Supplemental Eligible Account Holders, upon the issuance to them of withdrawable deposit accounts in PCSB Bank, in stock form, in the same dollar amount and under the same terms as held at PCSB Bank, in mutual form. In addition, Eligible Account Holders and Supplemental Eligible Account Holders will not recognize gain or loss upon receipt of an interest in a liquidation account in PCSB Bank in exchange for their ownership interests in PCSB Bank.

5. The basis of the account holders’ deposit accounts in PCSB Bank, in stock form, will be the same as the basis of their deposit accounts in PCSB Bank, in mutual form. The basis of the Eligible Account Holders and, Supplemental Eligible Account Holders interests in the liquidation account will be zero, which is the cost of such interest to such persons.

6. It is more likely than not that the nontransferable subscription rights have no value, based on the fact that these rights are acquired by the recipients without cost, are nontransferable and of short duration, and afford the recipients the right only to purchase the common stock at a price equal to its estimated fair market value, which will be the same price as the subscription price for the shares of common stock in the offering. Accordingly, no gain or loss will be recognized by Eligible Account Holders or Supplemental Eligible Account Holders upon distribution to them of nontransferable subscription rights to purchase shares of PCSB Financial common stock, provided that the amount to be paid for PCSB Financial common stock is equal to the fair market value of PCSB Financial common stock.

7. The basis of the shares of PCSB Financial common stock purchased in the offering will be the purchase price. The holding period of the PCSB Financial common stock purchased pursuant to the exercise of nontransferable subscription rights will commence on the date on which the right to acquire such stock was exercised.

8. No gain or loss will be recognized by PCSB Financial on the receipt of money in exchange for shares of PCSB Financial common stock sold in the offering.

In the view of RP Financial (which is acting as independent appraiser of the value of the shares of PCSB Financial common stock in connection with the conversion), the subscription rights do not have any value for the reasons set forth in paragraph 6 above. RP Financial’s view is not binding on the Internal Revenue Service. If the subscription rights granted to Eligible Account Holders and Supplemental Eligible Account Holders are deemed to have an ascertainable value, receipt of these rights could result in taxable gain to those Eligible Account Holders and Supplemental Eligible Account Holders who exercise the subscription rights in an amount equal to their value, and PCSB Financial could recognize gain on a distribution. Eligible Account Holders and Supplemental Eligible Account Holders are encouraged to consult with their own tax advisors as to the tax consequences if such subscription rights are deemed to have an ascertainable value.

The opinion of Luse Gorman, PC, unlike a letter ruling issued by the Internal Revenue Service, is not binding on the Internal Revenue Service and the conclusions expressed therein may be challenged at a future date. The Internal Revenue Service has issued favorable rulings for transactions substantially similar to the proposed conversion and offering, but any such ruling may not be cited as precedent by any taxpayer other than the taxpayer to whom the ruling is addressed. We do not plan to apply for a letter ruling concerning the transactions described herein.

An opinion regarding the New York State income tax consequences consistent with the federal tax opinion has been issued by Crowe Horwath LLP.

The federal and state tax opinions have been filed with the Securities and Exchange Commission as exhibits to PCSB Financial’s registration statement.

138

Certain Restrictions on Purchase or Transfer of Our Shares After the Offering

All shares of common stock purchased in the offering by a director, trustee, or certain officers of PCSB Financial or PCSB Bank, as well as their associates, generally may not be sold for a period of one year following the closing of the offering, except upon death or judicial declaration of incompetency of the individual. Each statement of ownership for restricted shares will bear a legend giving notice of this restriction on transfer, and instructions will be issued to PCSB Financial’s transfer agent to the effect that any transfer within this time period of any record ownership of the shares other than as provided above is a violation of the restriction. Any shares of common stock issued at a later date as a stock dividend, stock split, or otherwise, with respect to the restricted stock will be similarly restricted. The directors and executive officers of PCSB Financial also will be restricted by the insider trading rules under the Securities Exchange Act of 1934.

Purchases of shares of our common stock by any of our directors, trustees, certain officers and their associates, during the three-year period following the closing of the offering may be made only through a broker or dealer registered with the Securities and Exchange Commission, except with the prior written approval of the NYSDFS. This restriction does not apply, however, to purchases of our common stock by our stock option plan or any of our tax-qualified employee stock benefit plans or non-tax-qualified employee stock benefit plans, including any restricted stock plans.

NYSDFS regulations prohibit PCSB Financial from repurchasing its shares of common stock during the first year following the offering and from repurchasing more than 5% of its outstanding shares of common stock in each of the second and third years following the offering, unless, in each case, PCSB Financial receives the prior approval of the NYSDFS. In addition, the repurchase of shares of common stock is subject to Federal Reserve Board policy related to repurchases of shares by bank holding companies.

PCSB COMMUNITY FOUNDATION

General

In furtherance of our commitment to the communities in our market area, the plan of conversion provides that we will establish a new charitable foundation, PCSB Community Foundation, as a non-stock, nonprofit Delaware corporation in connection with the conversion and offering. The charitable foundation will be funded with cash and shares of our common stock, as further described below. By further enhancing our visibility and reputation in the communities within our market area, we believe that the charitable foundation will enhance the long-term value of PCSB Bank’s community banking franchise. The conversion and offering presents us with a unique opportunity to provide a substantial and continuing benefit to our community through the charitable foundation.

Purpose of the Charitable Foundation

In connection with the closing of the conversion and offering, PCSB Bank intends to contribute to the charitable foundation shares of its common stock equal to 2.1% of the shares sold in the offering and an amount of cash so that the total contribution will equal $5.0 million. At the minimum, midpoint, maximum and adjusted maximum of the offering range, we would contribute to the charitable foundation 282,625, 332,500, 382,375 and 439,731 shares of common stock and approximately $2.2 million, $1.7 million, $1.2 million and $603,000 in cash, respectively.

The purpose of the charitable foundation is to provide financial support to charitable organizations in our market area and to enable the communities that we serve to share in our long-term growth. The charitable foundation will be dedicated completely to community activities and the promotion of charitable causes, and may be able to support such activities in ways that are not presently available to us. It will also support our ongoing obligations to the community under the Community Reinvestment Act. PCSB Bank received a “Satisfactory” rating in its most recent Community Reinvestment Act examination.

139

Funding the charitable foundation with shares of our common stock is also intended to allow our communities to share in our potential growth and success after the offering is completed because the charitable foundation will benefit directly from any increases in the value of our shares of common stock. In addition, the charitable foundation will maintain close ties with PCSB Bank, thereby forming a partnership within the communities in which PCSB Bank operates.

Structure of the Charitable Foundation

The charitable foundation will be incorporated under Delaware law as a non-stock, nonprofit corporation. The certificate of incorporation of the charitable foundation will provide that the corporation is organized exclusively for charitable purposes as set forth in Section 501(c)(3) of the Internal Revenue Code. The certificate of incorporation will further provide that no part of the net earnings of the charitable foundation will inure to the benefit of, or be distributable to, its members, directors or officers or to private individuals.

The charitable foundation will be governed by a board of directors, initially consisting of Jeffrey Kellogg (a trustee of PCSB Bank) and             . We are required to select one person to serve on the initial board of directors who is not one of our officers or directors and who has experience with local charitable organizations and grant making, and we have selected                      as a director to satisfy these requirements. For five years after the conversion and offering, one seat on the charitable foundation’s board of directors will be reserved for a person from our local community who has experience with local community charitable organizations and grant making and who is not one of our officers, directors or employees, and at least one seat on the charitable foundation’s board of directors will be reserved for one of PCSB Bank’s directors.

The board of directors of the charitable foundation will be responsible for establishing its grant and donation policies, consistent with the purposes for which it was established. As directors of a nonprofit corporation, the directors of the charitable foundation will at all times be bound by their fiduciary duty to advance the charitable foundation’s charitable goals, to protect its assets and to act in a manner consistent with the charitable purposes for which the charitable foundation is established. The directors also will be responsible for directing the activities of the charitable foundation, including the management and voting of the shares of our common stock held by the charitable foundation. However, as required by applicable regulations, all shares of our common stock held by the charitable foundation must be voted in the same ratio as all other shares of our common stock on all proposals considered by our shareholders.

The charitable foundation’s place of business will be located at our administrative offices. The board of directors of the charitable foundation will appoint such officers and employees as may be necessary to manage its operations. To the extent applicable, we will comply with the affiliates restrictions set forth in Sections 23A and 23B of the Federal Reserve Act and applicable NYSDFS regulations governing transactions between PCSB Bank and the charitable foundation.

The charitable foundation will receive working capital from the initial cash contribution of $250,000 and:

(1) any dividends that may be paid on our shares of common stock in the future;

(2) within the limits of applicable federal and state laws, loans collateralized by the shares of common stock; and

(3) the proceeds of the sale of any of the shares of common stock in the open market from time to time.

As a private foundation under Section 501(c)(3) of the Internal Revenue Code, the charitable foundation will be required to distribute annually in grants or donations a minimum of 5% of the average fair market value of its net investment assets.

140

Tax Considerations

We believe that an organization created for the above purposes should qualify as a Section 501(c)(3) exempt organization under the Internal Revenue Code and should be classified as a private foundation. As long as the charitable foundation files an application for tax-exempt status within 27 months of the last day of the month in which it was organized, and provided the Internal Revenue Service approves the application, its effective date as a Section 501(c)(3) organization will be the date of its organization. We have not received a tax opinion as to whether the charitable foundation’s tax exempt status will be affected by the regulatory requirement that all shares of our common stock held by it must be voted in the same ratio as all other outstanding shares of our common stock on all proposals considered by our shareholders.

We believe that our contribution of shares of our common stock to the charitable foundation should not constitute an act of self-dealing and that we should be entitled to a deduction in the amount of the fair market value of the stock at the time of the contribution less the nominal amount that the charitable foundation is required to pay us for such stock. We are permitted to deduct for charitable purposes only an amount equal to 10% of our annual taxable income in any one year. We are permitted under the Internal Revenue Code to carry the excess contribution over the five-year period following the contribution to the charitable foundation. We estimate that all of the contribution should be deductible over the six-year period (i.e., the year in which the contribution is made and the succeeding five-year period). However, we do not have any assurance that the Internal Revenue Service will grant tax-exempt status to the charitable foundation. In such event, our contribution to the charitable foundation would be expensed without a tax benefit, resulting in a reduction in earnings in the year in which the Internal Revenue Service makes such a determination. Furthermore, even if the contribution is deductible, we may not have sufficient earnings to be able to use the deduction in full. Any such decision to continue to make additional contributions to the charitable foundation in the future would be based on an assessment of, among other factors, our financial condition at that time, the interests of our shareholders and depositors, and the financial condition and operations of the foundation.

As a private foundation, earnings and gains, if any, from the sale of common stock or other assets are exempt from federal and state income taxation. However, investment income, such as interest, dividends and capital gains, is generally taxed at a rate of 1%. The charitable foundation will be required to file an annual return with the Internal Revenue Service within four and one-half months after the close of its fiscal year. The charitable foundation will be required to make its annual return available for public inspection. The annual return for a private foundation includes, among other things, an itemized list of all grants made or approved, showing the amount of each grant, the recipient, any relationship between a grant recipient and the foundation’s managers and a concise statement of the purpose of each grant. The charitable foundation will also be required to file an annual report with the Office of the New York Attorney General.

Regulatory Requirements Imposed on the Charitable Foundation

The NYSDFS and the Federal Deposit Insurance Corporation require that, before our board of directors adopted the plan of conversion, the board of directors had to identify its members that will serve on the charitable foundation’s board, and these directors could not participate in our board’s discussions concerning contributions to the charitable foundation, and could not vote on the matter. Our board of directors complied with this regulation in adopting the plan of conversion.

The NYSDFS and the Federal Deposit Insurance Corporation will generally not object if a well-capitalized savings bank contributes to a charitable foundation an aggregate amount of 8% or less of the shares or proceeds issued in a offering. PCSB Bank qualifies as a well-capitalized savings bank for purposes of this limitation, and the contribution to the charitable foundation will not exceed this limitation.

141

The NYSDFS and the Federal Deposit Insurance Corporation impose the following additional requirements on the establishment of the charitable foundation:

• the charitable foundation’s primary purpose must be to serve and make grants in our local community;

• the NYSDFS and the Federal Deposit Insurance Corporation may examine the charitable foundation at the foundation’s expense;

• the charitable foundation must comply with all supervisory directives imposed by the NYSDFS and the Federal Deposit Insurance Corporation;

• the charitable foundation must provide annually to the Federal Deposit Insurance Corporation and the NYSDFS a copy of the annual report that the charitable foundation submits to the Internal Revenue Service;

• the charitable foundation must operate according to written policies adopted by its board of directors, including a conflict of interest policy;

• the charitable foundation may not engage in self-dealing and must comply with all laws necessary to maintain its tax-exempt status under the Internal Revenue Code; and

• the charitable foundation must vote its shares of our common stock in the same ratio as all of the other shares voted on each proposal considered by our shareholders.

RESTRICTIONS ON ACQUISITION OF PCSB FINANCIAL

Although the board of directors of PCSB Financial is not aware of any effort that might be made to obtain control of PCSB Financial after the conversion, the board of directors believes that it is appropriate to include certain provisions in PCSB Financial’s articles of incorporation and bylaws to protect the interests of PCSB Financial and its stockholders from takeovers which our board of directors might conclude are not in the best interests of PCSB Financial, its stockholders or PCSB Bank.

The following discussion is a general summary of the material provisions of PCSB Financial’s articles of incorporation and bylaws, PCSB Bank’s stock charter, Maryland corporation law and certain other regulatory provisions that may be deemed to have an “anti-takeover” effect. The following description of certain of these provisions is necessarily general and, with respect to provisions contained in PCSB Financial’s articles of incorporation and bylaws and PCSB Bank’s stock charter, reference should be made in each case to the document in question, each of which is part of PCSB Bank’s conversion application filed with the NYSDFS, and except for PCSB Bank’s stock charter, PCSB Financial’s registration statement filed with the Securities and Exchange Commission. See “Where You Can Find Additional Information.”

PCSB Financial’s Articles of Incorporation and Bylaws

PCSB Financial articles of incorporation and bylaws contain a number of provisions relating to corporate governance and rights of stockholders that might discourage future takeover attempts. As a result, stockholders who might desire to participate in such transactions may not have an opportunity to do so. In addition, these provisions will also render the removal of PCSB Financial’s board of directors or management more difficult.

Directors. The board of directors will be divided into three classes. The members of each class will be elected for a term of three years and only one class of directors will be elected annually. Therefore, it would take at least two annual elections to replace a majority of our directors. The bylaws establish qualifications for board members, including:

• a prohibition on service as a director by a person who is a director, trustee, officer, employee or a 10% stockholder of a competitor of PCSB Bank or any other subsidiary of PCSB Financial;

142

• a prohibition on service as a director by a person (i) who has been convicted of a crime involving dishonesty or breach of trust that is punishable by imprisonment for a term exceeding one year under state or federal law, (ii) who is currently charged in an information, indictment or other complaint with the commission of or participation in such a crime, or (iii) who has been the subject of a supervisory or enforcement action by a financial or securities regulatory agency that resulted in a cease and desist or other formal order or an agreement or other written statement which is subject to public disclosure by such agency;

• a prohibition on any director who does not confirm in writing that he or she is not party to any agreement or understanding with respect to how he or she would act or vote on any issue or question before the board of directors or that would otherwise impact his or her ability to discharge his or her fiduciary duties as a director;

• a prohibition on any director who does not agree in writing to comply with all of the PCSB Financial policies applicable to directors, in addition to written confirmation that such director is qualified to serve;

• a requirement that any person proposed to serve as director (other than the initial directors and other than directors who are also officers of PCSB Financial or PCSB Bank) have maintained his or her principal residence or principal place of business within 15 miles of an office of PCSB Financial, or a subsidiary of PCSB Financial for a period of at least one year before his or her election or appointment to the board of directors;

• a prohibition on service as a director by a person who has lost more than one election for service as a director of PCSB Financial; and

• a prohibition on service by nominees or representatives (as defined in applicable Federal Reserve Board regulations) of another person who would not be eligible for service or of an entity the partners or controlling persons of which would not be eligible for service.

Further, the bylaws impose notice and information requirements in connection with the nomination by stockholders of candidates for election to the board of directors or the proposal by stockholders of business to be acted upon at an annual meeting of stockholders. Such notice and information requirements are applicable to all stockholder business proposals and nominations, and are in addition to any requirements under the federal securities laws.

Evaluation of Offers. The articles of incorporation of PCSB Financial provide that its board of directors, when evaluating a transaction that would or may involve a change in control of PCSB Financial (whether by purchases of its securities, merger, consolidation, share exchange, dissolution, liquidation, sale of all or substantially all of its assets, proxy solicitation or otherwise), may, in connection with the exercise of its business judgment in determining what is in the best interests of PCSB Financial and its stockholders and in making any recommendation to the stockholders, give due consideration to all relevant factors, including, but not limited to:

• the economic effect, both immediate and long-term, upon PCSB Financial’s stockholders, including stockholders, if any, who do not participate in the transaction;

• the social and economic effect on the present and future employees, creditors and customers of, and others dealing with, PCSB Financial and its subsidiaries and on the communities in which PCSB Financial and its subsidiaries operate or are located;

• whether the proposal is acceptable based on the historical, current or projected future operating results or financial condition of PCSB Financial;

143

• whether a more favorable price could be obtained for PCSB Financial’s stock or other securities in the future;

• the reputation and business practices of the other entity to be involved in the transaction and its management and affiliates as they would affect the employees of PCSB Financial and its subsidiaries;

• the future value of the stock or any other securities of PCSB Financial or the other entity to be involved in the proposed transaction;

• any antitrust or other legal and regulatory issues that are raised by the proposal;

• the business and historical, current or expected future financial condition or operating results of the other entity to be involved in the transaction, including, but not limited to, debt service and other existing financial obligations, financial obligations to be incurred in connection with the proposed transaction, and other likely financial obligations of the other entity to be involved in the proposed transaction; and

• the ability of PCSB Financial to fulfill its objectives as a financial institution holding company and on the ability of its subsidiary financial institution(s) to fulfill the objectives of a federally insured financial institution under applicable statutes and regulations.

If the board of directors determines that any proposed transaction should be rejected, it may take any lawful action to defeat such transaction.

Restrictions on Calling Special Meetings. The bylaws provide that special meetings of stockholders can be called by only the Chairperson of the Board, the Vice Chairperson of the Board, the Chief Executive Officer, or a majority of the total number of directors that PCSB Financial would have if there were no vacancies on the board of directors, or the Secretary upon the written request of stockholders entitled to cast at least a majority of all votes entitled to vote at the meeting.

Prohibition of Cumulative Voting. The articles of incorporation prohibit cumulative voting for the election of directors.

Limitation of Voting Rights. The articles of incorporation provide that in no event will any person who beneficially owns more than 10% of the then-outstanding shares of common stock, be entitled or permitted to vote any of the shares of common stock held in excess of the 10% limit. The 10% limit shall not apply if, before the stockholder acquires shares in excess of the 10% limit, the acquisition is approved by a majority of the directors who are not affiliated with the holder and who were members of the board of directors before the time of the acquisition (or who were chosen to fill any vacancy of an otherwise unaffiliated director by a majority of the unaffiliated directors).

Restrictions on Removing Directors from Office. The articles of incorporation provide that directors may be removed only for cause, and only by the affirmative vote of the holders of a majority of the voting power of all of our then-outstanding capital stock entitled to vote generally in the election of directors (after giving effect to the limitation on voting rights discussed above in “—Limitation of Voting Rights”), voting together as a single class.

Stockholder Nominations and Proposals. The bylaws provide that any stockholder desiring to make a nomination for the election of directors or a proposal for new business at an annual meeting of stockholders must submit written notice to PCSB Financial at least 90 days prior and not earlier than 120 days before the anniversary date of the proxy statement relating to the previous year’s annual meeting. However, if less than 90 days’ prior public disclosure of the date of the meeting is given to stockholders and the date of the annual meeting is advanced by more than 30 days, or delayed by more than 30 days from the anniversary date of the preceding year’s annual meeting, then stockholders must submit written notice to PCSB Financial no later than 10 days following the day on which public disclosure of the date of the meeting is first made.

144

Authorized but Unissued Shares. After the conversion, PCSB Financial will have authorized but unissued shares of common and preferred stock. See “Description of Capital Stock of PCSB Financial.” The articles of incorporation authorize 200,000,000 shares of common stock and 10,000,000 shares of serial preferred stock. PCSB Financial is authorized to issue preferred stock from time to time in one or more series, subject to applicable provisions of law, and the board of directors is authorized to fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of such shares. In addition, the articles of incorporation provide that a majority of the total number of directors that PCSB Financial would have if there were no vacancies on the board of directors may, without action by the stockholders, amend the articles of incorporation to increase or decrease the aggregate number of shares of stock of any class or series that PCSB Financial has the authority to issue. If there is a proposed merger, tender offer or other attempt to gain control of PCSB Financial that the board of directors does not approve, it would be possible for the board of directors to authorize the issuance of a series of preferred stock with rights and preferences that would impede the completion of the transaction. An effect of the possible issuance of preferred stock therefore may be to deter a future attempt to gain control of PCSB Financial. The board of directors has no present plan or understanding to issue any preferred stock.

Amendments to Articles of Incorporation and Bylaws. Except as provided under “— Authorized but Unissued Shares,” above, regarding the amendment of the articles of incorporation by the board of directors to increase or decrease the number of shares authorized for issuance, or as otherwise allowed by law, any amendment to the articles of incorporation must be approved by our board of directors and also by two-thirds of the outstanding shares of our voting stock (or a majority of the outstanding shares of our voting stock if the amendment is approved by two-thirds of our board of directors); provided, however, that approval by at least 80% of the outstanding voting stock is generally required to amend the following provisions:

(i) The limitation on voting rights of persons who directly or indirectly beneficially own more than 10% of the outstanding shares of common stock;

(ii) The management of PCSB Financial by the board of directors and division of the board of directors into three staggered classes;

(iii) The ability of the board of directors to fill vacancies on the board;

(iv) the prohibition of cumulative voting;

(v) The requirement that at least a majority of the voting power of the stockholders must vote to remove directors, and can only remove directors for cause;

(vi) The ability of the board of directors to amend and repeal the bylaws and the required stockholder vote to amend or repeal the bylaws;

(vii) The ability of the board of directors to evaluate a variety of factors in evaluating offers to purchase or otherwise acquire PCSB Financial;

(viii) The authority of the board of directors to provide for the issuance of preferred stock;

(ix) The validity and effectiveness of any action lawfully authorized by the affirmative vote of the holders of a majority of the total number of outstanding shares of common stock;

(x) The number of stockholders constituting a quorum or required for stockholder consent;

(xi) The provision regarding stockholder proposals and nominations;

145

(xii) The indemnification of current and former directors and officers, as well as employees and other agents, by PCSB Financial;

(xiii) The limitation of liability of officers and directors to PCSB Financial for money damages; and

(xiv) The provision of the articles of incorporation requiring approval of at least 80% of the outstanding voting stock to amend the provisions of the articles of incorporation set forth in (i) through (xii) of this list and the provisions related to amendment of the articles of incorporation and bylaws.

The articles of incorporation also provide that the bylaws may be amended by the affirmative vote of a majority of the total number of directors that PCSB Financial would have if there were no vacancies on the board of directors or by the stockholders by the affirmative vote of at least 80% of the votes entitled to be cast in the election of directors (after giving effect to the limitation on voting rights discussed above in “—Limitation of Voting Rights”).

Maryland Corporate Law

Business Combinations. Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, statutory share exchange or, in circumstances specified in the statute, certain transfers of assets, certain stock issuances and transfers, liquidation plans and reclassifications involving interested stockholders and their affiliates or issuance or reclassification of equity securities. Maryland law defines an interested stockholder as: (i) any person who beneficially owns 10% or more of the voting power of a corporation’s voting stock after the date on which the corporation had 100 or more beneficial owners of its stock; or (ii) an affiliate or associate of the corporation at any time after the date on which the corporation had 100 or more beneficial owners of its stock who, within the two-year period before the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of the corporation. A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board.

After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: (i) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and (ii) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

Control Share Acquisitions. The Maryland General Corporation Law provides that “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by a vote of two-thirds of the shares entitled to be voted on the matter, excluding shares of stock owned by the acquiror or by officers or directors who are employees of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock previously acquired by the acquiror, or in respect of which the acquiror is able to exercise or direct the exercise of voting power except solely by virtue of a revocable proxy, would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power:

(i) one-tenth or more but less than one-third;

146

(ii) one-third or more but less than a majority; or

(iii) a majority of all voting power.

Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of control shares, subject to certain exceptions for shares acquired through descent or distribution, in satisfaction of a pledge or in a merger, consolidation or share exchange to which the corporation is a party. The control share acquisition statute applies to any Maryland corporation with 100 or more beneficial owners of its stock other than a close corporation or an investment company.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and delivery of an “acquiring person statement”), may compel the corporation’s Board of Directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders’ meeting. If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement within 10 days following a control share acquisition then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except for those which voting rights have previously been approved) for fair value, determined without regard to the absence of voting rights for the control shares, at the date of the last control share acquisition or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. Moreover, if voting rights for control shares are approved at a stockholders’ meeting and the acquiror becomes entitled to exercise or direct the exercise of a majority or more of all voting power, other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition. The foregoing provisions may be modified by a Maryland corporation’s charter or bylaws. Although PCSB Financial’s bylaws provide that the Maryland Control Share Acquisition law will be inapplicable to acquisitions of the Company’s common stock, this bylaw provision may be repealed at any time by a majority vote of the whole board of directors, in whole or in part, at any time, whether before or after a control share acquisition and may be applied to any prior or subsequent control share acquisition.

PCSB Bank’s Stock Charter

The charter of PCSB Bank provides that for a period of three years from the closing of the conversion and offering, no person (including a group acting in concert) other than PCSB Financial may offer directly or indirectly to acquire the beneficial ownership of more than 10% of any class of equity security of PCSB Bank. This provision does not apply to any tax-qualified employee benefit plan of PCSB Bank or PCSB Financial, or to an underwriter or member of an underwriting or selling group involving the public sale or resale of securities of PCSB Bank or any of its subsidiaries, so long as after the sale or resale, no underwriter or member of the selling group is a beneficial owner, directly or indirectly, of more than 10% of any class of equity securities of PCSB Bank. In addition, during this five-year period, all shares owned over the 10% limit may not be voted on any matter submitted to stockholders for a vote.

Conversion Regulations

NYSDFS regulations provide that, before the completion of the conversion, no person shall make any offer, or any announcement of an offer, to purchase or acquire stock in a converting institution or its holding company in excess of the maximum purchase limitations contained in the converting institution’s approved plan of conversion. The NYSDFS has defined “person” to include any corporation, partnership, trust, unincorporated association, any other entity or natural person. In addition, Federal Reserve Board regulations provide that, except with the prior approval of the Federal Reserve Board, no person for a period of three years following the date the completion of the conversion shall directly or indirectly acquire or offer to acquire the beneficial ownership of more than 10% of any class of capital stock of the converting institution or its holding company.

147

Change in Control Regulations

Under the Change in Bank Control Act, no person, or group of persons acting in concert, may acquire control of a bank holding company such as PCSB Financial unless the Federal Reserve Board has been given 60 days’ prior written notice and not disapproved the proposed acquisition. The Federal Reserve Board considers several factors in evaluating a notice, including the financial and managerial resources of the acquirer and competitive effects. Control, as defined under the applicable regulations, means the power, directly or indirectly, to direct the management or policies of the company or to vote 25% or more of any class of voting securities of the company. Acquisition of more than 10% of any class of a bank holding company’s voting securities constitutes a rebuttable presumption of control under certain circumstances, including where, as will be the case with PCSB Financial, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934.

In addition, federal regulations provide that no company may acquire control (as defined in the Bank Holding Company Act) of a bank holding company without the prior approval of the Federal Reserve Board. Any company that acquires such control becomes a “bank holding company” subject to registration, examination and regulation by the Federal Reserve Board.

DESCRIPTION OF CAPITAL STOCK OF PCSB FINANCIAL

General

PCSB Financial is authorized to issue 200,000,000 shares of common stock, par value of $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share. PCSB Financial currently expects to issue up to 20,507,375 shares of common stock (which number includes 382,375 shares expected to be contributed to the charitable foundation) in the conversion and offering. It will not issue shares of preferred stock in the conversion and offering. Each share of common stock will have the same relative rights as, and will be identical in all respects to, each other share of common stock. Upon payment of the subscription price for the common stock according to the plan of conversion all of the shares of common stock will be duly authorized, fully paid and non-assessable.

The shares of common stock will represent non-withdrawable capital, will not be an account of an insurable type, and will not be insured by the Federal Deposit Insurance Corporation or any other government agency.

Common Stock

Dividends. PCSB Financial can pay dividends on its common stock if, after giving effect to such distribution, (i) it would be able to pay its indebtedness as the indebtedness comes due in the usual course of business and (ii) its total assets exceed the sum of its liabilities and the amount needed, if it were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock who have a preference upon dissolution. The holders of common stock will be entitled to receive and share equally in dividends as may be declared by our board of directors out of funds legally available therefor. If PCSB Financial issues shares of preferred stock, the holders thereof may have a priority over the holders of the common stock with respect to dividends.

Voting Rights. Upon consummation of the conversion, the holders of common stock will have exclusive voting rights in PCSB Financial. They will elect its board of directors and act on other matters as are required to be presented to them under Maryland law or as are otherwise presented to them by the board of directors. Generally, each holder of common stock will be entitled to one vote per share and will not have any right to cumulate votes in the election of directors. Any person who beneficially owns more than 10% of the then-outstanding shares of common stock, however, will not be entitled or permitted to vote any shares of common stock held in excess of the 10% limit absent certain exceptions discussed previously. If PCSB Financial issues shares of preferred stock, holders of the preferred stock may also possess voting rights. Amendments to the articles of incorporation generally require, in addition to majority approval by the board of directors, a two-thirds approval of the outstanding shares eligible to vote, and certain amendments require the approval of 80% of the outstanding shares eligible to vote.

As a New York stock savings bank, corporate powers and control of PCSB Bank will be vested in its board of directors, who elect the officers of PCSB Bank and who fill any vacancies on the board of directors. Voting

148

rights in PCSB Bank will be vested exclusively in the sole owner of the shares of capital stock of PCSB Bank, which will be PCSB Financial, and voted at the direction of PCSB Financial’s board of directors. Consequently, the holders of the common stock of PCSB Financial will not have direct control of PCSB Bank.

Liquidation. Upon any liquidation, dissolution or winding up of PCSB Bank, PCSB Financial, as the holder of 100% of PCSB Bank’s capital stock, would be entitled to receive all assets of PCSB Bank available for distribution, after payment or provision for payment of all debts and liabilities of PCSB Bank, including all deposit accounts and accrued interest thereon, and after distribution of the balance in the liquidation account to Eligible Account Holders and Supplemental Eligible Account Holders. Upon any liquidation, dissolution or winding up of PCSB Financial, the holders of its common stock would be entitled to receive, after payment or provision for payment of all its debts and liabilities, all of the assets of PCSB Financial available for distribution. If preferred stock is issued, the holders thereof may have a priority over the holders of the common stock upon any liquidation or dissolution.

Preemptive Rights; Redemption. Holders of the common stock of PCSB Financial will not be entitled to preemptive rights with respect to any shares that may be issued, unless such preemptive rights are approved by the board of directors. The common stock is not subject to redemption.

Dissenters’ Rights of Appraisal. PCSB Financial’s articles of incorporation provide that PCSB Financial’s stockholders will not be entitled to dissenters’ rights of appraisal with respect to a merger or consolidation of PCSB Financial with another corporation unless the board of directors determines by a resolution approved by a majority of directors then in office that dissenters’ rights shall apply to all or any classes of stock.

Preferred Stock

None of PCSB Financial’s authorized shares of preferred stock will be issued as part of the offering or the conversion. Preferred stock may be issued with preferences and designations as our board of directors may from time to time determine. The board of directors may, without stockholder approval, issue shares of preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.

TRANSFER AGENT

The transfer agent and registrar for our common stock is                     ,             ,         .

EXPERTS

The consolidated financial statements of PCSB Bank and subsidiaries at June 30, 2016 and 2015 and for the years then ended have been included in this prospectus and in the registration statement of which this prospectus is a part, in reliance on the report of Crowe Horwath LLP, independent registered public accounting firm, which is included herein, upon the authority of said firm as experts in accounting and auditing.

RP Financial, LC. has consented to the publication herein of the summary of its report setting forth its opinion as to the estimated pro forma market value of the shares of common stock upon completion of the conversion and offering and its letter with respect to subscription rights.

LEGAL MATTERS

Luse Gorman, PC, Washington, D.C., counsel to PCSB Financial and PCSB Bank, has issued to PCSB Financial its opinion regarding the legality of the common stock and the federal income tax consequences of the conversion and offering. Crowe Horwath LLP has provided its opinion to us regarding the New York income tax consequences of the conversion and offering. Certain legal matters will be passed upon for Sandler O’Neill & Partners, L.P. by Silver, Freedman, Taff & Tiernan LLP, Washington, D.C.

149

WHERE YOU CAN FIND ADDITIONAL INFORMATION

PCSB Financial has filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 with respect to the shares of common stock offered hereby. As permitted by the rules and regulations of the Securities and Exchange Commission, this prospectus does not contain all the information set forth in the registration statement. Such information, including the appraisal report which is an exhibit to the registration statement, can be examined without charge at the public reference facilities of the Securities and Exchange Commission located at 100 F Street, N.E., Washington, D.C. 20549, and copies of such material can be obtained from the Securities and Exchange Commission at prescribed rates. The Securities and Exchange Commission’s telephone number is 1-800-SEC-0330. In addition, the Securities and Exchange Commission maintains a web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission, including PCSB Financial. The statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are, of necessity, brief descriptions of the material terms of, and should be read in conjunction with, such contract or document.

PCSB Bank has filed with the NYSDFS an application with respect to the conversion. This prospectus omits certain information contained in such application. The conversion application may be inspected, without charge, at the offices of the NYSDFS, One State Street, New York, New York. The plan of conversion is available, upon request, at each of PCSB Bank’s offices.

In connection with the offering, PCSB Financial will register its common stock under Section 12(b) of the Securities Exchange Act of 1934 and, upon such registration, PCSB Financial and the holders of its common stock will become subject to the proxy solicitation rules, reporting requirements and restrictions on common stock purchases and sales by directors, officers and greater than 10% shareholders, the annual and periodic reporting and certain other requirements of the Securities Exchange Act of 1934. Under the plan of conversion, PCSB Financial has undertaken that it will not terminate such registration for a period of at least three years following the conversion and offering.

150

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF PCSB BANK

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Statements of Financial Condition at September  30, 2016 (unaudited), June 30, 2016 and 2015	F-2
Consolidated Statements of Income for the three months ended September  30, 2016 and 2015 (unaudited) and the years ended June 30, 2016 and 2015	F-3
Consolidated Statements of Comprehensive Income for the three months ended September 30, 2016 and 2015 (unaudited) and the years ended June 30, 2016 and 2015	F-4
Consolidated Statements of Changes in Equity for the three months ended September 30, 2016 and the years ended June 30, 2016 and 2015	F-5
Consolidated Statements of Cash Flows for the three months ended September 30, 2016 and 2015 (unaudited) and the years ended June 30, 2016 and 2015	F-6
Notes to Consolidated Financial Statements	F-8

This prospectus does not include separate financial statements for PCSB Financial because it has not engaged in any significant activities, has no significant assets, and has no contingent liabilities, revenues or expenses.

All financial statement schedules are omitted because the required information either is inapplicable or is included in the financial statements or related notes.

151

Report of Independent Registered Public Accounting Firm

Board of Trustees

PCSB Bank and Subsidiaries

Brewster, New York

We have audited the accompanying consolidated statements of financial condition of PCSB Bank and Subsidiaries (the “Bank”) as of June 30, 2016 and 2015, and the related consolidated statements of income, comprehensive income (loss), changes in equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Bank as of June 30, 2016 and 2015, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

     /s/ Crowe Horwath LLP

Crowe Horwath LLP

Livingston, New Jersey

October 25, 2016

F-1

PCSB BANK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands)

	September 30,			June 30,
	2016			2016			2015
	(unaudited)
ASSETS
Cash and due from banks	$	56,181		$	36,258		$	73,367
Federal funds sold		4,242			5,320			4,394
Total cash and cash equivalents		60,423			41,578			77,761
Securities:
Held to maturity, at amortized cost (fair value of $268,247, $273,317 and $270,177, respectively)		265,071			270,679			269,913
Available-for-sale securities, at fair value		109,591			112,351			84,943
Total securities		374,662			383,030			354,856
Loans receivable, net of allowance for loan losses of $4,065, $4,042 and $3,921, respectively		763,915			782,336			727,134
Accrued interest receivable		3,287			3,361			3,234
Federal Home Loan Bank (FHLB) stock		1,641			2,047			1,719
Bank premises and equipment, net		10,818			10,774			7,979
Deferred tax asset, net		5,435			6,164			4,884
Other real estate owned (OREO)		1,059			905			368
Bank owned life insurance (BOLI)		22,724			22,557			10,824
Goodwill		6,106			6,106			5,843
Other intangible assets, net		666			702			860
Other assets		3,708			2,511			5,288
Total assets	$	1,254,444		$	1,262,071		$	1,200,750
LIABILITIES AND EQUITY
Liabilities
Deposits
Interest bearing deposits	$	981,083		$	990,032		$	930,864
Noninterest bearing deposits		135,754			122,663			129,641
Total deposits		1,116,837			1,112,695			1,060,505
Mortgages escrow funds		4,204			7,023			6,638
Federal Home Loan Bank advances		11,051			20,081			14,000
Other liabilities		10,846			12,323			9,336
Total liabilities		1,142,938			1,152,122			1,090,479
Equity
Retained earnings		119,375			117,919			114,993
Accumulated other comprehensive loss, net of income taxes		(7,869	)		(7,970	)		(4,722	)
Total equity		111,506			109,949			110,271
Total liabilities and equity	$	1,254,444		$	1,262,071		$	1,200,750

See accompanying notes to consolidated financial statements.

F-2

PCSB BANK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands)

	Three Months Ended September 30,				Years Ended June 30,
	2016		2015		2016		2015
	(unaudited)
Interest and dividend income
Loans	$	8,525	$	8,158	$	32,832	$	23,245
Securities		1,480		1,447		5,897		5,360
Federal funds sold and other		104		58		315		222
Total interest and dividend income		10,109		9,663		39,044		28,827
Interest expense
Deposits		1,267		1,116		4,562		3,783
Mortgages escrow funds		17		15		51		29
Federal Home Loan Bank advances		50		48		199		72
Total interest expense		1,334		1,179		4,812		3,884
Net interest income		8,775		8,484		34,232		24,943
Provision for loan losses		26		41		1,859		1,326
Net interest income after provision for loan losses		8,749		8,443		32,373		23,617
Non-interest income
Fees and service charges		242		256		1,053		955
Earnings from cash surrender value of BOLI		167		75		458		297
Other		143		97		440		315
Total non-interest income		552		428		1,951		1,567
Non-interest expense
Salaries and employee benefits		4,250		4,117		16,961		13,666
Occupancy and equipment		1,291		1,095		5,122		4,018
FDIC assessment		215		217		888		709
Professional fees		309		353		1,644		976
Postage, printing, stationary and supplies		133		167		681		460
Advertising		139		43		388		332
Merger and acquisition related expenses		—		122		790		1,147
Amortization of intangible assets		36		40		158		27
Other operating expenses		825		893		3,633		2,639
Total non-interest expense		7,198		7,047		30,265		23,974
Income before income tax expense		2,103		1,824		4,059		1,210
Income tax expense		647		568		1,133		702
Net income	$	1,456	$	1,256	$	2,926	$	508

See accompanying notes to consolidated financial statements.

F-3

PCSB BANK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Three Months Ended September 30,				Years Ended June 30,
	2016		2015		2016			2015
	(unaudited)
Net income	$	1,456	$	1,256	$	2,926		$	508
Other comprehensive income (loss)
Unrealized gains (losses) on securities
Unrealized holding gain (loss) arising during the period		154		318		255			(159	)
Less tax effect		53		127		55			(64	)
Net of tax		101		191		200			(95	)
Defined benefit pension and SERP plans
Net loss arising during the period		—		—		(4,933	)		(2,807	)
Reclassification adjustment for amortization of prior service cost and net gain (loss) included in salaries and employee benefits expense		—		—		482			(142	)
Less tax effect		—		—		(1,003	)		(1,168	)
Net of tax		—		—		(3,448	)		(1,781	)
Total other comprehensive income (loss)		101		191		(3,248	)		(1,876	)
Comprehensive income (loss)	$	1,557	$	1,447	$	(322	)	$	(1,368	)

See accompanying notes to consolidated financial statements.

F-4

PCSB BANK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended September 30, 2016 (unaudited) and Years ended June 30, 2016 and 2015

(In thousands)

	Retained Earnings		Accumulated Other Comprehensive Loss			Total Equity
Balance at July 1, 2014	$	114,485	$	(2,846	)	$	111,639
Net income		508		—			508
Other comprehensive loss		—		(1,876	)		(1,876	)
Balance at June 30, 2015		114,993		(4,722	)		110,271
Net income		2,926		—			2,926
Other comprehensive loss		—		(3,248	)		(3,248	)
Balance at June 30, 2016		117,919		(7,970	)		109,949
Net income		1,456		—			1,456
Other comprehensive income		—		101			101
Balance at September 30, 2016 (unaudited)	$	119,375	$	(7,869	)	$	111,506

See accompanying notes to consolidated financial statements.

F-5

PCSB BANK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three Months Ended September 30,						Years Ended June 30,
	2016			2015			2016			2015
	(unaudited)
Cash flows from operating activities
Net income	$	1,456		$	1,256		$	2,926		$	508
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for loan losses		26			41			1,859			1,326
Depreciation and amortization		347			291			1,265			752
Amortization of net premiums on securities and net deferred loan origination costs		299			234			943			971
Deferred income tax expense, net of valuation reserve		677			50			1,299			586
Net decrease (increase) in accrued interest receivable		74			(58	)		(127	)		45
Net gain on sale of OREO		(30	)		(3	)		(9	)		(1	)
Write-downs on OREO		—			—			30			87
Earnings from cash surrender value of BOLI		(167	)		(75	)		(458	)		(297	)
Net accretion of purchase accounting adjustments		(243	)		(386	)		(1,352	)		(132	)
Other adjustments, principally net changes in other assets and liabilities		(2,675	)		745			(431	)		(2,203	)
Net cash (used in) provided by operating activities		(236	)		2,095			5,945			1,642
Cash flows from investing activities
Purchases of securities:
Held to maturity		(22,334	)		(27,985	)		(112,896	)		(94,178	)
Available for sale		(10,269	)		(15,997	)		(56,420	)		(25,952	)
Proceeds from maturities, calls and sales of securities:
Held to maturity		27,805			33,911			107,656			97,971
Available for sale		13,109			5,986			33,058			44,996
Disbursements for loan originations, net of principal repayments		18,102			(31	)		(14,314	)		(3,221	)
Purchase of loans		—			(7,644	)		(43,981	)		(3,638	)
Acquisition, net cash paid		—			—			—			(20,649	)
Net redemption (purchase) of FHLB stock		406			(585	)		(328	)		1,167
Purchase of bank premises and equipment		(355	)		(855	)		(3,902	)		(549	)
Purchase of BOLI		—			—			(11,275	)		—
Proceeds from sale of OREO		254			159			1,030			183
Net cash provided by (used in) investing activities		26,718			(13,041	)		(101,372	)		(3,870	)
Cash flows from financing activities
Net increase (decrease) in deposits		4,212			(4,869	)		52,778			(4,274	)
Proceeds from Federal Home Loan Bank advances		—			20,000			24,100			20,000
Repayment of Federal Home Loan Bank advances		(9,030	)		(7,000	)		(18,019	)		(42,050	)
Net (decrease) increase in mortgage escrow funds		(2,819	)		(3,141	)		385			1,063
Net cash (used in) provided by financing activities		(7,637	)		4,990			59,244			(25,261	)
Net increase (decrease) in cash and cash equivalents		18,845			(5,956	)		(36,183	)		(27,489	)
Cash and cash equivalents at beginning of period		41,578			77,761			77,761			105,250
Cash and cash equivalents at end of period	$	60,423		$	71,805		$	41,578		$	77,761

See accompanying notes to consolidated financial statements.

F-6

PCSB BANK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Continued)

	Three Months Ended September 30,				Years Ended June 30,
	2016		2015		2016			2015
	(unaudited)
Supplemental information
Interest payments	$	1,351	$	1,174	$	4,814		$	3,832
Income tax payments, net of refunds		134		36		(351	)		424
Loans transferred to OREO		378		320		1,575			243
Acquisition of noncash assets and liabilities
Assets acquired		—		—		—			264,101
Liabilities assumed		—		—		—			249,295

See accompanying notes to consolidated financial statements.

F-7

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PCSB Bank (“the Bank”) is a community-oriented financial institution that provides financial services to individuals and businesses within its market area of Putnam, Southern Dutchess, Rockland and Westchester counties in New York. The Bank is a state-chartered mutual savings bank and its deposits are insured up to applicable limits by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (FDIC). The Bank’s primary regulators are the FDIC and the New York State Department of Financial Services.

Merger with CMS Bancorp: On April 28, 2015, CMS Bancorp and CMS Bank merged with and into PCSB Bank.

Basis of Presentation: The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, and include the accounts of the Bank and its three subsidiaries – PCSB Funding Corp., PCSB Commercial Bank and PCSB Realty Ltd. PCSB Funding Corp. is a real estate investment trust that holds certain mortgage assets. PCSB Commercial Bank is a state-chartered commercial bank authorized to accept the deposits of local governments in New York State. PCSB Realty Ltd. is a corporation that holds certain properties foreclosed upon by the Bank. All significant intercompany transactions and balances have been eliminated in consolidation.

The unaudited consolidated financial statements for the three months ended September 30, 2016 and 2015 reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The annualized results of operations for the three months ended September 30, 2016 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

Cash Flows: Cash and cash equivalents include cash, deposits with other financial institutions, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, and interest bearing deposits in other financial institutions.

Securities: Certain debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. All other debt and equity securities are classified as available for sale. The Bank has no trading securities.

Securities available for sale are reported at fair value. Unrealized gains and losses on securities available for sale are excluded from earnings and reported as accumulated other comprehensive income or loss (a separate component of equity), net of related income taxes.

Premiums and discounts on debt securities are amortized to interest income on a level-yield basis over the terms of the securities. Realized gains and losses on sales of securities are determined based on the amortized cost of the specific securities sold.

(Continued)

F-8

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Management evaluates securities for other-than-temporary impairment (OTTI) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

Loans: The Bank originates mortgage loans generally secured by existing single-family residential and commercial real estate properties and, to a lesser extent, properties under construction and development. The Bank also originates commercial business loans and certain types of consumer loans. A substantial portion of the Bank’s loan portfolio is secured by real estate properties located in the New York counties of Putnam, Westchester, and Dutchess, and to a lesser extent, New York City and the adjacent New York counties of Orange and Rockland. The ability of the Bank’s borrowers to make principal and interest payments is dependent upon, among other things, the level of overall economic activity and the real estate market conditions prevailing within the Bank’s concentrated lending area.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, unamortized purchase premiums and discounts, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Interest income on loans is discontinued at the time the loan is ninety days delinquent unless the loan is well secured and in process of collection. Loan purchase premiums and discounts are amortized over the contractual term of the loans. When loans are placed on non-accrual status, previously accrued but unpaid interest is reversed from income. Interest received on non-accrual loans is generally applied directly against the principal balance. Loans are returned to accrual status when all the principal and interest contractually due are brought current and future payments are reasonably assured.

Loan origination fees and certain direct loan origination costs are deferred and amortized to interest income as an adjustment to yield over the contractual term of the loans. Unamortized fees and costs on prepaid loans are recognized in interest income at the time of prepayment.

Purchased Credit Impaired Loans: The Bank purchases individual loans and groups of loans, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses.

(Continued)

F-9

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Such purchased credit impaired loans are accounted for individually or aggregated into pools of loans based on common risk characteristics, such as credit score, loan type, and date of origination. The Bank estimates the amount and timing of expected cash flows for each loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded as a provision for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred loan losses. The allowance for loan losses is increased by provisions for loan losses charged to income. Losses are charged to the allowance for loan losses when all or a portion of a loan is deemed to be uncollectible. Recoveries of loans previously charged off are credited to the allowance when realized. In management’s judgment, the allowance for loan losses is adequate to absorb probable incurred losses in the existing loan portfolio.

Establishing the allowance for loan losses involves significant management judgments utilizing the best information available at the time. Those judgments are subject to further review by the Bank’s regulators. Future adjustments to the allowance for loan losses may be necessary based on changes in economic and real estate market conditions, further information obtained regarding known problem loans, the identification of additional problem loans, and other factors.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for loans evaluated under the Bank’s normal loan review procedures. Smaller balance homogeneous loans are collectively evaluated for impairment (such as one-to-four family residential mortgage loans and consumer loans). Loans evaluated on an individual basis for impairment may be measured by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent.

The Bank’s impaired loans are generally collateral dependent. If the fair value of an impaired loan is less than its recorded investment, an impairment allowance is recognized and included in the allowance for loan losses.

(Continued)

F-10

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Bank determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component of the allowance covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Bank over a thirty-six month period, with heaviest weight placed on the most recent periods. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: lending policies, underwriting, charge-off and collection procedures; national and local economic trends and conditions; trends in nature and volume of the loan portfolio; experience, ability, and depth of lending management and other relevant staff; trends in delinquencies, classified loans and restructurings; quality of the loan review system and Board oversight; value of underlying collateral for collateral dependent loans; existence and effect of concentrations and levels; and effects of external factors, such as competition, legal and regulatory factors. The following portfolio segments have been identified: residential, other loans secured, commercial mortgage, construction, commercial, home equity and consumer and installment loans.

The risk characteristics of each of the identified portfolio segments are as follows:

Residential Loans – residential loans are generally made on the basis of the borrower’s ability to make repayment from his or her employment income or other income, and are secured by real property whose value tends to be more easily ascertainable. Repayment of residential loans is subject to adverse employment conditions in the local economy leading to increased default rate and decreased market values from oversupply in a geographic area. In general, these loans depend on the borrower’s continuing financial stability and, therefore, are likely to be adversely affected by various factors, including job loss, divorce, illness, or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Other Loans Secured – other loans secured by real estate are commercial loans extended for business purposes where a lien is recorded on real estate as collateral in addition to the business assets. Commercial loans are generally of higher risk than other types of loans as repayment is dependent on the borrower’s ability through business activities to generate sufficient cash flow to repay the loan. However, these loans carry less risk than commercial loans as the real estate collateral provides an additional source of repayment of the debt through the sale of the real estate in the event business conditions erode the borrowers’ capability to repay the debt through cash flow. In addition, the sale of the collateral property would require that any sales proceeds be applied to repay the Bank’s loan in order to satisfy the recorded lien.

(Continued)

F-11

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Commercial Mortgage Loans – commercial and multifamily real estate loans are secured by multifamily and nonresidential real estate and generally have larger balances and involve a greater degree of risk than residential real estate loans. Repayment of commercial and multifamily real estate loans depend on the global cash flow analysis of the borrower and the net operating income of the property, the borrower’s expertise, credit history and profitability, and the value of the underlying property. Of primary concern in commercial real estate lending is the borrower’s creditworthiness and the cash flow generated from the property securing the loan. As a result, repayment of such loans may be subject, to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy. Commercial and multifamily real estate is also subject to adverse market conditions that cause a decrease in market value or lease rates, obsolescence in location or function and market conditions associated with over supply of units in a specific region.

Construction Loans – construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, additional funds may be required to be advanced in excess of the amount originally committed to permit completion of the building. If the estimate of value proves to be inaccurate, the value of the building may be insufficient to assure full repayment if liquidation is required. If foreclosure is required on a building before or at completion due to a default, there can be no assurance that all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs will be recovered.

Commercial Loans – commercial loans are generally of higher risk than other types of loans and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. Furthermore, any collateral securing such loans may depreciate over time, may be difficult to appraise, and may fluctuate in value.

Home Equity Lines of Credit – home equity lines of credit consist of both fixed and variable interest rate products. These are primarily home equity loans to residential mortgage customers within the footprint of the primary lending territory. These loans generally will not exceed a combined (i.e., first and second mortgage) loan-to-value ratio of 75 percent at origination.

Consumer and Installment Loans – consumer and other loans generally have shorter terms and higher interest rates than one-to-four family mortgage loans. In addition, consumer and other loans expand the products and services we offer to better meet the financial services needs of our customers. Consumer and other loans generally involve greater credit risk than residential mortgage loans because of the difference in the underlying collateral. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because of the greater likelihood of damage to, loss of, or depreciation in the underlying collateral. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections depend on the borrower’s personal financial stability. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

(Continued)

F-12

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Other Real Estate Owned (OREO): Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Federal Home Loan Bank (FHLB) Stock: The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Bank Premises and Equipment: Bank premises and equipment are reported at cost less accumulated depreciation and amortization, except for land which is carried at cost. Depreciation expense is recognized on a straight-line basis over the estimated useful lives of the related assets. Amortization of leasehold improvements is recognized on a straight-line basis over the term of the lease or the life of the improvement, whichever is shorter. Costs incurred to improve or extend the life of the existing assets are capitalized. Repairs and maintenance, as well as renewals and replacements of a routine nature, are charged to expense as incurred.

Bank Owned Life Insurance (BOLI): BOLI policies are reflected on the consolidated statements of financial condition at cash surrender value, net of any deferred fees or loans. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in non-interest income on the consolidated statements of income and are not subject to income taxes.

Goodwill and Other Intangible Assets: Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Bank has selected March 31st as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet.

Other intangible assets, consisting of a core deposit intangible asset arising from a whole bank acquisition, are amortized on an accelerated method over their estimated useful lives of 10 years.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance-sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

(Continued)

F-13

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes: Income tax expense is the total of current period income tax due or refundable and the change in net deferred tax assets. Deferred tax assets and liabilities are recognized for the estimated future tax effects attributable to “temporary differences” between the financial statement carrying amounts and tax bases of existing assets and liabilities. Deferred tax assets are reduced by a valuation allowance if, based on an analysis of available evidence, management determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized. Adjustments to increase or decrease the valuation allowance are charged or credited, respectively, to income tax expense.

Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in future years. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recognized in the period that includes the enactment date of the change.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Bank recognizes interest and/or penalties related to income tax matters in income tax expense.

Retirement Plans: Pension expense is the net of service and interest cost, return on plan assets and amortization of gains and losses not immediately recognized. Employee 401(k) expense is the amount of matching contributions. Supplemental retirement plan expense allocates the benefits over years of service.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Segment Reporting: While management monitors the revenue streams of the various products and services, the identifiable segments are not material and operations are managed and financial performance is evaluated on a Bank-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

Reclassifications: Certain prior period amounts have been reclassified to conform to the current presentation. Reclassifications had no effect on prior period net income or equity.

(Continued)

F-14

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 2 – SECURITIES

The fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive loss were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2016 (unaudited)
U. S. Government and agency obligations	$	60,408	$	217	$	(30	)	$	60,595
Corporate and other debt securities		8,500		219		—			8,719
Mortgage-backed securities - residential		39,688		582		(42	)		40,228
Equity securities		49		—		—			49
Total available for sale	$	108,645	$	1,018	$	(72	)	$	109,591
June 30, 2016
U. S. Government and agency obligations	$	65,953	$	204	$	(25	)	$	66,132
Corporate and other debt securities		8,514		132		—			8,646
Mortgage-backed securities - residential		37,043		542		(61	)		37,524
Equity securities		49		—		—			49
Total available for sale	$	111,559	$	878	$	(86	)	$	112,351
June 30, 2015
U. S. Government and agency obligations	$	47,036	$	36	$	(155	)	$	46,917
Corporate and other debt securities		4,530		—		(121	)		4,409
Mortgage-backed securities - residential		32,791		788		(11	)		33,568
Equity securities		49		—		—			49
Total available for sale	$	84,406	$	824	$	(287	)	$	84,943

(Continued)

F-15

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 2 – SECURITIES (Continued)

The carrying amount, unrecognized gains and losses, and fair value of securities held to maturity were as follows (in thousands):

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
September 30, 2016 (unaudited)
U. S. Government and agency obligations	$	139,572	$	308	$	(24	)	$	139,856
Mortgage-backed securities – residential		71,052		1,684		(21	)		72,715
Mortgage-backed securities – commercial mortgage obligations		32,856		384		(44	)		33,196
Mortgage-backed securities – commercial		21,591		889		—			22,480
Total held to maturity	$	265,071	$	3,265	$	(89	)	$	268,247
June 30, 2016
U. S. Government and agency obligations	$	145,896	$	357	$	(51	)	$	146,202
Mortgage-backed securities – residential		72,842		1,342		(45	)		74,139
Mortgage-backed securities – commercial mortgage obligations		30,268		350		(38	)		30,580
Mortgage-backed securities – commercial		21,673		723		—			22,396
Total held to maturity	$	270,679	$	2,772	$	(134	)	$	273,317
June 30, 2015
U. S. Government and agency obligations	$	169,027	$	340	$	(300	)	$	169,067
Corporate and other debt securities		226		1		—			227
Mortgage-backed securities – residential		59,675		585		(442	)		59,818
Mortgage-backed securities – commercial mortgage obligations		21,150		105		(157	)		21,098
Mortgage-backed securities – commercial		19,835		204		(72	)		19,967
Total held to maturity	$	269,913	$	1,235	$	(971	)	$	270,177

The Bank did not sell any securities during the three months ended September 30, 2016 or 2015 or the year ended June 30, 2016. During the year ended June 30, 2015, the Bank sold 10 securities classified as available for sale with a carrying amount of $23.7 million, recognizing no gains or losses.

(Continued)

F-16

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 2 – SECURITIES (Continued)

The following table presents the fair value and carrying amount of debt securities at September 30, 2016 and June 30, 2016, by contractual maturity (in thousands). Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

	Held to Maturity				Available For Sale
	Carrying Amount		Fair Value		Amortized Cost		Fair Value
September 30, 2016 (unaudited)
Due in one year or less	$	25,484	$	25,526	$	20,999	$	21,017
Due from one to five years		106,035		106,168		39,909		40,161
Due from five to ten years		—		—		5,122		5,264
Due after ten years		8,053		8,162		2,878		2,873
Mortgage-backed securities		125,499		128,391		39,688		40,227
Total	$	265,071	$	268,247	$	108,596	$	109,542
June 30, 2016
Due in one year or less	$	22,005	$	22,033	$	19,490	$	19,495
Due from one to five years		118,946		119,120		46,902		47,149
Due from five to ten years		632		637		5,127		5,187
Due after ten years		4,313		4,412		2,948		2,947
Mortgage-backed securities		124,783		127,115		37,043		37,524
Total	$	270,679	$	273,317	$	111,510	$	112,302

Securities pledged at September, 30, 2016, June 30, 2016 and 2015 had carrying amounts of $79.6 million, $93.1 million and $96.7 million, respectively, and were pledged principally to secure FHLB advances and public deposits.

(Continued)

F-17

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 2 – SECURITIES (Continued)

Securities with unrealized losses at September 30, 2016, June 30, 2016 and 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (in thousands):

	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
September 30, 2016 (unaudited)
Available for sale
U. S. Government and agency obligations	$	12,350	$	(29	)	$	1,007	$	(1	)	$	13,357	$	(30	)
Mortgage-backed securities – residential		7,608		(37	)		551		(5	)		8,159		(42	)
Total available for sale	$	19,958	$	(66	)	$	1,558	$	(6	)	$	21,516	$	(72	)
Held to maturity
U.S. Government and agency obligations	$	20,010	$	(23	)	$	1,999	$	(1	)	$	22,009	$	(24	)
Mortgage-backed securities – residential		5,106		(21	)		—		—			5,106		(21	)
Mortgage-backed securities – commercial mortgage obligations		5,924		(26	)		3,540		(18	)		9,464		(44	)
Total held to maturity	$	31,040	$	(70	)	$	5,539	$	(19	)	$	36,579	$	(89	)
June 30, 2016
Available for sale
U. S. Government and agency obligations	$	19,462	$	(22	)	$	1,007	$	(3	)	$	20,469	$	(25	)
Mortgage-backed securities – residential		11,912		(52	)		676		(9	)		12,588		(61	)
Total available for sale	$	31,374	$	(74	)	$	1,683	$	(12	)	$	33,057	$	(86	)
Held to maturity
U.S. Government and agency obligations	$	22,000	$	(44	)	$	7,993	$	(7	)	$	29,993	$	(51	)
Mortgage-backed securities – residential		6,886		(19	)		4,895		(26	)		11,781		(45	)
Mortgage-backed securities – commercial mortgage obligations		4,420		(20	)		1,333		(18	)		5,753		(38	)
Total held to maturity	$	33,306	$	(83	)	$	14,221	$	(51	)	$	47,527	$	(134	)

(Continued)

F-18

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 2 – SECURITIES (Continued)

	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
June 30, 2015
Available for sale
U. S. Government and agency obligations	$	14,925	$	(82	)	$	8,938	$	(73	)	$	23,863	$	(155	)
Corporate and other debt securities		4,409		(121	)		—		—			4,409		(121	)
Mortgage-backed securities – residential		3,733		(7	)		1,076		(4	)		4,809		(11	)
Total available for sale	$	23,067	$	(210	)	$	10,014	$	(77	)	$	33,081	$	(287	)
Held to maturity
U.S. Government and agency obligations	$	26,174	$	(71	)	$	42,759	$	(229	)	$	68,933	$	(300	)
Mortgage-backed securities – residential		21,835		(152	)		11,254		(290	)		33,089		(442	)
Mortgage-backed securities – commercial mortgage obligations		5,097		(106	)		1,545		(51	)		6,642		(157	)
Mortgage-backed securities – commercial		4,403		(50	)		1,605		(22	)		6,008		(72	)
Total held to maturity	$	57,509	$	(379	)	$	57,163	$	(592	)	$	114,672	$	(971	)

As of September 30, 2016, the Bank’s security portfolio consisted of $374.7 million in securities, of which 37 securities with a fair value of $58.1 million were in an unrealized loss position. The majority of unrealized losses are related to the Bank’s U.S. Government and agency obligations and mortgage-backed securities.

As of June 30, 2016, the Bank’s security portfolio consisted of $383.0 million in securities, of which 52 securities with a fair value of $80.6 million were in an unrealized loss position. The majority of unrealized losses are related to the Bank’s U.S. Government and agency obligations and mortgage-backed securities.

As of June 30, 2015, the Bank’s security portfolio consisted of $354.9 million in securities, of which 90 securities with a fair value of $147.8 million were in an unrealized loss position. The majority of unrealized losses are related to the Bank’s U.S. Government and agency obligations and mortgage-backed securities.

There were no securities for which the Bank believes it is not probable that it will collect all amounts due according to the contractual terms of the security as of September 30, 2016. The unrealized losses are a result of a change in interest rates. The Bank has determined that it does not intend to sell, or it is not more likely than not that it will be required to sell, its securities that are in an unrealized loss position prior to the recovery of its amortized cost basis. Therefore, the Bank did not consider any securities to be other-than-temporarily impaired as of September 30, 2016.

(Continued)

F-19

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE

Loans receivable are summarized as follows (in thousands):

	September 30,			June 30,
	2016			2016			2015
	(unaudited)
Mortgage Loans
Residential	$	222,750		$	226,073		$	240,448
Commercial		375,896			385,827			324,574
Construction		28,802			25,050			11,886
Net deferred loan origination costs		319			319			187
		627,767			637,269			577,095
Commercial and consumer loans
Commercial loans		33,823			40,607			48,054
Other loans secured		48,781			49,993			51,645
Home equity lines of credit		40,396			41,180			40,605
Consumer and installment loans		16,407			16,476			12,858
Net deferred loan origination costs		806			853			798
		140,213			149,109			153,960
Total loans receivable		767,980			786,378			731,055
Allowance for loan losses		(4,065	)		(4,042	)		(3,921	)
Loans receivable, net	$	763,915		$	782,336		$	727,134

The Bank did not purchase any loans for the three months ended September 30, 2016. The Bank purchased $44.0 million of commercial mortgage and construction loans for the year ended June 30, 2016. Exclusive of the CMS Bank acquisition, the Bank purchased $3.6 million of loans in 2015.

(Continued)

F-20

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2016 and 2015 and the years ended June 30, 2016 and 2015 (in thousands):

	Residential Mortgages			Commercial Mortgages			Construction Loans		Commercial Loans			Other Loans Secured			Home Equity Lines of Credit			Consumer and Installment		Total
September 30, 2016 (unaudited)
Originated loans:
Beginning balance	$	237		$	2,149		$	269	$	604		$	397		$	73		$	313	$	4,042
Provision		(69	)		(46	)		33		(218	)		190			(3	)		101		(12	)
Loan (charge-offs)		—			—			—		—			(324	)		—			—		(324	)
Recoveries		70			18			—		173			98			—			—		359
Total ending allowance balance	$	238		$	2,121		$	302	$	559		$	361		$	70		$	414	$	4,065
Acquired loans:
Beginning balance	$	—		$	—		$	—	$	—		$	—		$	—		$	—	$	—
Provision		38			—			—		—			—			—			—		38
Loan (charge-offs)		(38	)		—			—		—			—			—			—		(38	)
Recoveries		—			—			—		—			—						—		—
Total ending allowance balance	$	—		$	—		$	—	$	—		$	—		$	—		$	—	$	—
Total loans:
Beginning balance	$	237		$	2,149		$	269	$	604		$	397		$	73		$	313	$	4,042
Provision		(31	)		(46	)		33		(218	)		190			(3	)		101		26
Loan (charge-offs)		(38	)		—			—		—			(324	)		—			—		(362	)
Recoveries		70			18			—		173			98			—			—		359
Total ending allowance balance	$	238		$	2,121		$	302	$	559		$	361		$	70		$	414	$	4,065

(Continued)

F-21

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

	Residential Mortgages			Commercial Mortgages			Construction Loans			Commercial Loans			Other Loans Secured			Home Equity Lines of Credit			Consumer and Installment			Total
September 30, 2015
Originated loans:
Beginning balance	$	193		$	1,766		$	100		$	1,266		$	416		$	69		$	111		$	3,921
Provision		(6	)		123			(188	)		97			(7	)		(4	)		26			41
Loan (charge-offs)		—			—			—			(188	)		—			—			(14	)		(202	)
Recoveries		—			—			192			—			—			—			—			192
Total ending allowance balance	$	187		$	1,889		$	104		$	1,175		$	409		$	65		$	123		$	3,952
June 30, 2016
Originated loans:
Beginning balance	$	193		$	1,766		$	100		$	1,266		$	416		$	69		$	111		$	3,921
Provision		444			215			(23	)		1,006			(19	)		28			208			1,859
Loan (charge-offs)		(400	)		(10	)		—			(1,668	)		—			(24	)		(31	)		(2,133	)
Recoveries		—			178			192			—			—						25			395
Total ending allowance balance	$	237		$	2,149		$	269		$	604		$	397		$	73		$	313		$	4,042
June 30, 2015
Originated loans:
Beginning balance	$	219		$	1,622		$	828		$	516		$	564		$	186		$	122		$	4,057
Provision		144			497			(401	)		1,221			(148	)		(80	)		93			1,326
Loan (charge-offs)		(175	)		(361	)		(327	)		(1,181	)		—			(43	)		(104	)		(2,191	)
Recoveries		5			8			—			710			—			6			—			729
Total ending allowance balance	$	193		$	1,766		$	100		$	1,266		$	416		$	69		$	111		$	3,921

Loans acquired in 2015 did not incur any charge-offs or recoveries or result in additional provision for loss as of June 30, 2016 or 2015.

(Continued)

F-22

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

The following tables present the balance in the allowance for loan losses and the recorded investment in loans, excluding net deferred fees and accrued interest due to immateriality, by portfolio segment, and based on impairment method as of September 30, 2016, June 30, 2016 and 2015 (in thousands):

	Residential Mortgages		Commercial Mortgages		Construction Loans		Commercial Loans		Other Loans Secured		Home Equity Lines of Credit		Consumer and Installment		Total
September 30, 2016 (unaudited)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	84	$	3	$	—	$	—	$	175	$	262
Collectively evaluated for impairment		238		2,121		218		556		361		70		239		3,803
Acquired with deteriorated credit quality		—		—		—		—		—		—		—		—
Total ending allowance balance	$	238	$	2,121	$	302	$	559	$	361	$	70	$	414	$	4,065
Loans:
Loans individually evaluated for impairment	$	4,876	$	5,447	$	144	$	924	$	5,537	$	674	$	349	$	17,951
Loans collectively evaluated for impairment		216,569		368,666		28,658		32,899		43,244		39,542		15,984		745,562
Loans acquired with deteriorated credit quality		1,305		1,783		—		—		—		180		74		3,342
Total ending loans balance	$	222,750	$	375,896	$	28,802	$	33,823	$	48,781	$	40,396	$	16,407	$	766,855

(Continued)

F-23

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

	Residential Mortgages		Commercial Mortgages		Construction Loans		Commercial Loans		Other Loans Secured		Home Equity Lines of Credit		Consumer and Installment		Total
June 30, 2016
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	83	$	—	$	2	$	—	$	175	$	260
Collectively evaluated for impairment		237		2,149		186		604		395		73		138		3,782
Acquired with deteriorated credit quality		—		—		—		—		—		—		—		—
Total ending allowance balance	$	237	$	2,149	$	269	$	604	$	397	$	73	$	313	$	4,042
Loans:
Loans individually evaluated for impairment	$	5,483	$	9,277	$	144	$	2,494	$	6,465	$	417	$	585	$	24,865
Loans collectively evaluated for impairment		219,310		374,772		24,906		38,113		43,528		40,583		15,807		757,019
Loans acquired with deteriorated credit quality		1,280		1,778		—		—		—		180		84		3,322
Total ending loans balance	$	226,073	$	385,827	$	25,050	$	40,607	$	49,993	$	41,180	$	16,476	$	785,206

(Continued)

F-24

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

	Residential Mortgages		Commercial Mortgages		Construction Loans		Commercial Loans		Other Loans Secured		Home Equity Lines of Credit		Consumer and Installment		Total
June 30, 2015
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	34	$	—	$	675	$	—	$	—	$	29	$	738
Collectively evaluated for impairment		193		1,732		100		591		416		69		82		3,183
Acquired with deteriorated credit quality		—		—		—		—		—		—		—		—
Total ending allowance balance	$	193	$	1,766	$	100	$	1,266	$	416	$	69	$	111	$	3,921
Loans:
Loans individually evaluated for impairment	$	7,082	$	9,422	$	2,020	$	4,617	$	10,677	$	438	$	380	$	34,636
Loans collectively evaluated for impairment		231,396		313,414		9,866		43,437		40,968		39,985		12,355		691,421
Loans acquired with deteriorated credit quality		1,970		1,738		—		—		—		182		123		4,013
Total ending loans balance	$	240,448	$	324,574	$	11,886	$	48,054	$	51,645	$	40,605	$	12,858	$	730,070

(Continued)

F-25

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

The following table presents information related to loans individually evaluated for impairment (excluding loans acquired with deteriorated credit quality) by class of loans as of and for the three months ended September 30, 2016 and years ended June 30, 2016 and 2015 (in thousands):

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
September 30, 2016 (unaudited)
With no related allowance recorded:
Residential mortgages	$	5,068	$	4,876	$	—	$	5,044	$	27	$	46
Commercial mortgages		6,431		5,447		—		7,341		88		97
Construction		12		12		—		12		—		—
Commercial loans		2,114		832		—		1,644		1		1
Other loans secured		6,697		5,537		—		5,954		80		111
Home equity lines of credit		694		674		—		545		5		(3	)
Consumer and installment		78		—		—		118		—		—
With an allowance recorded:
Construction		1,324		132		84		132		—		—
Other loans secured		92		92		3		93		1		(1	)
Consumer and installment		353		349		175		349		—		—
Total	$	22,863	$	17,951	$	262	$	21,232	$	202	$	251
June 30, 2016
With no related allowance recorded:
Residential mortgages	$	5,683	$	5,483	$	—	$	6,434	$	53	$	72
Commercial mortgages		9,947		9,277		—		12,253		504		485
Construction		12		12		—		393		7		7
Commercial loans		5,250		2,494		—		3,781		6		7
Other loans secured		7,762		6,408		—		6,901		159		201
Home equity lines of credit		445		417		—		692		—		1
Consumer and installment		314		236		—		322		—		2
With an allowance recorded:
Construction		1,324		132		83		132		—		—
Other loans secured		57		57		2		35		2		1
Consumer and installment		353		349		175		70		10		10
Total	$	31,147	$	24,865	$	260	$	31,013	$	741	$	786

(Continued)

F-26

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
June 30, 2015
With no related allowance recorded:
Residential mortgages	$	7,064	$	7,082	$	—	$	6,216	$	146	$	144
Commercial mortgages		9,395		9,121		—		7,365		242		257
Construction		1,984		2,020		—		4,271		—		—
Commercial loans		—		—		—		3,266		175		179
Other loans secured		11,528		10,634		—		11,570		587		591
Home equity lines of credit		457		438		—		254		1		1
Consumer and installment		5		5		—		1		—		—
With an allowance recorded:
Commercial mortgages		511		301		34		60		—		—
Commercial loans		5,800		4,617		675		1,669		18		18
Other loans secured		43		43		—		36		—		—
Consumer and installment		478		375		29		131		5		5
Total	$	37,265	$	34,636	$	738	$	34,839	$	1,174	$	1,195

The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2016 and June 30, 2016 and 2015 (in thousands):

	Nonaccrual						Loans Past Due Over 90 Days Still Accruing
	9/30/16		6/30/16		6/30/15		9/30/16		6/30/16		6/30/15
	(unaudited)						(unaudited)
Originated loans:
Residential mortgages	$	3,575	$	4,717	$	4,389	$	—	$	—	$	—
Commercial mortgages		307		300		6,308		—		—		—
Construction		144		144		2,020		—		—		—
Commercial loans		155		1,615		3,254		—		—		—
Other loans secured		2,613		3,433		3,757		—		—		514
Home equity lines of credit		366		405		424		—		—		—
Consumer and installment		352		584		310		—		4		4
Total originated loans	$	7,512	$	11,198	$	20,462	$	—	$	4	$	518
Acquired loans:
Residential mortgages	$	930	$	1,164	$	—	$	—	$	—	$	—
Home equity lines of credit		296		197		—		—		—		—
Consumer and installment		4		—		—		—		—		—
Total acquired loans	$	1,230		1,361	$	—	$	—	$	—	$	—
Total	$	8,742	$	12,559	$	20,462	$	—	$	4	$	518

(Continued)

F-27

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

Nonperforming loans include both smaller-balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The table above excludes acquired loans that are accounted for as purchased credit impaired loans totaling $3.3 million, $3.3 million and $4.0 million, respectively, as of September 30, 2016, June 30, 2016 and 2015. Such loans are excluded because the loans are in pools that are considered performing. The discounts arising from recording these loans at fair value upon acquisition were due in part to credit quality and the accretable yield is being recognized as interest income over the life of the loans based on expected cash flows.

The following table presents the aging of the recorded investment in past due loans by class of loans as of September 30, 2016, June 30, 2016 and 2015 (in thousands):

	30 -59 Days Past Due		60 -89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Total
September 30, 2016 (unaudited)
Originated loans:
Residential mortgages	$	—	$	208	$	2,421	$	2,629	$	150,633	$	153,262
Commercial mortgages		—		—		307		307		285,948		286,255
Construction		—		—		144		144		28,342		28,486
Commercial loans		—		—		—		—		31,401		31,401
Other loans secured		—		—		102		102		45,944		46,046
Home equity lines of credit		—		—		122		122		33,833		33,955
Consumer and installment loans		—		—		352		352		15,666		16,018
Total originated	$	—	$	208	$	3,448	$	3,656	$	591,767	$	595,423
Acquired loans:
Residential mortgages	$	—	$	—	$	1,469	$	1,469	$	68,019	$	69,488
Commercial mortgages		—		—		520		520		89,121		89,641
Construction		—		—		—		—		316		316
Commercial loans		—		—		—		—		2,422		2,422
Other loans secured		—		—		—		—		2,735		2,735
Home equity lines of credit		—		—		296		296		6,145		6,441
Consumer and installment loans		—		1		3		4		385		389
Total acquired	$	—	$	—	$	2,288	$	2,288	$	169,144	$	171,432
Total	$	—	$	209	$	5,736	$	5,944	$	760,911	$	766,855

(Continued)

F-28

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

	30 -59 Days Past Due		60 -89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Total
June 30, 2016
Originated loans:
Residential mortgages	$	430	$	573	$	2,232	$	3,235	$	150,010	$	153,245
Commercial mortgages		—		—		300		300		291,044		291,344
Construction		—		—		144		144		24,590		24,734
Commercial loans		—		760		1,615		2,375		35,621		37,996
Other loans secured		—		—		100		100		47,175		47,275
Home equity lines of credit		—		—		113		113		34,340		34,453
Consumer and installment loans		5		—		589		594		15,280		15,874
Total originated	$	435	$	1,333	$	5,093	$	6,861	$	598,060	$	604,921
Acquired loans:
Residential mortgages	$	732	$	—	$	1,073	$	1,805	$	71,023	$	72,828
Commercial mortgages		—		—		520		520		93,963		94,483
Construction		—		—		—		—		316		316
Commercial loans		—		—		—		—		2,611		2,611
Other loans secured		—		—		—		—		2,718		2,718
Home equity lines of credit		296		—		197		493		6,234		6,727
Consumer and installment loans		—		—		—		—		602		602
Total acquired	$	1,028	$	—	$	1,790	$	2,818	$	177,467	$	180,285
Total	$	1,463	$	1,333	$	6,883	$	9,679	$	775,527	$	785,206
June 30, 2015
Originated loans:
Residential mortgages	$	—	$	553	$	4,062	$	6,290	$	151,807	$	156,422
Commercial mortgages		—		—		1,195		1,195		215,519		216,714
Construction		—		—		2,020		2,020		9,550		11,570
Commercial loans		—		1,475		1,692		3,254		37,602		40,769
Other loans secured		—		—		663		663		50,663		51,326
Home equity lines of credit		—		—		424		481		32,562		32,986
Consumer and installment loans		47		211		118		376		11,269		11,645
Total originated	$	47	$	2,239	$	10,174	$	14,279	$	508,972	$	521,432
Acquired loans:
Residential mortgages	$	—	$	—	$	1,477	$	1,477	$	82,549	$	84,026
Commercial mortgages		—		498		—		498		107,362		107,860
Construction		—		—		—		—		316		316
Commercial loans		—		—		—		—		7,285		7,285
Other loans secured		—		—		—		—		319		319
Home equity lines of credit		—		—		—		—		7,619		7,619
Consumer and installment loans		—		—		—		—		1,213		1,213
Total acquired	$	—	$	498	$	1,477	$	1,975	$	206,663	$	208,638
Total	$	47	$	2,737	$	11,651	$	14,434	$	715,635	$	730,070

(Continued)

F-29

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

Troubled Debt Restructurings

During the years ended June 30, 2016 and 2015, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.

As of September 30, 2016, June 30, 2016 and 2015, the Bank had 24, 26 and 31 loans classified as troubled debt restructurings totaling $13.9 million, $18.6 million and $22.5 million, respectively, of which $9.4 million, $13.3 million and $11.7 million are performing in accordance with their modified terms. The Bank has allocated $3,000, $2,000 and $124,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2016, June 30, 2016 and 2015, and has not committed to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

The Bank did not modify any loans as troubled debt restructurings during the three month ended September 30, 2016. The following table presents loans by class modified as troubled debt restructurings that occurred during the years ended June 30, 2016 and 2015 (in thousands):

	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
June 30, 2016
Troubled debt restructurings:
Residential		3	$	1,697	$	1,697
Commercial mortgages		1		1,178		1,178
Other loans secured		1		64		64
Home equity lines of credit		1		200		200
Total		6	$	3,319	$	3,319
June 30, 2015
Troubled debt restructurings:
Residential		4	$	2,080	$	2,080
Commercial mortgages		3		4,103		4,103
Construction		1		1,742		1,742
Commercial loans		3		1,071		1,071
Other loans secured		3		183		183
Home equity lines of credit		1		8		8
Total		15	$	9,187	$	9,187

(Continued)

F-30

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

There were no troubled debt restructurings for which there was a subsequent payment default following the modification for the three months ended September 30, 2016 or the years ended June 30, 2016 and June 30, 2015.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s internal underwriting policy.

Certain loans, which were modified during the periods presented, did not meet the definition of a troubled debt restructuring, as the modification was a delay in a payment, ranging from thirty days to six months, which was considered to be insignificant.

Credit Quality Indicators

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a monthly basis. The Bank utilized the same grading process for acquired loans as it does for originated loans. The Bank uses the following definitions for risk ratings:

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

(Continued)

F-31

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

Loans not meeting the criteria above that are analyzed individually as part of the above-described process and loans in groups of homogenous loans are considered to be pass rated loans. These loans are monitored based on delinquency and performance as disclosed in a previous table. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2016 (unaudited)
Originated:
Residential mortgages	$	149,111	$	101	$	4,050	$	—	$	153,262
Commercial mortgages		277,912		1,993		6,350		—		286,255
Construction		28,342		—		144		—		28,486
Commercial loans		26,660		1,235		3,506		—		31,401
Other loans secured		38,207		—		7,839		—		46,046
Home equity lines of credit		33,589		—		366		—		33,955
Consumer and installment		15,510		3		156		349		16,018
Total originated	$	569,331	$	3,332	$	22,411	$	349	$	595,423
Acquired:
Residential mortgages	$	66,824	$	—	$	2,664	$	—	$	69,488
Commercial mortgages		86,563		943		2,135		—		89,641
Construction		316		—		—		—		316
Commercial loans		2,422		—		—		—		2,422
Other loans secured		2,735		—		—		—		2,735
Home equity lines of credit		5,948		—		493		—		6,441
Consumer and installment		389		—		—		—		389
Total acquired	$	165,197	$	943	$	5,292	$	—	$	171,432
Total	$	734,528	$	4,275	$	27,703	$	349	$	766,855

(Continued)

F-32

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

	Pass		Special Mention		Substandard		Doubtful		Total
June 30, 2016
Originated:
Residential mortgages	$	147,944	$	181	$	5,120	$	—	$	153,245
Commercial mortgages		278,491		2,101		10,752		—		291,344
Construction		24,590		—		144		—		24,734
Commercial loans		30,916		2,004		5,076		—		37,996
Other loans secured		38,382		109		8,784		—		47,275
Home equity lines of credit		34,047		—		406		—		34,453
Consumer and installment		15,069		24		432		349		15,874
Total originated	$	569,439	$	4,419	$	30,714	$	349	$	604,921
Acquired:
Residential mortgages	$	70,629	$	—	$	2,199	$	—	$	72,828
Commercial mortgages		91,380		949		2,154		—		94,483
Construction		316		—		—		—		316
Commercial loans		2,611		—		—		—		2,611
Other loans secured		2,718		—		—		—		2,718
Home equity lines of credit		6,529		—		198		—		6,727
Consumer and installment		602		—		—		—		602
Total acquired	$	174,785	$	949	$	4,551	$	—	$	180,285
Total	$	744,224	$	5,368	$	35,265	$	349	$	785,206
June 30, 2015
Originated:
Residential mortgages	$	418,781	$	444	$	7,197	$	—	$	156,422
Commercial mortgages		206,540		835		9,339		—		216,714
Construction		9,550		—		2,020		—		11,570
Commercial loans		30,567		2,393		7,809		—		40,769
Other loans secured		38,771		3,087		9,468		—		51,326
Home equity lines of credit		32,190		358		438		—		32,986
Consumer and installment		10,876		389		380		—		11,645
Total originated	$	477,275	$	7,506	$	36,651	$	—	$	521,432
Acquired:
Residential mortgages	$	82,056	$	—	$	1,970	$	—	$	84,026
Commercial mortgages		103,876		1,044		2,940		—		107,860
Construction		316		—		—		—		316
Commercial loans		7,285		—		—		—		7,285
Other loans secured		319		—		—		—		319
Home equity lines of credit		7,437		—		182		—		7,619
Consumer and installment		1,090		—		123		—		1,213
Total acquired	$	202,379	$	1,044	$	5,215	$	—	$	208,638
Total	$	679,654	$	8,550	$	41,866	$	—	$	730,070

(Continued)

F-33

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 3 – LOANS RECEIVABLE (Continued)

Purchased Credit Impaired Loans

The Bank acquired loans in 2015 for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans as of September 30, 2016, June 30, 2016 and 2015 is as follows (in thousands):

	9/30/16		6/30/16		6/30/15
	(unaudited)
Residential mortgages	$	1,305	$	1,280	$	1,970
Commercial mortgages		1,783		1,778		1,738
Home equity lines of credit		180		180		182
Consumer and installment		74		84		123
Carrying amount, net of allowance of $0	$	3,342	$	3,322	$	4,013

For those purchased credit impaired loans disclosed above, the Bank did not increase or reverse the allowance for loan losses during any period presented.

Accretable yield, or income expected to be collected, for acquired loans is as follows (in thousands) for the three months ended September 30, 2016 and for the years ended June 30, 2016 and 2015:

	9/30/16			6/30/16			6/30/15
	(unaudited)
Beginning balance	$	578		$	713		$	—
New loans acquired					—			750
Accretion of income		(46	)		(185	)		(37	)
Reclassification from nonaccretable difference		—			132			—
Disposals		—			(82	)		—
Ending balance	$	532		$	578		$	713

(Continued)

F-34

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 4 – BANK PREMISES AND EQUIPMENT

Bank premises and equipment are summarized as follows (in thousands):

	9/30/16			6/30/16			6/30/15
	(unaudited)
Land	$	1,997		$	1,997		$	1,997
Buildings and leasehold improvements		11,110			9,601			8,755
Furniture, fixtures and equipment		5,218			4,946			3,528
Construction and improvements in process		541			1,967			329
		18,866			18,511			14,609
Less: accumulated depreciation and amortization		(8,048	)		(7,737	)		(6,630	)
Total Bank premises and equipment, net	$	10,818		$	10,774		$	7,979

Depreciation expense was $311,000, $251,000, $1.1 million and $725,000 for the three months ended September 30, 2016 and 2015 and years ended June 30, 2016 and 2015, respectively.

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS

The change in goodwill during the 3 months ended September 30, 2016 and years ended June 30, 2016 and 2015 are as follows (in thousands):

	9/30/16		6/30/16		6/30/15
	(unaudited)
Beginning balance	$	6,106	$	5,843	$	—
Acquired goodwill – CMS Bancorp		—		—		5,843
Adjustment to CMS goodwill		—		263		—
Impairment		—		—		—
Ending balance	$	6,106	$	6,106	$	5,843

Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At September 30, 2016, the Bank had positive equity and the Bank elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment.

(Continued)

F-35

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS (Continued)

Acquired Intangible Assets: Acquired intangible assets were as follows (in thousands):

	9/30/16					6/30/16					6/30/15
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
	(unaudited)
Amortized intangible assets:
Core deposit intangible	$	887	$	(221	)	$	887	$	(185	)	$	887	$	(27	)
Total	$	887	$	(221	)	$	887	$	(185	)	$	887	$	(27	)

Aggregate amortization expense was $36,000, $40,000, $158,000 and $27,000 for the three months ended September 30, 2016 and 2015 and years ended June 30, 2016 and 2015, respectively.

Estimated amortization expense for each of the next five fiscal years ended June 30 (in thousands):

	9/30/16		6/30/2016
	(unaudited)
2017	$	106	$	143
2018		126		126
2019		110		110
2020		94		94
2021		78		78

NOTE 6 – DEPOSITS

Deposit balances are summarized as follows (in thousands):

	9/30/16		6/30/16		6/30/15
	(unaudited)
Demand	$	135,754	$	122,740	$	129,520
NOW accounts		107,595		111,455		82,890
Money market accounts		32,149		31,194		33,109
Savings		520,130		516,249		500,470
Time deposits		321,209		331,057		314,516
Total	$	1,116,837	$	1,112,695	$	1,060,505

Time deposits that meet or exceed the FDIC insurance limit of $250,000 were $51.3 million, $53.3 million and $37.3 million at September 30, 2016, June 30, 2016 and 2015, respectively.

(Continued)

F-36

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 6 – DEPOSITS (Continued)

Scheduled maturities of time deposits were as follows as of September 30 and June 30 and exclude fair value adjustments on acquired time deposits (in thousands):

	9/30/16		6/30/2016
	(unaudited)
Within 1 year	$	144,075	$	169,135
1 year to 2 years		49,526		44,739
2 years to 3 years		46,533		49,745
3 years to 4 years		26,996		26,782
4 years to 5 years		53,982		40,490
Thereafter		19		18
Total	$	321,131	$	330,909

Deposits of local governments held by PCSB Commercial Bank were $44.2 million, $49.4 million and $35.2 million at September 30, 2016, June 30, 2016 and 2015, respectively.

NOTE 7 – FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

Borrowings consist of advances from the Federal Home Loan Bank of New York. As of September 30, 2016, FHLB advances consisted of $7.0 million of short term advances with original maturities ranging from 10 to 16 months, as well as a $4.1 million amortizing term loan with a balloon payment of $2.8 million in 2026. The maturity schedule of advances is summarized as follows as of September 30, 2016 and June 30, 2016 (in thousands):

	September 30, 2016					June 30, 2016
	(unaudited)
	Amount Due		Weighted Average Rate			Amount Due		Weighted Average Rate
Year of maturity:
Within 1 year	$	7,000		0.85	%	$	16,000		0.79	%
1 year to 2 years		—		—			—		—
2 years to 3 years		—		—			—		—
3 years to 4 years		—		—			—		—
4 years to 5 years		—		—			—		—
Thereafter		4,051		2.62	%		4,081		2.62	%
Total		11,051		1.50	%	$	11,081		1.16	%

As a member of the FHLB of New York, the Bank had access to funds in the form of FHLB advances of approximately $202.3 million at September 30, 2016. Advances are secured by the Bank’s investment in FHLB stock and by a blanket security agreement. This agreement requires the Bank to maintain as collateral certain qualifying assets (such as U.S. Government agency and MBSs) with a discounted fair value, as defined, at least equal to 110% of any outstanding advances.

(Continued)

F-37

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 7 – FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS (Continued)

At September 30, 2016, the Bank also had access to funds of approximately $80.8 million in the form of secured borrowings through the discount window of the Federal Reserve Bank of New York. Collateral for these borrowings may include qualifying assets, such as one-to-four family residential loans. The Bank had no outstanding FRB borrowings as of September 30, 2016 or June 30, 2016 or 2015.

NOTE 8 – BUSINESS COMBINATIONS

On April 28, 2015, the Bank acquired all of the outstanding shares of CMS Bancorp. The business combination expanded the Bank’s presence in Westchester County and enhanced opportunities for business, customer relationships and the communities served by the Bank.

On the acquisition date, CMS Bancorp had 1,941,944 outstanding common shares, net of 192,362 shares of treasury stock, and shareholders’ equity of $17.8 million. CMS shareholders received $13.25 per share in cash resulting in a consideration value of $23.2 million.

The assets and liabilities in the CMS Bank acquisition were recorded at their fair value based on management’s best estimate based on information available at the date of acquisition. The acquisition was accounted for under the acquisition method of accounting in accordance with FASB ASC 805, “Business Combinations.” Accordingly, the assets acquired and liabilities assumed were recorded at their respective acquisition date fair values, and identifiable intangible assets were recorded at fair value. The resulting goodwill is not deductible for tax purposes.

Recognized amounts of identifiable assets acquired and (liabilities) assumed (in thousands):	As Originally Reported			Measurement Period Adjustments			As Adjusted
	(6/30/15)						(6/30/16)
Cash consideration paid to CMS shareholders	$	23,182		$	—		$	23,182
Cash	$	2,533		$	—		$	2,533
Available for sale investment securities		41,082			—			41,082
Loans		214,941			(163	) a		214,778
Premises and equipment		3,042			—			3,042
Other real estate owned		183			—			183
Core deposit intangible		887			—			887
Deferred tax assets, net		1,887			135	b		2,022
Other assets		2,079			(177	) c		1,902
Deposits		(208,261	)		—			(208,261	)
Federal Home Loan Bank advances		(36,050	)		—			(36,050	)
Other liabilities		(4,984	)		(58	) c		(5,042	)
Total identifiable net assets	$	17,339		$	(263	)	$	17,076
Goodwill	$	5,843		$	263		$	6,106

(Continued)

F-38

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 8 – BUSINESS COMBINATIONS (Continued)

Explanation of fair value adjustments:

a) The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio.

b) The adjustment represents the net deferred tax asset resulting from the fair value adjustments related to acquired assets and liabilities, as well as identifiable intangibles.

c) The adjustment represents the write down of receivables and accrued liabilities to their net realizable value.

NOTE 9 – INCOME TAXES

The components of income tax expense (benefit) are summarized as follows (in thousands):

	Three months ended September 30,						Years ended June 30,
	2016			2015			2016			2015
	(unaudited)
Current tax expense (benefit)
Federal	$	(19	)	$	510		$	(6	)	$	406
State		(11	)		8			(476	)		(290	)
		(30	)		518			(482	)		116
Deferred tax expense (benefit)
Federal		630			58			1,216			183
State		120			(10	)		250			(53	)
		750			48			1,466			130
State tax valuation allowance, net of federal benefit		(73	)		2			149			456
Total	$	647		$	568		$	1,133		$	702

Effective tax rates differ from federal statutory rate of 34% applied to income before income taxes due to the following (in thousands):

	Three months ended September 30,						Years ended June 30,
	2016			2015			2016			2015
	(unaudited)
Tax at federal statutory rate of 34%	$	715		$	620		$	1,380		$	411
State taxes, net of federal benefit		—			—			—			229
Tax-exempt interest income		(11	)		(27	)		(49	)		(56	)
BOLI income		(57	)		(25	)		(156	)		(101	)
Non-deductible acquisition related costs		—			—			—			139
Other, net		—			—			(42	)		80
Total	$	647		$	568		$	1,133		$	702

(Continued)

F-39

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 9 – INCOME TAXES (Continued)

Period-end deferred tax assets and liabilities were due to the following (in thousands):

	9/30/16			6/30/16			6/30/15
	(unaudited)
Deferred tax assets:
Allowance for loan losses	$	1,569		$	1,568		$	1,557
Deferred compensation		936			911			800
Purchase accounting adjustments		457			542			1,094
Deferred rent		255			263			266
Other comprehensive loss (defined benefit plans)		4,375			4,375			3,363
Depreciation of premises and equipment		412			417			227
NOL carryforward		1,396			1,066			194
Other		873			854			801
Total deferred tax assets		10,273			9,996			8,302
Deferred tax liabilities:
Prepaid pension costs		3,458			2,393			2,200
Deferred loan costs and fees, net		435			463			397
Other comprehensive income (securities)		321			269			215
Other		92			102			150
Total deferred tax liabilities		4,306			3,227			2,962
Deferred tax asset valuation allowance		(532	)		(605	)		(456	)
Net deferred tax asset		5,435		$	6,164		$	4,884

Period-end deferred tax assets include the allowance for loan losses, nonaccrual loan interest income, purchase accounting adjustments, accrued supplemental retirement plan (“SERP”) liability, fixed assets, deferred rent, other assets, net unrealized losses on pension and SERP obligations and NOL carryforwards. Period-end deferred tax liabilities include bond discount accretion, prepaid pension, net deferred loan fees and net unrealized gains on available-for-sale securities.

At June 30, 2016, after consideration of pre-transaction net operating losses due to the IRC section 382 limitation, the Bank had federal net operating loss carryforwards of approximately $1,866,000, which will begin to expire in 2035. The Bank has an apportioned New York State net operating loss carryforward of approximately $7,848,000 which will begin to expire in 2034. In addition, the Bank has Connecticut and New Jersey net operating losses of $265,000, which will begin to expire in 2036.

In 2014, New York State enacted comprehensive tax reform provisions with significant impact on financial institutions. As a result of this legislation, beginning on January 1, 2015, the Bank calculated its tax obligation to New York based upon the largest of a calculated income tax liability, a tax liability based upon average equity capital or a fixed minimum fee. It is more likely than not the Bank will generate New York losses in future years and therefore calculate its New York tax liability on the basis of average equity capital or a fixed minimum fee. Consequently, the Bank recorded a valuation allowance against its net New York deferred tax asset as of June 30, 2015, as it is unlikely this deferred tax asset will impact the Bank’s New York tax liability in future years.

(Continued)

F-40

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 9 – INCOME TAXES (Continued)

Management has determined that it is not required to establish a valuation allowance against any other deferred tax assets in accordance with accounting principles generally accepted in the United States of America since it is more likely than not that the deferred tax assets will be fully utilized in future periods. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods that the temporary differences comprising the deferred tax assets will be deductible.

As a thrift institution, the Bank is subject to special provisions in the federal tax laws regarding its allowable tax bad debt deductions and related tax bad debt reserves. Tax bad debt reserves consist of a defined base-year amount, plus additional amounts (excess reserves) accumulated after the base year. Deferred tax liabilities are recognized with respect to such excess reserves, as well as any portion of the base-year amount that is expected to become taxable (or recaptured) in the foreseeable future. The Bank’s base-year tax bad debt reserves totaled $2.8 million at September 30, 2016, June 30, 2016 and 2015, respectively. Associated deferred tax liabilities of $1.1 million have not been recognized at September 30, 2016, June 30, 2016 and 2015, since the Bank does not expect that the base-year reserves will become taxable in the foreseeable future. Taxation of the base-year reserve would occur only in very limited circumstances.

The Bank is subject to U.S. federal income tax as well as income tax of the state of New York. The Bank’s federal and state income tax returns are subject to examination for years after December 31, 2012. The audit of the Bank’s 2010 and 2011 federal income tax returns were completed by the Internal Revenue Service. The assessments were not material and were paid in 2013.

At September 30, 2016, June 30, 2016 and 2015, the Bank had no unrecognized tax benefits recorded. The Bank does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months.

NOTE 10 – COMPREHENSIVE INCOME (LOSS)

The following is a summary of the accumulated other comprehensive income balances, net of tax (in thousands):

	Balance at June 30, 2016			Current Period Change		Balance at September 30 2016
						(unaudited)
Unrealized gains on securities available for sale	$	323		$	101	$	424
Unrealized loss on pension benefits		(7,683	)		—		(7,683	)
Unrealized loss on SERP benefits		(810	)		—		(810	)
Total	$	(7,970	)	$	101	$	(7,869	)

(Continued)

F-41

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 10 – COMPREHENSIVE INCOME (LOSS) (Continued)

	Balance at June 30, 2015			Current Period Change			Balance at September 30 2015
							(unaudited)
Unrealized gains on securities available for sale	$	323		$	191		$	424
Unrealized loss on pension benefits		(4,311	)		—			(4,311	)
Unrealized loss on SERP benefits		(734	)		—			(734	)
Total	$	(4,722	)	$	191		$	(4,531	)
	Balance at June 30, 2015			Current Period Change			Balance at June 30, 2016
Unrealized gains on securities available for sale	$	323		$	200		$	523
Unrealized loss on pension benefits		(4,311	)		(3,372	)		(7,683	)
Unrealized loss on SERP benefits		(734	)		(76	)		(810	)
Total	$	(4,722	)	$	(3,248	)	$	(7,970	)
	Balance at June 30, 2014			Current Period Change			Balance at June 30, 2015
Unrealized gains on securities available for sale	$	418		$	(95	)	$	323
Unrealized loss on pension benefits		(2,622	)		(1,689	)		(4,311	)
Unrealized loss on SERP benefits		(642	)		(92	)		(734	)
Total	$	(2,846	)	$	(1,876	)	$	(4,722	)

(Continued)

F-42

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 11 – REGULATORY CAPITAL MATTERS

As of January 1, 2015, the Bank became subject to new capital rules set forth by the FDIC. The new capital rules revise the banking agencies’ leverage and risk-based capital requirements and the method for calculating risk weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act (the Basel III Capital Rules).

The Basel III Capital Rules establish a new minimum common equity Tier 1 capital requirement of 4.5% of risk-weighted assets; increased the minimum Tier 1 capital to risk-weighted assets requirement from 4% to 6%; and retained the minimum total capital to risk weighted assets requirement at 8.0%. A “well-capitalized” institution must generally maintain capital ratios 100-200 basis points higher than the minimum guidelines. Additionally, community banking institutions must maintain a capital conservation buffer of common equity Tier 1 capital in an amount greater than 2.5% of total risk-weighted assets to avoid being subject to limitations on capital distributions and discretionary bonus payments to executive officers. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and will be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019).

The Basel III Capital Rules also change the risk weights assigned to certain assets. The Basel III Capital Rules assigned a higher risk weight (150%) to loans that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The Basel III Capital Rules also alter the risk weighting for other assets, including marketable equity securities that are risk weighted generally at 300%. The Basel III Capital Rules require certain components of accumulated other comprehensive income (loss) to be included for purposes of calculating regulatory capital requirements unless a one-time opt-out is exercised. The Bank did exercise its opt-out option and will exclude the unrealized gain (loss) on investment securities component of accumulated other comprehensive income (loss) from regulatory capital.

Under its prompt corrective action regulations, the FDIC is required to take certain supervisory actions (and may take additional discretionary actions) with respect to an undercapitalized bank. Such actions could have a direct material effect on a bank’s financial statements. The regulations establish a framework for the classification of banks into five categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Generally, a bank is considered well capitalized if it has a leverage (Tier 1) capital ratio of at least 5.0%, a Tier 1 risk-based capital ratio of at least 6.0%, and a total risk-based capital ratio of at least 10.0%.

The foregoing capital ratios are based in part on specific quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the FDIC about capital components, risk weightings and other factors.

Management believes that, as of September 30, 2016, June 30, 2016 and 2015, the Bank met all capital adequacy requirements to which it was subject. Further, the most recent FDIC notification categorized the Bank as a well-capitalized institution under the prompt corrective action regulations. There have been no conditions or events since that notification that management believes have changed the Bank’s capital classification.

(Continued)

F-43

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 11 – REGULATORY CAPITAL MATTERS (Continued)

The following is a summary of the Bank’s actual capital amounts and ratios as of September 30, 2016, June 30, 2016 and 2015, compared to the required ratios for minimum capital adequacy and for classification as well capitalized (dollars in thousands):

						FDIC Required Ratios
	Bank Actual					Adequacy					As Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2016 (unaudited)
Leverage (Tier 1)	$	112,246		8.9	%	$	50,744		4.0	%	$	63,430		5.0	%
Risk Based:
Common Tier 1		112,246		13.9			36,371		4.5			52,537		6.5
Tier 1		112,246		13.9			48,495		6.0			64,600		8.0
Total		116,311		14.4			64,600		8.0			80,825		10.0
June 30, 2016
Leverage (Tier 1)	$	110,888		8.9	%	$	49,748		4.0	%	$	62,185		5.0	%
Risk Based:
Common Tier 1		110,888		13.5			37,036		4.5			53,497		6.5
Tier 1		110,888		13.5			49,382		6.0			65,842		8.0
Total		114,930		14.0			65,842		8.0			82,303		10.0
June 30, 2015
Leverage (Tier 1)	$	108,805		8.9	%	$	49,024		4.0	%	$	61,280		5.0	%
Risk Based:
Common Tier 1		108,805		15.5			31,650		4.5			45,717		6.5
Tier 1		108,805		15.5			42,200		6.0			56,267		8.0
Total		112,726		16.0			56,267		8.0			70,334		10.0

The risk-based capital requirements of Common Tier 1 capital, Tier 1 capital and total capital to risk-weighted assets of 4.5%, 6.0% and 8.0% also apply to PCSB Commercial Bank, which satisfied each of these requirements at September 30, 2016, June 30, 2016 and 2015, respectively.

The Bank makes a quarterly transfer of 10% of net income to a surplus account in accordance with New York State Banking Regulations. Such a transfer is not required if equity exceeds 10% of deposits at the end of a quarter. Use of the surplus account is subject to certain regulatory restrictions. The balance of the surplus account included in retained earnings was $15.1 million, $14.6 million and $14.3 million at September 30, 2016, June 30, 2016 and 2015, respectively.

(Continued)

F-44

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 12 – EMPLOYEE BENEFIT PLANS

Employee Pension Plan: The Bank maintains a non-contributory defined benefit pension plan that covers employees meeting specific requirements as to age and length of service. The Bank’s contributions to this qualified plan are determined on the basis of (i) the maximum amount that can be deducted for federal income tax purposes, and (ii) the amount determined by a consulting actuary as necessary to avoid an accumulated funding deficiency as defined by the Employee Retirement Income Security Act of 1974 (ERISA). Contributions are intended to provide not only for benefits attributed to service to date, but also those expected to be earned in the future.

Amendment to Employee Pension Plan: The Board of Trustees approved on August 8, 2012, an amendment to the Bank’s non-contributory defined benefit pension plan. The modification to this plan was effective as of October 1, 2012, and reduced the Bank’s contribution from 2% to 1% for those employees meeting the specific requirements as to age and length of service. In addition, any employee hired after October 1, 2012, is not eligible to participate in the defined benefit plan; instead, they will receive a contribution to their 401(k) account equal to 5% of their salary.

The following is a summary of the plan’s funded status (in thousands) as of June 30, 2016 and 2015 (the measurement date for financial reporting purposes):

	2016			2015
Change in benefit obligation:
Beginning benefit obligation	$	25,021		$	22,438
Service Cost		626			582
Interest Cost		1,086			949
Actuarial loss		2,923			1,882
Benefits paid		(822	)		(831	)
Settlements		(164	)		—
Ending benefit obligation		28,670			25,020
Change in plan assets, at fair value:
Beginning plan assets	$	24,503		$	23,286
Actual return		(302	)		548
Employer contribution		—			1,500
Benefits paid		(822	)		(831	)
Settlements		(164	)		—
Ending plan assets		23,215			24,503
Funded status	$	(5,455	)	$	(517	)
Accumulated benefit obligation	$	28,167		$	24,712

(Continued)

F-45

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 12 – EMPLOYEE BENEFIT PLANS (Continued)

The following is a summary of net period pension cost, contributions and benefits paid for the year ended June 30 (in thousands):

	2016		2015
Net period pension cost	$	483	$	47
Employer contributions		—		1,500
Benefits paid		821		831

Amounts recognized in accumulated other comprehensive loss at June 30 consist of (in thousands):

	2016			2015
Net loss	$	12,751		$	8,584
Prior service credit		(1,110	)		(1,398	)
	$	11,641		$	7,186

Net periodic pension cost and other amounts recognized in other comprehensive income for the year ended June 30 (in thousands):

	2016			2015
Net periodic benefit cost	$	483		$	47
Net loss (gain)		5,021			3,044
Amortization of prior service cost		288			288
Amortization of prior net loss		(854	)		(513	)
New past service liability		—			—
Total recognized in other comprehensive income		4,455			2,819
Total recognized loss in net periodic benefit cost and other comprehensive income	$	4,938		$	2,866

Net periodic benefit cost recognized for the three months ended September 30, 2016 and 2015 was $229,000 and $121,000, respectively.

The estimated net loss and past service cost for the pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit costs during the year ended June 30, 2017, are $1.4 million and $(288,000), respectively.

Contributions: The Bank contributed $3.0 million to the plan during the quarter ended September 30, 2016 and expects to make no additional contributions for the plan year ended June 30, 2017.

(Continued)

F-46

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 12 – EMPLOYEE BENEFIT PLANS (Continued)

Estimated Future Payments: The following benefit payments, which reflect expected future service, are expected for the years ending June 30 (in thousands):

2017	$	1,183
2018		1,255
2019		1,319
2020		1,346
2021		1,398
Following five years		7,570

Assumptions: Weighted-average assumptions used to determine pension benefit obligations:

	2016			2015
Discount rate		3.61	%		4.44	%
Rate of compensation increase		3.00			3.00

Weighted-average assumptions used to determine net periodic pension cost:

	2016			2015
Discount rate		4.44	%		4.33	%
Expected return on plan assets		7.50			7.50
Rate of compensation increase		3.00			3.00

Plan Assets

Plan assets are invested in a series of diversified investment funds of RSI Retirement Trust (“the Trust”). The investment funds include equity mutual funds, bond mutual funds, or commingled trust funds, each with its own investment objectives, investment strategies and risks. The Trust has been given discretion by the Bank to determine the appropriate strategic asset allocation, as governed by the Trust’s Statement of Investment Objectives and Guidelines. The long-term objective is to be invested 65% in equity securities (equity mutual funds), 34% in debt securities (bond mutual funds) and 1% in cash equivalents. The bond fund portion may be temporarily increased to 50% in order to lessen the volatility of asset values. Asset rebalancing is performed at least annually, with interim adjustments made if the investment mix varies by more than 10% from the target allocation.

The weighted average expected long-term rate of return is estimated based on current trends in the plan assets as well as projected future rates of returns on those assets. The long-term rate of return assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn real rates of return in the ranges of 3% to 10% and (1)% to 6%, respectively. The long-term inflation rate was estimated to be 3%. When these overall return expectations are applied to the plan’s target allocation, the result is an expected rate of return of approximately 2% to 9%.

The plan is only permitted to invest in assets approved by the RSI Trustee Board. All other investments are prohibited.

(Continued)

F-47

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 12 – EMPLOYEE BENEFIT PLANS (Continued)

The Bank’s actual pension plan asset allocation, target allocation and expected long-term rate of return by asset category are as follows:

	Target			Percentage of Plan Assets at Year-End						Weighted- Average Expected Long-Term Rate
Asset Category	Allocation			2016			2015			of Return
Equity mutual funds and common/collective trusts		65	%		58	%		56	%		3-10	%
Fixed income common/collective trusts		34			37			37			(1)-6	%
Cash equivalents		1			5			7			—	%
Total		100	%		100	%		100	%		2-9	%

Equity, Debt, Investment Funds and Other Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using spread to swap and the London Interbank Offered Rate (LIBOR) curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

The fair value of the plan assets at June 30, 2016 and 2015, by asset category, is as follows (in thousands):

			Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2016
Plan assets
Equity mutual funds and common/collective trusts	$	13,500	$	—	$	13,500	$	—
Fixed income common/ collective trusts		8,684		—		8,684		—
Cash and cash equivalents		1,031		1,031		—		—
Total	$	23,215	$	1,031	$	22,184	$	—

(Continued)

F-48

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 12 – EMPLOYEE BENEFIT PLANS (Continued)

			Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2015
Plan assets
Equity mutual funds and common/collective trusts	$	13,709	$	—	$	13,709	$	—
Fixed income common/ collective trusts		9,072		—		9,072		—
Cash and cash equivalents		1,722		1,722		—		—
Total	$	24,503	$	1,722	$	22,781	$	—

Defined Contribution Retirement Plan: The Bank maintains a defined contribution plan for eligible employees hired after October 1, 2012. All full-time employees who have attained age twenty-one and have a minimum of one year of service will receive a contribution to their 401(k) account equal to 5% of their salary. Plan expense was $39,000, $39,000, $162,000 and $60,000 for the three months ended September 30, 2016 and 2015 and years ended June 30, 2016 and 2015, respectively.

401(k) Plan: The Bank maintains a defined contribution plan for eligible employees under Section 401(k) of the Internal Revenue Code. All full-time employees who have attained age twenty-one and have a minimum of one year of service may elect to participate in the plan, by making contributions ranging from 2% to 10% of their compensation. The Bank makes matching contributions equal to 75% of the participant’s contributions that are not in excess of 6% of compensation. Savings plan expense was $100,000, $99,000, $410,000 and $339,000 for the three months ended September 30, 2016 and 2015 and for the years ended June 30, 2016 and 2015, respectively.

Acquired Pension Plan: As part of the CMS acquisition, the Bank acquired the pension plan of CMS Bank, which was frozen prior to and in the process of termination as of the acquisition date, a process which was not complete as of the acquisition date. During the year ended June 30, 2016, the CMS pension plan was terminated, resulting in a $629,000 charge to earnings.

Supplemental Retirement Plans: The Bank also maintains unfunded and non-qualified supplemental retirement plans to provide pension benefits in addition to those provided under the qualified pension plan.

The accrued benefit cost for the supplemental plans was approximately $3.5 million and $3.3 million at June 30, 2016 and 2015 (included in other liabilities in the consolidated statements of financial condition). Included in accumulated other comprehensive income were net losses of $1.2 million for the supplemental retirement plans as of June 30, 2016 and 2015, respectively. The projected benefit obligation and accumulated benefit obligation were $3.5 million as of the June 30, 2016 measurement date and $3.3 million as of June 30, 2015 measurement date.

Pension expense for the supplemental plans was $539,000 and $490,000 for the years ended June 30, 2016 and 2015, respectively.

(Continued)

F-49

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 12 – EMPLOYEE BENEFIT PLANS (Continued)

Supplemental retirement plans benefits of $272,000 were paid in both years ended June 30, 2016 and 2015.

Net periodic pension cost and other amounts recognized in other comprehensive income for the years ended June 30 (in thousands):

	2016			2015
Net periodic benefit cost	$	539		$	490
Net gain		89			237
Amortization of prior net loss		(84	)		(84	)
Total recognized in other comprehensive income		5			153
Total recognized in net periodic benefit cost and other comprehensive income	$	544		$	643

Net periodic benefit cost recognized for the three months ended September 30, 2016 and 2015 was $133,000 and $129,000, respectively.

The estimated net loss for the supplemental plans that will be amortized from accumulated other comprehensive income into net periodic benefit costs during the year ended June 30, 2017, is $93,000.

The following benefit payments, which reflect expected future service, are expected for the years ending June 30 (in thousands):

2017	$	272
2018		272
2019		272
2020		272
2021		3,021
Following five years		1,031

The assumed discount rates used for the supplemental plans range from 3.61% to 3.70%. The rates of compensation increases used are the same as those used for the employee pension plan.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance-Sheet Risk: The Bank is a party to commitments to originate loans, unused lines of credit and standby letters of credit (“credit-related financial instruments”) that involve, to varying degrees, elements of credit risk and interest rate risk in addition to the risks associated with loans recognized in the consolidated statements of condition. Substantially all of these credit-related financial instruments have been entered into with customers in the Bank’s primary lending area described in Note 1.

(Continued)

F-50

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 13 – COMMITMENTS AND CONTINGENCIES (Continued)

The contract amounts of credit-related financial instruments reflect the extent of the Bank’s involvement with those classes of financial instruments. The Bank’s exposure to credit loss in the event of non-performance by the counterparty is represented by the contract amount. The Bank uses the same credit policies in extending commitments, lines of credit and standby letters of credit as it does for on-balance sheet instruments.

The contract amounts of credit-related financial instruments at September 30, 2016, June 30, 2016 and 2015, are summarized below (in thousands):

	9/30/16		6/30/16		6/30/15
	(unaudited)
Commitments to originate loans	$	92,122	$	62,773	$	71,674
Unused lines of credit		53,267		58,788		53,686
Standby letters of credit		742		732		667

Lines of credit (including undisbursed construction loans) and commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. These agreements generally have fixed expiration dates or other termination clauses, and may require payment of a fee. Since certain lines of credit and commitments are expected to expire without being funded, the contract amounts do not necessarily represent future cash requirements. In extending lines of credit and commitments, the Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customer.

The Bank issues financial standby letters of credit that are irrevocable undertakings by the Bank to guarantee payment of a specified financial obligation. Most of the Bank’s financial standby letters of credit arise in connection with lending relationships and have terms of one year or less. The maximum potential future payments the Bank could be required to make equals the contract amount of standby letters of credit shown in the preceding table. The Bank’s recognized liability for financial standby letters of credit was insignificant at September 30, 2016, June 30, 2016 and 2015.

Operating Lease Commitments: The Bank leases certain branch properties and equipment under operating leases. Rent expense was $543,000, $399,000, $2.1 million and $1.9 million for the three months ended September 30, 2016 and 2015 and years ended June 30, 2016 and 2015, respectively. Rent commitments, before considering renewal options that generally are present, were as follows for the years ending June 30 (in thousands):

	9/30/16		6/30/2016
	(unaudited)
2017	$	1,863	$	2,501
2018		2,194		2,194
2019		1,706		1,706
2020		1,417		1,417
2021		1,153		1,153
Thereafter		8,189		8,189
Total	$	16,522	$	17,160

(Continued)

F-51

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 13 – COMMITMENTS AND CONTINGENCIES (Continued)

Legal Proceedings: In the normal course of business, the Bank is involved in certain legal proceedings. In the opinion of management, the consolidated financial statements of the Bank are not expected to be affected materially by the outcome of such legal proceedings.

NOTE 14 – FAIR VALUE

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: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as general classification of such instruments pursuant to the valuation hierarchy, is set forth below. While management believes the Bank’s valuation methodologies are appropriate and consistent with other financial institutions, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Investment Securities: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. Appraisals are generally obtained annually and may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Management performs a review of all appraisals, including any such adjustments.

OREO: Assets acquired through or instead of loan foreclosure are initially recorded at fair value, less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower cost or fair value, less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

(Continued)

F-52

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Appraisals for both collateral-dependent impaired loans and real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Bank. Once received, a member of the Credit Department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Once appraisals are considered appropriate, management discounts the appraised value for estimated selling costs, such as legal, broker, and property maintenance and insurance costs. The most recent analysis performed indicated discount rates ranging between 10% and 20% should be applied to properties with appraisals performed.

Assets and liabilities measured at fair value are summarized below (in thousands):

	Fair Value Measurements
	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
September 30, 2016 (unaudited)
Measured on a recurring basis:
Available-for-sale securities:
U.S. Government and agency obligations	$	—	$	60,595	$	—	$	60,595
Corporate and other debt securities		—		8,719		—		8,719
Mortgage-backed securities		—		40,228		—		40,228
Equity securities		—		49		—		49
Total assets at fair value	$	—	$	109,591	$	—	$	109,591
Measured on a non-recurring basis:
Impaired loans:
Mortgage loans:
Residential	$	—	$	—	$	1,219	$	1,219
Construction		—		—		48		48
Commercial and consumer loans:
Commercial loans		—		—		89		89
Consumer and installment loans		—		—		175		175
OREO – residential		—		—		1,059		1,059
Total assets at fair value	$	—	$	—	$	2,590	$	2,590

(Continued)

F-53

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

	Fair Value Measurements
	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
June 30, 2016
Measured on a recurring basis:
Available-for-sale securities:
U.S. Government and agency obligations	$	—	$	66,132	$	—	$	66,132
Corporate and other debt securities		—		8,646		—		8,646
Mortgage-backed securities		—		37,524		—		37,524
Equity securities		—		49		—		49
Total assets at fair value	$	—	$	112,351	$	—	$	112,351
Measured on a non-recurring basis:
Impaired loans:
Mortgage loans:
Residential	$	—	$	—	$	913	$	913
Construction		—		—		49		49
Commercial and consumer loans:
Other loans secured		—		—		54		54
Consumer and installment loans		—		—		175		175
OREO – residential		—		—		681		681
OREO – commercial		—		—		224		224
Total assets at fair value	$	—	$	—	$	2,096	$	2,096

(Continued)

F-54

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

	Fair Value Measurements
	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
June 30, 2015
Measured on a recurring basis:
Available-for-sale securities:
U.S. Government and agency obligations	$	—	$	46,917	$	—	$	46,917
Corporate and other debt securities		—		4,409		—		4,409
Mortgage-backed securities		—		33,568		—		33,568
Equity securities		—		49		—		49
Total assets at fair value	$	—	$	84,943	$	—	$	84,943
Measured on a non-recurring basis:
Impaired loans:
Mortgage loans:
Residential	$	—	$	—	$	3,028	$	3,028
Commercial mortgages		—		—		3,788		3,788
Construction		—		—		1,910		1,910
Commercial and consumer loans:
Commercial loans		—		—		3,942		3,942
Other loans secured		—		—		876		876
Home equity credit lines		—		—		189		189
Consumer and installment loans		—		—		469		469
OREO – residential		—		—		156		156
OREO – commercial		—		—		212		212
Total assets at fair value	$	—	$	—	$	14,570	$	14,570

Impaired loans in the table above had a carrying amount of $1.8 million, a remaining valuation allowance of $261,000 at September 30, 2016, incurred $38,000 of net charge-offs during the quarter ended September 30, 2016, which resulted in an additional provision for loan losses of $40,000 for the quarter. Impaired loans in the table above had a carrying amount of $1.5 million, a remaining valuation allowance of $259,000 at June 30, 2016, and incurred no net charge-offs during the year ended June 30, 2016, which resulted in an additional provision for loan losses of $175,000 for the year. Impaired loans had a carrying amount of $14.9 million, a remaining valuation allowance of $0.7 million at June 30, 2015, and incurred $1.7 million in charge-offs during the year ended June 30, 2015, which resulted in an additional provision for loan losses of $2.4 million for the year.

(Continued)

F-55

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

The following tables present quantitative information about Level 3 fair value measurements for selected financial instruments measured at fair value on a non-recurring basis at September 30, 2016 (unaudited) (in thousands):

	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range or Rate Used
Impaired loans – residential mortgages	$	1,219	Sales comparison	Adjustment for differences between comparable sales	-2.2% to 13.3%
Impaired loans – construction	$	48	Discounted cash flow	Discount rate	1.00%
Impaired loans – commercial loans	$	89	Discounted cash flow	Discount rate	4.50%
Impaired loans – consumer and installment loans	$	175	Discounted cash flow	Discount rate	4.25%
OREO – residential	$	1,059	Sales comparison	Adjustment for differences between comparable sales	-14% to 8%

The following tables present quantitative information about Level 3 fair value measurements for selected financial instruments measured at fair value on a non-recurring basis at June 30, 2016 (in thousands):

	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range or Rate Used
Impaired loans – residential mortgages	$	913	Sales comparison	Adjustment for differences between comparable sales	-2.0% to 13.3%
Impaired loans – construction	$	49	Discounted cash flow	Discount rate	1.00%
Impaired loans – other loans secured	$	54	Discounted cash flow	Discount rate	4.50%
Impaired loans – consumer and installment loans	$	175	Discounted cash flow	Discount rate	4.25%
OREO – residential	$	681	Sales comparison	Adjustment for differences between comparable sales	-14% to 8%
OREO – commercial	$	224	Sales contract	N/A	N/A

F-56

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

The following tables present quantitative information about Level 3 fair value measurements for selected financial instruments measured at fair value on a non-recurring basis at June 30, 2015 (in thousands):

	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range or Rate Used
Impaired loans – residential mortgages	$	3,028	Sales comparison	Adjustment for differences between comparable sales	-13.7% to +13.3%
			Discounted cash flow	Discount rate	8.0%
Impaired loans – commercial mortgages	$	3,787	Sales comparison	Adjustment for differences between comparable sales	-17.3% to +9.6%
			Income Approach	Cap rate	7.1% to 8.8%
			Discounted cash flow	Discount rate	6.0% to 8.0%
Impaired loans – construction	$	1,910	Discounted cash flow	Discount rate	1.0%
			Income approach	Cap rate	9.5%
Impaired loans – commercial loans	$	3,942	Discounted cash flow	Discount rate	0.3% to 6.0%
Impaired loans – other loans secured	$	876	Discounted cash flow	Discount rate	4.5% to 12.5%
Impaired loans – home equity credit lines	$	189	Sales comparison	Adjustment for differences between comparable sales	-13.4% to -8.7%
			Discounted cash flow	Discount rate	8.0%
Impaired loans – consumer and installment loans	$	469	Discounted cash flow	Discount rate	6.0% to 8.0%

F-57

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

The following is a summary of the carrying amounts and estimated fair values of the Bank’s financial assets and liabilities (in thousands) (none of which are held for trading purposes):

			Fair Value Measurements
	Carrying Amount		Level 1		Level 2		Level 3		Total
September 30, 2016 (unaudited)
Financial Assets:
Cash and cash equivalents	$	60,423	$	60,423	$	—	$	—	$	60,423
Securities held to maturity		265,071		—		267,966		281		268,247
Securities available for sale		109,591		—		109,591		—		109,591
Loans receivable, net		763,915		—		—		780,076		780,076
Accrued interest receivable		3,287		—		952		2,335		3,287
FHLB Stock		1,641		N/A		N/A		N/A		N/A
Financial Liabilities:
Demand, NOW, money market deposits and savings deposits	$	795,628	$	795,628	$	—	$	—	$	795,628
Time certificate accounts		321,209		—		324,506		—		324,506
Mortgage escrow funds		4,204		4,204		—		—		4,204
FHLB Advances		11,051		—		11,144		—		11,144
June 30, 2016
Financial Assets:
Cash and cash equivalents	$	41,578	$	41,578	$	—	$	—	$	41,578
Securities held to maturity		270,679		—		273,032		285		273,317
Securities available for sale		112,351		—		112,351		—		112,351
Loans receivable, net		782,336		—		—		799,242		799,242
Accrued interest receivable		3,361		—		958		2,403		3,361
FHLB Stock		2,047		N/A		N/A		N/A		N/A
Financial Liabilities:
Demand, NOW, money market deposits and savings deposits	$	781,638	$	781,638	$	—	$	—	$	781,638
Time certificate accounts		331,057		—		334,290		—		334,290
Mortgage escrow funds		7,023		7,023		—		—		7,023
FHLB Advances		20,081		—		20,171		—		20,171

F-58

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

			Fair Value Measurements
	Carrying Amount		Level 1		Level 2		Level 3		Total
June 30, 2015
Financial Assets:
Cash and cash equivalents	$	77,761	$	77,761	$	—	$	—	$	77,761
Securities held to maturity		269,913		—		269,833		344		270,177
Securities available for sale		84,943		—		84,943		—		84,943
Loans receivable, net		727,134		—		—		734,103		734,103
Accrued interest receivable		3,234		—		876		2,358		3,234
FHLB Stock		1,719		N/A		N/A		N/A		N/A
Financial Liabilities:
Demand, NOW, money market deposits and savings deposits	$	745,989	$	745,989	$	—	$	—	$	745,989
Time certificate accounts		314,516		—		316,431		—		316,431
Mortgage escrow funds		6,638		6,638		—		—		6,638
FHLB Advances		14,000		—		14,008		—		14,008

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Loans Receivable, Net: For valuation purposes, the loan portfolio was segregated into its significant categories such as one-to-four family residential mortgage loans, other mortgage loans, consumer loans and commercial loans. These categories were further analyzed, where appropriate, into components based on significant financial characteristics such as type of interest rate (adjustable or fixed). For adjustable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. The fair value of loans are considered Level 3.

FHLB Stock: It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

Accrued Interest Receivable/Payable: The carrying amount of accrued interest approximates fair value.

Deposits: The fair values disclosed for demand deposits (e.g., non-interest bearing demand, NOW, money market, savings deposits and escrow accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) and are considered Level 1. Fair values for time certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits, resulting in a Level 2 classification.

FHLB Advances: Fair value of the advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to the Bank’s current advances maturities schedule, resulting in a Level 2 classification.

F-59

PCSB BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three months ended September 30, 2016 and 2015 (unaudited)

and Years ended June 30, 2016 and 2015

NOTE 14 – FAIR VALUE (Continued)

Off-Balance Sheet Instruments: Fair values of the off-balance-sheet loan commitments, unused lines of credit and standby letters of credit described in Note 13 were estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions, considering the remaining terms of the instruments and the creditworthiness of the potential borrowers. At September 30, 2016, June 30, 2016 and 2015, the fair values of these instruments approximated the related carrying amounts (deferred fees), which were not material.

NOTE 15 – PLAN OF CONVERSION (unaudited)

On December 7, 2016, the Board of Trustees of the Bank adopted a plan of conversion (“Plan”). The Plan is subject to the approval of the FDIC, New York State Department of Financial Services, and the Board of Governors of the Federal Reserve System, and must be approved by the affirmative vote of at least a majority of the total votes eligible to be cast by the voting members of the Bank at a special meeting. The Plan sets forth that the Bank proposes to convert into a stock savings bank structure with the establishment of a stock holding company, PCSB Financial, Inc. (the “Company”), as parent of the Bank. The Bank will convert to the stock form of ownership, followed by the issuance of all of the Bank’s outstanding stock to the Company. Pursuant to the Plan, the Bank will determine the total offering value and number of shares of common stock based upon a valuation by an independent appraiser. The stock will be priced at $10.00 per share. The Bank’s Board of Trustees will adopt an employee stock ownership plan (ESOP) which will subscribe 8% of the common stock sold in the offering. The Company is being organized as a corporation incorporated under the laws of the State of Maryland and will own all of the outstanding common stock of the Bank upon completion of the conversion.

The costs of issuing the common stock will be deferred and deducted from the sales proceeds of the offering. If the conversion is unsuccessful, all deferred costs will be charged to operations. The Bank has no deferred conversion costs as of September 30, 2016 or June 30, 2016. The transaction is subject to approval by regulatory authorities and members of the Bank. At the completion of the conversion to stock form, the Bank will establish a liquidation account in the amount of retained earnings contained in the final prospectus. The liquidation account will be maintained for the benefits of eligible savings account holders who maintain deposit accounts in the Bank after conversion.

The conversion will be accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities and equity unchanged as a result.

F-60

No person has been authorized to give any information or to make any representation other than as contained in this prospectus and, if given or made, such other information or representation must not be relied upon as having been authorized by PCSB Financial or PCSB Bank. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby to any person in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the delivery of this prospectus nor any sale hereunder shall under any circumstances imply that there has been no change in the affairs of PCSB Financial or PCSB Bank since any of the dates as of which information is furnished herein or since the date hereof.

PCSB Financial Corporation

(Proposed Holding Company for PCSB Bank)

Up to 20,125,000 Shares

(Subject to increase to up to 23,143,750 Shares)

COMMON STOCK

PROSPECTUS

Sandler O’Neill + Partners, L.P.

            , 2017

These securities are not deposits or accounts and are not insured or guaranteed.

Until             , 2017, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II: INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

	Estimated Amount
Registrant’s Legal Fees and Expenses	$	725,000
Registrant’s Accounting Fees and Expenses		200,000
Marketing Agent Fees and Expenses (1)		1,838,000
Records Management Fees and Expenses		55,000
Appraisal Fees and Expenses		130,500
Printing, Postage, Mailing and EDGAR Fees		300,000
Filing Fees (NASDAQ, FINRA, NYSDFS and SEC)		220,500
Transfer Agent Fees and Expenses		20,000
Business Plan Fees and Expenses		40,000
Stock Certificate Fees and Expenses		10,000
Other		20,000
Total	$	3,559,000

(1) Estimated at the adjusted maximum of the offering range, assuming 100% of the shares are sold in the subscription offering.

Item 14. Indemnification of Directors and Officers

Article 10 of the Articles of Incorporation of PCSB Financial Corporation (the “Corporation”) sets forth the circumstances under which directors, officers, employees and agents of the Corporation may be insured or indemnified against liability which they may incur in their capacities as such:

ARTICLE 10. Indemnification, etc. of Directors and Officers.

A. Indemnification. The Corporation shall indemnify (1) its current and former directors and officers, whether serving the Corporation or at its request any other entity, to the fullest extent required or permitted by the Maryland General Corporation Law (the “MGCL”) now or hereafter in force, including the advancement of expenses under the procedures and to the fullest extent permitted by law, and (2) other employees and agents to such extent as shall be authorized by the Board of Directors and permitted by law; provided, however, that, except as provided in Section B of this Article 10 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

B. Procedure. If a claim under Section A of this Article 10 is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall also be entitled to be reimbursed the expense of prosecuting or defending such suit. It shall be a defense to any action for advancement of expenses that the Corporation has not received both (i) an undertaking as required by law to repay such advances if it shall ultimately be determined that the standard of conduct has not been met and (ii) a written affirmation by the indemnitee of his or her good faith belief that the standard of conduct necessary for indemnification by the Corporation has been met. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard for indemnification set forth in the MGCL. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination before the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable

II-1

standard of conduct set forth in the MGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct, or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article 10 or otherwise, shall be on the Corporation.

C. Non-Exclusivity. The rights to indemnification and to the advancement of expenses conferred in this Article 10 shall not be exclusive of any other right that any Person may have or hereafter acquire under any statute, these Articles, the Corporation’s Bylaws, any agreement, any vote of stockholders or the Board of Directors, or otherwise.

D. Insurance. The Corporation may maintain insurance, at its expense, to insure itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such Person against such expense, liability or loss under the MGCL.

E. Miscellaneous. The Corporation shall not be liable for any payment under this Article 10 in connection with a claim made by any indemnitee to the extent such indemnitee has otherwise actually received payment under any insurance policy, agreement, or otherwise, of the amounts otherwise indemnifiable hereunder. The rights to indemnification and to the advancement of expenses conferred in Sections A and B of this Article 10 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee’s heirs, executors and administrators.

F. Limitations Imposed by Federal Law. Notwithstanding any other provision set forth in this Article 10, in no event shall any payments made by the Corporation pursuant to this Article 10 exceed the amount permissible under applicable federal law, including, without limitation, Section 18(k) of the Federal Deposit Insurance Act and the regulations promulgated thereunder.

Any repeal or modification of this Article 10 by the stockholders of the Corporation or the Board of Directors shall not in any way diminish any rights to indemnification or advancement of expenses of such director or officer or the obligations of the Corporation arising hereunder with respect to events occurring, or claims made, while this Article 10 is in force.

Item 15. Recent Sales of Unregistered Securities

Not Applicable.

Item 16. Exhibits and Financial Statement Schedules

The exhibits and financial statement schedules filed as part of this registration statement are:

(a) List of Exhibits

1.1	Engagement Letter between PCSB Bank and Sandler O’Neill & Partners, L.P. (marketing agent services)*
1.2	Engagement Letter between PCSB Bank and Sandler O’Neill & Partners, L.P. (records management agent services)*
1.3	Form of Agency Agreement between PCSB Financial Corporation, PCSB Bank, and Sandler O’Neill & Partners, L.P.
2	Plan of Conversion of PCSB Bank, As Amended
3.1	Articles of Incorporation of PCSB Financial Corporation*
3.2	Bylaws of PCSB Financial Corporation*
4	Form of Common Stock Certificate of PCSB Financial Corporation*

II-2

5	Opinion of Luse Gorman, PC regarding legality of securities being registered*
8.1	Federal Income Tax Opinion of Luse Gorman, PC
8.2	State Income Tax Opinion of Crowe Horwath LLP
10.1	Form of PCSB Bank Employee Stock Ownership Plan
10.2	Form of Employment Agreement between PCSB Bank and Joseph D. Roberto*
10.3	Form of Employment Agreement between PCSB Bank and Scott N. Nogles*
10.4	Form of Employment Agreement between PCSB Bank and Michael P. Goldrick*
10.5	Form of Employment Agreement between PCSB Financial Corporation and Joseph D. Roberto*
10.6	Form of Employment Agreement between PCSB Financial Corporation and Scott N. Nogles*
10.7	Form of Employment Agreement between PCSB Financial Corporation and Michael P. Goldrick*
10.8	Form of One-Year Change in Control Agreement between PCSB Bank, PCSB Financial Corporation and certain executive officers*
10.9	Form of Two-Year Change in Control Agreement between PCSB Bank, PCSB Financial Corporation and certain executive officers*
10.10	Supplemental Executive Retirement Plan for Joseph D. Roberto*
10.11	Supplemental Life Insurance Agreement for Joseph D. Roberto*
10.12	Supplemental Life Insurance Plan for Senior Executives*
10.13	Form of Supplemental Executive Retirement Plan for Senior Executives*
10.14	PCSB Bank Trustee Fee Deferral Plan*
10.15	PCSB Bank Trustee Supplemental Life Insurance Plan*
10.16	PCSB Bank Death Benefit Only Plan for Michael T. Weber*
21	Subsidiaries of PCSB Financial Corporation*
23.1	Consent of Luse Gorman, PC (contained in Opinions included as Exhibits 5 and 8.1)
23.2	Consent of RP Financial, LC.*
23.3	Consent of Crowe Horwath LLP
24	Power of Attorney (set forth on signature page)
99.1	Appraisal Agreement between PCSB Bank and RP Financial, LC.*
99.2	Letter of RP Financial, LC. with respect to value of Subscription Rights*
99.3	Updated Appraisal Report of RP Financial, LC.
99.4	Marketing Materials*
99.5	Stock Order and Certification Form*

* Previously filed

(b) Financial Statement Schedules

No financial statement schedules are filed because the required information is inapplicable or is included in the consolidated financial statements and related notes.

Item 17. Undertakings

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the

II-3

Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter);

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(5) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(6) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(7) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(8) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is

II-4

against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Yorktown Heights, State of New York on February 1, 2017.

PCSB FINANCIAL CORPORATION
By:	/s/ Joseph D. Roberto
	Joseph D. Roberto
	Chairman, President and Chief Executive Officer (Duly Authorized Representative)

POWER OF ATTORNEY

We, the undersigned directors and officers of PCSB Financial Corporation (the “Corporation”) hereby severally constitute and appoint Joseph D. Roberto as our true and lawful attorney and agent, to do any and all things in our names in the capacities indicated below which said individual may deem necessary or advisable to enable the Corporation to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with the registration statement on Form S-1 relating to the offering of the Corporation’s common stock, including specifically, but not limited to, power and authority to sign for us in our names in the capacities indicated below the registration statement and any and all amendments (including post-effective amendments) thereto; and we hereby approve, ratify and confirm all that said individual shall do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signatures	Title	Date
/s/ Joseph D. Roberto Joseph D. Roberto	Chairman, President and Chief Executive Officer (Principal Executive Officer)	February 1, 2017
/s/ Scott Nogles* Scott Nogles	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 1, 2017
/s/ William L. Cuddy, Jr.* William L. Cuddy, Jr.	Director	February 1, 2017
/s/ Kevin B. Dwyer* Kevin B. Dwyer	Director	February 1, 2017
/s/ Willard I. Hill, Jr. Willard I. Hill, Jr.	Director	February 1, 2017
/s/ Jeffrey Kellogg* Jeffrey Kellogg	Director	February 1, 2017
/s/ Robert Lusardi* Robert Lusardi	Director	February 1, 2017
/s/ Matthew G. McCrosson* Matthew G. McCrosson	Director	February 1, 2017
/s/ Karl A. Thimm* Karl A. Thimm	Director	February 1, 2017
/s/ Michael T. Weber* Michael T. Weber	Director	February 1, 2017
/s/ Richard F. Weiss* Richard F. Weiss	Director	February 1, 2017

* Pursuant to the Power of Attorney contained on the signature page to the Registration Statement, as initially filed on December 12, 2016.

As filed with the Securities and Exchange Commission on February 1, 2017

Registration No. 333-215052

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

EXHIBITS

TO

PRE-EFFECTIVE AMENDMENT NO. 1

TO

REGISTRATION STATEMENT ON FORM S-1

PCSB Financial Corporation

PCSB Bank 401(k) Savings Plan

Yorktown Heights, New York

EXHIBIT INDEX

1.1	Engagement Letter between PCSB Bank and Sandler O’Neill & Partners, L.P. (marketing agent services)*
1.2	Engagement Letter between PCSB Bank and Sandler O’Neill & Partners, L.P. (records management agent services)*
1.3	Form of Agency Agreement between PCSB Financial Corporation, PCSB Bank, and Sandler O’Neill & Partners, L.P.
2	Plan of Conversion of PCSB Bank, As Amended
3.1	Articles of Incorporation of PCSB Financial Corporation*
3.2	Bylaws of PCSB Financial Corporation*
4	Form of Common Stock Certificate of PCSB Financial Corporation*
5	Opinion of Luse Gorman, PC regarding legality of securities being registered*
8.1	Federal Income Tax Opinion of Luse Gorman, PC
8.2	State Income Tax Opinion of Crowe Horwath LLP
10.1	Form of PCSB Bank Employee Stock Ownership Plan
10.2	Form of Employment Agreement between PCSB Bank and Joseph D. Roberto*
10.3	Form of Employment Agreement between PCSB Bank and Scott N. Nogles*
10.4	Form of Employment Agreement between PCSB Bank and Michael P. Goldrick*
10.5	Form of Employment Agreement between PCSB Financial Corporation and Joseph D. Roberto*
10.6	Form of Employment Agreement between PCSB Financial Corporation and Scott N. Nogles*
10.7	Form of Employment Agreement between PCSB Financial Corporation and Michael P. Goldrick*
10.8	Form of One-Year Change in Control Agreement between PCSB Bank, PCSB Financial Corporation and certain executive officers*
10.9	Form of Two-Year Change in Control Agreement between PCSB Bank, PCSB Financial Corporation and certain executive officers*
10.10	Supplemental Executive Retirement Plan for Joseph D. Roberto*
10.11	Supplemental Life Insurance Agreement for Joseph D. Roberto*
10.12	Supplemental Life Insurance Plan for Senior Executives*
10.13	Form of Supplemental Executive Retirement Plan for Senior Executives*
10.14	PCSB Bank Trustee Fee Deferral Plan*
10.15	PCSB Bank Trustee Supplemental Life Insurance Plan*
10.16	PCSB Bank Death Benefit Only Plan for Michael T. Weber*
21	Subsidiaries of PCSB Financial Corporation*
23.1	Consent of Luse Gorman, PC (contained in Opinions included as Exhibits 5 and 8.1)
23.2	Consent of RP Financial, LC.*
23.3	Consent of Crowe Horwath LLP
24	Power of Attorney (set forth on signature page)
99.1	Appraisal Agreement between PCSB Bank and RP Financial, LC.*
99.2	Letter of RP Financial, LC. with respect to value of Subscription Rights*
99.3	Updated Appraisal Report of RP Financial, LC.
99.4	Marketing Materials*
99.5	Stock Order and Certification Form*

* Previously filed.

EX-1.3

Exhibit 1.3

Up to 21,160,000 Shares

PCSB FINANCIAL CORPORATION

(a Maryland corporation)

Common Stock

(par value $0.01 per share)

AGENCY AGREEMENT

                                 , 2017

SANDLER O’NEILL & PARTNERS, L.P.

1251 Avenue of the Americas, 6^th Floor

New York, New York 10020

Ladies and Gentlemen:

PCSB Financial Corporation, a Maryland corporation (the “Company”), and PCSB Bank, a New York-chartered mutual savings bank (the “Bank”), hereby confirm their agreement with Sandler O’Neill & Partners, L.P. (“Sandler O’Neill” or the “Agent”) with respect to the offer and sale by the Company of up to 21,160,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The shares of Common Stock to be sold by the Company in the Offerings (as defined below) are hereinafter called the “Securities.” In addition, as described herein, the Company will contribute a number of shares of Common Securities to PCSB Community Foundation (the “Foundation”) (such shares hereinafter being referred to as the “Foundation Shares”), plus an amount of cash so that the total contribution will equal $5.0 million, based on the offering price of $10.00 per share.

The Securities are being offered for sale and the Foundation Shares are being contributed all in accordance with the Plan of Conversion (the “Plan”) adopted by the Board of Trustees of the Bank pursuant to which the Bank intends to convert from a New York-chartered mutual savings bank to a New York-chartered stock savings bank and to issue all of its stock to the Company.

Pursuant to the Plan, the Company will offer to certain depositors of the Bank and to the Bank’s tax-qualified employee benefit plans, including the Bank’s employee stock ownership plan (the “ESOP”) and the Bank’s 401(k) Savings Plan (the “401(k) Plan” and collectively with the ESOP, the “Employee Plans”), rights to subscribe for the Securities in a subscription offering (the “Subscription Offering”). Securities that are not subscribed for in the Subscription Offering may be offered to certain members of the general public in a community offering (the “Community Offering”), with preference given to natural persons (including trusts of natural persons) residing in the New York counties of Dutchess, Putnam, Rockland and Westchester. The Community Offering, which together with the Subscription Offering, as each may be extended or reopened from time to time, are herein referred to as the “Subscription and Community Offering,” may be commenced concurrently with, during or after the Subscription Offering. It is currently anticipated that any Securities not subscribed for in the Subscription and Community Offering will be offered, subject to Section 2 hereof, in a syndicated offering (the “Syndicated Offering”) or in an underwritten public offering (the “Public Offering”); provided, however, that the Community Offering may be held concurrently with, during or after the Subscription Offering and the Syndicated Offering or the Public Offering. The Subscription and Community Offering, the Syndicated Offering and the Public Offering are hereinafter referred to collectively as the “Offerings,” and the conversion of the Bank from mutual to stock form, the acquisition of the capital stock of the Bank by the Company and the

1

Offerings are referred to herein collectively as the “Conversion.” It is acknowledged that the number of Securities to be sold in the Conversion may be increased or decreased as described in the Prospectus (as hereinafter defined). If the number of Securities is increased or decreased in accordance with the Plan, the term “Securities” shall mean such greater or lesser number, where applicable. If there is a Public Offering, the Public Offering will be governed by a separate Underwriting Agreement, as hereinafter defined, as described in Section 2 hereof.

In connection with the Offerings and pursuant to the terms of the Plan as described in the Prospectus as defined below, the Company will establish the Foundation. Immediately following the consummation of the Offerings, subject to compliance with certain conditions as may be imposed by regulatory authorities, the Company will contribute to the Foundation a number of shares of Common Stock equal to 2.1% of the Securities plus an amount of cash so that the total contribution will equal $5.0 million, based on the offering price of $10.00 per share.

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (No. 333-215052), including a related prospectus, for the registration of the sale of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), has filed such amendments thereto, if any, and such amended prospectuses as may have been required to the date hereof by the Commission in order to declare such registration statement effective, and will file such additional amendments thereto and such amended prospectuses and prospectus supplements as may hereafter be required. Such registration statement (as amended to date, if applicable, and as from time to time amended or supplemented hereafter, including post-effective amendments thereto containing the preliminary and final prospectus for the Public Offering, if any) and the prospectuses constituting a part thereof (including in each case all documents incorporated or deemed to be incorporated by reference therein and the information, if any, deemed to be a part thereof pursuant to the rules and regulations of the Commission promulgated under the Securities Act, as from time to time amended or supplemented pursuant to the Securities Act or otherwise (the “Securities Act Regulations”), as well as the preliminary prospectus, if any, as defined in Rule 430A of the Securities Act Regulations contained in a post-effective amendment to the Registration Statement or a new registration statement and the final prospectus filed pursuant to Rule 430A and Rule 424(b) of the Securities Act Regulations for use in the Public Offering), are hereinafter referred to as the “Registration Statement” and the “Prospectus,” respectively, except that if any revised prospectus shall be used by the Company in connection with the Subscription and Community Offering, the Syndicated Offering or the Public Offering, if any, which differs from the Prospectus on file at the Commission at the time the Registration Statement becomes effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the Securities Act Regulations), the term “Prospectus” shall refer to such revised prospectus from and after the time it is first provided to the Agent for such use.

Concurrently with the execution of this Agreement, the Company is delivering to the Agent copies of the Prospectus of the Company to be used in the Subscription and Community Offering and, if necessary, will deliver copies of the Prospectus and a prospectus supplement for use in a Syndicated Offering or Public Offering, if any. Such Prospectus contains information with respect to the Bank, the Company and the Common Stock.

SECTION 1. REPRESENTATIONS AND WARRANTIES.

(a) The Company and the Bank jointly and severally represent and warrant to the Agent as of the date hereof as follows:

(i) The Registration Statement has been declared effective by the Commission, no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the knowledge of the Company and the Bank, threatened by the Commission. At the time the Registration

2

Statement became effective and at the Closing Time referred to in Section 2 hereof, the Registration Statement complied and will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus as of the date hereof does not, and at the Closing Time referred to in Section 2 hereof will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information with respect to the Agent furnished to the Company in writing by the Agent or its counsel expressly for use in the Registration Statement or Prospectus which the Company and the Bank agree consists solely of the Agent Information (as hereinafter defined) described as such in Section 6(a) hereof.

(ii) At the time of filing the Registration Statement relating to the offering of the Securities and as of the date hereof, the Company was not, and is not, an ineligible issuer, as defined in Rule 405 of the Securities Act Regulations. At the time of the filing of the Registration Statement and at the time of the use of any issuer free writing prospectus, as defined in Rule 433(h) of the Securities Act Regulations, the Company met the conditions required by Rules 164 and 433 of the Securities Act Regulations for the use of a free writing prospectus. If required to be filed, the Company has filed any issuer free writing prospectus related to the Securities at the time it was required to be filed under Rule 433 of the Securities Act Regulations and, if not required to be filed, it has retained such free writing prospectus in the Company’s records pursuant to Rule 433(g) of the Securities Act Regulations and, if any issuer free writing prospectus is used after the date hereof in connection with the offering of the Securities, the Company will file or retain such free writing prospectus as required by Rule 433 of the Securities Act Regulations.

(iii) As of the Applicable Time, neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the Applicable Time and the Statutory Prospectus, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus included in the Registration Statement relating to the Securities or any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent expressly for use therein, it being understood and agreed that the only information furnished by the Agent consists of the Agent Information described in Section 6(a) hereof. As used in this paragraph and elsewhere in this Agreement:

1. “Applicable Time” means each and every date when a potential purchaser submitted a subscription or otherwise committed to purchase Securities.

2. “Statutory Prospectus”, as of any time, means the Prospectus relating to the Securities that is included in the Registration Statement relating to the Securities immediately prior to the relevant Applicable Time, including any document incorporated by reference therein.

3. “Issuer-Represented Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433(h) of the Securities Act Regulations, relating to the Securities. The term does not include any writing exempted from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the Securities Act, without regard to Rule 172 or Rule 173 of the Securities Act Regulations.

3

4. “Issuer-Represented General Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors.

5. “Issuer-Represented Limited-Use Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any “bona fide electronic road show,” as defined in Rule 433 of the Securities Act Regulations, that is made available without restriction pursuant to Rule 433(d)(8)(ii) of the Securities Act Regulations or otherwise, even though not required to be filed with the Commission.

6. “Permitted Free Writing Prospectus” means any free writing prospectus consented to by the Company and the Agent.

(iv) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offerings and sale of the Securities or until any earlier date that the Company notified or notifies the Agent (as described in the next sentence), did not, does not and will not include any information that materially conflicted, conflicts or will conflict with the information contained in the Registration Statement relating to the offering of the Securities, including any document incorporated by reference therein that has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus materially conflicted, conflicts or would conflict with the information contained in the Registration Statement relating to the offering of the Securities or included, includes or would include an untrue statement of a material fact or omitted, omits or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent expressly for use therein.

(v) The Prospectus and each Issuer-Represented Free Writing Prospectus when filed, if filed by electronic transmission, pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical to the copy thereof delivered to the Agent for use in connection with the offer and sale of the Securities.

(vi) The Company has filed with the Board of Governors of the Federal Reserve System (the “FRB”) an application on Form FR Y-3 for approval, pursuant to Section 3(a)(1) of the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and the regulations promulgated thereunder, and has filed pursuant to Section 143b of the New York Banking Law (the “Banking Law”) with the NYSDFS (as defined below) a holding company application for the Company to become a bank holding company with respect to the Bank (together the “Holding Company Applications”). The Company has received written notice from the FRB and the NYSDFS of their respective approvals of the Holding Company Applications, such approvals remain in full force and effect, no order has been issued by the FRB or the NYSDFS suspending or revoking such approval and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the FRB or the NYSDFS. At the date of such approvals and at the Closing Time referred to in Section 2 hereof, the Holding Company Applications complied and will comply in all material respects with the applicable provisions of the BHC Act, the New York Conversion Law and the regulations promulgated thereunder and the Holding Company Applications are truthful and accurate in all material respects.

4

(vii) Pursuant to Section 14-e of the Banking Law and the applicable rules and regulations of the New York State Department of Financial Services (the “NYSDFS”) (collectively, “New York Conversion Law”), the Bank has filed with the NYSDFS an Application for Approval of Conversion (the “New York Conversion Application”), and pursuant to federal law and the applicable rules and regulations of the Federal Deposit Insurance Corporation (“FDIC”), and specifically 12 C.F.R § 303.160-163 and 12 C.F.R. §333.4 (the “Conversion Regulations”), the Bank has filed a Notice of Intent to Convert with the FDIC (the “FDIC Notice”), and in each case has filed such amendments thereto and supplementary materials as may have been required to the date hereof (the New York Conversion Application and the FDIC Notice, collectively, as amended to date, if applicable, and as from time to time amended or supplemented hereafter, are hereinafter referred to as the “Conversion Applications”), including copies of the Bank’s Proxy Statement for a Special Meeting of its Depositors relating to the Conversion (the “Proxy Statement”), the Conversion Valuation Appraisal Report (the “Appraisal”) prepared by RP Financial, LC., and the Prospectus. The Offerings and the Plan have been duly adopted by the Board of Directors of the Company and the Board of Trustees of the Bank and such adoption has not since been rescinded or revoked. The NYSDFS has conditionally approved the New York Conversion Application, and such approval remains in full force and effect and no order has been issued by the NYSDFS suspending or revoking such approval and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the NYSDFS. The FDIC has reviewed the FDIC Notice and has issued to the Bank a letter of intent of non-objection, and such letter of intent of non-objection remains in full force and effect and no order has been issued by the FDIC suspending or revoking such letter of intent of non-objection and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the FDIC. At the time of the approval of the New York Conversion Application, including the Prospectus and the Proxy Statement (including any amendment or supplement thereto), by the NYSDFS and the issuance of the letter of intent of non-objection by the FDIC with respect to the FDIC Notice and at all times subsequent thereto until the Closing Time referred to in Section 2, the Conversion Applications, including the Prospectus and the Proxy Statement (including any amendment or supplement thereto), will comply in all material respects with New York Conversion Law and the Conversion Regulations, and the Conversion Applications were truthful and accurate in all material respects.

(viii) At the time of their use, the Proxy Statement and any other proxy solicitation materials with respect to the Special Meeting of Depositors of the Bank will comply in all material respects with the applicable provisions of the New York Conversion Law and the Conversion Regulations and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company and the Bank will promptly file the Prospectus and any supplemental sales literature with the Commission, the NYSDFS and the FDIC. The Prospectus and all supplemental sales literature, as of the date the Registration Statement became effective and at the Closing Time referred to in Section 2 hereof, complied and will comply in all material respects with the applicable requirements of the Conversion Regulations and the Securities Act Regulations and, at or prior to the time of their first use, will have received all required authorizations of the NYSDFS, the FDIC, the FRB and the Commission for use in final form.

(ix) None of the Commission, the FRB, the NYSDFS, the FDIC or any state securities “Blue Sky” authority, if applicable, has by order or otherwise, prevented or suspended the use of the Proxy Statement, the Prospectus or any supplemental sales literature authorized by the Company or the Bank for use in connection with the Offerings, and no actions or proceedings for such purposes are pending or, to the knowledge of the Company or the Bank, threatened.

(x) At the Closing Time referred to in Section 2 hereof, the Company and the Bank will have completed the conditions precedent to the Conversion and the establishment of the Foundation

5

in accordance with the Plan, applicable New York Conversion Law and the Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all material terms, conditions, requirements and provisions precedent to the Conversion and the establishment of the Foundation imposed upon the Company or the Bank by the NYSDFS, the FDIC, the FRB, or any other regulatory authority, other than those which the regulatory authority permits to be completed after the Conversion or which has been waived thereby. The Conversion, the Offerings and other transactions contemplated hereby do not and will not require any material consent, approval, authorization or permit or filing with any other governmental agency or regulatory authority, except as disclosed in the Prospectus.

(xi) RP Financial, LC. (the “Appraiser”), which prepared the valuation of the Company as part of the Conversion, has advised the Company and the Bank in writing that it satisfies all requirements for an appraiser set forth in the New York Conversion Law and the Conversion Regulations and any interpretations or guidelines issued by the NYSDFS or FDIC or its respective staff with respect thereto and that it has not been advised by the NYSDFS or FDIC that it is not so qualified to prepare such valuation.

(xii) Crowe Horwath LLP, the accountants who audited the financial statements for the two-year period ended June 30, 2016 included in the Registration Statement, has advised the Company and the Bank in writing that they are independent public accountants within the meaning of Rule 101 of the American Institute of Certified Public Accountants (the “AICPA”), that they are registered with the Public Company Accounting Oversight Board (“PCAOB”) and such accountants are, with respect to the Company and the Bank, independent certified public accountants as required by the Securities Act, the Securities Act Regulations and the Conversion Regulations.

(xiii) The only direct subsidiaries of the Bank are listed on Exhibit A hereto (collectively, the “Subsidiaries”). Except for the Subsidiaries, the Bank does not, directly or indirectly, control any other corporation, limited liability company, partnership, joint venture, association, trust or other business organization. Upon completion of the Conversion, the only direct subsidiary of the Company will be the Bank.

(xiv) The consolidated financial statements and the related notes thereto included in the Registration Statement, the Prospectus and the General Disclosure Package present fairly the financial position of the Bank and its Subsidiaries at the dates indicated and the results of operations, comprehensive income, changes in equity and cash flows for the periods specified, and comply as to form with the applicable accounting requirements of the Securities Act Regulations and the Conversion Regulations; except as otherwise stated in the Registration Statement, the Prospectus and the General Disclosure Package, said financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis present fairly the information required to be stated therein except as noted therein. The other financial, statistical and pro forma information and related notes included in the Prospectus and the General Disclosure Package present fairly the information shown therein on a basis consistent with the audited financial statements included in the Prospectus, and as to the pro forma adjustments, the adjustments made therein have been consistently applied on the basis described therein.

(xv) Since the respective dates as of which information is given in the Registration Statement, the Prospectus and the General Disclosure Package, except as otherwise stated therein: (A) there has been no material adverse change in the financial condition, results of operations, business affairs, management or prospects of the Company, the Bank and the Subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business (“Material Adverse Effect”), (B) except for transactions specifically referred to or contemplated in the Registration Statement, the Prospectus and the General Disclosure Package, there have been no transactions entered into by the Company, the Bank or the Subsidiaries, other than those in the ordinary course of business, which are

6

material with respect to the Company and the Bank, (C) the capitalization, liabilities, assets, properties and business of the Company and the Bank conform in all material respects to the descriptions contained in the Prospectus and the General Disclosure Package and none of the Company, the Bank or the Subsidiaries has any material liabilities of any kind, contingent or otherwise, except as disclosed in the Registration Statement, the Prospectus or the General Disclosure Package and (D) none of the Company, the Bank or the Subsidiaries has issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings in the ordinary course of business consistent with past practice from the same or similar sources and in similar amounts as indicated in the Prospectus and the General Disclosure Package.

(xvi) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby; and the Company is duly qualified to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect. Following the completion of the Conversion, the Company will be a registered bank holding company under the BHC Act.

(xvii) Upon consummation of the Conversion and the contribution of the Foundation Shares, the authorized, issued and outstanding capital stock of the Company will be within the range as set forth in the Prospectus and the General Disclosure Package under “Capitalization” (except for subsequent issuances, if any, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus and the General Disclosure Package); except as set forth elsewhere in this Agreement, no shares of Common Stock have been or will be issued and outstanding prior to the Closing Time referred to in Section 2 hereof; at the time of the Conversion, the Securities and the Foundation Shares will have been duly authorized for issuance and, in the case of the Securities, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and stated on the cover page of the Prospectus, and in the case of the Foundation Shares, when contributed by the Company pursuant to the Plan, will be duly and validly issued and fully paid and nonassessable; the certificates and/or book entries, as applicable, representing the shares of Common Stock will conform to the requirements of applicable law and regulations; and the issuance of the Securities is not subject to preemptive or other similar rights except for subscription rights granted under the Plan in accordance with New York Conversion Law and the Conversion Regulations.

(xviii) The Bank has been duly organized and is validly existing as a New York-chartered savings bank in mutual form and upon consummation of the Conversion will be a New York-chartered savings bank in stock form in both instances with full corporate power and authority to own, lease and operate its property and to conduct its business as described in the Prospectus and the General Disclosure Package and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby. The Company, the Bank and the Subsidiaries have obtained all licenses, permits and other governmental authorizations currently required for the conduct of their respective businesses or required for the conduct of their respective businesses as contemplated by the Holding Company Applications and the Conversion Applications and as described in the Prospectus and the General Disclosure Package, except where the failure to obtain such licenses, permits or other governmental authorizations would not have a Material Adverse Effect. All such licenses, permits and other governmental authorizations are in full force and effect and the Company, the Bank and the Subsidiaries are in all material respects in compliance therewith. None of the Company, the Bank or the Subsidiaries has received notice of any proceeding or action relating to the revocation or modification of any such license, permit or other governmental authorization which, singly or in the aggregate, if the

7

subject of an unfavorable decision, ruling or finding, might have a Material Adverse Effect. Each of the Bank and the Subsidiaries are duly qualified to transact business and are in good standing under the laws of its jurisdiction of organization and is qualified as a foreign corporation in any jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

(xix) The Bank is a member in good standing of the Federal Home Loan Bank of New York; the deposit accounts of the Bank are insured by the FDIC up to the applicable limits and upon consummation of the Conversion, the liquidation account for the benefit of eligible account holders and supplemental eligible account holders will be duly established in accordance with the requirements of the Plan and the Conversion Regulations.

(xx) The authorized capital stock of the Company consists of 200,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.01 per share (the “Company Preferred Stock”). No shares of Common Stock and no shares of Company Preferred Stock have been or will be issued and outstanding prior to the Closing Time. Upon consummation of the Conversion described in the Prospectus, the authorized capital stock of the Bank will be 10,000 shares of common stock, par value $1.00 per share (“Bank Common Stock”), and 1,000 shares of preferred stock, par value $1.00 per share (“Bank Preferred Stock”). No shares of Bank Common Stock and no shares of Bank Preferred Stock have been or will be issued prior to the Closing Time referred to in Section 2 hereof. As of the Closing Time referred to in Section 2 hereof, the shares of Bank Common Stock to be issued to the Company will have been duly authorized for issuance and, when issued and delivered by the Bank pursuant to the Plan against payment of the consideration described in the Plan and in the Prospectus and the General Disclosure Package, will be duly and validly issued and fully paid and nonassessable, and all such Bank Common Stock will be owned beneficially and of record by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; and the certificates representing the shares of the Bank Common Stock will conform with the requirements of applicable laws and regulations. The issuance of the Bank Common Stock is not subject to preemptive or similar rights and there are no other warrants, options or rights of any kind to acquire additional shares of Bank Common Stock or Bank Preferred Stock.

(xxi) The Company and the Bank have taken all corporate action necessary for them to execute, deliver and perform this Agreement and the transactions contemplated hereby, and this Agreement has been duly executed and delivered by, and is the valid and binding agreement of the Company and the Bank, assuming due execution by the Agent, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws and the availability of equitable remedies.

(xxii) Subsequent to the respective dates as of which information is given in the Registration Statement, the Prospectus and the General Disclosure Package and prior to the Closing Time, except as otherwise may be indicated or contemplated therein, neither the Company nor the Bank will have (A) except as otherwise set forth herein, issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings in the ordinary course of business from the same or similar sources and in similar amounts as indicated in the Prospectus and the General Disclosure Package or (B) entered into any transaction or series of transactions which is material in light of the business of the Company and the Bank, considered as one enterprise, excluding the origination, purchase and sale of loans or the purchase or sale of investment securities or mortgage-backed securities in the ordinary course of business consistent with past practice.

(xxiii) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement, the issuance of the Securities or the consummation of the Conversion that has not been obtained or will be obtained prior to the Closing Time, and a copy of which has been delivered to the Agent, except as may be required under the “blue sky” or state securities laws of various jurisdictions.

8

(xxiv) None of the Company, the Bank or any of the Subsidiaries is in violation of their respective articles of incorporation/organization certificate or bylaws (and the Bank will not be in violation of its amended organization certificate or bylaws in stock form upon consummation of the Conversion); and none of the Company, the Bank or any of the Subsidiaries is in default (nor has any event occurred which, with notice or lapse of time or both, would constitute a default) in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the Bank or any of the Subsidiaries is a party or by which it or either of them may be bound, or to which any of the property or assets of the Company, the Bank or any of the Subsidiaries is subject, except for such defaults that would not, individually or in the aggregate, have a Material Adverse Effect; and there are no contracts or documents of the Company, the Bank or any of the Subsidiaries that are required to be filed as exhibits to the Registration Statement, the Conversion Applications or the Holding Company Applications that have not been so filed or described.

(xxv) The Conversion and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate action on the part of the Company and the Bank and do not and will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or the Bank pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or the Bank is a party or by which it or either of them may be bound, or to which any of the property or assets of the Company or the Bank is subject, except for such conflicts, breaches or defaults that would not, individually or in the aggregate, have a Material Adverse Effect; nor will such action result in any violation of the provisions of the respective articles of incorporation or bylaws of the Company or the Bank, or any applicable law, administrative regulation or administrative or court decree.

(xxvi) No labor dispute with the employees of the Company or the Bank exists or, to the knowledge of the Company or the Bank, is imminent or threatened; and the Company and the Bank are not aware of any existing or threatened labor disturbance by the employees of any of its principal suppliers or contractors that might be expected to result in any Material Adverse Effect.

(xxvii) Each of the Company, the Bank and the Subsidiaries has good and marketable title to all properties and assets for which ownership is material to the business of the Company, the Bank or the Subsidiaries and to those properties and assets described in the Prospectus and the General Disclosure Package as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Prospectus and the General Disclosure Package and all of the leases and subleases material to the business of the Company, the Bank or the Subsidiaries under which the Company, the Bank or the Subsidiaries hold properties, including those described in the Prospectus and the General Disclosure Package, are valid and binding agreements of the Company, the Bank or the Subsidiaries, enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency or similar laws and availability of equitable remedies.

(xxviii) None of the Company, the Bank or the Subsidiaries is in violation of any order or directive from the FRB, the NYSDFS, the FDIC, the Commission or any regulatory authority to make any material change in the method of conducting its respective businesses; the Company, the Bank and the Subsidiaries have conducted and are conducting their business so as to comply in all material respects with all applicable statutes, regulations and administrative and court decrees (including, without limitation, all regulations, decisions, directives and orders of the FRB, the NYSDFS, the FDIC and the Commission). Neither the Company, the Bank nor any of the Subsidiaries is subject or is party to, or has received any notice or advice that either of them may become subject or party to, any investigation with

9

respect to any cease-and-desist order, agreement, consent agreement, memorandum of understanding or other regulatory enforcement action, proceeding or order with or by, or is a party to any commitment letter or similar undertaking to, or is subject to any directive by, or has been a recipient of any supervisory letter from, or has adopted any board resolutions at the request of, any Regulatory Agency (as defined below) that currently restricts in any material respect the conduct of their business or that in any material manner relates to their capital adequacy, their credit policies, their management or their business (each, a “Regulatory Agreement”), nor has the Company, the Bank or any of the Subsidiaries been advised by any Regulatory Agency that it is considering issuing or requesting any such Regulatory Agreement; and there is no unresolved violation, criticism or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of the Company, the Bank or any of the Subsidiaries that, in the reasonable judgment of the Company or the Bank, is expected to result in a Material Adverse Effect, or that might materially and adversely affect the properties or assets thereof or that might materially and adversely affect the consummation of the Conversion or the performance of this Agreement. As used herein, the term “Regulatory Agency” means any federal or state agency charged with the supervision or regulation of depository institutions or holding companies of depository institutions, or engaged in the insurance of depository institution deposits, or any court, administrative agency or commission or other governmental agency, authority or instrumentality having supervisory or regulatory authority with respect to the Company, the Bank or any of the Subsidiaries.

(xxix) There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company or the Bank, threatened, against or affecting the Company, the Bank or any of the Subsidiaries that is required to be disclosed in the Registration Statement (other than as disclosed therein), or that might result in any Material Adverse Effect, or that might materially and adversely affect the properties or assets thereof, the performance of this Agreement or the consummation of the Conversion; all pending legal or governmental proceedings to which the Company, the Bank or any of the Subsidiaries is a party or of which any of their respective property or assets is the subject that are not described in the Registration Statement, including ordinary routine litigation incidental to their business, are considered in the aggregate not material.

(xxx) The Company and the Bank have obtained (i) an opinion of its counsel, Luse Gorman, PC, with respect to the legality of the Securities and the Foundation Shares to be issued and the federal income tax consequences of the Conversion and (ii) the opinion of Crowe Horwath LLP with respect to the New York state tax consequences of the Conversion, copies of which are filed as exhibits to the Registration Statement; all material aspects of the aforesaid opinions is accurately summarized in the Prospectus and the General Disclosure Package; the facts and representations upon which such opinions are based are truthful, accurate and complete in all material respects; and neither the Company nor the Bank has taken or will take any action inconsistent therewith.

(xxxi) Neither the Company nor the Bank is and, upon completion of the Conversion and the Offerings and sale of the Securities and the application of the net proceeds therefrom, will be, required to be registered under the Investment Company Act of 1940, as amended.

(xxxii) All of the loans represented as assets on the most recent consolidated financial statements or selected financial information of the Bank and on the financial statements included in the Prospectus and the General Disclosure Package meet or are exempt from all requirements of federal, state or local law pertaining to lending, including, without limitation, truth in lending (including the requirements of Regulations Z and 12 C.F.R. Part 226), real estate settlement procedures, consumer credit protection, equal credit opportunity and all disclosure laws applicable to such loans, except for violations which, if asserted, would not result in a Material Adverse Effect.

10

(xxxiii) To the knowledge of the Company and the Bank, with the exception of the intended loan to the Bank’s ESOP by the Company to enable the ESOP to purchase Securities in an amount up to eight percent (8%) of the Common Stock that will be sold in the Offerings and issued to the Foundation, none of the Company, the Bank or their employees has made any payment of funds of the Company or the Bank as a loan for the purchase of the Common Stock or made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law.

(xxxiv) Each of the Bank and the Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(xxxv) The Company, the Bank and the Subsidiaries are in compliance in all material respects with the applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transaction Reporting Act of 1970, as amended, and the rules and regulations thereunder. The Bank has established compliance programs and is in compliance in all material respects with the requirements of the USA PATRIOT Act and all applicable regulations promulgated thereunder and any other applicable money laundering or similar or related laws and any related rules, regulations or guidelines issued, administered or enforced by any applicable governmental agency or regulatory authority. There is no charge, investigation, action, suit or proceeding before any court, regulatory authority or governmental agency or body pending or, to the knowledge of the Company and the Bank, threatened regarding the Bank’s compliance with the USA PATRIOT Act or any regulations promulgated thereunder and any other applicable money laundering or similar or related laws and any related rules, regulations or guidelines issued, administered or enforced by any applicable governmental agency or regulatory authority.

(xxxvi) None of the Company, the Bank or any Subsidiary, nor any properties owned or operated by the Company, the Bank or any Subsidiary, is in material violation of or liable under any Environmental Law (as defined below). There are no actions, suits or proceedings, or demands, claims, notices or investigations (including, without limitation, notices, demand letters or requests for information from any environmental agency) instituted or pending, or to the knowledge of the Company or the Bank threatened, relating to the liability of any property owned or operated by the Company, the Bank or any Subsidiary under any Environmental Law, except for such actions, suits or proceedings, or demands, claims, notices or investigations that, individually or in the aggregate, would not have a Material Adverse Effect. For purposes of this subsection, the term “Environmental Law” means any federal, state, local or foreign law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any regulatory authority relating to (i) the protection, preservation or restoration of the environment (including, without limitation, air, water, vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by type or by quantity, including any material containing any such substance as a component.

(xxxvii) The Company, the Bank and each Subsidiary have filed all federal, state and local income and franchise tax returns required to be filed and have made timely payments of all taxes shown as due and payable in respect of such returns, and no deficiency has been asserted with respect thereto by any taxing authority. The Company and the Bank have no knowledge of any tax deficiency that has been asserted or could be asserted against the Company, the Bank or any Subsidiary.

11

(xxxviii) The Company has submitted or will have submitted prior to Closing all notices required to consummate the Conversion and to have the Securities listed on the Nasdaq Stock Market effective as of the Closing Time referred to in Section 2 hereof.

(xxxix) At or prior to the Closing Time, the Company will have filed a Form 8-A for the Securities to be registered under Section 12(b) of the Exchange Act (the “Exchange Act Registration Statement”).

(xl) There are no affiliations or associations (as such terms are defined by the Financial Industry Regulatory Authority (“FINRA”)) between any member of FINRA and any of the Company’s or the Bank’s officers or directors. Neither the Company nor the Bank has: (i) issued any securities within the last 18 months (except for notes to evidence bank loans or other liabilities in the ordinary course of business or as described in the Prospectus and the General Disclosure Package); (ii) had any dealings with respect to sales of securities within the 12 months prior to the date hereof with any member of the FINRA, or any person related to or associated with such member, other than discussions and meetings relating to the Offerings and purchases and sales of U.S. government and agency and other securities in the ordinary course of business; or (iii) engaged any intermediary between the Agent and the Company and the Bank in connection with the Offerings, and no person is being compensated in any manner for such services.

(xli) The Bank and each Subsidiary carries, or is covered by, and the Company will carry, or be covered by, prior to Closing, insurance in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective properties as is customary for companies engaged in similar industries.

(xlii) The Company and the Bank have not relied on the Agent or its counsel for any legal, tax or accounting advice in connection with the Conversion.

(xliii) The records of eligible account holders, supplemental eligible account holders and other depositors of the Bank are accurate and complete in all material respects.

(xliv) The Company, the Bank and each Subsidiary are in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company, the Bank or any Subsidiary, respectively, would have any liability; each of the Company, the Bank and each Subsidiary has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”); and each “pension plan” for which the Company, the Bank and any Subsidiary would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, that would cause the loss of such qualification.

(xlv) The Company is in compliance with the applicable provisions of the Sarbanes-Oxley Act, the rules and regulations of the Commission thereunder, and the Nasdaq corporate governance rules applicable to the Company, and will use its best efforts to comply with those provisions of the Sarbanes-Oxley Act and the Nasdaq corporate governance rules that will become effective in the future upon their effectiveness.

12

(xlvi) No forward-looking statement (within the meaning of Section 27A of the Securities Act) contained in the Registration Statement, the General Disclosure Package, the Prospectus and any Issuer-Represented Free Writing Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(xlvii) All of the information, as may have been updated or amended, provided to the Agent or to counsel for the Agent by the Company and the Bank and their respective officers and directors in connection with letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules 5110 and 5121 is true, complete and correct.

(xlviii) Neither of the Company, the Bank nor any of their affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes. For purposes of this subsection, “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company or the Bank.

(xlix) Neither the Company or the Bank, nor any director, officer, employee or, to the knowledge of the Company or the Bank agent or affiliate thereof is (a) currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) or relevant sanctioning authority; (b) located, organized or resident in a country or territory that is the subject of such sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria); and (c) the Company will not, directly or indirectly, use the proceeds of the Offerings, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person, or engage in dealings or transactions with any person, or in any country, or territory, subject to any U.S. sanctions administered by OFAC or relevant sanctioning authority.

(l) Neither the Company nor any of its subsidiaries nor any director, officer or employee of the Company or any of its subsidiaries nor, to the knowledge of the Company or the Bank, any agent, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (b) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (c) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (d) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Bank and the Subsidiaries have instituted, maintain and enforce, and the Company, the Bank and the Subsidiaries will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.

(li) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; and (ii) are effective in all material respects to perform the functions for which they were established. There (i) are not any significant deficiencies in the design or operation of internal controls

13

that could adversely affect the Company’s ability to record, process, summarize, and report financial data or (ii) has not been any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls. Since September 30, 2016, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

(lii) Except as has not had and would not reasonably be expected to have a Material Adverse Effect:

(A) The Company and the Bank have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or the Bank satisfied, (i) all applicable federal, state and local laws, rules and regulations with respect to the origination, insuring, purchase, sale, pooling, servicing, subservicing, or filing of claims in connection with mortgage loans, including all laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company or the Bank and any Agency, Loan Investor or Insurer (as such terms are hereinafter defined), (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan; and

(B) No Agency, Loan Investor or Insurer has (i) claimed in writing that the Company or the Bank has violated or has not complied with the applicable underwriting standards with respect to mortgage loans sold by the Company or the Bank to a Loan Investor or Agency, or with respect to any sale of mortgage servicing rights to a Loan Investor, (ii) imposed in writing restrictions on the activities (including commitment authority) of the Company or the Bank or (iii) indicated in writing to the Company or the Bank that it has terminated or intends to terminate its relationship with the Company or the Bank for poor performance, poor loan quality or concern with respect to the Company’s or the Bank’s compliance with laws.

For purposes of hereof (X) “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal National Mortgage Association, the U.S. Department of Veterans’ Affairs, the Rural Development Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or the Bank or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities; (Y) “Loan Investor” means any person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Company or the Bank or a security backed by or representing an interest in any such mortgage loan; and (Z) “Insurer” means a person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Company or the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral.

(liii) Except as described in the Prospectus and the General Disclosure Package, there are no contractual encumbrances or contractual restrictions or regulatory restrictions on the ability (i) of the Company or the Bank to pay dividends or to make any other distributions on the Company’s or the Bank’s capital stock or (ii) of the Company or the Bank (A) to pay any indebtedness owed to the Company or the Bank, (B) to make any loans or advances to, or investments in, the Company or the Bank, subject to applicable law and regulation, or (C) to transfer any of its property or assets to the Company or the Bank.

14

(liv) The Foundation has been duly authorized and incorporated and is validly existing as a non-stock corporation in good standing under the laws of the State of Delaware with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; the Foundation will not be a bank holding company with the meaning of 12 C.F.R. Section 225.2(c) as a result of the issuance of shares of Common Stock to it in accordance with the terms of the Plan and in the amounts as described in the Prospectus; no approvals are required to establish the Foundation and to contribute the shares of Common Stock thereto as described in the Prospectus other than those obtained from the NYSDFS; except as specifically disclosed in the Prospectus, there are no agreements and/or understandings, written or oral, between the Company and the Bank on the one hand and the Foundation, on the other, with respect to the control, directly or indirectly, over the voting and the acquisition or disposition of the Foundation Shares; at the Closing Time, the Foundation Shares will have been duly authorized for issuance and, when issued and contributed by the Company pursuant to the Plan, will be duly and validly issued and fully paid and nonassessable. The issuance of the Foundation Shares to the Foundation pursuant to the Plan has been registered under the Securities Act pursuant to the Registration Statement.

(b) Any certificate signed by any officer of the Company or the Bank and delivered to the Agent or counsel for the Agent shall be deemed a representation and warranty by the Company or the Bank to the Agent and, for purposes of the opinions to be delivered to the Agent pursuant to Sections 5(b)(1) and 5(b)(2) hereof, to the counsel for the Company and the Agent, respectively, as to matters covered thereby.

SECTION 2. APPOINTMENT OF AGENT; SALE AND DELIVERY OF THE SECURITIES; CLOSING. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby appoints Sandler O’Neill (i) as its exclusive marketing agent to consult with and advise the Company, and to assist the Company with the solicitation of subscriptions and purchase orders for the Securities, in the Subscription Offering and the Community Offering; (ii) as sole book-running manager in connection with the solicitation of purchase orders for the Securities in the Syndicated Offering, if applicable, and (iii) as the sole book-running manager in the Public Offering, if applicable. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, Sandler O’Neill accepts such appointment and agrees to use its best efforts to assist the Company with the solicitation of subscriptions and purchase orders for Securities in the Subscription and Community and in any Syndicated Offering in accordance with this Agreement; provided, however, that the Agent shall not be obligated to take any action that is inconsistent with any applicable laws, regulations, decisions or orders.

The services to be rendered pursuant to this appointment include the following: (i) consulting as to the financial and securities marketing implications of the Plan; (ii) reviewing with the Board of Directors the financial impact of the Offerings on the Company, based upon the Appraiser’s appraisal of the Common Stock; (iii) reviewing all offering documents, including the Prospectus, stock order forms and related offering materials (it being understood that preparation and filing of such documents is the sole responsibility of the Company, the Bank and their counsel); (iv) assisting in the design and implementation of a marketing strategy for the Offerings; (v) assisting the Company’s and the Bank’s management in scheduling and preparing for meetings with potential investors and/or other broker-dealers in connection with the Offerings, including assistance in preparing presentation materials for such meetings; and (vi) providing such other general advice and assistance as may be reasonably necessary to promote the successful completion of the Offerings.

15

The appointment of the Agent hereunder shall terminate upon the earlier to occur of (i) forty-five (45) days after the last day of the Subscription Offering and, if held, the Community Offering, unless the Company and the Agent agree in writing to extend such period and any applicable regulator, if required, agrees to extend the period of time in which the Securities may be sold, or (ii) the receipt and acceptance of subscriptions and purchase orders for all of the Securities, or (iii) the completion of the Syndicated Offering or Public Offering, if applicable.

If any of the Securities remain available after the expiration of the Subscription Offering and, if held, the Community Offering, at the request of the Company and the Bank, the Agent will either (i) seek to form a syndicate of registered brokers or dealers (“Selected Dealers”) to assist in the solicitation of purchase orders of such Securities on a best efforts basis in a Syndicated Offering or (ii) enter into an underwriting agreement with the Company and the Bank (the “Underwriting Agreement”) for the Public Offering substantially in the form attached as Exhibit B to this Agreement. Sandler O’Neill will serve as sole book-running manager of any Syndicated Offering or Public Offering. The Agent will endeavor to distribute the Securities among the Selected Dealers or selected underwriters, as applicable, in a fashion that best meets the distribution objectives of the Company and the Bank and the requirements of the Plan, which may result in limiting the allocation of stock to certain Selected Dealers or selected underwriters, as applicable. It is understood that in no event shall the Agent be obligated to act as a Selected Dealer to enter into the Underwriting Agreement or to take or purchase any Securities except pursuant to the Underwriting Agreement.

In the event the Company is unable to sell at least the total minimum amount of the Securities, as set forth on the cover page of the Prospectus, within the period herein provided, this Agreement shall terminate and the Company shall refund promptly to any persons who have subscribed for any of the Securities the full amount that it may have received from them, together with interest as provided in the Prospectus and the General Disclosure Package, and no party to this Agreement shall have any obligation to the others hereunder, except for the obligations of the Company and the Bank as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as provided in Sections 6(b) and 7 hereof. Appropriate arrangements for promptly placing the funds received from subscriptions for Securities or other offers to purchase Securities in special interest-bearing accounts with the Bank until all Securities are sold and paid for were made by the Company prior to the commencement of the Subscription Offering, with provision for refund to the purchasers as set forth above, or for delivery to the Company if all Securities are sold.

If at least the total minimum amount of Securities, as set forth on the cover page of the Prospectus, are sold, the Company agrees to issue or have issued the Securities sold and to release for delivery certificates for such Securities or statements reflecting book entry ownership of such Securities at the Closing Time against payment therefor by release of funds from the special interest-bearing accounts referred to above. The closing shall be held at the offices of Luse Gorman PC, at 10:00 a.m., Eastern Time, or at such other place and time as shall be agreed upon by the parties hereto, on a business day to be agreed upon by the parties hereto. The Company shall notify the Agent by telephone, confirmed in writing, when funds shall have been received for all the Securities. Certificates or statements reflecting book-entry ownership of Securities shall be delivered directly to the purchasers thereof in accordance with their directions. Notwithstanding the foregoing, certificates or statements reflecting book-entry ownership of Securities purchased through Selected Dealers shall be made available to the Agent for inspection at least 24 hours prior to the Closing Time at such office as the Agent shall designate. The hour and date upon which the Company shall release for delivery all of the Securities, in accordance with the terms hereof, is herein called the “Closing Time.”

The Company will pay any stock issue and transfer taxes that may be payable with respect to the sale of the Securities.

16

In addition to the reimbursement of the expenses specified in Section 4 hereof, the Agent will receive:

(a) as compensation for its marketing agent services in the Subscription and Community Offerings, a fee of ninety basis points (0.90%) of the aggregate purchase price of the Securities sold in the Subscription Offering, excluding in each case shares purchased by or contributed to (i) any employee benefit plan or trust of the Company or the Bank established for the benefit of their respective directors, officers and employees, (ii) any director, officer or employee of the Company or the Bank or members of their immediate families (whether directly or through a business, trust or other entity controlled by such person) and (iii) the Foundation; and

(b) with respect to any Securities sold in the Syndicated Offering, an aggregate fee of five percent (5.0%) of the aggregate purchase price of Securities sold in the Syndicated Offering.

If this Agreement is terminated by the Agent in accordance with the provisions of Section 9(a) hereof or the Conversion is terminated by the Company, no fee shall be payable by the Company to the Agent; provided, however, that the Company shall reimburse the Agent in accordance with the provisions of Section 4 hereof for all of its reasonable out-of-pocket expenses up to $110,000, subject to increase to $125,000 in the event a Syndicated Offering or Public Offering is conducted, incurred prior to termination. In addition, the Company shall be obligated to pay the other fees and expenses as contemplated by the provisions of Section 4 hereof in the event of any such termination.

All fees payable to the Agent hereunder shall be payable in immediately available funds at the Closing Time, or upon the termination of this Agreement, as the case may be.

SECTION 3. COVENANTS OF THE COMPANY AND THE BANK. The Company and the Bank jointly and severally covenant with the Agent as follows:

(a) The Company and the Bank will prepare and file such amendments or supplements to the Registration Statement, the Prospectus, the Conversion Applications, the Holding Company Applications, and the Proxy Statement as may hereafter be required by the Securities Act Regulations or the Conversion Regulations or as may hereafter be requested by the Agent. Following completion of the Subscription and Community Offering, in the event of a Syndicated Offering or a Public Offering, the Company and the Bank will (i) promptly prepare and file with the Commission, if required, a post-effective amendment to the Registration Statement relating to the results of the Subscription and Community Offering, any additional information with respect to the proposed plan of distribution, including the Syndicated Offering or the Public Offering, if any, and any revised pricing information or (ii) if no such post-effective amendment is required, will file with the Commission a prospectus or prospectus supplement containing information relating to the results of the Subscription and Community Offering and pricing information pursuant to Rule 424 of the Securities Act Regulations, in either case in a form acceptable to the Agent. The Company and the Bank will notify the Agent immediately, and confirm the notice in writing, (i) of the effectiveness of any post-effective amendment of the Registration Statement, the filing of any supplement to the Prospectus and the filing of any amendment to the Conversion Applications or the Holding Company Applications, (ii) of the receipt of any comments from the NYSDFS, the FDIC, the FRB or the Commission with respect to the transactions contemplated by this Agreement or the Plan, (iii) of any request by the Commission, the NYSDFS, the FDIC, or the FRB for any amendment to the Registration Statement, the Conversion Applications or the Holding Company Applications or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the NYSDFS, the FDIC or the FRB of any order suspending its approval of the Conversion Applications or the Holding Company Applications or the initiation of any proceedings for that purpose, (v) of the issuance by the Commission or the NYSDFS of an order suspending the Offerings or the use of the Prospectus or any Issuer-Represented Free Writing Prospectus or the initiation or threatened initiation of

17

such proceedings, (vi) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, and (vii) of the receipt of any notice with respect to the suspension of any qualification of the Securities for offering or sale in any jurisdiction. The Company and the Bank will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

(b) The Company represents and agrees that, unless it obtains the prior consent of the Agent, and the Agent represents and agrees that, unless it obtains the prior consent of the Company, they have not made and will not make any offer relating to the Securities that would constitute an Issuer-Represented Free Writing Prospectus or that would constitute a “free writing prospectus,” as defined in Rule 405 of the Securities Act Regulations, required to be filed with the Commission. The Company represents that it has and will comply with the requirements of Rule 433 of the Securities Act Regulations applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Company need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the Securities Act without regard to Rule 172 or 173 of the Securities Act Regulations. If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus materially conflicted or would materially conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company will notify promptly the Agent so that any use of such Issuer-Represented Free Writing Prospectus may cease until it is amended or supplemented and the Company will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Agent expressly for use therein.

(c) The Company and the Bank will give the Agent notice of their intention to file or prepare any amendment to the Conversion Applications, the Holding Company Applications or the Registration Statement (including any post-effective amendment) or any amendment or supplement to the Prospectus (including any revised prospectus that the Company proposes for use in connection with any Syndicated Offering or Public Offering that differs from the prospectus on file at the Commission at the time the Registration Statement becomes effective, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the Securities Act Regulations), will furnish the Agent with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus to which the Agent or counsel for the Agent may reasonably object.

(d) The Company and the Bank will deliver to the Agent as many signed copies and as many conformed copies of the Holding Company Applications, the Conversion Applications and the Registration Statement as originally filed and of each amendment thereto (including non-confidential exhibits filed therewith or incorporated by reference therein) as the Agent may reasonably request, and from time to time such number of copies of the Prospectus as the Agent may reasonably request.

(e) During the period when the Prospectus is required to be delivered, the Company and the Bank will comply, at their own expense, with all requirements imposed upon them by the NYSDFS, the FDIC, the New York Conversion Law, by the applicable Conversion Regulations, as from time to time in force, and by the Nasdaq Stock Market, the Securities Act, the Securities Act Regulations, the Exchange Act, and the Exchange Act Regulations, including, without limitation, Regulation M under the Exchange Act, so far as necessary to permit the continuance of sales or dealing in shares of Common Stock during such period in accordance with the provisions hereof and the Prospectus.

18

(f) If any event or circumstance shall occur as a result of which it is necessary, in the reasonable opinion of counsel for the Agent, to amend or supplement the Registration Statement or Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or if it is necessary to amend or supplement the Prospectus to comply with applicable law and regulation, the Company and the Bank will forthwith amend or supplement the Registration Statement or Prospectus (in form and substance reasonably satisfactory to counsel for the Agent) so that, as so amended or supplemented, the Registration Statement or Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading or so the Prospectus will comply with applicable law and regulation, and the Company and the Bank will furnish to the Agent a reasonable number of copies of such amendment or supplement. For the purpose of this subsection, the Company and the Bank will each furnish such information with respect to itself as the Agent may from time to time reasonably request.

(g) The Company will take all necessary action, in cooperation with the Agent, to qualify the Securities and the Foundation Shares, to the extent applicable, for offering and sale under the applicable securities laws of such states of the United States and other jurisdictions as the Conversion Regulations may require and as the Agent and the Company have agreed; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement.

(h) The Company authorizes the Agent and any Selected Dealer to act as agents of the Company in distributing the Prospectus to persons entitled to receive subscription rights and other persons to be offered Securities having record addresses in the states or jurisdictions set forth in a survey of the securities or “blue sky” laws of the various jurisdictions in which the Offerings will be made (the “Blue Sky Survey”).

(i) The Company will make generally available to its security holders as soon as practicable, but not later than 60 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the Securities Act Regulations) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the “effective date” (as defined in said Rule 158) of the Registration Statement.

(j) During the period ending on the third anniversary of the date on which the closing of the transactions contemplated hereby occurs, the Company will furnish to its shareholders as soon as practicable after the end of each such fiscal year an annual report (including consolidated statements of financial condition and consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows, certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), consolidated summary financial information of the Company and the Bank for such quarter in reasonable detail. In addition, the Company will use its reasonable best efforts to make such annual report and quarterly consolidated summary financial information public through the issuance of appropriate press releases at the same time or prior to the time of the furnishing thereof to shareholders of the Company.

(k) During the period ending on the third anniversary of the date on which the closing of the transactions contemplated hereby occurs, the Company will furnish to the Agent (i) as soon as publicly available, a copy of each report or other document of the Company furnished generally to shareholders of the Company or furnished to or filed with the Commission under the Exchange Act or any national

19

securities exchange or system on which any class of securities of the Company is listed, and (ii) from time to time, such other information concerning the Company as the Agent may reasonably request. For purposes of this paragraph, any document filed electronically with the Commission shall be deemed furnished to the Agent.

(l) The Company and the Bank will (i) use their best efforts to complete the conditions precedent to the Offerings and the Conversion in accordance with the Plan, the applicable Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all material terms, conditions, requirements and provisions precedent to the Conversion and the Offerings imposed upon the Company or the Bank by the Commission, the NYSDFS, the FDIC, the FRB or any other regulatory authority or state securities (blue sky) authority, and to comply with those which the regulatory authority permits to be completed after the Conversion and the Offerings; and (ii) conduct the Conversion and the Offerings in the manner described in the Prospectus and in accordance with the Plan, the Conversion Regulations and all other applicable material laws, regulations, decisions and orders, including in compliance with all terms, conditions, requirements and provisions precedent to the Conversion and the Offerings imposed upon the Company and the Bank by the Commission, the NYSDFS, the FDIC, the FRB or any other regulatory or blue sky authority.

(m) The Company and the Bank will comply, at their own expense, with all requirements imposed by the Commission, the FRB, the NYSDFS, the FDIC and the Nasdaq Stock Market or pursuant to the applicable Securities Act Regulations and Conversion Regulations as from time to time in force.

(n) The Company will promptly inform the Agent upon its receipt of service with respect to any material litigation or administrative action instituted with respect to the Conversion or the Offerings.

(o) Each of the Company and the Bank will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus and the General Disclosure Package under “How We Intend to Use the Proceeds From the Offering.”

(p) The Company will report the use of proceeds from the Offerings on its first periodic report following the Closing Time filed pursuant to Sections 13(a) and 15(d) of the Exchange Act and on any subsequent periodic reports as may be required pursuant to Rule 463 of the Securities Act Regulations.

(q) The Company will maintain the effectiveness of the Exchange Act Registration Statement for not less than three years and will comply in all material respects with its filing obligations under the Exchange Act. For three years, the Company will use its best efforts to effect and maintain the listing of the Common Stock on the Nasdaq Stock Market and, once listed on the Nasdaq Stock Market, the Company will comply with all applicable listing standards required by the Nasdaq Stock Market.

(r) The Company and the Bank will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with FINRA Rules 5130 and 5131.

(s) Other than in connection with any employee benefit plan or arrangement described in the Prospectus and the General Disclosure Package, the Company will not, without the prior written consent of the Agent, sell or issue, contract to sell or otherwise dispose of, any shares of Common Stock other than the Securities and the Foundation Shares for a period of 180 days following the Closing Time.

(t) During the period beginning on the date hereof and ending on the later of the third anniversary of the Closing Time or the date on which the Agent receives full payment in satisfaction of any claim for indemnification or contribution to which they may be entitled pursuant to Sections 6 or 7

20

hereof, respectively, made prior to the third anniversary of the Closing Time, neither the Company nor the Bank shall, without the prior written consent of the Agent (which consent shall not be unreasonably withheld, conditioned or delayed), take or permit to be taken any action that could result in the Common Stock or the Bank Common Stock becoming subject to any security interest, mortgage, pledge, lien or encumbrance, with the exception of the intended loan to the Bank’s ESOP by the Company to enable the ESOP to purchase securities in an amount up to eight percent (8%) of the Common Stock that will be sold in the Offerings and issued to the Foundation.

(u) The Company and the Bank will comply with the conditions imposed by or agreed to with the FRB and the NYSDFS in connection with its approval of the Holding Company Applications, the NYSDFS in connection with its approval of the New York Conversion Application, including the Plan, and the FDIC in connection with its non-objection of the FDIC Notice.

(v) The Company shall not deliver the Securities or the Foundation Shares until the Company and the Bank have satisfied each condition set forth in Section 5 hereof, unless such condition is waived by the Agent.

(w) The Company or the Bank will furnish to the Agent as early as practicable prior to the Closing Time, but no later than two (2) full business days prior thereto, a copy of the latest available unaudited interim consolidated financial statements of the Bank, which have been read by Crowe Horwath LLP, as stated in their letters to be furnished pursuant to subsections (f) and (g) of Section 5 hereof.

(x) During the period in which the Prospectus is required to be delivered, each of the Company and the Bank will conduct its business in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all decisions, directives and orders of the Commission, the FRB, the NYSDFS, the FDIC and the Nasdaq Stock Market.

(y) The Company and the Bank will not amend the Plan in any manner that would affect adversely the sale of the Securities or the terms of this Agreement without the consent of the Agent.

(z) The Company and the Bank will not, prior to the Closing Time, incur any liability or obligation, direct or contingent, or enter into any material transaction, other than in the ordinary course of business consistent with past practice, except as contemplated by the Prospectus and the General Disclosure Package.

(aa) The Company and the Bank will use all reasonable efforts to comply with, or cause to be complied with, the conditions precedent to the obligations of the Agent specified in Section 5 hereof.

(bb) The Company and the Bank will provide the Agent with any information necessary to carry out the allocation of the Securities in the event of an oversubscription, and such information will be accurate and reliable in all material respects.

(cc) The Company and the Bank will notify the Agent when funds have been received for the minimum number of Securities set forth in the Prospectus.

(dd) The Company and the Bank shall use their best efforts to ensure that the Foundation submits within the time frames required by applicable law a request to the Internal Revenue Service to be recognized as a tax-exempt organization under Section 501(c)(3) of the Code; the Company and the Bank will take no action which may reasonably be expected to result in the possible loss of the Foundation’s tax-exempt status; and neither the Company nor the Bank will contribute any additional assets to the Foundation until such time that such additional contributions will be deductible for federal and state income tax purposes.

21

SECTION 4. PAYMENT OF EXPENSES. The Company and the Bank jointly and severally agree to pay all expenses incident to the performance of their obligations under this Agreement, including but not limited to (i) the cost of obtaining all securities and bank regulatory approvals, including any required FINRA filing fees, (ii) the cost of printing and distributing the Offering materials, (iii) the costs of Blue Sky qualification (including fees and expenses of Blue Sky counsel) of the Securities in the various states, (iv) the fees and expenses incurred in connection with obtaining the listing of the Securities on the Nasdaq Stock Market, (v) all fees and disbursements of the Company’s counsel, accountants and other advisors, and (vi) the establishment and operational expenses for the Stock Information Center (e.g. postage, telephones, supplies, temporary employees, etc.). In the event the Agent incurs any such fees and expenses on behalf of the Company or the Bank, the Bank will reimburse the Agent for such fees and expenses whether or not the Conversion is consummated; provided however, that the Agent shall not incur any substantial expenses on behalf of the Company or the Bank pursuant to this section without prior approval of the Bank.

The Company and the Bank jointly and severally agree to pay certain expenses incident to the performance of the Agent’s obligations under this Agreement, regardless of whether the Conversion is consummated, including (i) the filing fees paid or incurred by the Agent in connection with all filings with FINRA, (ii) all reasonable documented out-of-pocket expenses up to $110,000 incurred by the Agent in connection with its services as marketing agent as described above including, without limitation, legal fees and expenses, travel, meals, lodging, postage, syndication and documentation expenses, if no Syndicated Offering occurs and up to $125,000 if a Syndicated Offering or Public Offering occurs, and (iii) reasonable out-of-pocket expenses up to $25,000 as records management agent; provided, however, that the Agent shall document such expenses to the reasonable satisfaction of the Company and the Bank. All fees and expenses to which the Agent is entitled to reimbursement under this paragraph of this Section 4 shall be due and payable upon receipt by the Company or the Bank of a written accounting therefor setting forth in reasonable detail the expenses incurred by the Agent.

SECTION 5. CONDITIONS OF AGENT’S OBLIGATIONS. The Company, the Bank and the Agent agree that the issuance and the sale of Securities and all obligations of the Agent hereunder are subject to the accuracy of the representations and warranties of the Company and the Bank herein contained as of the date hereof and the Closing Time, to the accuracy of the statements of officers and directors of the Company and the officers and trustees of Bank made pursuant to the provisions hereof, to the performance by the Company and the Bank of their obligations hereunder, and to the following further conditions:

(a) No stop order suspending the effectiveness of the Registration Statement, including any post-effective amendment thereto, shall have been issued under the Securities Act or proceedings therefor initiated or, to the knowledge of the Company, threatened by the Commission, no order suspending the Offerings or authorization for final use of the Prospectus, including any prospectus included in a post-effective amendment to the Registration Statement, shall have been issued or proceedings therefor initiated or, to the knowledge of the Company, threatened by the Commission, the NYSDFS, the FDIC or the FRB and no order suspending the sale of the Securities in any jurisdiction shall have been issued.

(b) At the Closing Time, the Agent shall have received:

(1) The favorable opinion, dated as of the Closing Time, of Luse Gorman, PC, counsel for the Company and the Bank, in form and substance satisfactory to counsel for the Agent, as attached hereto as Exhibit C.

22

(2) The favorable opinion, dated as of the Closing Time, of Silver, Freedman, Taff & Tiernan LLP, counsel for the Agent, as to such matters as the Agent may reasonably require.

(3) In addition to giving their opinions required by subsections (b)(l) and (b)(2), respectively, of this Section, Luse Gorman, PC and Silver, Freedman, Taff & Tiernan LLP shall each additionally state that nothing has come to their attention that would lead them to believe that the Registration Statement (except for financial statements and schedules and other financial, pro forma or statistical data included therein or omitted therefrom, as to which counsel need make no statement), at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except for financial statements and schedules and other financial, pro forma or statistical data included therein or omitted therefrom, as to which counsel need make no statement), at the time the Registration Statement became effective, as of the date of the Prospectus or at the Closing Time, or (if applicable) that the General Disclosure Package as of the Applicable Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In giving their opinions, Luse Gorman, PC and Silver, Freedman, Taff & Tiernan LLP may rely as to matters of fact on certificates of officers and directors of the Company and the Bank and certificates of public officials. Silver, Freedman, Taff & Tiernan LLP may also rely on the opinion of Luse Gorman, PC.

(c) At the Closing Time referred to in Section 2 hereof, the Company and the Bank shall have completed in all material respects the conditions precedent to the Conversion in accordance with the Plan, the applicable Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Conversion imposed upon the Company or the Bank by the FRB, the NYSDFS or the FDIC or any other regulatory authority other than those which the FRB, the NYSDFS or the FDIC or any such other regulatory authority permit to be completed after the Conversion.

(d) At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement and the Prospectus, any Material Adverse Effect, whether or not arising in the ordinary course of business, and the Agent shall have received a certificate of the Chief Executive Officer of the Company and the Bank and the Chief Financial Officer of the Company and the Bank, dated as of Closing Time, to the effect that (i) there has been no such Material Adverse Effect, (ii) there shall have been no material transaction entered into by the Company or the Bank from the latest date as of which the financial condition of the Company or the Bank, as set forth in the Registration Statement, the Prospectus and the General Disclosure Package other than transactions referred to or contemplated therein and transactions in the ordinary course of business consistent with past practice, (iii) neither the Company nor the Bank shall have received from the FRB, the NYSDFS or the FDIC any order or direction (oral or written) to make any material change in the method of conducting its business with which it has not complied (which order or direction, if any, shall have been disclosed in writing to the Agent) or which materially and adversely would affect the business, financial condition, results of operations or prospects of the Company and the Bank, considered as one enterprise, (iv) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (v) each of the Company and the Bank have complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Time, (vi) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the knowledge of the Company or the Bank, threatened by the Commission, (vii) no order suspending the NYSDFS’ approval of the Conversion Applications or the FRB’s or NYSDFS’ approval of the Holding

23

Company Applications or the transactions contemplated thereby has been issued and no proceedings for that purpose have been initiated or, to the knowledge of the Company or the Bank, threatened by the NYSDFS or the FRB and no person has sought to obtain regulatory or judicial review of the action of the NYSDFS in approving the Plan in accordance with the New York Conversion Law nor has any person sought to obtain regulatory or judicial review of the action of the NYSDFS in approving the Conversion Applications or the FRB or the NYSDFS in approving the Holding Company Applications, and (viii) no order suspending the Subscription and Community Offering, the Syndicated Offering or the Public Offering or authorization for use of the Prospectus has been issued and no proceedings for that purpose have been initiated by the NYSDFS, the FDIC or the FRB.

(e) At the Closing Time, the Agent shall have received a certificate of the Chief Executive Officer of the Company and the Bank and the Chief Financial Officer of the Company and the Bank, dated as of Closing Time, to the effect that (i) they have reviewed the contents of the Registration Statement, the Prospectus and the General Disclosure Package; (ii) based on each of their knowledge, the Registration Statement, the Prospectus and the General Disclosure Package do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which such statements were made, not misleading; (iii) based on each of their knowledge, the financial statements and other financial information included in the Registration Statement, the Prospectus and the General Disclosure Package fairly present the financial condition and results of operations of the Bank as of and for the dates and periods covered by the Registration Statement and the Prospectus; (iv) they are responsible for establishing and maintaining disclosure controls and procedures; (v) they have designed such disclosure controls and procedures to ensure that material information relating to the Company and the Bank is made known to them.

(f) As of the date hereof, the Agent shall have received from Crowe Horwath LLP a letter dated such date, in form and substance satisfactory to the Agent, to the effect that: (i) they are independent public accountants with respect to the Company and the Bank within the meaning of the Code of Ethics of the AICPA, the Securities Act and the Securities Act Regulations and the Conversion Regulations, they are registered with the PCAOB, and they are not in violation of the auditor independence requirements of the Sarbanes-Oxley Act; (ii) it is their opinion that the consolidated financial statements and supporting schedules included in the Registration Statement and covered by their opinions therein comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Securities Act Regulations; (iii) based upon limited procedures as agreed upon by the Agent and Crowe Horwath LLP set forth in detail in such letter, nothing has come to their attention which causes them to believe that, except as set forth in such letter, (A) the unaudited consolidated financial statements and supporting schedules of the Bank included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act, the Securities Act Regulations and the Conversion Regulations or are not presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement and the Prospectus, (B) the unaudited amounts of net interest income and net income set forth under “Selected Consolidated Financial and Other Data” or under “Recent Developments” in the Prospectus and the General Disclosure Package do not agree with the amounts set forth in unaudited consolidated financial statements as of and for the dates and periods presented under such captions or such amounts were not determined on a basis substantially consistent with that used in determining the corresponding amounts in the audited consolidated financial statements included in the Registration Statement, the Prospectus and the General Disclosure Package, (C) at a specified date not more than five (5) business days prior to the date of this Agreement, there has been any increase in the long-term or short-term debt of the Bank or any decrease in consolidated total assets, the allowance for loan losses, total deposits or retained earnings of the Bank, in each case as compared with the amounts shown in the December 31, 2016 unaudited consolidated statements of financial condition presented under the “Recent Developments” caption in the Registration

24

Statement or, (D) during the period from December 31, 2016 to a specified date not more than five (5) business days prior to the date of this Agreement, there were any decreases, as compared with the corresponding period in the preceding fiscal year, in total interest income, net interest income, net interest income after provision for loan losses, income before income tax expense or net income of the Bank, except in all instances for increases or decreases which the Registration Statement, the Prospectus and the General Disclosure Package disclose have occurred or may occur; and (iv) in addition to the examination referred to in their opinions and the limited procedures referred to in clause (iii) above, they have carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information that are included in the Registration Statement, Prospectus and the General Disclosure Package and that are specified by the Agent, and have found such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Company and the Bank identified in such letter.

(g) At the Closing Time, the Agent shall have received from Crowe Horwath LLP a letter dated as of the Closing Time, to the effect that they reaffirm the statements made in the letters furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than five (5) business days prior to the Closing Time.

(h) At the Closing Time, the Securities and the Foundation Shares shall have been approved for listing on the Nasdaq Stock Market.

(i) At the Closing Time, the Bank shall have received a letter from the Appraiser, dated as of the Closing Time, confirming its appraisal.

(j) At the Closing Time, counsel for the Agent shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities and the issuance and contribution of the Foundation Shares as herein contemplated shall be satisfactory in form and substance to the Agent and counsel for the Agent.

(k) At any time prior to the Closing Time, (i) there shall not have occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in the judgment of the Agent, are so material and adverse as to make it impracticable to market the Securities or to enforce contracts, including subscriptions or orders, for the sale of the Securities, and (ii) trading generally on any of the NYSE MKT, the New York Stock Exchange or the Nasdaq shall not have been suspended, and minimum or maximum prices for trading shall not have been fixed, or maximum ranges for prices for securities have been required, by any of said Exchanges or by order of the Commission or any other governmental authority, and a banking moratorium shall not have been declared by either Federal or New York authorities.

SECTION 6. INDEMNIFICATION.

(a) The Company and the Bank, jointly and severally, agree to indemnify and hold harmless the Agent, each person, if any, who controls the Agent, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and its respective partners, directors, officers, employees and agents as follows:

(i) from and against any and all loss, liability, claim, judgment, damage and expense whatsoever, as incurred, related to or arising out of the Conversion (including the establishment of the Foundation and the contribution of the Foundation Shares thereto by the Company) or any action taken by the Agent where acting as agent of the Company or the Bank or otherwise as described in Section 2 hereof;

25

(ii) from and against any and all loss, liability, claim, judgment, damage and expense whatsoever, as incurred, based upon or arising out of (A) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, the General Disclosure Package, any Issuer-Represented Free Writing Prospectus, the Proxy Statement, or any amendment or supplement thereto (including any post-effective amendment), (B) the omission or alleged omission to state a material fact required to be stated in the Registration, the Prospectus or the General Disclosure Package or necessary to make the statements therein not misleading or (C) any omission or alleged omission from the Prospectus, the General Disclosure Package, any Issuer-Represented Free Writing Prospectus or the Proxy Statement to state therein a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading;

(iii) from and against any and all loss, liability, claim, judgment, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever described in clauses (i) or (ii) above, if such settlement is effected with the written consent of the Company or the Bank, which consent shall not be unreasonably withheld; and

(iv) from and against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and disbursements of counsel chosen by the Agent), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation, proceeding or inquiry by any governmental agency or body, commenced or threatened, or any claim pending or threatened whatsoever described in clauses (i) or (ii) above, to the extent that any such expense is not paid under clause (i), (ii) or (iii) above;

provided, however, that the indemnification provided for in this paragraph (a) shall not apply to any loss, liability, claim, judgment, damage or expense that arises out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or the General Disclosure Package or any Issuer-Represented Free Writing Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading which was made in reliance upon and in conformity with the written information furnished to the Company by the Agent expressly for use therein, provided that the Company and the Bank hereby acknowledge and agree that the only information that the Agent has furnished to the Company consists solely of the information set forth in the second paragraph of the section “The Conversion and Offering-Plan of Distribution; Selling Agent and Underwriting Compensation” in the Prospectus, the second sentence of the section “Summary — Market for Common Stock,” the third sentence of the section “Risk Factors — Risks Related to This Offering — We have never issued common stock to the public, and there is no guarantee that a liquid market will develop,” and in the third sentence of the section “Market for the Common Stock.” (the “Agent Information”). To the extent required by law, the indemnification provided for in this paragraph (a) shall be subject to and limited by Section 23A of the Federal Reserve Act, as amended and (b) Part 359 of the Regulations of the FDIC.

(b) The Agent agrees to indemnify and hold harmless the Company and the Bank, their directors or trustees, as applicable, each of their officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, judgment, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to

26

untrue statements or omissions, or alleged untrue statements or omissions, of a material fact made in the Prospectus or the General Disclosure Package or any Issuer-Represented Free Writing Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Agent Information.

(c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability that it may have otherwise than on account of this indemnity agreement. If any such action shall be brought or asserted against an indemnified party and such indemnified party shall have notified the indemnifying party thereof, the indemnifying party shall retain counsel reasonably satisfactory to the indemnified party (who shall not, without the consent of the indemnified party, be counsel to the indemnifying party) to represent the indemnified party in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may be legal defenses available to such indemnified party that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. An indemnifying party may participate at its own expense in the defense of any such action. The indemnifying party shall not be liable for the fees and expenses of more than one counsel (in addition to no more than one local counsel in each separate jurisdiction in which any action or proceeding is commenced) separate from such indemnifying party’s own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. Notwithstanding anything to the contrary in this Section 6, the indemnifying party shall not, without the prior written consent of an indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened action in respect of which indemnity could have been sought hereunder by such indemnified party unless (i) such settlement includes an unconditional release of such indemnified party in form and substance satisfactory to such indemnified party from all liability on claims that are the subject matter of such action and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) The Company and the Bank also agree that the Agent shall not have any liability (whether direct or indirect, in contract or tort or otherwise) to the Bank, the Company and its security holders or the Bank’s or the Company’s creditors relating to or arising out of the engagement of the Agent pursuant to, or the performance by the Agent of the services contemplated by, this Agreement, except to the extent that any liability is found in a final judgment by a court of competent jurisdiction to have resulted primarily from the Agent’s bad faith, willful misconduct or gross negligence.

(e) In addition to, and without limiting, the provisions of Section (6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or any of its partners, directors, officers, employees, affiliates or agents is requested or required to appear as a witness or otherwise gives testimony in any action, proceeding, investigation or inquiry brought by or on behalf of or against the Company, the Bank, the Agent or any of its affiliates or any participant in the transactions contemplated hereby in which the Agent or such person or agent is not named as a defendant, the Company and the Bank jointly and severally agree to reimburse the Agent and its partners, directors, officers, employees or agents for all reasonable and necessary out-of-pocket expenses incurred by them in connection with preparing or appearing as a witness or otherwise giving testimony and to compensate the Agent and its partners, directors, officers, employees or agents in an amount to be mutually agreed upon.

27

SECTION 7. CONTRIBUTION. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 6 hereof is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms or is insufficient in respect of any losses, liabilities, claims, judgments, damages or expenses referred to therein, the Company, the Bank, and the Agent shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company or the Bank and the Agent, as incurred, in such proportions (i) that the Agent is responsible for that portion represented by the percentage that the maximum aggregate marketing fees appearing on the cover page of the Prospectus bears to the maximum aggregate gross proceeds appearing thereon and the Company and the Bank are jointly and severally responsible for the balance or (ii) if, but only if, the allocation provided for in clause (i) is for any reason held unenforceable, in such proportion as is appropriate to reflect not only the relative benefits to the Company and the Bank on the one hand and the Agent on the other, as reflected in clause (i), but also the relative fault of the Company and the Bank on the one hand and the Agent on the other, as well as any other relevant equitable considerations; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and its respective partners, directors, officers, employees, affiliates and agents shall have the same rights to contribution as the Agent, and each director of the Company and each trustee of the Bank, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company or the Bank within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company and the Bank. Notwithstanding anything to the contrary set forth herein, to the extent permitted by applicable law, in no event shall the Agent be required to contribute an aggregate amount in excess of the aggregate marketing fees to which the Agent is entitled and actually paid pursuant to this Agreement.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Company or the Bank submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Agent or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities.

SECTION 9. TERMINATION OF AGREEMENT

(a) The Agent may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, since the date of this Agreement or since the respective dates as of which information is given in the Registration Statement, any Material Adverse Effect, whether or not arising in the ordinary course of business, (ii) if there has occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in the judgment of the Agent, are so material and adverse as to make it impracticable to market the Securities or to enforce contracts, including subscriptions or orders, for the sale of the Securities, (iii) if trading generally on the Nasdaq, the NYSE MKT or the New York Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by any of said Exchanges or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either Federal or New York authorities, (iv) if any condition specified in Section 5 hereof shall not have been fulfilled when and as required to be fulfilled; (v) if there shall have been such material adverse change in the condition or prospects of the Company or the Bank or the

28

prospective market for the Company’s Securities as in the Agent’s good faith opinion would make it inadvisable to proceed with the offering, sale or delivery of the Securities; (vi) if, in the Agent’s good faith opinion, the aggregate price for the Securities established by the Appraiser is not reasonable or equitable under then prevailing market conditions, or (vii) if the Conversion is not consummated on or prior to June 30, 2017.

(b) If this Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Sections 2 and 4 hereof relating to the reimbursement of expenses and except that the provisions of Sections 6 and 7 hereof shall survive any termination of this Agreement.

SECTION 10. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Agent shall be directed to 1251 Avenue of the Americas, 6 ^th Floor, New York, New York 10020, attention of General Counsel, with a copy to Martin L. Meyrowitz, P.C. at Silver, Freedman, Taff & Tiernan LLP, 3299 K Street, N.W., Suite 100, Washington, D.C. 20007; notices to the Company and the Bank shall be directed to either of them at 2651 Strang Boulevard, Suite 100, Yorktown Heights, New York 10598, attention of Joseph Roberto, Chairman, President and Chief Executive Officer, with a copy to Kip Weissman, Esq., at Luse Gorman, PC, 5335 Wisconsin Avenue Suite 780, Washington, D.C. 20015.

SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be binding upon the Agent, the Company and the Bank and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Agent, the Company and the Bank and their respective successors and the controlling persons and the partners, officers, directors, trustees, employees, affiliates and agents referred to in Sections 6 and 7 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein or therein contained. This Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Agent, the Company and the Bank and their respective successors, and said controlling persons, partners, officers, directors and trustees and their heirs, partners, legal representatives, and for the benefit of no other person, firm or corporation.

SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire understanding of the parties hereto with reference to the transactions contemplated hereby and supersedes any and all other oral or written agreements heretofore made, except for (i) the engagement letter dated August 17, 2016, by and between Sandler O’Neill and the Bank, relating to Sandler O’Neill’s service as records management agent in connection with the Conversion and (ii) the Underwriting Agreement, if entered into in connection with the Public Offering. No waiver, amendment or other modification of this Agreement shall be effective unless in writing and signed by the parties hereto.

SECTION 13. GOVERNING LAW AND TIME. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State without regard to the conflicts of laws provisions thereof. Unless otherwise noted, specified times of day refer to Eastern time.

SECTION 14. SEVERABILITY. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

29

SECTION 15. HEADINGS. Section headings are not to be considered part of this Agreement, are for convenience and reference only, and are not to be deemed to be full or accurate descriptions of the contents of any paragraph or subparagraph.

[The next page is the signature page]

30

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent on the one hand, and the Company and the Bank on the other in accordance with its terms.

Very truly yours,
PCSB FINANCIAL CORPORATION
(a Maryland corporation)
By:
	Joseph Roberto
	Chairman, President and Chief Executive Officer
PCSB BANK
By:
	Joseph Roberto
	Chairman, President and Chief Executive Officer

CONFIRMED AND ACCEPTED
As of date first above written:
SANDLER O’NEILL & PARTNERS, L.P.
By:	Sandler O’Neill & Partners Corp.,
	the sole general partner
By:
Name:
	Authorized Signatory

31

EXHIBIT A TO AGENCY AGREEMENT

SUBSIDIARIES

PCSB Funding Corp.

PCSB Commercial Bank

PCSB Realty, Ltd.

A-1

EXHIBIT B TO AGENCY AGREEMENT

FORM OF UNDERWRITING AGREEMENT

Shares

PCSB Financial Corporation

(a Maryland corporation)

Common Stock

(par value $0.01 per share)

UNDERWRITING AGREEMENT

                    , 2017

SANDLER O’NEILL & PARTNERS, L.P.

AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS

C/O SANDLER O’ NEILL & PARTNERS, L.P.

1251 Avenue of the Americas, 6^th Floor

New York, New York 10020

Ladies and Gentlemen:

PCSB Financial Corporation, a Maryland corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”), for whom Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”) is acting as representative (in such capacity, the “Representative”), an aggregate of [            ] shares (the “Shares”) of the common stock, par value $0.01 per share (“Common Stock”), of the Company. The shares of Common Stock to be sold by the Company in the Offerings (as hereinafter defined), including the Shares being sold pursuant to this Agreement, are hereinafter referred to collectively as the “Securities.” In addition, as described herein, the Company will contribute a number of shares of Common Securities to PCSB Community Foundation (the “Foundation”) (such shares hereinafter being referred to as the “Foundation Shares”), plus an amount of cash so that the total contribution will equal $5.0 million, based on the offering price of $10.00 per share.

The Securities are being sold and the Foundation Shares are being contributed all in accordance with the Plan of Conversion (the “Plan”) adopted by the Board of Trustees of PCSB Bank, a New York-chartered mutual savings bank (the “Bank”), pursuant to which the Bank intends to convert from a New York-chartered mutual savings bank to a New York-chartered stock savings bank and to issue all of its stock to the Company.

Pursuant to the Plan, the Company offered to certain depositors of the Bank and to the Bank’s tax qualified employee benefit plans, including the Bank’s tax qualified employee savings and stock ownership plan (the “ESOP”) and the Bank’s 401(k) Savings Plan (the “401(k) Plan” and collectively with the ESOP, the “Employee Plans”), rights to subscribe for the Securities in a subscription offering (the “Subscription Offering”). In addition, the Securities were offered to certain members of the general public in a community offering and/or a syndicate community offering (collectively, the “Community Offering”). The Community Offering, together with the Subscription Offering, are herein referred to as the “Subscription and Community Offering.” The Subscription and Community Offering, and the

B-1

underwritten public offering (“Public Offering”) to which this Agreement relates, are hereinafter referred to collectively as the “Offerings.” The conversion of the Bank from mutual to stock form, the acquisition of the capital stock of the Bank by the Company and the Offerings are referred to herein collectively as the “Conversion.”

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (No. 333- 215052), including a related prospectus, for the registration of the sale of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), has filed such amendments thereto, if any, and such amended prospectuses as may have been required to the date hereof by the Commission in order to declare such registration statement effective, and will file such additional amendments thereto and such amended prospectuses and prospectus supplements as may hereafter be required. Such registration statement (as amended to date, if applicable, and as from time to time amended or supplemented hereafter), including post-effective amendments thereto containing the preliminary prospectus (the “Preliminary Prospectus”) as defined in Rule 430A of the rules and regulations of the Commission promulgated under the Securities Act, as from time to time amended or supplemented pursuant to the Securities Act or otherwise (the “Securities Act Regulations”) for the Public Offering and the prospectuses constituting a part thereof (including in each case all documents incorporated or deemed to be incorporated by reference therein and the information, if any, deemed to be a part thereof pursuant to the Securities Act Regulations, including all information deemed to be part of the Registration Statement pursuant to Rule 430A of the Securities Act Regulations as well as the Preliminary Prospectus contained in a post-effective amendment to the Registration Statement or a new registration statement and the prospectus filed pursuant to Rule 430A and Rule 424(b) of the Securities Act Regulations for use in the Public Offering), are hereinafter referred to as the “Registration Statement” and the “Prospectus,” respectively, except that if any revised prospectus shall be used by the Company in connection with the Public Offering which differs from the Prospectus on file at the Commission at the time the Registration Statement becomes effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the Securities Act Regulations), the term “Prospectus” shall refer to such revised prospectus from and after the time it is first provided to the Representative for such use in connection with the Public Offering of the Shares by the Underwriters.

Concurrently with the execution of this Agreement, the Company is delivering to the Representative copies of the Prospectus of the Company to be used in the Public Offering. Such prospectus contains information with respect to the Bank, the Company and the Common Stock.

SECTION 1. REPRESENTATIONS AND WARRANTIES.

(a) The Company the Bank and the Bank jointly and severally represent and warrant to the Representative as of the date hereof as follows:

(i) The Registration Statement has been declared effective by the Commission, no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the knowledge of the Company and the Bank, threatened by the Commission. At the time the Registration Statement, including any post-effective amendment thereto, became effective and at the Time of Delivery referred to in Section 2 hereof, the Registration Statement complied and will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus as of the date hereof does not, and at the Time of Delivery referred to in Section 2 hereof will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the

B-2

Registration Statement or Prospectus made in reliance upon and in conformity with information with respect to the Underwriters furnished to the Company in writing by the Representative or its counsel expressly for use in the Registration Statement or Prospectus which the Company and the Bank agree consists solely of the Underwriters’ Information (as hereinafter defined) described as such in Section 6(a) hereof.

(ii) At the time of filing the Registration Statement relating to the offering of the Shares and as of the date hereof, the Company was not, and is not, an ineligible issuer, as defined in Rule 405 of the Securities Act Regulations. At the time of the filing of the Registration Statement and at the time of the use of any issuer free writing prospectus, as defined in Rule 433(h) of the Securities Act Regulations, the Company met the conditions required by Rules 164 and 433 of the Securities Act Regulations for the use of a free writing prospectus. If required to be filed, the Company has filed any issuer free writing prospectus related to the Securities at the time it was required to be filed under Rule 433 of the Securities Act Regulations and, if not required to be filed, it has retained such free writing prospectus in the Company’s records pursuant to Rule 433(g) of the Securities Act Regulations and, if any issuer free writing prospectus is used after the date hereof in connection with the offering of the Securities, the Company will file or retain such free writing prospectus as required by Rule 433 of the Securities Act Regulations.

(iii) As of the Applicable Time, neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the Applicable Time, the Statutory Prospectus, and the final pricing information included on the cover page of the Prospectus, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus or the Registration Statement relating to the Securities or any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Representative expressly for use therein, it being understood and agreed that the only information furnished by the Underwriters consists of the Underwriters’ Information described in Section 6(a) hereof. As used in this paragraph and elsewhere in this Agreement:

1. “Applicable Time” means [    ]:00 [a./p.] m., Eastern Time, on the date of this Agreement.

2. “Statutory Prospectus”, as of any time, means the preliminary prospectus relating to the Shares that is included in the Registration Statement relating to the Shares immediately prior to the Applicable Time, including any document incorporated by reference therein.

3. “Issuer-Represented Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433(h) of the Securities Act Regulations, relating to the Securities. The term does not include any writing exempted from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the Securities Act, without regard to Rule 172 or Rule 173 of the Securities Act Regulations.

4. “Issuer-Represented General Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors.

5. “Issuer-Represented Limited-Use Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus.

B-3

The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any “bona fide electronic road show,” as defined in Rule 433 of the Securities Act Regulations, that is made available without restriction pursuant to Rule 433(d)(8)(ii) of the Securities Act Regulations or otherwise, even though not required to be filed with the Commission.

6. “Permitted Free Writing Prospectus” means any free writing prospectus consented to by the Company and the Representative.

(iv) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offerings and sale of the Securities or until any earlier date that the Company notified or notifies the Representative (as described in the next sentence), did not, does not and will not include any information that materially conflicted, conflicts or will conflict with the information contained in the Registration Statement relating to the offering of the Securities, including any document incorporated by reference therein that has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus materially conflicted, conflicts or would conflict with the information contained in the Registration Statement relating to the offering of the Securities or included, includes or would include an untrue statement of a material fact or omitted, omits or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will notify promptly the Representative so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Representative expressly for use therein.

(v) The Preliminary Prospectus, the Prospectus and each Issuer-Represented Free Writing Prospectus when filed, if filed by electronic transmission, pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical to the copy thereof delivered to the Representative for use in connection with the offer and sale of the Shares.

(vi) The Company has filed with the Board of Governors of the Federal Reserve System (the “FRB”) an application on Form FR Y-3 for approval, pursuant to Section 3(a)(1) of the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and the regulations promulgated thereunder, and has filed pursuant to Section 143-b of the New York Banking Law (as defined below) with the NYSDFS (as defined below) a holding company application for the Company to become a bank holding company with respect to the Bank (together the “Holding Company Applications”). The Company has received written notice from the FRB and the NYSDFS of their respective approvals of the Holding Company Applications, such approvals remain in full force and effect, no order has been issued by the FRB or the NYSDFS suspending or revoking such approval and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the FRB or the NYSDFS. At the date of such approvals and at the Closing Time referred to in Section 2 hereof, the Holding Company Applications complied and will comply in all material respects with the applicable provisions of the BHC Act, the New York Banking Law and the regulations promulgated thereunder and the Holding Company Applications are truthful and accurate in all material respects.

(vii) Pursuant to Section 14-e of the Banking Law and the applicable rules and regulations of the New York State Department of Financial Services (the “NYSDFS”) (collectively, “New York Conversion Law”), the Bank has filed with the NYSDFS an Application for Approval of

B-4

Conversion (the “New York Conversion Application”), and pursuant to federal law and the applicable rules and regulations of the Federal Deposit Insurance Corporation (“FDIC”), and specifically 12 C.F.R § 303.160-163 and 12 C.F.R. §333.4 (the “Conversion Regulations”), the Bank has filed a Notice of Intent to Convert with the FDIC (the “FDIC Notice”), and in each case has filed such amendments thereto and supplementary materials as may have been required to the date hereof (the New York Conversion Application and the FDIC Notice, collectively, as amended to date, if applicable, and as from time to time amended or supplemented hereafter, are hereinafter referred to as the “Conversion Applications”), including copies of the Bank’s Proxy Statement for a Special Meeting of its Depositors relating to the Conversion (the “Proxy Statement”), the Conversion Valuation Appraisal Report (the “Appraisal”) prepared by RP Financial, LC., and the Prospectus. The Offerings and the Plan have been duly adopted by the Board of Directors of the Company and the Board of Trustees of the Bank and such adoption has not since been rescinded or revoked. The NYSDFS has conditionally approved the New York Conversion Application, and such approval remains in full force and effect and no order has been issued by the NYSDFS suspending or revoking such approval and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the NYSDFS. The FDIC has reviewed the FDIC Notice and has issued to the Bank a letter of intent of non-objection, and such letter of intent of non-objection remains in full force and effect and no order has been issued by the FDIC suspending or revoking such letter of intent of non-objection and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the FDIC. At the time of the approval of the New York Conversion Application, including the Prospectus and the Proxy Statement (including any amendment or supplement thereto), by the NYSDFS and the issuance of the letter of intent of non-objection by the FDIC with respect to the FDIC Notice and at all times subsequent thereto until the Time of Delivery referred to in Section 2, the Conversion Applications, including the Prospectus and the Proxy Statement (including any amendment or supplement thereto), will comply in all material respects with New York Banking Law and the Conversion Regulations, and the Conversion Applications were truthful and accurate in all material respects.

(viii) At the time of their use, the Proxy Statement and any other proxy solicitation materials with respect to the Special Meeting of Depositors of the Bank will comply in all material respects with the applicable provisions of the New York Banking Law and the Conversion Regulations and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company and the Bank will promptly file the Prospectus and any supplemental sales literature with the Commission, the NYSDFS and the FDIC. The Prospectus and all supplemental sales literature, as of the date the Registration Statement became effective and at the Time of Delivery referred to in Section 2 hereof, complied and will comply in all material respects with the applicable requirements of the Conversion Regulations and the Securities Act Regulations and, at or prior to the time of their first use, will have received all required authorizations of the NYSDFS, the FDIC, the FRB and the Commission for use in final form.

(ix) None of the Commission, the FRB, the NYSDFS, the FDIC or any state securities “Blue Sky” authority, if applicable, has by order or otherwise, prevented or suspended the use of the Proxy Statement, the Prospectus or any supplemental sales literature authorized by the Company or the Bank for use in connection with the Offerings, and no actions or proceedings for such purposes are pending or, to the knowledge of the Company or the Bank, threatened.

(x) At the Time of Delivery referred to in Section 2 hereof, the Company and the Bank will have completed the conditions precedent to the Conversion and the establishment of the Foundation in accordance with the Plan, applicable New York Banking Law and the Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all material terms, conditions, requirements and provisions precedent to the Conversion and the establishment of the

B-5

Foundation imposed upon the Company or the Bank by the NYSDFS, the FDIC, the FRB, or any other regulatory authority, other than those which the regulatory authority permits to be completed after the Conversion or which has been waived thereby. The Conversion, the Offerings and other transactions contemplated hereby do not and will not require any material consent, approval, authorization or permit or filing with any other governmental agency or regulatory authority, except as disclosed in the Prospectus.

(xi) RP Financial, LC. (the “Appraiser”), which prepared the valuation of the Company as part of the Conversion, has advised the Company and the Bank in writing that it satisfies all requirements for an appraiser set forth in the New York Banking Law and the Conversion Regulations and any interpretations or guidelines issued by the NYSDFS or FDIC or its respective staff with respect thereto and that it has not been advised by the NYSDFS or FDIC that it is not so qualified to prepare such valuation.

(xii) Crowe Horwath LLP, the accountants who audited the consolidated financial statements for the two-year period ended June 30, 2016 included in the Registration Statement and performed the procedures established by the Public Company Accounting Oversight Board (the “PCAOB”) for a review of interim financial information as described in SAS No. 100, Interim Financial Information on the unaudited consolidated financial statement of the Bank, for the three month period ended September 30, 2016 and 2015 included in the Registration Statement, has advised the Company and the Bank in writing that they are independent public accountants within the meaning of Rule 101 of the American Institute of Certified Public Accountants (the “AICPA”), that they are registered with the PCAOB and such accountants are, with respect to the Company and the Bank, independent certified public accountants as required by the Securities Act, the Securities Act Regulations and the Conversion Regulations and such accountants are not in violation of the auditors independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

(xiii) The only direct subsidiaries of the Bank are listed on Exhibit A hereto (collectively, the “Subsidiaries”). Except for the Subsidiaries, the Bank does not, directly or indirectly, control any other corporation, limited liability company, partnership, joint venture, association, trust or other business organization. Upon completion of the Conversion, the only direct subsidiary of the Company will be the Bank.

(xiv) The consolidated financial statements and the related notes thereto included in the Registration Statement, the Prospectus and the General Disclosure Package present fairly the financial position of the Bank and its Subsidiaries at the dates indicated and the results of operations, comprehensive income, changes in equity and cash flows for the periods specified, and comply as to form with the applicable accounting requirements of the Securities Act Regulations and the Conversion Regulations; except as otherwise stated in the Registration Statement, the Prospectus and the General Disclosure Package, said financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis present fairly the information required to be stated therein except as noted therein. The other financial, statistical and pro forma information and related notes included in the Prospectus and the General Disclosure Package present fairly the information shown therein on a basis consistent with the audited and unaudited financial statements included in the Prospectus, and as to the pro forma adjustments, the adjustments made therein have been consistently applied on the basis described therein.

(xv) Since the respective dates as of which information is given in the Registration Statement, the Prospectus and the General Disclosure Package, except as otherwise stated therein: (A) there has been no material adverse change in the financial condition, results of operations, business affairs, management or prospects of the Company, the Bank and the Subsidiaries, considered as one

B-6

enterprise, whether or not arising in the ordinary course of business (“Material Adverse Effect”), (B) except for transactions specifically referred to or contemplated in the Registration Statement, the Prospectus and the General Disclosure Package, there have been no transactions entered into by the Company, the Bank or the Subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and the Bank, (C) the capitalization, liabilities, assets, properties and business of the Company and the Bank conform in all material respects to the descriptions contained in the Prospectus and the General Disclosure Package and none of the Company, the Bank or the Subsidiaries has any material liabilities of any kind, contingent or otherwise, except as disclosed in the Registration Statement, the Prospectus or the General Disclosure Package and (D) none of the Company, the Bank or the Subsidiaries has issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings in the ordinary course of business consistent with past practice from the same or similar sources and in similar amounts as indicated in the Prospectus and the General Disclosure Package.

(xvi) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby; and the Company is duly qualified to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect. Following the completion of the Conversion, the Company will be a registered bank holding company under the BHC Act.

(xvii) Upon consummation of the Conversion and the contribution of the Foundation Shares, the authorized, issued and outstanding capital stock of the Company will be within the range as set forth in the Prospectus and the General Disclosure Package under “Capitalization” (except for subsequent issuances, if any, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus and the General Disclosure Package); except as set forth elsewhere in this Agreement, no shares of Common Stock have been or will be issued and outstanding prior to the Time of Delivery referred to in Section 2 hereof; at the time of the Conversion, the Securities, including the Shares, and the Foundation Shares will have been duly authorized for issuance and, in the case of the Securities, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and stated on the cover page of the Prospectus, and in the case of the Foundation Shares, when contributed by the Company pursuant to the Plan, will be duly and validly issued and fully paid and nonassessable; the certificates and/or book entries, as applicable, representing the shares of Common Stock will conform to the requirements of applicable law and regulations; and the issuance of the Securities is not subject to preemptive or other similar rights except for subscription rights granted under the Plan in accordance with New York Banking Law and the Conversion Regulations.

(xviii) The Bank has been duly organized and is validly existing as a New York-chartered savings bank in mutual form and upon consummation of the Conversion will be a New York-chartered savings bank in stock form in both instances with full corporate power and authority to own, lease and operate its property and to conduct its business as described in the Prospectus and the General Disclosure Package and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby. The Company, the Bank and the Subsidiaries have obtained all licenses, permits and other governmental authorizations currently required for the conduct of their respective businesses or required for the conduct of their respective businesses as contemplated by the Holding Company Applications and the Conversion Applications and as described in the Prospectus and the General Disclosure Package, except where the failure to obtain such licenses, permits or other governmental authorizations would not have a Material Adverse Effect. All such licenses, permits and

B-7

other governmental authorizations are in full force and effect and the Company, the Bank and the Subsidiaries are in all material respects in compliance therewith. None of the Company, the Bank or the Subsidiaries has received notice of any proceeding or action relating to the revocation or modification of any such license, permit or other governmental authorization which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, might have a Material Adverse Effect. Each of the Bank and the Subsidiaries are duly qualified to transact business and are in good standing under the laws of its jurisdiction of organization and is qualified as a foreign corporation in any jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

(xix) The Bank is a member in good standing of the Federal Home Loan Bank of New York; the deposit accounts of the Bank are insured by the FDIC up to the applicable limits and upon consummation of the Conversion, the liquidation account for the benefit of eligible account holders and supplemental eligible account holders will be duly established in accordance with the requirements of the Plan and the Conversion Regulations.

(xx) The authorized capital stock of the Company consists of 200,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.01 per share (the “Company Preferred Stock”). No shares of Common Stock and no shares of Company Preferred Stock have been or will be issued and outstanding prior to the Time of Delivery. Upon consummation of the Conversion described in the Prospectus, the authorized capital stock of the Bank will be 10,000 shares of common stock, par value $1.00 per share (“Bank Common Stock”), and 1,000 shares of preferred stock, par value $1.00 per share (“Bank Preferred Stock”). No shares of Bank Common Stock and no shares of Bank Preferred Stock have been or will be issued prior to the Closing Time referred to in Section 2 hereof. As of the Closing Time referred to in Section 2 hereof, the shares of Bank Common Stock to be issued to the Company will have been duly authorized for issuance and, when issued and delivered by the Bank pursuant to the Plan against payment of the consideration described in the Plan and in the Prospectus and the General Disclosure Package, will be duly and validly issued and fully paid and nonassessable, and all such Bank Common Stock will be owned beneficially and of record by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; and the certificates representing the shares of the Bank Common Stock will conform with the requirements of applicable laws and regulations. The issuance of the Bank Common Stock is not subject to preemptive or similar rights and there are no other warrants, options or rights of any kind to acquire additional shares of Bank Common Stock or Bank Preferred Stock.

(xxi) The Company and the Bank have taken all corporate action necessary for them to execute, deliver and perform this Agreement and the transactions contemplated hereby, and this Agreement has been duly executed and delivered by, and is the valid and binding agreement of the Company and the Bank, assuming due execution by the Agent, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws and the availability of equitable remedies.

(xxii) Subsequent to the respective dates as of which information is given in the Registration Statement, the Prospectus and the General Disclosure Package and prior to the Time of Delivery, except as otherwise may be indicated or contemplated therein, neither the Company nor the Bank will have (A) except as otherwise set forth herein, issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings in the ordinary course of business from the same or similar sources and in similar amounts as indicated in the Prospectus and the General Disclosure Package or (B) entered into any transaction or series of transactions which is material in light of the business of the Company and the Bank, considered as one enterprise, excluding the origination, purchase and sale of loans or the purchase or sale of investment securities or mortgage-backed securities in the ordinary course of business consistent with past practice.

B-8

(xxiii) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement, the issuance of the Securities, including the Shares, or the consummation of the Conversion that has not been obtained or will be obtained prior to the Time of Delivery, and a copy of which has been delivered to the Representative, except as may be required under the “blue sky” or state securities laws of various jurisdictions.

(xxiv) None of the Company, the Bank or any of the Subsidiaries is in violation of their respective articles of incorporation/organization certificate or bylaws (and the Bank will not be in violation of its amended organization certificate or bylaws in stock form upon consummation of the Conversion); and none of the Company, the Bank or any of the Subsidiaries is in default (nor has any event occurred which, with notice or lapse of time or both, would constitute a default) in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the Bank or any of the Subsidiaries is a party or by which it or either of them may be bound, or to which any of the property or assets of the Company, the Bank or any of the Subsidiaries is subject, except for such defaults that would not, individually or in the aggregate, have a Material Adverse Effect; and there are no contracts or documents of the Company, the Bank or any of the Subsidiaries that are required to be filed as exhibits to the Registration Statement, the Conversion Applications or the Holding Company Applications that have not been so filed or described.

(xxv) The Conversion and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate action on the part of the Company and the Bank and do not and will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or the Bank pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or the Bank is a party or by which it or either of them may be bound, or to which any of the property or assets of the Company or the Bank is subject, except for such conflicts, breaches or defaults that would not, individually or in the aggregate, have a Material Adverse Effect; nor will such action result in any violation of the provisions of the respective articles of incorporation or bylaws of the Company or the Bank, or any applicable law, administrative regulation or administrative or court decree.

(xxvi) No labor dispute with the employees of the Company or the Bank exists or, to the knowledge of the Company or the Bank, is imminent or threatened; and the Company and the Bank are not aware of any existing or threatened labor disturbance by the employees of any of its principal suppliers or contractors that might be expected to result in any Material Adverse Effect.

(xxvii) Each of the Company, the Bank and the Subsidiaries has good and marketable title to all properties and assets for which ownership is material to the business of the Company, the Bank or the Subsidiaries and to those properties and assets described in the Prospectus and the General Disclosure Package as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Prospectus and the General Disclosure Package and all of the leases and subleases material to the business of the Company, the Bank or the Subsidiaries under which the Company, the Bank or the Subsidiaries hold properties, including those described in the Prospectus and the General Disclosure Package, are valid and binding agreements of the Company, the Bank or the Subsidiaries, enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency or similar laws and availability of equitable remedies.

(xxviii) None of the Company, the Bank or the Subsidiaries is in violation of any order or directive from the FRB, the NYSDFS, the FDIC, the Commission or any regulatory authority to make any material change in the method of conducting its respective businesses; the Company, the Bank and the Subsidiaries have conducted and are conducting their business so as to comply in all material respects

B-9

with all applicable statutes, regulations and administrative and court decrees (including, without limitation, all regulations, decisions, directives and orders of the FRB, the NYSDFS, the FDIC and the Commission). Neither the Company, the Bank nor any of the Subsidiaries is subject or is party to, or has received any notice or advice that either of them may become subject or party to, any investigation with respect to any cease-and-desist order, agreement, consent agreement, memorandum of understanding or other regulatory enforcement action, proceeding or order with or by, or is a party to any commitment letter or similar undertaking to, or is subject to any directive by, or has been a recipient of any supervisory letter from, or has adopted any board resolutions at the request of, any Regulatory Agency (as defined below) that currently restricts in any material respect the conduct of their business or that in any material manner relates to their capital adequacy, their credit policies, their management or their business (each, a “Regulatory Agreement”), nor has the Company, the Bank or any of the Subsidiaries been advised by any Regulatory Agency that it is considering issuing or requesting any such Regulatory Agreement; and there is no unresolved violation, criticism or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of the Company, the Bank or any of the Subsidiaries that, in the reasonable judgment of the Company or the Bank, is expected to result in a Material Adverse Effect, or that might materially and adversely affect the properties or assets thereof or that might materially and adversely affect the consummation of the Conversion or the performance of this Agreement. As used herein, the term “Regulatory Agency” means any federal or state agency charged with the supervision or regulation of depository institutions or holding companies of depository institutions, or engaged in the insurance of depository institution deposits, or any court, administrative agency or commission or other governmental agency, authority or instrumentality having supervisory or regulatory authority with respect to the Company, the Bank or any of the Subsidiaries.

(xxix) There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company or the Bank, threatened, against or affecting the Company, the Bank or any of the Subsidiaries that is required to be disclosed in the Registration Statement (other than as disclosed therein), or that might result in any Material Adverse Effect, or that might materially and adversely affect the properties or assets thereof, the performance of this Agreement or the consummation of the Conversion; all pending legal or governmental proceedings to which the Company, the Bank or any of the Subsidiaries is a party or of which any of their respective property or assets is the subject that are not described in the Registration Statement, including ordinary routine litigation incidental to their business, are considered in the aggregate not material.

(xxx) The Company and the Bank have obtained (i) an opinion of its counsel, Luse Gorman, PC, with respect to the legality of the Securities and the Foundation Shares to be issued and the federal income tax consequences of the Conversion and (ii) the opinion of Crowe Horwath LLP with respect to the New York state tax consequences of the Conversion, copies of which are filed as exhibits to the Registration Statement; all material aspects of the aforesaid opinions is accurately summarized in the Prospectus and the General Disclosure Package; the facts and representations upon which such opinions are based are truthful, accurate and complete in all material respects; and neither the Company nor the Bank has taken or will take any action inconsistent therewith.

(xxxi) Neither the Company nor the Bank is and, upon completion of the Conversion and the Offerings and sale of the Securities and the application of the net proceeds therefrom, will be, required to be registered under the Investment Company Act of 1940, as amended.

(xxxii) All of the loans represented as assets on the most recent consolidated financial statements or selected financial information of the Bank and on the financial statements included in the Prospectus and the General Disclosure Package meet or are exempt from all requirements of federal, state or local law pertaining to lending, including, without limitation, truth in lending (including the

B-10

requirements of Regulations Z and 12 C.F.R. Part 226), real estate settlement procedures, consumer credit protection, equal credit opportunity and all disclosure laws applicable to such loans, except for violations which, if asserted, would not result in a Material Adverse Effect.

(xxxiii) To the knowledge of the Company and the Bank, with the exception of the intended loan to the Bank’s ESOP by the Company to enable the ESOP to purchase Securities in an amount up to eight percent (8%) of the Common Stock that will be sold in the Offerings and issued to the Foundation, none of the Company, the Bank or their employees has made any payment of funds of the Company or the Bank as a loan for the purchase of the Common Stock or made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law.

(xxxiv) Each of the Bank and the Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(xxxv) The Company, the Bank and the Subsidiaries are in compliance in all material respects with the applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transaction Reporting Act of 1970, as amended, and the rules and regulations thereunder. The Bank has established compliance programs and is in compliance in all material respects with the requirements of the USA PATRIOT Act and all applicable regulations promulgated thereunder and any other applicable money laundering or similar or related laws and any related rules, regulations or guidelines issued, administered or enforced by any applicable governmental agency or regulatory authority. There is no charge, investigation, action, suit or proceeding before any court, regulatory authority or governmental agency or body pending or, to the knowledge of the Company and the Bank, threatened regarding the Bank’s compliance with the USA PATRIOT Act or any regulations promulgated thereunder and any other applicable money laundering or similar or related laws and any related rules, regulations or guidelines issued, administered or enforced by any applicable governmental agency or regulatory authority.

(xxxvi) None of the Company, the Bank or any Subsidiary, nor any properties owned or operated by the Company, the Bank or any Subsidiary, is in material violation of or liable under any Environmental Law (as defined below). There are no actions, suits or proceedings, or demands, claims, notices or investigations (including, without limitation, notices, demand letters or requests for information from any environmental agency) instituted or pending, or to the knowledge of the Company or the Bank threatened, relating to the liability of any property owned or operated by the Company, the Bank or any Subsidiary under any Environmental Law, except for such actions, suits or proceedings, or demands, claims, notices or investigations that, individually or in the aggregate, would not have a Material Adverse Effect. For purposes of this subsection, the term “Environmental Law” means any federal, state, local or foreign law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any regulatory authority relating to (i) the protection, preservation or restoration of the environment (including, without limitation, air, water, vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by type or by quantity, including any material containing any such substance as a component.

B-11

(xxxvii) The Company, the Bank and each Subsidiary have filed all federal, state and local income and franchise tax returns required to be filed and have made timely payments of all taxes shown as due and payable in respect of such returns, and no deficiency has been asserted with respect thereto by any taxing authority. The Company and the Bank have no knowledge of any tax deficiency that has been asserted or could be asserted against the Company, the Bank or any Subsidiary.

(xxxviii) The Company has submitted or will have submitted prior to Closing all notices required to consummate the Conversion and to have the Securities, including the Shares, and the Foundation Shares listed on the Nasdaq Stock Market effective as of the Closing Time referred to in Section 2 hereof.

(xxxix) At or prior to the Closing Time, the Company will have filed a Form 8-A for the Securities, including the Shares, and the Foundation Shares to be registered under Section 12(b) of the Exchange Act (the “Exchange Act Registration Statement”).

(xl) There are no affiliations or associations (as such terms are defined by the Financial Industry Regulatory Authority (“FINRA”)) between any member of FINRA and any of the Company’s or the Bank’s officers or directors. Neither the Company nor the Bank has: (i) issued any securities within the last 18 months (except for notes to evidence bank loans or other liabilities in the ordinary course of business or as described in the Prospectus and the General Disclosure Package); (ii) had any dealings with respect to sales of securities within the 12 months prior to the date hereof with any member of the FINRA, or any person related to or associated with such member, other than discussions and meetings relating to the Offerings and purchases and sales of U.S. government and agency and other securities in the ordinary course of business; or (iii) engaged any intermediary between the Representative and the Company and the Bank in connection with the Offerings, and no person is being compensated in any manner for such services.

(xli) The Bank and each Subsidiary carries, or is covered by, and the Company will carry, or be covered by, prior to Closing, insurance in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective properties as is customary for companies engaged in similar industries.

(xlii) The Company and the Bank have not relied on the Representative or its counsel for any legal, tax or accounting advice in connection with the Conversion.

(xliii) The records of eligible account holders, supplemental eligible account holders and other depositors are accurate and complete in all material respects.

(xliv) The Company, the Bank and each Subsidiary are in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company, the Bank or any Subsidiary, respectively, would have any liability; each of the Company, the Bank and each Subsidiary has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”); and each “pension plan” for which the Company, the Bank and any Subsidiary would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, that would cause the loss of such qualification.

B-12

(xlv) The Company is in compliance with the applicable provisions of the Sarbanes-Oxley Act, the rules and regulations of the Commission thereunder, and the Nasdaq corporate governance rules applicable to the Company, and will use its best efforts to comply with those provisions of the Sarbanes-Oxley Act and the Nasdaq corporate governance rules that will become effective in the future upon their effectiveness.

(xlvi) The Company has not directly or indirectly distributed, and will not distribute, any offering materials in connection with the offering and sale of the Shares other than any Preliminary Prospectus, the General Disclosure Package, the Prospectus and other materials, if any, permitted under the Securities Act and consistent with Section 3(a) below.

(xlvii) No forward-looking statement (within the meaning of Section 27A of the Securities Act) contained in the Registration Statement, the General Disclosure Package, the Prospectus and any Issuer-Represented Free Writing Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(xlviii) All of the information, as may have been updated or amended, provided to the Representative or to counsel for the Underwriters by the Company and the Bank and their respective officers and directors in connection with letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules 5110 and 5121 is true, complete and correct.

(xlix) Neither of the Company, the Bank nor any of their affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes. For purposes of this subsection, “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company or the Bank.

(l) Neither the Company or the Bank, nor any director, officer, employee or, to the knowledge of the Company or the Bank agent or affiliate thereof is (a) currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) or relevant sanctioning authority; (b) located, organized or resident in a country or territory that is the subject of such sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria); and (c) the Company will not, directly or indirectly, use the proceeds of the Offerings, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person, or engage in dealings or transactions with any person, or in any country, or territory, subject to any U.S. sanctions administered by OFAC or relevant sanctioning authority.

(li) Neither the Company nor any of its subsidiaries nor any director, officer or employee of the Company or any of its subsidiaries nor, to the knowledge of the Company or the Bank, any agent, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (b) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (c) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (d) made, offered, agreed, requested or taken

B-13

an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Bank and the Subsidiaries have instituted, maintain and enforce, and the Company, the Bank and the Subsidiaries will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.

(lii) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; and (ii) are effective in all material respects to perform the functions for which they were established. There (i) are not any significant deficiencies in the design or operation of internal controls that could adversely affect the Company’s ability to record, process, summarize, and report financial data or (ii) has not been any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls. Since June 30, 2016, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

(liii) Except as has not had and would not reasonably be expected to have a Material Adverse Effect:

(A) The Company and the Bank have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or the Bank satisfied, (i) all applicable federal, state and local laws, rules and regulations with respect to the origination, insuring, purchase, sale, pooling, servicing, subservicing, or filing of claims in connection with mortgage loans, including all laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company or the Bank and any Agency, Loan Investor or Insurer (as such terms are hereinafter defined), (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan; and

(B) No Agency, Loan Investor or Insurer has (i) claimed in writing that the Company or the Bank has violated or has not complied with the applicable underwriting standards with respect to mortgage loans sold by the Company or the Bank to a Loan Investor or Agency, or with respect to any sale of mortgage servicing rights to a Loan Investor, (ii) imposed in writing restrictions on the activities (including commitment authority) of the Company or the Bank or (iii) indicated in writing to the Company or the Bank that it has terminated or intends to terminate its relationship with the Company or the Bank for poor performance, poor loan quality or concern with respect to the Company’s or the Bank’s compliance with laws.

For purposes of hereof (X) “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal National Mortgage Association, the U.S. Department of Veterans’ Affairs, the Rural Development Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or the Bank or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities; (Y) “Loan Investor” means any person (including an Agency) having a beneficial interest in any mortgage loan

B-14

originated, purchased or serviced by the Company or the Bank or a security backed by or representing an interest in any such mortgage loan; and (Z) “Insurer” means a person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Company or the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral.

(liv) Except as described in the Prospectus and the General Disclosure Package, there are no contractual encumbrances or contractual restrictions or regulatory restrictions on the ability (i) of the Company or the Bank to pay dividends or to make any other distributions on the Company’s or the Bank’s capital stock or (ii) of the Company or the Bank (A) to pay any indebtedness owed to the Company or the Bank, (B) to make any loans or advances to, or investments in, the Company or the Bank, subject to applicable law and regulation, or (C) to transfer any of its property or assets to the Company or the Bank.

(lv) The Foundation has been duly authorized and incorporated and is validly existing as a non-stock corporation in good standing under the laws of the State of Delaware with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; the Foundation will not be a bank holding company with the meaning of 12 C.F.R. Section 225.2(c) as a result of the issuance of shares of Common Stock to it in accordance with the terms of the Plan and in the amounts as described in the Prospectus; no approvals are required to establish the Foundation and to contribute the shares of Common Stock thereto as described in the Prospectus other than those obtained from the NYSDFS; except as specifically disclosed in the Prospectus, there are no agreements and/or understandings, written or oral, between the Company and the Bank on the one hand and the Foundation, on the other, with respect to the control, directly or indirectly, over the voting and the acquisition or disposition of the Foundation Shares; at the Closing Time, the Foundation Shares will have been duly authorized for issuance and, when issued and contributed by the Company pursuant to the Plan, will be duly and validly issued and fully paid and nonassessable. The issuance of the Foundation Shares to the Foundation pursuant to the Plan has been registered under the Securities Act pursuant to the Registration Statement.

(b) Any certificate signed by any officer of the Company or the Bank and delivered to the Representative or counsel for the Underwriters shall be deemed a representation and warranty by the Company or the Bank to the Representative and, for purposes of the opinions to be delivered to the Representative pursuant to Sections 5(b)(1) and 5(b)(2) hereof, to the counsel for the Company and the Underwriters, respectively, as to matters covered thereby.

SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.

(a) Subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $[            ], the number of Shares set forth opposite the name of such Underwriter in Schedule I hereto, subject to adjustments in accordance with Section 9 hereof.

(b) Upon the authorization by the Company of the release of the Shares, the several Underwriters propose to offer the Shares for sale upon the terms and conditions set forth in the Prospectus.

B-15

(c) The Shares to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as the Representative may request (or in the form of one or more global certificates deposited with the Depository Trust Company (“DTC”) and registered in the name of [Cede & Co.,] as nominee for DTC) upon at least forty-eight hours prior notice to the Company shall be delivered by or on behalf of the Company to the Representative, through the facilities of DTC, for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same day) funds to the account specified by the Company, to the Representative at least forty-eight hours in advance. The Company will cause the certificates representing the Shares to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be, with respect to the Shares, [9:30] a.m., Eastern Time, on [            ], 2017 or such other time and date as the Representative and the Company may agree upon in writing. Such time and date for delivery of the Shares is herein called the “Time of Delivery.”

(d) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 5 hereof, including the cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to Section 5(k) hereof, will be delivered at the offices of Luse Gorman, PC (the “Closing Location”), and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at [    ] p.m., Eastern Time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 2, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.

(e) It is understood that each Underwriter has authorized the Representative, for such Underwriter’s account, to accept delivery of, receipt for, and make payment of the purchase price for, the Shares which such Underwriter has agreed to purchase. Sandler O’Neill & Partners, L.P., individually and not as Representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Shares to be purchased by any Underwriter whose funds have not been received by Sandler O’Neill & Partners, L.P. by the Time of Delivery but such payment shall not relieve such Underwriter from its obligations hereunder.

SECTION 3. COVENANTS OF THE COMPANY AND THE BANK. The Company and the Bank jointly and severally covenant with the Representative as follows:

(a) The Company and the Bank agree to: prepare the Prospectus in a form approved by the Representative and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) of the Securities Act Regulations; to make no further amendment or any supplement to the Registration Statement or Prospectus or Issuer-Represented Free Writing Prospectus which shall be disapproved by the Representative promptly after reasonable notice thereof; to advise the Representative, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Representative with copies thereof; to advise the Representative, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, Issuer-Represented Free Writing Prospectus or Prospectus, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose or pursuant to Section 8A of the

B-16

Securities Act, or of any request by the Commission for the amending or supplementing of the Registration Statement, any Preliminary Prospectus, any Issuer-Represented Free Writing Prospectus or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, Issuer-Represented Free Writing Prospectus or Prospectus or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order.

(b) The Company represents and agrees that, unless it obtains the prior consent of the Representative, and the Representative represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Shares that would constitute an “Issuer-Represented Free Writing Prospectus,” or that would constitute a “free writing prospectus,” as defined in Rule 405 of the Securities Act Regulations, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Representative is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has and will comply with the requirements of Rule 433 of the Securities Act Regulations applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Company need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the Securities Act without regard to Rule 172 or 173 of the Securities Act Regulations. If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus materially conflicted or would materially conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company will notify promptly the Agent so that any use of such Issuer-Represented Free Writing Prospectus may cease until it is amended or supplemented and the Company will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Agent expressly for use therein.

(c) The Company and the Bank will give the Representative notice of their intention to file or prepare any amendment to the Conversion Applications, the Holding Company Applications, or the Registration Statement (including any post-effective amendment) or any amendment or supplement to the Prospectus (including any revised prospectus that the Company proposes for use in connection with the Public Offering of the Shares that differs from the prospectus on file at the Commission at the time the Registration Statement becomes effective, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the Securities Act Regulations), will furnish the Representative with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus to which the Representative or counsel for the Representative may reasonably object.

(d) The Company and the Bank will deliver to the Representative as many signed copies and as many conformed copies of the Holding Company Applications, the Conversion Applications, and the Registration Statement as originally filed and of each amendment thereto (including non-confidential exhibits filed therewith or incorporated by reference therein) as the Representative may reasonably request, and prior to 10:00 a.m. Eastern Time on the New York Business Day next succeeding the date of this Agreement and from time to time such number of copies of the Prospectus as the Representative may reasonably request.

B-17

(e) During the period when the Prospectus is required to be delivered, the Company and the Bank will comply, at their own expense, with all requirements imposed upon them by the FRB, the NYSDFS, the FDIC, the New York Conversion Law, by the applicable Conversion Regulations, as from time to time in force, and by the Nasdaq Stock Market, the Securities Act, the Securities Act Regulations, the Exchange Act, and the Exchange Act Regulations, including, without limitation, Regulation M under the Exchange Act, so far as necessary to permit the continuance of sales or dealing in shares of Common Stock during such period in accordance with the provisions hereof and the Prospectus.

(f) If any event or circumstance shall occur as a result of which it is necessary, in the reasonable opinion of counsel for the Representative, to amend or supplement the Registration Statement or the Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or it is necessary to amend or supplement the Prospectus to comply with applicable law and regulation, the Company and the Bank will forthwith amend or supplement the Registration Statement or the Prospectus (in form and substance reasonably satisfactory to counsel for the Representative) so that, as so amended or supplemented, the Registration Statement or the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading or so that the Prospectus will comply with applicable law and regulation, and the Company and the Bank will furnish to the Representative a reasonable number of copies of such amendment or supplement. For the purpose of this subsection, the Company and the Bank will each furnish such information with respect to itself as the Representative may from time to time reasonably request.

(g) The Company will take all necessary action, in cooperation with the Representative, to qualify the Shares and the Foundation Shares, to the extent applicable, for offering and sale under the applicable securities laws of such states of the United States and other jurisdictions as the Conversion Regulations may require and as the Representative and the Company have agreed; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. In each jurisdiction in which the Shares and/or the Foundation Shares have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement.

(h) The Company will make generally available to its security holders as soon as practicable, but not later than 60 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the Securities Act Regulations) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the initial “effective date” (as defined in said Rule 158) of the Registration Statement (and at the later effective date of any post-effective amendments thereto).

(i) During the period ending on the third anniversary of the date on which the closing of the transactions contemplated by this Agreement occurs, the Company will furnish to its shareholders as soon as practicable after the end of each such fiscal year an annual report (including consolidated statements of financial condition and consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows, certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the initial effective date of the Registration Statement), consolidated summary financial information of the Company and the Bank for such quarter in reasonable detail. In addition, the Company will use its reasonable best efforts to make such annual report and quarterly consolidated summary financial information public through the issuance of appropriate press releases at the same time or prior to the time of the furnishing thereof to shareholders of the Company.

B-18

(j) During the period ending on the third anniversary of the date on which the closing of the transactions contemplated hereby occurs, the Company will furnish to the Representative (i) as soon as publicly available, a copy of each report or other document of the Company furnished generally to shareholders of the Company or furnished to or filed with the Commission under the Exchange Act or any national securities exchange or system on which any class of securities of the Company is listed, and (ii) from time to time, such other information concerning the Company as the Representative may reasonably request. For purposes of this paragraph, any document filed electronically with the Commission shall be deemed furnished to the Representative.

(k) The Company and the Bank will (i) use their best efforts to complete the conditions precedent to the Offerings and the Conversion in accordance with the Plan, the applicable Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all material terms, conditions, requirements and provisions precedent to the Conversion and the Offerings imposed upon the Company or the Bank by the Commission, the NYSDFS, the FDIC, the FRB or any other regulatory authority or state securities (blue sky) authority, and to comply with those which the regulatory authority permits to be completed after the Conversion and the Offerings; and (ii) conduct the Conversion and the Offerings in the manner described in the Prospectus and in accordance with the Plan, the Conversion Regulations and all other applicable material laws, regulations, decisions and orders, including in compliance with all terms, conditions, requirements and provisions precedent to the Conversion and the Offerings imposed upon the Company and the Bank by the Commission, the NYSDFS, the FDIC, the FRB or any other regulatory or blue sky authority.

(l) The Company and the Bank will comply, at their own expense, with all requirements imposed by the Commission, the FRB, the NYSDFS, the FDIC and the Nasdaq Stock Market or pursuant to the applicable Securities Act Regulations and Conversion Regulations as from time to time in force.

(m) The Company will promptly inform the Representative upon its receipt of service with respect to any material litigation or administrative action instituted with respect to the Conversion or the Offerings.

(n) Each of the Company and the Bank will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus and the General Disclosure Package under “How We Intend to Use the Proceeds From the Offering.”

(o) The Company will report the use of proceeds from the Offerings on its first periodic report filed at the Time of Delivery pursuant to Sections 13(a) and 15(d) of the Exchange Act and on any subsequent periodic reports as may be required pursuant to Rule 463 of the Securities Act Regulations.

(p) The Company will maintain the effectiveness of the Exchange Act Registration Statement for not less than three years and will comply in all material respects with its filing obligations under the Exchange Act. For three years, the Company will use its best efforts to effect and maintain the listing of the Common Stock on the Nasdaq Stock Market and, once listed on the Nasdaq Stock Market, the Company will comply with all applicable corporate governance standards required by the Nasdaq Stock Market.

(q) The Company and the Bank will take such actions and furnish such information as are reasonably requested by the Representative in order for the Representative to ensure compliance with FINRA Rules 5130 and 5131.

B-19

(r) Other than in connection with any employee benefit plan or arrangement described in the Prospectus and the General Disclosure Package, the Company will not, without the prior written consent of the Representative, sell or issue, contract to sell or otherwise dispose of, any shares of Common Stock other than the Securities and the Foundation Shares for a period of 180 days following the Time of Delivery.

(s) During the period beginning on the date hereof and ending on the later of the third anniversary of the Time of Delivery or the date on which the Representative receives full payment in satisfaction of any claim for indemnification or contribution to which they may be entitled pursuant to Sections 6 or 7 hereof, respectively, made prior to the third anniversary of the Time of Delivery, neither the Company nor the Bank shall, without the prior written consent of the Representative, (which consent shall not be unreasonably withheld, conditioned or delayed), take or permit to be taken any action that could result in the Common Stock or the Bank Common Stock becoming subject to any security interest, mortgage, pledge, lien or encumbrance, with the exception of the intended loan to the Bank’s ESOP by the Company to enable the ESOP to purchase securities in an amount up to 8.0% of the Common Stock that will be sold in the Offerings and issued to the Foundation.

(t) The Company and the Bank will comply with the conditions imposed by or agreed to with the FRB and the NYSDFS in connection with their approval of the Holding Company Applications, the NYSDFS in connection with its approval of the New York Conversion Application, including the Plan, and the FDIC in connection with its non-objection of the FDIC Notice.

(u) The Company shall not deliver the Securities or the Foundation Shares until the Company and the Bank have satisfied each condition set forth in Section 5 hereof, unless such condition is waived by the Representative.

(v) The Company or the Bank will furnish to the Representative as early as practicable prior to the Closing Time, but no later than two (2) full business days prior thereto, a copy of the latest available unaudited interim consolidated financial statements of the Bank, which have been read by Crowe Horwarth LLP, as stated in their letters to be furnished pursuant to subsections (f) and (g) of Section 5 hereof.

(w) During the period in which the Prospectus is required to be delivered, each of the Company and the Bank will conduct its business in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all decisions, directives and orders of the Commission, the FRB, the NYSDFS, the FDIC and the Nasdaq Stock Market.

(x) The Company and the Bank will not amend the Plan in any manner that would affect adversely the sale of the Securities or the terms of this Agreement without the consent of the Representative.

(y) The Company and the Bank will not, prior to the Time of Delivery, incur any liability or obligation, direct or contingent, or enter into any material transaction, other than in the ordinary course of business consistent with past practice, except as contemplated by the Prospectus and the General Disclosure Package.

(z) The Company and the Bank will use all reasonable efforts to comply with, or cause to be complied with, the conditions precedent to the obligations of the Representative specified in Section 5 hereof.

B-20

(aa) The Company will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of the Common Stock or any other reference security, whether to facilitate the sale or resale of the Shares or otherwise, and the Company will, and shall use its commercially reasonable best efforts to cause each of its affiliates to, comply with all applicable provisions of Regulation M with respect to the Shares. If the limitations of Rule 102 of Regulation M (“Rule 102”) do not apply with respect to the Shares or any other reference security pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice from the Representative (or, if later, at the time stated in the notice), the Company will, and shall use its commercially reasonable best efforts to cause each of its affiliates to, comply with Rule 102 as though such exception were not available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.

(bb) The Company and the Bank shall use their best efforts to ensure that the Foundation submits within the time frames required by applicable law a request to the Internal Revenue Service to be recognized as a tax-exempt organization under Section 501(c)(3) of the Code; the Company and the Bank will take no action which may reasonably be expected to result in the possible loss of the Foundation’s tax-exempt status; and neither the Company nor the Bank will contribute any additional assets to the Foundation until such time that such additional contributions will be deductible for federal and state income tax purposes.

SECTION 4. PAYMENT OF EXPENSES. The Company and the Bank jointly and severally agree to reimburse the Underwriters for their reasonable out-of-pocket expenses incurred in connection with the performance of their obligations under this Agreement and the Agency Agreement, including, without limitation, legal fees and expenses, data processing fees and expenses, postage, document production, advertising, syndication and travel expenses, up to an aggregate maximum thereunder of $125,000 (plus up to an additional $25,000 of out-of-pocket expenses and a $30,000 fee as records management agent); provided, however, that the Underwriters shall document such expenses to the reasonable satisfaction of the Company. All fees and expenses to which the Underwriters are entitled to reimbursement under this paragraph of this Section 4 shall be due and payable upon receipt by the Company or the Bank of a written accounting therefor setting forth in reasonable detail the expenses incurred by the Underwriters. The Underwriters acknowledge and agree that the dollar amount of expenses specified above are inclusive of the expenses incurred in connection with the Subscription and Community Offering.

The Company and the Bank jointly and severally agree to pay all expenses incident to the performance of their obligations under this Agreement, including without limitation, (i) the cost of obtaining all securities and bank regulatory approvals, including any required FINRA filing fees, (ii) the cost of printing and distributing the Public Offering materials, (iii) the costs of Blue Sky qualification (including fees and expenses of Blue Sky counsel) of the Shares in the various states, (iv) the fees and expenses incurred in connection with the listing of the Shares on the Nasdaq Stock Market, and (v) all fees and disbursements of the Company’s counsel, accountants and other advisors. In the event the Underwriters incur any such fees and expenses on behalf of the Company or the Bank, the Bank will reimburse the Underwriters for such fees and expenses whether or not the Public Offering is consummated.

SECTION 5. CONDITIONS OF UNDERWRITERS’ OBLIGATIONS. The Company, the Bank and the Representative agree that the issuance and the sale of Shares and the issuance and sale of the shares of Common Stock in the Subscription Offering and the Community Offering and the issuance of the Foundation Shares and all obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company and the Bank herein contained as of the date hereof and the Time of Delivery, to the accuracy of the statements of officers and directors of the Company and the Bank made pursuant to the provisions hereof, to the performance by the Company and the Bank of their obligations hereunder, and to the following further conditions:

B-21

(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the Securities Act Regulations and in accordance with Section 3(a) hereof (or a post-effective amendment shall have been filed and declared effective in accordance with the requirements of Rule 430A); no stop order suspending the effectiveness of the Registration Statement, including any post-effective amendment thereto, shall have been issued under the Securities Act or proceedings therefor initiated or, to the knowledge of the Company, threatened by the Commission, no order suspending the Offerings or authorization for final use of the Prospectus, including any prospectus included in a post-effective amendment to the Registration Statement, shall have been issued or proceedings therefor initiated or, to the knowledge of the Company, threatened by the Commission, the NYSDFS, the FDIC or the FRB and no order suspending the sale of the Shares in any jurisdiction shall have been issued.

(b) At the Time of Delivery, the Representative shall have received:

(1) The favorable opinion, dated as of Time of Delivery, of Luse Gorman, PC, counsel for the Company and the Bank, in form and substance satisfactory to counsel for the Representative as attached hereto as Exhibit B.

(2) The favorable opinion, dated as of Time of Delivery, of Silver, Freedman, Taff & Tiernan LLP, counsel for the Underwriters, as to such matters as the Representative may reasonably require.

(3) In addition to giving their opinions required by subsections (b)(l) and (b)(2), respectively, of this Section, Luse Gorman, PC and Silver, Freedman, Taff & Tiernan LLP shall each additionally state that nothing has come to their attention that would lead them to believe that the Registration Statement (except for financial statements and schedules and other financial, pro forma or statistical data included therein, as to which counsel need make no statement), at the time it initially became effective (and at the time any post-effective amendment was declared effective), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except for financial statements and schedules and other financial, pro forma or statistical data included therein, as to which counsel need make no statement), at the time the Registration Statement became effective, as of the date of the Prospectus, or at Time of Delivery, or (if applicable) that the General Disclosure Package as of the Applicable Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In giving their opinions, Luse Gorman, PC and Silver, Freedman, Taff & Tiernan LLP may rely as to matters of fact on certificates of officers and directors of the Company and the Bank and certificates of public officials. Silver, Freedman, Taff & Tiernan LLP may also rely on the opinion of Luse Gorman, PC.

(c) At the Time of Delivery referred to in Section 2 hereof, the Company and the Bank shall have completed in all material respects the conditions precedent to the Conversion in accordance with the Plan, the applicable Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Conversion imposed upon the Company or the Bank by the FRB, the NYSDFS or the FDIC or any other regulatory authority other than those which the FRB, the NYSDFS or the FDIC or any such other regulatory authority permits to be completed after the Conversion.

B-22

(d) At the Time of Delivery, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement and the Prospectus, any Material Adverse Effect, whether or not arising in the ordinary course of business and the Representative shall have received a certificate of the Chief Executive Officer of the Company and the Bank and the Chief Financial Officer of the Company and the Bank, dated as of Time of Delivery, to the effect that (i) there has been no such Material Adverse Effect, (ii) there shall have been no material transaction entered into by the Company or the Bank from the latest date as of which the financial condition of the Company or the Bank, as set forth in the Registration Statement and the Prospectus other than transactions referred to or contemplated therein and transactions in the ordinary course of business consistent with past practice, (iii) neither the Company nor the Bank shall have received from the FRB, the NYSDFS or the FDIC any order or direction (oral or written) to make any material change in the method of conducting its business with which it has not complied (which order or direction, if any, shall have been disclosed in writing to the Representative) or which materially and adversely would affect the business, financial condition, results of operations or prospects of the Company and the Bank, considered as one enterprise, (iv) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Time of Delivery, (v) each of the Company and the Bank have complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to Time of Delivery, including all agreements and all conditions set forth in the Agency Agreement, (vi) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the knowledge of the Company or the Bank, threatened by the Commission; (vii) no order suspending the NYSDFS’ approval or the FDIC’s non-objection of the Conversion Applications or the FRB’s or NYSDFS’ approval of the Holding Company Applications or the transactions contemplated thereby has been issued and no proceedings for that purpose have been initiated or, to the knowledge of the Company or the Bank, threatened by the NYSDFS, the FDIC or the FRB and no person has sought to obtain regulatory or judicial review of the action of the NYSDFS in approving the Plan in accordance with the New York Conversion Law nor has any person sought to obtain regulatory or judicial review of the action of the NYSDFS in approving or the FDIC in not objecting to the Conversion Applications or the FRB or the NYSDFS in approving the Holding Company Applications, and (viii) no order suspending the Offerings or authorization for use of the Prospectus has been issued and no proceedings for that purpose have been initiated by the NYSDFS, the FDIC or the FRB.

(e) At the Time of Delivery, the Representative shall have received a certificate of the Chief Executive Officer of the Company and the Bank and the Chief Financial Officer of the Company and the Bank, dated as of Time of Delivery, to the effect that (i) they have reviewed the contents of the Registration Statement, the Prospectus and the General Disclosure Package; (ii) based on each of their knowledge, the Registration Statement and the Prospectus do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which such statements were made, not misleading; (iii) based on each of their knowledge, the financial statements and other financial information included in the Registration Statement, the Prospectus and the General Disclosure Package fairly present the financial condition and results of operations of the Bank as of and for the dates and periods covered by the Registration Statement and the Prospectus; (iv) they have evaluated the effectiveness of their disclosure controls and procedures; (v) they have designed such disclosure controls and procedures to ensure that material information relating to the Company and the Bank is made known to them.

(f) As of the date hereof, the Representative shall have received from Crowe Horwath LLP a letter dated such date, in form and substance satisfactory to the Representative, to the effect that: (i) they

B-23

are independent public accountants with respect to the Company and the Bank within the meaning of the Code of Ethics of the AICPA, the Securities Act and the Securities Act Regulations and the Conversion Regulations, they are registered with the PCAOB, and they are not in violation of the auditor independence requirements of the Sarbanes-Oxley Act; (ii) it is their opinion that the consolidated financial statements and supporting schedules included in the Registration Statement, including any post-effective amendment thereto, and covered by their opinions therein comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Securities Act Regulations; (iii) based upon limited procedures as agreed upon by the Representative and Crowe Horwath LLP set forth in detail in such letter, nothing has come to their attention which causes them to believe that, except as set forth in such letter, (A) the unaudited consolidated financial statements and supporting schedules of the Bank included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act, the Securities Act Regulations and the Conversion Regulations or are not presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement and the Prospectus, (B) the unaudited amounts of net interest income and net income set forth under “Selected Consolidated Financial and Other Data” or under “Recent Developments” in the Prospectus and the General Disclosure Package do not agree with the amounts set forth in unaudited consolidated financial statements as of and for the dates and periods presented under such captions or such amounts were not determined on a basis substantially consistent with that used in determining the corresponding amounts in the audited consolidated financial statements included in the Registration Statement, the Prospectus and the General Disclosure Package, (C) at a specified date not more than five (5) business days prior to the date of this Agreement, there has been any increase in the long-term or short-term debt of the Bank or any decrease in consolidated total assets, the allowance for loan losses, total deposits or retained earnings of the Bank, in each case as compared with the amounts shown in the December 31, 2016 unaudited consolidated statements of financial condition presented under the “Recent Development” section in the Registration Statement or, (D) during the period from December 31, 2016 to a specified date not more than five (5) business days prior to the date of this Agreement, there were any decreases, as compared with the corresponding period in the preceding fiscal year, in total interest income, net interest income, net interest income after provision for loan losses, income before income tax expense or net income of the Bank, except in all instances for increases or decreases which the Registration Statement, the Prospectus and the General Disclosure Package disclose have occurred or may occur; and (iv) in addition to the examination referred to in their opinions and the limited procedures referred to in clause (iii) above, they have carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information that are included in the Registration Statement, Prospectus and the General Disclosure Package and that are specified by the Representative, and have found such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Company and the Bank identified in such letter.

(g) At Time of Delivery, the Representative shall have received from Crowe Horwath LLP a letter, dated as of Time of Delivery, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than five (5) business days prior to Time of Delivery.

(h) At Time of Delivery, the Securities and the Foundation Shares shall have been approved for listing on the Nasdaq Stock Market.

(i) At Time of Delivery, the Representative shall have received a letter from the Appraiser, dated as of the Time of Delivery, confirming its appraisal.

B-24

(j) At Time of Delivery, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities, including the Shares, and the Foundation Shares, as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities, including the Shares, and the issuance of contribution of the Foundation Shares as herein contemplated shall be satisfactory in form and substance to the Representative and counsel for the Underwriters.

(k) At any time prior to Time of Delivery, (i) there shall not have occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in the judgment of the Representative, are so material and adverse as to make it impracticable to market the Shares or to enforce contracts, including subscriptions or orders, for the sale of the Securities, and (ii) trading generally on any of the NYSE MKT, the New York Stock Exchange or the Nasdaq shall not have been suspended, and minimum or maximum prices for trading shall not have been fixed, or maximum ranges for prices for securities have been required, by any of said Exchanges or by order of the Commission or any other governmental authority, and a banking moratorium shall not have been declared by either Federal or New York authorities.

SECTION 6. INDEMNIFICATION.

(a) The Company and the Bank, jointly and severally, agree to indemnify and hold harmless each Underwriter, each person, if any, who controls such Underwriter, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and its respective partners, directors, officers, employees and agents as follows:

(i) from and against any and all loss, liability, claim, judgment, damage and expense whatsoever, as incurred, related to or arising out of the Conversion (including the establishment of the Foundation and the contribution of the Foundation Shares thereto by the Company) or any action taken by the Underwriters where acting as agent of the Company or the Bank or otherwise as described in Section 2 hereof;

(ii) from and against any and all loss, liability, claim, judgment, damage and expense whatsoever, as incurred, based upon or arising out of (A) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, the General Disclosure Package, any Issuer-Represented Free Writing Prospectus, the Proxy Statement or any amendment or supplement thereto (including any post-effective amendment), (B) the omission or alleged omission to state a material fact required to be stated in the Registration Statement, the Prospectus or the General Disclosure Package or necessary to make the statements therein not misleading or (C) any omission or alleged omission from the Prospectus, the General Disclosure Package, any Issuer-Represented Free Writing Prospectus or the Proxy Statement to state therein a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading;

(iii) from and against any and all loss, liability, claim, judgment, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever described in clauses (i) or (ii) above, if such settlement is effected with the written consent of the Company or the Bank, which consent shall not be unreasonably withheld; and

B-25

(iv) from and against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and disbursements of counsel chosen by the Representative), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation, proceeding or inquiry by any governmental agency or body, commenced or threatened, or any claim pending or threatened whatsoever described in clauses (i) or (ii) above, to the extent that any such expense is not paid under clause (i), (ii) or (iii) above;

provided, however, that the indemnification provided for in this paragraph (a) shall not apply to any loss, liability, claim, judgment, damage or expense that arises out of any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Prospectus, the Prospectus or the General Disclosure Package or any Issuer-Represented Free Writing Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading which was made in reliance upon and in conformity with the written information furnished to the Company by an Underwriter through the Representative expressly for use therein, provided that the Company and the Bank hereby acknowledge and agree that the only information that the Underwriters have furnished to the Company consists solely of the information set forth in the second paragraph of the section “The Conversion and Offering-Plan of Distribution; Selling Agent and Underwriting Compensation” in the Prospectus, the second sentence of the section “Summary — Market for Common Stock,” the third sentence of the section “Risk Factors — Risks Related to This Offering — We have never issued common stock to the public, and there is no guarantee that a liquid market will develop,” and in the third sentence of the section “Market for the Common Stock.” (the “Underwriter Information”). To the extent required by law, the indemnification provided for in this paragraph (a) shall be subject to and limited by Section 23A of the Federal Reserve Act, as amended and (b) Part 359 of the Regulations of the FDIC.

(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company and the Bank, their directors or trustees, as applicable, each of their officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, judgment, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, of a material fact made in the Preliminary Prospectus, the Prospectus or the General Disclosure Package or any Issuer-Represented Free Writing Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriters’ Information.

(c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability that it may have otherwise than on account of this indemnity agreement. If any such action shall be brought or asserted against an indemnified party and such indemnified party shall have notified the indemnifying party thereof, the indemnifying party shall retain counsel reasonably satisfactory to the indemnified party (who shall not, without the consent of the indemnified party, be counsel to the indemnifying party) to represent the indemnified party in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may be legal defenses available to such indemnified party that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the

B-26

indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. An indemnifying party may participate at its own expense in the defense of any such action. The indemnifying party shall not be liable for the fees and expenses of more than one counsel (in addition to no more than one local counsel in each separate jurisdiction in which any action or proceeding is commenced) separate from such indemnifying party’s own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. Notwithstanding anything to the contrary in this Section 6, the indemnifying party shall not, without the prior written consent of an indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened action in respect of which indemnity could have been sought hereunder by such indemnified party unless (i) such settlement includes an unconditional release of such indemnified party in form and substance satisfactory to such indemnified party from all liability on claims that are the subject matter of such action and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) The Company and the Bank also agree that no Underwriter shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Bank, the Company and its security holders or the Bank’s or the Company’s creditors relating to or arising out of the performance by the Underwriters of the services contemplated by this Agreement, except to the extent that any liability is found in a final judgment by a court of competent jurisdiction to have resulted primarily from any such Underwriter’s bad faith, willful misconduct or gross negligence.

(e) In addition to, and without limiting, the provisions of Section (6)(a)(iv) hereof, in the event that an Underwriter, any person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or any of its partners, directors, officers, employees, affiliates or agents is requested or required to appear as a witness or otherwise gives testimony in any action, proceeding, investigation or inquiry brought by or on behalf of or against the Company, the Bank, the Underwriter or any of its respective affiliates or any participant in the transactions contemplated hereby in which the Underwriter or such person or agent is not named as a defendant, the Company and the Bank jointly and severally agree to reimburse the Underwriter and its partners, directors, officers, employees or agents for all reasonable and necessary out-of-pocket expenses incurred by them in connection with preparing or appearing as a witness or otherwise giving testimony and to compensate the Underwriter and its partners, directors, officers, employees or agents in an amount to be mutually agreed upon.

SECTION 7. CONTRIBUTION. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 6 hereof is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, or is insufficient in respect of any losses, liabilities, claims, judgments, damages or expenses referred to therein, the Company, the Bank, and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company or the Bank and the Underwriters, as incurred, in such proportions (i) that the Underwriters are responsible for that portion represented by the percentage that the total net proceeds from the Public Offering of the Shares (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus and the Company and the Bank are jointly and severally responsible for the balance or (ii) if, but only if, the allocation provided for in clause (i) is for any reason held unenforceable, in such proportion as is appropriate to reflect not only the relative benefits to the Company and the Bank on the one hand and the Underwriters on the other, as reflected in clause (i), but also the relative fault of the Company and the Bank on the one hand and the Underwriters on the other, as well as any other relevant equitable considerations; provided, however, that no person guilty of fraudulent

B-27

misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and its respective partners, directors, officers, employees, affiliates and agents shall have the same rights to contribution as the Underwriters, and each director of the Company and each trustee of the Bank, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company or the Bank within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company and the Bank. Notwithstanding anything to the contrary set forth herein, to the extent permitted by applicable law, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Company or the Bank submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriters or any controlling persons, or by or on behalf of the Company, and shall survive delivery of the Shares.

SECTION 9. DEFAULT BY UNDERWRITERS.

(a) If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery, the Representative may in its discretion arrange for it or another party or other parties to purchase such Shares on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representative does not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representative to purchase such Shares on such terms. In the event that, within the respective prescribed periods, the Representative notifies the Company that it has so arranged for the purchase of such Shares, or the Company notifies the Representative that it has so arranged for the purchase of such Shares, the Representative or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments to the Registration Statement or the Prospectus which in the Representative’s opinion may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Shares.

(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the Representative and the Company as provided in Section 9(a), the aggregate number of such Shares which remains unpurchased does not exceed one tenth of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

B-28

(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the Representative and the Company as provided in Section 9(a) hereof, the aggregate number of such Shares which remains unpurchased exceeds one tenth of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in Section 9(b) hereof to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for obligations under Section 4 and the indemnity and contribution agreements in Sections 6 and 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

(d) If this Agreement is terminated pursuant to Section 9(c) hereof, none of the Company or the Bank shall then be under any liability to any Underwriter except as provided in Sections 4, 6 and 7 hereof; but, if this Agreement is terminated pursuant to Section 5 or for any other reason, any Shares are not delivered by or on behalf of the Company as provided herein, the Company and the Bank, jointly and severally, will reimburse the Underwriters for all out-of-pocket expenses, including fees and disbursements of counsel, incurred by the Underwriters in connection with the transactions contemplated hereby, including, without limitation, marketing, syndication and travel expenses incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to any Underwriter except as provided in Sections 6 and 7 hereof.

SECTION 10. TERMINATION OF AGREEMENT.

(a) The Representative may terminate this Agreement, by notice to the Company, at any time at or prior to the Time of Delivery (i) if there has been, since the date of this Agreement or since the respective dates as of which information is given in the Registration Statement, any Material Adverse Effect, whether or not arising in the ordinary course of business, (ii) if there has occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in the judgment of the Representative, are so material and adverse as to make it impracticable to market the Shares or to enforce contracts, including subscriptions or orders, for the sale of the Shares, (iii) if trading generally on the Nasdaq, the New York Stock Exchange or the NYSE MKT has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by any of said Exchanges or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either Federal or New York authorities, (iv) if any condition specified in Section 5 hereof shall not have been fulfilled when and as required to be fulfilled; (v) if there shall have been such material adverse change in the condition or prospects of the Company or the Bank or the prospective market for the Securities as in the Representative’s good faith opinion would make it inadvisable to proceed with the offering, sale or delivery of the Shares.

(b) If this Agreement is terminated pursuant to this Section 10, such termination shall be without liability of any party to any other party except as provided in Sections 2 and 4 hereof relating to the reimbursement of expenses and except that the provisions of Sections 6 and 7 hereof shall survive any termination of this Agreement.

SECTION 11. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Representative shall be directed to 1251 Avenue of the Americas, 6^th Floor, New York, New York 10020, attention of General Counsel, with a copy to Martin L. Meyrowitz, P.C. at Silver, Freedman, Taff & Tiernan LLP, 3299 K Street, N.W., Suite 100, Washington, D.C. 20007; notices to the Company and the Bank shall be directed to either of them at 2651 Strang Boulevard, Suite 100, Yorktown Heights, New York, 10598, Attention of Joseph Roberto, Chairman, President and Chief Executive Officer, with a copy to Kip Weissman, Esq., at Luse Gorman, PC, 5335 Wisconsin Avenue, NW, Suite 780, Washington, DC 20001.

B-29

SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company and the Bank and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company and the Bank and their respective successors and the controlling persons and the partners, officers, directors, trustees, employees, affiliates and agents referred to in Sections 6 and 7 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein or therein contained. This Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and the Bank and their respective successors, and said controlling persons, partners, officers, directors and trustees and their heirs, partners, legal representatives, and for the benefit of no other person, firm or corporation.

SECTION 13. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire understanding of the parties hereto with reference to the Public Offering contemplated hereby and supersedes any and all other oral or written agreements heretofore made, except for the engagement letter dated August 17, 2016, by and between Sandler O’Neill and the Bank, relating to Sandler O’Neill’s service as records management agent in connection with the Conversion and (ii) the Agency Agreement relating to Sandler O’Neill serving as marketing agent in the Subscription Offering and the Community Offering. No waiver, amendment or other modification of this Agreement shall be effective unless in writing and signed by the parties hereto.

SECTION 14. GOVERNING LAW AND TIME. This Agreement, and any claim controversy or dispute arising under or related to this Agreement, shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State without regard to the conflicts of laws provisions thereof. Unless otherwise noted, specified times of day refer to Eastern time.

SECTION 15. SEVERABILITY. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

SECTION 16. HEADINGS. Section headings are not to be considered part of this Agreement, are for convenience and reference only, and are not to be deemed to be full or accurate descriptions of the contents of any paragraph or subparagraph.

[The next page is the signature page]

B-30

If the foregoing is in accordance with your understanding, please sign and return to us [            ] counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters, the Company and the Bank. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.

Very truly yours,
PCSB FINANCIAL CORPORATION
(a Maryland corporation)
By:
	Name:	Joseph Roberto
	Title:	Chairman, President and Chief     Executive Officer
PCSB BANK
By:
	Name:	Joseph Roberto
	Title:	Chairman, President and Chief     Executive Officer

CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER O’NEILL & PARTNERS, L.P. AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS
By:	Sandler O’Neill & Partners Corp.,     the sole general partner
By:
	Authorized Signatory

B-31

SCHEDULE I

Underwriter	Total Number of Shares to be Purchased
Sandler O’Neill & Partners, L.P.
Total

EX-2

Exhibit 2

PLAN OF CONVERSION

OF

PCSB BANK,

AS AMENDED

TABLE OF CONTENTS

1.	DEFINITIONS	2
2.	PROCEDURES FOR CONVERSION	7
3.	APPLICATIONS AND APPROVALS	9
4.	SALE OF SUBSCRIPTION SHARES	9
5.	PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES	9
6.	RETENTION OF OFFERING PROCEEDS BY THE HOLDING COMPANY	10
7.	SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)	11
8.	SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)	11
9.	SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY)	12
10.	COMMUNITY OFFERING	12
11.	SYNDICATED COMMUNITY OFFERING OR FIRM COMMITMENT OFFERING	13
12.	LIMITATIONS ON PURCHASES	14
13.	PAYMENT FOR SUBSCRIPTION SHARES	15
14.	MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS	16
15.	UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT	17
16.	RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES	17
17.	ESTABLISHMENT OF LIQUIDATION ACCOUNT	17
18.	CONTRIBUTION TO THE FOUNDATION	19
19.	VOTING RIGHTS OF STOCKHOLDERS	19
20.	RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION	19
21.	REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION	20
22.	TRANSFER OF DEPOSIT ACCOUNTS	20
23.	REGISTRATION AND MARKETING	21
24.	TAX RULINGS OR OPINIONS	21
25.	STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS	21
26.	RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY	21
27.	PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK	22
28.	ARTICLES OF INCORPORATION AND BYLAWS	23
29.	CONSUMMATION OF CONVERSION AND EFFECTIVE DATE	23
30.	EXPENSES OF CONVERSION	23
31.	AMENDMENT OR TERMINATION OF PLAN	23
32.	CONDITIONS TO CONVERSION	23
33.	INTERPRETATION	24

(i)

PLAN OF CONVERSION

OF

PCSB BANK

INTRODUCTION

This Plan of Conversion (the “Plan”) provides for the conversion of PCSB Bank (the “Bank”) from a New York-chartered mutual savings bank to a New York-chartered capital stock savings bank (the “Conversion”). As part of the Conversion, the Bank will establish a new stock holding company (the “Holding Company”) that will issue, concurrently with the Conversion, shares of its Common Stock sold in the Offering.

The primary business purpose of the Conversion is to provide the Bank and the Holding Company with additional capital to support growth and achieve economies of scale in response to changing regulatory and market conditions, including higher compliance and operating costs associated with new banking regulations. Bank regulators also have increased the minimum regulatory capital requirements for banks and savings banks, and the additional capital raised in the Conversion will enable the Bank to grow and also continue to satisfy the new capital requirements. The Conversion will also provide the Bank and the Holding Company greater flexibility to effect corporate transactions, including mergers and acquisitions, and expansion of the Bank’s branch network.

The Holding Company will offer shares of its Common Stock in the Offering upon the terms and conditions set forth herein. The subscription rights granted to Participants in the Subscription Offering are set forth below. To the extent shares of Common Stock remain available for purchase after the completion of the Subscription Offering, the Company may offer the remaining shares for sale in a Community Offering, Syndicated Community Offering or Firm Commitment Offering. All sales of Common Stock in any Community Offering, Syndicated Community Offering or Firm Commitment Offering will be at the sole discretion of the Holding Company.

The Conversion will have no effect on depositors, borrowers or other customers of the Bank (other than with respect to voting and liquidation rights as set forth herein). After the Conversion, the Bank’s insured deposit accounts will continue to be insured by the FDIC to the fullest extent provided by applicable law.

In furtherance of the Bank’s commitment to its community, this Plan provides for a contribution of Holding Company Common Stock and/or cash, subject to regulatory limitations, to the Foundation. The funding of the Foundation is intended to enhance the Bank’s existing community reinvestment activities in a manner that will allow the Bank’s local communities to share in the growth and profitability of the Holding Company and the Bank over the long term.

1

This Plan has been approved by the Board of Directors of the Bank. This Plan also must be approved by Voting Depositors of the Bank at a Special Meeting of Depositors to be called for that purpose by the following votes: (i) at least 75% of the votes cast by Voting Depositors of the Bank, represented in person or by proxy, and (ii) at least a majority of the total number of votes entitled to be cast by Voting Depositors of the Bank. The DFS must approve this Plan and the transactions contemplated hereby before it is presented to Voting Depositors for their approval. In addition, the Holding Company will make any and all filings in a timely manner with the FDIC, the Federal Reserve and the SEC to obtain any requisite regulatory approvals or non-objections to complete the Conversion.

1.    DEFINITIONS

For the purposes of this Plan, the following terms have the following respective meanings:

Account Holder – Any Person holding a Deposit Account in the Bank.

Acting in Concert – The term Acting in Concert means (i) knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement; or (ii) a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. A person or company that acts in concert with another person or company (“other party”) shall also be deemed to be acting in concert with any person or company that is also acting in concert with that other party, except that any Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in concert with its trustee or a Person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the Tax-Qualified Employee Stock Benefit Plan will be aggregated.

Affiliate – The term affiliate, when applied to a specified Person, includes any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

Annual Closing Date – means June 30.

Appraised Value Range – The range of the estimated consolidated pro forma market value of the Holding Company, which shall also be equal to the estimated pro forma market value of the total number of Subscription Shares to be issued in the Conversion, as determined by the Independent Appraiser before the commencement of the Subscription Offering and as it may be amended from time to time thereafter. The maximum and minimum of the Appraised Value Range may vary as much as 15% above and 15% below, respectively, the midpoint of the Appraised Value Range. The maximum of the Appraisal Value Range may be increased by the Independent Appraiser by up to 15% after the commencement of the Subscription Offering to reflect changes in market or financial conditions or demand for the Common Stock.

Associate – The term Associate, when used to indicate a relationship with any Person, means (i) any corporation or organization (other than the Holding Company, the Bank or a majority-owned subsidiary of the Bank) if the Person is a senior officer or partner or beneficially owns, directly or indirectly, 10% or more of any class of equity securities of the corporation or organization, (ii) any trust or other estate, if the Person has a substantial beneficial interest in the trust or estate or is a trustee or fiduciary of the trust or estate, except that for the purposes of this Plan relating to subscriptions in the Offering and the sale of Subscription Shares following the Conversion, a Person who has a substantial beneficial interest in any Non-Tax-Qualified Employee Stock Benefit Plan or any Tax-Qualified Employee Stock Benefit Plan, or who is a trustee or fiduciary of such plan, is not an associate of such plan, and except that for purposes of aggregating total shares that may be held by Officers and Directors, the term “Associate” does not include any Tax-Qualified Employee Stock Benefit Plan, and (iii) any Person who is related by blood or marriage to such Person and who (A) lives in the same home as such Person or (B) is a Director or Officer of the Bank, the Holding Company or a subsidiary of the Bank or the Holding Company.

2

Bank – PCSB Bank, in its pre-Conversion mutual form or its post-Conversion stock form, as indicated by the context.

Bank Regulators – the DFS and, where applicable, the FDIC and the Federal Reserve.

Code – The Internal Revenue Code of 1986, as amended.

Common Stock – The common stock, par value $0.01 per share, of the Holding Company.

Community – Dutchess, Putnam, Rockland and Westchester Counties in New York.

Community Offering – The offering for sale to certain members of the general public directly by the Holding Company of Subscription Shares not subscribed for in the Subscription Offering. The Community Offering may occur concurrently with the Subscription Offering and any Syndicated Community Offering, or upon conclusion of the Subscription Offering.

Control – (including the terms “controlling,” “controlled by,” and “under common control with”) means the direct or indirect power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise as described in Section 143-b of the New York Banking Law.

Conversion – The conversion of the Bank to stock form pursuant to this Plan and all steps incident or necessary thereto, including the Offering.

Conversion Application – The application on such form as may be prescribed by the DFS which will be filed by the Bank with the DFS in connection with the Conversion.

Conversion Notice – The notice in such form as may be prescribed by the FDIC which will be filed by the Bank with the FDIC in connection with the Conversion.

DFS – The New York State Department of Financial Services.

Deposit Account – Any withdrawable account, including, without limitation, savings, time, demand, NOW accounts, money market, certificate and passbook accounts.

Depositor – Any Person that qualifies as a depositor of the Bank.

3

Director – A member of the Board of Trustees of the Bank (in mutual form), of the Board of Directors of the Bank (in stock form) or of the Board of Directors of the Holding Company, as appropriate in the context.

Eligible Account Holder – Any Person holding a Qualifying Deposit on the Eligibility Record Date for purposes of determining subscription rights and establishing subaccount balances in the Liquidation Account.

Eligibility Record Date – The date for determining Eligible Account Holders, which is September 30, 2015.

Employees – All Persons who are employed by the Bank or the Holding Company.

Employee Plans – Any one or more Tax-Qualified Employee Stock Benefit Plans of the Bank or the Holding Company, including any ESOP and the 401(k) Plan.

ESOP – The Bank’s Employee Stock Ownership Plan, and related trust.

FDIC – The Federal Deposit Insurance Corporation.

Federal Reserve – The Board of Governors of the Federal Reserve System.

Firm Commitment Offering – The offering, at the sole discretion of the Holding Company, of Subscription Shares not subscribed for in the Subscription Offering and any Community Offering, to members of the general public through one or more underwriters. A Firm Commitment Offering may occur following the Subscription Offering and the Community Offering as an alternative to a Syndicated Community Offering.

Foundation – PCSB Bank Charitable Foundation, a new charitable foundation intended to qualify as an exempt organization under Code Section 501(c)(3) that will receive Holding Company Common Stock and/or cash in connection with the Offering.

Foundation Shares – Shares of Holding Company Common Stock issued to the Foundation in connection with the Conversion.

Holding Company – The corporation formed to acquire all of the shares of capital stock of the Bank in connection with the Conversion, which shall be incorporated in Maryland or such other state as shall be designated by the Board of Trustees of the Bank.

Holding Company Application – The holding company application on such form as may be prescribed by the Federal Reserve, which will be filed with the Federal Reserve in connection with the Conversion and the formation of the Holding Company. Such term shall also include the appropriate change in control application on such form as may be prescribed by the DFS in connection with the Conversion and formation of the Holding Company.

Independent Appraiser – The appraiser retained by the Holding Company and the Bank to prepare an appraisal of the pro forma market value of the Subscription Shares.

4

Liquidation Account – The account established by the Bank representing the liquidation interests received by Eligible Account Holders and any Supplemental Eligible Account Holders in the Conversion in exchange for their liquidation and other interests in the Bank immediately before the Conversion.

Offering – The offering and issuance, pursuant to this Plan, of Common Stock in a Subscription Offering, Community Offering, Syndicated Community Offering or Firm Commitment Offering, as the case may be.

Offering Range – The range of the number of shares of Common Stock offered for sale in the Offering. The Offering Range shall be equal to the Appraised Value Range divided by the Subscription Price.

Officer – The term Officer means the president, any vice president (but not an assistant vice president, second vice president, or other vice president having authority similar to an assistant or second vice president), the secretary, the treasurer, the comptroller, and any other person performing similar functions with respect to any organization whether incorporated or unincorporated. The term Officer also includes the Chairman of the Board of Directors if the Chairman is authorized by the charter or bylaws of the organization to participate in its operating management or if the Chairman in fact participates in such management.

Order Form – Any form (together with any cover letter and acknowledgment) sent to any Participant or other Person containing, among other things, a description of the alternatives available to such Person under this Plan and by which any such Person may make elections regarding subscriptions for Subscription Shares.

Participant – Any Eligible Account Holder, Employee Plan or Supplemental Eligible Account Holder.

Person – An individual, a corporation, a partnership, an association, a joint-stock company, a limited liability company, a trust, an unincorporated organization, or a government or political subdivision of a government.

Plan – This Plan of Conversion as it exists on the date hereof and as it may hereafter be amended in accordance with its terms.

Prospectus – The one or more documents used in offering for sale the Subscription Shares.

Qualifying Deposit – The aggregate balance of all Deposit Accounts in the Bank of (i) an Eligible Account Holder at the close of business on the Eligibility Record Date, provided such aggregate balance is not less than $100, or (ii) a Supplemental Eligible Account Holder at the close of business on the Supplemental Eligibility Record Date, provided such aggregate balance is not less than $100.

5

Resident – Any Person who occupies a dwelling within the Community, has a present intent to remain within the Community for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within the Community together with an indication that such presence within the Community is something other than merely transitory in nature. For a corporation or other business entity to be a Resident, the principal place of business or headquarters of such entity must be in the Community. To the extent a Person is a personal benefit plan, the circumstances of the beneficiary shall apply with respect to this definition. In the case of all other benefit plans, circumstances of the trustee shall be examined for purposes of this definition. The Bank may use deposit or loan records or such other evidence provided to it to determine whether a Person is a resident of the Community. In all cases, however, such a determination shall be in the sole discretion of the Bank. A Person must be a “Resident” for the purpose of determining whether such Person “resides” in the Community as such term is used in this Plan.

SEC – The United States Securities and Exchange Commission.

Special Meeting of Depositors – The special meeting of Depositors and any adjournments thereof held to consider and vote upon this Plan.

Subscription Offering – The offering for sale of Subscription Shares to Participants.

Subscription Price – The price per Subscription Share to be paid by Participants and others in the Offering. The Subscription Price will be determined by the Board of Directors of the Holding Company and fixed before the commencement of the Subscription Offering.

Subscription Shares – Shares of Common Stock offered for sale in the Offering.

Supplemental Eligible Account Holder – Any Person (other than Directors and Officers of the Bank, and their Associates) who holds a Qualifying Deposit on the Supplemental Eligibility Record Date, who is not an Eligible Account Holder.

Supplemental Eligibility Record Date – The date for determining Supplemental Eligible Account Holders, which shall be the last day of the calendar quarter preceding DFS approval of the application for conversion. The Supplemental Eligibility Record Date will only occur if the DFS has not approved the Conversion within 15 months after the Eligibility Record Date.

Syndicated Community Offering – The offering, at the sole discretion of the Holding Company, of Subscription Shares not subscribed for in the Subscription Offering and the Community Offering, to members of the general public through a syndicate of broker-dealers. The Syndicated Community Offering may occur concurrently with the Subscription Offering and any Community Offering, or upon conclusion of the Subscription Offering and any Community Offering.

Tax-Qualified Employee Stock Benefit Plan – Any defined benefit plan or defined contribution plan, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which, with its related trust, meets the requirements to be “qualified” under Section 401 of the Code. The Bank may make scheduled discretionary contributions to a tax-qualified employee stock benefit plan; provided, however, such contributions do not cause the Bank to fail to meet its regulatory capital requirements. A “Non-Tax-Qualified Employee Stock Benefit Plan” is any defined benefit plan or defined contribution plan that is not so qualified.

6

Voting Depositor – Any Person who at the close of business on the Voting Record Date is entitled to vote as a Depositor of the Bank. A Voting Depositor shall be entitled to cast a number of votes as determined in accordance with Section 9019 of the New York Banking Law.

Voting Record Date – The date fixed by the Directors for determining eligibility to vote at the Special Meeting of Depositors.

2.    PROCEDURES FOR CONVERSION

A.    After approval of this Plan by the Board of Directors of the Bank, this Plan and the transactions contemplated hereby, together with all other requisite material, shall be submitted to the Bank Regulators for approval. Notice of the adoption of this Plan by the Board of Directors of the Bank will be published in a newspaper having general circulation in each community in which an office of the Bank is located, and copies of this Plan will be made available at each office of the Bank for inspection by Depositors. The Bank also will publish notices of the filing of the Conversion Application with the DFS and the filing of the Holding Company Application with the Federal Reserve.

Promptly following approval by the Bank Regulators, this Plan and the transactions contemplated hereby will be submitted to a vote of the Voting Depositors at the Special Meeting of Depositors. The Bank will mail to all Voting Depositors, at their address appearing on the records of the Bank as of the Voting Record Date, a proxy statement in either long or summary form describing this Plan. The Holding Company also will mail to all Participants a Prospectus and Order Form for the purchase of Subscription Shares, subject to other provisions of this Plan. In addition, all Participants will receive, or will be given the opportunity to request by telephone or by letter addressed to the Bank’s Secretary, a copy of this Plan. Upon approval of the Plan by (i) 75% of the aggregate dollar amount of deposits of Voting Depositors, represented in person or by proxy at the Special Meeting of Depositors, and (ii) a majority of the total number of votes entitled to be cast by Voting Depositors, the Holding Company and the Bank will take all other necessary steps pursuant to applicable laws and regulations to consummate the Conversion. The Conversion must be completed within 24 months from the date of the approval of this Plan by the DFS, unless a longer time period is permitted by the DFS.

B.    The period for the Subscription Offering will be not less than 20 days nor more than 45 days from the date Participants are first mailed a Prospectus and Order Form, unless extended. Any shares of Common Stock for which subscriptions have not been received in the Subscription Offering may be offered for sale in a Community Offering, a Syndicated Community Offering or a Firm Commitment Offering, or in any other manner permitted by the Bank Regulators and the SEC. All sales of shares of Common Stock must be completed within 45 days after the last day of the Subscription Offering, unless the offering period is extended by the Holding Company with the approval of the Bank Regulators. No single extension of more than 60 days will be granted.

7

C.    The Conversion will be effected as follows, or in any other manner that is consistent with the purposes of this Plan and applicable laws and regulations. Each of the steps set forth herein shall be deemed to occur in such order as is necessary to consummate the Conversion pursuant to the Plan, the intent of the Board of Directors of the Holding Company and the Board of Directors of the Bank, and applicable Federal and state regulations and policy. Approval of this Plan by Voting Depositors also shall constitute approval of each of the transactions necessary to implement this Plan.

(1) The Bank will convert its charter to a New York stock savings bank charter, which authorizes the issuance of capital stock;

(2) The Holding Company will purchase all of the capital stock issued by the Bank in connection with its conversion from mutual to stock form in exchange for at least 50% of the net proceeds of the Offering; and

(3) The Holding Company will issue the Common Stock in the Offering as provided in this Plan.

D.    The Holding Company shall register the Subscription Shares and the Foundation Shares with the SEC and any appropriate state securities authorities.

E.    The Board of Directors of the Bank may determine for any reason at any time before the issuance of the Subscription Shares not to utilize a holding company form of organization in the Conversion. If the Board of Directors determines not to complete the Conversion utilizing a holding company form of organization, the stock of the Bank will be issued and sold in accordance with this Plan. In such case, the Holding Company’s registration statement will be withdrawn from the SEC, the Holding Company Application will be withdrawn from the Federal Reserve, and the Bank will take steps necessary to complete the Conversion, with the concurrence of the DFS, including filing any necessary documents with the DFS and any other applicable state or Federal regulatory agencies and will issue and sell the Subscription Shares in accordance with this Plan. In such event, any subscriptions or orders received for Subscription Shares of the Holding Company shall be deemed to be subscriptions or orders for common stock of the Bank, and the Bank shall take such steps as permitted or required by the DFS and any other applicable state or Federal regulatory agencies.

F.    Upon completion of the Conversion, the legal existence of the Bank shall not terminate but the Bank (in stock form) shall be a continuation of the entity of the Bank (in mutual form) and all property of the mutual Bank, including its right, title and interest in and to all property of whatever kind and nature, whether real, personal, or mixed, and things and choses in action, and every right, privilege, interest and asset of every conceivable value or benefit then existing or pertaining to it, or which would inure to it, immediately by operation of law and without the necessity of any conveyance or transfer and without any further act or deed shall vest in the Bank (in stock form). The Bank (in stock form) shall have, hold, and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the Bank (in mutual form). The Bank (in stock form) at the time and the taking effect of the Conversion shall continue to have and succeed to all the rights, obligations and relations of the Bank (in mutual form). All pending actions and other judicial or administrative proceedings to which the Bank (in mutual form) was a party shall not be discontinued by reason of the Conversion, but may be prosecuted to final judgment or order in the same manner as if the Conversion had not been made and the Bank (in stock form) resulting from the Conversion may continue the actions in its name notwithstanding the Conversion. Upon completion of the Conversion, each Person having a Deposit Account at the Bank before the Conversion will continue to have a Deposit Account, without further payment therefor, in the same amount and subject to the same terms and conditions (except for voting and liquidation rights) as in effect before the Conversion. All insured Deposit Accounts in the Bank after the Conversion will continue to be insured by the FDIC to the extent provided by applicable law.

8

G.    The executive offices/headquarters, home office and branch offices of the Bank shall be unaffected by the Conversion. The executive offices of the Holding Company shall be located at the current executive offices of the Bank.

3.    APPLICATIONS AND APPROVALS

The Boards of Directors of the Holding Company and the Bank will take all necessary steps to convert the Bank to stock form, form the Holding Company and complete the Conversion. The Bank shall file a Conversion Application with the DFS and a Conversion Notice with the FDIC, and the Holding Company shall file a Holding Company Application with the Federal Reserve and the DFS and a registration statement with the SEC. The Bank and Holding Company shall make any additional filings necessary to obtain all approvals required to complete the Conversion.

4.    SALE OF SUBSCRIPTION SHARES

The Subscription Shares will be offered simultaneously in the Subscription Offering to the Participants in the respective priorities set forth in this Plan. The Subscription Offering may begin as early as the mailing of the Prospectus and the Proxy Statement for the Special Meeting of Depositors. The Common Stock will not be insured by the FDIC or any government agency. The Bank will not extend credit to any Person to purchase shares of Common Stock.

Any shares of Common Stock for which subscriptions have not been received in the Subscription Offering may be offered for sale in the Community Offering. The Subscription Offering may begin before the Special Meeting of Depositors and, in that event, the Community Offering also may begin before the Special Meeting of Depositors. The sale of Common Stock offered for sale before the Special Meeting of Depositors, however, is subject to the approval of this Plan by Voting Depositors.

If feasible, any shares of Common Stock remaining after the Subscription Offering and the Community Offering, if a Community Offering is conducted, will be sold in a Syndicated Community Offering or a Firm Commitment Offering, or in any manner approved by the Bank Regulators that will achieve the widest distribution of the Common Stock. The issuance of Common Stock in the Subscription Offering and any Community Offering will be consummated simultaneously on the date of the sale of Common Stock in any Syndicated Community Offering or Firm Commitment Offering, and only if the required minimum number of shares of Common Stock has been issued.

5.    PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES

The total number of shares, or a range thereof, of Subscription Shares to be offered for sale in the Offering will be determined jointly by the Boards of Directors of the Bank and the Holding Company immediately before the commencement of the Subscription Offering, and will be based on the Appraised Value Range and the Subscription Price. The Offering Range will be equal to the Appraised Value Range divided by the Subscription Price. The estimated pro forma consolidated market value of the Holding Company will be subject to adjustment within the Appraised Value Range if necessitated by market or financial conditions, with the receipt of any required approvals of the Bank Regulators, and the maximum of the Appraised Value Range may be increased by up to 15% after the commencement of the Subscription Offering to reflect changes in market and financial conditions or demand for the shares. The total number of Subscription Shares issued in the Offering will be equal to the estimated pro forma consolidated market value of the Holding Company, as may be amended, divided by the Subscription Price.

9

If the Subscription Price multiplied by the number of Subscription Shares to be sold in the Offering is below the minimum of the Appraised Value Range, or materially above the maximum of the Appraised Value Range, a resolicitation of subscribers may be required, provided that up to a 15% increase above the maximum of the Appraised Value Range will be deemed not material and thus shall not require a resolicitation. Any such resolicitation shall be effected in such manner and within such time as the Bank and the Holding Company shall establish, provided that all required regulatory approvals are obtained.

Notwithstanding the foregoing, Subscription Shares will not be issued unless, before the consummation of the Offering, the Independent Appraiser confirms to the Bank, the Holding Company and the Bank Regulators, that, to the best knowledge of the Independent Appraiser, nothing of a material nature has occurred which, taking into account all relevant factors, would cause the Independent Appraiser to conclude that the number of Subscription Shares to be sold in the Offering multiplied by the Subscription Price is incompatible with its estimate of the aggregate consolidated pro forma market value of the Holding Company. If such confirmation is not received, the Holding Company may cancel the Offering, extend the Offering and establish a new Subscription Price and/or Appraised Value Range, hold a new Offering, or take such other action as the Bank Regulators may permit.

The Common Stock to be issued in the Offering shall be fully paid and non-assessable.

6.    RETENTION OF OFFERING PROCEEDS BY THE HOLDING COMPANY

The Holding Company may retain up to 50% of the net proceeds of the Offering. The Offering proceeds will provide additional capital to the Holding Company and the Bank for future growth of the Bank’s assets, products and services in a highly competitive and regulated financial services environment, and would facilitate expansion through acquisitions of financial service organizations, diversification into other related businesses and for other business and investment purposes, including the possible payment of dividends and possible future repurchases of the Common Stock as permitted by applicable Federal and state regulations and policy. Following the Conversion, the Bank may distribute additional capital to the Holding Company from time to time, subject to applicable regulations governing capital distributions.

10

7.    SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)

A.    Each Eligible Account Holder shall have nontransferable subscription rights to subscribe for in the Subscription Offering up to the greater of 20,000 shares of Common Stock, 0.10% of the total number of shares of Common Stock issued in the Offering, or fifteen times the product (rounded down to the next whole number) obtained by multiplying the number of Subscription Shares offered in the Offering by a fraction of which the numerator is the amount of the Eligible Account Holder’s Qualifying Deposit and the denominator is the total amount of Qualifying Deposits of all Eligible Account Holders, in each case on the Eligibility Record Date, subject to the provisions of Section 12.

B.    If Eligible Account Holders exercise subscription rights for a number of Subscription Shares in excess of the total number of such shares eligible for subscription, the Subscription Shares shall be allocated among the subscribing Eligible Account Holders so as to permit each subscribing Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation of Subscription Shares equal to the lesser of 100 shares or the number of shares for which such Eligible Account Holder has subscribed. Any remaining shares will be allocated among the subscribing Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the amount of the Qualifying Deposit of each Eligible Account Holder whose subscription remains unsatisfied bears to the total amount of the Qualifying Deposits of all Eligible Account Holders whose subscriptions remain unsatisfied. If the amount so allocated exceeds the amount subscribed for by any one or more Eligible Account Holders, the excess shall be reallocated (one or more times as necessary) among those Eligible Account Holders whose subscriptions are still not fully satisfied on the same principle until all available shares have been allocated.

C.    Subscription rights as Eligible Account Holders received by Directors and Officers and their Associates that are based on increased deposits made by such persons during the 12 months preceding the Eligibility Record Date shall be subordinated to the subscription rights of all other Eligible Account Holders, except as permitted by the Bank Regulators.

8.    SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)

The Employee Plans of the Holding Company and the Bank shall have subscription rights to purchase in the aggregate up to 10% of the aggregate of the Subscription Shares issued in the Offering and the Foundation Shares contributed to the Foundation, including any Subscription Shares to be issued as a result of an increase in the maximum of the Offering Range after commencement of the Subscription Offering and before completion of the Conversion. Consistent with applicable laws and regulations and practices and policies, the Employee Plans may use funds contributed by the Holding Company or the Bank and/or borrowed from an independent financial institution to exercise such subscription rights, and the Holding Company and the Bank may make scheduled discretionary contributions thereto, provided that (i) such contributions do not cause the Holding Company or the Bank to fail to meet any applicable regulatory capital requirements and (ii) the Bank Regulators do not object on supervisory grounds. The Employee Plans shall not be deemed to be Associates or Affiliates of or Persons Acting in Concert with any Director or Officer of the Holding Company or the Bank. Alternatively, if permitted by the Bank Regulators, the Employee Plans may purchase all or a portion of such shares in the open market after the Conversion.

11

9.    SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY)

A.    Each Supplemental Eligible Account Holder shall have nontransferable subscription rights to subscribe for in the Subscription Offering up to the greater of 20,000 shares of Common Stock, 0.10% of the total number of shares of Common Stock issued in the Offering, or fifteen times the product (rounded down to the next whole number) obtained by multiplying the number of Subscription Shares offered in the Offering by a fraction of which the numerator is the amount of the Supplemental Eligible Account Holder’s Qualifying Deposit and the denominator is the total amount of Qualifying Deposits of all Supplemental Eligible Account Holders, in each case on the Supplemental Eligibility Record Date, subject to the availability of sufficient shares after filling in full all subscription orders of the Eligible Account Holders and Employee Plans and to the purchase limitations specified in Section 12.

B.    If Supplemental Eligible Account Holders exercise subscription rights for a number of Subscription Shares in excess of the total number of such shares eligible for subscription, the Subscription Shares shall be allocated among the subscribing Supplemental Eligible Account Holders so as to permit each such subscribing Supplemental Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation of Subscription Shares equal to the lesser of 100 shares or the number of shares for which each such Supplemental Eligible Account Holder has subscribed. Any remaining shares will be allocated among the subscribing Supplemental Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the amount of the Qualifying Deposit of each such Supplemental Eligible Account Holder bears to the total amount of the Qualifying Deposits of all Supplemental Eligible Account Holders whose subscriptions remain unsatisfied. If the amount so allocated exceeds the amount subscribed for by any one or more Supplemental Eligible Account Holders, the excess shall be reallocated (one or more times as necessary) among those Supplemental Eligible Account Holders whose subscriptions are still not fully satisfied on the same principle until all available shares have been allocated.

10.    COMMUNITY OFFERING

If subscriptions are not received for all Subscription Shares offered for sale in the Subscription Offering, shares for which subscriptions have not been received may be offered for sale in the Community Offering through a direct community marketing program that may use a broker, dealer, consultant or investment banking firm experienced and expert in the sale of savings institutions securities. Such entities may be compensated on a fixed fee basis or on a commission basis, or a combination thereof, provided that such fee is acceptable to the Superintendent of Financial Services. Any Person may purchase up to 20,000 shares of Common Stock in the Community Offering, subject to the purchase limitations specified in Section 12. If orders for Common Stock in the Community Offering exceed the number of shares available for sale, shares may be allocated (to the extent shares remain available) first to cover orders of natural persons (including trusts of natural persons) residing in the Community so that each Person in such category of the Community Offering may receive, to the extent possible, the lesser of 100 shares or the number of shares they ordered, and thereafter any remaining shares will be allocated to Persons in such category of the Community Offering on an equal number of shares basis per order. If orders for Common Stock in the Community Offering still exceed the number of shares available for sale after satisfying the orders of natural persons (including trusts of natural persons) residing in the Community in accordance with the allocation procedures described in the previous sentence, then the same allocation procedures shall be used to allocate shares among Persons not residing in the Community.

12

The Holding Company shall use its best efforts consistent with this Plan to distribute Common Stock sold in the Community Offering in such a manner as to promote the widest distribution practicable of such stock. The Holding Company reserves the right to reject any or all orders, in whole or in part, that are received in the Community Offering, which right shall be exercised in a manner reasonably consistent with achieving a reasonably wide distribution of the Common Stock.

11.    SYNDICATED COMMUNITY OFFERING OR FIRM COMMITMENT OFFERING

If feasible, the Board of Directors may determine to offer Subscription Shares not sold in the Subscription Offering or the Community Offering, if any, in a Syndicated Community Offering, subject to such terms, conditions and procedures as may be determined by the Holding Company in a manner that will achieve the widest distribution of the Common Stock, and subject to the right of the Holding Company to accept or reject in whole or in part any orders in the Syndicated Community Offering, which right shall be exercised in a manner reasonably consistent with achieving a reasonably wide distribution of the Common Stock. In the Syndicated Community Offering, any Person may purchase up to 20,000 shares of Common Stock, subject to the purchase limitations specified in Section 12. Provided that the Subscription Offering has begun, the Holding Company may begin the Syndicated Community Offering at any time (including as soon as practicable after the termination of the Subscription Offering and any Community Offering), provided that the completion of the offer and sale of the Common Stock will be conditioned upon the approval of this Plan by Voting Depositors.

Alternatively, if feasible, the Board of Directors may determine to offer Subscription Shares not sold in the Subscription Offering or any Community Offering for sale in a Firm Commitment Offering subject to such terms, conditions and procedures as may be determined by the Holding Company, and subject to the right of the Holding Company to accept or reject in whole or in part any orders in the Firm Commitment Offering. Provided the Subscription Offering has begun, the Holding Company may begin the Firm Commitment Offering at any time.

If, for any reason, a Syndicated Community Offering or Firm Commitment Offering of shares of Common Stock not sold in the Subscription and Community Offerings cannot be effected, or if any insignificant residue of shares of Common Stock is not sold in the Subscription and Community Offerings or in a Syndicated Community Offering or Firm Commitment Offering, the Holding Company will make other arrangements, if possible, for the disposition of unsubscribed shares aggregating at least the minimum of the Offering Range. Such other purchase arrangements will be subject to receipt of any required approval of the Bank Regulators.

13

12.    LIMITATIONS ON PURCHASES

The following limitations shall apply to all purchases and issuances of shares of Subscription Shares:

A.    The maximum number of shares of Common Stock that may be subscribed for or purchased in all categories in the Offering by any Person or Participant together with any Associate or group of Persons Acting in Concert (“In Concert Group”) is 30,000 shares of Common Stock, except that the Employee Plans may subscribe for up to 10% of the Common Stock sold in the Offering (including shares issued if the maximum of the Offering Range is increased up to 15%) and contributed to the Foundation. If the number of shares of Common Stock otherwise allocable pursuant to Sections 7 through 12 inclusive, would be in excess of the maximum number of shares permitted to be allocated to any In Concert Group as set forth in this section, the number of shares of Common Stock allocated to each Person that makes up such In Concert Group shall first be reduced to the lowest limitation applicable to each such Person and then the number of shares of Common Stock allocated to each such Person shall be reduced until the aggregate allocation to the In Concert Group complies with the limits of this section. The method of reducing the allocation of each Person in any In Concert Group shall be determined by the Holding Company in its sole discretion.

B.    The maximum number of shares of Common Stock that may be issued to or purchased in all categories of the Offering by Officers and Directors and their Associates, in the aggregate, shall not exceed 25% of the shares of Common Stock sold in the Offering and contributed to the Foundation.

C.    A minimum of 25 shares of Common Stock must be purchased by each Person purchasing shares in the Offering to the extent those shares are available; provided, however, that if the minimum number of shares of Common Stock purchased times the Subscription Price exceeds $500, then such minimum purchase requirement shall be reduced to such number of shares which when multiplied by the price per share shall not exceed $500, as determined by the Board.

D.    Depending upon market or financial conditions, the Board of Directors of the Holding Company, with the receipt of any required approvals of the Bank Regulators and without further approval of Voting Depositors, may decrease or increase any of the purchase limitations in this Plan, provided that the maximum purchase limitations may not be increased to a percentage in excess of 5.0% of the shares sold in the Offering. If the Holding Company increases the maximum purchase limitation(s), the Holding Company shall resolicit Persons who subscribed for the maximum purchase amount in the Subscription Offering, and may, in the sole discretion of the Holding Company, resolicit certain other large subscribers. If there is such a resolicitation, the Holding Company shall have the right, in its sole discretion, to require such persons to supply immediately available funds for the purchase of additional shares of Common Stock. Such persons will be prohibited from paying with a personal check, but the Holding Company may allow payment by wire transfer.

If the total number of shares offered in the Offering is increased due to an increase in the maximum of the Appraised Value Range of up to 15%, the additional shares may, at the discretion of the Holding Company, be used to fill the Employee Plans orders and then will be allocated in accordance with the purchase priorities set forth in this Plan.

14

For purposes of this Section 12, (i) Directors, Officers and Employees of the Bank and the Holding Company or any of their subsidiaries shall not be deemed to be Associates or a group affiliated with each other or otherwise Acting in Concert solely as a result of their capacities as such, and (ii) shares purchased by Tax-Qualified Employee Stock Benefit Plans shall not be attributable to the individual trustees or beneficiaries of any such plan for purposes of determining compliance with the limitations set forth in paragraphs A. and B. of this Section 12, provided that shares purchased by a Tax-Qualified Employee Stock Benefit Plan pursuant to instructions of an individual in an account in such plan in which the individual has the right to direct the investment, including any plan of the Bank qualified under Section 401(k) of the Code, shall be aggregated and included in that individual’s purchases and not attributed to the Tax-Qualified Employee Stock Benefit Plan.

Each Person purchasing Common Stock in the Offering shall be deemed to confirm that such purchase does not conflict with the above purchase limitations contained in this Plan.

13.    PAYMENT FOR SUBSCRIPTION SHARES

All payments for Common Stock subscribed for in the Subscription Offering and Community Offering must be delivered in full to the Bank, the Holding Company or an agent of the Bank or the Holding Company, as described in the Order Form, together with a properly completed and executed Order Form, on or before the expiration date of the Offering; provided, however, that if the Employee Plans subscribe for shares in the Subscription Offering, such plans will not be required to pay for the shares of Common Stock at the time they subscribe but rather may pay for such shares at the Subscription Price upon consummation of the Offering. Subscription funds will be held in a segregated account at the Bank.

Except as set forth in Section 12D, payment for Common Stock subscribed for in the Subscription Offering and any Community Offering shall be made by personal check, money order or bank draft. Alternatively, subscribers in the Subscription and Community Offerings may pay for the shares for which they have subscribed by authorizing the Bank on the Order Form to make a withdrawal from designated types of Deposit Accounts at the Bank in an amount equal to the aggregate Subscription Price of such shares. Such authorized withdrawal shall be without penalty as to premature withdrawal. If the authorized withdrawal is from a certificate account, and the remaining balance does not meet the applicable minimum balance requirement, the certificate shall be canceled at the time of withdrawal, without penalty, and the remaining balance will earn interest at the passbook rate. Funds for which a withdrawal is authorized will remain in the subscriber’s Deposit Account and will continue to earn interest thereon, but may not be used by the subscriber during the Subscription and Community Offerings. Thereafter, the withdrawal will be given effect only to the extent necessary to satisfy the subscription (to the extent it can be filled) at the Subscription Price per share. Interest will continue to be earned on any amounts authorized for withdrawal until such withdrawal is given effect. Interest on funds received by personal check, bank draft or money order will be paid by the Bank at not less than the passbook rate. Such interest will be paid from the date payment is processed by the Bank until consummation or termination of the Offering. If for any reason the Offering is not consummated, all payments made by subscribers in the Subscription and Community Offerings will be refunded to them with interest. In case of amounts authorized for withdrawal from Deposit Accounts, refunds will be made by canceling the authorization for withdrawal. The Bank is prohibited by regulation from making any loans or granting any lines of credit for the purchase of stock in the Offering, and therefore, will not do so.

15

14.    MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS

As soon as practicable after the registration statement prepared by the Holding Company and the Bank has been declared effective by the SEC, and the Bank Regulators have approved the Conversion, cleared the proxy statement to be provided to Voting Depositors and authorized the Prospectus and other offering materials for use, Order Forms will be distributed to the Eligible Account Holders, Employee Plans and Supplemental Eligible Account Holders at their addresses appearing on the records of the Bank as of the Voting Record Date for the purpose of subscribing for shares of Common Stock in the Subscription Offering and will be made available for use by those other Persons to whom a Prospectus is delivered.

Each Order Form will be preceded or accompanied by a Prospectus describing the Holding Company, the Bank, the Common Stock and the Offering. Each Order Form will contain, among other things, the following:

A.    A specified date by which all Order Forms must be received by the Bank or the Holding Company or its agent, which date shall be at least 20 days but not more than 45 days following the date on which the Order Forms are first mailed to Participants by the Holding Company, and which date will constitute the termination of the Subscription Offering unless extended;

B.    The Subscription Price per share for shares of Common Stock to be sold in the Offering;

C.    A description of the minimum and maximum number of Subscription Shares that may be subscribed for pursuant to the exercise of subscription rights or otherwise purchased in the Subscription and Community Offering;

D.    Instructions as to how each recipient of an Order Form is to indicate thereon the number of Subscription Shares for which such person elects to subscribe and the available alternative methods of payment therefor;

E.    An acknowledgment that the recipient of the Order Form has received a final copy of the Prospectus before execution of the Order Form;

F.    A statement to the effect that all subscription rights are nontransferable, will be void at the end of the Subscription Offering, and can only be exercised by delivering to the Bank or the Holding Company or its agent within the subscription period such properly completed and executed Order Form, together with payment in the full amount of the aggregate purchase price as specified in the Order Form for the shares of Common Stock for which the recipient elects to subscribe in the Subscription Offering (or by authorizing on the Order Form that the Bank withdraw said amount from the subscriber’s Deposit Account at the Bank);

16

G.    A statement to the effect that the executed Order Form, once received by the Holding Company, may not be modified or amended by the subscriber without the consent of the Holding Company; and

H.    Certain legends stating that subscription rights may not be transferred and that the shares of the Common Stock are not deposits and are not insured or guaranteed by the Federal government, and a certification stating that the subscriber is purchasing the shares for his or her own account.

The Holding Company reserves the right in its sole discretion to accept or reject orders received on photocopied or facsimilied order forms.

15.    UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT

If Order Forms (a) are not delivered or are not timely delivered by the United States Postal Service, (b) are not received back by the Holding Company or its agent or are received by the Holding Company or its agent after the expiration date specified thereon, (c) are defectively filled out or executed, (d) are not accompanied by the full required payment, unless waived by the Holding Company, for the shares of Common Stock subscribed for (including cases in which deposit accounts from which withdrawals are authorized are insufficient to cover the amount of the required payment), or (e) are not mailed pursuant to a “no mail” order placed in effect by the account holder, the subscription rights of the Participant to whom such rights have been granted will lapse as though such Participant failed to return the completed Order Form within the time period specified thereon; provided, however, that the Holding Company may, but will not be required to, waive any immaterial irregularity on any Order Form or require the submission of a corrected Order Form or the remittance of full payment for subscribed shares by such date as the Holding Company may specify. The interpretation of the Bank or the Holding Company of terms and conditions of this Plan and of the Order Forms will be final, subject to the authority of the Bank Regulators.

16.    RESIDENTS OF FOREIGN COUNTRIES

The Holding Company will make reasonable efforts to comply with the securities laws of all States in the United States in which Persons entitled to subscribe for shares of Common Stock pursuant to this Plan reside. However, no such Person will be issued subscription rights or be permitted to purchase shares of Common Stock in the Subscription Offering if such Person resides in a foreign country.

17.    ESTABLISHMENT OF LIQUIDATION ACCOUNT

At the time of the Conversion the Bank shall establish a Liquidation Account in an amount equal to the Bank’s total equity as reflected in the latest statement of financial condition contained in the final Prospectus used in the Offering. Following the Conversion, the Liquidation Account will be maintained by the Bank for the benefit of the Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain their Deposit Accounts at the Bank. Each Eligible Account Holder and Supplemental Eligible Account Holder shall, with respect to his Deposit Account, hold a related inchoate interest in a portion of the Liquidation Account balance in relation to his Deposit Account balance at the Eligibility Record Date or Supplemental Eligibility Record Date, respectively, or to such balance as it may be subsequently reduced, as hereinafter provided.

17

In the unlikely event of a complete liquidation of the Bank (and only in such event), following all liquidation payments to creditors (including those to Account Holders to the extent of their Deposit Accounts) each Eligible Account Holder and Supplemental Eligible Account Holder shall be entitled to receive a liquidating distribution from the Liquidation Account, in the amount of the then adjusted subaccount balance for his Deposit Account then held, before any liquidation distribution may be made to any holders of the Bank’s capital stock. No merger, consolidation, purchase of bulk assets with assumption of Deposit Accounts and other liabilities, or similar transactions with an FDIC-insured institution, in which the Bank is not the surviving institution shall be deemed to be a complete liquidation for this purpose. In such transactions, the Liquidation Account shall be assumed by the surviving institution.

The initial subaccount balance for a Deposit Account held by an Eligible Account Holder and Supplemental Eligible Account Holder shall be determined by multiplying the opening balance in the Liquidation Account by a fraction, the numerator of which is the amount of the Qualifying Deposits of such Account Holder and the denominator of which is the total amount of all Qualifying Deposits of all Eligible Account Holders and Supplemental Eligible Account Holders, respectively. For Deposit Accounts in existence at both the Eligibility Record Date and the Supplemental Eligibility Record Date, separate initial subaccount balances shall be determined on the basis of the Qualifying Deposits in such Deposit Account on each such record date. Such initial subaccount balance shall not be increased, but shall be subject to downward adjustment as described below.

If, at the close of business on any Annual Closing Date, commencing on or after the effective date of the Conversion, the deposit balance in the Deposit Account of an Eligible Account Holder or Supplemental Eligible Account Holder is less than the lesser of (i) the balance in the Deposit Account at the close of business on any other Annual Closing Date after the Eligibility Record Date or Supplemental Eligibility Record Date, or (ii) the amount of the Qualifying Deposit in such Deposit Account as of the Eligibility Record Date or Supplemental Eligibility Record Date, the subaccount balance for such Deposit Account shall be adjusted by reducing such subaccount balance in an amount proportionate to the reduction in such deposit balance. If there is such downward adjustment, the subaccount balance shall not be subsequently increased notwithstanding any subsequent increase in the deposit balance of the related Deposit Account. If any such Deposit Account is closed, the related subaccount shall be reduced to zero. The creation and maintenance of the Liquidation Account shall not operate to restrict the use or application of any of the equity accounts of the Bank, except that the Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause its equity to be reduced below the amount required for the Liquidation Account.

18

18.    CONTRIBUTION TO THE FOUNDATION

As part of the Conversion, the Holding Company and the Bank intend to donate shares of Holding Company Common Stock and cash to the Foundation, in such amounts, subject to regulatory limits, as shall be approved by the Board of Directors. This contribution to the Foundation is intended to enhance the Bank’s existing community reinvestment activities, and to share with the communities in which the Bank conducts its business a part of the Bank’s financial success as a community minded, financial services institution. The contribution of Holding Company Common Stock to the Foundation may further this goal as it may enable the community to share in the growth and profitability of the Holding Company and the Bank over the long term.

The Foundation is dedicated to the promotion of charitable purposes including community development, grants or donations to support housing assistance, not-for-profit community groups and other types of organizations or civic-minded projects. The Foundation will annually distribute total grants to assist charitable organizations or to fund projects within its local community of not less than 5% of the average fair market value of Foundation assets each year, less certain expenses. In order to serve the purposes for which it was formed and to maintain its qualification under Code Section 501(c)(3), the Foundation may sell, on an annual basis, a portion of the Foundation Shares.

For a period of five years following the Conversion, except for temporary periods resulting from death, resignation, removal or disqualification, (i) at least one director of the Foundation will be an independent director who is unaffiliated with the Holding Company and the Bank who is from the Bank’s local community and who has experience with local community charitable organizations and grant making, and (ii) at least one director shall be a person who is also a member of the Board of Directors of the Bank. The board of directors of the Foundation will be responsible for establishing the policies of the Foundation, including a conflicts of interest policy, consistent with the stated purposes of the Foundation.

The contribution to the Foundation as part of the Conversion must be approved by a majority of the total number of votes eligible to be cast by Voting Depositors.

19.    VOTING RIGHTS OF STOCKHOLDERS

Following consummation of the Conversion, the holders of the voting capital stock of the Holding Company shall have the exclusive voting rights with respect to the Holding Company.

20.    RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION

A.    All shares of Common Stock purchased by Directors or Officers of the Holding Company or the Bank in the Offering shall be subject to the restriction that, except as provided in this Section 20 or as may be approved by the Bank Regulators, no interest in such shares may be sold or otherwise disposed of for value for a period of one year following the date of purchase in the Offering.

B.    The restriction on disposition of Subscription Shares set forth above in this Section 20 shall not apply to the following:

19

(1) Any exchange of such shares in connection with a merger or acquisition involving the Bank or the Holding Company, as the case may be, which has been approved by the appropriate Federal regulatory agency; and

(2) Any disposition of such shares following the death of the person to whom such shares were initially sold under the terms of this Plan.

C.    With respect to all Subscription Shares subject to restrictions on resale or subsequent disposition, each of the following provisions shall apply:

(1) Each certificate representing shares restricted by this section shall bear a legend giving notice of the restriction;

(2) Instructions shall be issued to the stock transfer agent for the Holding Company not to recognize or effect any transfer of any certificate or record of ownership of any such shares in violation of the restriction on transfer; and

(3) Any shares of capital stock of the Holding Company issued with respect to a stock dividend, stock split, or otherwise with respect to ownership of outstanding Subscription Shares subject to the restriction on transfer hereunder shall be subject to the same restriction as is applicable to such Subscription Shares.

21.    REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION

For a period of three years following the Conversion, no Officer, Director or their Associates shall purchase, without the prior written approval of the Bank Regulators, any outstanding shares of Common Stock except from a broker-dealer registered with the SEC. This provision shall not apply to the exercise of any options pursuant to a stock option plan or purchases of Common Stock made by or held by any Tax-Qualified Employee Stock Benefit Plan or Non-Tax-Qualified Employee Stock Benefit Plan of the Bank or the Holding Company (including the Employee Plans) which may be attributable to any Officer or Director. As used herein, the term “negotiated transaction” means a transaction in which the securities are offered and the terms and arrangements relating to any sale are arrived at through direct communications between the seller or any person acting on its behalf and the purchaser or his investment representative. The term “investment representative” shall mean a professional investment advisor acting as agent for the purchaser and independent of the seller and not acting on behalf of the seller in connection with the transaction.

22.    TRANSFER OF DEPOSIT ACCOUNTS

Each person holding a Deposit Account at the Bank at the time of Conversion shall retain an identical Deposit Account at the Bank following Conversion in the same amount and subject to the same terms and conditions (except as to voting and liquidation rights).

20

23.    REGISTRATION AND MARKETING

Within the time period required by applicable laws and regulations, the Holding Company will register the securities issued in connection with the Conversion pursuant to the Securities Exchange Act of 1934 and will not deregister such securities for a period of at least three years thereafter, except that the requirement that registration be maintained for three years may be fulfilled by any successor to the Holding Company. In addition, the Holding Company will use its best efforts to encourage and assist a market maker to establish and maintain a market for the Common Stock and to list those securities on a national or regional securities exchange.

24.    TAX RULINGS OR OPINIONS

Consummation of the Conversion is expressly conditioned upon prior receipt by the Bank of either a ruling or an opinion of counsel with respect to Federal tax laws, and either a ruling, an opinion of counsel, or a letter of advice from their tax advisor with respect to applicable state tax laws, to the effect that consummation of the transactions contemplated by the Conversion and this Plan will not result in a taxable reorganization under the provisions of the applicable codes or otherwise result in any adverse tax consequences to the Holding Company or the Bank, or to the account holders receiving subscription rights before or after the Conversion, except in each case to the extent, if any, that subscription rights are deemed to have value on the date such rights are issued.

25.    STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS

A.    The Holding Company and the Bank are authorized to adopt Tax-Qualified Employee Stock Benefit Plans in connection with the Conversion, including without limitation, an ESOP. Existing as well as any newly created Tax-Qualified Employee Stock Benefit Plans may purchase shares of Common Stock in the Offering to the extent permitted by the terms of such benefit plans and this Plan.

B.    The Holding Company and the Bank are authorized to enter into employment and other compensation agreements with their executive officers.

C.    The Holding Company and the Bank are authorized to adopt stock option plans, restricted stock plans and other Non-Tax-Qualified Employee Stock Benefit Plans no sooner than six months after the completion of the Conversion and Offering, provided that such stock plans conform to any applicable requirements of Federal and DFS regulations, and the Holding Company intends to implement such stock plans after the completion of the Conversion and Offering, subject to any necessary stockholder approvals.

26.    RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY

A.    For a period of three years from the date of consummation of the Conversion, no person, other than the Holding Company, may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any class of an equity security of the Bank without the prior written consent of the Bank Regulators. Nothing in this Plan shall prohibit the Holding Company from repurchasing its shares so long as such repurchases are in compliance with applicable regulations.

21

B.    In connection with the Conversion, the Bank will apply to the DFS to amend its charter and bylaws consistent with applicable law and DFS regulations. The Bank’s amended charter and bylaws may contain Bank Regulators-approved anti-takeover provisions, such as a charter provision stipulating that no person, except the Holding Company, for a period of three years following the closing date of the Conversion, may directly or indirectly acquire or offer to acquire the beneficial ownership of more than 10% of any class of equity security of the Bank without the prior written approval of the applicable Bank regulators. The Bank’s charter may also provide that for a period of three years following the closing date of the Conversion, shares beneficially owned in violation of the above-described charter provision shall not be entitled to vote and shall not be voted by any person or counted as voting stock in connection with any matter submitted to stockholders for a vote. In addition, special meetings of the stockholders relating to changes in control or amendment of the charter may only be called by the Board of Directors, and shareholders shall not be permitted to cumulate their votes for the election of Directors.

C.    The articles of incorporation of the Holding Company may contain a provision stipulating that in no event shall the record owners of any outstanding shares of Common Stock that are beneficially owned by a person who beneficially owns in excess of 10% of such outstanding shares be entitled or permitted to any vote with respect to any shares held in excess of 10%. In addition, the articles of incorporation and bylaws of the Holding Company may contain provisions that prohibit cumulative voting for the election of directors, provide for staggered terms for directors, limit the calling of special meetings, require supermajority shareholder votes to amend certain provisions of the articles of incorporation, allow the Board of Directors to issue preferred stock and increase the amount of authorized capital stock without shareholder approval, provide certain qualifications and restrictions for election as director and certain advance notice requirements for shareholder proposals and nominations.

D.    For the purposes of this section:

(1) The term “person” includes an individual, a firm, a corporation or other entity;

(2) The term “offer” includes every offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of, a security or interest in a security for value;

(3) The term “acquire” includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise; and

(4) The term “security” includes non-transferable subscription rights issued pursuant to a plan of conversion as well as a “security” as defined in Section 2(a)(1) of the Securities Act of 1933, as amended.

27.    PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK

A. The Holding Company shall comply with any applicable law and regulation in connection with the repurchase of any shares of its capital stock following consummation of the Conversion.

22

B.    The Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause its regulatory capital to be reduced below (i) the amount required for the Liquidation Account, or (ii) applicable Federal regulatory capital requirements. The ability of the Bank to declare and pay a cash dividend on, or repurchase any of, its capital stock is also subject to the receipt of any required approval by the Bank Regulators.

28.    ARTICLES OF INCORPORATION AND BYLAWS

By voting to approve this Plan, Voting Depositors will be voting to adopt the articles of incorporation and bylaws for the Holding Company, and the organization certificate and bylaws of the Bank.

29.    CONSUMMATION OF CONVERSION AND EFFECTIVE DATE

The effective date of the Conversion shall be the date of the closing of the sale of all shares of the Common Stock all requisite regulatory and Depositor approvals have been obtained, all applicable waiting periods have expired, and sufficient subscriptions and orders for Subscription Shares have been received. The closing of the sale of all shares of Common Stock sold in the Offering shall occur simultaneously on the effective date of the closing.

30.    EXPENSES OF CONVERSION

The Bank and the Holding Company may retain and pay for the services of legal, financial and other advisors to assist in connection with any or all aspects of the Conversion, including the Offering and the contribution to the Foundation, and such parties shall assure that such expenses are reasonable.

31.    AMENDMENT OR TERMINATION OF PLAN

If deemed necessary or desirable, this Plan may be substantively amended as a result of comments from the Bank Regulators or the SEC or otherwise at any time before solicitation of proxies from Voting Depositors to vote on this Plan by the Board of Directors of the Bank, and at any time thereafter by the Board of Directors of the Bank with the concurrence of the Bank Regulators. Any amendment to this Plan made after approval by Voting Depositors with the approval of the Bank Regulators shall not require further approval by Voting Depositors unless otherwise required by the Bank Regulators. The Board of Directors of the Bank may terminate this Plan at any time before the Special Meeting of Depositors to vote on this Plan, and at any time thereafter with the concurrence of the Bank Regulators.

By adopting this Plan, the Voting Depositors of the Bank authorize the Board of Directors of the Bank to amend or terminate this Plan under the circumstances set forth in this Section 31.

32.    CONDITIONS TO CONVERSION

Consummation of the Conversion pursuant to this Plan is expressly conditioned upon the following:

23

A.    Prior receipt by the Bank of rulings of the United States Internal Revenue Service and the state taxing authorities, or opinions of counsel or tax advisers, as described in Section 24;

B.    The issuance of at least the minimum number of Subscription Shares offered in the Offering; and

C.    The completion of the Conversion within the time period specified in Section 2.

33.    INTERPRETATION

All interpretations of this Plan and application of its provisions to particular circumstances by a majority of the Board of Directors of the Bank shall be final, subject to the authority of the Bank Regulators.

Dated: December 7, 2016, as amended                     , 2017

24

EX-8.1

Exhibit 8.1

LUSE GORMAN, PC

Attorneys at Law

5335 WISCONSIN AVENUE, N.W., SUITE 780

WASHINGTON, DC 20015

TELEPHONE (202) 274-2000

FACSIMILE (202) 362-2902

www.luselaw.com

January 31, 2017

Board of Trustees

PCSB Bank

2615 Stang Blvd., Suite 100

Yorktown Heights, New York 10598

Re: Federal Income Tax Opinion Relating to Conversion of

PCSB Bank from a New York-Chartered Mutual Savings Bank

into a New York-Chartered Stock Savings Bank                                

Members of the Board Trustees:

In accordance with your request, set forth below is the opinion of this firm relating to the material federal income tax consequences of the proposed conversion (the “Conversion”) of PCSB Bank (the “Bank”) from a New York-chartered mutual savings bank to a New York-chartered stock savings bank (“Stock Bank”). In the Conversion, all of the Bank’s to-be-issued stock will be acquired by PCSB Financial Corporation, a Maryland corporation (the “Holding Company”).

For purposes of this opinion, we have examined such documents and questions of law as we have considered necessary or appropriate, including but not limited to the: (1) Holding Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Registration Statement”) relating to the proposed issuance of up to 23,583,481 shares (at the adjusted maximum of the offering range, including the shares issued to the charitable foundation) of common stock, par value $0.01 per share; (2) applications or notices for approval/non-objection of the Conversion and the formation of a new bank holding company filed with the New York State Department of Financial Services, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System (the “Applications”); (3) Plan of Conversion adopted by the Bank on December 7, 2016 (the “Plan”); (4) Articles of Organization and Bylaws of the Bank; and (5) Articles of Incorporation and Bylaws of the Holding Company. In such examination, we have assumed and have not independently verified the authenticity of all original documents, the accuracy of all copies, and the genuineness of all signatures. We have further assumed the absence of adverse facts not apparent from the face of the instruments and documents we examined. Capitalized terms used herein but not defined herein shall have the same meaning as set forth in the Plan.

Board of Trustees

PCSB Bank

January 31, 2017

Page 2

In issuing our opinion, we have assumed that the Bank will comply with the terms and conditions of the Plan, and that the various representations and warranties that are provided to us are accurate, complete, true and correct. Accordingly, we express no opinion concerning the effect, if any, of variations from the foregoing. We specifically express no opinion concerning tax matters relating to the Plan under state and local tax laws and under federal income tax laws except on the basis of the documents and assumptions described above.

In issuing the opinion set forth below, we have relied solely on existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations (the “Regulations”) thereunder, current administrative rulings, notices and procedures, and court decisions. Such laws, regulations, administrative rulings, notices and procedures and court decisions are subject to change at any time. Any such change could affect the continuing validity of the opinions set forth below. This opinion is as of the date hereof, and we disclaim any obligation to advise you of any change in any matter considered herein after the date hereof.

In rendering our opinion, we have assumed that the persons and entities identified in the Plan will at all times comply with applicable state and federal laws and the factual representations of the Bank. In addition, we have assumed that the activities of the persons and entities identified in the Plan will be conducted strictly in accordance with the Plan. Any variations may affect the opinions we are rendering. For purposes of this opinion, we are relying on the factual representations provided to us by the Bank, which are incorporated herein by reference.

We emphasize that the outcome of litigation cannot be predicted with certainty and, although we have attempted in good faith to opine as to the probable outcome of the merits of each tax issue with respect to which an opinion was requested, there can be no assurance that our conclusions are correct or that they would be adopted by the Internal Revenue Service or a court.

BACKGROUND

The Bank is a mutual savings bank organized under the laws of the State of New York that is in the process of converting to a New York-chartered stock savings bank. As a New York-chartered mutual savings bank, the Bank has no authorized capital stock. Instead the Bank, in mutual form, has a unique equity structure. A depositor in the Bank is entitled to payment of interest on his or her account balance as declared and paid by the Bank. A depositor has no right to a distribution of any earnings of the Bank, except for interest paid on the deposit balance, and such earnings become retained earnings of the Bank. However, a depositor has a pro-rata ownership interest in the net worth of the Bank based upon the deposit balance in his or her account. This interest may only be realized in the event of a complete liquidation of the Bank. A depositor who reduces or closes his or

Board of Trustees

PCSB Bank

January 31, 2017

Page 3

her deposit account with the Bank receives solely the balance of his or her deposit account. In connection with and at the time of the Conversion, Eligible Account Holders and Supplemental Eligible Account Holders will exchange their liquidation rights in the Bank for an interest in a liquidation account (“Liquidation Account”) established at the Stock Bank.

PROPOSED TRANSACTION

The Holding Company has been formed under the laws of the State of Maryland for the purpose of the proposed transactions described herein, to engage in business as a bank holding company and to hold all of the stock of the Stock Bank. The Holding Company will issue shares of its voting common stock (“Company Stock”), upon completion of the mutual-to-stock conversion of the Bank, to persons purchasing such shares as described in greater detail below.

Following regulatory approval, the Plan provides for the offer and sale of shares of Common Stock in a Subscription Offering pursuant to nontransferable subscription rights on the basis of the following preference categories: (1) Eligible Account Holders of the Bank; (2) the Bank’s tax-qualified employee stock benefit plans, including the newly formed employee stock ownership plan and the Bank’s 401(k) plan; and (3) Supplemental Eligible Account Holders of the Bank, all as described in the Plan. The minimum amount of shares in the offering range must be sold. If shares remain after all orders are filled in the categories described above, the Plan calls for a community offering to the general public with a preference for members of the general public residing in Duchess, Putnam, Rockland and Westchester Counties, New York (“Community Offering”), followed by a syndicated community offering (“Syndicated Community Offering”) for the shares not sold in the Community Offering.

Pursuant to the Plan, all such shares will be issued and sold at a uniform price per share. The aggregate purchase price at which all shares of Common Stock will be offered and sold pursuant to the Plan will be equal to the estimated pro forma market value of the Bank, as converted. The estimated pro forma market value will be determined by RP Financial, LC., an independent appraiser. The conversion of the Bank from mutual-to-stock form and the sale of newly issued shares of the stock of the Stock Bank to the Holding Company will be deemed effective concurrently with the closing of the sale of Common Stock.

Board of Trustees

PCSB Bank

January 31, 2017

Page 4

OPINION OF COUNSEL

Based solely upon the foregoing information, we render the following opinion:

1. The change in the form of operation of the Bank from a New York-chartered mutual savings bank to a New York-chartered stock savings bank, as described above, will constitute a reorganization within the meaning of Code Section 368(a)(1)(F), and no gain or loss will be recognized to either the Bank or to Stock Bank as a result of such Conversion. See Rev. Rul. 80-105, 1980-1 C.B. 78. The Bank and Stock Bank will each be a party to a reorganization within the meaning of Code Section 368(b). Rev. Rul. 72-206, 1972-1 C.B. 104.

2. No gain or loss will be recognized by Stock Bank on the receipt of money from Holding Company in exchange for its shares or by Holding Company upon the receipt of money from the sale of Common Stock. Code Section 1032(a).

3. The assets of the Bank will have the same basis in the hands of Stock Bank as they had in the hands of the Bank immediately prior to the Conversion. Code Section 362(b).

4. The holding period of the Bank’s assets to be received by Stock Bank will include the period during which the assets were held by the Bank prior to the Conversion. Code Section 1223(2).

5. No gain or loss will be recognized by the account holders of the Bank upon the issuance to them of withdrawable deposit accounts in Stock Bank in the same dollar amount and under the same terms as their deposit accounts in the Bank and no gain or loss will be recognized by Eligible Account Holders or Supplemental Eligible Account Holders upon receipt by them of an interest in the Liquidation Account of Stock Bank, in exchange for their ownership interests in the Bank. Code Section 354(a).

6. The basis of the account holders’ deposit accounts in the Stock Bank will be the same as the basis of their deposit accounts in the Bank surrendered in exchange therefor. The basis of each Eligible Account Holder’s and Supplemental Eligible Account Holder’s interests in the Liquidation Account of the Stock Bank will be zero, that being the cost of such property.

7. It is more likely than not that the fair market value of the nontransferable subscription rights to purchase Common Stock will be zero. Accordingly, no gain or loss will be recognized by Eligible Account Holders or Supplemental Eligible Account Holders upon the distribution to them of the nontransferable subscription rights to purchase Common Stock. No taxable income will be realized by the Eligible Account Holders or Supplemental Eligible Account Holders as a result of the exercise of the nontransferable subscription rights. Rev. Rul. 56-572, 1956-2 C.B. 182.

Board of Trustees

PCSB Bank

January 31, 2017

Page 5

8. It is more likely than not that the basis of the Common Stock to its stockholders will be the purchase price thereof. (Section 1012 of the Code). The stockholder’s holding period will commence upon the exercise of the subscription rights. (Section 1223(5) of the Code).

9. For purposes of Section 381 of the Code, the Stock Bank will be treated as if there had been no reorganization. Accordingly, the taxable year of the Bank will not end on the effective date of the Conversion merely because of the transfer of assets of the Bank to the Stock Bank, and the tax attributes of the Bank will be taken into account by the Stock Bank as if there had been no reorganization. (Treas. Reg. Section 1.381(b)-(1)(a)(2)).

10. The part of the taxable year of the Bank before the reorganization and the part of the taxable year of Stock Bank after the reorganization will constitute a single taxable year of Stock Bank. See Rev. Rul. 57-276, 1957-1 C.B. 126. Consequently, the Bank will not be required to file a federal income tax return for any portion of such taxable year solely by reason of the Conversion. Treas. Reg. Section 1.381(b)-1(a)(2).

11. The tax attributes of the Bank enumerated in Code Section 381(c) will be taken into account by Stock Bank. Treas. Reg. Section 1.381(b)-1(a)(2).

Notwithstanding any reference to Code Section 381 above, no opinion is expressed or intended to be expressed herein as to the effect, if any, of this transaction on the continued existence of, the carryover or carryback of, or the limitation on, any net operating losses of the Bank or its successor, Stock Bank, under the Code.

Our opinion under paragraph 7 above is predicated on the representation that no person shall receive any payment, whether in money or property, in lieu of the issuance of subscription rights. Our opinion under paragraphs 7 and 8 is based on the facts that the subscription rights will be granted at no cost to the recipients, will be legally non-transferable and of short duration, and will provide the recipient with the right only to purchase shares of Common Stock at the same price to be paid by members of the general public in any Community Offering. We also note that RP Financial, LC. has issued a letter dated December 12, 2016 stating that the subscription rights will have no ascertainable market value. We further note that the Internal Revenue Service has not in the past reached a different conclusion with respect to the value of nontransferable subscription rights. If the subscription rights are subsequently found to have value, income may be recognized by various recipients of the subscription rights (in certain cases, whether or not the rights are exercised) and the Holding Company and/or Stock Bank may be taxable on the distribution of the subscription rights.

Board of Trustees

PCSB Bank

January 31, 2017

Page 6

CONSENT

We hereby consent to the filing of the opinion as an exhibit to the Registration Statement, and as an exhibit to the Applications with respect to the Conversion, as applicable. We also hereby consent to the references to this firm in the prospectus which is a part of the Registration Statement and the Applications.

USE OF OPINION

We expressly consent to the use of and reliance on this opinion by Crowe Horwath LLP in issuing its state tax opinion to the Bank related to the Conversion.

Very truly yours,

/s/ LUSE GORMAN, PC

LUSE GORMAN, PC

EX-8.2

Exhibit 8.2

Crowe Horwath LLP Independent Member Crowe Horwath International   488 Madison Avenue, Floor 3 New York, New York 1002-5722 Tel 212.572.5500 Fax 212.572.5572 www.crowehorwath.com

January 31, 2017

Board of Trustees

PCSB Bank

2651 Strang Boulevard, Suite 100

Yorktown Heights, New York 10598

Re: State Tax Opinion Relating to Conversion of PCSB Bank from a New York-Chartered Mutual Savings Bank into a New York-Chartered Stock Savings Bank

Members of the Board Trustees:

You have asked for our opinion on the consequences of the Plan of Conversion, as approved by the Board of Trustees on December 7, 2016 (the “Plan”) on the New York State franchise tax on general business corporations (“Corporate Franchise Tax”) measured by business income and the Corporate Franchise Tax under the fixed dollar minimum tax formula, and certain New York State personal income tax (“Personal Income Tax”) consequences to individual account holders who are New York residents, resulting directly from the Plan described in the facts below.

In accordance with your request, we render our opinion relating to the Corporate Franchise Tax and certain Personal Income Tax consequences of the proposed conversion (the “Conversion”) of PCSB Bank (the “Bank”) from a New York-chartered mutual savings bank to a New York-chartered stock savings bank (the “Stock Bank”), concurrent with an acquisition of all the Bank’s to-be-issued stock by PCSB Financial Corporation (the “Holding Company”). All capitalized terms used in this letter, unless defined otherwise, shall have the same meaning assigned to them as in the Plan of Conversion, as approved by the Board of Trustees on December 7, 2016 (the “Plan”).

We have not considered any non-income tax consequences, or state, local or foreign income tax consequences, other than the Corporate Franchise Tax measured by business income and under the fixed dollar minimum tax formula, and Personal Income Tax matters directly addressed in our opinion, and therefore, do not express any opinion regarding the treatment that would be given the transaction by the applicable authorities on any other state, federal local or foreign tax issues. We also express no opinion on nontax issues such as corporate law or securities law matters. We express no opinion other than that as stated below, and neither this opinion nor any prior statements are intended to imply or to be an opinion on any other matters.

Statement of Facts

In rendering our opinion, we have relied upon the facts, information, assumptions and representations as contained in the Plan, including all exhibits attached thereto, and upon the federal income tax opinion regarding the Plan, prepared by the law firm Luse Gorman, PC that is to be included in the regulatory filings pertaining to the Plan (the “Federal Tax Opinion”). We have assumed that these facts are complete and accurate and have not independently audited or otherwise verified any of these facts or assumptions.

Board of Trustees

PCSB Bank

January 31, 2017

Page 2

You have represented to us that we have been provided with all of the facts necessary to render our opinion.

A brief, but not necessarily all-inclusive, summary of the Plan is as follows:

The Bank is a mutual savings bank organized under the laws of the State of New York that is in the process of converting to a New York-chartered stock savings bank. As a New York-chartered mutual savings bank, the Bank has no authorized capital stock. Instead the Bank, in mutual form, has a unique equity structure. A depositor in the Bank is entitled to payment of interest on his or her account balance as declared and paid by the Bank. A depositor has no right to a distribution of any earnings of the Bank, except for interest paid on the deposit balance, and such earnings become retained earnings of the Bank. However, a depositor has a pro-rata ownership interest in the net worth of the Bank based upon the deposit balance in his or her account. This interest may only be realized in the event of a complete liquidation of the Bank. A depositor who reduces or closes his or her deposit account with the Bank receives solely the balance of his or her deposit account. In connection with and at the time of the Conversion, Eligible Account Holders and Supplemental Eligible Account Holders will exchange their liquidation rights in the Bank for an interest in a liquidation account (“Liquidation Account”) established at the Stock Bank.

The Holding Company has been formed under the laws of the State of Maryland for the purpose of the proposed transactions described herein, to engage in business as a bank holding company and to hold all of the stock of the Stock Bank. The Holding Company will issue shares of its voting common stock (“Company Stock”), upon completion of the mutual-to-stock conversion of the Bank, to persons purchasing such shares as described in greater detail below.

Following regulatory approval, the Plan provides for the offer and sale of shares of Common Stock in a Subscription Offering pursuant to nontransferable subscription rights on the basis of the following preference categories: (1) Eligible Account Holders of the Bank; (2) the Bank’s tax-qualified employee stock benefit plans, including the newly formed employee stock ownership plan and the Bank’s 401(k) plan; and (3) Supplemental Eligible Account Holders of the Bank, all as described in the Plan. The minimum amount of shares in the offering range must be sold. If shares remain after all orders are filled in the categories described above, the Plan calls for a community offering to the general public with a preference for members of the general public residing in Duchess, Putnam, Rockland and Westchester Counties, New York (“Community Offering”), followed by a syndicated community offering (“Syndicated Community Offering”) and/or a firm commitment offering for the shares not sold in the Community Offering.

Pursuant to the Plan, all such shares will be issued and sold at a uniform price per share. The aggregate purchase price at which all shares of Common Stock will be offered and sold pursuant to the Plan will be equal to the estimated pro forma market value of the Bank, as converted. The estimated pro forma market value will be determined by RP Financial, LC., an independent appraiser. The conversion of the Bank from mutual-to-stock form and the sale of newly issued shares of the stock of the Stock Bank to the Holding Company will be deemed effective concurrently with the closing of the sale of Common Stock.

A misstatement or omission of any fact or a change or amendment in any of the facts, assumptions or representations upon which we have relied may require a modification of all or a part of this opinion.

Corporate Franchise Tax on Business Corporations

Effective for tax years beginning on or after January 1, 2015, the franchise tax on banking corporations under Tax Law Article 32 was repealed, and banking corporations are subject to the Corporate Franchise Tax under Tax Law Article 9-A. New York 2014-15 Budget Bill.

Board of Trustees

PCSB Bank

January 31, 2017

Page 3

The Corporate Franchise Tax is imposed on a corporation for the privilege of exercising its corporate franchise, doing business, employing capital, owning or leasing property in New York in a corporate or organized capacity, maintaining an office in New York, or deriving receipts from activity in New York. N.Y. Tax Law § 209(a). The term “corporation” includes: (a) an association within the meaning of Section 7701(a)(3) of the Internal Revenue Code of 1986, as amended (“IRC”) (including a limited liability company), (b) a joint-stock company or association, (c) a publicly traded partnership treated as a corporation for purposes of the IRC § 7704 and (d) any business conducted by a trustee or trustees wherein interest or ownership is evidenced by certificate or other written instrument.

A corporation’s tax liability is the highest of three alternative bases: (1) business income, (2) capital and (3) a fixed dollar minimum tax. N.Y. Tax Law § 210(1). The scope of this opinion is limited to the consequences of the Plan on the computation of the business income and the fixed dollar minimum tax bases of the Corporate Franchise Tax.

In general, the tax on business income is calculated by reference to federal taxable income reported to the United States Treasury (entire net income), reduced by investment income and other exempt income, multiplied by the applicable tax rate. N.Y. Tax Law § 208(8) and § 210(1)(a).

Entire net income, a starting-point for computing business income, is defined as “total net income from all sources which shall be presumably the same as the entire taxable income, which, except as hereinafter provided in this subdivision, the taxpayer is required to report to the United States treasury department.” N.Y. Tax Law § 208(9).

N.Y. Tax Law § 208(9)(a) and (b) provide modifications and adjustments required in computing entire net income. There are no modifications or adjustments to entire net income relating to the IRC sections cited in the Federal Tax Opinion.

Investment income is defined as “income, including capital gains in excess of capital losses, from investment capital, to the extent included in computing entire net income” less interest deductions. N.Y. Tax Law § 208(6)(a)(i). The term “other exempt income” means the sum of exempt controlled foreign corporation income and exempt unitary corporation dividends. N.Y. Tax Law § 208(6-a)(a). In computing investment income, exempt controlled foreign corporation income and exempt unitary corporation dividends, there are no modifications or adjustments to investment income relating to the IRC sections cited in the Federal Tax Opinion.

Based on the foregoing, with respect to the Corporate Franchise Tax calculated on the basis of business income it is more likely than not that the Plan should be treated the same manner as it is treated for federal income tax purposes.

The fixed dollar minimum tax is calculated by reference to New York receipts, which are receipts included in the numerator of the apportionment factor determined under N.Y. Tax Law § 210-A for the taxable year. N.Y. Tax Law § 210(1)(d)(1)(E). The apportionment factor is “a fraction, determined by including only those receipts, net income, net gains, and other items that are included in the computation of the taxpayer’s business income for the taxable year.” N.Y. Tax Law § 210-A(1). Accordingly, since there is no effect on the computation of business income as a result of the Plan, it is more likely than not that the Plan will have no effect on the Corporate Franchise Tax calculated on a fixed minimum tax basis.

N.Y. Tax Law § 211(1) states that “every taxpayer which ceases to exercise its franchise or to be subject to the tax imposed by this article shall transmit to the commissioner a report on the date of such cessation or at such other time as the commissioner may require covering each year or period for which no report was theretofore filed.” Since the Bank will continue to exercise its franchise as the Stock Bank, it is more likely than not that the Plan will not end the taxable year of the Bank and the taxable year of the Bank should be used as the taxable year of the Stock Bank.

Board of Trustees

PCSB Bank

January 31, 2017

Page 4

Personal Income Tax

The Personal Income Tax is imposed on New York taxable income of all resident individuals. N.Y. Tax Law § 601. The New York taxable income of a resident individual is New York adjusted income, reduced by the New York deduction and New York exemptions. N.Y. Tax Law § 611(a).

New York adjusted income is calculated by reference to federal adjusted gross income reported for the taxable year with certain modifications. N.Y. Tax Law § 612(a). New York deductions and subtractions from federal adjusted gross income are provided in N.Y. Tax Law § 613 through § 616. There are no modifications or adjustments applicable to transactions relating to the IRC sections cited in the Federal Tax Opinion. Therefore, it is more likely than not that the receipt of subscription rights and/or liquidation interests under the Plan should be treated the same as for federal income tax purposes.

Opinion

You have provided us with a copy of the Federal Tax Opinion regarding the Plan, in which Luse Gorman, PC has opined that the various proposed transactions to be undertaken as part of the Plan will be treated for federal income tax purposes as “reorganizations” within the meaning of IRC § 368(a)(1).

Our opinion regarding the Corporate Franchise Tax and certain Personal Income Tax consequences related to the Plan adopts and relies upon the facts, representations, assumptions, and conclusions as set forth in the Federal Tax Opinion and incorporates the capitalized terms contained in the Federal Tax Opinion. Our opinion assumes that the ultimate federal income tax consequences of the Plan will be those as described in the Federal Tax Opinion. Based upon that information, we render the following opinion with respect to the Corporate Franchise Tax and certain Personal Income Tax consequences of the Plan:

(1) It is more likely than not that the federal income tax treatment of the Plan will be respected for purposes of the Corporate Franchise Tax calculated on the basis of business income.

(2) It is more likely than not that the Plan will have no effect on the Corporate Franchise Tax calculated on a fixed minimum tax basis.

(3) It is more likely than not that the federal income tax treatment of the receipt of subscription rights and/or liquidation interests will be respected for purposes of the Personal Income Tax of Eligible Account Holders, Supplemental Eligible Account Holders and Other Members who are otherwise subject to the New York Personal Income Tax.

Limitations on Opinion

Our opinion is as of January 31, 2017 and we accept no responsibility to update this opinion for events, transactions, circumstances or changes in any of the facts, assumptions or representations occurring after this date.

The discussion and conclusions set forth herein are based upon the New York State Tax Law and existing administrative and judicial interpretations thereof, as of January 31, 2017 all of which are subject to change. If there is a change, including a change having retroactive effect, in the New York State Tax Law or in the prevailing judicial interpretation of the foregoing, the opinions expressed herein would necessarily have to be re-evaluated in light of any such changes. We have no responsibility to update this opinion for any such changes occurring after the date of this letter.

Board of Trustees

PCSB Bank

January 31, 2017

Page 5

The opinions expressed herein are based solely upon our interpretation of New York State Tax Law as interpreted by court decisions, and by rulings and procedures issued by the New York State Department of Taxation and Finance (the “Department”) as of the date of this letter.

Our opinions are not binding on the Department, and there can be no assurance that The Department will not take a position contrary to any of the opinions expressed herein.

The opinion expressed herein reflects our assessment of the probable outcome of litigation and other adversarial proceedings based solely on an analysis of the existing tax authorities relating to the issues. It is important, however, to note that litigation and other adversarial proceedings are frequently decided on the basis of such matters as negotiation and pragmatism upon the outcome of such potential litigation or other adversarial proceedings.

Should it finally be determined that the facts or the federal income tax consequences are not as described in the Federal Tax Opinion, the Corporate Franchise Tax consequences, the Personal Income Tax consequences and our New York State tax opinion may differ from what is contained herein. If any fact contained in this opinion letter or the Federal Tax Opinion changes to alter the federal income tax treatment, it is imperative that we be notified in order to determine the effect, if any, on the New York State tax consequences. We have no responsibility to update this opinion for events, transactions, circumstances, or changes in any of the facts, assumptions or representations occurring after the date of this letter. This opinion is given solely for the benefit of the Bank, the Stock Bank, the Holding Company, the Eligible Account Holders, and the Supplemental Eligible Account Holders, and may not be relied upon by any other party without our express written consent.

Use of Opinion

We hereby consent to the filing of the opinion as an exhibit to the Registration Statement, and as an exhibit to the Applications with respect to the Plan, as applicable. We also consent to the references to our firm in the prospectus which is a part of the Registration Statement and the Applications.

Very truly yours,

Crowe Horwath LLP

EX-10.1

Exhibit 10.1

PCSB BANK EMPLOYEE STOCK OWNERSHIP

ADOPTION AGREEMENT

Prepared by:

Luse Gorman, PC

PCSB BANK EMPLOYEE STOCK OWNERSHIP

ADOPTION AGREEMENT

TABLE OF CONTENTS

EMPLOYER INFORMATION	1
PLAN INFORMATION	2
SECTION A. GENERAL INFORMATION	2
Plan Name/Effective Date	2
Plan Features	2
ESOP Contributions	2
Compensation	3
Compensation Exclusions	4
Definitions	4
SECTION B. ELIGIBILITY	5
Exclusions	5
Eligibility Service Rules	5
Eligibility for Non-Elective Contributions	6
Eligibility Service Computation Rules	7
SECTION C. CONTRIBUTIONS	8
Non-Elective - Allocation Service	8
Non-Elective - Formula	9
Vesting Service Rules	10
Vesting Schedules	11
SECTION E. DISTRIBUTIONS	12
Normal/Early Retirement	12
Time & Form of Payment	12
Payments on Death	13
Cash Out	14
Required Beginning Date	15
SECTION F. IN-SERVICE WITHDRAWALS	15
Vesting Status	15
Retirement/Hardship/Age	15
Other Withdrawals	16
Conditions/Limitations	17
Loans	17
SECTION G. PLAN OPERATIONS AND TOP-HEAVY	17
Plan Operations	17
Statute of Limitations	20
Top-Heavy	20
SECTION I. MISCELLANEOUS	21
SECTION J. EXECUTION PAGE	22
CUSTOM LANGUAGE ADDENDUM	23
ADDENDA EXECUTION PAGE	24

i

[Intended for Cycle A3]

ADOPTION AGREEMENT

ESOP

The undersigned adopting employer hereby adopts this Plan. The Plan is intended to qualify as a tax-exempt plan under Code sections 401(a) and 501(a), respectively. The ESOP Accounts of the Plan and the applicable portion of the Trust are also intended to qualify as a tax-exempt employee stock ownership plan and trust under Code section 4975(e)(7). The Plan shall consist of this Adoption Agreement, its related Basic Plan Document #CA3-ESOP and any related Appendix and Addendum to the Adoption Agreement. Unless otherwise indicated, all Section references are to Sections in the Basic Plan Document.

EMPLOYER INFORMATION

NOTE: An amendment is not required to change the responses in items 1-13 below.

1. Name of adopting employer (Plan Sponsor): PCSB Bank

2. Address: 2651 Strang Blvd. Suite 100

3. City: Yorktown Heights

4. State: New York

5. Zip: 10598

6. Phone number: 914 248-7272

7. Fax number: 914 248-4311

8. Plan Sponsor EIN: 14-0984880

9. Plan Sponsor fiscal year end: June 30

10. Entity Type

a. Plan Sponsor entity type:

i. ☒ C Corporation

ii. ☐ S Corporation

iii. ☐ Non Profit Organization

iv. ☐ Partnership

v. ☐ Limited Liability Company

vi. ☐ Limited Liability Partnership

vii. ☐ Sole Proprietorship

viii. ☐ Union

ix. ☐ Government Agency

x. ☐ Other: (must be a legal entity recognized under the Code)

b. If “Union” (10a.viii) is selected, enter name of the representative of the parties who established or maintain the Plan:

11. State of organization of Plan Sponsor: New York

12. Affiliated Service Groups

☐ The Plan Sponsor is a member of an affiliated service group. List all members of the group (other than the Plan Sponsor):             

NOTE: Affiliated service group members must adopt the Plan with the approval of the Plan Sponsor to participate.

NOTE: Listing affiliated service group members is for information purposes only and is optional.

13. Controlled Groups

☒ The Plan Sponsor is a member of a controlled group. List all members of the group (other than the Plan Sponsor): PCSB Financial Corporation

NOTE: Controlled group members must adopt the Plan with the approval of the Plan Sponsor to participate.

NOTE: Listing controlled group members is for information purposes only and is optional.

1 Copyright © 2002-2017

SECTION A. GENERAL INFORMATION

PLAN INFORMATION

SECTION A. GENERAL INFORMATION

Plan Name/Effective Date

1. Plan Number: 003

2. Plan name:

a. PCSB Bank Employee Stock Ownership

b.

3. Effective Date

a. Original effective date of Plan: 1/1/2017

b. ☐ This is a restatement of a previously-adopted plan. Effective date of Plan restatement:                 

NOTE: The date specified in A.3a for a new plan may not be earlier than the first day of the Plan Year during which the Plan is adopted by the Plan Sponsor.

NOTE: If A.3b is not selected, the Effective Date of the terms of this document shall be the date specified in A.3a. If A.3b is selected, the Effective Date of the restatement shall be the date specified in A.3b. However if the Adoption Agreement states another specific effective date for any Plan provision, when a provision of the Plan states another effective date, such stated specific effective date shall apply as to that provision. The date specified in A.3b for an amended and restated plan may not be earlier than the first day of the Plan Year during which the amended and restated Plan is adopted by the Plan Sponsor.

4. Plan Year

a. Plan Year means each 12-consecutive month period ending on December 31 (e.g. December 31)

b. ☐ The Plan has a short Plan Year. The short Plan Year begins                  and ends                 

5. Limitation Year means:

a. ☒ Plan Year

b. ☐ calendar year

c. ☐ tax year of the Plan Sponsor

d. ☐ other:                 

NOTE: If A.5d is selected, the limitation year must be a consecutive 12-month period. This includes a fiscal year with an annual period varying from 52 to 53 weeks, so long as the fiscal year satisfies the requirements of Code section 441(f).

6. Frozen Plan

☐ The Plan is frozen as to eligibility and benefits effective                 

NOTE: If A.6 is selected, no Eligible Employee shall become a Participant, no Participant shall be eligible to further participate in the Plan and no contributions shall accrue as of and after the date specified.

Plan Features

ESOP Contributions

7. ESOP Accounts

The Non-Elective Contribution Account shall constitute the ESOP Accounts of the Plan for purposes of:

a. ☒ Investing in Employer Stock (Section 1.02.)

b. ☐ Investing in other investments types for diversification (Section 1.02.)

c. If more than one ESOP Account is specified in A.7 and the Employer Stock to be allocated to ESOP Accounts is insufficient to fully fund the contributions to the ESOP Accounts, specify the ordering rule of the ESOP contributions made in the form of Employer Stock (Section 4A.01(b)):

i. ☐ Pro rata

ii. ☐ Pursuant to the special ordering rule:                 

NOTE: It may be possible for other Accounts to be specified as ESOP Accounts. Consult with appropriate counsel before specifying any other Accounts.

2 Copyright © 2002-2017

SECTION A. GENERAL INFORMATION

Compensation

8. Compensation

a. Definition of Compensation for purposes of allocations:

i. ☐ W-2. Wages within the meaning of Code section 3401(a) and all other payments of compensation paid to an Employee by the Employer (in the course of the Employer’s trade or business) for which the Employer is required to furnish the Employee a written statement under Code sections 6041(d), 6051(a)(3), and 6052.

ii. ☐ Withholding. Wages paid to an Employee by the Employer (in the course of the Employer’s trade or business) within the meaning of Code section 3401(a) for the purposes of income tax withholding at the source.

iii. ☒ Section 415 Safe Harbor Option. As described in the definition of “Section 415 Safe Harbor Option” in Article 2 of the Basic Plan Document.

b. If “415 Safe Harbor” is selected, exclude amounts received during the year by an employee pursuant to a nonqualified unfunded deferred compensation plan to the extent includible in gross income: Yes

c. Compensation is determined over the period specified below ending with or within the Plan Year:

i. ☒ Plan Year

ii. ☐ calendar year

iii. ☐ Plan Sponsor Fiscal Year

iv. ☐ Limitation Year

v. ☐ Other twelve-month period beginning on:                  (enter month and day)

d. ☒ Include deferrals in the definition of Compensation

e. ☐ Include deemed Code section 125 compensation in the definition of Compensation

f. ☐ Include differential military pay (as defined in Code section 3401(h)(2)) in the definition of Compensation

g. ☐ Include other pay (not otherwise included in A.8a):                 

NOTE: A.8c must be “Plan Year” if the Plan is excluding compensation earned before entry (A.12 is selected).

NOTE: If “Plan Year” is not selected in A.8c, for new/rehired Employees whose date of hire is less than 12 months before the end of the 12-month period designated, Compensation will be determined over the Plan Year.

NOTE: If deferrals (A.8d) are selected, Compensation shall also include any amount which is contributed by the Employer pursuant to a salary reduction agreement and which is not includable in the gross income of the Employee under Code sections 125, 402(e)(3), 402(h), 403(b), 132(f) or 457. If the Plan uses the 415 Safe Harbor definition of Compensation (A.13a.iii is selected) and A.8c.i and/or A.8c.ii is not selected deferrals will not be included in Compensation for Non-Elective Contributions.

NOTE: If deemed 125 Compensation (A.8e) is selected, Compensation shall include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code section 125 only if the Employer does not request or collect information regarding the Participant’s other health coverage as part of the enrollment process for the health plan. This option is meant to be interpreted consistent with Revenue Ruling 2002-27 and any superseding guidance.

NOTE: If A.8f is not selected and differential military pay exists, the payments will be included in Statutory Compensation.

NOTE: If other pay (A.8g) is selected, A.8g should indicate for what purposes and which class of Participants the Compensation is included, must be objectively determinable and may not be specified in a manner that is subject to Employer discretion.

9. Post Severance Compensation

a. ☒ Include Post Severance Compensation in definition of Compensation

NOTE: A.9 will also apply for purposes of Statutory Compensation.

10. Post Year End Compensation

a. ☐ Determine Compensation using Post Year End Compensation

NOTE: If selected, amounts earned during the current year and paid during the first few weeks of the next year will be included in current year Compensation.

NOTE: A.10 will also apply for purposes of Statutory Compensation.

3 Copyright © 2002-2017

SECTION A. GENERAL INFORMATION

Compensation Exclusions

11. Pay Before Participation

☒ Exclude pay earned before participation in the Plan from definition of Compensation

NOTE: If selected, Compensation shall include only that compensation which is actually paid to the Participant during that part of the Plan Year the Participant is eligible to participate in the Plan. If not selected, Compensation shall include that compensation which is actually paid to the Participant during the period specified in A.8c.

12. 414(s) Safe Harbor Alternative Definition

☒ Exclude certain benefits from definition of Compensation

NOTE: If selected, Compensation shall exclude all of the following items (even if includable in gross income): reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, and welfare benefits (Treas. Reg. section 1.414(s)-1(c)(3)).

13. Other Pay

a. Exclude other pay from definition of Compensation for the following Participants:

i. ☐ None

ii. ☐ Highly Compensated Employees only

iii. ☒ All Participants

b. Describe other pay excluded from definition of Compensation: exclude contributions made by the Employer to any other pension, welfare or other employee benefit plan, amounts realized from the exercise of a nonqualified stock option or the sale of a qualified stock option share, premiums for group-term life insurance and other amounts which receive special tax benefits.

NOTE: If All Participants (A.13a.iii) is selected, the definition of Compensation will not be a safe harbor definition within the meaning of Treas. Reg. 1.414(s)-1(c).

NOTE: A.13b will only apply if A.13a.ii or iii is selected. A.14b should indicate for what purposes and which class of Participants the Compensation is excluded.

NOTE: The pay specified above (A.13b) must be objectively determinable and may not be specified in a manner that is subject to Employer discretion.

NOTE: See Section 4.01(c) for rules regarding elections for bonuses or other special pay.

14. Statutory Compensation

a. Definition of Statutory Compensation:

i. ☐ W-2. Wages within the meaning of Code section 3401(a) and all other payments of compensation paid to an Employee by the Employer (in the course of the Employer’s trade or business) for which the Employer is required to furnish the Employee a written statement under Code sections 6041(d), 6051(a)(3), and 6052.

ii. ☐ Withholding. Wages within the meaning of Code section 3401(a) for the purposes of income tax withholding at the source paid to the Employee by the Employer (in the course of the Employer’s trade or business).

iii. ☒ Section 415 Safe Harbor Option. As described in the definition of “Section 415 Safe Harbor Option” in Article 2 of the Basic Plan Document.

NOTE: See A.9 and A.10 to determine if Statutory Compensation will include Post Severance Compensation and/or be determined using Post Year End Compensation.

NOTE: If A.8f is not selected and differential military pay exists, the payments will be included in Statutory Compensation.

Definitions

15. Highly Compensated Employee

a. ☒ Use top-paid group election in determining Highly Compensated Employees

b. ☒ Use calendar year beginning with or within the preceding Plan Year in determining Highly Compensated Employees

NOTE: A.15b will only apply if the Plan Year end in A.4a is not December 31.

16. Disability

Definition of Disability

a. ☒ Under Code section 22(e). The Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The permanence and degree of such impairment shall be supported by medical evidence.

b. ☐ Under the Social Security Act. The determination by the Social Security Administration that the Participant is eligible to receive disability benefits under the Social Security Act.

4 Copyright © 2002-2017

SECTION A. GENERAL INFORMATION

c. ☐ Inability to engage in comparable occupation. The Participant suffers from a physical or mental impairment that results in his inability to engage in any occupation comparable to that in which the Participant was engaged at the time of his disability. The permanence and degree of such impairment shall be supported by medical evidence.

d. ☐ Pursuant to other Employer Disability Plan. The Participant is eligible to receive benefits under a Employer-sponsored disability plan.

e. ☐ Under uniform rules established by the Plan Administrator. The Participant is mentally or physically disabled under a written nondiscriminatory policy.

f. ☐ Other:             

NOTE: If A.16f is selected, provide the definition of Disability. The definition provided must be objectively determinable and may not be specified in a manner that is subject to discretion.

17. Choice of Law

Name of state or commonwealth for choice of law (Section 14.05): New York

SECTION B. ELIGIBILITY

Exclusions

The term “Eligible Employee” shall not include (Check items B.1 - B.4 as appropriate):

1. ☒ Union Employees Any Employee who is included in a unit of Employees covered by a collective bargaining agreement, if retirement benefits were the subject of good faith bargaining, and if the collective bargaining agreement does not provide for participation in this Plan.

2. ☒ Any Leased Employee (as defined in Article 2).

3. ☒ Non-Resident Aliens Any Employee who is a non-resident alien who received no earned income (within the meaning of Code section 911(d)(2)) which constitutes income from services performed within the United States (within the meaning of Code section 861(a)(3)).

4. Other Employees

☒ Other: Employees compensated on an hourly basis or commission basis and Owner-Employees.

NOTE: If selected, describe other excluded Employees from definition of Eligible Employee and indicate for what purposes, the Employees are excluded. The definition provided must be objectively determinable and may not be specified in a manner that is subject to discretion.

NOTE: See Section 3.04(a) for rules regarding excluded employees.

5. Opt-Out

☒ An Employee may irrevocably elect not to participate in Plan pursuant to Treas. Reg. section 1.401(k)-1(a)(3)(v).

Eligibility Service Rules

6. Other Employer Service

☒ Count years of service with employers other than the Employer for eligibility purposes. List other employers and indicate for what purposes the service applies along with any limitations: Count prior service with Community Mutual Savings Bank for employees acquired by merger on April 28, 2015

7. Break in Service

a. ☒ Rule of parity. Exclude eligibility service before a period of five (5) consecutive One-Year Breaks in Service/Periods of Severance if an Employee does not have any nonforfeitable right to the Account balance derived from Employer contributions.

b. ☒ One-year holdout. If an Employee has a One-Year Break in Service/Period of Severance, exclude eligibility service before such period until the Employee has completed a Year of Eligibility Service after returning to employment with the Employer.

NOTE: B.7b applies for purposes of eligibility to receive Non-Elective Contributions only.

NOTE: B.7c could be used, for example, to require less than 500 hours of service (but not more than 500 hours) for a One-Year Break in Service under B.7a and/or B.7b, or to specify that the break in service rule(s) only apply to certain contributions.

5 Copyright © 2002-2017

SECTION B. ELIGIBILITY

8. Special Participation Date

a. ☒ Allow immediate participation for all Eligible Employees employed on a specific date. All Eligible Employees employed on 4/12/2017 shall become eligible to participate in the Plan as of 1/1/2017

b. ☒ The Plan provides conditions or limitations on immediate participation: If April 12, 2017 is not the closing date of the stock offering of PCSB Financial Corporation, then Eligible Employees who are in employed on the closing date of such stock offering.

NOTE: If B.8b applies (B.8a is selected) and is selected, describe the conditions or limitations and indicate for what purposes the conditions or limitations apply. The conditions/limitations must be objectively determinable and may not be specified in a manner that is subject to discretion.

Eligibility for Non-Elective Contributions

9. Age Requirement for Non-Elective Contributions

Minimum age requirement for Non-Elective Contributions: 21

NOTE: Age 21 maximum; an age 26 maximum will apply instead if the Plan is maintained exclusively for employees of an educational institution (as defined in Code section 170(b)(1)(A)(ii)) by an employer which is exempt from tax under section 501(a) which provides that each Participant having at least 1 year of service has a right to 100 percent of his accrued benefit under the Plan which is nonforfeitable (within the meaning of section 411) at the time such benefit accrues.

10. Service Requirement for Non-Elective

a. Minimum service requirement for Non-Elective Contributions:

i. ☐ None

ii. ☐ Completion of one Year of Eligibility Service - Hours of Service necessary for a Year of Eligibility Service:                  (not to exceed 1,000)

iii. ☒ Completion of one Year of Eligibility Service - elapsed time

iv. ☐ Completion of one and 1/2 Year of Eligibility Service - Hours of Service necessary for a Year of Eligibility Service:                  (not to exceed 1,000). An Eligible Employee shall be deemed to earn 1/2 Year of Eligibility Service on the date that is six months after the end of the Eligibility Computation Period during which he earns his first Year of Eligibility Service; provided, that the individual is an Eligible Employee on the applicable entry date

v. ☐ Completion of one and 1/2 Year of Eligibility Service - elapsed time

vi. ☐ Completion of two Years of Eligibility Service - Hours of Service necessary for one Year of Eligibility Service:                  (not to exceed 1,000)

vii. ☐ Completion of two Years of Eligibility Service - elapsed time

viii. ☐ Completion of                  Hours of Service (not to exceed 1,000) within a twelve month period. The service requirement shall be deemed met at the time the specified number of Hours of Service are completed.

ix. ☐ Completion of                  months of service - elapsed time (not to exceed 24)

x. ☐ Completion of                  Hours of Service (not to exceed 1,000) in a                  month period (not to exceed 12 - hours of service failsafe applies)

xi. ☐ Completion of                  consecutive months of continuous service (not to exceed 12 - hours of service failsafe applies)

xii. ☐ Other:                  (hours of service failsafe applies if elapsed time is not specified)

b. Months of service. If the service requirement is not met in the first consecutive period of months, describe the next service requirement:

i. ☐ Rolling. Each successive period shall begin immediately after the preceding period and shall end on or before the first Eligibility Computation Period after which time the Plan will revert to 1,000 Hours of Service in an Eligibility Computation Period.

ii. ☐ Revert to 1,000 Hours of Service in an Eligibility Computation Period.

NOTE: Service taken into account for purposes of B.10 shall be determined under the terms and conditions specified for determining a Year of Eligibility Service.

NOTE: B.10a cannot exceed 1 year, unless the Plan provides a nonforfeitable right to 100% of the Participant’s Non-Elective Contribution Account balance after not more than 2 years of service, in which case up to 2 years is permitted.

NOTE: If B.10a.vii is selected, the service requirements provided must comply with Code section 410(a), be definitely determinable and may not be specified in a manner that is subject to discretion.

NOTE: B.10b only applies if B.10a.x or B.10a.xi is selected.

6 Copyright © 2002-2017

SECTION B. ELIGIBILITY

NOTE: Hours of service failsafe: if B.10a.x - B.10a.xii is selected and the Plan uses the Hours of Service method, the service requirement under B.10e Eligible Employee completes 1,000 Hours of Service; provided, that the individual is an Eligible Employee on the applicable entry date.

11. Additional Requirements for Non-Elective Contributions

☒ Additional requirements, limitations, conditions or other modifications to B.9-10 (eligibility to receive allocations of Non-Elective Contributions) apply: employment on last day of the plan year

NOTE: See Section 3.04 for rules regarding eligibility requirements.

NOTE: The additional requirements provided must be objectively determinable and may not be specified in a manner that is subject to Employer discretion and are subject to the same limits/requirements set out under options B.9-10.

12. Entry Dates for Non-Elective Contributions

a. Frequency of entry dates for Non-Elective Contributions:

i. ☐ immediate

ii. ☐ first day of each calendar month

iii. ☐ first day of each Plan quarter

iv. ☒ first day of the first month and seventh month of the Plan Year

v. ☐ first day of the Plan Year

vi. ☐ other:                 

b. An Eligible Employee shall become a Participant eligible to receive an allocation of Non-Elective Contributions on the entry date selected in B.12a that is:

i. ☒ coincident with or next following the date the requirements of B.9 through B.11 are met

ii. ☐ next following the date the requirements of B.9 through B.11 are met

iii. ☐ coincident with or immediately preceding the date the requirements of B.9 through B.11 are met

iv. ☐ immediately preceding the date the requirements of B.9 through B.11 are met

v. ☐ nearest to the date the requirements of B.9 through B.11 are met

NOTE: If immediate entry (B.12a.i) is selected, an Eligible Employee shall become a Participant eligible to receive an allocation of Non-Elective Contributions immediately upon meeting the requirements of B.9 through B.11.

NOTE: B.12b is not applicable if immediate or other (B.12a.i or B.12a.vi) is selected.

NOTE: The Plan must provide that an Eligible Employee who has attained age 21 and who has completed one Year of Eligibility Service (two Years of Eligibility Service may be used for contributions other than Elective Deferrals if the Plan provides a nonforfeitable right to 100% of the Participant’s applicable Account balance after not more than 2 Years of Eligibility Service) shall commence participation in the Plan no later than the earlier of: (1) the first day of the first Plan Year beginning after the date on which such Eligible Employee satisfied such requirements; or (2) the date that is 6 months after the date on which he satisfied such requirements.

Eligibility Service Computation Rules

13. Eligibility Service Computation Rules

a. ☐ Eligibility Computation Period switches to Plan Year.

b. Select hours equivalency for eligibility purposes:

i. ☐ None

An Employee shall be credited with the following service with the Employer:

ii. ☐ 10 Hours of Service for each day or partial day

iii. ☐ 45 Hours of Service for each week or partial week

iv. ☐ 95 Hours of Service for each semi-monthly payroll period or partial semi-monthly payroll period

v. ☐ 190 Hours of Service for each month or partial month

c. The hours equivalency shall apply to:

i. ☐ All Employees

ii. ☐ Only Employees not paid on a per-hour basis

d. ☐ The following modifications shall be made to the requirements specified in B.13a-c:                 

NOTE: B.13c will not apply if B.13b.i is selected (“None”).

NOTE: The responses to B.13 are used only to the extent that the Plan determines eligibility service by the Hour of Service method and will apply uniformly to B.10, wherever Hours of Service is elected unless otherwise provided in B.13d.

NOTE: If B.13d is selected, the modifications must be objectively determinable and may not be specified in a manner that is subject to Employer discretion. For example, B.13d could be used to restrict the Accounts where Eligibility Computation Periods switch to the Plan Year.

7 Copyright © 2002-2017

SECTION C. CONTRIBUTIONS

SECTION C. CONTRIBUTIONS

Non-Elective - Allocation Service

NOTE: An Eligible Employee who has met the requirements of Section B and who has satisfied the following requirements shall be eligible to receive an allocation of Non-Elective Contributions during the applicable Plan Year.

1. Allocation Service Requirements for Non-Elective Contributions

a. ☐ In order to share in the allocation of Non-Elective Contributions, a Participant is required to complete the following Hours of Service in the applicable Plan Year             

b. ☒ In order to share in the allocation of Non-Elective Contributions, a Participant is required to be employed by the Employer on the last day of Plan Year

c. ☐ In order to share in the allocation of Non-Elective Contributions, a Participant is required to be employed by the Employer on the last day of Plan Year or complete at least              Hours of Service in the applicable Plan Year

NOTE: C.1a and C.1b are inapplicable if C.1c is selected.

NOTE: C.1a and C.1c may not be more than 1,000.

2. Non-Elective Allocation Service Computation Rules

a. Select hours equivalency:

i. ☐ None

An Employee shall be credited with the following service with the Employer:

ii. ☐ 10 Hours of Service for each day or partial day

iii. ☐ 45 Hours of Service for each week or partial week

iv. ☐ 95 Hours of Service for each semi-monthly payroll period or partial semi-monthly payroll period

v. ☐ 190 Hours of Service for each month or partial month

b. The hours equivalency shall apply to:

i. ☐ All Employees

ii. ☐ Only Employees not paid on a per-hour basis

NOTE: C.2 is only applicable if C.1a or C.1c is selected.

3. Exceptions to Allocation Service Requirements for Non-Elective Contributions

a. Modify Hour of Service requirement and/or last day requirement for a Participant who terminates employment with the Employer during the Plan Year due to:

i. ☒ death.

ii. ☒ Disability

iii. ☒ attainment of Normal Retirement Date

b. Any Hour of Service requirement and last day requirement shall be modified as follows:

i. ☐ Waive both the Hour of Service requirement and last day requirement

ii. ☐ Waive the Hour of Service requirement only

iii. ☒ Waive last day requirement only

c. ☐ The following other modifications shall be made to the requirements specified in C.1-3b:             

NOTE: C.3 is only applicable if C.1a, C.1b or C.1c is selected.

NOTE: C.3c may only be used to make minor changes to the requirements specified in C.1-3b and must be specified in a manner that is objectively determinable and may not be specified in a manner that is subject to Employer discretion. For example, C.3c could be used to clarify that last day but not Hours of Service is waived for death while Hours of Service and last day are waived for Disability and attainment of Normal Retirement Age.

4. Coverage Failures for Non-Elective Contributions

Method to fix Non-Elective Contribution Code section 410(b) ratio percentage coverage failures (Section 4.03(d)):

a. ☐ Do not automatically fix

b. ☒ Add just enough Participants to meet the coverage requirements

c. ☐ Add all non-excludable Participants

8 Copyright © 2002-2017

SECTION C. CONTRIBUTIONS

Non-Elective - Formula

5. Non-Elective allocation formula. See Section 4.01(b) of the BPD.

6. Allocation of Non-Elective Contributions

a. Non-Elective Contributions are allocated to Participant Accounts at the following time(s):

i. ☒ End of Plan Year

ii. ☐ Semi-annually

iii. ☐ Quarterly

iv. ☐ Each calendar month

v. ☐ Each pay period

b. Minimum and Maximum Non-Elective Allocations

i. ☐ Allocations of Non-Elective Contributions for a Participant shall be subject to a minimum amount:                 

ii. ☐ Allocations of Non-Elective Contributions for a Participant shall be subject to a maximum amount:                 

NOTE: Any service requirements specified in C.1 through C.3 shall be applied pro rata to the period selected in this C.6a. Any last day rule specified in C.1 through C.3 shall be applied as of the end of each period selected in this C.6a.

7. Non-Elective - Disability

☐ Allocate Non-Elective Contributions to Disabled Participants who do not meet the allocation service requirements (Section 4.01(e)). Allocations to Disabled Participants end as of the earliest of: (i) the last day of the Plan Year in which occurs the              anniversary of the start of the Participant’s Disability or (ii) such other time specified in Section 4.01(e).

NOTE: C.7 shall not be more than “tenth”.

NOTE: Allocations under C.7 may occur after Termination.

8. Death or Disability During Qualified Military Service

☐ For benefit accrual purposes, a Participant that dies or becomes Disabled while performing qualified military service will be treated as if he had been employed by the Employer on the day preceding death or Disability and terminated employment on the day of death or Disability (Section 4.04).

9. Prevailing Wage

a. ☐ In addition to any other Non-Elective Contributions otherwise provided in the Plan, an amount necessary to meet the Employer’s requirements under an applicable prevailing wage statute shall be allocated. The formula for allocating Non-Elective Contributions shall be specified in the Prevailing Wage Addendum to the Adoption Agreement.

The prevailing wage allocation offset:

i. ☐ None

ii. ☐ The prevailing wage allocations will offset any other Non-Elective Contribution allocations that would otherwise be made to a Participant

iii. ☐ Other:                 

b. ☐ Qualified Non-Elective Contributions (in addition to any non-elective contribution made pursuant to C.5 and Section 4.01) shall be allocated in an amount necessary to meet the Employer’s requirements under an applicable prevailing wage statute. Allocations will be made in an amount necessary to meet the Employer’s requirements under an applicable prevailing wage statute. The formula for allocating Qualified Non-Elective Contributions shall be specified in an Addendum to the Adoption Agreement.

The prevailing wage allocation offset:

i. ☐ None

ii. ☐ The prevailing wage allocations will offset any other Qualified Non-elective Contribution allocations that would otherwise be made to a Participant.

iii. ☐ Other:                 

c. ☐ Exclude              from receiving benefits under an applicable prevailing wage statute under this Plan.

NOTE: Depending upon the offset rule chosen, timing of allocations may need to be considered as contributions under Prevailing Wage are typically required to be made not less often than quarterly.

NOTE: The offset provided under C.9a.iii and/or C.9b.iii must be objectively determinable and may not be specified in a manner that is subject to Employer discretion

NOTE: C.9c must be used to exclude Highly Compensated Employees or another nondiscriminatory class of employees from receiving Prevailing Wage allocations. Note that the Employees excluded will generally still need to be provided the Prevailing Wage benefits in another manner.

9 Copyright © 2002-2017

SECTION C. CONTRIBUTIONS

10. QNECs

☐ The following limitations, conditions and/or special rules apply to Qualified Non-Elective Contributions:              (Section 4.01(b))Subject to C.10 if applicable, the Employer’s Qualified Non-elective Contribution shall be allocated in such manner as determined by the Company. The Company shall notify the Plan Administrator and/or the Trustee in writing of the manner in which such contributions shall be allocated.

NOTE: A Qualified Non-elective Contribution of a Nonhighly Compensated Employee will not be taken into account in satisfying the requirements of Section 5.01 to the extent it is a disproportionate contribution within the meaning of Treas. Reg. sections 1.401(k)-2(a)(6)(iv) and/or 1.401(m)-2(a)(6)(v).

11. Rollovers

Rollover Contributions are permitted (Section 4.02):

a. ☒ No

b. ☐ Yes - All Eligible Employees may make a Rollover Contribution even if not yet a Participant in the Plan

c. ☐ Yes - Only active Participants may make a Rollover Contribution

d. ☐ Yes -              may make a Rollover Contribution

NOTE: The Plan Administrator has discretion under Section 4.02 to limit the types of rollover contributions accepted by the Plan and must use that discretion in a consistent and nondiscriminatory manner.

12. 415 Additional Language

☐ Additional language necessary to satisfy Code section 415 because of the required aggregation of multiple plans:                 .

Vesting Service Rules

1. Vesting service computation method

a. ☐ Hours of Service. Number of Hours of Service necessary for a Year of Vesting Service:                 

b. ☒ Elapsed Time

NOTE: Unless D.1.b (Elapsed Time) is selected, the Plan will use the Hours of Service method for determining vesting service. If D.1.b (Elapsed Time) is selected, questions D.2 through D.3 are disregarded.

NOTE: D.1a may not be more than 1,000. If left blank, the Plan will use 1,000 Hours of Service.

2. Vesting Service Equivalencies

a. Select equivalency for vesting purposes:

i. ☐ None.

An Employee shall be credited with the following service with the Employer:

ii. ☐ 10 Hours of Service for each day or partial day

iii. ☐ 45 Hours of Service for each week or partial week

iv. ☐ 95 Hours of Service for each semi-monthly payroll period or partial semi-monthly payroll period

v. ☐ 190 Hours of Service for each month or partial month

b. The hours equivalency selected in D.2a shall apply to:

i. ☐ All Employees

ii. ☐ Only Employees not paid on a per-hour basis

NOTE: D.2b does not apply if D.2a.i is selected.

3. Vesting Computation Period

a. ☐ Calendar year

b. ☐ Plan Year

c. ☐ The twelve-consecutive month period commencing on the date the Employee first performs an Hour of Service; each subsequent twelve-consecutive month period shall commence on the anniversary of such date

d. ☐ Other:                 

NOTE: D.3d must be a twelve-consecutive month period.

4. Other Employer Service

☒ Count years of service with employers other than the Employer for vesting purposes. List other employers and indicate for what purposes (e.g., Non-Elective, etc.) the service applies along with any limitations: Count service with Community Mutual Savings Bank for employees acquired by merger on August 28, 2015

5. Vesting Exceptions

a. ☒ Death. Provide for full vesting for a Participant who terminates employment with the Employer due to death while an Employee (Section 6.02).

10 Copyright © 2002-2017

SECTION C. CONTRIBUTIONS

b. ☒ Disability. Provide for full vesting for a Participant who terminates employment with the Employer due to Disability while an Employee (Section 6.02).

c. ☐ Early Retirement. Provide for 100% vesting upon the attainment of Early Retirement Date while an Employee (Section 6.02).

6. Vesting Exclusions

a. ☒ Exclude Years of Vesting Service earned before age 18

b. ☐ Exclude Years of Vesting Service earned before the Employer maintained this Plan or a predecessor plan

c. ☐ One-year holdout. If an Employee has a One-Year Break in Service/Period of Severance, exclude Years of Vesting Service earned before such period until the Employee has completed a Year of Vesting Service after returning to employment with the Employer.

d. ☒ Rule of parity. If an Employee does not have any nonforfeitable right to the Account balance derived from Employer contributions, exclude Years of Vesting Service earned before a period of five (5) consecutive One-Year Breaks in Service/Periods of Severance.

7. Special Vesting Provisions

☐ Provide for special vesting provisions:             

NOTE: Any special provisions must satisfy Code sections 401(a)(4) and 411.

Vesting Schedules

8. Non-Elective Contribution Account

Vesting Schedule for Non-Elective Contributions:

a. ☐ 100%

b. ☒ 2-6 Year Graded

b. ☐ 1-5 Year Graded

c. ☐ 1-4 Year Graded

d. ☐ 3 Year Cliff

e. ☐ 2 Year Cliff

f. ☐ Other:

i. Other Non-Elective Schedule - less than 1 year:     %

ii. Other Non-Elective Schedule - 1 year but less than 2 years:     %

iii. Other Non-Elective Schedule - 2 years but less than 3 years:     %

iv. Other Non-Elective Schedule - 3 years but less than 4 years:     %

v. Other Non-Elective Schedule - 4 years but less than 5 years:     %

vi. Other Non-Elective Schedule - 5 years but less than 6 years:     %

vii. Other Non-Elective Schedule - 6 or more years: 100%.

NOTE: See Section 6.02 for definitions of the applicable vesting schedules.

NOTE: Any vesting schedule described in E.8g must provide vesting at least as rapidly as the “3 Year Cliff” vesting schedule or the “2-6 Year Graded” vesting schedule and D.8f.vii will be deemed to be 100%.

9. Other Vesting Schedule

a. ☐ The Plan has another vesting schedule:             

b. Describe the Participants to which the other vesting schedule applies:             

c. ☐ Retain pre-PPA Non-Elective vesting schedule for pre 2007 contributions:             

NOTE: The vesting schedule in D.9 is in addition to the vesting schedules in D.8

NOTE: D.9b must be applied in a consistent and nondiscriminatory manner. For example, D.9b could be used to describe a prior vesting schedule, vesting for a transfer account, or a vesting schedule that applies to Participants covered by a collective bargaining agreement provided retirement benefits were the subject of good faith bargaining.

NOTE: The vesting schedule must satisfy the applicable minimum vesting requirements of Code section 411(a)(2) at every point in time, for all Participants’ years of service.

10. Forfeitures

Forfeitures will be used in the following manner (Articles 5 and 6):

a. ☒ Any permissible method (restore forfeitures, reduce Employer contributions (or reallocate as Employer contributions) made pursuant to Article 4 or to pay Plan expenses)

b. ☐ Other:             

NOTE: D.10b is limited to one or a combination of the options described in D.10a. D.10b may be used to further restrict the uses of forfeiture and must be applied in a consistent and nondiscriminatory manner.

11 Copyright © 2002-2017

SECTION E. DISTRIBUTIONS

SECTION E. DISTRIBUTIONS

Normal/Early Retirement

1. Normal Retirement

a. Normal Retirement Age means:

i. ☒ Attainment of age 65

ii. ☐ Later of attainment of age              and the service specified in E.1b

b. Select the type and length of service used to measure Normal Retirement Age:

i. ☐ Eligibility.              Years of Eligibility Service

ii. ☐ Vesting.              Years of Vesting Service

iii. ☐ Participation.              anniversary of participation (e.g. third, fourth, etc.)

c. Normal Retirement Date means:

i. ☐ Normal Retirement Age

ii. ☐ First day of calendar month coincident or next following Normal Retirement Age

iii. ☐ First day of calendar month nearest Normal Retirement Age

iv. ☐ Anniversary date nearest Normal Retirement Age

v. ☒ Other: first day of month coinciding with or next following Normal Retirement Age

NOTE: The age entered in E.1a may not be more than 65.

NOTE: E.1b may not require more than the fifth anniversary of participation as defined in Treas. Reg. section 1.411(a)-7(b)(1) and any superseding guidance.

NOTE: The Normal Retirement Age shall be deemed met no later than the later of age 65 or the fifth anniversary of participation as defined in Treas. Reg. section 1.411(a)-7(b)(1) and any superseding guidance.

2. Early Retirement

a. Early Retirement Age means:

i. ☒ None. The Plan does not have an early retirement feature.

ii. ☐ Attainment of age             

iii. ☐ Later of attainment of age              and the service specified in F.2b

b. Select the type and length of service used to measure Early Retirement Age:

i. ☐ Eligibility.              Years of Eligibility Service

ii. ☐ Vesting.              Years of Vesting Service

iii. ☐ Participation.              anniversary of participation (e.g. third, fourth, etc.)

c. Early Retirement Date means:

i. ☐ Early Retirement Age

ii. ☐ First day of calendar month coincident or next following Early Retirement Age

iii. ☐ First day of calendar month nearest Early Retirement Age

iv. ☐ Anniversary date nearest Early Retirement Age

v. ☐ Other:             

NOTE: The age entered in E.2a may not be more than 65.

NOTE: E.2b is only applicable if E.2a.iii is selected.

NOTE: See related selections D.5c (vesting upon Early Retirement Date) and F.2b (in-service distributions upon Early Retirement Date).

Time & Form of Payment

NOTE: Unless E.10b is “Yes”, E.3 through E.5 shall only apply to Accounts other than those that comprise Participant’s ESOP Accounts.

3. Time of Payment (Other than Death)

a. ☐ Immediate. As soon as administratively feasible with a final payment made consisting of any allocations occurring after such Termination of Employment

b. ☒ End of Plan Year. As soon as administratively feasible after all contributions have been allocated relating to the Plan Year in which the Participant’s Account balance becomes distributable

c. ☐ Normal Retirement Date.

12 Copyright © 2002-2017

SECTION E. DISTRIBUTIONS

d. ☐ Other:             

NOTE: Any entry in E.3d must comply with Code section 401(a)(9), Section 7.02(e) and other requirements of Article 7.

4. Form of Payment (Other than Death)

Medium of distribution from the Plan:

a. ☐ Cash only

b. ☒ Cash or in-kind

c. ☐ Cash or in-kind rollover to an Individual Retirement Account sponsored by the following vendor:             

5. Default Form of Payment (Other than Death)

a. Unless otherwise elected by the Participant, distributions shall be made in the form of:

i. ☒ Lump sum only

ii. ☐ Qualified Joint and     % Survivor Annuity (not less than 50% and not more than 100%)

b. In addition to the form described in E.5a, distributions from the Plan after Termination for reasons other than death may be made in the following forms (select all that apply):

i. ☒ Lump sum only

ii. ☐ Lump sum payment or substantially equal annual, or more frequent installments over a period not to exceed the joint life expectancy of the Participant and his Beneficiary

iii. ☐ Under a continuous right of withdrawal pursuant to which a Participant may withdraw such amounts at such times as he shall elect

iv. ☐ Other:             

NOTE: E.5b.iii and any entry in E.5b.iv must comply with Code section 401(a)(9), Section 7.02(e) and other requirements of Article 7.

6. Distributions as an Annuity

a. Permit Participants to make distributions in the form of an annuity

i. ☐ Yes - entire account

ii. ☐ Yes - the following conditions and/or limitations shall apply:             

iii. ☒ No

NOTE: If E.6a.i or E.6a.ii is selected, a Participant may elect to have the Plan Administrator apply his vested Account to the extent provided above toward the purchase of an annuity contract, which shall be distributed to the Participant. The terms of such annuity contract shall comply with the provisions of this Plan and any annuity contract shall be nontransferable.

NOTE: If E.6b.i or E.6b.ii is selected, a Beneficiary may elect to have the Plan Administrator apply his vested Account to the extent provided above toward the purchase of an annuity contract, which shall be distributed to the Beneficiary. The terms of such annuity contract shall comply with the provisions of this Plan (including Section 7.05) and any annuity contract shall be nontransferable.

NOTE: E.6a.ii and E.6b.ii must be applied in a consistent and nondiscriminatory manner (for example, limiting annuity distributions to accounts in excess of a certain dollar amount.)

7. Transfer from Pension Plan

☐ The Plan has received a transfer of assets from a plan subject to the survivor annuity rules of Code sections 411(a)(11) and 417 (e.g., a money purchase or defined benefit plan).

Payments on Death

8. Beneficiary Designation

To the extent that a Participant’s Account is subject to the survivor annuity rules of Section 7.10, the spouse of a married Participant shall be the beneficiary of     % of such Participant’s Account unless the spouse waives his or her rights to such benefit pursuant to Section 7.10 (Section 7.04).

NOTE: E.8 may not be less than 50%.

NOTE: E.8 only applies to Accounts subject to the survivor annuity requirements of Section 7.10.

9. Payment upon Participant’s Death

Distributions on account of the death of the Participant shall be made in accordance with the following:

a. ☒ Pay entire Account balance by end of fifth year for all Beneficiaries in accordance with Sections 7.02(b)(1)(A) and 7.02(b)(2)(A) only

b. ☐ Pay entire Account balance no later than the 60th day following the end of Plan Year in which the Participant dies

13 Copyright © 2002-2017

SECTION E. DISTRIBUTIONS

c. ☐ Allow extended payments for all beneficiaries in accordance with Sections 7.02(b)(1)(A), (B) and (C) and 7.02(b)(2)(A) and (B)

d. ☐ Pay entire Account balance by end of fifth year for Beneficiaries in accordance with Sections 7.02(b)(1)(A) and 7.02(b)(2)(A) and allow extended payments in accordance with Sections 7.02(b)(1)(B) and (C) and 7.02(b)(2)(B) only if the Participant’s spouse is the Participant’s sole primary Beneficiary

e. ☐ Other:             

NOTE: Any entry in E.9e must comply with Code section 401(a)(9), Section 7.02(b) and other requirements of Article 7.

10. ESOP Distributions

a. Distributions from a Participant’s ESOP Accounts may be made over a period longer than the period described in Section 7.02(a)(3):

i. ☐ Yes

ii. ☒ No

b. Distributions from a Participant’s ESOP Accounts may be made pursuant to the elections in E.3, E.5 and E.9

i. ☒ Yes

ii. ☐ No

c. Distributions from a Participant’s ESOP Accounts may be made in Employer Stock:

i. ☒ Yes

ii. ☐ No

d. Apply the distribution rules of Section 7.02(a) and the diversification rules of Section 9.02(b) to Employer Stock acquired by the Plan on or before December 31, 1986:

i. ☐ Yes

ii. ☒ No

e. Provide for a right of first refusal for distributions payable in Employer Stock (Section 7.02(d)(3)):

i. ☐ Yes

ii. ☒ No

11. Beneficiaries

a. Death benefits when there is no designated beneficiary:

i. ☒ Standard according to Section 7.04(c)

ii. ☐ Other:             

b. ☒ Revocation. A beneficiary designation to a spouse shall be automatically revoked upon the following circumstances: divorce

c. Domestic Partners are treated as a spouse under the terms of this Plan for purposes of death benefits to the extent applicable:

i. ☒ No

ii. ☐ Yes - limited to the following terms and conditions:             

iii. ☐ Yes

d. ☐ The term “Domestic Partner” as defined in Article 2 is modified in the following manner:             

e. ☐ For purposes of determining a Participant’s spouse, the one-year rule in Code section 417(d), Treas. Reg. section 1.401(a)-20 applies.

NOTE: If E.11a.ii (Other) is selected, death benefits when there is no designated beneficiary shall be provided pursuant to F.11a.ii. The death benefits described must be definitely determinable and may not be specified in a manner that is subject to discretion.

NOTE: If E.11c.i is selected, E.11d does not apply.

NOTE: If E.11d is selected, the modifications must be nondiscriminatory and definitely determinable.

NOTE: Domestic Partners shall not be treated as a spouse under the following Sections of the Plan: 7.02(b) (distribution upon death), 7.05 (minimum distributions) and 7.06 (direct rollovers).

NOTE: If revocation is selected (E.11b) you may use this item to indicate automatic revocation upon divorce.

Cash Out

12. Cash Out

a. ☒ Involuntary cash-out amount for purposes of Section 7.03: $1000

b. Minimum Account balance for Qualified Joint and Survivor Annuity consent requirements (Section 7.10): $        

14 Copyright © 2002-2017

SECTION E. DISTRIBUTIONS

c. Involuntary cash-out of a terminated Participant’s Account balance when it exceeds the cash-out amount specified in E.10a is deferred under Section 7.03(b) until:

i. ☒ Later of age 62 or Normal Retirement Date - payment made in a lump sum only

ii. ☐ Required Beginning Date - Participant may elect payment in a lump sum or installments

iii. ☐ Required Beginning Date - payment made in a lump sum only

iv. ☐ Other:             

d. ☒ Exclude amounts attributable to Rollover Contributions in determining the value of the Participant’s nonforfeitable account balance for purposes of the Plan’s Involuntary Cash out Rules (Sections 7.03 and 7.10)

NOTE: E.12a and E.12b have a $5,000 maximum, $5,000 will be entered unless otherwise specified.

NOTE: If E.12a is not selected and E.10b is zero, E.10d does not apply.

NOTE: E.12b only applies to Accounts subject to the survivor annuity requirements of Section 7.10.

NOTE: If E.12a is less than $1,000, E.12d may not be selected.

NOTE: Any entry in E.12c.iv must comply with Code section 411(a)(11), Section 7.03 and other requirements of Article 7.

Required Beginning Date

13. Required Beginning Date

Required Beginning Date for a Participant other than a More Than 5% Owner:

a. ☒ Retirement. April 1 of the calendar year following the later of the calendar year in which the Participant: (x) attains age 70-1/2, or (y) retires

b. ☐ Age 70-1/2. April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2c. ☐ Election. The option provided in E.13a; provided that a Participant may elect to commence distributions pursuant to either E.13a or E.13b

NOTE: A Participant’s Required Beginning Date is a protected benefit under Code section 411(d)(6).

SECTION F. IN-SERVICE WITHDRAWALS

NOTE: See Section 8.05 for limits on in-service distributions.

NOTE: In-service withdrawal options are meant as enabling rules. If an in-service distribution is permitted under any option specified below, the in-service withdrawal is permissible.

Vesting Status

1. Vesting Status for In-service Withdrawals

Select one:

☐ In-service withdrawals otherwise permitted under Section G are allowed from Accounts that are partially vested

☐ An Account must be fully vested for a Participant to receive an in-service withdrawal

NOTE: The response to F.1 will be ignored if the Plan does not allow in-service withdrawals.

NOTE: Withdrawals under F.2-10 are only permitted from the portion of a Participant’s Accounts described in F.1 unless otherwise specified in F.11.

Retirement/Hardship/Age

2. Normal/Early Retirement

a. ☐ Allow in-service distributions after attainment of Normal Retirement Date (Section 7.01(b)) from the following Accounts:             

b. ☐ Allow in-service distributions after attainment of Early Retirement Date (Section 7.01(a)) from the following Accounts:             

3. Hardship

Hardship withdrawals are allowed as follows (Section 8.01):

a. ☒ None

b. ☐ All Accounts.

c. ☐ Selected Accounts

15 Copyright © 2002-2017

SECTION F. IN-SERVICE WITHDRAWALS

i. ☐ Non-Elective Contribution Account

ii. ☐ Rollover Contribution Account

iii. ☐ Transfer Account

iv. ☐ Other:             

d. The criteria used in determining whether a Participant is entitled to receive a Hardship withdrawal:

i. ☐ Safe Harbor criteria set forth in Section 8.01(b)

ii. ☐ Non Safe Harbor criteria set forth in Section 8.01(c)

e. ☐ More flexible Hardship criteria applies to permitted Account(s)

i. ☐ Use criteria specified in Section 8.01(c)

ii. ☐ Use criteria specified in Section 8.01(c) with the following additional criteria and/or modifications:             

f. ☐ Expand the Hardship criteria to include the Beneficiary of the Participant

g. ☐ Other limitations on Hardship withdrawals:             

NOTE: If F.3a is selected, F.3b through F.3g do not apply.

NOTE: F.3e only applies if Hardship withdrawals are permitted from Accounts not subject to Treas. Reg. 1.401(k)-1(d) (Accounts specified in F.3c.ii-iv to the extent applicable and selected above). If F.3e is selected, the requirements of Section 8.01(b)(2) shall not apply, the amount of the hardship distribution may not exceed the Participant’s vested interest under the applicable Account and the requirements of Revenue Ruling 71-224 and any superseding guidance shall apply.

NOTE: F.3f only applies if the Plan provides for in-service withdrawals on account of Hardship and uses the safe harbor criteria for Hardship determinations. If F.3f is selected, Hardship distributions may be made for a primary Beneficiary for expenses described in Treas. Reg. sections 1.401(k)-1(d)(3)(iii)(B)(1), (3), or (5) (relating to medical, tuition, and funeral expenses, respectively). A “primary Beneficiary” is an individual who is named as a Beneficiary under the Plan and has an unconditional right to all or a portion of the Participant’s Account Balance upon the death of the Participant.

4. Specified Age and Service

a. In-service withdrawals are allowed on attainment of age              and              service (Section 8.02):

i. ☒ None

ii. ☐ All Accounts

iii. ☐ Selected Accounts

b. If Selected Accounts is selected, specified age and service withdrawals may be made from the following Accounts:

i. ☐ Non-Elective Contribution Account

ii. ☐ Rollover Contribution Account

iii. ☐ Transfer Account

iv. ☐ Other:             

NOTE: F.4b only applies if F.4a.iii is selected.

5. Specified Age

a. In-service withdrawals are allowed on attainment of age              (Section 8.02):

i. ☒ None

ii. ☐ All Accounts

iii. ☐ Selected Accounts

b. If Selected Accounts is selected, specified age withdrawals may be made from the following Accounts:

i. ☐ Non-Elective Contribution Account

ii. ☐ Rollover Contribution Account

iii. ☐ Transfer Account

iv. ☐ Other:             

NOTE: F.5b only applies if F.5a.iii is selected.

Other Withdrawals

6. Withdrawals After Period of Participation

a. ☐ Non-Elective Contributions (Section 8.03(a)). In-service withdrawals are allowed from a Participant’s Non-Elective Contribution Account after              years of Participation

b. ☐ ESOP Contributions. In-service withdrawals are allowed from a Participant’s ESOP Account after              years of Participation

NOTE: F.6a-b may not be less than five.

16 Copyright © 2002-2017

SECTION F. IN-SERVICE WITHDRAWALS

7. Withdrawals After Period of Accumulation

a. ☐ Non-Elective Contributions (Section 8.03(a)). In-service withdrawals are allowed from a Participant’s Non-Elective Contribution Account on funds held for              years.

b. ☐ ESOP Contributions (Section 8.03(a)). In-service withdrawals are allowed from a Participant’s ESOP Account on funds held for              years.

NOTE: F.7a-b may not be less than two.

8. At Any Time (Section 8.03(b))☐ In-service withdrawals are allowed from the Rollover Contribution Account

9. Transfer Account

Permit a distribution to be made to a Participant who has attained age 62 and who has not separated from employment from the transfer Account

a. ☐ Yes - under any distribution option offered to a Terminated Participant

b. ☐ Yes - limited to the following terms and conditions:             

NOTE: F.9 only applies if E.7 is selected (Plan has received a transfer of assets from a plan subject to the survivor annuity rules of Code sections 401(a)(11) and 417).

10. Disability

☐ Allow distributions upon Disability.

NOTE: A severe disability equivalent to A.20a is as follows: the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The permanence and degree of such impairment shall be supported by medical evidence.

Conditions/Limitations

11. Other Conditions/Limitations

☐ The following limitations, conditions and/or special rules apply to in-service withdrawals:             

NOTE: Unless otherwise specified, the limitations will apply to all in-service withdrawals (F.1 through F.10). F.11 must be applied in a consistent and nondiscriminatory manner. For example, F.11 could be used to specify the number of withdrawals permitted in a specified time period. See Section 8.05.

Loans

12. Loans

Loans are permitted:

☐  Yes    ☒  No

SECTION G. PLAN OPERATIONS AND TOP-HEAVY

Plan Operations

1. Permitted Investments

a. ☒ Plan may invest up to 100% of the Trust Fund in “qualifying employer securities” and “qualifying employer real property” (Section 9.04)

b. ☐ Plan may invest assets other than ESOP Accounts in life insurance (Section 9.11)

NOTE: If G.1a is selected, the selection shall not apply to Accounts prohibited from investing more than 10% of assets in “qualifying employer securities” and “qualifying employer real property” under section 407(b)(2) of ERISA.

2. ☐ Plan may invest in qualifying longevity annuity contracts (“QLACs”)

a. The date the QLAC option will first be available under the Plan             

3. Indicate the extent to which terminated Participants shall be subject to the Reshuffling provisions of Section 7.02(d)(4):

a. ☐ Redemption. Employer Stock held in a terminated Participant’s ESOP Account shall be redeemed for assets other than Employer Stock

b. ☐ Transfer. Employer Stock held in a terminated Participant’s ESOP Account shall be transferred to other Participant Accounts where it will be redeemed for assets other than Employer Stock held in that Account

17 Copyright © 2002-2017

SECTION G. PLAN OPERATIONS AND TOP-HEAVY

c. ☐ Other.

d. ☒ None.

4. Reshuffling provisions. Indicate: (i) when such redemption/transfer shall occur, (ii) the manner in which Employer stock will be valued, and (iii) the method used to determine how many shares of Employer Stock shall be redeemed/transferred and to which Participant Accounts the Employer Stock shall be transferred:             

5. Indicate the extent to which Participants’ Accounts will be subject to Rebalancing:

a. ☒ The Plan will not be subject to Rebalancing

b. ☐ ESOP Accounts will be Rebalanced to:     %

6. Indicate which Participants will be affected by Rebalancing:

a. ☐ All Participants

b. ☐ Only Active Participants

c. ☐ Only Terminated Participants

7. Participant Self-Direction

a. Specify the extent to which the Plan permits Participant self-direction and indicate the Plan’s intent to comply with ERISA section 404(c) (Section 9.02):

i. ☐ All Accounts other than ESOP Accounts

ii. ☐ Some Accounts

iii. ☒ None

b. If “Some Accounts” is selected, a Participant may self-direct the following Accounts Accounts if they are not ESOP Account:

i. ☐ Non-Elective Contribution Account

ii. ☐ Rollover Contribution Account

iii. ☐ Transfer Account

iv. ☐ Other:             

c. ☐ Participants may also establish individual brokerage accounts.

d. Participants may exercise voting rights with respect to the assets held in Accounts other than ESOP Accounts (Section 9.06(a)):

i. ☐ Employer stock only

ii. ☐ All investments

iii. ☐ Selected investments:             

NOTE: If G.7a.iii (None) is selected, G.7b through G.7d do not apply.

NOTE: G.7b only applies if G.2a.ii is selected.

NOTE: If G.1a is selected (employer securities) and G.7a.i or G.7a.ii (404(c) applies) is selected, then voting rights must be selected in G.7d.i, G.7d.ii or G.2d.iii.

8. Valuation Date for Accounts other than ESOP Accounts

a. ☒ Last day of Plan Year

b. ☐ Last day of each Plan quarter

c. ☐ Last day of each month

d. ☐ Each business day

e. ☐ Other:              (Must be at least annually).

NOTE: If G.7a.i or G.7a.iii (404(c) applies) is selected then Valuation Date must be at least quarterly.

9. Valuation Date for ESOP Accounts (Article 2 Definitions and Section 9.10)

a. ☒ Last day of Plan Year

b. ☐ Other:             

10. Diversification

a. Enter the method used to determine “years of participation in the Plan” for the Diversification Election Period:

i. ☐ Anniversaries of participation

ii. ☒ Plan Years entitled to receive an allocation

iii. ☐ Plan Years with minimum Hours of Service:             

iv. ☐ Other:             

b. Enter the amount of Employer Stock the Qualified Participant will be permitted to diversify during the Qualified Election Period:

i. ☒ the minimum amount permitted under section 9.02(b)

ii. ☐              amount for each Diversification Election Period

18 Copyright © 2002-2017

SECTION G. PLAN OPERATIONS AND TOP-HEAVY

iii. ☐ Other Amount              (please describe the amount and the affected Diversification Election Periods)

11. Plan Administration

a. Designation of Plan Administrator (Section 12.01)

i. ☒ Plan Sponsor

ii. ☐ Committee appointed by Plan Sponsor

iii. ☐ Other:             

b. Establishment of procedures for the Plan Administrator and the Investment Fiduciary (Sections 12.01(c) and 12.02(c))

i. ☒ Plan Administrator and Investment Fiduciary adopt own procedures

ii. ☐ Governing body of the Plan Sponsor sets procedures for Plan Administrator and Investment Fiduciary

c. Type of indemnification for the Plan Administrator and Investment Fiduciary

i. ☐ None - the Employer will not indemnify the Plan Administrator or the Investment Fiduciary

ii. ☒ Standard according to Section 12.06

iii. ☐ Provided pursuant to an outside agreement

d. ☐ The following modifications shall be made to the duties of the applicable parties:             

NOTE: G.11d may be used to reallocate duties between the Plan Sponsor and the Plan Administrator. It may also be used to designate additional parties to perform specific Plan Administrator and/or Plan Sponsor duties.

12. Trust

a. Use the Trust agreement contained in the Basic Plan Document

i. ☐ Yes

ii. ☒ No

iii. ☐ Yes, but only for the following assets/Accounts:             ; other assets/Accounts will use an outside Trust or be held by an insurance company.

iv. ☐ Not Applicable - assets are held solely by an insurance company

b. Trustee Type

i. ☒ Corporate. Trustee name and address: Pentegra Trust Company, 108 Corporate Park Drive White Plains, New York 10604

ii. ☐ Individual. Trustee name(s):             

c. Type of Trustee Indemnification:

i. ☐ Standard according to Section 10.07(b)

ii. ☐ None

d. ☐ The Trustees may designate one or more Trustees to act on behalf of all Trustees (Section 10.05(b)(2)).

e. The Trustee is also the Investment Fiduciary (Section 10.06):

i. ☐ Yes

ii. ☒ No. The Investment Fiduciary is: ESOP Committee

f. The special trustee for purposes of determining and collecting contributions under the Plan is:

i. ☐ the chief executive officer of the Plan Sponsor

ii. ☐ the Trustee

iii. ☒ other: CFO of Plan Sponsor

NOTE: Section 10.09 shall apply to the extent assets are held in an outside trust agreement.

NOTE: If the Trust agreement contained in the Basic Plan Document applies, then Trustee signature(s) is/are not necessary on amendments if the amendment does not affect Trustee duties.

NOTE: If G.12a.iv is selected, G.12b - e shall not apply.

NOTE: If a separate trust agreement is to be used (G.12a.ii or G.12a.iii is selected), the items in G.1-5 shall apply only to the extent that they are not superseded by the terms of the separate trust agreement. Only the trust document(s) previously approved by the IRS may be utilized with this Plan and still rely on the Plan’s advisory letter.

NOTE: If G.12a.i or G.12a.iii (use trust in Basic Plan Document) is selected and G.12c.ii (no indemnification) is selected, indemnification for the Trustee may be pursuant to an agreement that is not a part of the Plan.

NOTE: If G.12c.ii (no indemnification) Section 10.07(b) shall not apply and indemnification for the Trustee may be pursuant to an agreement that is not a part of the Plan.

NOTE: G.12f must be an individual or a corporation with trust powers and is intended to comply with FAB 2008-01.

13. Trust Administrative Modifications

a. ☐ The following modifications are made to the permitted investments under the Trust Fund:             

b. ☐ The following modifications are made to the duties of the Trustee, Investment Fiduciary or Investment Manager:             

19 Copyright © 2002-2017

SECTION G. PLAN OPERATIONS AND TOP-HEAVY

c. ☐ The following modifications are made to other administrative provisions of the Trust Fund:             

NOTE: G.13 only applies if G.12a.i or G.12a.iii is selected (the Trust Agreement contained in the Basic Plan Document applies).

NOTE: The addition of language in G.13 cannot conflict with other provisions of the Plan and cannot cause the Plan to fail to qualify under Code section 401(a). Under no circumstances can a modification consist of: 1) removal or change to the prudent man rule, 2) addition of arbitration for Participant disputes, 3) addition of securities lending program, and 4) modification of the duties of the special trustee in Section 10.02(b) to determine and collect contributions under the Plan.

Statute of Limitations

14. Statute of Limitations

☐ The Plan has a contractual statute of limitations as follows:             

NOTE: The statute of limitations must not be unreasonably short (See Heimeshoff v. Hartford Life Ins. Co., U.S., No. 12-729 (2013)).

Top-Heavy

15. Top-Heavy Allocations

Top-Heavy allocations are made to

a. ☐ This Plan. Participants who share in Top-Heavy minimum allocations:

i. ☐ Non-Key only. Any Participant who is employed by the Employer on the last day of the Plan Year and is not a Key Employee

ii. ☐ All Participants. Any Participant who is employed by the Employer on the last day of the Plan Year

iii. ☐ Participants covered by a collective bargaining agreement will share in Top-Heavy minimum allocations provided retirement benefits were the subject of good faith bargaining.

b. ☒ Pursuant to the terms of Putnam County Savings Bank 401(k) Savings Plan

c. ☐ Other (include information about which Plan allocations are made to and which Participants in this Plan will share in Top-Heavy minimums):             

d. Other plan maintained by the Employer

i. ☐ N/A - no other plan

ii. ☒ Defined Contribution

iii. ☐ Defined Benefit

NOTE: Choose one option, G.15a, b or c.

NOTE: G.15a.iii may be selected in addition to G.15a.i or G.15a.ii. If G.15a.iii applies and is not selected, Employees covered under a collective bargaining agreement that bargains in good faith for retirement benefits shall not be eligible to receive top-heavy minimum allocations.

NOTE: If G.15b is selected, include the name of the other plan.

NOTE: G.15d is not applicable if G.15c is selected.

16. Top-Heavy Vesting

Top-Heavy vesting schedule:

a. ☐ 100%

b. ☒ 2-6 Year Graded

c. ☐ 3 Year Cliff

d. ☐ Other:

i. Other Top-Heavy Schedule - less than 1 year:     %

ii. Other Top-Heavy Schedule - 1 year but less than 2 years:     %

iii. Other Top-Heavy Schedule - 2 years but less than 3 years:     %

iv. Other Top-Heavy Schedule - 3 years but less than 4 years:     %

v. Other Top-Heavy Schedule - 4 years but less than 5 years:     %

vi. Other Top-Heavy Schedule - 5 years but less than 6 years:     %

vii. Other Top-Heavy Schedule - 6 or more years: 100%.

NOTE: See Section 11.03 for definitions of the applicable vesting schedules.

NOTE: If G.16 is “Other”, then any vesting schedule described in G.11d must provide vesting at least as rapidly as the “3 Year Cliff” vesting schedule or the “2-6 Year Graded” vesting schedule.

20 Copyright © 2002-2017

SECTION G. PLAN OPERATIONS AND TOP-HEAVY

17. Present Value Assumptions

a. Enter the interest rate to be used for determining Present Value to compute the Top-Heavy ratio:     %

b. Enter the mortality table to be used for determining Present Value to compute the Top-Heavy ratio:             

11. 416 Additional Language

☐ Additional language necessary to satisfy Code section 416 because of the required aggregation of multiple plans:             .

SECTION I. MISCELLANEOUS

Failure to properly fill out the Adoption Agreement may result in disqualification of the Plan.

The Plan shall consist of this Adoption Agreement #001, its related Basic Plan Document #CA3-ESOP and any related Appendix and Addendum specifically created in response to a question within the Adoption Agreement.

21 Copyright © 2002-2017

SECTION J. EXECUTION PAGE

SECTION J. EXECUTION PAGE

The undersigned agree to be bound by the terms of this Adoption Agreement and Basic Plan Document and acknowledge receipt of same. The parties have caused this Plan to be executed this      day of             , 2017.

PCSB BANK:

Signature:                                                                      

Print Name:                                                                   

Title/Position:                                                                

22 Copyright © 2002-2017

CUSTOM LANGUAGE ADDENDUM

CUSTOM LANGUAGE ADDENDUM

One-third Rule rider - If allocation of Employer Non-Elective Contributions in accordance with Section 4.01(b) will result in an allocation of more than one-third of the total contribution for a Plan Year to the Accounts of Highly Compensated Employees, and such allocation would cause any Highly Compensated Employee to exceed the limitations under Code section 415(c) or the Employer to exceed the deduction limits under Code Section 404, then no more than one-third of the Employer Non-Elective Contribution used for repayment of any Exempt Loan shall be allocated to the accounts of Highly Compensated Employees, with the remaining Employer Non-Elective Contribution to be allocated solely to Non-Highly Compensated Employees in the ratio that such Non-Highly Compensated Employee Participant’s Compensation bears to the Compensation of all Non-Highly Compensated Employee Participants.

Change in Control Termination rider - In the event that the Employer has a Change in Control, as defined in the Bank Holding Company Act, then Participants in the Plan will become 100% vested in their Accounts and the Plan shall terminate in accordance with the provisions of Section 13.03 on or immediately before the effective date of the Change in Control.

23 Copyright © 2002-2017

ADDENDA EXECUTION PAGE

ADDENDA EXECUTION PAGE

The undersigned agree to be bound by the terms of the foregoing addenda to the Plan and acknowledge receipt of same. The addenda are executed this      day of             , 2017.

PCSB BANK:

Signature:                                                                      

Print Name:                                                                   

Title/Position:                                                                

24 Copyright © 2002-2017

ADDENDA EXECUTION PAGE

PLEASE NOTE THAT THERE ARE AT LEAST

TWO SIGNATURE PAGES ON THIS DOCUMENT

25 Copyright © 2002-2017

BASIC PLAN DOCUMENT #CA3-ESOP

[INTENDED FOR CYCLE A3]

Copyright © 2002-2017 All Rights Reserved.

TABLE OF CONTENTS

ARTICLE 1. INTRODUCTION	1
Section 1.01 Plan and Trust	1
Section 1.02 Employee Stock Ownership Plan	1
Section 1.03 Application of Plan and Trust	1
ARTICLE 2. DEFINITIONS	2
ARTICLE 3. PARTICIPATION	16
Section 3.01 Non-Elective Contributions	16
Section 3.02 Transfers	16
Section 3.03 Termination and Rehires	16
Section 3.04 Limitations on Exclusions	16
Section 3.05 Procedures for Admission	17
Section 3.06 Participants Receiving Differential Military Pay	17
ARTICLE 4. CONTRIBUTIONS	18
Section 4.01 Non-Elective Contributions	18
Section 4.02 Rollover Contributions	19
Section 4.03 Transfers	20
Section 4.04 Military Service	20
Section 4.05 Multiple Employer Plan	20
ARTICLE 4A SPECIAL ESOP PROVISIONS	21
Section 4A.01 ESOP Contributions	21
Section 4A.02 Exempt Loan	21
Section 4A.03 Release of Employer Stock	22
Section 4A.04 Prohibited Allocation	22
Section 4A.05 Non-ESOP Portion of Plan	24
ARTICLE 5. LIMITATIONS ON CONTRIBUTIONS	25
Section 5.01 Maximum Amount of Annual Additions	25
ARTICLE 6. VESTING	27
Section 6.01 Participant Contributions	27
Section 6.02 Non-Elective Contributions	27
Section 6.03 Forfeitures	28
ARTICLE 7. DISTRIBUTIONS	30
Section 7.01 Commencement of Distributions	30
Section 7.02 Timing and Form of Distributions	30
Section 7.03 Cash-Out of Small Balances	34
Section 7.04 Beneficiary	35
Section 7.05 Minimum Distribution Requirements	35
Section 7.06 Direct Rollovers	40
Section 7.07 Minor or Legally Incompetent Payee	41
Section 7.08 Missing Payee	42
Section 7.09 Distributions Upon Termination of Plan	42
Section 7.10 Joint and Survivor Annuities	42
ARTICLE 8. IN-SERVICE DISTRIBUTIONS AND LOANS	44
Section 8.01 Hardship	44
Section 8.02 Specified Age	46
Section 8.03 Other Withdrawals	46

i Copyright © 2002-2017

Section 8.04 Transfer Account	46
Section 8.05 Rules Regarding In-Service Distributions	46
Section 8.06 Loans	47
ARTICLE 9. INVESTMENT AND VALUATION OF TRUST FUND	49
Section 9.01 Investment of Assets	49
Section 9.02 Participant Self-Direction	49
Section 9.03 Individual Accounts	50
Section 9.04 Qualifying Employer Investments	50
Section 9.05 Allocation of Earnings and Losses	50
Section 9.06 Voting Rights	51
Section 9.07 Liquidity	52
Section 9.08 Restrictions on Employer Stock	52
Section 9.09 Treatment of Dividends	52
Section 9.10 Use of Appraiser	53
Section 9.11 Life Insurance	53
Section 9.12 Nonterminable Protections and Rights	54
Section 9.13 Qualifying Longevity Annuity Contract (QLAC)	54
ARTICLE 10. TRUST FUND	55
Section 10.01 Trust Fund	55
Section 10.02 Duties of the Trustee	56
Section 10.03 General Investment Powers	57
Section 10.04 Other Investment Powers	58
Section 10.05 Instructions	59
Section 10.06 Investment of the Fund	60
Section 10.07 Compensation and Indemnification	61
Section 10.08 Resignation and Removal	61
Section 10.09 Other Trust Agreement	62
ARTICLE 11. SPECIAL TOP-HEAVY RULES	63
Section 11.01 Top-Heavy Status	63
Section 11.02 Minimum Allocations	63
Section 11.03 Minimum Vesting	64
ARTICLE 12. PLAN ADMINISTRATION	66
Section 12.01 Plan Administrator	66
Section 12.02 Investment Fiduciary	67
Section 12.03 Compensation of Plan Administrator and Investment Fiduciary	68
Section 12.04 Plan Expenses	68
Section 12.05 Allocation of Fiduciary Responsibility	68
Section 12.06 Indemnification	68
Section 12.07 Claims Procedure	68
Section 12.08 Written Communication	69
ARTICLE 13. AMENDMENT, MERGER AND TERMINATION	70
Section 13.01 Amendment	70
Section 13.02 Merger and Transfer	71
Section 13.03 Termination	71
ARTICLE 14. MISCELLANEOUS	72
Section 14.01 Nonalienation of Benefits	72
Section 14.02 Rights of Alternate Payees	72
Section 14.03 No Right to Employment	73
Section 14.04 No Right to Trust Assets	73
Section 14.05 Governing Law	73

ii Copyright © 2002-2017

Section 14.06 Severability of Provisions	73
Section 14.07 Headings and Captions	73
Section 14.08 Gender and Number	73
Section 14.09 Disaster Relief	74

iii Copyright © 2002-2017

ARTICLE 1 INTRODUCTION

ARTICLE 1 INTRODUCTION

Section 1.01 PLAN AND TRUST

This document (“Basic Plan Document”) and its related Adoption Agreement are intended to qualify as a tax-exempt plan and trust under Code sections 401(a) and 501(a), respectively.

Section 1.02 EMPLOYEE STOCK OWNERSHIP PLAN

The Plan and the Accounts specified in the Adoption Agreement as the Employee Stock Ownership Plan (ESOP) Accounts and the applicable portion of the Trust are also intended to qualify as a tax-exempt ESOP and trust under Code section 4975(e)(7). The Accounts specified in the Adoption Agreement as the ESOP Accounts of the Plan shall be invested primarily in Employer Stock.

Section 1.03 APPLICATION OF PLAN AND TRUST

Except as otherwise specifically provided herein, the provisions of this Plan shall apply to those individuals who are Eligible Employees of the Company on or after the Effective Date. Except as otherwise specifically provided for herein, the rights and benefits, if any, of former Eligible Employees of the Company whose employment terminated prior to the Effective Date, shall be determined under the provisions of the Plan, as in effect from time to time prior to that date.

1 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

ARTICLE 2 DEFINITIONS

“Account” means the balance of a Participant’s interest in the Trust Fund as of the applicable date as adjusted pursuant to Article 9. “Account” or “Accounts” shall include to the extent provided in the Adoption Agreement, Non-Elective Contribution Account, Rollover Contribution Account, Transfer Account and such other account(s) or subaccount(s) as the Plan Administrator, in its discretion, deems appropriate.

“Adoption Agreement” means the document executed in conjunction with this Basic Plan Document that contains the optional features selected by the Plan Sponsor.

“Alternate Payee” means the person entitled to receive payment of benefits under the Plan pursuant to a Qualified Domestic Relations Order.

“Annual Addition” means the sum of the following amounts credited to a Participant’s Account for the Limitation Year:

(a)    Employer contributions allocated to a Participant’s Account Non-Elective Contributions. Employer contributions shall also include;

(b)    after-tax contributions;

(c)    forfeitures;

(d)    amounts allocated, after March 31, 1984, to an individual medical account, as defined in Code section 415(l)(2), which is part of a pension or annuity plan maintained by the Employer;

(e)    amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits, allocated to the separate account of a key employee, as defined in Code section 419A(d)(3), under a welfare benefit fund, as defined in Code section 419(e), maintained by the Employer; and

(f)    allocations under a simplified employee pension plan.

Notwithstanding the foregoing, an Annual Addition shall not include a restorative payment within the meaning of IRS Revenue Ruling 2002-45 and any superseding guidance.

“Annuity Starting Date” means the first day of the first period for which an amount is paid as an annuity or any other form.

“Applicable Plan” means a plan that is established and maintained by: (i) an employer whose charter or bylaws restrict the ownership of substantially all outstanding employer securities to employees or to a trust described in Code section 401(a), (ii) an S Corporation, or (iii) a bank (as defined in Code section 581) which is prohibited by law from redeeming or purchasing its own securities.

“Beneficiary” means the person(s) entitled to receive benefits, under Section 7.04 of the Plan, upon the Participant’s death.

“Board” means the governing body of the Plan Sponsor. If the Plan Sponsor is a sole proprietorship, the Board means the sole proprietor.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Committee that may be appointed by the Plan Sponsor pursuant to Section 12.01 to serve as Plan Administrator.

2 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Company” means the Plan Sponsor and any other entity that has adopted the Plan with the approval of the Plan Sponsor.

“Compensation” shall have the meaning set forth in the Adoption Agreement. To the extent provided in the Adoption Agreement, amounts not includible in gross income under Code section 125 shall include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage (“deemed Code section 125 compensation”). An amount will be treated as an amount under Code section 125 only if the Company does not request or collect information regarding the Participant’s other health coverage as part of the enrollment process for the health plan.

Compensation shall include other compensation paid by the later of: (a) 2-1/2 months after an Employee’s severance from employment with the Company or (b) the end of the Limitation Year that includes the date of the Employee’s severance from employment with the Company if: (1) the payment is regular compensation for services during the Participant’s regular working hours, or compensation for services outside the Participant’s regular working hours (e.g., overtime or shift differential), commissions, bonuses, or other similar payments; and (2) the payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Company.

The exclusions from Compensation for payments after severance from employment do not apply to payments to a Participant who does not currently perform services for the Company by reason of Qualified Military Service to the extent those payments do not exceed the amounts the Participant would have received if the individual had continued to perform services for the Company rather than entering Qualified Military Service. To the extent selected in the Adoption Agreement and pursuant to Code section 414(u)(12), IRS Notice 2010-15 and any superseding guidance, differential wage payments shall be treated as Compensation.

To the extent provided in Section 4.01(e), Compensation shall include compensation paid to a Participant who is permanently and totally disabled.

Compensation must be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). For any Self-Employed Individual covered under the Plan, Compensation will mean Earned Income.

For any Plan Year, the annual compensation of each Participant taken into account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Code section 401(a)(17)(B). Annual compensation means Compensation during the Plan Year or such other consecutive 12-month period over which Compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.

If a determination period consists of fewer than 12 months, the annual Compensation limit is an amount equal to the otherwise applicable annual Compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is 12.

“Deemed-Owned Shares” means, with respect to any person: (i) the stock in the S Corporation constituting employer securities of an employee stock ownership plan which is allocated to such person under the Plan, and; (ii) such person’s share of the stock in such corporation which is held by the Plan but which is not allocated under the Plan to Participants or Beneficiaries. For purposes of clause (ii) of the preceding sentence, a person’s share of unallocated S corporation stock held by the Plan is the amount of the unallocated stock which would be allocated to such person if the unallocated stock were allocated to all Participants in the same proportions as the most recent stock allocation under the Plan.

“Determination Date” means the last day of the preceding Plan Year. Notwithstanding the foregoing, the Determination Date for the first Plan Year shall be the last day of such year.

“Disabled” or “Disability” shall have the meaning specified in the Adoption Agreement. The determination of Disability shall be made by the Plan Administrator.

3 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Disqualified Person” means a person defined in Code section 4975(e)(2), including but not limited to (i) a fiduciary of the Plan; (ii) a person providing services to the Plan; (iii) the Employer; (iv) an owner of 50% or more of the combined voting power or value of all classes of stock of the Plan Sponsor entitled to vote or the total value of shares of all classes of stock of the Plan Sponsor and certain members of such owner’s family; or (v) an officer, director, 10% or greater shareholder or highly compensated employee (who earns 10% or more of the yearly wages) of the Employer.

“Diversification Election Period” means the six Plan Years beginning with the Plan Year during which a Participant becomes a Qualified Participant.

“Domestic Partner” means, unless otherwise specified in the Adoption Agreement, a partner of the Participant if the Participant is in a civil union or similar relationship recognized under the laws of any state. A Participant may only have one Domestic Partner. A Participant may not have a Domestic Partner if the Participant is legally married to a person. If Domestic Partners are treated as a spouse under this Plan, Section 7.10 applies and a Domestic Partner instead of a spouse is the Beneficiary of the survivor annuity, the term “Qualified Joint and Survivor Annuity” shall be modified to “Joint and Survivor Annuity”, “qualified preretirement survivor annuity” shall be modified to “preretirement survivor annuity”, and Qualified Optional Survivor Annuity” shall be modified to “Optional Survivor Annuity”.

“Earned Income” means the net earnings from self-employment in the trade or business with respect to which the Plan is established, for which personal services of the individual are a material income-producing factor. Net earnings will be determined without regard to items not included in gross income and the deductions allocable to such items. Net earnings are reduced by contributions by the Employer to a qualified plan to the extent deductible under Code section 404. Net earnings shall be determined with regard to the deduction allowed to the taxpayer by Code section 164(f) for taxable years beginning after December 31, 1989.

“Effective Date” shall have the meaning set forth in Section A.3 of the Adoption Agreement except as otherwise specified in the Plan or Adoption Agreement.

“Eligibility Computation Period” means a 12-consecutive month period beginning with an Employee’s Employment Commencement Date and each anniversary thereof. Notwithstanding the foregoing, if the Adoption Agreement provides that the Eligibility Computation Period switches to the Plan Year his succeeding Eligibility Computation Period for such purpose will switch to the Plan Year, beginning with the Plan Year that includes the first anniversary of his Employment Commencement Date. If the Eligibility Computation Period switches to the Plan Year, an Employee who is credited with a Year of Eligibility Service in both the initial Eligibility Computation Period and the first Plan Year which commences prior to the first anniversary of the Employee’s initial Eligibility Computation Period will be credited with two Years of Eligibility Service.

“Eligible Employee” means any Employee employed by the Company, subject to the modifications and exclusions described in the Adoption Agreement.

If an individual is subsequently reclassified as, or determined to be, an Employee by a court, the Internal Revenue Service or any other governmental agency or authority, or if the Company is required to reclassify such individual as an Employee as a result of such reclassification or determination (including any reclassification by the Company in settlement of any claim or action relating to such individual’s employment status), such individual shall not become an Eligible Employee by reason of such reclassification or determination.

An individual who becomes employed by the Employer in a transaction between the Employer and another entity that is a stock or asset acquisition, merger, or other similar transaction involving a change in the employer of the employees of the trade or business shall not become eligible to participate in the Plan until the Plan Sponsor specifically authorizes such participation.

“Employee” means any individual who is employed by the Employer, including a Self-Employed Individual. The term “Employee” includes any Leased Employee of the Employer. No Leased Employee may become a Participant hereunder unless he becomes an Eligible Employee. The term “Employee” shall not include a person who is classified by the Employer as an independent contractor or a person (other than a Self-Employed Individual) who is not treated as an employee for purposes of withholding federal employment taxes.

4 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Employer” means the Company or any other employer that is a member of the same controlled group of corporations as the Employer within the meaning of Code section 1563(a) (as modified by subparagraphs (B) and (C) of Code section 409(l)(4) and as determined without regard to sections 1563(a)(4) and 1563(e)(C).

“Employer Stock” means the securities issued by the Employer that qualifies as employer securities within the meaning of Code section 409(l).

(1)    Common stock of the employer which is (publically traded) readily tradable on an established securities market; or

(2)    In a privately held company, it is the class of common stock with the greatest voting power and greatest dividend rights.

“Employer Stock Fund” means the Investment Fund which is invested primarily in Employer Stock.

“Employment Commencement Date” means the first date on which the Eligible Employee performs an Hour of Service.

“ERISA” means the Employee Retirement Income Security Act of 1974, all amendments thereto and all federal regulations promulgated pursuant thereto.

“ESOP Accounts” means those Accounts specified in Section 1.02 and the Adoption Agreement as the ESOP portion of the Plan. The ESOP Accounts shall be invested in the Employer Stock Fund.

“Exempt Loan” means an extension of credit to the Plan pursuant to Article 4A.02.

“Highly Compensated Employee” means, effective for Plan Years beginning after December 31, 1996, any Employee who during the Plan Year performs services for the Employer and who:

(a)    was a More Than 5% Owner at any time during the Plan Year or the preceding Plan Year; or

(b)    during the preceding Plan Year (the Adoption Agreement may provide that the foregoing determination may be made with respect to the calendar year beginning with or within the preceding Plan Year) received Statutory Compensation in excess of the Code section 414(q)(1) amount ($80,000 as adjusted) and unless otherwise provided in the Adoption Agreement was a member of the top paid group of Employees within the meaning of Code section 414(q)(3).

The determination of who is a Highly Compensated Employee will be made in accordance with Code section 414(q) and the regulations thereunder to the extent they are not inconsistent with the method established above.

The term Highly Compensated Employee also includes a former Employee who was a Highly Compensated Employee when he separated from service or at any time after attaining age 55.

“Hour of Service” means:

(a)    Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours will be credited to the Employee for the computation period in which the duties are performed.

(b)    Each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. No more than 501 Hours of Service will be credited under this paragraph for any single continuous period (whether or not such period occurs in a single computation period). Hours under this paragraph will be calculated and credited pursuant to DOL Reg. section 2530.200b-2 which is incorporated herein by this reference.

5 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

(c)    Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service will not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). These hours will be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made.

Solely for purposes of determining whether a One-Year Break in Service has occurred, an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 Hours of Service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this paragraph shall be credited (1) in the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or (2) in all other cases, in the following computation period.

If the Employer is a member of an affiliated service group (under Code section 414(m)), a controlled group of corporations (under Code section 414(b)), a group of trades or businesses under common control (under Code section 414(c)) or any other entity required to be aggregated with the Employer pursuant to Code section 414(o), service will be credited for any employment with such groups during the time the Employer is a member of the applicable group. Service will also be credited for any individual considered an Employee for purposes of this Plan under Code sections 414(n) or 414(o).

If the Employer maintains the plan of a predecessor employer, service with such employer will be treated as service for the Employer.

Service with respect to Qualified Military Service shall be credited in accordance with Code section 414(u) and service shall also be determined to the extent required by the Family and Medical Leave Act of 1993.

Notwithstanding the foregoing, for determining service under the elapsed time method an Hour of Service means each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer.

“Impermissible Allocation” means, any Annual Addition occurring during a Nonallocation Year to a S Corporation Disqualified Person under this Plan or any other plan of the Employer qualified under Code section 401(a).

“Impermissible Accrual” means, all Employer Stock consisting of shares in the S Corporation and all other Plan assets attributable to S Corporation shares held in a S Corporation Disqualified Person’s Account for the benefit of that S Corporation Disqualified Person, regardless of whether such Impermissible Accrual is attributable to contributions in the current year or prior years Plan assets attributable to S Corporation stock held in a S Corporations Disqualified Person’s Account include distributions made on such S Corporation stock within the meaning of Code section 1368, proceeds from the sale of such S Corporation stock, and earnings on such distributions or proceeds.

“Investment Fiduciary” means the person(s) designated in the Adoption Agreement. The fiduciary will be subject to standards of conduct as prescribed under ERISA.

“Investment Funds” means the funds, including the Employer Stock Fund, in which the Trust Fund is invested.

“Investment Manager” means an investment manager as described in section 3(38) of ERISA.

“Key Employee” means for Plan Years beginning after December 31, 2001, any Employee or former Employee (including any deceased Employee) who, at any time during the Plan Year that includes the Determination Date, is an officer of the Employer having an annual Testing Compensation greater than $130,000 (as adjusted under Code section 416(i)(1) for Plan Years beginning after December 31, 2002), a More Than 5% Owner of the Employer, or a 1-percent owner of the Employer having Testing Compensation of more than $150,000. In determining whether a plan is top-heavy

6 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

for Plan Years beginning before January 1, 2002, Key Employee means any Employee or former Employee (including any deceased Employee) who at any time during the 5-year period ending on the Determination Date, is an officer of the Employer having Testing Compensation that exceeds 50 percent of the dollar limitation under Code section 415(b)(1)(A), an owner (or considered an owner under Code section 318) of one of the ten largest interests in the Employer if such individual’s Testing Compensation exceeds 100 percent of the dollar limitation under Code section 415(c)(1)(A), a More than 5% Owner of the Employer, or a 1-percent owner of the Employer who has Testing Compensation of more than $150,000. The determination of who is a Key Employee will be made in accordance with Code section 416(i)(1) and the applicable regulations and other guidance of general applicability issued thereunder.

“Leased Employee” means any person (other than an Employee of the Employer) who pursuant to an agreement between the Employer and any other person (“leasing organization”) has performed services for the Employer (or for the Employer and related persons determined in accordance with Code section 414(n)(6)) on a substantially full time basis for a period of at least one year, and such services are performed under primary direction or control by the Employer. Contributions or benefits provided a Leased Employee by the leasing organization which are attributable to services performed for the Employer shall be treated as provided by the Employer. A person shall not be considered a Leased Employee if: (i) such person is covered by a money purchase pension plan providing: (1) a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined in Code section 415(c)(3), but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee’s gross income under Code sections 125, 402(e)(3), 402(h), 403(b), 132(f) or 457, (2) immediate participation, and (3) full and immediate vesting; and (ii) Leased Employees do not constitute more than 20 percent of the Employer’s nonhighly compensated work force.

“Leveraged Shares” means shares of Employer Stock acquired by the Trustee with the proceeds of an Exempt Loan pursuant to Article 4A.02.

“Limitation Year” means the year specified in the Adoption Agreement for purposes of determining Annual Additions limits pursuant to Article 5. All qualified plans maintained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different 12-consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made.

“Member of the Family” means, with respect to any individual: (i) the spouse of the individual; (ii) an ancestor or lineal descendant of the individual or the individual’s spouse; (iii) a brother or sister of the individual or the individual’s spouse and any lineal descendant of the brother or sister; and (iv) the spouse of any individual described in clause (ii) or (iii). A spouse of an individual who is legally separated from such individual under a decree of divorce or separate maintenance shall not be treated as such individual’s spouse for purposes of this Subsection (D).

“More Than 5% Owner” means any person who (a) owns (either directly or by attribution, under Code section 318) more than 5% of the outstanding stock of the Employer or stock possessing more than 5% of the total combined voting power of all stock of the Employer or, (b) in the case of an unincorporated business, any person who owns more than 5% of the capital or profits interest in the Employer. For purposes of Section 7.05, a Participant is treated as a More Than 5% Owner if such Participant is a More Than 5% Owner at any time during the Plan Year ending with or within the calendar year in which such owner attains age 70-1/2 and shall continue to be considered a More Than 5% Owner (and distributions must continue under Section 7.05) even if the Participant ceases to be a 5% owner in a subsequent year.

“Nonallocation Event” means any event that the Plan Administrator determines would otherwise cause a Nonallocation Year (as defined in Section 4A.04(b)) to occur. Events that may cause a nonallocation year include, but are not limited to, a contribution to the Plan in the form of shares of Employer Stock, a distribution from the Plan in the form of shares of Employer Stock, a change of investment within a Plan account of a S Corporation Disqualified Person that alters the number of shares of employer stock held in the account of the S Corporation Disqualified Person, or the issuance by the employer of Synthetic Equity as defined by Code section 409(p)(6)(C) and Treas. Reg. section 1.409(p)-1(f). A Nonallocation Event occurs only if (i) the total number of shares of Employer Stock that, held in the ESOP account of those Participants who are or who would be S Corporation Disqualified Persons after taking into account the Participant’s Synthetic Equity and the Nonallocation Event exceeds (ii) the number of shares of Employer Stock equal to 49.9% of the total number of shares of Employer Stock outstanding after taking the Nonallocation Event into account (causing a Nonallocation Year to occur).

7 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Nonallocation Period” means the period beginning on the date of a sale of Employer Stock to the Plan financed with an Exempt Loan and ending on the later of ten years after the date of such sale or the date of the allocation attributable to the final payment on the Exempt Loan incurred with respect to the sale.

“Nonallocation Year” means any Plan Year if, at any time during such Plan Year: (i) the Plan holds employer securities consisting of stock in an S Corporation; and (ii) S Corporation Disqualified Persons own at least 50 percent of the number of outstanding shares of stock in the S Corporation or (iii) at least 50% of the sum of (A), the outstanding shares of stock in the S Corporation (including Deemed-Owned Shares), and (B) the Synthetic Equity shares owned by S Corporation Disqualified Persons. For purposes of this definition, the rules of Code section 318(a) shall apply for purposes of determining ownership, except that in applying Code section 318(a)(1), the members of an individual’s family shall include members of the family defined in Subsection (3)(D) herein pursuant to Code section 409(p)(4)(D) and Code section 318(a)(4) regarding options shall not apply. Notwithstanding the employee trust exception in Code section 318(a)(2)(B)(i), an individual shall be treated as owning Deemed-Owned Shares of the individual. Solely for purposes of applying Code section 409(p)(5) (regarding the treatment of synthetic equity), Synthetic Equity shares are only treated as owned by S Corporation Disqualified Persons if such treatment results in the treatment of a Plan Year as a Nonallocation Year.

“Non-Elective Contribution” means a contribution made by the Company that is allocated to a Participant’s Non-Elective Contribution Account pursuant to Article 4.

“Non-Elective Contribution Account” means so much of a Participant’s Account as consists of Non-Elective Contributions made to the Plan.

“Non-ESOP Accounts” means those Accounts specified in Section 1.02 and the Adoption Agreement as the Non-ESOP portion of the Plan. The Non-ESOP Accounts shall be invested in the other non-Employer Stock assets of the Plan.

“Non-Key Employee” means any Employee or former Employee who is not a Key Employee.

“Nonhighly Compensated Employee” means an Employee who is not a Highly Compensated Employee.

“Normal Retirement Age” shall have the meaning set forth in the Adoption Agreement.

“One-Year Break in Service” means, for purposes of determining eligibility service, an Eligibility Computation Period or, for purposes of determining a Year of Vesting Service, a Vesting Computation Period during which an Employee is credited with 500 or fewer Hours of Service.

“One-Year Period of Severance” means a Period of Severance of at least 12-consecutive months. In the case of an individual who is absent from work for maternity or paternity reasons, the 12-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a One-Year Period of Severance. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (a) by reason of the pregnancy of the individual, (b) by reason of the birth of a child of the individual, (c) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (d) for purposes of caring for such child for a period beginning immediately following such birth or placement.

“Participant” means an Eligible Employee who participates in the Plan in accordance with Article 3.

“Period of Severance” means a continuous period of time during which the Employee does not perform an Hour of Service for the Employer. Such period begins on the date the Employee retires, dies, quits or is discharged, or if earlier, the 12 month anniversary of the date on which the Employee was otherwise first absent from service.

“Permissive Aggregation Group” means the Required Aggregation Group of plans, plus any other plan or plans of the Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code sections 401(a)(4) and 410.

“Plan Administrator” means the person(s) designated pursuant to the Adoption Agreement and Section 12.01. The Plan Administrator is a “named fiduciary” within the meaning of ERISA section 402(a)(2).

8 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Plan Sponsor” means the entity described in the Adoption Agreement.

“Plan Year” means the 12-consecutive month period described in the Adoption Agreement. In the event the Plan incurs a short Plan Year of less than 12-consecutive months, the requirements of the Department of Labor Regulations in 2530.202 and 2530.203 and corresponding Treas. Reg. section 1.410(a) shall be satisfied.

“Post Severance Compensation” means amounts paid by the later of: (a) 2-1/2 months after an Employee’s severance from employment with the Company or (b) the end of the applicable Limitation Year/Plan Year that includes the date of severance from employment with the Company; and those amounts would have been included in the definition of Compensation if they were paid prior to the Participant’s severance from employment with the Company. However the payment must be for (a) unused accrued bona fide sick, vacation, or other leave, but only if the Participant would have been able to use the leave if the Employee had continued in employment; or (b) received by a Participant pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid to the Participant at the same time if the Participant had continued in employment with the Company and only to the extent that the payment is includible in the Participant’s gross income.

“Post Year End Compensation” means amounts earned during a year but not paid during that year solely because of the timing of pay periods and pay dates if: (a) these amounts are paid during the first few weeks of the next year; (b) the amounts are included on a uniform and consistent basis with respect to all similarly situated Employees; and (c) no compensation is included in more than one year.

“Present Value” means a benefit of equivalent value and shall be based only on the interest and mortality rates specified in the Adoption Agreement.

“QLAC” means a qualifying longevity annuity contract as defined in Treasury Regulation 1.401(a)(9)-6, Q&A 17.

“Qualified Domestic Relations Order” means any judgment, decree, or order (including approval of a property settlement agreement) that constitutes a “qualified domestic relations order” within the meaning of Code section 414(p).

“Qualified Joint and Survivor Annuity” means for a married Participant, an immediate annuity for the life of the Participant with a survivor annuity for the life of the Participant’s spouse which is not less than 50 percent and not more than 100 percent of the amount of the annuity which is payable during the joint lives of the Participant and the spouse and which is the amount of benefit which can be purchased with the Participant’s vested Account balance subject to Section 7.10. The percentage of the survivor annuity under the plan shall be 50%, unless a different percentage is elected in the Adoption Agreement. For a single Participant, a Qualified Joint and Survivor Annuity means an immediate annuity for the life of the Participant and which is the amount of benefit which can be purchased with the Participant’s vested Account balance. The terms of such annuity contract shall comply with the provisions of this Plan and the annuity contract shall be nontransferable.

“Qualified Military Service” means qualified military service as defined in Code section 414(u).

“Qualified Optional Survivor Annuity” means an annuity for the life of the Participant with a survivor annuity that is equal to the applicable percentage of the amount of the annuity that is payable during the joint lives of the Participant and the spouse, and that is the actuarial equivalent of a single life annuity for the life of the Participant. The survivor percentage of the Qualified Optional Survivor Annuity shall be determined in accordance with the following:

(a)    If the Plan provides for a specific Qualified Joint and Survivor Annuity survivor annuity percentage and such percentage is less than 75%, then the Plan’s Qualified Optional Survivor Annuity shall be 75%.

(b)    If the Plan provides for a specific Qualified Joint and Survivor Annuity survivor annuity percentage and such percentage is greater than or equal to 75%, then the Plan’s Qualified Optional Survivor Annuity shall be 50%.

(c)    If the Plan does not provide for a specific Qualified Joint and Survivor Annuity survivor annuity percentage, then the Qualified Joint and Survivor Annuity survivor annuity percentage shall be 50% and the Qualified Optional Survivor Annuity survivor annuity percentage shall be 75%.

9 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Qualified Participant” means a Participant who has attained age 55 and has 10 years of participation in the Plan or a predecessor plan until the date on which the Participant ceases to be entitled to any benefit under the Plan as specified in the Adoption Agreement. For this purpose, a predecessor plan includes any ESOP maintained by the Employer or a predecessor employer within the meaning of Treasury Regulation 1.415(f)-1(c), and any plan that has been merged into, consolidated with, or transferred assets to the plan in accordance with 414(l) of the Code.

“Qualifying Employer Real Property” means real property (and related personal property) which is leased to the employer of employees covered by the Plan, or to an affiliate of such employer. For purposes of determining the time at which a Plan acquires Qualifying Employer Real Property for purposes of this section , such property shall be deemed to be acquired by the Plan on the date on which the plan acquires the property or on the date on which the lease to the employer (or affiliate) is entered into, whichever is later.

“Qualifying Employer Security” means a security issued by an employer of employees covered by the plan, or by an affiliate of such employer. A contract to which ERISA section 408(b)(5) applies shall not be treated as a security for purposes of this section.

“Rebalancing” is the mandatory transfer of Employer Stock into and out of Participant’s Accounts designed to result in all Participant Accounts having the same proportion of Employer Stock.

“Released and Unallocated Account” means the account established and maintained in the Trust to hold Employer Stock released from the Suspense Account, as described in Article 4A, but not yet allocated to Participants’ Accounts and dividends thereon.

“Reshuffling” means the mandatory transfer of Employer Stock into or out of the ESOP accounts for administrative purposes such as distributions, diversifications or segregation upon termination.

“Required Aggregation Group” means (a) each qualified plan of the Employer in which at least one Key Employee participates or participated at any time during the Plan Year containing the Determination Date or any of the four preceding Plan Years (regardless of whether the Plan has terminated), and (b) any other qualified plan of the Employer which enables a plan described in (a) to meet the requirements of Code sections 401(a)(4) or 410.

“Required Beginning Date” means April 1 of the calendar year following the later of the calendar year in which the Participant attains age 70-1/2 or the calendar year in which the Participant retires, except that benefit distributions to a More Than 5% Owner must commence by April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2. The Adoption Agreement may provide that for a Participant other than a More Than 5% Owner: (a) the Required Beginning Date is the April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2; or (b) the Participant may elect to begin receiving distributions at the date specified in the preceding sentence or the date specified in clause (a) of this sentence.

“Rollover Contribution” means an Employee contribution made to the Plan as a rollover from another eligible retirement plan or individual retirement account pursuant to Article 4 of the Plan.

“Rollover Contribution Account” means so much of a Participant’s Account as consists of a Participant’s Rollover Contributions (and corresponding earnings) made to the Plan.

“Section 415 Safe Harbor Option” means a definition of Compensation that:

(a)    Includes all of the following:

(1)    The Employee’s wages, salaries, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan, to the extent that the amounts are includible in gross income (or to the extent amounts would have been received and includible in gross income but for an election under Code section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)). These amounts include, but are not limited to, commissions paid to salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan as described in Treas. Reg. section 1.62-2(c).

10 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

(2)    Amounts described in Code section 104(a)(3), 105(a), or 105(h), but only to the extent that these amounts are includible in the gross income of the Employee.

(3)    Amounts paid or reimbursed by the Employer for moving expenses incurred by an Employee, but only to the extent that at the time of the payment it is reasonable to believe that these amounts are not deductible by the Employee under Code section 217.

(4)    The value of a nonstatutory option (which is an option other than a statutory option as defined in Treas. Reg. section 1.421-1(b)) granted to an Employee by the Employer, but only to the extent that the value of the option is includible in the gross income of the Employee for the taxable year in which granted.

(5)    The amount includible in the gross income of an Employee upon making the election described in Code section 83(b).

(6)    Amounts that are includible in the gross income of an Employee under the rules of Code section 409A or 457(f)(1)(A) or because the amounts are constructively received by the Employee.

(b)    Excludes all of the following:

(1)    Contributions (other than elective contributions described in Code section 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b)) made by the Employer to a plan of deferred compensation (including a simplified employee pension plan described in Code section 408(k) or a simple retirement account described in Code section 408(p), and whether or not qualified) to the extent that the contributions are not includible in the gross income of the Employee for the taxable year in which contributed. In addition, any distributions from a plan of deferred compensation (whether or not qualified) are not considered as compensation for Code section 415 purposes, regardless of whether such amounts are includible in the gross income of the Employee when distributed.

(2)    Amounts realized from the exercise of a nonstatutory option (which is an option other than a statutory option as defined in Treas. Reg. section 1.421-1(b)), or when restricted stock or other property held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture (see Code section 83 and regulations promulgated thereunder).

(3)    Amounts realized from the sale, exchange, or other disposition of stock acquired under a statutory stock option (as defined in Treas. Reg. section 1.421-1(b)).

(4)    Other amounts that receive special tax benefits, such as premiums for group-term life insurance (but only to the extent that the premiums are not includible in the gross income of the Employee and are not salary reduction amounts that are described in Code section 125).

(5)    Other items of remuneration that are similar to any of the items listed in paragraphs (b)(1) through (b)(4) of this section.

“S Corporation” means a corporation described in Code section 1361(a)(1) for which an election under Code section 1362(a) is in effect.

“S Corporation Disqualified Person” means any person whose: (i) number of Deemed-Owned Shares is at least 10% of the total number of the Deemed-Owned Shares,; (ii) aggregated number of Deemed-Owned Shares and Synthetic Equity shares is at least 10% of the sum of (a) the total number of Deemed-Owned Shares and (b) such person’s Synthetic Equity shares; (iii) number of Deemed-Owned Shares, together with the number of Deemed-Owned Shares of the Members of the Family of such person, is at least 20% of the total number of Deemed-Owned Shares; or (iv) aggregate number of Deemed-Owned Shares and Synthetic Equity shares, together with the aggregate number of Deemed-Owned Shares and Synthetic Equity shares of the Members of the Family of such person, is at least 20% of the sum of the total number of Deemed-Owned Shares and (b) the Synthetic Equity shares owned by such person and the members fo the family of such person. Solely for the purposes of determining whether a person is a S Corporation Disqualified Person, a person is only treated as owning Synthetic Equity shares if such treatment results in that person being treated as an S Corporation Disqualified Person.

11 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Self-Employed Individual” means any individual who has Earned Income for the taxable year from the trade or business for which the Plan is established, including an individual who would have Earned Income but for the fact that the trade or business had no net profits for the taxable year. An individual shall not be a Self-Employed Individual unless he or she is also an owner of the Company.

“Suspense Account” means the account established and maintained in the Trust to hold Employer Stock acquired with the proceeds of an Exempt Loan, which has not yet been released pursuant to Article 4A, and dividends thereon.

“Statutory Compensation” shall have the meaning set forth in the Adoption Agreement.

Statutory Compensation must be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). For any Self-Employed Individual, Statutory Compensation shall mean Earned Income.

Statutory Compensation shall include any amount which is contributed by the Company pursuant to a salary reduction agreement and which is not includible in the gross income of the Participant under Code sections 125, 402(e)(3), 402(h), 403(b), 132(f) or 457. To the extent provided in the Adoption Agreement, Statutory Compensation shall include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage (“deemed Code section 125 compensation”). An amount will be treated as an amount under Code section 125 only if the Company does not request or collect information regarding the Participant’s other health coverage as part of the enrollment process for the health plan.

Statutory Compensation shall include other compensation paid by 2-1/2 months after a Participant’s severance from employment with the Company if: (a) the payment is regular compensation for services during the Participant’s regular working hours, or compensation for services outside the Participant’s regular working hours (e.g., overtime or shift differential), commissions, bonuses, or other similar payments; and the payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Company. The exclusions from compensation for payments after severance from employment do not apply to payments to a Participant who does not currently perform services for the Company by reason of qualified military service (as that term is used in Code section 414(u)(1)) to the extent those payments do not exceed the amounts the Participant would have received if the individual had continued to perform services for the Company rather than entering qualified military service. To the extent provided in the Plan, Statutory Compensation shall include compensation paid to a Participant who is permanently and totally disabled.

Notwithstanding any other provision hereof to the contrary, the annual Statutory Compensation of each Employee taken into account under the Plan for any Plan Year shall not exceed the amount in effect for such year under Code section 401(a)(17). If a Plan Year consists of fewer than 12 months, the applicable limitation under Code section 401(a)(17) will be multiplied by a fraction, the numerator of which is the number of months in such year, and the denominator of which is 12.

“Synthetic Equity” means any stock option, warrant, restricted stock, deferred issuance stock right, or similar interest or right that gives the holder the right to acquire or receive stock of the S Corporation in the future. Except to the extent provided in the regulations, synthetic equity also includes a stock appreciation right, phantom stock unit, nonqualified deferred compensation or similar right to a future cash payment based on the value of such stock or appreciation in such value.

“Termination” and “Termination of Employment” means any absence from service that ends the employment of the Employee with the Employer.

12 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Top-Heavy Ratio” means:

(a)    If the Employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Employer has not maintained any defined benefit plan which during the 5-year period ending on the Determination Date(s) has or has had accrued benefits, the Top-Heavy Ratio for this Plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s), including any part of any account balance distributed in the one-year period ending on the Determination Date(s), (five-year period ending on the Determination Date in the case of a distribution made for a reason other than severance from employment, death or disability and in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 1-year period ending on the Determination Date(s)) (5-year period ending on the Determination Date in the case of a distribution made for a reason other than severance from employment, death or disability and in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002), both computed in accordance with Code section 416 and the regulations thereunder. Both the numerator and denominator of the Top-Heavy Ratio are increased to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under Code section 416 and the regulations thereunder.

(b)    If the Employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Employer maintains or has maintained one or more defined benefit plans which during the 5-year period ending on the Determination Date(s) has or has had any accrued benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation group as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with (a) above, and the Present Value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all Participants, determined in accordance with (a) above, and the Present Value of accrued benefits under the defined benefit plan or plans for all Participants as of the Determination Date(s), all determined in accordance with Code section 416 and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top-Heavy Ratio are increased for any distribution of an accrued benefit made in the one-year period ending on the Determination Date (five-year period ending on the Determination Date in the case of a distribution made for a reason other than severance from employment, death or disability and in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002).

(c)    For purposes of (a) and (b) above the value of account balances and the Present Value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in Code section 416 and the regulations thereunder for the first and second Plan Years of a defined benefit plan. The account balances and accrued benefits of a Participant (1) who is a Non Key Employee but who was a Key Employee in a prior year, or (2) who has not been credited with at least one hour of service with any Employer maintaining the Plan at any time during the one-year period (5-year period in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002) ending on the Determination Date will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with Code section 416 and the regulations thereunder. Deductible employee contributions will not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year.

The accrued benefit of a Non Key Employee shall be determined under: (x) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Employer, or (y) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Code section 411(b)(1)(C).

“Transfer Account” means so much of a Participant’s Account as consists of amounts transferred from another eligible retirement plan (and corresponding earnings) pursuant to Article 4 in a transaction that was not an eligible rollover distribution within the meaning of Code section 402.

“Trust Fund” means all of the assets of the Plan held by the Trustee pursuant to Article 10 or held by an insurance company pursuant to section 403 of ERISA.

13 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

“Trustee” means the person or persons designated by the Plan Sponsor to serve as the Trustee of the Trust Fund to the extent the assets of the Plan are not held solely by an insurance company. If the Trustee is a corporate Trustee the Trustee will be a directed Trustee unless otherwise indicated in a separate agreement. If the Trustee is an individual Trustee, the Trustee will be a discretionary Trustee unless otherwise indicated in a separate agreement.

“Valuation Date” has the meaning specified in the Adoption Agreement. Valuations of Employer Stock shall be made pursuant to Section 9.10, in accordance with a method consistently followed and uniformly applied in good faith. Notwithstanding anything in the Adoption Agreement to the contrary and in the event that a Participant is to receive a distribution from the Plan, or there is to be a transfer of assets and/or division of assets from the Plan, the Plan Administrator may in its sole discretion declare a special Valuation Date for that portion of the Plan that is not daily-valued in extraordinary situations to protect the interests of Participants in the Plan or the Participant receiving the distribution. Such extraordinary circumstances include a significant change in economic conditions or market value of the Trust Fund.

“Vesting Computation Period” means, for purposes of determining Years of Vesting Service, the period described in the Adoption Agreement.

“Year of Eligibility Service” means, with respect to any Employee, an Eligibility Computation Period during which he completes at least the service specified in the Adoption Agreement. If the Plan uses the elapsed time method: (a) “Year of Eligibility Service” means a twelve month period of time beginning on an Employee’s Employment Commencement Date and ending on the date on which eligibility service is being determined; (b) in order to determine the number of whole Years of Eligibility Service under the elapsed time method, nonsuccessive periods of service and less than whole year periods of service shall be aggregated on the basis that twelve months of service (30 days are deemed to be a month in the case of the aggregation of fractional months) or 365 days of service are equal to a whole year of service; (c) an Employee will also receive credit for any Period of Severance of less than twelve consecutive months; and (d) if less than one Year of Eligibility Service is required in Article 3, such service shall be determined by substituting such period for “twelve month” and “Year” where they appear in this paragraph. If the Plan provides for fractional Years of Eligibility Service, the requirement to complete any specified hours in the fractional period shall be waived.

All eligibility service with the Employer is taken into account except that if permitted in the Adoption Agreement, the following service shall be disregarded in determining Years of Eligibility Service:

(a)    One-Year Holdout. If an Employee has a One-Year Break in Service (One-Year Period of Severance to the extent the Plan uses the elapsed time method), Years of Eligibility Service before such period will not be taken into account until the Employee has completed a Year of Eligibility Service after returning to employment with the Employer.

(b)    Rule of Parity. If an Employee does not have any nonforfeitable right to the Account balance derived from Employer contributions, Years of Eligibility Service before a period of five (5) consecutive One-Year Breaks in Service (One-Year Periods of Severance to the extent the Plan uses the elapsed time method) will not be taken into account in computing eligibility service.

If a Participant’s Years of Eligibility Service are disregarded pursuant to the foregoing, such Participant will be treated as a new Employee for eligibility purposes. If a Participant’s Years of Eligibility Service may not be disregarded pursuant to the foregoing, such Participant shall participate in the Plan pursuant to the terms of Article 3.

To the extent provided in the Adoption Agreement, eligibility service may also include service with employers other than the Employer.

“Year of Vesting Service” means a Vesting Computation Period during which the Employee completes at least the number of hours specified in the Adoption Agreement. If the Plan uses the elapsed time method: (a) “Year of Vesting Service” means a twelve month period of time beginning on an Employee’s Employment Commencement Date and ending on the date on which vesting service is being determined; (b) in order to determine the number of whole Years of Vesting Service under the elapsed time method, nonsuccessive periods of service and less than whole year periods of service shall be aggregated on the basis that 12 months of service (30 days are deemed to be a month in the case of the aggregation of fractional months) or 365 days of service are equal to a whole year of service; and (c) an Employee will also receive credit for any Period of Severance of less than 12-consecutive months.

14 Copyright © 2002-2017

ARTICLE 2 DEFINITIONS

All Years of Vesting Service with the Employer are taken into account except that for an Employee who has five consecutive One-Year Breaks in Service (One-Year Periods of Severance to the extent the Plan uses the elapsed time method) and except to the extent provided in Article 6, all periods of service after such breaks in service/periods of severance shall be disregarded for the purpose of vesting the Employee’s Employer-derived Account balance that accrued before such breaks in service/periods of severance, but except as otherwise expressly provided, both the service before and after such breaks in service/periods of severance shall count for purposes of vesting the Employee’s Employer-derived Account balance that accrues after such breaks in service/periods of severance pursuant to Article 6.

In addition, if permitted in the Adoption Agreement, the following service shall be disregarded in determining Years of Vesting Service:

(a)    One-Year Holdout. If an Employee has a One-Year Break in Service (One-Year Period of Severance to the extent the Plan uses the elapsed time method), Years of Vesting Service before such period will not be taken into account until the Employee has completed a Year of Vesting Service after returning to employment with the Employer.

(b)    Rule of Parity. If an Employee does not have any nonforfeitable right to the Account balance derived from Employer contributions, Years of Vesting Service before a period of five (5) consecutive One-Year Breaks in Service (One-Year Periods of Severance to the extent the Plan uses the elapsed time method) will not be taken into account in computing vesting service. Elective Deferrals under a qualified CODA are taken into account for purposes of determining whether a Participant is a nonvested Participant for purposes of Code section 411(a)(6)(D)(iii).

(c)    Years of Vesting Service before age 18 and/or Years of Vesting Service before the Employer maintained this Plan or a predecessor plan will not be taken into account in computing vesting service.

To the extent provided in the Adoption Agreement, vesting service may also include service with employers other than the Employer.

15 Copyright © 2002-2017

ARTICLE 3 PARTICIPATION

ARTICLE 3 PARTICIPATION

Section 3.01 NON-ELECTIVE CONTRIBUTIONS

Each Eligible Employee as of the Effective Date who was eligible to participate in the Plan with respect to Non-Elective Contributions immediately prior to the Effective Date shall be a Participant eligible to receive Non-Elective Contributions pursuant to Article 4 on the Effective Date. Each other Eligible Employee who was not a Participant in the Plan with respect to Non-Elective Contributions immediately prior to the Effective Date shall become a Participant eligible to receive Non-Elective Contributions on the date specified in the Adoption Agreement; provided that he is an Eligible Employee on such date. Notwithstanding the foregoing, a Participant shall be eligible to receive Non-Elective Contributions only to the extent such contributions are permitted in the Adoption Agreement.

Section 3.02 TRANSFERS

If a change in job classification or a transfer results in an individual no longer qualifying as an Eligible Employee, such Employee shall cease to be a Participant for purposes of Article 4 (or shall not become eligible to become a Participant) as of the effective date of such change of job classification or transfer. Should such Employee again qualify as an Eligible Employee or if an Employee who was not previously an Eligible Employee becomes an Eligible Employee, he shall become a Participant with respect to the contributions for which the eligibility requirements have been satisfied as of the later of the effective date of such subsequent change of status or the date the Employee meets the eligibility requirements of this Article 3.

Section 3.03 TERMINATION AND REHIRES

If an Employee has a Termination of Employment, such Employee shall cease to be a Participant for purposes of Article 4 (or shall not become eligible to become a Participant) as of his Termination of Employment. An individual who has satisfied the applicable eligibility requirements set forth in Article 3 as of his Termination date, and who is subsequently reemployed by the Company as an Eligible Employee, shall resume or become a Participant immediately upon his rehire date with respect to the contributions for which the eligibility requirements of this Article 3 have been satisfied. An individual who has not so qualified for participation on his Termination date, and who is subsequently reemployed by the Company as an Eligible Employee, shall be eligible to participate as of the later of the effective date of such reemployment or the date the individual meets the eligibility requirements of this Article 3. The determination of whether a rehired Eligible Employee satisfies the requirements of Article 3 shall be made after the application of any applicable break in service rules.

Section 3.04 LIMITATIONS ON EXCLUSIONS

(a)    Exclusions. Any employee exclusion entered in the Adoption Agreement shall not be valid to the extent that such exclusion requires that the maximum number of Nonhighly Compensated Employees with the highest amount of compensation and/or service shall be excluded from participation so that the Plan still meets the coverage requirements of Code section 410(b).

(b)    Coverage. The Plan must provide that an Eligible Employee who has attained age 21 and who has completed one Year of Eligibility Service (two Years of Eligibility Service may be used for contributions other than Elective Deferrals if the Plan provides a nonforfeitable right to 100% of the Participant’s applicable Account balance after not more than 2 Years of Eligibility Service) shall commence participation in the Plan no later than the earlier of: (1) the first day of the first Plan Year beginning after the date on which such Eligible Employee satisfied such requirements; or (2) the date that is 6 months after the date on which he satisfied such requirements.

(c)    A Participant shall be treated as benefiting under the Plan for any Plan Year during which the Participant received or is deemed to receive an allocation in accordance with Treas. Reg. section 1.410(b)-3(a). Notwithstanding any provision of the Plan to the contrary, no Participant shall earn an allocation hereunder except as provided under the terms of the Plan as in effect on the last day of the Plan Year after giving effect to all retroactive amendments that may be permitted under applicable Internal Revenue Service procedures and other applicable law; including, without limitation, any amendment permitted under Treas. Reg. section 1.401(a)(4)-11.

16 Copyright © 2002-2017

ARTICLE 3 PARTICIPATION

Section 3.05 PROCEDURES FOR ADMISSION

The Plan Administrator shall prescribe such forms and may require such data from Participants as are reasonably required to enroll a Participant in the Plan or to effectuate any Participant elections made pursuant to this Article 3.

Section 3.06 PARTICIPANTS RECEIVING DIFFERENTIAL MILITARY PAY

To the extent selected in the Adoption Agreement and pursuant to Code section 414(u)(12), IRS Notice 2010-15 and any superseding guidance, a Participant receiving differential wage payments (as defined in Code section 3401(h)(2)) shall be treated as an Employee of the Employer making the payment and the differential wage payments may be treated as Compensation under the Plan to the extent selected in the Adoption Agreement.

17 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

ARTICLE 4 CONTRIBUTIONS

Section 4.01 NON-ELECTIVE CONTRIBUTIONS

(a)    Amount. Subject to the limitations described in Article 5, the Company may, in its sole discretion, make Non-Elective Contributions to the Plan on behalf of each Participant who has completed any service requirements specified in the Adoption Agreement.

(b)    Allocation of Non-Elective Contributions. Non-Elective Contributions shall be allocated to the Non-Elective Contribution Accounts of each Participant eligible to share in such allocations pursuant to Subsection (a) in the ratio that each Participant’s Compensation bears to the Compensation of all eligible Participants.

(c)    Participant. For purposes of this Section, “Participant” shall mean an Eligible Employee who has met the eligibility requirements of Article 3 with respect to Non-Elective Contributions.

(d)    Coverage Failures. If the application of the rules described above causes the Plan to fail to meet the minimum coverage requirements of Code section 410(b)(1)(B) (the Plan does not benefit a percentage of Nonhighly Compensated Employees that is at least 70% of the percentage of Highly Compensated Employees who benefit under the Plan) for any Plan Year with respect to contributions described in this Section 4.03 because such contributions have not been allocated to a sufficient number or percentage of Participants for such year, then the list of Participants eligible to share in such contributions for such year shall be expanded to include the Participants described in the Adoption Agreement.

(1)    If the Adoption Agreement specifies that all non-excludable Participants shall be entitled to share in such contributions for such year, then the following additional Participants shall be eligible to share in such contributions:

(A)    Any Participant who remains in the Employer’s employ on the last day of such Plan Year; and

(B)    Any Participant who completes at least 501 Hours of Service during such Plan Year (whether or not he remains in the Employer’s employ on the last day of such Plan Year).

(2)    If the Adoption Agreement specifies that just enough Participants shall be entitled to share in such contributions for such year, then the following additional Participants shall be eligible to share in such contributions:

(A)    The list of Participants eligible to share in such contributions for such Plan Year shall be expanded to include the minimum number of Participants who would not otherwise be eligible as are necessary to satisfy the minimum coverage requirements under Code section 410(b)(1)(B). The specific Participants who shall become eligible to share in such contributions for such Plan Year pursuant to this Paragraph (A) shall be those Participants who remain in the Company’s employ on the last day of such Plan Year and who have completed the greatest amount of service during the Plan Year.

(B)    If, after the application of Paragraph (A) above, the minimum coverage requirements of Code section 410(b)(1)(B) are still not satisfied, then the list of Participants eligible to share in such contributions for such Plan Year shall be further expanded to include the minimum number of Participants who do not remain in the Company’s employ on the last day of the Plan Year as are necessary to satisfy such requirements. The specific Participants who shall become eligible to share in the Company’s contribution for such Plan Year pursuant to this Paragraph (B) shall be those Participants who had completed the greatest amount of service during the Plan Year before terminating their employment with the Employer.

Notwithstanding the foregoing, the Plan Administrator always retains the option to meet the minimum coverage requirements of Code section 410(b) by using the average benefits test of Code section 410(b)(1)(C).

18 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

(e)    Disability. In addition to the foregoing, if the Adoption Agreement specifies that contributions described in this Section shall be allocated to Disabled Participants, a Participant who does not meet the requirements of Subsection (a) due to Disability shall be eligible to share in such contributions; provided that such Disability would also constitute a disability pursuant to Code section 22(e). The Company shall allocate the applicable contributions on behalf of each such Disabled Participant on the basis of the Compensation each such Participant would have received for the Limitation Year if the Participant had been paid at the rate of Compensation paid immediately before suffering a Disability. Contributions allocated to Participants suffering a Disability pursuant to this Subsection shall be fully vested when made. Such allocations shall cease on the first to occur of the following:

(1)    the last day of the Plan Year in which occurs the anniversary specified in the Adoption Agreement of the date the Plan Administrator determines that the Participant’s Disability commenced;

(2)    the date the Participant ceases to suffer from a Disability;

(3)    the date the Participant refuses to submit to a periodic examination by the Company or its agent to determine the existence of a Disability; or

(4)    the date the Participant dies.

Section 4.02 ROLLOVER CONTRIBUTIONS

(a)    To the extent provided in the Adoption Agreement, the Plan Administrator may direct the Trustee to accept Rollover Contributions made in cash or other form acceptable to the Trustee. Rollover Contributions shall be allocated to the Participant’s/Eligible Employee’s (to the extent elected in the Adoption Agreement) Rollover Contribution Account. The Plan may accept the following Rollover Contributions to the extent allowed by the Plan Administrator in its sole discretion:

(1)    A rollover from a plan qualified under Code section 401(a) or 403(a) if the contribution qualifies as a tax-free rollover as defined in Code section 402(c). If it is later determined that the amount received does not qualify as a tax-free rollover, the amount shall be refunded to the Eligible Employee.

(2)    A rollover from a “Conduit Individual Retirement Account”, as determined in accordance with procedures established by the Plan Administrator and only if the contribution qualifies as a tax-free rollover as defined in Code section 402(c). If it is later determined that the amount received does not qualify as a tax-free rollover, the amount shall be refunded to the Eligible Employee.

(3)    A direct rollover of an eligible rollover distribution of after-tax employee contributions from a qualified plan described in Code section 401(a) or 403(a). The Plan shall separately account for amounts so transferred, including separately accounting for the portion of such contribution which is includible in gross income and the portion of such contribution which is not so includible.

(4)    Any rollover of an eligible rollover distribution from an annuity contract described in Code section 403(b). The Plan shall separately account for after-tax amounts so transferred, including separately accounting for the portion of such contribution which is includible in gross income and the portion of such contribution which is not so includible.

(5)    Any rollover of an eligible rollover distribution from an eligible plan under Code section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state.

(6)    Any rollover contribution of the portion of a distribution from an individual retirement account or annuity described in Code sections 408(a) or 408(b) that is eligible to be rolled over and would otherwise be includible in gross income.

(7)    If the Plan permits Roth Elective Deferrals, the Plan may accept a Rollover Contribution to a Roth Elective Deferral Account only if it is a direct rollover from another Roth elective deferral account under an applicable retirement plan described in Code section 402A(e)(1) and only to the extent the rollover is permitted under the rules of Code section 402(c).

19 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

(8)    Any additional rollover contribution as may be permitted by applicable law.

(b)    Plan Administrator Procedures. The Plan Administrator may establish uniform procedures that include, but are not limited to, prescribing limitations on the frequency and minimum amount of rollovers; provided, that no procedures involving minimum amounts shall prescribe a minimum withdrawal greater than $1,000.

Section 4.03 TRANSFERS

The Trustee may accept a direct transfer of assets, made without the consent of the affected Employees, from the trustee of any other qualified plan described in Code section 401(a) to the extent permitted by the Code and the regulations and rulings thereunder. In the event assets are transferred to the Plan pursuant to the foregoing sentence, the transferred assets shall be accounted for separately in the Transfer Account of the affected Employees to the extent necessary to preserve a more favorable vesting schedule or any other any legally-protected benefits available to such Employees under the transferor plan. The Plan Administrator shall establish a vesting schedule for the Transfer Account; provided that such schedule is not less favorable that the vesting schedule under the transferor plan.

Section 4.04 MILITARY SERVICE

(a)    In General. Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service shall be provided in accordance with Code section 414(u).

(b)    Death Benefits Under USERRA. Effective January 1, 2007, if a Participant dies while performing qualified military service (as defined in Code section 414(u)), the survivors of the Participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service specified in Subsection (d) below) provided under the plan as if the Participant had resumed and then terminated employment on account of death pursuant to Code section 401(a)(37), Notice 2010-5 and any superseding guidance.

(c)    Death or Disability During Qualified Military Service. To the extent provided in the Adoption Agreement and pursuant to Code section 414(u)(9), Notice 2010-5 and any superseding guidance, a Participant that dies or becomes disabled while performing qualified military service (as defined in Code section 414(u)) will be treated as if he had been employed by the Company on the day preceding death or disability and terminated employment on the day of death or disability and receive benefit accruals related to the period of qualified military service as provided under Code section 414(u)(8), except as provided below:

(1)    All Participants eligible for benefits under the Plan by reason of this Section shall be provided benefits on reasonably equivalent terms.

Section 4.05 MULTIPLE EMPLOYER PLAN

If the Employees of more than one employer within the meaning of Code section 413(c) and that is a member of the same controlled group of corporations as the Employer within the meaning of Code section 1563(a) (as modified by subparagraphs (B) and (C) of Code section 409(l)(4) and as determined without regard to sections 1563(a)(4) and 1563(e)(C) are covered under the Plan, the provisions of such section shall apply to the Plan. The Plan Administrator may restrict the allocation of any forfeitures arising hereunder to the entity for which the applicable Participant is or was employed.

20 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

ARTICLE 4A

SPECIAL ESOP PROVISIONS

Section 4A.01 ESOP CONTRIBUTIONS

(a)    Amount of ESOP Contributions. The Company shall make a contribution to the Plan in cash sufficient to pay any currently maturing obligations on an Exempt Loan (to the extent that such obligations will not be satisfied pursuant to the terms of Article 4 by means of contributions paid to ESOP Accounts or by use of dividends pursuant to Article 9). Such contributions shall be applied, as the Plan Administrator shall direct the Trustee, to repay any outstanding Exempt Loan in accordance with any pledge or similar agreement. The Company may make additional contributions in cash or Employer Stock; provided however, that Rollover Contributions and transfers may be in such other form that may be acceptable to the Trustee and the Plan Administrator.

(b)    Allocation of ESOP Contributions. ESOP Contributions made in the form of Employer Stock and Employer Stock transferred to the Released and Unallocated Account shall be allocated to the ESOP Accounts in the manner specified in Section 4.01(b) and determined by the Plan Administrator. The shares so allocated shall have a fair market value as of the allocation date equal to the amount of the contributions to which the Participant is entitled. Allocations to Participants within each ESOP Account shall be made pursuant to the terms of Section 4.01(b).

Section 4A.02 EXEMPT LOAN

(a)    Authorization - Use. The Board may direct the Trustee to borrow money from a Disqualified Person, or another source which is guaranteed by a Disqualified Person, the proceeds of which are used within a reasonable time to: (1) acquire Employer Stock, (2) repay such Exempt Loan, or (3) repay a prior Exempt Loan pursuant to applicable regulations.

(b)    Terms of Exempt Loan Agreements. All Exempt Loans shall satisfy the following requirements:

(1)    The loan shall be primarily for the benefit of Participants and their Beneficiaries.

(2)    The loan shall be for a specified term, shall bear no more than a reasonable rate of interest, and shall not be payable on demand except in the event of default.

(3)    The terms of an Exempt Loan must be at least as favorable to the Plan as the terms of a comparable loan resulting from an arm’s length negotiation between independent parties.

(4)    The collateral pledged by the Trustee shall consist only of the Employer Stock purchased with the borrowed funds, or Employer Stock that was pledged as collateral in connection with a prior Exempt Loan that was repaid with the proceeds of the current Exempt Loan.

(5)    Under the terms of the loan agreement, the lender shall have no recourse against the Trust, or any of its assets, except with respect to the collateral and contributions (other than contributions of Employer Stock) by the Company that are made to satisfy the Trustee’s obligations under the loan agreement and earnings attributable to such collateral and such contributions.

(6)    No person entitled to payment under the Exempt Loan has any right to Plan assets other than collateral given for the Exempt Loan, contributions (other than contributions of Employer Stock) that are made under the Plan to meet its obligations under the Exempt Loan, and earnings attributable to such collateral and the investment of such contributions.

(7)    The payments made on the Exempt Loan during a Plan Year shall not exceed an amount equal to the sum of such contributions and earnings received during or prior to the year less such payments on the Exempt Loan in prior years. Such contributions and earnings must be accounted for separately in the books of account for separately in the books of account of the ESOP until the Exempt Loan is repaid.

(8)    The Exempt Loan cannot be payable upon the demand of any person except in the event of default. In the event of default, the value of Plan assets transferred in satisfaction of the Exempt Loan shall not exceed the amount of default; moreover, if the lender is a Disqualified Person, the loan agreement shall provide for a transfer of Plan assets upon default only upon and to the extent of the failure of the Plan to meet the payment schedule of the Exempt Loan. For purposes of this paragraph, the making of a guarantee does not make a person a lender.

21 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

Section 4A.03 RELEASE OF EMPLOYER STOCK

(a)    Employer Stock purchased with the proceeds of an Exempt Loan shall be held in the Suspense Account as the collateral for that Exempt Loan. Such Employer Stock shall be released from the Suspense Account, and transferred to the Released and Unallocated Account, on a pro-rata basis according to the amount of the payment on the Exempt Loan determined under one of the following two alternative formulas specified in Subsections (a)(1) and (a)(2) in the discretion of the Plan Administrator and in accordance with the terms of the Exempt Loan.

(1)    For each payment during the duration of the Exempt Loan, the number of shares of Employer Stock released and transferred to the Released and Unallocated Account shall equal the number of such shares held in the Suspense Account immediately before release for the current payment period multiplied by a fraction. The numerator of the fraction is the amount of principal and interest paid for the payment period, and the denominator of the fraction is the sum of the numerator plus the remaining principal and interest to be paid for all future payments. The number of future payments under the Exempt Loan must be definitely ascertainable and must be determined without taking into account any possible extensions or renewal periods. If the interest rate under the Exempt Loan is variable, the interest to be paid in future payment periods must be computed by using the interest rate applicable as of the end of the immediately preceding payment period. Notwithstanding the foregoing, if the Exempt Loan is repaid with the proceeds of a subsequent Exempt Loan, such repayment shall not operate to release all of the Employer Stock in the Suspense Account; rather, such release shall be effected pursuant to the foregoing provisions of this subsection on the basis of payments of principal and interest on such substitute loan. If collateral includes more than one class of securities, the number of securities of each class to be released for a Plan Year must be determined by applying the same fraction to each class; or

(2)    For each payment during the duration of the Exempt Loan, the number of shares of Employer Stock released and transferred to the Released and Unallocated Account is determined solely with reference to the principal payment of the Exempt Loan. Employer Stock in the Suspense Account may be released in accordance with this subsection (2) only if the following three conditions are met:

(i)    The Exempt Loan provides for annual payments of principal and interest at a cumulative rate that is not less rapid at any time than level annual payments of such amounts for ten years;

(ii)    The interest portion of any payment is disregarded for purposes of determining the number of shares released only to the extent it would be treated as interest under standard loan amortization tables; and

(iii)    If the Exempt Loan is renewed, extended or refinanced, the sum of the expired duration of the Exempt Loan and the renewal period, the extension period or the duration of a new Exempt Loan does not exceed ten years.

(b)    More than One Exempt Loan. If at any time there is more than one Exempt Loan outstanding, separate accounts shall be established under the Suspense Account and the Released and Unallocated Account for each Exempt Loan. Each Exempt Loan for which a separate account is maintained shall be treated separately for purposes of Subsection (a) governing the release of shares from the Suspense Account.

(c)    If the Employer is a C-Corporation and no more than one-third of the Employer contributions that are used to repay the principal and interest due on an Exempt Loan and that are deductible under Code section 404(a)(9) are allocated to the accounts of Highly Compensated Employees during the Plan Year, then Annual Additions do not include forfeitures of the Employer Stock purchased with the proceeds of an Exempt Loan and also do not include Employer contributions that are used to pay interest on an Exempt Loan and are deductible under Code section 404(a)(9)(B) and charged against the Participant’s Account.

Section 4A.04 PROHIBITED ALLOCATION

(a)    Section 1042. Notwithstanding any provision in this Plan to the contrary, if shares of Employer Stock (in a C-Corporation only) are sold to the Plan by a shareholder in a transaction for which special tax treatment is elected by such shareholder (or his representative) pursuant to Code section 1042, no assets attributable to such Employer Stock may be allocated to the ESOP Accounts of: (i) the shareholder, and any person who is related to such shareholder [within the meaning of Code section 267(b)], during the Nonallocation Period except that lineal descendants of such shareholder may

22 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

receive allocations so long as no more than 5% of the aggregate amount of all Employer Stock sold by such shareholder in a transaction to which Code section 1042 applies is allocated to such lineal descendants of such shareholder; and (ii) any other person who owns [after application of Code section 318(a)] more than 25 percent in value of the outstanding securities of the Employer.

For purposes of this Subsection, “nonallocation period” means the period beginning on the date of a sale of Employer Stock to the Plan financed with an Exempt Loan and ending on the later of ten years after the date of such sale or the date of the allocation attributable to the final payment on the Exempt Loan incurred with respect to the sale.

(b)    Subchapter S Corporations.

(1)    In General. Notwithstanding any provision in this Plan to the contrary, if the Employer Stock is issued by an S Corporation, no portion of the assets attributable to (or allocable in lieu of) Employer Stock may, during a Nonallocation Year, accrue (or be allocated directly or indirectly under any Employer plan qualified under Code section 401(a)) for the benefit of any S Corporation Disqualified Person. This Subsection (b) shall be effective for Plan Years beginning after December 31, 2004 and only to the extent that Employer Stock consists of shares in an S Corporation. However, in the case of: (i) an employee stock ownership plan established after March 14, 2001 (within the meaning of Internal Revenue Service Revenue Ruling 2003-6); or (ii) an employee stock ownership plan established on or before March 14, 2001 where the employer securities held by the Plan consist of stock in a corporation that is not an S Corporation on such date, this Subsection (b) shall be effective for Plan Years ending after March 14, 2001.

(2)    Prevention of Nonallocation Year. In the absence of a Board resolution to otherwise prevent a Nonallocation Year, or if the Plan Administrator determines that a future event will cause a Nonallocation Year, the Plan Adminstrator will reduce the account balances of S Corporation of Disqualified Persons by transferring as described below the number of shares of Employer Stock necessary to prevent a Nonallocation Year. The affected Employer Stock will be transferred from the ESOP Portion to the Non-ESOP Portion prior to the Nonallocation Year. Immediately following the transfer, the number of shares transferred from that Participant’s account in the ESOP portion will be credited to the Participant’s Non-ESOP portion. The Plan Administrator will take steps to ensure that all actions necessary to implement the transfer are taken before the Nonallocation Year occurs.

(3)    Other Rules. The following other rules apply for purposes of this Subsection (b):

(A)    Treatment of Synthetic Equity.

(i)    In General. For purposes of Subsections (3)(A) and (3)(B), in the case of a person who owns Synthetic Equity in the S Corporation, except to the extent provided in regulations, the shares of stock in such corporation on which such Synthetic Equity is based shall be treated as outstanding stock in such corporation and Deemed-Owned Shares of such person if such treatment of Synthetic Equity of one or more such persons results in (i) the treatment of any person as a S Corporation Disqualified Person, or (ii) the treatment of any year as a Nonallocation Year. For purposes of this Subsection, Synthetic Equity shall be treated as owned by a person in the same manner as stock is treated as owned by a person under the rules of Code section 318(a)) as modified in this paragraph. In applying Code section 318(a)(1), the members of an individuals family include the Members of the Family and Code section 318(a)(4) regarding stock options ins disregarded. Notwithstanding the employee trust exception in section 318(a)(2)(B)(i), an individual is treated as owning Deemed-Owned Shares of the individual. If, without regard to this Subsection, a person is treated as a S Corporation Disqualified Person or a year is treated as a Nonallocation Year, this Subsection shall not be construed to result in the person or year not being so treated.

(ii)    Determination of Other Synthetic Equity. This Subsection (2) shall apply with regard to other Synthetic Equity described in Treas. Reg. section 1.409(p)-1(f)(4)(iii)(A) or superseding guidance. The Plan Administrator shall use the first day of the Plan Year as the annual determination date and the number of shares of Synthetic Equity owned shall be treated as owned for the period from a determination date through the date immediately preceding the next following determination date pursuant to Treas. Reg. section 1.409(p)-1(f)(4)(iii)(B). The Plan Administrator shall use triannual recalculations specified in Treas. Reg. section 1.409(p)-1(f)(4)(iii)(C). Such triannual recalculations may be modified as provided in Treas. Reg. section 1.409(p)-1(f)(4)(iii)(C)(3).

23 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

Section 4A.05 NON-ESOP PORTION OF PLAN

(a)    Non-ESOP Portion. Assets held under the Plan in accordance with this Section are held under a portion of the Plan that is not an employee stock ownership plan (ESOP), within the meaning of Code section 4975(e)(7). Amounts held in the portion of the Plan that is not an ESOP (the Non-ESOP portion) shall be held in Accounts that are separate from the Accounts for the amounts held in the remainder of the Plan (the ESOP Portion). Any statements provided to Participants and/or Beneficiaries to show their interest in the Plan shall separately identify the amounts held in each such portion. Except as specifically set forth in this Section, all of the terms of the Plan apply to any amount held under the Non-ESOP Portion of the Plan in the same manner and to the same extent as an amount held under the ESOP Portion of the Plan.

(b)    Transfers from ESOP Portion to Non-ESOP Portion of Plan.

(1)    Amount to be Transferred. In the case of any event that the Plan Administrator determines would otherwise cause a Nonallocation Event to occur, shares of employer stock held under the Plan before the date of the Nonallocation Event shall be transferred from the ESOP Portion of the Plan to the Non-ESOP Portion of the Plan as provided in Subsection (b)(2). The amount transferred under this Subsection shall be the amount that the Plan Administrator determines to be the minimum amount that is necessary to ensure that a Nonallocation Year does not occur, but in no event is the amount so transferred to be less than the excess of (i) the total number of shares of Employer Stock that, held in the ESOP account of those Participants who are or who would be S Corporation Disqualified Persons after taking into account the Participant’s Synthetic Equity and the Nonallocation Event exceeds (ii) the number of shares of Employer Stock equal to 49.9% of the total number of shares of Employer Stock outstanding after taking the Nonallocation Event into account (causing a Nonallocation Year to occur). The Plan Administrator shall take steps to ensure that all actions necessary to implement the transfer are taken before the Nonallocation Event occurs.

(2)    Ordering Rules.

(A)    Except as provided for in Subsection (b)(2)(B), at the date of the transfer, the total number of shares transferred, as provided for in Subsection (b)(1), shall be charged against the accounts of Participants who are S Corporation Disqualified Persons (i) by first reducing the ESOP account of the Participant who is a S Corporation Disqualified Person whose account has the largest number of shares (with the addition of Synthetic Equity shares) and (ii) thereafter by reducing the ESOP accounts of each succeeding Participant who is a S Corporation Disqualified Person who has the largest number of shares in his or her account (with the addition of Synthetic Equity shares). Immediately following the transfer, the number of transferred shares charged against any Participant’s account in the ESOP Portion of the Plan shall be credited to an account established for that Participant in the Non-ESOP portion of the Plan.

(B)    Notwithstanding Subsection (b)(2)(A), the number of shares transferred shall be charged against the accounts of Participants who are S Corporation Disqualified Person (i) by first reducing the account of the Participant with the fewest shares (including Synthetic Equity shares) who is a S Corporation Disqualified Person and who is a Highly Compensated Employee to cause the Participant not to be a disqualified person, and (ii) thereafter reducing the account of each other Participant who is a S Corporation Disqualified Person and a Highly Compensated Employee, in the order of who has the fewest ESOP shares (including synthetic equity shares). A transfer under this Subsection (b)(2)(B) only applies to the extent that the transfer results in fewer shares being transferred than in a transfer under Subsection (b)(2)(A).

(3)    Tie Breaker.

(A)    If two or more Participants described in Subsection (b)(2) have the same number of shares, the account of the Participant with the longest service shall be reduced first.

(B)    Beneficiaries of the Plan are treated as Plan Participants for purposes of this Section.

(c)    Income Taxes. If the Trust owes income taxes as a result of unrelated business taxable income under Code section 512(e) with respect to shares of employer stock held in the Non-ESOP Portion of the Plan, the income tax payments made by the Trustee shall be charged against the accounts of each Participant or Beneficiary who has an account in the Non-ESOP Portion of the Plan in proportion to the ratio of the shares of employer stock in such Participant’s or Beneficiary’s account in the non-ESOP Portion of the Plan to the total shares of employer stock in the non-ESOP Portion of the Plan. The Employer shall purchase shares of employer stock from the Trustee with cash (based on the fair market value of the shares so purchased) from each such account to the extent cash is not otherwise available to make the income tax payments from the Participant’s or Beneficiary’s ESOP accounts or his or her other defined contribution plan accounts.

24 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

ARTICLE 5 LIMITATIONS ON CONTRIBUTIONS

Section 5.01 MAXIMUM AMOUNT OF ANNUAL ADDITIONS

(a)    General Rule.

(1)    One Plan. If the Participant does not participate in, and has never participated in another qualified plan maintained by the Employer or a welfare benefit fund, as defined in Code section 419(e) maintained by the Employer, or an individual medical account, as defined in Code section 415(l)(2), maintained by the Employer, or a simplified employee pension plan, as defined in Code section 408(k), maintained by the Employer, which provides an Annual Addition, the amount of Annual Additions which may be credited to the Participant’s Account for any Limitation Year will not exceed the lesser of the maximum permissible amount specified in Section 5.01(b) or any other limitation contained in this Plan. If the Employer contribution that would otherwise be contributed or allocated to the Participant’s Account would cause the Annual Additions for the Limitation Year to exceed such maximum permissible amount, the amount contributed or allocated will be reduced so that the Annual Additions for the Limitation Year will equal the maximum permissible amount.

(2)    Multiple Plans. This Subsection 5.01(a)(2) applies if, in addition to this Plan, the Participant is covered under another qualified defined contribution plan maintained by the Employer, a welfare benefit fund maintained by the Employer, an individual medical account maintained by the Employer, or a simplified employee pension plan maintained by the Employer, that provides an Annual Addition during any Limitation Year. The Annual Additions which may be credited to a Participant’s Account under this Plan for any such Limitation Year will not exceed the maximum permissible amount specified in Section 5.01(b) reduced by the Annual Additions credited to a Participant’s account under the other qualified defined contribution plans, welfare benefit funds, individual medical accounts, and simplified employee pension plans for the same Limitation Year.

(b)    Maximum Permissible Amount. For Limitation Years beginning on or after January 1, 2002, the maximum permissible amount is the lesser of:

(1)    $40,000, as adjusted for increases in the cost-of-living under Code section 415(d); or

(2)    100% of the Participant’s Statutory Compensation for the Limitation Year. The Compensation limit referred to in this Subsection (b)(2) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code sections 401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition. Notwithstanding the preceding sentence, Statutory Compensation for purposes of Section 5.01 for a Participant in a defined contribution plan who is permanently and totally disabled (as defined in Code section 22(e)(3)) is the Compensation such Participant would have received for the Limitation Year if the Participant had been paid at the rate of Compensation paid immediately before becoming permanently and totally disabled.

Prior to determining the Participant’s actual Statutory Compensation for the Limitation Year, the Employer may determine the maximum permissible amount for a Participant on the basis of a reasonable estimation of the Participant’s Statutory Compensation for the Limitation Year, uniformly determined for all Participants similarly situated. As soon as is administratively feasible after the end of the Limitation Year, the maximum permissible amount for the Limitation Year will be determined on the basis of the Participant’s actual Statutory Compensation for the Limitation Year.

(c)    Correction of Excess. If there is an allocation in excess of the Maximum Permissible Amount, the Plan Administrator shall correct such excess pursuant to the procedures outlined under EPCRS as described in Rev. Proc. 2008-50 and any superseding guidance.

25 Copyright © 2002-2017

ARTICLE 4 CONTRIBUTIONS

(d)    Special ESOP Rule.

(1)    General Rule. In the case of an applicable plan that meets the requirements of Subsection (d)(2) below, the limitations imposed by this Section do not apply to: (i) forfeitures of employer securities (within the meaning of Code section 409(l)) if such securities were acquired with the proceeds of a loan (as described in Code section 404(a)(9)(A)); or (ii) employer contributions which are deductible under Code section 404(a)(9)(B) and charged against the Participant’s Account.

(2)    Applicable Plan. An employee stock ownership plan as described in Code section 4975(e)(7) meets the requirements of this Subsection if no more than one-third of the employer contributions for the Limitation Year that are deductible under Code section 404(a)(9) are allocated to Highly Compensated Employees. This Subsection (f) shall not apply if the Employer Stock is issued by an S Corporation.

(e)    Stock Value Declines Below Basis. Notwithstanding the foregoing, the amount of Company contributions attributable to ESOP Contributions that is considered an Annual Addition for any Limitation Year shall in no event be greater than the lesser of (i) the amount of the payment of principal and interest on the Acquisition Loan or (ii) the fair market value of shares released from the Suspense Account on account of the repayment and allocated to Participants.

26 Copyright © 2002-2017

ARTICLE 6 VESTING

ARTICLE 6 VESTING

Section 6.01 PARTICIPANT CONTRIBUTIONS

A Participant shall have a fully vested and nonforfeitable interest in his Rollover Contribution Account. A Participant shall also be fully vested in cash dividends that the Participant elects to have reinvested in the Plan pursuant to Section 9.09(a)(2)(B).

Section 6.02 NON-ELECTIVE CONTRIBUTIONS

The Participant’s interest in his Non-Elective Contribution Account shall vest based on his Years of Vesting Service in accordance with the terms of the Adoption Agreement.

For purposes of the Adoption Agreement, “3-7 Year Graded”, “2-6 Year Graded”, “1-5 Year Graded”, “1-4 Year Graded”, “5 Year Cliff”, “3 Year Cliff” and “2 Year Cliff” shall be determined in accordance with the following schedules:

	Years of Vesting Service	Vesting Percentage
“3-7 Year Graded”:
	Less than Three Years		0	%
	Three Years but less than Four Years		20	%
	Four Years but less than Five Years		40	%
	Five Years but less than Six Years		60	%
	Six Years but less than Seven Years		80	%
	Seven or More Years		100	%
“2-6 Year Graded”:
	Less than Two Years		0	%
	Two Years but less than Three Years		20	%
	Three Years but less than Four Years		40	%
	Four Years but less than Five Years		60	%
	Five Years but less than Six Years		80	%
	Six or More Years		100	%
“1-5 Year Graded”:
	Less than One Year		0	%
	One Year but less than Two Years		20	%
	Two Years but less than Three Years		40	%
	Three Years but less than Four Years		60	%
	Four Years but less than Five Years		80	%
	Five or More Years		100	%
“5 Year Cliff”:
	Less than Five Years		0	%
	Five or More Years		100	%
“3 Year Cliff”:
	Less than Three Years		0	%
	Three or More Years		100	%
“2 Year Cliff”:
	Less than Two Years		0	%
	Two or More Years		100	%

27 Copyright © 2002-2017

ARTICLE 6 VESTING

Notwithstanding the foregoing, a Participant will become fully (100%) vested upon his attainment of Normal Retirement Age while an Employee. In addition, the Adoption Agreement may provide that a Participant will become fully (100%) vested upon (i) his death while an Employee, or (ii) his suffering a Disability while an Employee.

Section 6.03 FORFEITURES

(a)    Participants Receiving a Distribution. A Participant who receives a distribution of the value of the entire vested portion of his Account shall forfeit the nonvested portion of such Account as soon as administratively feasible after such distribution; but no later than the end of the Plan Year following the date of such distribution. For purposes of this Section, if the value of a Participant’s vested Account balance is zero upon Termination, the Participant shall be deemed to have received a distribution of such vested Account. A Participant’s vested Account balance shall not include accumulated deductible employee contributions within the meaning of Code section 72(o)(5)(B) for Plan Years beginning prior to January 1, 1989. If the Participant elects to the extent permitted by Article 7 to have distributed less than the entire vested portion of the Account balance derived from Employer contributions, the part of the nonvested portion that will be treated as a forfeiture is the total nonvested portion multiplied by a fraction, the numerator of which is the amount of the distribution attributable to Employer contributions and the denominator of which is the total value of the vested Employer-derived Account balance. No forfeitures will occur solely as a result of a Participant’s withdrawal of employee contributions.

(b)    Participants Not Receiving a Distribution. The nonvested portion of the Account balance of a Participant who has a Termination of Employment and does not receive a complete distribution of the vested portion of his Account shall be forfeited as soon as administratively feasible after the date he incurs five consecutive One-Year Breaks in Service (One-Year Periods of Severance if the Plan uses the elapsed time method); but no later than the end of the Plan Year following the date of such break in service.

(c)    Reemployment.

(1)    Before Five One-Year Breaks. If a Participant receives or is deemed to receive a distribution pursuant to this Section and the Participant resumes employment covered under this Plan, the Participant’s Employer-derived Account balance will be restored to the amount on the date of distribution if the Participant repays to the Plan the full amount of the distribution attributable to Employer contributions before the earlier of 5 years after the first date on which the Participant is subsequently reemployed by the Employer, or the date the Participant incurs 5 consecutive One-Year Breaks in Service (One-Year Periods of Severance if the Plan uses the elapsed time method) following the date of the distribution. If a zero-vested Participant is deemed to receive a distribution pursuant to this Section, and the Participant resumes employment covered under this Plan before the date the Participant incurs 5 consecutive One-Year Breaks in Service (One-Year Periods of Severance if the Plan uses the elapsed time method), upon the reemployment of such Participant, the Employer-derived Account balance of the Participant will be restored to the amount on the date of such deemed distribution. Forfeitures that are restored pursuant to the foregoing shall be accomplished by an allocation of forfeitures, or if such forfeitures are insufficient, by a special Company contribution.

(2)    After Five One-Year Breaks. If a Participant resumes employment as an Eligible Employee after forfeiting the nonvested portion of his Account balance after 5 consecutive One-Year Breaks in Service (One-Year Periods of Severance if the Plan uses the elapsed time method) and is not fully vested upon reemployment, the Participant’s Account balance attributable to his pre-break service shall be kept separate from that portion of his Account balance attributable to his post-break service until such time as his post-break Account balance becomes fully vested.

(d)    Disposition of Forfeitures. Amounts forfeited from a Participant’s Account under this Section shall be used to restore forfeitures, reduce Company contributions made pursuant to Article 4 or to pay Plan expenses.

(e)    Employer Stock Fund. The portion of a Participant’s Account invested in Investment Funds other than the Employer Stock Fund shall be forfeited before that portion of the Account invested in the Employer Stock Fund. If the Participant’s Account is invested in more than one class of qualifying employer securities, the Participant shall forfeit the same proportion from each such class

28 Copyright © 2002-2017

ARTICLE 6 VESTING

(f)    Vesting Following In-Service Withdrawals or Payment in Installments. If a distribution is made at a time when a Participant has a nonforfeitable right to less than 100 percent of his Account derived from Employer contributions and the Participant may increase the nonforfeitable percentage in the Account:

(1)    A separate Account will be established for the Participant’s interest in the Plan as of the time of the distribution, and

(2)    At any relevant time the Participant’s nonforfeitable portion of the separate Account will be equal to an amount (“X”) determined by the formula:

X = P(AB + (R × D)) - (R × D)

For purposes of applying the formula: P is the nonforfeitable percentage at the relevant time; AB is the Account balance at the relevant time; D is the amount of the distribution; and R is the ratio of the Account balance at the relevant time to the Account balance after distribution.

29 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

ARTICLE 7 DISTRIBUTIONS

Section 7.01 COMMENCEMENT OF DISTRIBUTIONS

(a)    Normal Retirement. A Participant, upon attainment of Normal Retirement Age, shall be entitled to retire and to receive his Account as his benefit hereunder pursuant to Section 7.02.

(b)    Late Retirement. If a Participant continues in the employ of the Company beyond his Normal Retirement Age, his participation under the Plan shall continue, and his benefits under the Plan shall commence following his actual Termination of Employment pursuant to Section 7.02.

(c)    Disability Retirement. If a Participant becomes Disabled, he shall become entitled to receive his vested Account pursuant to Section 7.02 following the date he has a Termination of Employment.

(d)    Death. If a Participant dies, either before or after his Termination of Employment, his Beneficiary designated pursuant to Section 7.04 shall become entitled to receive the Participant’s vested Account pursuant to Section 7.02.

(e)    Termination of Employment. A Participant shall become entitled to receive his vested Account pursuant to Section 7.02 following the date he has a Termination of Employment.

Section 7.02 TIMING AND FORM OF DISTRIBUTIONS

(a)    ESOP Accounts.

(1)    Distribution for Reasons of Attainment of Retirement Age, Disability or Death. If a Participant’s ESOP Accounts become distributable pursuant to Section 7.01 on account of attainment of Normal or Late Retirement, Disability or death, payment of his vested ESOP Accounts shall commence with respect to Employer Stock acquired by or contributed to the Plan after December 31, 1986 (or all Employer Stock if so provided in the Adoption Agreement) not later than one year after the close of the Plan Year in which the Participant otherwise separates from service unless the Participant elects a later date.

(2)    Distribution for Reasons Other than Retirement, Disability or Death. If a Participant’s ESOP Accounts become distributable pursuant to Section 7.01 on account of any reason other than Normal or Late Retirement Age, Disability or death, payment of his vested ESOP Accounts shall commence with respect to Employer Stock acquired by or contributed to the Plan after December 31, 1986 (or all Employer Stock if so provided in the Adoption Agreement) not later than the close of the Plan Year which is the 6th Plan Year following the Plan Year in which the Participant otherwise separates from service unless the Participant elects a later date. This Subsection (a)(2) shall not apply if the Participant is reemployed by the Company before distribution is required to begin.

(3)    Form of Payments. Form of Payments. The benefit of a Participant entitled to a distribution of his ESOP Accounts derived from Employer Stock acquired by or contributed to the Plan after December 31, 1986 (or all Employer Stock if so provided in the Adoption Agreement) shall be payable in substantially equal annual, or more frequent installments over a period not to exceed the greater of (i) five (5) years, or (ii) in case of Participant with account balance greater than $1,035,000, five (5) years plus one year for each $205,000 that the balance exceeds $1,035,000. These dollar amounts are adjusted for cost of living by the Secretary of the Treasury in accordance with Code section 409(o)(2) at the same time and manner as under Code section 415(d). To the extent permitted in the Adoption Agreement, a Participant may elect to have payments extend over a longer or shorter period.

(4)    Delayed Distribution. Notwithstanding the foregoing and at the election of the Plan Administrator, distribution of the ESOP Contribution Account (other than for reasons specified in Paragraph (1) above) need not commence until the close of the Plan Year in which the Exempt Loan is repaid in full; provided that the proceeds of the Exempt loan were not used to acquire Employer Stock issued by an S Corporation.

30 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(5)    To the extent provided in the Adoption Agreement, distributions may also be paid over the periods applicable to Accounts other than the ESOP Accounts. In any event, distributions made on account of the death of the Participant must be made in the manner described in Subsections (c)(1)(A), (B) & (C) and Subsections (c)(2)(A) & (B) below.

(6)    Any amendment or exercise of employer discretion regarding revisions of optional forms of benefit shall be subject to the requirements of Treas. Reg. section 1.411(d)-4 Q&A-2(d).

(b)    Accounts other than ESOP Accounts.

(1)    Distribution for Reasons Other Than Death. If a Participant’s Accounts other than his ESOP Account becomes distributable pursuant to Section 7.01 for any reason other than death and such amount is not required to be distributed in the form of a Qualified Joint and Survivor Annuity pursuant to Section 7.10, payment of his vested Accounts other than his ESOP Account shall commence at such times and shall be payable in the form and at such times as specified in the Adoption Agreement. To the extent permitted in the Adoption Agreement, a Participant may elect to have the Plan Administrator apply his Accounts other than his ESOP Account toward the purchase of an annuity contract. The terms of such annuity contract shall comply with the provisions of this Plan and any annuity contract shall be nontransferable and shall be distributed to the Participant.

The method of distribution shall be selected by the Participant on a form prescribed by the Plan Administrator. If no such selection is made by the Participant, payment shall be made in the form of a lump sum distribution unless payment is required to be made in the form of a Qualified Joint and Survivor Annuity pursuant to Section 7.10. No distribution shall be made if the Participant is rehired by the Company before payments commence.

(2)    Distribution on Account of Death. If a Participant’s Accounts other than his ESOP Account becomes distributable pursuant to Section 7.01 on account of death, the distributions will be made pursuant to Subsection (c) below.

(c)    Distribution on Account of Death.

(1)    Before Distribution Has Begun. If the Participant dies before distribution of his Account begins and such amount is not required to be distributed in the form of a Qualified Preretirement Survivor Annuity pursuant to Section 7.10, distribution of the Participant’s entire Account shall be completed by the time and in the manner specified in the Adoption Agreement. To the extent permitted in the Adoption Agreement, payments may be made over the following periods:

(A)    A complete distribution shall be made by December 31 of the calendar year containing the fifth anniversary of the Participant’s death;

(B)    Distributions may be made over the life or over a period certain not greater than the life expectancy of the Beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the Participant died; and/or

(C)    If the Beneficiary is the Participant’s surviving spouse, the date distributions are required to begin in accordance with Subparagraph (B) above shall not be earlier than the later of (i) December 31 of the calendar year immediately following the calendar year in which the Participant died and (ii) December 31 of the calendar year in which the Participant would have attained age 70-1/2.

If the Plan permits Participant elections under this Subsection (c)(1) and the Participant has not made an election as to form of payment by the time of his death, the Participant’s Beneficiary must elect the method of distribution no later than the earlier of (1) December 31 of the calendar year in which distributions would be required to begin under this Section, or (2) December 31 of the calendar year which contains the fifth anniversary of the date of death of the Participant. If the Participant has no designated Beneficiary, or if the designated Beneficiary does not elect a method of distribution, distribution of the Participant’s entire interest must be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

31 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

If the surviving spouse dies after the Participant, the provisions of this Subsection (c)(1), with the exception of Subparagraph (C) therein, shall be applied as if the surviving spouse were the Participant.

(2)    After Distribution Has Begun. If the Participant dies after distribution of his Account has begun, the remaining portion of such Account will continue to be distributed at least as rapidly as the method of distribution being used prior to the Participant’s death. If the Participant’s Account was not being distributed in the form of an annuity at the time of his death: (i) distribution of the Participant’s entire Account shall be completed by the time and in the manner specified in the Adoption Agreement; and (ii) the Beneficiary may elect to receive the Participant’s remaining vested Account balance in a lump sum distribution. To the extent permitted in the Adoption Agreement, payments may be made over the following periods:

(A)    A complete distribution shall be made by December 31 of the calendar year containing the fifth anniversary of the Participant’s death; and/or

(B)    Distributions shall continue to be distributed at least as rapidly as the method of distribution being used prior to the Participant’s death.

The Beneficiary shall provide the Plan Administrator with the death notice or other sufficient documentation before any payments are made pursuant to this Subsection.

(d)    Special Rules Relating to ESOP Accounts.

(1)    In General. Unless a Participant elects to receive his distribution in cash, distribution of a Participant’s vested ESOP Account shall be made in whole shares of Employer Stock, with any fractional shares paid in cash. Shares of Employer Stock distributed may include such legend restrictions on transferability as the Company may reasonably require to assure compliance with applicable federal and state securities laws. Notwithstanding any provision of the Plan to the contrary: (i) a Participant shall not have the right to receive Employer Stock with respect to the portion of the Participant’s Account that has been reinvested pursuant to Section 9.02(b), and (ii) except as otherwise provided in the Adoption Agreement and if the Plan is an Applicable Plan , a distribution from the Employer Stock Fund shall be made in cash. If pursuant to the foregoing a Participant elects to receive any portion of his ESOP Account in the form of Employer Stock that is invested in Investment Funds other than the Employer Stock Fund, the Plan Administrator shall direct the Trustee to liquidate such other Investment Funds and purchase whole shares Employer Stock with the proceeds. In the event that there is not enough Employer Stock available for purchase, the Participant may elect to: (i) receive Employer Stock to the extent available and receive the balance in cash, (ii) receive Employer Stock to the extent available and receive the balance in Employer Stock at a later date when such stock becomes available, or (iii) defer distribution until such Employer Stock becomes available.

(2)    Put Option. If the Employer Stock is not readily tradable on an established market (within the meaning of IRS Notice 2011-19 for Plan Years beginning on or after January 1, 2012 or such later date provided in such Notice) and the Plan is not an Applicable Plan, the Employer or the Plan will purchase Employer Stock that has been distributed to a Participant or Beneficiary if the Participant or Beneficiary offers the Employer stock for sale to the Employer or the Plan during one of the two put option periods described below. A fair valuation formula that meets the requirements of section 9.10 will be used to determine the amount to be paid to the Participant or Beneficiary.

The first put option period is the period of 60 days beginning on the date following the date that the Employer Stock distributed to the Participant or Beneficiary. The second put option period is a period of 60 days in the following Plan Year.

Such put option shall be enforceable by the Participant for a period of at least 60 days following the date of distribution of Employer Stock and, if the put option is not exercised within such 60-day period, for an additional period of at least 60 days in the following Plan Year (as provided in applicable Treasury regulations). The Company may permit the Trustee to purchase any shares covered by the put option directly from the Participant.

(A)    Payment Requirement for Total Distribution. If the Company is required to repurchase Employer Stock that is distributed to the Participant as part of a total distribution, the Company may make payments in substantially equal periodic payments (not less frequently than annually) over a period beginning not later than 30 days

32 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

after the exercise of the put option and not exceeding 5 years, provided that there is adequate security provided and reasonable interest paid on the unpaid amounts. For purposes of this paragraph, the term “total distribution” means the distribution within one taxable year to the recipient of the balance to the credit of the recipient’s account.

(B)    Payment Requirement for Installment Distributions.    If the Company is required to repurchase Employer Stock as part of an installment distribution, payment shall made not later than 30 days after the exercise of the put option described in this paragraph (3).

(3)    Right of First Refusal. To the extent provided in the Adoption Agreement, shares of Employer Stock distributed by the Trustee to a Participant or Beneficiary shall be subject to a “Right of First Refusal” if such shares do not constitute registration-type securities within the meaning of Code section 409(e).

(A)    Parties. The Right of First Refusal shall be in favor of the Company, the Plan, or both in any order of priority as determined by the Plan Administrator.

(B)    Price. The selling price and other terms under the Right of First Refusal must not be less favorable to the Participant than the greater of the value of the Employer Stock determined under Section 9.10, or the purchase price and other written terms offered by an independent and unrelated buyer making a good faith offer to purchase the Employer Stock.

(C)    Term. The Right of First Refusal must lapse no later than 14 days after the Participant gives written notice to the holder of the Employer Stock by an independent and unrelated buyer.

(D)    Conditions. The Company may require that the distributee execute such documents (and may provide suitable legends on the applicable stock certificates) that include the terms of the right of first refusal prior to receiving Employer Stock.

(4)    Stock Reshuffling. If the Plan is an Applicable Plan, any Employer Stock held in an ESOP Account shall be redeemed or transferred annually to the extent provided in the Adoption Agreement. Such redemption or transfer shall be subject to the following:

(A)    Employer Stock diversified under sections 9.02(b) shall not be mandatorily returned to Participants’ Accounts who are subject to such provisions.

(B)    If the Participant may take an immediate distribution of his or her Account and does not consent to a distribution and is subject to the Reshuffling provisions such Participant must be provided sufficient investment options in order to ensure that the loss of the Employer Stock investment is not a significant detriment within the meaning of Treas. Reg. section 1.411(a)-11(c)(2)(i).

(e)    Valuation Date. The distributable amount of a Participant’s Account is the vested portion of his Account as of the Valuation Date coincident with or next preceding the date distribution is made to the Participant or Beneficiary as reduced by any subsequent distributions, withdrawals or loans.

(f)    Restriction on Deferral of Payment. Unless otherwise elected, benefit payments under the Plan will begin to a Participant not later than the 60th day after the latest of the close of the Plan Year in which:

(1)    the Participant attains Normal Retirement Age;

(2)    occurs the 10th anniversary of the year in which his participation commenced; or

(3)    the Participant has a Termination of Employment.

(g)    Minimum Distribution Requirements. Distributions shall be made in a method that is in conformance with the requirements set forth in Section 7.05. Section 7.05 shall not be deemed to create a type of benefit (e.g., installment payments, lump sum within five years or immediate lump sum payment) to any class of Participants and Beneficiaries that is not otherwise permitted by the Plan. Any elections described in Section 7.02(a)(5) and 7.02(c) shall also apply to this Section 7.05.

33 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

Section 7.03 CASH-OUT OF SMALL BALANCES

(a)    Vested Account Balance Does Not Exceed $5,000. Notwithstanding the foregoing, if involuntary cash-out is selected in the Adoption Agreement and the vested amount of an Account payable to a Participant or Beneficiary does not exceed $5,000 (or such lesser amount specified in the Adoption Agreement) at the time such individual becomes entitled to a distribution hereunder (or at any subsequent time established by the Plan Administrator to the extent provided in applicable Treasury Regulations), such vested Account shall be paid in a lump sum to the extent it is not subject to the automatic rollover provisions of Section 7.06(c) below.

(b)    Vested Account Balance Exceeds $5,000. If the value of a Participant’s vested Account balance exceeds $5,000 or such lesser amount as specified in the Adoption Agreement, and the Account balance is immediately distributable, the Participant must consent to any distribution of such Account balance. Notwithstanding the foregoing and unless otherwise specified in the Adoption Agreement, payments shall commence as of the Participants Required Beginning Date in the form of a lump sum or installment payments. The Participant’s consent shall be obtained in writing within the 180-day period ending on the Annuity Starting Date. The Plan Administrator shall notify the Participant of the right to defer any distribution until the date specified in the Adoption Agreement. Such notification shall include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the Plan, and shall be provided no less than 30 days and no more than 180 days prior to the Annuity Starting Date. Except to the extent provided in Section 7.10, distribution may commence less than 30 days after the notice described in the preceding sentence is given, provided the Plan Administrator clearly informs the Participant that he has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and the Participant, after receiving the notice, affirmatively elects a distribution. In the event a Participant’s vested Account balance becomes distributable without consent pursuant to this Subsection (b), and the Participant fails to elect a form of distribution, the vested Account balance of such Participant shall be paid in a single sum except to the extent provided in Section 7.10.

(c)    For purposes of this Section 7.03, the Participant’s vested Account balance shall not include amounts attributable to accumulated deductible Employee contributions within the meaning of Code section 72(o)(5)(B).

(d)    Required Distributions and Plan Termination. Consent of the Participant or his spouse shall not be required to the extent that a distribution is required to satisfy Code sections 401(a)(9) or 415. In addition, upon termination of this Plan the Participant’s Account balance shall be distributed to the Participant in a lump sum distribution unless payment is made in the form of a Qualified Joint and Survivor Annuity pursuant to Section 7.10. However, if the Employer maintains another defined contribution plan (other than an employee stock ownership plan as defined in Code section 4975(e)(7)), then the Participant’s Account balance will be transferred, without the Participant’s consent, to the other plan if the Participant does not consent to an immediate distribution.

(e)    Rollovers (1) Applicability and Effective Date. This Section 7.03(e) shall apply if elected by the Plan Sponsor in the Adoption Agreement and shall be effective January 1, 2002 unless otherwise specified in the Adoption Agreement.

(2)    Treatment of Rollovers. If elected in the Adoption Agreement, Rollovers shall be disregarded in determining the value of the Account balance for involuntary distributions. For purposes of this Section 7.03, the Participant’s vested Account balance shall not include that portion of the Account balance that is attributable to Rollover Contributions (and earnings allocable thereto) within the meaning of Code sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

(f)    Notice of Right to Defer. Any description of a Participant’s right to defer a distribution under Code section 411(a)(11) must also include a description of the consequences of failing to defer receipt of the distribution. The Plan will not be treated as failing to meet these notice requirements if the Plan Administrator makes a reasonable attempt to comply with the new requirements during the period that is within 90 days of the issuance of regulations.

34 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

Section 7.04 BENEFICIARY

(a)    Beneficiary Designation Right. Each Participant, and if the Participant has died, the Beneficiary of such Participant, shall have the right to designate one or more primary and one or more secondary Beneficiaries to receive any benefit becoming payable upon such individual’s death. To the extent that a Participant’s Account is not subject to Section 7.10, the spouse of a married Participant shall be the sole primary Beneficiary of such Participant unless the requirements of Subsection (b) are met. To the extent that a Participant’s Account is subject to Section 7.10, the spouse of a married Participant shall be the Beneficiary of 100% of such Participant’s Account unless the spouse waives his or her rights to such benefit pursuant to Section 7.10. All Beneficiary designations shall be in writing in a form satisfactory to the Plan Administrator and shall only be effective when filed with the Plan Administrator during the Participant’s lifetime (or if the Participant has died, during the lifetime of the Beneficiary of such Participant who desires to designate a further Beneficiary). Except as provided in Section 7.04(b) or Section 7.10, as applicable, each Participant (or Beneficiary) shall be entitled to change his Beneficiaries at any time and from time to time by filing written notice of such change with the Plan Administrator.

(b)    Form and Content of Spouse’s Consent. To the extent that a Participant’s Account is not subject to Section 7.10, the Participant may designate a Beneficiary other than his spouse pursuant to this Subsection if: (i) the spouse has waived the spouse’s right to be the Participant’s Beneficiary in accordance with this Subsection, (ii) the Participant has no spouse, or (iii) the Plan Administrator determines that the spouse cannot be located or such other circumstances exist under which spousal consent is not required, as prescribed by Treasury regulations. If required, such consent: (i) shall be in writing, (ii) shall relate only to the specific alternate Beneficiary or beneficiaries designated (or permits Beneficiary designations by the Participant without the spouse’s further consent), (iii) shall acknowledge the effect of the consent, and (iv) shall be witnessed by a plan representative or notary public. Any consent by a spouse, or establishment that the consent of a spouse may not be obtained, shall not be effective with respect to any other spouse. Any spousal consent that permits subsequent changes by the Participant to the Beneficiary designation without the requirement of further spousal consent shall acknowledge that the spouse has the right to limit such consent to a specific Beneficiary, and that the spouse voluntarily elects to relinquish such right.

(c)    In the event that the Participant fails to designate a Beneficiary, or in the event that the Participant is predeceased by all designated primary and secondary Beneficiaries, the death benefit shall be payable to the Participant’s spouse or, if there is no spouse, if there is no spouse, to the Participant’s children in equal shares or, if there are no children to the Participant’s estate unless otherwise specified in the Adoption Agreement.

Section 7.05 MINIMUM DISTRIBUTION REQUIREMENTS

(a)    General Rules.

(1)    Effective Date.

(A)    In General. Subject to Section 7.10, the requirements of this Section shall apply to any distribution of a Participant’s interest and will take precedence over any inconsistent provisions of this Plan. Unless otherwise specified in the Adoption Agreement, the provisions of this Section apply to calendar years beginning after December 31, 2002.

(B)    2009 Waiver of Requirements. Notwithstanding other provisions of the Plan to the contrary; to the extent provided in the Adoption Agreement and by Code section 401(a)(9), IRS Notice 2009-82 and any superseding guidance, a Participant or Beneficiary who would have been required to receive 2009 RMDs or Extended 2009 RMDs will receive those distributions for 2009 unless the Participant or Beneficiary chooses not to receive such distributions. Participants and Beneficiaries described in the preceding sentence will be given the opportunity to elect to stop receiving the distributions described in the preceding sentence.

(i)    In addition, notwithstanding other provisions of the Plan to the contrary, and solely for purposes of applying the direct rollover provisions of the Plan, certain additional distributions in 2009, as chosen in the Adoption Agreement, will be treated as eligible rollover distributions.

35 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(ii)    Definitions:

(1)    “2009 RMDs” are Required Minimum Distributions for 2009 but for the enactment of section 401(a)(9)(H) of the Code;

(2)    “Extended 2009 RMDs” are one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the Participant, the joint lives (or joint life expectancy) of the Participant and the Participant’s designated Beneficiary, or for a period of at least 10 years.

(2)    Construction. All distributions required under this Section shall be determined and made in accordance with the regulations under Code section 401(a)(9) and the minimum distribution incidental benefit requirement of Code section 401(a)(9)(G). Nothing contained in this Section shall be deemed to create a type of benefit (e.g., installment payments, lump sum within five years or immediate lump sum payment) to any class of Participants and/or Beneficiaries that is not otherwise permitted by the Plan.

(3)    Limits on Distribution Periods. As of the first distribution calendar year, distributions to a Participant, if not made in a single sum, may only be made over one of the following periods:

(A)    the life of the Participant;

(B)    the joint lives of the Participant and a designated Beneficiary;

(C)    a period certain not extending beyond the life expectancy of the Participant; or

(D)    a period certain not extending beyond the joint life and last survivor expectancy of the Participant and a designated Beneficiary.

(b)    Time and Manner of Distribution.

(1)    Required Beginning Date. Unless an earlier date is specified in Section 7.02(b), the Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s Required Beginning Date.

(2)    Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

(A)    If the Participant’s surviving spouse is the Participant’s sole designated Beneficiary, then unless an earlier date is specified in Section 7.02(b), distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70-1/2, if later.

(B)    If the Participant’s surviving spouse is not the Participant’s sole designated Beneficiary, then, unless otherwise specified in Section 7.02(b), distributions to the designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(C)    If there is no designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death unless an earlier date is specified in Section 7.02(b).

(D)    If the Participant’s surviving spouse is the Participant’s sole designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse are required to begin, this Subsection (b)(2), other than Subsection (b)(2)(A), will apply as if the surviving spouse were the Participant except as otherwise provided in Section 7.02(b).

For purposes of this Subsection (b)(2) and Subsection (d), unless Subsection (b)(2)(D) applies, distributions are considered to begin on the Participant’s Required Beginning Date. If Subsection (b)(2)(D) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under section

36 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

Subsection (b)(2)(A). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant’s Required Beginning Date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under Subsection (b)(2)(A)), the date distributions are considered to begin is the date distributions actually commence.

(3)    Forms of Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first distribution calendar year distributions will be made in accordance with Subsections (c) and (d) to the extent otherwise permitted by the Plan. If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code 401(a)(9) and the regulations.

(c)    Required Minimum Distributions During Participant’s Lifetime.

(1)    Amount of Required Minimum Distribution For Each Distribution Calendar Year. During the Participant’s lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of:

(A)    the quotient obtained by dividing the Participant’s Account balance by the distribution period in the Uniform Lifetime Table set forth in Treas. Reg. section 1.401(a)(9)-9, Q&A-2 using the Participant’s age as of the Participant’s birthday in the distribution calendar year; or

(B)    if the Participant’s sole designated Beneficiary for the distribution calendar year is the Participant’s spouse, the quotient obtained by dividing the Participant’s Account balance by the number in the Joint and Last Survivor Table set forth in Treas. Reg. section 1.401(a)(9)-9, Q&A-3 using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in the distribution calendar year.

(2)    Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death. Required minimum distributions will be determined under this Subsection (c) beginning with the first distribution calendar year and continuing up to, and including, the distribution calendar year that includes the Participant’s date of death.

(3)    The amount of the Required Minimum Distribution shall include the amount payable under a QLAC that has passed its annuity starting date (as defined in the QLAC).

(d)    Required Minimum Distributions After Participant’s Death.

(1)    Death On or After Date Distributions Begin.

(A)    Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant’s designated Beneficiary, determined as follows:

(i)    The Participant’s remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(ii)    If the Participant’s surviving spouse is the Participant’s sole designated Beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year. For distribution calendar years after the year of the surviving spouse’s death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

(iii)    If the Participant’s surviving spouse is not the Participant’s sole designated Beneficiary, the designated Beneficiary’s remaining life expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year.

37 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(B)    No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated Beneficiary as of the September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account balance by the Participant’s remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(2)    Death Before Date Distributions Begin.

(A)    Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account balance by the remaining life expectancy of the Participant’s designated Beneficiary, determined as provided in Subsection (d)(1).

(B)    No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(C)    Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the Participant’s sole designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Subsection (b)(2)(i), this Subsection (d)(2) will apply as if the surviving spouse were the Participant.

(e)    Definitions.

(1)    Designated Beneficiary. The individual who is designated by the Participant (or the Participant’s surviving spouse) as the Beneficiary of the Participant’s interest under the Plan and who is the designated Beneficiary under Code section 401(a)(9) and Treas. Reg. section 1.401(a)(9)-4.

(2)    Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant’s Required Beginning Date. For distributions beginning after the Participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin under Subsection (b)(2). The required minimum distribution for the Participant’s first distribution calendar year will be made on or before the Participant’s Required Beginning Date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant’s Required Beginning Date occurs, will be made on or before December 31 of that distribution calendar year.

(3)    Life expectancy. Life expectancy is computed by use of the Single Life Table in Treas. Reg. section 1.401(a)(9)-9, Q&A-1.

(4)    Participant’s Account Balance. The Account balance as of the last Valuation Date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the Account as of dates in the valuation calendar year after the Valuation Date and decreased by (1) distributions made in the valuation calendar year after the Valuation Date and (2) any amount held in a QLAC that has not reached its annuity starting date (as defined in the QLAC). The Account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.

(f)    TEFRA Section 242(b)(2) Elections.

(1)    Notwithstanding the other requirements of this Section and subject to the requirements of Section 7.10, distribution on behalf of any employee, including a More than 5% Owner, who has made a designation under section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (a “section 242(b)(2) election”) may be made in accordance with all of the following requirements (regardless of when such distribution commences):

(A)    The distribution by the Plan is one which would not have disqualified such plan under Code section 401(a)(9) as in effect prior to amendment by the Deficit Reduction Act of 1984.

38 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(B)    The distribution is in accordance with a method of distribution designated by the Employee whose interest in the Plan is being distributed or, if the Employee is deceased, by a Beneficiary of such Employee.

(C)    Such designation was in writing, was signed by the Employee or the Beneficiary, and was made before January 1, 1984.

(D)    The Employee had accrued a benefit under the Plan as of December 31, 1983.

(E)    The method of distribution designated by the Employee or the Beneficiary specifies the time at which distribution will commence, the period over which distributions will be made, and in the case of any distribution upon the Employee’s death, the Beneficiaries of the Employee listed in order of priority.

(2)    A distribution upon death will not be covered by this transitional rule unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the Employee.

(3)    For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the Employee, or the Beneficiary, to whom such distribution is being made, will be presumed to have designated the method of distribution under which the distribution is being made if the method of distribution was specified in writing and the distribution satisfies the requirements in Subsections (f)(1)(A) and (E).

(4)    If a designation is revoked, any subsequent distribution must satisfy the requirements of Code section 401(a)(9) and the regulations thereunder. If a designation is revoked subsequent to the date distributions are required to begin, the Plan must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been required to have been distributed to satisfy Code section 401(a)(9) and the regulations thereunder, but for the section 242(b)(2) election. For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements. Any changes in the designation will be considered to be a revocation of the designation. However, the mere substitution or addition of another Beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life).

(5)    In the case in which an amount is transferred or rolled over from one plan to another plan, the rules in Treas. Reg. section 1.401(a)(9)-8, Q&A-14 and Q&A-15, shall apply.

(g)    Application of Five Year Rule.

(1)    To the extent permitted in Section 7.02(b), if the Participant dies before distributions are required to begin and there is a designated Beneficiary, distributions to the designated Beneficiary are not required to begin by the date specified in Subsection (b)(2), but the Participant’s entire interest may be distributed to the designated Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. If the Participant’s surviving spouse is the Participant’s sole designated Beneficiary and the surviving spouse dies after the Participant but before distributions to either the Participant or the surviving spouse begin, this election will apply as if the surviving spouse were the Participant.

(2)    To the extent permitted in Section 7.02(b), Participants or beneficiaries may elect on an individual basis whether the 5-year rule or the life expectancy rule in Subsections (b)(2) and (d)(2) applies to distributions after the death of a Participant who has a designated Beneficiary. The election must be made no later than the earlier of September 30 of the calendar year in which distributions would be required to begin under Subsections (b)(2), or by September 30 of the calendar year which contains the fifth anniversary of the Participant’s (or, if applicable, surviving spouse’s) death. If neither the Participant nor Beneficiary makes an election under this paragraph, distributions will be made in accordance with Subsections (b)(2), (d)(2) and (h)(1).

39 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

Section 7.06 DIRECT ROLLOVERS

(a)    In General. This Section applies to distributions made after December 31, 2001. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee’s election under this part, a distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution that is equal to at least $200 (or such lesser amount as determined by the Plan Administrator in a nondiscriminatory manner) paid directly to an eligible retirement plan specified by the distributee in a direct rollover. If an eligible rollover distribution is less than $500 (or such lesser amount as determined by the Plan Administrator in a nondiscriminatory manner), a distributee may not make the election described in the preceding sentence to roll over a portion of the eligible rollover distribution. This Paragraph shall be subject to Code sections 401(a)(31) and 402(f); Treas. Reg. sections 1.401(a)(31)-1, 1.402(c)-2; and IRS Notices 2005-5, 2008-30, 2009-69, and 2009-75.

(b)    Definitions.

(1)    Eligible Rollover Distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code section 401(a)(9); any hardship distribution; the portion of any other distribution(s) that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); and any other distribution(s) that is reasonably expected to total less than $200 during a year.

A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Code section 408(a) or (b), or to a qualified defined contribution plan described in Code section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(2)    Eligible Retirement Plan. An eligible retirement plan is an eligible plan under Code section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan, an individual retirement account described in Code section 408(a), individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), an annuity contract described in Code section 403(b), or a qualified plan described in Code section 401(a), that accepts the distributee’s eligible rollover distribution. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the Alternate Payee under a Qualified Domestic Relations Order, as defined in Code section 414(p).

If any portion of an eligible rollover distribution is attributable to payments or distributions from a Roth Elective Deferral Account, an eligible retirement plan shall only include another Roth elective deferral account under an applicable retirement plan described in Code section 402A(e)(1) or to a Roth IRA described in Code section 408A and only to the extent the rollover is permitted under the rules of Code section 402(c). The Plan will not provide for a direct rollover (including an automatic rollover) for distributions from a Participant’s Roth Elective Deferral Account if the amount of the distributions that are eligible rollover distributions are reasonably expected to total less than $200 during a year. In addition, any distribution from a Participant’s Roth Elective Deferral Account is not taken into account in determining whether distributions from a Participant’s other Accounts are reasonably expected to total less than $200 during a year. The provisions of this Section that allow a Participant to elect a direct rollover of only a portion of an eligible rollover distribution but only if the amount rolled over is at least $500 are applied by treating any amount distributed from the Participant’s Roth Elective Deferral Account as a separate distribution from any amount distributed from the Participant’s other Accounts in the Plan, even if the amounts are distributed at the same time.

Notwithstanding the foregoing, effective for distributions made after December 31, 2007, a Participant may roll over a distribution from the Plan to a Roth IRA provided that the amount rolled over is an eligible rollover distribution (as defined in Code section 402(c)(4)) and, pursuant to Code section 408A(d)(3)(A), there is included in gross income any amount that would be includible if the distribution were not rolled over.

40 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

Notwithstanding the foregoing, effective January 1, 2007, a non-spouse Beneficiary who is a designated Beneficiary within the meaning of Code section 401(a)(9)(E) may, after the death of the Participant, make a direct rollover of a distribution to an IRA established on behalf of the designated Beneficiary; provided that the distributed amount satisfies all the requirements to be an eligible rollover distribution other than the requirement that the distribution be made to the Participant or the Participant’s spouse. Such direct rollovers shall be subject to the terms and conditions of IRS Notice 2007-7 and superseding guidance, including but not limited to the provision in Q&A-17 regarding required minimum distributions. Effective January 1, 2010, the distributions described in this paragraph shall be subject to Code sections 401(a)(31), 402(f) and 3405(c).

Notwithstanding the foregoing, effective for taxable years beginning on or after January 1, 2007, a portion of a distribution shall not fail to be an eligible rollover distribution merely because such portion consists of amounts which are not includible in gross income. However, such portion may be transferred as a direct rollover only to a qualified trust or to an annuity contract described in Code section 403(b) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(3)    Distributee. A distributee includes an employee or former employee. In addition, the employee’s or former employee’s surviving spouse and the employee’s or former employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code section 414(p), are distributees with regard to the interest of the spouse or former spouse.

(4)    Direct Rollover. A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee.

(c)    Automatic Rollovers. In the event of a mandatory distribution greater than $1,000 (or such lesser amount as determined by the Plan Administrator in a nondiscriminatory manner) in accordance with the provisions of Section 7.03(a), if the Participant does not elect to have such distribution paid directly to an eligible retirement plan specified by the Participant in a direct rollover or to receive the distribution directly in accordance with Section 7.02, then the Plan Administrator will pay the distribution in a direct rollover to an individual retirement plan designated by the Plan Administrator. Unless otherwise elected in the Adoption Agreement, for purposes of determining whether a mandatory distribution is greater than $1,000, the portion of the Participant’s distribution attributable to any Rollover Contribution is included. Eligible rollover distributions from a Participant’s Roth Elective Deferral Account are separately taken into account in determining whether the total amount of the Participant’s Account balances under the Plan exceeds $1,000 for purposes of mandatory distributions from the Plan.

(d)    Special Rule for S Corporations. The Plan may permit a direct rollover of the distribution of S Corporation stock to an IRA, provided that:

(1)    The S Corporation shall repurchase the stock immediately upon the Plan’s distribution of the stock to an IRA;

(2)    Either: (i) the S Corporation must repurchase the S Corporation stock contemporaneously with, and effective on the same day as, the distribution, or (ii) the Plan may assume the rights and obligations of the S Corporation to repurchase the S Corporation stock immediately upon the Plan’s distribution of the stock to an IRA and the Plan repurchases the S Corporation stock contemporaneously with, and effective on the same day as, the distribution;

(3)    No income (including tax-exempt income), loss, deduction, or credit attributable to the distributed S Corporation stock under Code section 1366 shall be allocated to the Participant’s IRA.

Section 7.07    MINOR OR LEGALLY INCOMPETENT PAYEE

If a distribution is to be made to an individual who is either a minor or legally incompetent, the Plan Administrator may direct that such distribution be paid to the legal guardian. If a distribution is to be made to such person and there is no

41 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

legal guardian, the Plan Administrator may direct that payment be made to: (a) a parent, (b) a person holding a power of attorney; (c) a person authorized to act on behalf of such person under state law, or (d) the custodian for such person under the Uniform Transfer to Minors Act, if such is permitted by the laws of the state in which such minor resides. Such payment shall fully discharge the Trustee, Plan Administrator, Trust Fund, and the Employer from further liability on account thereof.

Section 7.08 MISSING PAYEE

If all or any portion of the distribution payable to a Participant or Beneficiary remains unpaid because the Plan Administrator has been unable to ascertain the whereabouts of the Participant or Beneficiary after making reasonable efforts to contact the Participant or Beneficiary (which may include, but not be limited to, sending a registered letter, return receipt requested, to the last known address of such Participant or Beneficiary; and/or a commercial locating service) the Plan Administrator may use a reasonable method to remove the assets from the Plan that is consistent with ERISA and the Code. Such methods may include, but not be limited to, (a) creating an individual retirement plan designated by the Plan Administrator; or (b) if, for a period of more than five years after such distribution becomes payable or six months after all attempts to locate the Participant or Beneficiary, the Plan Administrator is still unable to ascertain the whereabouts of the Participant or Beneficiary, the amount so distributable may be treated as a forfeiture under Article 6 hereof. Notwithstanding the foregoing, if a claim is subsequently made by the Participant or Beneficiary for the forfeited benefit pursuant to clause (b) of the preceding sentence, such benefit shall be reinstated without any credit or deduction for earnings and losses. Amounts forfeited from a Participant’s Account under this Section shall be used pursuant to Section 6.03(d).

Section 7.09 DISTRIBUTIONS UPON TERMINATION OF PLAN

Except as provided in Section 7.10, a Participant may receive the balance of his Account in a lump sum payment upon termination of the Plan without the establishment of alternative defined contribution plan (as described in Treas. Reg. section 1.401(k)-1(d)(4)) other than an employee stock ownership plan (as defined in Code section 4975(e) or Code section 409), a simplified employee pension plan (as defined in Code section 408(k)), a SIMPLE IRA Plan (defined in Code section 408(p)), a plan or contract that satisfies the requirements of Code section 403(b), or a plan that is described in Code section 457(b) or (f).

Section 7.10 JOINT AND SURVIVOR ANNUITIES

(a)    Application. Notwithstanding any provision to the contrary, this Section shall apply: (i) if a Participant elects benefits in the form of any annuity; or (ii) to the portion of the Participant’s Transfer Account attributable to funds subject to the survivor annuity requirements of Code section 401(a)(11) and section 417 that were transferred from another plan (or to such other Accounts if the amounts subject to such survivor annuities and were not separately accounted for). This Section shall only apply if the Participant’s Account exceeds $5,000 (or such lesser amount specified in the Adoption Agreement) at the time such individual becomes entitled to a distribution hereunder (or at any subsequent time established by the Plan Administrator to the extent provided in applicable Treasury regulations). Effective January 1, 2002 unless otherwise specified in the Adoption Agreement and if elected by the Plan Sponsor in the Adoption Agreement, for purposes of this Section 7.10(a), the Participant’s vested Account balance shall not include that portion of the Account balance that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Code sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

(b)    Qualified Joint and Survivor Annuity. Unless otherwise elected pursuant to Subsection (d) below, a Participant’s vested Account balance, to the extent provided in Subsection (a) above, will be paid to him by the purchase and delivery of an annuity in the form of a Qualified Joint and Survivor Annuity. Effective for Annuity Starting Dates in Plan Years beginning after December 31, 2007, to the extent that the Plan must offer a Qualified Joint and Survivor Annuity, the Plan shall also offer a Qualified Optional Survivor Annuity as another optional form of benefit.

A Participant may waive the Qualified Joint and Survivor Annuity during a period that begins on the first day of the 180-day period ending on the Annuity Starting Date and ends on the later of the Annuity Starting Date or the 30th day after the Plan Administrator provides the Participant with a written explanation of the Qualified Joint and Survivor Annuity. The Plan Administrator shall no less than 30 days and no more than 180 days prior to the Annuity Starting Date provide each Participant a written explanation of: (i) the terms and conditions of a Qualified Joint and Survivor Annuity;

42 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(ii) the Participant’s right to make and the effect of an election to waive the Qualified Joint and Survivor Annuity form of benefit; (iii) the rights of a Participant’s spouse; and (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity; and (v) the relative values of the various optional forms of benefits under the Plan pursuant to Treas. Reg. section 1.417(a)(3)-1(c)(2).

The Annuity Starting Date for a distribution in a form other than a Qualified Joint and Survivor Annuity may be less than 30 days after receipt of the written explanation described in the preceding paragraph provided: (i) the Participant has been provided with information that clearly indicates that the Participant has at least 30 days to consider whether to waive the Qualified Joint and Survivor Annuity and elect (with spousal consent) to a form of distribution other than a Qualified Joint and Survivor Annuity; (ii) the Participant is permitted to revoke any affirmative distribution election at least until the Annuity Starting Date or, if later, at any time prior to the expiration of the 7-day period that begins the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; and (iii) the Annuity Starting Date is a date after the date that the written explanation was provided to the Participant.

(c)    Qualified Preretirement Survivor Annuity. Unless otherwise elected within the applicable election period and to the extent provided in Subsection (a) above, if a Participant dies before the Annuity Starting Date then at least 50% of the Participant’s vested Account balance shall be applied toward the purchase of an annuity for the life of the surviving spouse which shall be distributed to the spouse. The surviving spouse may direct the commencement of payments under the qualified preretirement survivor annuity within a reasonable time after the Participant’s death. The terms of such annuity contract shall comply with the provisions of this Plan and the annuity contract shall be nontransferable. The applicable election period shall be the period which begins on the first day of the Plan Year in which the Participant attains age 35 and ends on the date of the Participant’s death. If a Participant separates from service prior to the first day of the Plan Year in which he attains age 35, the election period shall begin on the date of separation. A Participant who has not yet attained age 35 may waive the annuity specified in this Subsection (c) provided that (1) the Participant receives a written explanation pursuant to the following paragraph and (2) such election is not effective as of the first day of the Plan Year in which the Participant attains age 35. Any new waiver on or after such date shall be subject to the full requirements of this Subsection. Notwithstanding anything in this Section to the contrary, the surviving spouse may elect, in writing, to have the Account balance be distributed pursuant to Section 7.02(b).

The Plan Administrator shall provide each Participant within the applicable period for such Participant a written explanation of the annuity described in this Subsection (c) in such terms and in such manner as would be comparable to the explanation provided for meeting the requirements of Subsection (b) applicable to a Qualified Joint and Survivor Annuity. The applicable period for a Participant is whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35; (ii) a reasonable period ending after the individual becomes a Participant; or (iii) within a reasonable period ending after Termination of Employment in the case of a Participant who separates from service before attaining age 35.

For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (ii) and (iii) is the end of the two-year period beginning one year prior to the date the applicable event occurs, and ending one year after that date. If a Participant who separates from service before the Plan Year in which he attains age 35 thereafter returns to employment with the Employer, the applicable period for such Participant shall be redetermined.

(d)    Elections. Any waiver of the annuities described in Subsections (b) and (c) above shall not be effective unless: (i) the Participant’s spouse consents in writing to the election; (ii) the election designates a specific Beneficiary, including any class of beneficiaries or any contingent beneficiaries, which may not be changed without spousal consent (or the spouse expressly permits designations by the Participant without any further spousal consent); (iii) the spouse’s consent acknowledges the effect of the election; and (iv) the spouse’s consent is witnessed by a plan representative or notary public. Additionally, a Participant’s waiver of the Qualified Joint and Survivor Annuity shall not be effective unless the election designates a form of benefit payment which may not be changed without spousal consent (or the spouse expressly permits designations by the Participant without any further spousal consent). If it is established to the satisfaction of a plan representative that there is no spouse (within the meaning of Code section 417) or that the spouse cannot be located, a waiver will be deemed a qualified election. Any consent by a spouse obtained under this provision (or establishment that the consent of a spouse may not be obtained) shall be effective only with respect to such spouse. A consent that permits designations by the Participant without any requirement of further consent by such spouse must acknowledge that the spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the

43 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

spouse voluntarily elects to relinquish either or both such rights. A revocation of a prior waiver may be made by a Participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant has received notice as provided in Subsections (b) and (c).

Any consent by a spouse obtained under this provision (or establishment that the consent of a spouse may not be obtained) shall be effective only with respect to such spouse. A consent that permits designations by the Participant without any requirement of further consent by such spouse must acknowledge that the spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the spouse voluntarily elects to relinquish either or both such rights. A revocation of a prior waiver may be made by a Participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant has received notice as provided in Subsections (b) and (c).

For purposes of determining a Participant’s spouse, the Plan Administrator shall apply the one-year rule in Code section 417(d), Treas. Reg. section 1.401(a)-20 to the extent selected in the Adoption Agreement.

(f)    Deferred Annuity Contracts. In determining whether and/or how the Qualified Joint and Survivor Annuity and the Qualified Preretirement Survivor Annuity rules described in Code sections 401(a)(11) and 417 apply to a deferred annuity contract purchased under the Plan, the provisions of Internal Revenue Service Revenue Ruling 2012-3 and any superseding guidance shall apply.

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

Section 8.01 HARDSHIP

(a)    Hardship. A Participant may receive a distribution on account of hardship from the Accounts specified in the Adoption Agreement. Notwithstanding anything in the Plan to the contrary if the Adoption Agreement permits a hardship distribution from an Account, the amount available for a hardship distribution from such Account shall include any amounts grandfathered under Treas. Reg. section 1.401(k)-1(d)(3)(ii)(B). Unless otherwise specified in the Adoption Agreement, a Participant shall only be permitted to receive a hardship distribution pursuant to this Section 8.01 from Accounts that are fully (100%) vested.

(b)    Hardship - Safe Harbor. If the Adoption Agreement provides that the Plan has adopted safe harbor criteria for Hardship withdrawal, the following shall apply:

(1)    Immediate and Heavy Financial Need. A hardship distribution shall only be made upon the finding by the Plan Administrator of an immediate and heavy financial need where such Participant lacks other available resources. The following are the only financial needs considered immediate and heavy:

(A)    Expenses for (or necessary to obtain) medical care that would be deductible under Code section 213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income) for the Employee, or the Employee’s spouse, children, or dependents (as defined in Code section 152, and, for taxable years beginning on or after January 1, 2005, without regard to Code section 152(b)(1), (b)(2) and (d)(1)(B));

(B)    Costs directly related to the purchase of a principal residence for the Employee (excluding mortgage payments);

(C)    Payment of tuition, related educational fees, and room and board expenses, for up to the next 12 months of post-secondary education for the Employee, or the Employee’s spouse, children, or dependents (as defined in Code section 152, and, for taxable years beginning on or after January 1, 2005, without regard to Code section 152(b)(1), (b)(2) and (d)(1)(B));

(D)    Payments necessary to prevent the eviction of the Employee from the Employee’s principal residence or foreclosure on the mortgage on that residence;

44 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(E)    Payments for burial or funeral expenses for the employee’s deceased parent, spouse, children or dependents (as defined in Code section 152, and, for taxable years beginning on or after January 1, 2005, without regard to Code section 152(d)(1)(B));

(F)    Expenses for the repair of damage to the employee’s principal residence that would qualify for the casualty deduction under Code section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income); and

(G)    Other expenses as provided by the Commissioner as specified in Treas. Reg. section 1.401(k)-1(d)(3)(v).

(2)    Amount Necessary to Satisfy Need. A distribution will be considered as necessary to satisfy an immediate and heavy financial need of the Participant only if:

(A)    The distribution is not in excess of the amount of the immediate and heavy financial need (including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution);

(B)    The Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans under all plans maintained by the Employer; and

(C)    All plans maintained by the Employer provide that the Participant’s Elective Deferrals (and after tax contributions) will be suspended for 6 months (12 months, for hardship distributions before 2002) after the receipt of the hardship distribution; and

(c)    Hardship - Non Safe Harbor. If the Adoption Agreement provides that the Plan has adopted the non-safe harbor criteria for hardship for permitted Accounts, the following shall apply:

(1)    Immediate and Heavy Financial Need. A hardship distribution shall only be made upon the finding by the Plan Administrator of an immediate and heavy financial need where such Participant lacks other available resources. Whether a Participant has an immediate and heavy financial need is to be determined based on all relevant facts and circumstances. The need to pay the funeral expenses of a family member would constitute an immediate and heavy financial need and a distribution made to a Participant for the purchase of a boat or television would not constitute a distribution made on account of an immediate and heavy financial need. A financial need may be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred by the Participant.

(2)    Amount Necessary to Satisfy Need. A distribution is not treated as necessary to satisfy an immediate and heavy financial need of a Participant to the extent the amount of the distribution is in excess of the amount required to relieve the financial need or to the extent the need may be satisfied from other resources that are reasonably available to the Participant. This determination generally is to be made on the basis of all relevant facts and circumstances. For purposes of this Subsection, the Participant’s resources are deemed to include those assets of the Participant’s spouse and minor children that are reasonably available to the Participant. A vacation home jointly owned (regardless of the nature of legal title) by the Participant and the Participant’s spouse will be deemed a resource of the Participant. However, property held for the Participant’s child under an irrevocable trust or under the Uniform Gifts to Minors Act is not treated as a resource of the Participant. The amount of an immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. A distribution generally may be treated as necessary to satisfy a financial need if the Employer relies upon the Participant’s written representation, unless the Employer has actual knowledge to the contrary, that the need cannot reasonably be relieved:

(A)    Through reimbursement or compensation by insurance or otherwise;

(B)    By liquidation of the Participant’s assets;

(C)    By cessation of all Participant contributions under the Plan;

45 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(D)    By other currently available distributions (including distribution of ESOP dividends under Code section 404(k)) and nontaxable (at the time of the loan) loans, under plans maintained by the Employer or by any other employer; or

(E)    By borrowing from commercial sources on reasonable commercial terms in an amount sufficient to satisfy the need.

For purposes of this Subsection, a need cannot reasonably be relieved by one of the actions listed above if the effect would be to increase the amount of the need. For example, the need for funds to purchase a principal residence cannot reasonably be relieved by a Plan loan if the loan would disqualify the Employee from obtaining other necessary financing.

Section 8.02 SPECIFIED AGE

A Participant may receive a distribution on attainment of a specified age from the Accounts specified in the Adoption Agreement. Unless otherwise specified in the Adoption Agreement, a Participant shall only be permitted to receive a specified age distribution pursuant to this Section 8.02 from Accounts that are fully (100%) vested.

Section 8.03 OTHER WITHDRAWALS

(a)    After a Period Certain. To the extent provided in the Adoption Agreement, a Participant may receive a distribution from his Non-Elective Contribution Account which has accumulated for at least twenty-four (24) months. However, an individual who has been a Participant for five (5) or more Plan Years shall be entitled to receive a distribution of his Non-Elective Contribution Account regardless of the length of time the funds have accumulated. Unless otherwise specified in the Adoption Agreement, a Participant shall only be permitted to receive a distribution pursuant to this Section 8.03(a) from Accounts that are fully vested.

(b)    At Any Time. To the extent provided in the Adoption Agreement, a Participant may receive a distribution from his Rollover Contribution Account at any time.

Section 8.04 TRANSFER ACCOUNT

In addition to the foregoing, a Participant may receive a distribution from his Transfer Account as permitted under the terms of any plan from which funds in such Account were transferred to the extent that such optional forms of benefit must be preserved pursuant to Code section 411(d)(6).

Section 8.05 RULES REGARDING IN-SERVICE DISTRIBUTIONS

(a)    In General. This Section shall apply only to the extent that in-service withdrawals are otherwise permitted pursuant to this Article 8.

(b)    Frequency and Amount of Withdrawals. The Plan Administrator may establish uniform procedures that include, but are not limited to, prescribing limitations on the frequency and minimum amount of withdrawals; provided, that no procedures involving minimum amounts shall prescribe a minimum withdrawal greater than $1,000. Unless otherwise provided in the Adoption Agreement, such distributions may be paid in cash or in-kind

(c)    Form of Withdrawals. All distributions of amounts withdrawn pursuant to Sections 8.01, 8.02, 8.03 and 8.04 shall be made in the form of a single sum as soon as practicable following the Valuation Date as of which such withdrawal is made. Such distributions shall be paid in cash; provided however, that in-service withdrawals may be made from ESOP Accounts in Employer Stock to the extent that the Plan permits distributions from ESOP Accounts in Employer Stock.

(d)    Active Employment. Only Employees shall be eligible to receive in-service distributions pursuant to this Article 8.

46 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(e)    Ordering Rule. The Plan Administrator shall determine the ordering rule for in-service distributions. Such ordering rule may provide that the Participant may elect to have payments made any combination of such accounts and any other Account.

(f)    Transfer Account. A Participant may receive a distribution from the vested portion of his Transfer Account only to the extent such account was not transferred from a qualified plan subject to Code section 412, to the extent Section 8.04 applies or to the extent the Adoption Agreement permits distributions to be made to a Participant who has attained age 62 and who has not separated from employment.

(g)    Spousal Consent. If Section 7.10 applies to the Account distributed a Participant must obtain the consent of his or her spouse, if any, to obtain an Account balance as an in-service distribution. Spousal consent shall be obtained no earlier than the beginning of the 180-day period that ends on the date on which the in-service distribution is to be so secured. The consent must be in writing, must acknowledge the effect of the in-service distribution, and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to that in-service distribution.

Section 8.06 LOANS

(a)    Eligible Participants. To the extent provided in the Adoption Agreement, a Participant may apply for a loan from the Plan and the provisions of Code section 72(p) and Treas. Reg. section 1.72(p)-1 shall apply to the Plan and are hereby incorporated by reference. The Plan Administrator may provide that a loan may only be granted for the purpose of enabling the Participant to meet a financial hardship or an unusual or special situation in his financial affairs. Loans shall only be granted pursuant to the terms of this Section to persons who the Plan Administrator determines have the ability to repay the loan. Loans shall not be made available to Participants who are or were Highly Compensated Employees in an amount greater than the amount available to other Participants. Loans shall be made available to all Participants on a nondiscriminatory and reasonably equivalent basis.

(b)    Maximum Loan Amount. Unless otherwise provided in the Adoption Agreement, loans shall not be made from an ESOP Account. No loan to any Participant can be made to the extent that such loan when added to the outstanding balance of all other loans to the Participant would exceed the lesser of:

(1)    $50,000 reduced by the excess (if any) of the highest outstanding balance of loans during the one year period ending on the day before the loan is made, over the outstanding balance of loans from the Plan on the date the loan is made; or

(2)    one-half the present value of the vested Account balance of the Participant or, if greater and so provided in the Adoption Agreement, the total vested Account balance up to $10,000; provided that additional security is given to the extent such loan exceeds 50% of the vested Account balance .

For the purpose of the above limitation, all loans from all qualified plans of the Employer are aggregated.

(c)    Loan Term and Amortization. Any loan shall by its terms require that repayment (principal and interest) be amortized in level payments, not less frequently than quarterly, over a period not extending beyond five years from the date of the loan. If so provided in the Adoption Agreement, a loan term may extend beyond five years if the loan is used to acquire a dwelling unit which within a reasonable time (determined at the time the loan is made) will be used as the principal residence of the Participant.

(d)    Minimum Loan Amount—Maximum Number of Loans. The Adoption Agreement shall specify a minimum loan amount and the maximum number of loans outstanding at any one time.

(e)    Interest Rate. Interest shall be charged at a rate to be fixed by the Plan Administrator and, in determining the interest rate, the Plan Administrator shall take into consideration interest rates currently being charged on similar commercial loans by persons in the business of lending money.

(f)    Security. All loans shall be secured by no more than one-half of the vested portion of the Participant’s Accounts (determined immediately after the origination of the loan) and such additional security as the Plan Administrator may deem necessary. All loans made to Participants under this Section are to be considered Trust Fund investments and shall be segregated for purposes of Article 9 hereof unless provided otherwise in the Adoption Agreement.

47 Copyright © 2002-2017

ARTICLE 8 IN-SERVICE DISTRIBUTIONS AND LOANS

(g)    Repayment. Loans shall be repaid in accordance with the foregoing and the Plan Administrator may require as a condition to granting such loan that it be repaid through payroll deductions. Unless the loan note provides otherwise, the principal amount of the loan and accrued interest shall become immediately due and payable upon a Termination of Employment. Repayment may be suspended pursuant to Code section 414(u).

(h)    Loan Fees. Fees properly chargeable in connection with a loan may be charged, in accordance with a uniform and nondiscriminatory policy established by the Plan Administrator, against the Account of the Participant to whom the loan is granted.

(i)    Default. In the event of default, foreclosure on the note and attachment of security shall not occur until a distributable event occurs in the Plan.

(j)    Loans to Self-Employed Persons. For Plan loans made before January 1, 2002, no loans will be made to any shareholder-employee or owner-employee. For purposes of this requirement, a shareholder-employee means an employee or officer of an electing small business (Subchapter S) corporation who owns (or is considered as owning within the meaning of Code section 318(a)(1), on any day during the taxable year of such corporation, more than 5% of the outstanding stock of the corporation. An owner-employee means, if the Employer is a sole proprietorship, an individual who is the sole proprietor, or, if the Employer is a partnership, a partner owning more than 10% of either the capital or profits interest of the partnership.

(k)    Loan Procedures. The Plan Administrator is authorized to adopt any administrative rules or procedures that it deems necessary or appropriate with respect to the granting and administering of loans under this Article 8.

(l)    Spousal Consent. If Section 7.10 applies or if so provided in the Adoption Agreement, a Participant must obtain the consent of his or her spouse, if any, to use the Account balance as security for a loan. Spousal consent shall be obtained no earlier than the beginning of the 180-day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to that loan. A new consent shall be required if the Account balance is used for renegotiation, extension, renewal, or other revision of the loan.

(m)    Ordering Rule. The Plan Administrator shall determine from which Accounts a Participant may receive a loan and the ordering rule for loans.

If Section 7.10 applies and a valid spousal consent has been obtained, then, notwithstanding any other provision of this Plan, the portion of the Participant’s vested Account balance used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. If less than 100% of the Participant’s vested Account balance (determined without regard to the preceding sentence) is payable to the surviving spouse, then the Account balance shall be adjusted by first reducing the vested Account balance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse.

48 Copyright © 2002-2017

ARTICLE 9 INVESTMENT AND VALUATION OF TRUST FUND

ARTICLE 9 INVESTMENT AND VALUATION OF TRUST FUND

Section 9.01 INVESTMENT OF ASSETS

All existing assets of the Trust Fund and all future contributions shall be invested in accordance with the terms of this Article 9. All assets of the Trust Fund may be commingled for investment purposes with the assets of any retirement plan which is maintained by the Company and which qualifies under Code section 401(a) and may be held as a single fund under one or more trust instruments; provided that the value of each plan’s assets can be determined at any time. The assets allocable to each such plan shall in no event be used for the benefit of Participants in the other plans.

Section 9.02 PARTICIPANT SELF-DIRECTION

(a)    In General. To the extent provided for in the Adoption Agreement, the Plan Administrator may permit Participants to direct the investment of their Accounts pursuant to this Section 9.02. Any Participant self direction shall be made pursuant to such uniform guidelines and procedures as the Plan Administrator may establish from time to time. Notwithstanding the foregoing, a Participant may not alter his investment in the Employer Stock Fund except as provided in Subsection (b) below.

(b)    Pre-Retirement Diversification Rights.

(1)    The Plan Administrator shall offer a Qualified Participant the option to direct the investment of Employer Stock acquired by or contributed to the Plan after December 31, 1986 (or all Employer Stock if so provided in the Adoption Agreement) into other Investment Funds pursuant to this Subsection and Code section 401(a)(28)(B)(ii)(II) during the Diversification Election Period. The Participant must elect such option within 90 days after the end of each Plan Year during the Diversification Election Period, and the value of such Employer Stock will be invested as directed by such Participant within 180 days after the end of such Plan Year.

(2)    The maximum number of shares of Employer Stock which a Qualified Participant may elect to reinvest as of the end of each of the Plan Years during the Diversification Election Period shall be that number of such shares (rounded to the nearest whole number) which is equal to the result determined by the formula (25% x (A + B)) - B, where A is the number of shares of Employer Stock which are allocated to his Account as of the applicable date and B is the number of shares of Employer Stock, if any, previously reinvested by the Participant pursuant to this Subsection, provided that for purposes of determining such maximum number of shares for the last Plan Year in a Diversification Election Period, fifty percent (50%) shall be substituted for twenty-five percent (25%). No Participant may elect to reinvest during any Diversification Election Period if the fair market value as of the end of the preceding Plan Year of Employer Stock allocated to such Participant’s account is $500 or less, determined as of the Plan’s valuation date immediately preceding the first day on which a Qualified Participant is eligible to make a diversification election.

(3)    In the event a Qualified Participant elects to diversify pursuant to the foregoing, the Plan Administrator may elect instead to distribute to the Qualified Participant the amounts subject to such election. The distribution must occur within 90 days after the last day of the annual Diversification Election Period. Distribution of diversified Employer Stock must comply with section 7.02(a).

(4)    In the event a Qualified Participant elects to diversify pursuant to the foregoing, the Plan Administrator may elect instead to transfer an amount equal to the value of the diversified Employer Stock to another qualified defined contribution plan of the Employer that offers at least three investment options (each of which must be diversified and have materially different risk and return characteristics). This transfer must be made within 90 days after the last day of the annual Diversification Election Period and must comply with applicable qualification requirements, including Code section 414(l), 411(d)(6) and 401(a)(11).

(c)    Investment Elections. To the extent provided in Subsections (a) and (b), each Qualified Participant shall direct in the form and manner and at the time or times prescribed by the Plan Administrator the percentage of the applicable Accounts to be invested in one or more of at least three alternative investment options available under the Plan. Each of these investment options must be diversified and have materially different risk and return characteristics. The Plan must invest the value of the diversified Employer Stock in accordance with the direction of the Qualified Participant within 90 days

49 Copyright © 2002-2017

ARTICLE 9 INVESTMENT AND VALUATION OF TRUST FUND

after the end of the annual Diversification Election Period. After the death of the Participant, a Beneficiary shall be entitled to make investment elections as if the Beneficiary were the Participant. Notwithstanding the foregoing, the Plan Administrator may restrict investment transfers to the extent required to comply with applicable law.

(d)    Loans. If the Adoption Agreement does not permit Participant self-direction, any assets that are held in the form of a Participant loan made pursuant to Article 8 shall be treated as a segregated investment unless otherwise provided by the Plan Administrator.

Section 9.03 INDIVIDUAL ACCOUNTS

To the extent provided in the Adoption Agreement, there shall be maintained on the books of the Plan with respect to each Participant, as applicable, a Non-Elective Contribution Account, Rollover Contribution Account, Transfer Account and any other Account established by the Plan Administrator. Each such Account shall separately reflect the Participant’s interest in the Trust Fund relating to such Account. Each Participant shall receive, at least annually, a statement of his Account. A Participant’s interest in the Trust Fund shall be determined and accounted for based on his beneficial interest in such fund.

Section 9.04 QUALIFYING EMPLOYER INVESTMENTS

Subject to Section 1.02, the Trustee may invest up to 100% (to extent that the Plan is not subject to Section 7.10) of the fair market value of the assets of the Trust Fund in Qualifying Employer Securities or Qualifying Employer Real Property”. In accordance with IRC 409(l), the term “employer security” means (i) common stock issued by the Employer, or by a corporation within the same controlled group, which is readily tradeable on an established securities market (this requires that sales of the stock take place regularly and consistently based on the facts and circumstances), (ii) if there is no readily tradeable common stock, closely held common stock of the Employer which has a combination of voting power and dividend rights equal to or in excess of the class of common stock of the Employer having the greatest dividend rights, and (iii) noncallable preferred stock if the stock is convertible into stock which meets the requirements of (i) or (ii) above, and if the conversion price is reasonable as of the date the ESOP acquired the preferred stock.

Section 9.05 ALLOCATION OF EARNINGS AND LOSSES

(a)    Reinvestment. Except as provided in Section 9.09, the dividends, capital gains distributions, and other earnings received on the Trust Fund shall be allocated to such fund and reinvested.

(b)    Valuation. Except as provided in Section 9.10, the assets of each Investment Fund shall be valued at their current fair market value as of each Valuation Date, and Accounts of each Participant with interests in that Investment Fund shall be credited with such Participant’s allocable share of the earnings and losses of each Investment Fund since the immediately preceding Valuation Date. Such allocation shall be done on the basis of such Participant’s interest in the applicable Investment Fund. For purposes of the allocation of investment earnings and losses, the Plan Administrator may adjust the value of interests of Investment Funds in Accounts as of the preceding Valuation Date to account for any contributions, distributions or withdrawals that occur after such preceding Valuation Date.

(c)    Allocation to Individual Accounts. The Accounts of each Participant shall be adjusted as of each Valuation Date by (i) reducing such Accounts by any distributions and withdrawals made therefrom since the preceding Valuation Date, (ii) increasing or reducing such Accounts by the Participant’s share of earnings and losses and reasonable fees charged against such accounts at the direction of the Plan Administrator, and (iii) crediting such Accounts with any contributions made thereto since the preceding Valuation Date.

(d)    Allocation of Expenses. The Plan Administrator may allocate all, none or any portion of the Plan’s expenses to Participant Accounts. When allocating expenses among Participant Accounts, the Plan Administrator may allocate such expenses using any reasonable method that does not violate Title I of ERISA and does not discriminate in favor of Highly Compensated Employees within the meaning of applicable provisions of Code section 401(a)(4). Such methods may include, but not be limited to: (i) allocating expenses only to current or former employees (or among any other classification(s) of employees), (ii) allocating expenses directly to individual employees, (iii) allocating expenses using the per capita or pro rata method, and (iv) any combination of the foregoing.

50 Copyright © 2002-2017

ARTICLE 9 INVESTMENT AND VALUATION OF TRUST FUND

(e)    Valuation for Distribution. Except as provided in Section 9.10, for the purposes of paying the amounts to be distributed to a Participant or Beneficiary pursuant to Articles 7 and 8, the value of the Participant’s interest shall be determined in accordance with the provisions of this Article as of the Valuation Date related to the date benefits are paid.

(f)    No Rights Created by Allocation. An allocation of contributions or earnings to the separate Account of a Participant under this Article 9 shall not cause the Participant to have any right, title or interest in any assets of the Plan except at the time and under the terms and conditions expressly provided for in the Plan.

(g)    Dividends and Credits. Any dividends or credits earned on insurance contracts will be allocated to the Participant’s Account for whose benefit the contract is held. No contract will be purchased under the Plan unless such contract or a separate definite written agreement between the Company and the insurer provides that no value under contracts providing benefits under the Plan or credits determined by the insurer (on account of dividends, earnings, or other experience rating credits, or surrender or cancellation credits) with respect to such contracts may be paid or returned to the Company or diverted to or used for other than the exclusive benefit of the Participants or their Beneficiaries. However, any contribution made by the Company may be returned to the Company pursuant to Article 10.

Section 9.06 VOTING RIGHTS

(a)    Accounts other than ESOP Accounts. To the extent provided in the Adoption Agreement, a Participant and a Beneficiary of a deceased Participant shall have the right to direct the Trustee as to the exercise of voting rights with respect to investments allocated to Accounts other than ESOP Accounts. An individual’s allocable share of investment in the applicable Accounts shall be determined in the discretion of the Plan Administrator. As soon as practicable prior to the occasion for the exercise of such voting rights, the person designed by the Plan Administrator (the “Designee”) shall deliver or cause to be delivered, to each Participant and Beneficiary of a deceased Participant entitled to vote all notices, prospectuses, financial statements, proxies and proxy soliciting material relating to such investment allocated to the Participant’s Account. Instructions by Participants and Beneficiaries to the Designee shall be in such form and pursuant to such regulations as the Plan Administrator shall prescribe. Any such instructions shall remain in the strict confidence of the Designee. Any investments for which no instructions are received by the Designee within such time specified by notice and, unless otherwise required by applicable law, any shares which are not allocated to Participants’ Accounts shall be voted in the same proportion that the shares for which instructions are received are voted. With respect to fractional shares for which instructions are received by the Designee, the Designee shall aggregate all such fractional shares for which the same instructions are received into whole shares and shall vote such whole shares as instructed. Any remaining fractional shares shall be voted in the same proportion that the shares for which instructions are received are voted.

(b)    ESOP Accounts. Except as provided below, all Employer Stock held in the Trust and allocated to ESOP Accounts shall generally be voted by the Trustee, as directed by the Plan Administrator.

(1)    In General. Each Participant or, if applicable, his Beneficiary shall be entitled to direct the Trustee as to the exercise of any voting rights attributable to shares of Employer Stock then allocated to his ESOP Accounts.

(2)    Nonregistered Securities. Notwithstanding the foregoing, this Subsection (b)(2) shall apply if the Employer Stock does not constitute registration-type securities within the meaning of Code section 409(e). A Participant or Beneficiary shall only be entitled to direct the Trustee with respect to the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all of the assets of a trade or business, or such other transactions which may be prescribed by applicable Treasury regulations promulgated under Code section 409(e). Each participant shall be entitled to one vote with respect to such issues.

(3)    Instructions. If Participants are entitled to so direct the Trustee as to the voting of Employer Stock pursuant to Subsection (b)(1) or (b)(2), all such Employer Stock as to which such instructions have been received (which may include an instruction to abstain) shall be voted in accordance with such instructions. However, the Trustee shall vote any unallocated Employer Stock in the Trust Fund, or any allocated Employer Stock as to which no voting instructions have been received, in the same proportion as Employer Stock as to which voting instructions have been received, unless otherwise directed by the Plan Administrator.

51 Copyright © 2002-2017

ARTICLE 9 INVESTMENT AND VALUATION OF TRUST FUND

(4)    Exempt Loan Subject to Code Section 133. Each Participant or, if applicable, his Beneficiary shall be entitled to direct the Trustee as to the exercise of any and all voting rights attributable to shares of Employer Stock then allocated to his Account that were acquired with the proceeds of an Exempt Loan that is subject to the full pass through voting requirements of Code section 133.

(5)    Tender Offer. In the event of a tender offer for any Common Stock, the Plan Administrator shall direct the Trustee to accept or reject the offer with respect to the shares of Employer Stock held in the Trust Fund.

Section 9.07 LIQUIDITY

(a)    Trustee’s Put Option. If Trustee determined that the Trust does not have sufficient cash to provide for distributions of benefits, payment of expenses or for other expenditures, the Trustee shall have an option to sell shares of Employer Stock to the Company to the to the extent necessary to provide for such expenditures, provided the sale does not violate the terms of the Plan or applicable law. The sales price shall be determined pursuant to Section 9.10.

(b)    Loans. If permitted under applicable law, rulings or regulations, and not a prohibited transaction under Code section 4975(c) or sections 406 or 407 of ERISA (or a prohibited transaction exemption), the Plan Administrator, at the request of the Trustee, shall cause the Company to advance to the Trustee the amounts needed for distributions of benefits, payment of expenses or for other expenditures. Such amounts shall be reimbursed by the Trustee to the Company, with such interest as may be permitted under ERISA.

Section 9.08 RESTRICTIONS ON COMPANY STOCK

Except as required by Code section 409(h) and by Treas. Reg. section 54.4975-7(b)(9) and (10), or as otherwise required by applicable law, no Employer Stock purchased with an Exempt Loan may be subject to a put, call or other option, or buy-sell or similar arrangement while held by, and when distributed from, the Plan, whether or not the Plan is an employee stock ownership plan within the meaning of Code section 4975(e)(7) at that time. The Plan shall not obligate itself to acquire securities from a particular security holder at an indefinite time determined upon the happening of an event such as the death of the holder.

Section 9.09 TREATMENT OF DIVIDENDS

(a)    Cash Dividends.

(1)    Dividends on Unallocated Employer Stock. Any cash dividends received which are attributable to shares of Employer Stock (i) acquired with the proceeds of an Exempt Loan and (ii) held in the Suspense Account or the Released and Unallocated Account shall be either: (x) held invested until the next Exempt Loan repayment, at which time such dividends, and interest thereon, shall be applied to repay the principal and, at the Plan Administrator’s discretion the interest, of the Exempt Loan; or (y) allocated to Participants’ Accounts under Article 4 for such Plan Year.

(2)    Dividends on Allocated Employer Stock. As determined in the sole discretion of the Plan Administrator, any cash dividends paid with respect to shares of Employer Stock allocated to a Participant’s Account may be: (i) used to repay the principal balance of an outstanding Exempt Loan or interest thereon in whole or in part pursuant to Subsection (a)(2)(A) below; (ii) allocated to Participants’ Accounts; or (iii) distributed currently (or within 90 days after the close of the Plan Year in which such dividends are paid to the Trustee) in cash to such Participants (or their Beneficiaries) on a nondiscriminatory basis pursuant to Subsection (a)(2)(B) below.

(A)    Repay Exempt Loan. In the event the Plan Administrator elects to repay the Exempt Loan, Employer Stock with a fair market value of not less than the amount of such dividend shall be allocated to each Participant to whom such dividend would have been allocated.

(B)    Distribute to Participants. The Plan Administrator may distribute cash dividends paid with respect to shares of Employer Stock allocated to Participants’ Accounts. The Plan Administrator may also allow Plan Participants to further elect to have such dividends paid to the Plan, or be distributed currently in cash to such Participants (or their Beneficiaries) under such election procedures as may be established by the Plan Administrator; provided that the dividends are paid within 90 days after the close of the Plan Year in which such dividends are paid. Such distributions may be made directly by the Corporation or by the Trustee after receipt of the dividends.

52 Copyright © 2002-2017

ARTICLE 9 INVESTMENT AND VALUATION OF TRUST FUND

(b)    Stock Dividends. Stock dividends paid (and stock received by the Trustee as a result of a stock split, stock conversion, reorganization or recapitalization of the Company) shall be credited to the account under which such dividends arise.

Section 9.10 USE OF APPRAISER

If the Employer Stock is not readily tradable on an established securities market (within the meaning of IRS Notice 2011-19 for Plan Years beginning on or after January 1, 2012 or such later date provided in such Notice), all valuations of Employer Stock acquired by or contributed to the Plan after December 31, 1986 with respect to activities carried on by the Plan shall be performed by an independent appraiser. For purposes of the preceding sentence, the term “independent appraiser” means any appraiser meeting the requirements of Code section 170(a). Valuations of Employer Stock must be made in good faith and based on all relevant factors for determining the fair market value of securities. In the case of a transaction between the Plan and a S-Corporation Disqualified Person, value must be determined as of the date of the applicable transaction. For all other purposes under the Plan, value must be determined as of the most recent Valuation Date under the Plan. Earnings on shares allocated to Participant’s accounts will be allocated to those accounts at least annually.

Section 9.11 LIFE INSURANCE

(a)    Purchase of Life Insurance. To the extent provided in the Adoption Agreement, a Participant may request that his Accounts that are not ESOP Accounts be invested in insurance on his life, and if the Plan Administrator, in its discretion, approves such request, it shall direct the Trustee to apply for and be the owner of any insurance contract purchased under the terms of this Section. The insurance contract(s) must provide that proceeds will be payable to the Trustee; however, the Trustee shall be required to pay over all proceeds of the contract(s) to the Participant’s Beneficiary in accordance with the distribution provisions of this Plan. The form and type of contract purchased shall be determined by the Plan Administrator. The Plan Administrator may also establish rules that prohibit the purchase of life insurance where the annual premium is estimated to be less than a certain minimum amount. If the Plan Administrator directs the Trustee to borrow against such contracts, such borrowings shall be on a uniform and nondiscriminatory basis. Any discretion shall be exercised in a non-discriminatory manner.

(b)    Maximum Insurance Amounts. The total premiums paid for a Participant’s ordinary life insurance shall be less than 50% of the aggregate Company contributions allocated to such Participant’s Account. If term insurance or universal life insurance is purchased, the aggregate premiums shall not exceed 25% of aggregate Company contributions allocated to the insured Participant’s Account. If both ordinary life insurance and either term insurance or universal life insurance is purchased for a Participant, the aggregate premiums for such term insurance and/or universal life insurance plus one-half of the total premiums for such ordinary life insurance shall not in the aggregate exceed 25% of the aggregate Company contributions allocated to the insured Participant’s Account. However, the foregoing restrictions shall not apply to funds that may be withdrawn or distributed from the Plan in accordance with applicable law even if such withdrawals/distributions are not permitted under the terms of the Plan.

(c)    Beneficiary. The Trust Fund shall be designated as the Beneficiary to receive death benefits payable pursuant to the provisions of any life insurance policy purchased pursuant to this Section. Any death proceeds received by the Trust Fund shall be added to the deceased Participant’s Account and distributed pursuant to Article 7 hereof. Under no circumstances shall the Trust Fund retain any part of the proceeds. In the event of any conflict between the terms of this Plan and the terms of any insurance contract purchased hereunder, the Plan provisions shall control.

(d)    Conversion of Policies. If an insured Participant does not die prior to retirement, the Trustee may: (i) convert the entire value of any such life insurance contract at or before retirement into cash to provide the retirement benefits set forth in Article 7 so that no portion of such value may be used to continue life insurance protection beyond retirement; or (ii) distribute any such contract to the Participant. Nothing provided herein shall be construed to prohibit the purchase, sale, transfer or exchange of any individual life insurance contract which would otherwise be permitted under applicable prohibited transaction class exemptions or Department of Labor Regulations.

53 Copyright © 2002-2017

ARTICLE 9 INVESTMENT AND VALUATION OF TRUST FUND

(e)    Distributions. Any distribution of an insurance policy or the proceeds of an insurance policy purchased pursuant to this Section shall be subject to the requirements of Article 7.

Section 9.12 NONTERMINABLE PROTECTIONS AND RIGHTS

If the Plan provides for an exempt loan and that loan is repaid or if the Plan ceases to be an ESOP plan, any existing put, call or other option, or buy-sell or similar arrangement existing at the time of the change are nonterminable with respect to distributions of securities that were acquired with the exempt loan, as required under Treas.

Section 9.13 QUALIFYING LONGEVITY ANNUITY CONTRACT (QLAC)

(a)    Purchase of QLAC. To the extent provided in the Adoption Agreement, a Participant may request that a portion of his Account be invested in a QLAC. The QLAC must meet all requirements as stated under Treasury Regulation 1.401(a)(9)-6.

(b)    Maximum QLAC Amount. The total amount of all QLACs purchased for a Participant under this Plan or any other plan cannot exceed the limits as specified in Treasury Regulation 1.401(a)(9)-6, A-17(b). The Plan Administrator may rely on information provided by the Participant with regard to QLACs purchased for the Participant under any other plan.

(c)    Excess Premiums. If a QLAC fails to meet the maximum QLAC amount under Treasury Regulation 1.401(a)(9)-6, A-17(b), the amount will no longer be considered a QLAC and will be included in the Participant’s Account Balance for purposes of distributions under Plan Section 7.05 as of the date the excess premium payment is made unless the amount is returned to a non-QLAC portion of the Participant’s Account by the end of the calendar year following the calendar year in which the excess premium payment was made.

54 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

ARTICLE 10 TRUST FUND

Section 10.01 TRUST FUND

(a)    Continuation of Trust Fund. A Trust is hereby established or continued under the Plan and the Trustee will maintain a trust account for the Plan and, as part thereof, Participants’ Accounts for such individuals as the Company shall from time to time give written notice to the Trustee are Participants in the Plan. The Trustee will accept and hold in the Trust Fund such contributions on behalf of Participants as it may receive from time to time from the Company, including amounts transferred by any prior trustee of the Plan, and such earnings, income and appreciation as may accrue thereon; less losses, depreciation and payments made by the Trustee to carry out the purposes of the Plan. The Trust Fund shall be fully invested and reinvested in accordance with the applicable provisions of the Plan.

(b)    Exclusive Benefit. All contributions made to the Plan are made for the exclusive benefit of the Participants and their Beneficiaries, and such contributions shall not be used for, nor diverted to, purposes other than for the exclusive benefit of the Participants and their Beneficiaries (including the costs of maintaining and administering the Plan and corresponding Trust).

(c)    Return of Contributions. Notwithstanding any other provision of the Plan: (1) as contributions made prior to the receipt of an initial determination letter are conditional upon a favorable determination as to the qualified status of the Plan under Code section 401(a), if the Plan receives an adverse determination with respect to its initial qualification, then any such contribution may be returned to the Company within one year after such determination, provided the application for determination is made by the time prescribed by law; (2) contributions made by the Company based upon mistake of fact may be returned to the Company within one year of such contribution; (3) as all contributions to the Plan are conditioned upon their deductibility under the Code, if a deduction for such a contribution is disallowed, such contribution may be returned to the Company within one year of the disallowance of such deduction; and (4) after all liabilities under the Plan have been satisfied, the remaining assets of the Trust shall be distributed to the Company if such distribution does not contravene any provision of applicable law.

In the case of the return of a contribution due to mistake of fact or the disallowance of a deduction, the amount that may be returned is the excess of the amount contributed over the amount that would have been contributed had there not been a mistake or disallowance. Earnings attributable to the excess contributions may not be returned to the Company but losses attributable thereto must reduce the amount to be so returned. Any return of contribution or distribution of assets made by the Trustee pursuant to this Section shall be made only upon the direction of the Company, which shall have exclusive responsibility for determining whether the conditions of such return or distribution have been satisfied and for the amount to be returned.

(d)    Assets Not Held by Trustee. The Trustee shall not be responsible for any assets of the Plan that are held outside of the Trust Fund. The Trustee is expressly hereby relieved of any responsibility or liability for any losses resulting to the Plan arising from any acts or omissions on the part of any insurance company holding assets outside of the Trust Fund. The Trustee may require the Company to serve as custodian for all promissory notes and related documents issued in connection with the Plan’s Participant loan program and require the Company to be responsible for the safekeeping of same.

(e)    Group Trust. In the event that the Trust is a part of any group trust (within the meaning of Internal Revenue Service Revenue Rulings 81-100 and 2011-1): (1) participation in the Trust is limited to (i) individual retirement accounts which are exempt under Code section 408(e), (ii) pension and profit-sharing trusts which are exempt under Code section 501(a) by qualifying under Code section 401(a) and (iii) accounts under Code sections 403(b)(7), 403(b)(9) and governmental retiree benefit plans under Code section 401(a)(24) to the extent the requirements of Revenue Ruling 2011-1 are met; (2) no part of the corpus or income which equitably belongs to any individual retirement account or Employer’s trust may be used for or diverted to any purposes other than for the exclusive benefit of the individual or the Employees, respectively, or their Beneficiaries who are entitled to benefits under such participating individual retirement account or Employer’s trust; (3) no part of the equity or interest in the Trust Fund shall be subject to assignment by a participating individual retirement account or Employer’s trust; and (4) the Trustee shall maintain separate accounts for each participating trust or individual retirement account.

55 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

Section 10.02 DUTIES OF THE TRUSTEE

(a)    In General. The Trustee is not a party to, and has no duties or responsibilities under the Plan, other than those that may be expressly contained in this Article. The Trustee shall have no duties, responsibilities or liability with respect to the acts or omissions of any prior trustee. The Trustee shall discharge its assigned duties and responsibilities under this Article and the Plan with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

(b)    Contributions. The Trustee agrees to accept contributions that are paid to it by the Company (as well as Rollover Contributions and direct transfers from other eligible retirement plans) in accordance with the terms of this Article. Such contributions shall be in cash or in such other form that may be acceptable to the Trustee. In-kind contributions of other than qualifying employer securities are permitted provided that the contribution is discretionary and unencumbered. Qualifying employer securities may be contributed subject to the requirements of ERISA section 408(e). The Trustee shall have no responsibility for any property until it is received by the Trustee. The special trustee specified in the Adoption Agreement has the duty to determine and collect contributions under the Plan. The Company shall have the sole duty and responsibility for the determination of the accuracy or sufficiency of the contributions to be made under the Plan, the transmittal of the same to the Trustee and compliance with any statute, regulation or rule applicable to contributions.

(c)    Distributions. The Trustee shall make distributions out of the Trust Fund pursuant to instructions described in Section 10.05. The Trustee shall not have any responsibility or duty under this Article for determining that such are in accordance with the terms of the Plan and applicable law, including without limitation, the amount, timing or method of payment and the identity of each person to whom such payments shall be made. The Trustee shall have no responsibility or duty to determine the tax effect of any payment or to see to the application of any payment. In making payments, the Company acknowledges that the Trustee is acting as a paying agent and not as the payor, for tax information reporting and withholding purposes. In the event that any dispute shall arise as to the persons to whom payment or delivery of any assets shall be made by the Trustee, the Trustee may withhold such payment or delivery until such dispute shall have been settled by the parties concerned or shall have been determined by a court of competent jurisdiction.

(d)    Records. The Trustee shall keep full and accurate accounts of all receipts, investments, disbursements and other transactions hereunder, including such specific records as may be agreed upon in writing between the Company and the Trustee. All such accounts, books and records shall be open to inspection and audit at all reasonable times by any authorized representative of the Company or the Plan Administrator. A Participant may examine only those individual account records pertaining directly to him.

(e)    Accounting. The Trustee shall file with the Plan Administrator a written account of the administration of the Trust Fund showing all transactions effected by the Trustee subsequent to the period covered by the last preceding account and all property held at the end of the accounting period. The Trustee shall use its best effort to file such written account within ninety (90) days, but not later than one hundred twenty (120) days after the end of each Plan Year. Upon approval of such accounting by the Plan Administrator, neither the Company nor the Plan Administrator shall be entitled to any further accounting by the Trustee. The Plan Administrator may approve such accounting by written notice of approval delivered to the Trustee or by failure to express objection to such accounting in writing delivered to the Trustee within six (6) months from the date on which the accounting is delivered to the Plan Administrator.

(f)    Participant Eligibility. The Trustee shall not be required to determine the facts concerning the eligibility of any Participant to participate in the Plan, the amount of benefits payable to any Participant or Beneficiary under the Plan, or the date or method of payment or disbursement. The Trustee shall be fully entitled to rely in good faith solely upon the written advice and directions of the Plan Administrator as to any such question of fact.

(g)    Indicia of Ownership. The Trustee shall not hold the indicia of ownership of any assets of the Trust Fund outside of the jurisdiction of the District Courts of the United States, unless in compliance with section 404(b) of ERISA and regulations thereunder.

(h)    Notice. The Trustee shall provide the Company with advance notice of any legal actions the Trustee may take with respect to the Plan and Trust and shall promptly notify the Company of any claim against the Plan and Trust.

56 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

(i)    Other Fiduciaries. The Trustee shall not be responsible for the acts or omissions of any other persons except as may be required by ERISA section 405.

Section 10.03 GENERAL INVESTMENT POWERS

In addition to all powers and authority under common law, statutory authority and other provisions of this Article, the Trustee shall have the following powers and authorities to be exercised in accordance with and subject to the provisions of Section 10.04 hereof:

(a)    Invest and reinvest the Trust Fund in any property, real, personal or mixed, wherever situated, and whether situated, and whether or not productive of income or consisting of wasting assets, including, without limitation, common and preferred stock, bonds, notes, debentures, options, mutual funds, leaseholds, mortgages (including without limitation, any collective or part interest in any bond and mortgage or note and mortgage), certificates of deposit, and oil, mineral or gas properties, royalties, interests or rights (including equipment pertaining thereto), without being limited to the classes of property in which trustees are authorized by law or any rule of court to invest trust funds and without regard to the proportion any such property may bear to the entire amount of the Trust Fund;

(b)    Hold property in nominee name, in bearer form, or in book entry form, in a clearinghouse corporation or in a depository, provided that such property is held in conformance with DOL Reg. section 2550-403a-1(b) and that such property is held by (i) a bank or trust company that is subject to supervision by the United States or a state, or a nominee of such bank or trust company, (ii) a broker or dealer registered under the Securities Exchange Act of 1934, or a nominee of such broker or dealer; (iii) a “clearing agency,” as defined in section 3(a)(23) of the Securities Exchange Act of 1934, or its nominee; or (iv) any other entity as provided in DOL Reg. section 2550-403a-1(b);

(c)    Collect income payable to and distributions due to the Trust Fund and sign on behalf of the Trust any declarations, affidavits, certificates of ownership and other documents required to collect income and principal payments, including but not limited to, tax reclamations, rebates and other withheld amounts;

(d)    To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition;

(e)    Pursuant to the terms of Section 10.06, to vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property;

(f)    Take all action necessary to pay for authorized transactions or make authorized distributions, including exercising the power to borrow or raise monies from any lender, upon such terms and conditions as are necessary to settle such transactions or distributions;

(g)    To keep such portion of the Trust Fund uninvested in cash or cash balances as the Trustee may, from time to time, deem to be in the best interests of the Plan, without liability for interest thereon;

(h)    To accept and retain for such time as the Trustee may deem advisable any securities or other property received or acquired as Trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder;

(i)    To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted;

(j)    To settle, compromise, or submit to arbitration any claims, debts, or damages due or owing to or from the Trust Fund, to commence or defend suits or legal or administrative proceedings, and to represent the Plan and/or Trust Fund in all suits and legal and administrative proceedings (arbitration shall not be permitted to the extent the claim involves a Participant);

57 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

(k)    To invest in Treasury Bills and other forms of United States government obligations;

(l)    To deposit cash in accounts in the banking department of the Trustee or an affiliated banking organization;

(m)    To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations;

(n)    To invest and reinvest all or any portion of the Trust Fund collectively with funds of other retirement plan trusts exempt from tax under Code section 501(a), including, without limitation, the power to invest collectively with such other funds through the medium of one or more common, collective or commingled trust funds which have been or may hereafter be operated by the Trustee, the instrument or instruments establishing such trust fund or funds, as amended from time to time, being made part of this Trust so long as any portion of the Trust Fund shall be invested through the medium thereof;

(o)    To sell, either at public or private sale, option to sell, mortgage, lease for a term of years less than or continuing beyond the possible date of the termination of the Trust created hereunder, partition or exchange any real property which may from time to time constitute a portion of the Trust Fund, for such prices and upon such terms as it may deem best, and to make, execute and deliver to the purchasers thereof good and sufficient deeds of conveyance therefor and all assignments, transfers and other legal instruments, either necessary or convenient for the passing of the title and ownership thereof to the purchaser, free and discharged of all trusts and without liability on the part of such purchasers to see to the proper application of the purchase price;

(p)    To repair, alter, improve or demolish any buildings which may be on any real estate forming part of the Trust Fund or to erect entirely new structures thereon;

(q)    To renew, extend or participate in the renewal or extension of any mortgage, upon such terms as may be deemed advisable, and to agree to a reduction in the rate of interest on any mortgage or to any other modification or change in the terms of any mortgage or of any guarantee pertaining thereto, in any manner and to any extent that may be deemed advisable for the protection of the Trust Fund or the preservation of the value of the investment; to waive any default, whether in the performance of any covenant or condition of any mortgage or in the performance of any guarantee, or to enforce any such default in such manner and to such extent as may be deemed advisable; to exercise and enforce any and all rights of foreclosure, to bid on property in foreclosure, to take a deed in lieu of foreclosure with or without paying a consideration therefor, and in connection therewith to release the obligation on the bond or note secured by the mortgage; and to exercise and enforce in any action, suit or proceeding at law or in equity any rights or remedies in respect to any mortgage or guarantee;

(r)    To purchase any authorized investment at a premium or at a discount;

(s)    To purchase any annuity contract; and

(t)    To do all such acts and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to carry out the purposes of the Plan.

Section 10.04 OTHER INVESTMENT POWERS

(a)    Requirement for Preapproval. The powers granted the Trustee under Section 10.03 shall be exercised by the Trustee upon the written direction from the Investment Fiduciary pursuant to Sections 10.05 and 10.06. Any written direction of the Investment Fiduciary may be of a continuing nature, but may be revoked in writing by the Investment Fiduciary at any time. The Trustee shall comply with any direction as promptly as possible, provided it does not contravene the terms of the Plan or the provision of any applicable law. The Investment Fiduciary, by written direction, may require the Trustee to obtain written approval of the Investment Fiduciary before exercising such of its powers as may be specified in such direction. Any such direction may be of a continuing nature or otherwise and may be revoked in writing by the Investment Fiduciary at any time. The Trustee shall not be responsible for any loss that may result from the failure or refusal of the Investment Fiduciary to give any such required direction or approval.

58 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

(b)    Prohibited Transactions. The Trustee shall not engage in any prohibited transaction within the meaning of the Code and ERISA.

(c)    Legal Actions. The Trustee is authorized to execute all necessary receipts and releases and shall be under the duty to make efforts to collect such sums as may appear to be due (except contributions hereunder); provided, however, that the Trustee shall not be required to institute suit or maintain any litigation to collect the proceeds of any asset unless it has been indemnified to its satisfaction for counsel fees, costs, disbursements and all other expenses and liabilities to which it may in its judgment be subjected by such action. Notwithstanding anything to the contrary herein contained, the Trustee is authorized to compromise and adjust claims arising out of any asset held in the Trust Fund upon such terms and conditions as the Trustee may deem just, and the action so taken by the Trustee shall be binding and conclusive upon all persons interested in the Trust Fund.

(d)    Retention of Advisors. The Trustee, with the consent of the Investment Fiduciary, may retain the services of investment advisors to invest and reinvest the assets of the Trust Fund, as well as employ such legal, actuarial, medical, accounting, clerical and other assistance as may be required in carrying out the provisions of the Plan. The Trustee may also appoint custodians, subcustodians or subtrustees as to part or all of the Trust Fund.

Section 10.05 INSTRUCTIONS

(a)    Reliance on Instructions. Whenever the Trustee is permitted or required to act upon the directions or instructions of the Investment Fiduciary, Plan Administrator or Company, the Trustee shall be entitled to act in good faith upon any written communication signed by any person or agent designated to act as or on behalf of the Investment Fiduciary, Plan Administrator or Company. Such person or agent shall be so designated either under the provisions of the Plan or in writing by the Company and their authority shall continue until revoked in writing. The Trustee shall incur no liability for failure to act in good faith on such person’s or agent’s instructions or orders without written communication, and the Trustee shall be fully protected in all actions taken in good faith in reliance upon any instructions, directions, certifications and communications believed to be genuine and to have been signed or communicated by the proper person.

(b)    Designation of Agent.

(1)    Plan Sponsor. The Plan Sponsor shall notify the Trustee in writing as to the appointment, removal or resignation of any person designated to act as or on behalf of the Investment Fiduciary, Plan Administrator or Plan Sponsor. After such notification, the Trustee shall be fully protected in acting in good faith upon the directions of, or dealing with, any person designated to act as or on behalf of the Investment Fiduciary, Plan Administrator or Plan Sponsor until it receives notice to the contrary. The Trustee shall have no duty to inquire into the qualifications of any person designated to act as or on behalf of the Investment Fiduciary, Plan Administrator or Plan Sponsor.

(2)    Trustee. To the extent provided in the Adoption Agreement, if there is more than one Trustee, the Trustees may designate one or more of the Trustees to act on behalf of the Trustees. Such designated Trustee shall be authorized to take any and all actions and execute and deliver such documents as may be necessary or appropriate.

(c)    Procedures. The Trustee may adopt such rules and procedures as it deems necessary, desirable, or appropriate including, but not limited to: (1) taking action with or without formal meetings; and (2) in the event that there is more than one Trustee, a procedure specifying whether action may be taken by a less than unanimous vote.

(d)    Payment of Benefits. The Trustee shall pay benefits and expenses from the Trust Fund only upon the written direction of the Plan Administrator. The Trustee shall be fully entitled to rely in good faith on such directions furnished by the Plan Administrator, and shall be under no duty to ascertain whether the directions are in accordance with the provisions of the Plan.

59 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

Section 10.06 INVESTMENT OF THE FUND

(a)    Investment Funds. The Investment Fiduciary shall have the exclusive authority and discretion to select the Investment Funds available for investment under the Plan. In making such selection, the Investment Fiduciary shall use the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Subject to the first sentence of Subsection (b) below, the available investments under the Plan shall be sufficiently diversified so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. The Investment Fiduciary shall notify the Trustee in writing of the selection of the Investment Funds currently available for investment under the Plan, and any changes thereto.

(b)    Participant Self-Direction. To the extent permitted by the Plan Administrator and the Adoption Agreement pursuant to Section 9.02, each Participant shall have the right, in accordance with the provisions of the Plan, to direct the investment by the Trustee of all amounts allocated to the separate Accounts of the Participant under the Plan among any one or more of the available Investment Funds; provided, however, that during any transition period as may be determined by the Investment Fiduciary, the Investment Fiduciary may direct the investment by the Trustee into the Investment Funds available during such period with respect to which individual Participants’ directions shall not have been made or shall not have been permitted to be made under the Plan. All investment directions by Participants shall be timely furnished to the Trustee by the Plan Administrator, except to the extent such directions are transmitted telephonically or otherwise by Participants directly to the Trustee or its delegate in accordance with rules and procedures established and approved by the Plan Administrator and communicated to the Trustee. In making any investment of the assets of the Fund, the Trustee shall be fully entitled to rely on such directions furnished to it by the Plan Administrator or by Participants in accordance with the Plan Administrator’s approved rules and procedures, and shall be under no duty to make any inquiry or investigation with respect thereto. If the Trustee receives any contribution under the Plan that is not accompanied by instructions directing its investment, the Trustee shall notify the Plan Administrator of that fact, and the Trustee may, in its discretion, hold all or a portion of the contribution uninvested without liability for loss of income or appreciation pending receipt of proper investment directions.

(c)    Investment Managers.

(1)    Appointment of Investment Managers. The Investment Fiduciary may appoint one or more Investment Managers with respect to some or all of the assets of the Trust Fund as contemplated by section 402(c)(3) of ERISA. Any such Investment Manager shall acknowledge to the Investment Fiduciary in writing that it accepts such appointment and that it is an ERISA fiduciary with respect to the Plan and the Trust Fund. The Investment Fiduciary shall provide the Trustee with a copy of the written agreement (and any amendments thereto) between the Investment Fiduciary and the Investment Manager. By notifying the Trustee of the appointment of an Investment Manager, the Investment Fiduciary shall be deemed to certify that such Investment Manager meets the requirements of section 3(38) of ERISA. The authority of the Investment Manager shall continue until the Investment Fiduciary rescinds the appointment or the Investment Manager has resigned.

(2)    Separation of Duties. The assets with respect to which a particular Investment Manager has been appointed shall be specified by the Investment Fiduciary and shall be segregated in a separate account for the Investment Manager (the “Separate Account”) and the Investment Manager shall have the power to direct the Trustee in every aspect of the investment of the assets of the Separate Account. The Trustee shall not be liable for the acts or omissions of an Investment Manager and shall have no liability or responsibility for acting pursuant to the direction of, or failing to act in the absence of, any direction from an Investment Manager, unless the Trustee knows that by such action or failure to act it would be itself committing a breach of fiduciary duty or participating in a breach of fiduciary duty by such Investment Manager, it being the intention of the parties that each party shall have the full protection of section 405(d) of ERISA.

(d)    Proxies.

(1)    Delivery of Information. The Trustee shall deliver, or cause to be delivered, to the Company or Plan Administrator all notices, prospectuses, financial statements, proxies and proxy soliciting materials received by the Trustee relating to securities held by the Trust or, if applicable, deliver these materials to the appropriate Participant or the Beneficiary of a deceased Participant.

60 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

(2)    Voting. The Trustee shall not vote any securities held by the Trust except in accordance with the written instructions of the Company, the Investment Fiduciary, or to the extent provided in the Adoption Agreement, the Participant or the Beneficiary of the Participant, if the Participant is deceased. However, the Trustee may, in the absence of instructions, vote “present” for the sole purpose of allowing such shares to be counted for establishment of a quorum at a shareholders’ meeting. The Trustee shall have no duty to solicit instructions from Participants, Beneficiaries, the Investment Fiduciary or the Company.

(3)    Investment Manager. To the extent not delegated to Participants pursuant to Subsection (b), the Investment Manager shall be responsible for making any proxy voting or tender offer decisions with respect to securities held in the Separate Account and the Investment Manager shall maintain a record of the reasons for the manner in which it voted proxies or responded to tender offers.

(e)    Life Insurance. Any life insurance investment allowed under Article 9 shall be a permitted Investment Fund.

Section 10.07 COMPENSATION AND INDEMNIFICATION

(a)    Compensation. The Trustee shall be entitled to reasonable compensation for its services as is mutually agreed upon with the Plan Sponsor; provided that such compensation does not result in a prohibited transaction within the meaning of the Code and ERISA. If the Trustee and the Company mutually agree that the Trustee may retain as additional compensation for its services any earnings resulting from the anticipated short-term investment of funds (“float”) on Plan assets deposited in or transferred to a Trustee general or omnibus account, then the Trustee shall be authorized to retain such float; provided, that such agreement: (i) discloses the specific circumstances under which float will be earned and retained, (ii) in the case of float on distributions, discloses when the float period commences and ends, and (iii) discloses the rate of the float or the specific manner in which such rate will be determined. If approved by the Plan Administrator, the Trustee shall also be entitled to reimbursement for all direct expenses properly and actually incurred on behalf of the Plan. Such compensation or reimbursement shall be paid to the Trustee out of the Trust Fund unless paid directly by the Company.

(b)    Indemnification. Unless otherwise provided in an Addendum to the Adoption Agreement, each Company shall indemnify and hold harmless the Trustee (and its delegates) from all claims, liabilities, losses, damages and expenses, including reasonable attorneys’ fees and expenses, incurred by the Trustee in connection with its duties hereunder to the extent not covered by insurance, except when the same is due to the Trustee’s own gross negligence, willful misconduct, lack of good faith, or breach of its fiduciary duties under the Plan or ERISA.

Section 10.08 RESIGNATION AND REMOVAL

(a)    Resignation. The Trustee may resign at any time by written notice to the Plan Sponsor which shall be effective 60 days after delivery unless prior thereto a successor Trustee assumes the responsibilities of Trustee hereunder.

(b)    Removal. The Trustee may be removed by the Plan Sponsor at any time.

(c)    Successor Trustee. The appointment of a successor Trustee hereunder shall be accomplished by and shall take effect upon the delivery to the resigning or removed Trustee, as the case may be, of written notice of the Plan Sponsor appointing such successor Trustee, and an acceptance in writing of the office of successor Trustee hereunder executed by the successor so appointed. Any successor Trustee may be either a corporation authorized and empowered to exercise trust powers or one or more individuals. All of the provisions set forth herein with respect to the Trustee shall relate to each successor Trustee so appointed with the same force and effect as if such successor Trustee had been originally named herein as the Trustee hereunder. If within 45 days after notice of resignation shall have been given under the provisions of this Article a successor Trustee shall not have been appointed, the resigning Trustee or the Plan Sponsor may apply to any court of competent jurisdiction for the appointment of a successor Trustee.

(d)    Transfer of Trust Fund. Upon the appointment of a successor Trustee, the resigning or removed Trustee shall transfer and deliver the Trust Fund to such successor Trustee, after reserving such reasonable amount as it shall deem necessary to provide for its expenses in the settlement of its account, the amount of any compensation due to it and any sums chargeable against the Trust Fund for which it may be liable. If the sums so reserved are not sufficient for such purposes, the resigning or removed Trustee shall be entitled to reimbursement for any deficiency from the Plan Sponsor.

61 Copyright © 2002-2017

ARTICLE 10 TRUST FUND

Section 10.09 OTHER TRUST AGREEMENT

(a)    General. This Section 10.09 shall apply only to the extent provided in the Adoption Agreement. If this Section applies, the terms of a separate trust agreement shall apply and Sections 9.06, 10.01 through 10.08 and Article 12 shall apply only to the extent that they are not superseded by the terms of the separate trust agreement. Other Sections of the Plan shall be construed in a manner compatible with the separate trust agreement.

(b)    Trustee. The Trustee shall be the person(s) or entity listed in the separate trust agreement. The Trustee shall be obligated under the terms and conditions of the separate trust agreement as executed by the Trustee and the Plan Administrator or Sponsor.

62 Copyright © 2002-2017

ARTICLE 11 SPECIAL “TOP-HEAVY” RULES

ARTICLE 11 SPECIAL TOP-HEAVY RULES

Section 11.01 TOP-HEAVY STATUS

The special provisions set forth in this Article 11 shall apply during any Plan Year in which this Plan, together with any other retirement plans required to be aggregated under Code section 416(g) and the Treasury Regulations promulgated thereunder, is “Top-Heavy.” This Plan is Top-Heavy for any Plan Year beginning after 1983:

(a)    If the Top-Heavy Ratio for this Plan exceeds 60% and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans;

(b)    If this Plan is a part of a Required Aggregation Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group of plans exceeds 60%; or

(c)    If this Plan is a part of a Required Aggregation Group and part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%.

Section 11.02 MINIMUM ALLOCATIONS

(a)    In General. In General. Notwithstanding other provisions of this Plan, for any Plan Year during which this Plan is Top-Heavy and the Top-Heavy minimum allocation is not met solely or partially in another plan, the following shall apply:

(1)    Unless otherwise provided in the Adoption Agreement and subject to (a)(4) and (a)(5) below, a Participant specified in Subsection (a)(2) below shall receive the minimum allocation or benefit requirement applicable to Top-Heavy plans specified in (a)(3) below.

(2)    Participants Receiving Minimum Allocation/Benefit. If the Participant is not eligible to participate in a defined benefit plan in a group specified in Section 11.01 other than a frozen plan in which no additional accruals are being made, he or she shall receive the minimum allocation or benefit in this Plan or any other defined contribution plan that is sponsored by the Employer provided, he or she is (i) an Eligible Employee as described in the Adoption Agreement; and (ii) employed by the Employer on the last day of the Plan Year. If the Participant is eligible to participate in a defined benefit plan in a group specified in Section 11.01, and the Top-Heavy minimum is to be made in this Plan for such Participant, he or she shall receive the minimum allocation or benefit in this Plan or any other defined contribution plan that is sponsored by the Employer provided, he or she is (i) an Eligible Employee as described in the applicable plan document; and (ii) has completed 1,000 Hours of Service (in accordance with such defined benefit plan) during such Plan Year. In the event a Participant is entitled to a Top-Heavy minimum benefit accrual under a defined benefit plan and is not otherwise eligible for a Top-Heavy minimum allocation under this Plan because of severance of employment prior to the last day of the Plan Year, such requirement shall be waived in this Plan solely to the extent the Top-Heavy minimum is required to be given in this Plan.

(3)    Amount of Minimum Allocation/Benefit. If the Participant is not eligible to participate in a defined benefit plan in a group specified in Section 11.01, the Top-Heavy minimum allocation (“defined contribution minimum”) shall not be less than the lesser of 3% of such Participant’s Statutory Compensation or the largest percentage of Company contributions (including Elective Deferrals) and forfeitures, as a percentage of Key Employee’s Statutory Compensation, as limited by Code section 401(a)(17), allocated on behalf of any Key Employee for that Plan Year. If: (i) the Participant is eligible to participate in a defined benefit plan in a group specified in Section 11.01, (ii) satisfies the requirement in the defined benefit plan to receive the Top-Heavy minimum under the terms of that plan, and (iii) the Top-Heavy minimum is to be given in this Plan, the Top-Heavy minimum benefit (“defined benefit minimum”) shall be determined under one of the following methods:

(A)    Defined Benefit Minimum. A defined benefit minimum, which is an accrued benefit at any point in time equal to at least the product of (i) a Participant’s average annual compensation for the period of consecutive years (not exceeding five) when the Participant had the highest aggregate compensation from the Employer and (ii) the lesser of 2% per year of service or 1-year period of service (within the meaning of Code section 416), as applicable, with the Employer or 20%, subject to the rules of Code section 416 and the Regulations thereunder;

63 Copyright © 2002-2017

ARTICLE 11 SPECIAL “TOP-HEAVY” RULES

(B)    Floor Offset. A floor offset approach, pursuant to Revenue Ruling 76-259, 1976-2 C.B. 111, under which the defined benefit minimum of the defined benefit plan that is provided pursuant to Subsection (A) above is offset by the benefits provided under the defined contribution plan (or plans);

(C)    Comparability Analysis. A demonstration, using a comparability analysis of Rev. Rul. 81-202, that the plans are providing benefits at least equal to the defined benefit minimum that is provided pursuant to Subsection (A) above; or

(D)    Defined Contribution Minimum. An allocation of Employer contributions and forfeitures that are made on behalf of such Participant under this Plan (or any defined contribution plan that is sponsored by the Employer) equal to 5% of the Participant’s Statutory Compensation unless off-setting a portion of the minimum allocation in another plan or the Participant in this Plan is not a participant in the defined benefit plan. If the Plan allocates its Profit Sharing or Pension Contribution using permitted disparity (integration), it may, therefore, substitute the 3% in the first step of its allocation process with 5% (or such other amount required) in order to satisfy the Top-Heavy minimum allocation.

(4)    The minimum allocation is determined without regard to any Social Security contribution. The Top-Heavy minimum shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the Plan Year because of: (i) the Participant’s failure to complete 1,000 Hours of Service (or any equivalent provided in the Plan); (ii) the Participant’s failure to make mandatory Employee contributions to the Plan; or (iii) Compensation less than a stated amount. Except as provided in Subsections (b) and (c) below, neither Elective Deferrals nor Matching Contributions may be taken into account for the purpose of satisfying the minimum Top-Heavy contribution requirement.

(5)    Contributions under other Plans. To the extent provided in the Adoption Agreement, the minimum allocation requirement discussed in Subsection 11.02(a) may be met solely or partially in another plan. If the minimum allocation requirement of this Section 11.02 for any Plan Year is met partially in another plan, this Plan may offset the minimum required allocation in Subsection 11.02(a) by the amount allocated in or the benefit accrued in the other plan. If, after applying the requirements of Code section 416, corresponding regulations and this Article 11, the Top-Heavy minimum allocation is not satisfied, then additional contributions may be made to this Plan and/or to one or more plans that are part of the Required Aggregation Group or Permissive Aggregation Group.

(b)    Matching Contributions. Employer Matching Contributions may be taken into account for purposes of satisfying the minimum contribution requirements of Code section 416(c)(2) and the Plan. The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer Matching Contributions that are used to satisfy the minimum contribution requirements shall be treated as Matching Contributions for purposes of the ACP test and other requirements of Code section 401(m).

(c)    The Top-Heavy requirements of Code section 416 and this Section shall not apply in any year beginning after December 31, 2001, in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code sections 401(k)(11), 401(k)(12) or 401(k)(13) and Matching Contributions with respect to which the requirements of Code sections 401(m)(10), 401(m)(11) or 401(m)(12) are met; or in which the Plan is part of an “eligible combined plan” in compliance with Code section 414(x), IRS Notice 2009-71, and any superseding/subsequent guidance.

Section 11.03 MINIMUM VESTING

(a)    For any Plan Year in which this Plan is Top-Heavy, the Top-Heavy vesting schedule specified in the Adoption Agreement shall automatically apply to the Plan to the extent that it is more favorable than the vesting schedule provided for in Article 6.

64 Copyright © 2002-2017

ARTICLE 11 SPECIAL “TOP-HEAVY” RULES

For purposes of the Adoption Agreement, “2-6 Year Graded” and “3 Year Cliff” shall be determined in accordance with the following schedules:

	Years of Vesting Service	Vesting Percentage
“2-6 Year Graded”:
	Less than Two Years		0	%
	Two Years but less than Three Years		20	%
	Three Years but less than Four Years		40	%
	Four Years but less than Five Years		60	%
	Five Years but less than Six Years		80	%
	Six or More Years		100	%
“3 Year Cliff”:
	Less than Three Years		0	%
	Three or More Years		100	%

(b)    The minimum vesting schedule applies to all benefits within the meaning of Code section 411(a)(7) except those attributable to Employee contributions or those already subject to a vesting schedule which vests at least as rapidly as the schedule listed above, including benefits accrued before the effective date of Code section 416 and benefits accrued before the Plan became Top-Heavy. Further, no decrease in a Participant’s nonforfeitable percentage may occur in the event the Plan’s status as Top-Heavy changes for any Plan Year. However, this Section does not apply to the Account balances of any Employee who does not have an Hour of Service after the Plan initially became Top-Heavy and such Employee’s Account balance attributable to Company contributions and forfeitures will be determined without regard to this Section. The minimum allocation required (to the extent required to be nonforfeitable under Code section 416(b)) may not be forfeited under Code sections 411(a)(3)(B) or 411(a)(3)(D).

65 Copyright © 2002-2017

ARTICLE 12 PLAN ADMINISTRATION

ARTICLE 12 PLAN ADMINISTRATION

Section 12.01 PLAN ADMINISTRATOR

(a)    Designation. The Plan Administrator shall be specified in the Adoption Agreement. In the absence of a designation in the Adoption Agreement, the Plan Sponsor shall be the Plan Administrator. If a Committee is designated as the Plan Administrator, the Committee shall consist of one or more individuals who may be Employees appointed by the Plan Sponsor and the Committee may elect a chairman and may adopt such rules and procedures as it deems desirable. The Committee may also take action with or without formal meetings and may authorize one or more individuals, who may or may not be members of the Committee, to execute documents in its behalf.

(b)    Authority and Responsibility of the Plan Administrator. The Plan Administrator shall be the Plan “administrator” as such term is defined in section 3(16) of ERISA and as such shall have total and complete discretionary power and authority:

(1)    to make factual determinations, to construe and interpret the provisions of the Plan, to correct defects and resolve ambiguities and inconsistencies therein and to supply omissions thereto. Any construction, interpretation or application of the Plan by the Plan Administrator shall be final, conclusive and binding;

(2)    to determine the amount, form or timing of benefits payable hereunder and the recipient thereof and to resolve any claim for benefits in accordance with this Article 12;

(3)    to determine the amount and manner of any allocations and/or benefit accruals hereunder, including whether the Plan maintains an ERISA account and the manner in which amounts deposited in such ERISA account shall be allocated;

(4)    to maintain and preserve records relating to Participants, former Participants, and their Beneficiaries and Alternate Payees;

(5)    to prepare and furnish to Participants, Beneficiaries and Alternate Payees all information and notices required under applicable law or the provisions of this Plan;

(6)    to prepare and file or publish with the Secretary of Labor, the Secretary of the Treasury, their delegates and all other appropriate government officials all reports and other information required under law to be so filed or published;

(7)    to approve and enforce any loan hereunder including the repayment thereof;

(8)    to provide directions to the Trustee with respect to the purchase of life insurance (to the extent permitted in the Adoption Agreement), methods of benefit payment, valuations at dates other than regular Valuation Dates and on all other matters where called for in the Plan or requested by the Trustee;

(9)    to hire such professional assistants and consultants as it, in its sole discretion, deems necessary or advisable; and shall be entitled, to the extent permitted by law, to rely conclusively on all tables, valuations, certificates, opinions and reports which are furnished by same;

(10)    to determine all questions of the eligibility of Employees and of the status of rights of Participants, Beneficiaries and Alternate Payees;

(11)    to arrange for bonding, if required by law;

(12)    to adjust Accounts in order to correct errors or omissions;

(13)    to determine whether any domestic relations order constitutes a Qualified Domestic Relations Order and to take such action as the Plan Administrator deems appropriate in light of such domestic relations order;

66 Copyright © 2002-2017

ARTICLE 12 PLAN ADMINISTRATION

(14)    to retain records on elections and waivers by Participants, their spouses and their Beneficiaries and Alternate Payees;

(15)    to supply such information to any person as may be required;

(16)    to establish, revise from time to time, and communicate to the Trustee and/or the Investment Fiduciary and Investment Manager(s), a funding policy and method for the Plan;

(17)    to prepare and file or publish with the Secretary of Labor, the Secretary of the Treasury, their delegates and all other appropriate government officials all reports and other information required under law to be so filed or published; and

(18)    to perform such other functions and duties as are set forth in the Plan that are not specifically given to the Investment Fiduciary or Trustee.

(c)    Procedures. Unless otherwise provided in the Adoption Agreement and to the extent that the Adoption Agreement provides that the Board adopts procedures for the Plan Administrator and the Board fails to adopt such procedures, the Plan Administrator may adopt such rules and procedures as it deems necessary, desirable, or appropriate for the administration of the Plan. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon information furnished to it. The Plan Administrator’s decisions shall be binding and conclusive as to all parties.    Except as otherwise provided in a separate trust agreement, the Investment Fiduciary’s decisions shall be binding and conclusive as to all parties.

(d)    Allocation of Duties and Responsibilities. The Plan Administrator may designate other persons to carry out any of his duties and responsibilities under the Plan.

Section 12.02 INVESTMENT FIDUCIARY

(a)    Designation. The Plan Investment Fiduciary shall be designated by the Plan Sponsor. In the absence of a designation, the Plan Administrator shall be the Investment Fiduciary. The Investment Fiduciary may consist of a committee consisting of one or more individuals who may be Employees appointed by the Plan Sponsor. If a committee is appointed, the committee shall elect a chairman and may adopt such rules and procedures as it deems desirable. The committee may take action with or without formal meetings and may authorize one or more individuals, who may or may not be members of the committee, to execute documents in its behalf.

(b)    Authority and Responsibility of the Investment Fiduciary. The Investment Fiduciary shall have the following discretionary authority and responsibility:

(1)    to manage the investment of the Trust Fund;

(2)    to appoint one or more Investment Managers;

(3)    to hire such professional assistants and consultants as it, in its sole discretion, deems necessary or advisable;

(4)    to establish, revise from time to time, and communicate to the Trustee and/or Investment Manager(s), an investment policy for the Plan; and

(5)    to supply such information to any person as may be required.

(c)    Procedures. Unless otherwise provided in the Adoption Agreement and to the extent that the Adoption Agreement provides that the Board adopts procedures for the Investment Fiduciary and the Board fails to adopt such procedures, the Investment Fiduciary may adopt such rules and procedures as it deems necessary, desirable, or appropriate in furtherance of its duties hereunder. When making a determination or calculation, the Investment Fiduciary shall be entitled to rely upon information furnished to it.

67 Copyright © 2002-2017

ARTICLE 12 PLAN ADMINISTRATION

Section 12.03 COMPENSATION OF PLAN ADMINISTRATOR AND INVESTMENT FIDUCIARY

The Plan Administrator and Investment Fiduciary shall be entitled to reasonable compensation for their services as is mutually agreed upon to the extent that such compensation would not constitute a prohibited transaction within the meaning of the Code and ERISA.

Section 12.04 PLAN EXPENSES

All direct expenses of the Plan, Trustee, Plan Administrator and Investment Fiduciary or any other person in furtherance of their duties hereunder shall be paid or reimbursed by the Company, and if not so paid or reimbursed, shall be proper charges to the Trust Fund and shall be paid therefrom.

Section 12.05 ALLOCATION OF FIDUCIARY RESPONSIBILITY

A Plan fiduciary shall have only those specific powers, duties, responsibilities and obligations as are explicitly given him under the Plan and Trust Agreement. It is intended that each fiduciary shall not be responsible for any act or failure to act of another fiduciary. A fiduciary may serve in more than one fiduciary capacity with respect to the Plan.

Section 12.06 INDEMNIFICATION

Unless otherwise provided in an Addendum to the Adoption Agreement, the Company shall indemnify and hold harmless any person serving as the Investment Fiduciary and/or Plan Administrator (and their delegates) from all claims, liabilities, losses, damages and expenses, including reasonable attorneys’ fees and expenses, incurred by such persons in connection with their duties hereunder to the extent not covered by insurance, except when the same is due to such person’s own gross negligence, willful misconduct, lack of good faith, or breach of its fiduciary duties under this Plan or ERISA.

Section 12.07 CLAIMS PROCEDURES

(a)    Application for Benefits. A Participant or any other person entitled to benefits from the Plan (a “Claimant”) may apply for such benefits by completing and filing a claim with the Plan Administrator. Any such claim shall be in writing and shall include all information and evidence that the Plan Administrator deems necessary to properly evaluate the merit of and to make any necessary determinations on a claim for benefits. The Plan Administrator may request any additional information necessary to evaluate the claim.

(b)    Timing of Notice of Denied Claim. The Plan Administrator shall notify the Claimant of any adverse benefit determination within a reasonable period of time, but not later than 90 days (45 days if the claim relates to a disability determination) after receipt of the claim. This period may be extended one time by the Plan for up to 90 days (30 additional days if the claim relates to a disability determination), provided that the Plan Administrator both determines that such an extension is necessary due to matters beyond the control of the Plan and notifies the Claimant, prior to the expiration of the initial review period, of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision. If the claim relates to a disability determination, the period for making the determination may be extended for up to an additional 30 days if the Plan Administrator notifies the Claimant prior to the expiration of the first 30-day extension period.

(c)    Content of Notice of Denied Claim. If a claim is wholly or partially denied, the Plan Administrator shall provide the Claimant with a written notice identifying (1) the reason or reasons for such denial, (2) the pertinent Plan provisions on which the denial is based, (3) any material or information needed to grant the claim and an explanation of why the additional information is necessary, and (4) an explanation of the steps that the Claimant must take if he wishes to appeal the denial including a statement that the Claimant may bring a civil action under ERISA.

(d)    Appeals of Denied Claim. If a Claimant wishes to appeal the denial of a claim, he shall file a written appeal with the Plan Administrator on or before the 60th day (180th day if the claim relates to a disability determination) after he receives the Plan Administrator’s written notice that the claim has been wholly or partially denied. The written appeal shall identify both the grounds and specific Plan provisions upon which the appeal is based. The Claimant shall be provided, upon request and free of charge, documents and other information relevant to his claim. A written appeal may

68 Copyright © 2002-2017

ARTICLE 12 PLAN ADMINISTRATION

also include any comments, statements or documents that the Claimant may desire to provide. The Plan Administrator shall consider the merits of the Claimant’s written presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Plan Administrator may deem relevant. The Claimant shall lose the right to appeal if the appeal is not timely made. The Plan Administrator shall ordinarily rule on an appeal within 60 days (45 days if the claim relates to a disability determination). However, if special circumstances require an extension and the Plan Administrator furnishes the Claimant with a written extension notice during the initial period, the Plan Administrator may take up to 120 days (90 days if the claim relates to a disability determination) to rule on an appeal.

(e)    Denial of Appeal. If an appeal is wholly or partially denied, the Plan Administrator shall provide the Claimant with a notice identifying (1) the reason or reasons for such denial, (2) the pertinent Plan provisions on which the denial is based, (3) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s claim for benefits, and (4) a statement describing the Claimant’s right to bring an action under section 502(a) of ERISA. The determination rendered by the Plan Administrator shall be binding upon all parties.

(f)    Determinations of Disability. If the claim relates to a disability determination, determinations of the Plan Administrator shall include the information required under applicable United States Department of Labor regulations.

Section 12.08 WRITTEN COMMUNICATION

To the extent permitted by applicable Treasury and/or Department of Labor Regulations and accepted by the Plan Administrator and, as applicable, the Trustee, all provisions of the Plan and Trust that require written notices and elections shall be interpreted to mean authorized electronic and telephonic notices and elections. Any notice made under the terms of the Plan may be made in any electronic or telephonic method.

69 Copyright © 2002-2017

ARTICLE 13 AMENDMENT, MERGER AND TERMINATION

ARTICLE 13 AMENDMENT, MERGER AND TERMINATION

Section 13.01 AMENDMENT

The provisions of the Plan may be amended in writing at any time and from time to time by the Plan Sponsor, provided, however, that:

(a)    No amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant’s accrued benefit and no amendment shall increase the duties and liabilities of the Trustee without the Trustee’s consent. Notwithstanding the preceding sentence, a Participant’s Account balance may be reduced to the extent permitted under Code section 412(c)(8). For purposes of this Subsection, a Plan amendment which has the effect of decreasing a Participant’s Account balance, with respect to benefits attributable to service before the amendment, shall be treated as reducing an accrued benefit.

A Plan amendment may not decrease a Participant’s accrued benefits, or otherwise place greater restrictions or conditions on a Participant’s rights to Code section 411(d)(6) protected benefits, even if the amendment merely adds a restriction or condition that is permitted under the vesting rules in Code section 411(a)(3) through (11). Notwithstanding the foregoing, an amendment described in the previous sentence does not violate Code section 411(d)(6) to the extent: (1) it applies with respect to benefits that accrue after the applicable amendment date; (2) the Plan amendment changes the Plan’s Vesting Computation Period and it satisfies the applicable requirements under 29 CFR 2530.203-2(c); or (3) permitted under Code section 412(d)(2) or Treas. Reg. sections 1.411(d)-3 and 1.411(d)-4 and any superseding guidance.

No amendment to the Plan shall be effective to eliminate or restrict an optional form of benefit. The preceding sentence shall not apply to a Plan amendment that eliminates or restricts the ability of a Participant to receive payment of his or her Account balance under a particular optional form of benefit if the amendment is permitted under applicable Treasury Regulations.

A Plan amendment may also provide exceptions from the general prohibition against the elimination or restriction of optional forms of benefit for in-kind distributions and elective transfers as specified under Treas. Reg. section 1.411(d)-4 Q&A 2 and 3.

(b)    If the Plan’s vesting schedule is amended, in the case of an Employee who is a Participant as of the later of the date the amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee’s Employer-derived accrued benefit will not be less than the percentage computed under the Plan without regard to such amendment.

(c)    If the Plan’s vesting schedule is amended, or the Plan is amended in any way that directly or indirectly affects the computation of the Participant’s nonforfeitable percentage or if the Plan is deemed amended by an automatic change to or from a Top-Heavy vesting schedule, each Participant with at least 3 Years of Vesting Service with the Employer may elect, within a reasonable period after the adoption of the amendment or change, to have the nonforfeitable percentage computed under the Plan without regard to such amendment or change. For Participants who do not have at least 1 Hour of Service in any Plan Year beginning after December 31, 1988, the preceding sentence shall be applied by substituting “5 Years of Vesting Service” for “3 Years of Vesting Service” where such language appears. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of:

(1)    60 days after the amendment is adopted;

(2)    60 days after the amendment becomes effective; or

(3)    60 days after the Participant is issued written notice of the amendment by the Plan Administrator.

The election provided for in this Section 13.01 shall be made in writing and shall be irrevocable when made.

70 Copyright © 2002-2017

ARTICLE 13 AMENDMENT, MERGER AND TERMINATION

(d)    Code section 411(d)(6) protected benefits will be available without regard to Employer discretion in accordance with Treas. Reg. section 1.411(d)(4), Q & A’s #8 & 9.

(e)    Amendment to Other Vesting Provisions.

(1)    Except as provided in Subsection (e)(2), a plan amendment may not decrease a Participant’s accrued benefits, or otherwise place greater restrictions or conditions on a Participant’s rights to Code section 411(d)(6) protected benefits, even if the amendment merely adds a restriction or condition that is permitted under the vesting rules in Code section 411(a)(3) through (11).

(2)    An amendment described in Subsection (e)(2) does not violate Code section 411(d)(6) to the extent: (i) it applies with respect to benefits that accrue after the applicable amendment date; or (ii) the plan amendment changes the Plan’s vesting computation period and it satisfies the applicable requirements under 29 CFR 2530.203-2(c).

(f)    An amendment or restatement of the Plan may be made by any method including a formal record of action by the Board or other written document and execution of such amendment or restatement may be made by written or electronic means.

Section 13.02 MERGER AND TRANSFER

(a)    Merger. In the event of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each Participant shall have a benefit in the surviving or transferee plan (as if such plan were then terminated immediately after such merger, consolidation or transfer) that is equal to or greater than the benefit he would have had immediately before such merger, consolidation or transfer in the plan in which he was then a Participant had such plan been terminated at that time.

(b)    Transfer. The Plan Administrator may direct the Trustee to accept assets and related liabilities from another qualified plan provided that it receives sufficient evidence that the transferor plan is a tax-qualified plan. The Plan Administrator may direct the Trustee to transfer assets and related liabilities to another qualified plan provided that it receives sufficient evidence that the transferee plan is a tax-qualified plan.

Section 13.03 TERMINATION

(a)    It is the intention of the Plan Sponsor that this Plan will be permanent. However, the Plan Sponsor reserves the right to terminate the Plan at any time for any reason.

(b)    Each entity constituting the Company reserves the right to terminate its participation in this Plan. Each such entity constituting the Company shall be deemed to terminate its participation in the Plan if: (1) it is a party to a merger in which it is not the surviving entity and the surviving entity is not an affiliate of another entity constituting the Company; or (2) it sells all or substantially all of its assets to an entity that is not an affiliate of another entity constituting the Company.

(c)    Any termination of the Plan shall become effective as of the date designated by the Plan Sponsor. Except as expressly provided elsewhere in the Plan, prior to the satisfaction of all liabilities with respect to the benefits provided under this Plan, no termination shall cause any part of the funds or assets held to provide benefits under the Plan to be used other than for the benefit of Participants or to meet the administrative expenses of the Plan. In the event of the termination or partial termination of the Plan the Account balance of each affected Participant will be nonforfeitable. In the event of a partial termination of the Plan the Account balance of each affected Participant will be nonforfeitable. In the event of a complete discontinuance of contributions under the Plan, the Account balance of each affected Participant will be nonforfeitable. Upon termination of the Plan, Participant Accounts shall be distributed in a single lump sum payment unless otherwise required pursuant to Article 7.

71 Copyright © 2002-2017

ARTICLE 14 MISCELLANEOUS

ARTICLE 14 MISCELLANEOUS

Section 14.01 NONALIENATION OF BENEFITS

(a)    Except as provided in Section 14.01(b), the Trust Fund shall not be subject to any form of attachment, garnishment, sequestration or other actions of collection afforded creditors of the Company, Participants or Beneficiaries under the Plan and all payments, benefits and rights shall be free from attachment, garnishment, trustee’s process, or any other legal or equitable process available to any creditor of such Company, Participant or Beneficiary. Except as provided in Section 14.01(b), no Participant or Beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which he may expect to receive, contingently or otherwise, under the Plan, except the right to designate a Beneficiary. Any reference to a Participant or Beneficiary shall include an Alternate Payee or the Beneficiary of an Alternate Payee.

(b)    Notwithstanding the foregoing, the Trustee and/or Plan Administrator may:

(1)    Subject to Section 14.02 below, comply with the provisions and conditions of any Qualified Domestic Relations Order pursuant to the provisions of Code section 414(p).

(2)    Comply with any federal tax levy made pursuant to Code section 6331.

(3)    Subject to the provisions of Code section 401(a)(13), comply with the provisions and conditions of a judgment, order, decree or settlement agreement issued on or after August 5, 1997 between the Participant and the Secretary of Labor or the Pension Benefit Guaranty Corporation relating to a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA.

(4)    Bring action to recover benefit overpayments.

Section 14.02 RIGHTS OF ALTERNATE PAYEES

(a)    General. An Alternate Payee shall have no rights to a Participant’s benefit and shall have no rights under this Plan other than those rights specifically granted to the Alternate Payee pursuant to a Qualified Domestic Relations Order that are consistent with this Section 14.02.

(b)    Distribution. Notwithstanding any provision of the Plan to the contrary, the Plan Administrator may direct the Trustee to distribute all or a portion of a Participant’s benefits under the Plan to an Alternate Payee in accordance with the terms and conditions of a Qualified Domestic Relations Order. The Plan hereby specifically permits and authorizes distribution of a Participant’s benefits under the Plan to an Alternate Payee in accordance with a Qualified Domestic Relations Order prior to the date the Participant has a Termination of Employment, or prior to the date the Participant attains his earliest retirement age as defined in Code section 414(p). Unless otherwise provided in the Adoption Agreement, the preceding sentence does not apply to the Participant’s ESOP Account.

(c)    Investment Funds. If the Qualified Domestic Relations Order does not specify the Participant’s Accounts, or Investment Funds in which such Accounts are invested, from which amounts that are separately accounted for shall be paid to an Alternate Payee, such amounts shall be distributed, or segregated, from the Participant’s Accounts, and the Investment Funds in which such Accounts are invested (excluding any amounts invested as a Participant loan), on a pro rata basis. A Qualified Domestic Relations Order may not provide for the assignment to an Alternate Payee of an amount that exceeds the balance of the Participant’s vested Accounts after deduction of any outstanding loan.

(d)    Default Rules. Unless a Qualified Domestic Relations Order establishing a separate account for an Alternate Payee provides to the contrary:

(1)    Death Benefits. An Alternate Payee shall have the right to designate a Beneficiary who shall receive benefits payable to an Alternate Payee which have not been distributed at the time of the Alternate Payee’s death. If the Alternate Payee does not designate a Beneficiary, or if the Beneficiary predeceases the Alternate Payee, benefits payable to the Alternate Payee which have not been distributed shall be paid pursuant to Section 7.04(c) (substituting “Alternate Payee” for “Participant”). Any death benefit payable to the Beneficiary of an Alternate Payee shall be paid in a single sum as soon as administratively practicable after the Alternate Payee’s death.

72 Copyright © 2002-2017

ARTICLE 14 MISCELLANEOUS

(2)    Investment Direction. An Alternate Payee shall have the right to direct the investment of any portion of a Participant’s Accounts payable to the Alternate Payee under such order in the same manner with respect to a Participant, which amounts shall be separately accounted for by the Trustee in the Alternate Payee’s name.

(3)    Voting Rights. An Alternate Payee shall have the right to direct the Trustee as to the exercise of voting rights in the same manner as provided with respect to a Participant.

(e)    Withdrawals/Loans. An Alternate Payee shall not be permitted to make any withdrawals under Article 8 and shall not be permitted to make a loan from the separate Account established for the Alternate Payee pursuant to the Qualified Domestic Relations Order.

(f)    Treatment as Spouse. A former spouse may be treated as the spouse or surviving spouse and a current spouse will not be treated as the spouse or surviving spouse to the extent provided under a Qualified Domestic Relations Order.

(g)    Plan Procedures. Effective April 6, 2007, pursuant to DOL regulation 2530.206, a domestic relations order will not fail to be a Qualified Domestic Relations Order solely because the domestic relations order: (1) revises or is issued after another domestic relations order or Qualified Domestic Relations Order, or (2) the domestic relations order is issued after the Participant’s death, divorce or Annuity Starting Date..

Section 14.03 NO RIGHT TO EMPLOYMENT

Nothing contained in this Plan shall be construed as a contract of employment between the Employer and the Participant, or as a right of any Employee to continue in the employment of the Employer, or as a limitation of the right of the Employer to discharge any of its Employees, with or without cause.

Section 14.04 NO RIGHT TO TRUST ASSETS

No Employee, Participant, former Participant, Beneficiary or Alternate Payee shall have any rights to, or interest in, any assets of the Trust upon Termination of Employment or otherwise, except as specifically provided under the Plan. All payments of benefits under the Plan shall be made solely out of the assets of the Trust.

Section 14.05 GOVERNING LAW

This Plan shall be construed in accordance with and governed by the laws of the state or commonwealth specified in the Adoption Agreement to the extent not preempted by Federal law.

Section 14.06 SEVERABILITY OF PROVISIONS

If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included.

Section 14.07 HEADINGS AND CAPTIONS

The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

Section 14.08 GENDER AND NUMBER

Except where otherwise clearly indicated by context, the masculine and the neuter shall include the feminine and the neuter, the singular shall include the plural, and vice-versa.widctlpar

73 Copyright © 2002-2017

ARTICLE 14 MISCELLANEOUS

Section 14.09 DISASTER RELIEF

The Plan may grant temporary disaster relief in compliance with Code sections 1400M and 1400Q, and subsequent guidance and/or law, to the extent provided in a resolution by the Plan Sponsor. Such resolution by the Plan Sponsor may include, but is not limited to: (a) increasing the statutory limits on, delaying the repayment of, and/or waiving the adequate security requirement for Participants loans; (b) permitting qualified disaster distributions; and/or (c) permitting the re-contribution of prior disaster distributions by Participants.

74 Copyright © 2002-2017

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement of PCSB Financial Corporation (proposed holding company for PCSB Bank) on Pre-Effective Amendment No. 1 to Form S-1 of our report dated October 25, 2016 on the consolidated financial statements of PCSB Bank and Subsidiaries and to the reference to us under the heading “Experts” in the prospectus,

Crowe Horwath LLP

New York, New York

February 1, 2017

EX-99.3

Exhibit 99.3

1100 North Glebe Road Suite 600

Arlington, Virginia 22201

703.528.1700

rpfinancial.com

January 20, 2017

Board of Directors

PCSB Financial Corporation

Board of Trustees

PCSB Bank

2651 Strang Boulevard

Suite 100

Yorktown Heights, New York 10598

Members of the Boards of Directors and Trustees:

We have completed and hereby provide an updated appraisal of the estimated pro forma market value of the common stock which is to be issued in connection with the mutual-to-stock conversion described below.

This updated appraisal is furnished pursuant to the requirements stipulated in the Code of Federal Regulations and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” (the “Valuation Guidelines”) of the Office of Thrift Supervision (“OTS”) and accepted by the Federal Reserve Board (“FRB”), the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”) and the New York State Department of Financial Services (the “Department”), and applicable regulatory interpretations thereof. Our original appraisal report, dated November 11, 2016 (the “Original Appraisal”), is incorporated herein by reference. As in the preparation of our Original Appraisal, we believe the data and information used herein is reliable; however, we cannot guarantee the accuracy and completeness of such information.

On December 7, 2016, the Board of Trustees of the PCSB Bank or the “Bank” adopted a plan of conversion, incorporated herein by reference, in which the Bank will convert from a New York mutual savings bank to a New York stock bank and become a wholly-owned subsidiary of PCSB Financial Corporation (“PCSB Financial” or the “Company”), a newly formed Maryland corporation.

PCSB Financial will offer its common stock in a subscription offering to Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans including PCSB Bank’s employee stock ownership plan (the “ESOP”) and Supplemental Eligible Account Holders, as such terms are defined for purposes of applicable federal regulatory guidelines governing mutual-to-stock conversions. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a community offering and/or a syndicated/firm commitment offering. A portion of the net proceeds received from the sale of the common stock will be used to purchase all of the then to be issued and outstanding capital stock of PCSB Bank and the balance of the net proceeds will be retained by the Company.

Washington Headquarters
Three Ballston Plaza	Telephone: (703) 528-1700
1100 North Glebe Road, Suite 600	Fax No.: (703) 528-1788
Arlington, VA 22201	Toll-Free No.: (866) 723-0594
www.rpfinancial.com	E-Mail: mail@rpfinancial.com

Board of Directors

Boards of Trustees

January 20, 2017

Page 2

At this time, no other activities are contemplated for the Company other than the ownership of the Bank, a loan to the newly-formed ESOP and reinvestment of the proceeds that are retained by the Company. In the future, PCSB Financial may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends or repurchase its stock, although there are no specific plans to undertake such activities at the present time.

The plan of conversion provides for the establishment of a new charitable foundation (the “Foundation”). The Foundation contribution will total $5.0 million and will be funded with PCSB Financial common stock contributed by the Company in an amount equal to 1.9% of the shares of common stock sold in the offering and the remainder in cash. The purpose of the Foundation is to provide financial support to charitable organizations in the communities in which PCSB Bank operates and to enable those communities to share in the Bank’s long-term growth. The Foundation will be dedicated completely to community activities and the promotion of charitable causes.

This updated appraisal reflects the following noteworthy items: (1) a review of recent developments in PCSB Bank’s financial condition, including financial data through December 31, 2016; (2) an updated comparison of PCSB Bank’s financial condition and operating results versus the Peer Group companies identified in the Original Appraisal; and (3) a review of stock market conditions since the date of the Original Appraisal.

The estimated pro forma market value is defined as the price at which PCSB Financial’s common stock, immediately upon completion of the public stock offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Our valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the pro forma market value thereof. RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits the company, its principals or employees from purchasing stock of its client institutions.

Discussion of Relevant Considerations

1. Financial Results

Table 1 presents summary balance sheet and income statement details for the twelve months ended September 30, 2016 and updated financial information through December 31, 2016. PCSB Bank’s assets decreased by $13.6 million or 1.08% from September 30, 2016 to December 31, 2016. Cash and cash equivalents and investment securities accounted for most of the decline in assets during the quarter ended December 31, 2016, which was partially offset by an increase in net loans receivable. Overall, cash and investments (inclusive of FHLB stock) decreased from $436.7 million or 34.81% of assets at September 30, 2016 to $417.6 million or 33.65% of assets at December 31, 2016. Net loans receivable increased from $763.9 million or 60.90% of assets at September 30, 2016 to $766.7 million or 61.79% of assets at December 31, 2016. The respective balances for bank-owned life insurance and goodwill/intangibles increased slightly and decreased slightly during the quarter ended December 31, 2016 to equal $22.9 million or 1.84% of assets and $6.7 million or 0.54% of assets at December 31, 2016.

Board of Directors

Boards of Trustees

January 20, 2017

Page 3

Table 1

PCSB Bank

Recent Financial Data

	At September, 2016						At December 31, 2016
	Amount			Assets			Amount			Assets
	($000)			(%)			($000)			(%)
Balance Sheet Data
Total assets	$	1,254,444			100.00	%	$	1,240,883			100.00	%
Cash, cash equivalents		60,423			4.82			48,327			3.89
Investment securities		374,662			29.87			367,954			29.65
Loans receivable, net		763,915			60.90			766,681			61.79
FHLB stock		1,641			0.13			1,324			0.11
Goodwill and core deposit intangible		6,772			0.54			6,735			0.54
Bank-owned life insurance		22,724			1.81			22,885			1.84
Deposits		1,116,837			89.03			1,107,720			89.27
Borrowings		11,051			0.88			4,022			0.32
Total equity		111,506			8.89			112,757			9.09
Tangible equity		104,734			8.35			106,022			8.54
	12 Months Ended						12 Months Ended
	September 30, 2016						December 31, 2016
	Amount			Avg. Assets			Amount			Avg. Assets
	($000)			(%)			($000)			(%)
Summary Income Statement
Interest income	$	39,490			3.20	%	$	39,782			3.20	%
Interest expense		(4,967	)		(0.40	)		(5,103	)		(0.41	)
Net interest income		34,523			2.80			34,679			2.79
Provisions for loan losses		(1,844	)		(0.15	)		(2,050	)		(0.16	)
Net interest income after prov.		32,679			2.65			32,629			2.63
Non-interest operating income		2,075			0.17			2,249			0.18
Loan settlement		—			0.00			1,615			0.13
Merger and acq. related expenses		(668	)		(0.05	)		(629	)		(0.05	)
Non-interest operating expense		(29,748	)		(2.41	)		(30,101	)		(2.42	)
Income before income tax expense		4,338			0.35			5,763			0.47
Income taxes		(1,212	)		(0.10	)		(1,692	)		(0.14	)
Net income	$	3,126			0.25	%	$	4,071			0.33	%

Sources: PCSB Bank’s prospectus, audited and unaudited financial statements, and RP Financial calculations.

Board of Directors

Boards of Trustees

January 20, 2017

Page 4

Updated credit quality measures for the Bank remained favorable, although the balance of non-performing assets increased slightly during the quarter ended December 31, 2016. PCSB Bank’s non-performing assets increased from $9.8 million or 0.78% of assets at September 30, 2016 to $11.1 million or 0.90% of assets at December 31, 2016. An Increase in real estate owned accounted for most of the increase in the non-performing assets balance.

The Bank’s funding composition showed decreases in deposits and borrowings during the quarter ended December 31, 2016, which was funded by asset shrinkage. Deposits decreased from $1.117 billion or 89.03% of assets at September 30, 2016 to $1.108 billion or 89.27% of assets at December 31, 2016. Deposit run-off during the quarter was largely attributable to a decline in certificates of deposit (“CDs”). A decrease in FHLB advances reduced the balance of borrowings from $11.1 million or 0.88% of assets at September 30, 2016 to $4.0 million or 0.32% of assets at December 31, 2016. PCSB Bank’s tangible equity increased from $104.7 million to $106.0 million during the quarter ended December 31, 2016, which combined with asset shrinkage provided for an increase in the Bank’s tangible equity-to-assets ratio from 8.35% at September 30, 2016 to 8.54% at December 31, 2016.

PCSB Bank’s operating results for the twelve months ended September 30, 2016 and December 31, 2016 are also set forth in Table 1. The Bank’s reported earnings increased from $3.1 million or 0.25% of average assets for the twelve months ended September 30, 2016 to $4.1 million or 0.33% of average assets for the twelve months ended December 31, 2016. The increase in net income was mostly due to a $1.6 million settlement on a loan charged–off by CMS Bank prior to the merger, which was recorded during the three months ended December 31, 2016. Increases in net interest and non-interest operating, as well as a slight decrease in merger and acquisition related expenses, also contributed to the increase in the Bank’s updated earnings. Higher operating expenses and loan loss provisions partially offset the increase in the Bank’s updated earnings.

PCSB Bank’s net interest income was up slightly during the most recent twelve month period, which was realized through a more significant increase in interest income relative to interest expense. Growth in interest income was driven by an increase in the average balance of interest-earning assets during the three months ended December 31, 2016 compared to the year ago quarter, as well as by a four basis point increase in the average yield on interest-earning assets to 3.33% for the three months ended December 31, 2016 as compared to 3.29% for the three months ended December 31, 2015. Similarly, the increase in interest expense was due to an increase in the average balance of interest-bearing liabilities during the three months ended December 31, 2016 compared to the year ago quarter, as well as by a four basis point increase in the average cost of interest-bearing liabilities to 0.53% for the three months ended December 31, 2016 as compared to 0.49% for the three months ended December 31, 2015. Overall, net interest income increased from $34.5 million or 2.80% of average assets during the twelve months ended September 30, 2016 to $34.7 million or 2.79% of average assets during the twelve months ended December 31, 2016.

Board of Directors

Boards of Trustees

January 20, 2017

Page 5

Operating expenses increased from $29.7 million or 2.41% of average assets during the twelve months ended September 30, 2016 to $30.1 million or 2.42% of average assets during the twelve months ended December 31, 2016. Overall, PCSB Bank’s updated ratios for net interest income and operating expenses provided for a similar expense coverage ratio (net interest income divided by operating expenses). PCSB Bank’s expense coverage ratio decreased from 1.16x for the twelve months ended September 30, 2016 to 1.15x for the twelve months ended December 31, 2016.

Non-interest operating income increased from $2.1 million or 0.17% of average assets during the twelve months ended September 30, 2016 to $2.2 million or 0.18% of average assets during the twelve months ended December 31, 2016. Overall, when factoring non-interest operating income into core earnings, the Bank’s updated efficiency ratio of 81.48% (operating expenses as a percent of net interest income and non-interest operating income) was similar to the 81.14% efficiency ratio recorded for the twelve months ended September 30, 2016.

Loan loss provisions were slightly higher during the most recent twelve month period, increasing from $1.8 million or 0.15% of average assets during the twelve months ended September 30, 2016 to $2.1 million or 0.16% of average assets during the twelve months ended December 31, 2016. The Bank maintained allowances for loan losses of $4.6 million at December 31, 2016, equal to 0.60% of total loans and 51.83% of non-accruing loans.

The Bank’s updated earnings showed an increase in non-operating income during the most recent twelve month period, which was mostly due to a $1.6 million settlement recorded on a loan charged-off by CMS Bank prior to the merger. To a lesser extent, the increase non-interest operating income was due to a slight decrease in merger and acquisition related expenses during the most recent twelve month period. Overall, net non-operating income increased from a loss of $668,000 or 0.05% of average assets during the twelve months ended September 30, 2016 to income of 986,000 or 0.08% of average assets during the twelve months ended December 31, 2016.

The income tax expense increased from $1.2 million or 0.10% of average assets for the twelve months ended September 30, 2016 to $1.7 million or 0.14% of average assets for the twelve months ended December 31, 2016.

2. Peer Group Financial Comparisons

Tables 2 and 3 present the financial characteristics and operating results for PCSB Bank, the Peer Group and all publicly-traded thrifts. The Bank’s and the Peer Group’s ratios are based on financial results through December 31, 2016 and September 30, 2016, respectively.

In general, the comparative balance sheet ratios for the Bank and the Peer Group did not vary significantly from the ratios exhibited in the Original Appraisal. Consistent with the Original Appraisal, the Bank’s updated interest-earning asset composition reflected a lower concentration of loans and a higher concentration of cash and investments. Overall, the Bank’s and the Peer Group’s updated interest-earning assets-to-assets ratios equaled 95.44% and 95.23%, respectively.

Board of Directors

Boards of Trustees

January 20, 2017

Page 6

Table 2

Balance Sheet Composition and Growth Rates

Comparable Institution Analysis

As of September 30, 2016

			Balance Sheet as a Percent of Assets
			Cash &			MBS &						Net						Borrowed			Sub.			Total			Goodwill			Tangible
			Equivalents			Invest			BOLI			Loans (1)			Deposits			Funds			Debt			Equity			& Intang			Equity
PCSB Bank		NY
December 31, 2016				3.89	%		29.76	%		1.84	%		61.79	%		89.27	%		0.32	%		0.00	%		9.09	%		0.54	%		8.54	%
All Public Companies
Averages				5.60	%		16.64	%		1.84	%		72.37	%		73.77	%		11.70	%		0.47	%		12.77	%		0.74	%		12.03	%
Medians				3.72	%		14.60	%		1.78	%		75.08	%		73.31	%		11.45	%		0.00	%		11.52	%		0.09	%		11.09	%
State of  NY
Averages				4.43	%		12.78	%		1.47	%		77.80	%		73.53	%		14.13	%		0.83	%		10.05	%		1.25	%		8.80	%
Medians				1.95	%		10.13	%		1.53	%		78.61	%		74.43	%		13.30	%		0.36	%		9.69	%		0.81	%		8.17	%
Comparable Group
Averages				4.92	%		17.93	%		1.74	%		72.38	%		72.36	%		13.73	%		0.41	%		12.34	%		0.40	%		11.94	%
Medians				3.51	%		14.03	%		1.48	%		72.94	%		73.61	%		14.87	%		0.00	%		10.50	%		0.11	%		9.40	%
Comparable Group
BLMT	BSB Bancorp, Inc.	MA		2.41	%		8.74	%		0.00	%		86.19	%		68.77	%		22.81	%		0.00	%		7.56	%		0.00	%		7.56	%
CSBK	Clifton Bancorp Inc.	NJ		1.73	%		25.04	%		4.64	%		67.18	%		58.86	%		17.11	%		0.00	%		23.08	%		0.00	%		23.08	%
ESSA	ESSA Bancorp, Inc.	PA		2.53	%		22.90	%		2.06	%		68.79	%		68.54	%		20.31	%		0.00	%		9.95	%		0.92	%		9.03	%
FCAP	First Capital, Inc.	IN		11.58	%		33.58	%		0.95	%		49.71	%		88.77	%		0.00	%		0.00	%		10.61	%		1.05	%		9.56	%
HMNF	HMN Financial, Inc.	MN		5.05	%		11.80	%		0.00	%		79.70	%		86.37	%		1.31	%		0.00	%		10.91	%		0.19	%		10.73	%
MLVF	Malvern Bancorp, Inc.	PA		11.78	%		13.68	%		2.24	%		69.91	%		73.31	%		14.37	%		0.00	%		11.52	%		0.00	%		11.52	%
PBHC	Pathfinder Bancorp, Inc.	NY		3.30	%		26.04	%		1.59	%		65.16	%		77.41	%		11.45	%		2.09	%		8.27	%		0.66	%		7.60	%
SIFI	SI Financial Group, Inc.	CT		4.12	%		12.14	%		1.37	%		78.49	%		73.92	%		13.56	%		0.54	%		10.39	%		1.15	%		9.24	%
WSBF	Waterstone Financial, Inc.	WI		3.03	%		14.37	%		3.41	%		75.98	%		53.24	%		21.06	%		0.00	%		22.82	%		0.03	%		22.78	%
WEBK	Wellesley Bancorp, Inc.	MA		3.72	%		10.96	%		1.09	%		82.66	%		74.42	%		15.36	%		1.47	%		8.31	%		0.00	%		8.31	%

			Balance Sheet Annual Growth Rates																					Regulatory Capital
						MBS, Cash &									Borrows.			Total			Tangible			Tier 1			Tier 1			Risk-Based
			Assets			Investments			Loans (1)			Deposits			&Subdebt			Equity			Equity			Leverage			Risk-Based			Capital
PCSB Bank		NY
December 31, 2016				2.21	%		-2.59	%		3.58	%		2.94	%		-59.19	%		1.50	%		1.01	%		9.28	%		14.02	%		14.59	%
All Public Companies
Averages				14.12	%		8.79	%		17.61	%		15.87	%		17.03	%		9.70	%		10.61	%		12.18	%		18.37	%		19.49	%
Medians				10.15	%		1.99	%		14.36	%		11.19	%		0.79	%		3.79	%		1.67	%		11.09	%		15.49	%		16.70	%
State of  NY
Averages				4.77	%		-9.73	%		6.33	%		7.01	%		9.13	%		7.21	%		3.72	%		9.54	%		14.67	%		15.79	%
Medians				1.35	%		-9.96	%		5.60	%		2.39	%		-4.84	%		4.10	%		3.78	%		9.92	%		13.63	%		14.98	%
Comparable Group
Averages				17.81	%		18.09	%		19.90	%		18.67	%		118.12	%		5.86	%		1.90	%		12.76	%		18.04	%		19.15	%
Medians				13.37	%		7.82	%		17.37	%		11.63	%		13.46	%		6.30	%		0.40	%		11.51	%		17.04	%		18.27	%
Comparable Group
BLMT	BSB Bancorp, Inc.	MA		22.53	%		10.90	%		25.19	%		18.00	%		0.00	%		9.22	%		6.71	%		11.32	%		13.66	%		14.91	%
CSBK	Clifton Bancorp Inc.	NJ		13.72	%		-20.69	%		30.17	%		13.80	%		81.05	%		-10.46	%		-8.19	%		8.50	%		11.84	%		12.45	%
ESSA	ESSA Bancorp, Inc.	PA		10.33	%		4.73	%		10.62	%		10.77	%		12.36	%		2.96	%		-2.45	%		13.41	%		18.58	%		19.84	%
FCAP	First Capital, Inc.	IN		55.64	%		152.11	%		20.51	%		63.63	%		0.00	%		32.06	%		32.12	%		14.16	%		20.23	%		21.48	%
HMNF	HMN Financial, Inc.	MN		10.78	%		-17.71	%		24.96	%		11.41	%		875.30	%		8.91	%		-8.89	%		11.00	%		12.59	%		13.85	%
MLVF	Malvern Bancorp, Inc.	PA		25.25	%		24.07	%		46.73	%		29.33	%		14.56	%		16.22	%		6.13	%		15.51	%		23.11	%		23.86	%
PBHC	Pathfinder Bancorp, Inc.	NY		18.10	%		11.93	%		14.24	%		11.84	%		182.48	%		-16.73	%		2.81	%		11.69	%		21.65	%		22.91	%
SIFI	SI Financial Group, Inc.	CT		5.81	%		4.39	%		5.60	%		8.99	%		-6.82	%		3.80	%		-2.02	%		10.11	%		15.49	%		16.70	%
WSBF	Waterstone Financial, Inc.	WI		2.88	%		-15.99	%		11.29	%		9.45	%		-12.91	%		4.85	%		-12.97	%		22.66	%		31.06	%		32.25	%
WEBK	Wellesley Bancorp, Inc.	MA		13.02	%		27.11	%		9.68	%		9.52	%		35.17	%		7.75	%		5.74	%		9.28	%		12.21	%		13.29	%

(1) Includes loans held for sale.

(2) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

Source: SNL Financial, LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2017 by RP^® Financial, LC.

Board of Directors

Boards of Trustees

January 20, 2017

Page 7

Table 3

Income as Percent of Average Assets and Yields, Costs, Spreads

Comparable Institution Analysis

For the 12 Months Ended September 30, 2016

						Net Interest Income															Non-Interest Income
															Loss			NII			Recurring			Other			Total
			Net												Provis.			After			Gain on Sale			Non-Int			Non-Int
			Income			Income			Expense			NII			on IEA			Provis.			of Loans			Income			Expense
			(%)			(%)			(%)			(%)			(%)			(%)			(%)			(%)			(%)
PCSB Bank		NY
December 31, 2016				0.33	%		3.20	%		0.41	%		2.79	%		0.16	%		2.63	%		0.00	%		0.18	%		2.42	%
All Public Companies
Averages				0.70	%		3.54	%		0.59	%		2.95	%		0.07	%		2.87	%		0.35	%		0.54	%		2.77	%
Medians				0.62	%		3.52	%		0.56	%		2.92	%		0.07	%		2.86	%		0.06	%		0.43	%		2.65	%
State of NY
Averages				0.54	%		3.50	%		0.72	%		2.78	%		0.05	%		2.73	%		0.19	%		0.41	%		2.46	%
Medians				0.49	%		3.56	%		0.79	%		2.82	%		0.07	%		2.74	%		0.03	%		0.43	%		2.35	%
Comparable Group
Averages				0.74	%		3.49	%		0.68	%		2.81	%		0.10	%		2.71	%		0.74	%		0.43	%		2.89	%
Medians				0.54	%		3.40	%		0.68	%		2.71	%		0.13	%		2.55	%		0.07	%		0.49	%		2.58	%
Comparable Group
BLMT	BSB Bancorp, Inc.	MA		0.57	%		3.13	%		0.70	%		2.43	%		0.14	%		2.29	%		0.01	%		0.14	%		1.52	%
CSBK	Clifton Bancorp Inc.	NJ		0.36	%		3.04	%		0.83	%		2.20	%		0.16	%		2.05	%		0.00	%		0.15	%		1.69	%
ESSA	ESSA Bancorp, Inc.	PA		0.45	%		3.37	%		0.66	%		2.71	%		0.15	%		2.56	%		0.00	%		0.43	%		2.46	%
FCAP	First Capital, Inc.	IN		0.89	%		3.43	%		0.24	%		3.19	%		0.06	%		3.13	%		0.16	%		0.68	%		2.67	%
HMNF	HMN Financial, Inc.	MN		0.89	%		4.13	%		0.24	%		3.89	%		-0.03	%		3.92	%		0.37	%		0.86	%		3.70	%
MLVF	Malvern Bancorp, Inc.	PA		1.59	%		3.36	%		0.89	%		2.46	%		0.13	%		2.33	%		0.13	%		0.55	%		1.85	%
PBHC	Pathfinder Bancorp, Inc.	NY		0.48	%		3.58	%		0.53	%		3.05	%		0.16	%		2.89	%		0.01	%		0.56	%		2.89	%
SIFI	SI Financial Group, Inc.	CT		0.42	%		3.38	%		0.66	%		2.72	%		0.17	%		2.55	%		0.08	%		0.62	%		2.63	%
WSBF	Waterstone Financial, Inc.	WI		1.26	%		3.59	%		1.26	%		2.33	%		0.03	%		2.30	%		6.60	%		0.12	%		6.96	%
WEBK	Wellesley Bancorp, Inc.	MA		0.50	%		3.90	%		0.75	%		3.15	%		0.08	%		3.07	%		0.06	%		0.21	%		2.54	%

			Non-Op. Items									Yields, Costs, and Spreads
									Provision												MEMO:		MEMO:
			Net Gains/			Extrao.			for			Yield			Cost			Yld-Cost			Assets/		Effective
			Losses (2)			Items			Taxes			On IEA			Of IBL			Spread			FTE Emp.		Tax Rate
			(%)			(%)			(%)			(%)			(%)			(%)					(%)
PCSB Bank		NY
December 31, 2016				0.08	%		0.00	%		0.14	%		3.35	%		0.52	%		2.83	%	$	7,343		29.36	%
All Public Companies
Averages				-0.01	%		0.00	%		0.27	%		3.78	%		0.79	%		2.99	%	$	7,034		22.93	%
Medians				0.00	%		0.00	%		0.28	%		3.73	%		0.73	%		2.96	%	$	5,792		32.98	%
State of NY
Averages				-0.03	%		0.00	%		0.30	%		3.70	%		1.09	%		2.61	%	$	8,189		32.08	%
Medians				0.02	%		0.00	%		0.21	%		3.76	%		1.00	%		2.86	%	$	5,819		32.84	%
Comparable Group
Averages				0.01	%		0.00	%		0.22	%		3.70	%		0.84	%		2.84	%	$	7,514		19.44	%
Medians				0.00	%		0.00	%		0.26	%		3.70	%		0.83	%		2.83	%	$	5,673		31.25	%
Comparable Group
BLMT	BSB Bancorp, Inc.	MA		0.00	%		0.00	%		0.35	%		3.22	%		0.89	%		2.33	%	$	18,033		37.97	%
CSBK	Clifton Bancorp Inc.	NJ		0.01	%		0.00	%		0.15	%		3.26	%		1.17	%		2.09	%	$	11,513		29.72	%
ESSA	ESSA Bancorp, Inc.	PA		0.06	%		0.00	%		0.15	%		3.63	%		0.80	%		2.83	%	$	5,792		25.05	%
FCAP	First Capital, Inc.	IN		-0.07	%		0.00	%		0.34	%		3.77	%		0.31	%		3.41	%	$	4,457		27.75	%
HMNF	HMN Financial, Inc.	MN		0.00	%		0.00	%		0.57	%		4.28	%		0.24	%		3.97	%	$	3,439		38.90	%
MLVF	Malvern Bancorp, Inc.	PA		0.08	%		0.00	%		-0.79	%		3.57	%		1.07	%		2.43	%	$	9,890		-99.83	%
PBHC	Pathfinder Bancorp, Inc.	NY		0.07	%		0.00	%		0.16	%		3.78	%		0.56	%		3.32	%	$	5,554		25.35	%
SIFI	SI Financial Group, Inc.	CT		0.00	%		0.00	%		0.20	%		3.59	%		0.77	%		2.82	%	$	5,510		32.79	%
WSBF	Waterstone Financial, Inc.	WI		0.00	%		0.00	%		0.79	%		3.88	%		1.77	%		2.11	%	$	2,091		38.35	%
WEBK	Wellesley Bancorp, Inc.	MA		0.00	%		0.00	%		0.31	%		3.98	%		0.85	%		3.11	%	$	8,860		38.38	%

(1) Net gains/losses includes gain/loss on sale of securities and nonrecurring income and expense.

(2) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

Source: SNL Financial, LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2017 by RP^® Financial, LC.

Board of Directors

Boards of Trustees

January 20, 2017

Page 8

Consistent with the Original Appraisal, PCSB Bank’s funding composition showed a higher concentration of deposits and a lower concentration of borrowings relative to the comparable Peer Group measures. Updated interest-bearing liabilities-to-assets ratios equaled 89.59% and 86.50% for the Bank and the Peer Group, respectively. PCSB Bank’s updated tangible equity-to-assets ratio equaled 8.54%, which remained below the comparable Peer Group ratio of 11.94%. Overall, PCSB Bank’s updated interest-earning assets-to-interest-bearing liabilities (“IEA/IBL”) ratio equaled 106.53%, which remained below the comparable Peer Group ratio of 110.09%. As discussed in the Original Appraisal, the additional capital realized from stock proceeds should serve to increase PCSB Bank’s IEA/IBL ratio, as the level of interest-bearing liabilities funding assets will be lower due to the increase in capital realized from the offering and the net proceeds realized from the offering will be primarily deployed into interest-earning assets.

Updated growth rates for PCSB Bank are based on annualized growth rates for the 18 months ended December 31, 2016 and the Peer Group’s growth rates are based on growth for the twelve months ended September 30, 2016. PCSB Bank recorded a 2.21% increase in assets, versus a 17.81% increase in assets for the Peer Group. Asset growth by the Peer Group was in part supported by an acquisition completed by ESSA Bancorp. Asset growth by the Bank was largely sustained by a 3.58% increase in loans, which was in part funded by a 2.59% decline in cash and investments. Similarly, the Peer Group’s asset growth was primarily realized through a 19.90% increase in loans and was supplemented with an 18.09% increase in cash and investments.

The Bank’s asset growth was primarily funded by a 2.94% increase in deposits, which also funded a 59.19% reduction in borrowings. Comparatively, deposit and borrowing growth rates for the Peer Group equaled 18.67% and 118.12%, respectively. Updated tangible net worth growth rates for the Bank and the Peer Group equaled 1.01% and 1.90%, respectively.

Table 3 displays comparative operating results for PCSB Bank and the Peer Group, based on earnings for the twelve months ended December 31, 2016 and September 30, 2016, respectively. PCSB Bank and the Peer Group reported net income to average assets ratios of 0.33% and 0.74%, respectively. The Peer Group’s higher return was realized through a higher ratio for non-interest operating income, a lower ratio for loan provisions and a lower effective tax rate, while the Bank maintained earnings advantages with respect to a lower ratio for operating expenses and a higher ratio for non-operating gains.

In terms of core earnings strength, updated expense coverage ratios posted by PCSB Bank and the Peer Group equaled 1.15x and 0.97x, respectively. The Bank’s higher expense coverage continued to be supported by a lower operating expense ratio, which was partially offset by the Peer Group’s slightly higher net interest income ratio. The Peer Group’s higher net interest income ratio was realized through a higher interest income ratio, which was largely offset by the Bank’s lower interest expense ratio.

Board of Directors

Boards of Trustees

January 20, 2017

Page 9

Non-interest operating income remained a larger contributor to the Bank’s earnings, as such income amounted to 0.18% and 1.17% of the Bank’s and the Peer Group’s average assets, respectively. Accordingly, taking non-interest operating income into account in assessing PCSB Bank’s core earnings strength relative to the Peer Group’s, the Bank’s updated efficiency ratio of 81.48% remained higher (less favorable) than the Peer Group’s efficiency ratio of 72.61%.

Loan loss provisions remained a slightly larger factor in the Bank’s updated earnings, with loan loss provisions established by the Bank and the Peer Group equaling 0.16% and 0.10% of average assets, respectively.

In contrast to the Original Appraisal, non-operating gains and losses realized from the sale of assets and other non-operating items were a larger contributor to the Bank’s updated earnings. The Bank reported net non-operating income equal to 0.08% of average assets, versus net non-operating income equal to 0.01% of average assets for the Peer Group. As set forth in the Original Appraisal, typically, such gains and losses are discounted in valuation analyses as they tend to have a relatively high degree of volatility, and, thus, are not considered part of core operations. Extraordinary items remained a non-factor in the Bank’s and the Peer Group’s updated earnings.

The Bank’s effective tax rate of 29.36% remained above the Peer Group’s effective tax rate of 19.44% for the Peer Group.

The Bank’s updated credit quality measures continued to imply a slightly higher degree of credit risk exposure relative to the comparable Peer Group measures. As shown in Table 4, the Bank’s non-performing assets/assets and non-performing loans/loans ratios of 1.58% and 2.25%, respectively, were higher than the comparable Peer Group ratios of 1.09% and 1.27%. The Bank’s updated reserve coverage ratios continued to indicate a lower level of reserves as a percent of non-performing loans (26.70% versus 174.03% for the Peer Group) and a lower level of reserves as a percent of loans (0.60% versus 1.03% for the Peer Group). Net loan charge-offs remained a more significant factor for the Bank, with net loan charge-offs as a percent of loans equal to 0.19% and 0.04 for the Bank and the Peer Group, respectively.

3. Stock Market Conditions

Since the date of the Original Appraisal, the performance of the broader stock market has generally been positive. Following seven consecutive sessions of closing higher, the Dow Jones Industrial Average (the “DJIA”) closed down in mid-November 2016 as investors pared gains in shares that led the post-election stock market rally. The post-election stock market rally resumed during the second half of November, as U.S. stocks notched new record highs. Overall, the DJIA finished up 5.4% for the month of November. Led by gains in financial shares, stocks continued to surge higher during the first half of December. Stocks retreated after the Federal Reserve raised its target rate by a quarter of a percentage point at the conclusion of its mid-December policy meeting. After trading in a narrow range heading into late-December, stocks slumped in the final trading days of 2016. However, overall, the major U.S. stock indexes posted solid gains for 2016, with the DJIA and NASDAQ increasing 13.4% and 7.5%, respectively, in 2016. Bank and healthcare stocks led the stock market higher at the start of 2017, as the DJIA approached the 20000 milestone in the first week of trading during 2017. Stocks traded in a narrow range heading into the fourth quarter earnings season and then edged lower in mid-January, as investors weighed both the timing and ultimate impact of expected policy changes from the new presidential administration. On January 20, 2017, the DJIA closed at 19827.25 or 5.20% higher since the date of the Original Appraisal and the NASDAQ closed at 5555.33 or 6.08% higher since the date of the Original Appraisal.

Board of Directors

Boards of Trustees

January 20, 2017

Page 10

Table 4

Credit Risk Measures and Related Information

Comparable Institution Analysis

As of September 30, 2016

						NPAs &			Adj NPAs &												Rsrves/
			REO/			90+Del/			90+Del/			NPLs/			Rsrves/			Rsrves/			NPAs &			Net Loan			NLCs/
			Assets			Assets (1)			Assets (2)			Loans (1)			Loans HFI			NPLs (1)			90+Del (1)			Chargeoffs (3)			Loans
			(%)			(%)			(%)			(%)			(%)			(%)			(%)			($000)			(%)
PCSB Bank		NY
December 31, 2016				0.18	%		1.58	%		0.90	%		2.25	%		0.60	%		26.70	%		23.67	%	$	1,446			0.19	%
All Public Companies
Averages				0.09	%		1.07	%		0.66	%		1.35	%		1.00	%		117.87	%		99.79	%	$	1,621			0.06	%
Medians				0.04	%		0.88	%		0.54	%		1.08	%		0.94	%		92.03	%		85.79	%	$	180			0.03	%
State of NY
Averages				0.07	%		0.90	%		0.60	%		1.11	%		0.81	%		138.56	%		114.71	%	$	1,043			0.05	%
Medians				0.09	%		0.88	%		0.63	%		1.10	%		0.86	%		112.19	%		100.07	%	$	245			0.03	%
Comparable Recent Conversions(4)
RNDB	Randolph Bancorp, Inc.	MA		0.12	%		1.74	%		0.73	%		2.22	%		1.02	%		43.16	%		40.41	%	$	177			0.06	%
Comparable Group
Averages				0.21	%		1.09	%		0.60	%		1.27	%		1.03	%		174.03	%		159.30	%	$	492			0.04	%
Medians				0.11	%		1.09	%		0.57	%		1.23	%		0.94	%		98.68	%		81.05	%	$	347			0.04	%
Comparable Group
BLMT	BSB Bancorp, Inc.	MA		0.00	%		2.48	%		0.09	%		2.88	%		0.72	%		50.42	%		48.48	%	$	91			0.01	%
CSBK	Clifton Bancorp Inc.	NJ		0.07	%		0.38	%		0.29	%		0.45	%		0.59	%		130.98	%		105.84	%	$	348			0.05	%
ESSA	ESSA Bancorp, Inc.	PA		0.15	%		1.66	%		1.25	%		2.16	%		0.74	%		34.12	%		31.01	%	$	2,413			0.20	%
FCAP	First Capital, Inc.	IN		0.57	%		1.28	%		1.06	%		1.52	%		0.90	%		65.73	%		34.91	%	$	599			0.09	%
HMNF	HMN Financial, Inc.	MN		0.12	%		1.04	%		0.85	%		1.14	%		1.87	%		162.38	%		143.90	%	($	1,716	)		-0.34	%
MLVF	Malvern Bancorp, Inc.	PA		0.00	%		0.53	%		0.28	%		0.63	%		0.94	%		148.63	%		124.86	%	$	180			0.04	%
PBHC	Pathfinder Bancorp, Inc.	NY		0.09	%		0.89	%		0.63	%		1.21	%		1.29	%		106.87	%		95.91	%	$	634			0.14	%
SIFI	SI Financial Group, Inc.	CT		0.09	%		1.13	%		0.50	%		1.31	%		0.94	%		72.00	%		66.19	%	$	345			0.03	%
WSBF	Waterstone Financial, Inc.	WI		0.42	%		1.38	%		1.01	%		1.25	%		1.36	%		90.49	%		63.22	%	$	1,880			0.15	%
WEBK	Wellesley Bancorp, Inc.	MA		0.60	%		0.09	%		0.09	%		0.11	%		0.96	%		878.64	%		878.64	%	$	146			0.03	%

(1) Includes TDRs for the Company and the Peer Group.

(2) Excludes TDRs that are in compliance with their modified terms.

(3) Net loan chargeoffs are shown on a last twelve month basis.

(4) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

Source: SNL Financial, LC and RP^® Financial, LC. calculations. The information provided in this table has been obrained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2017 by RP^® Financial, LC.

Board of Directors

Boards of Trustees

January 20, 2017

Page 11

Thrift stocks generally performed similarly as the broader stock market since the date of the Original Appraisal. The post-election surge in bank and thrift stocks reflected investor expectations that a Republican-led government would move to roll back banking sector regulations. Financial shares retreated along with the broader stock market following the mid-December rate hike by the Federal Reserve. While thrift shares traded in a tight range in the closing weeks of 2016, the SNL Index for all publicly-traded thrifts finished 2016 with a gain of 19.49% in which the substantial portion of the gains occurred following the presidential election. Financial shares led the stock market higher at the start of 2017, which was followed by a pullback as investors dumped shares of financial companies and bought government bonds. Despite generally favorable fourth quarter earnings reports posted by the money center banks, the downturn in financial shares continued heading into the second half of January, On January 20, 2017, the SNL Index for all publicly-traded thrifts closed at 940.5, an increase of 4.79% since November 11, 2016.

Since the date of the Original Appraisal, the updated pricing measures for the Peer Group generally reflected increases that were comparable to or slightly above the increase recorded in the SNL Index for all publicly-traded thrifts. Comparatively, the updated pricing measures for all publicly-traded thrifts generally showed slightly larger increases relative to the Peer Group and the SNL Index for all publicly-traded thrifts. Since the date of the Original Appraisal, the stock prices of nine out of the ten Peer Group companies were higher as of January 20, 2017. A comparative pricing analysis of the Peer Group and all publicly-traded thrifts is shown in the following table, based on closing stock market prices as of November 11, 2016 and January 20, 2017.

Average Pricing Characteristics

	At Nov. 11, 2016			At Jan 20, 2017			% Change
Peer Group
Price/Earnings (x)		18.23	x		19.58	x		7.41	%
Price/Core Earnings (x)		18.42			19.89			7.98
Price/Book (%)		115.63	%		122.77	%		6.17
Price/Tangible Book(%)		120.40			127.76			6.11
Price/Assets (%)		14.65			15.14			3.34
Avg. Mkt. Capitalization ($ Mil)	$	187.26		$	194.23			3.72
All Publicly-Traded Thrifts
Price/Earnings (x)		18.15	x		19.85	x		9.37	%
Price/Core Earnings (x)		19.38			20.27			4.59
Price/Book (%)		120.76	%		129.20	%		6.99
Price/Tangible Book(%)		130.63			140.32			7.42
Price/Assets (%)		14.84			15.86			6.87
Avg. Mkt. Capitalization ($ Mil)	$	508.70		$	572.97			12.63

Board of Directors

Boards of Trustees

January 20, 2017

Page 12

As set forth in the Original Appraisal, the “new issue” market is separate and distinct from the market for seasoned issues like the Peer Group companies in that the pricing ratios for converting issues are computed on a pro forma basis, specifically: (1) the numerator and denominator are both impacted by the conversion offering amount, unlike existing stock issues in which price change affects only the numerator; and (2) the pro forma pricing ratio incorporates assumptions regarding source and use of proceeds, effective tax rates, stock plan purchases, etc. which impact pro forma financials, whereas pricing for existing issues are based on reported financials. The distinction between the pricing of converting and existing issues is perhaps most evident in the case of the price/book (“P/B”) ratio in that the P/B ratio of a converting thrift will typically result in a discount to book value, whereas in the current market for existing thrifts the P/B ratio may reflect a premium to book value. Therefore, it is appropriate to also consider the market for new issues, both at the time of the conversion and in the aftermarket.

As shown in Table 5, two standard conversion offerings have been completed during the past three months. The average closing pro forma price/tangible book ratio of the two recent standard conversion offerings equaled 63.7%. As of January 20, 2017, the two recent standard conversion offerings reflected an average stock price of 46.4% from their IPO prices.

Shown in Table 6 are the current pricing ratios for the only fully-converted offering completed during the past three months that trades on NASDAQ. The current P/TB ratio of HV Bancorp equaled 98.39%, based on closing stock prices as of January 20, 2017.

Summary of Adjustments

In the Original Appraisal, we made the following adjustments to PCSB Bank’s pro forma value based upon our comparative analysis to the Peer Group:

Key Valuation Parameters:	PreviousValuation Adjustment
Financial Condition	Slight Upward
Profitability, Growth and Viability of Earnings	Moderate Downward
Asset Growth	No Adjustment
Primary Market Area	Slight Upward
Dividends	No Adjustment
Liquidity of the Shares	No Adjustment
Marketing of the Issue	No Adjustment
Management	No Adjustment
Effect of Govt. Regulations and Regulatory Reform	No Adjustment

The factors concerning the valuation parameters of primary market area, dividends, liquidity of the shares, management and effect of government regulations and regulatory reform did not change since the Original Appraisal. Accordingly, those parameters were not discussed further in this update.

A slight upward adjustment remained appropriate for financial condition, based largely on the upward adjustments applied for the Bank’s balance sheet liquidity, interest-bearing funding composition and stronger pro forma capital position. Likewise, no adjustment remained appropriate for the Bank’s asset growth, as the Peer Group’s stronger historical asset growth was largely related to acquisition related growth and, on a pro forma basis, the Bank’s leverage capacity will be greater than the Peer Group’s leverage capacity. A moderate downward adjustment remained appropriate for earnings, based on the Bank’s lower reported earnings on a ROAA basis, less favorable efficiency ratio, higher implied credit risk exposure and lower pro forma core ROE.

Board of Directors

Boards of Trustees

January 20, 2017

Page 13

Table 5

Pricing Characteristics and After-Market Trends

Conversions Completed in the Last Three Months

Institutional Information			Pre-Conversion Data											Offering Information											Contribution to		Insider Purchases
			Financial Info.					Asset Quality																	Char. Found.		% Off Incl. Fdn.+Merger Shares
														Excluding Foundation												% of	Benefit Plans												Initial
	Conversion				Equity/			NPAs/			Res.			Gross		%			% of			Exp./				Public Off.				Recog.			Stk			Mgmt.&			Div.
Institution	Date	Ticker	Assets		Assets			Assets			Cov.			Proc.		Offer			Mid.			Proc.			Form	Inc. Fdn.	ESOP			Plans			Option			Dirs.			Yield
			($Mil)		(%)			(%)			(%)			($Mil.)		(%)			(%)			(%)				(%)	(%)			(%)			(%)			(%)(1)			(%)
Standard Conversions
HV Bancorp Inc. -PA*	1/12/17	HVBC-NASDAQ	$	177		7.46	%		0.76	%		54	%	$	21.8		100	%		132	%		6.0	%	N.A.	N.A.		8.0	%		4.0	%		10.0	%		8.5	%		0.00	%
Community Savings Bancorp Inc. - OH	1/11/17	CCSB-OTC Pink	$	54		12.43	%		0.65	%		78	%	$	4.4		100	%		96	%		27.2	%	N.A.	N.A.		8.0	%		4.0	%		10.0	%		41.9	%		0.00	%
Averages - Standard Conversions:			$	115		9.95	%		0.71	%		66	%	$	13.1		100	%		114	%		16.6	%	N.A.	N.A.		8.0	%		4.0	%		10.0	%		25.2	%		0.00	%
Medians - Standard Conversions:			$	115		9.95	%		0.71	%		66	%	$	13.1		100	%		114	%		16.6	%	N.A.	N.A.		8.0	%		4.0	%		10.0	%		25.2	%		0.00	%

Institutional Information			Pro Forma Data																				Post-IPO Pricing Trends
			Pricing Ratios(2)(5)									Financial Charac.											Closing Price:
																							First					After					After
	Conversion					Core						Core						Core			IPO		Trading		%			First		%			First		%			Thru		%
Institution	Date	Ticker	P/TB			P/E			P/A			ROA			TE/A			ROE			Price		Day		Chge			Week(3)		Chge			Month(4)		Chge			1/20/17		Chge
			(%)			(x)			(%)			(%)			(%)			(%)			($)		($)		(%)			($)		(%)			($)		(%)			($)		(%)
Standard Conversions
HV Bancorp Inc. -PA*	1/12/17	HVBC-NASDAQ		70.2	%		24.9	x		11.2	%		0.5	%		16.0	%		2.8	%	$	10.00	$	13.67		36.7	%	$	14.08		40.8	%	$	14.02		40.2	%	$	14.02		40.2	%
Community Savings Bancorp Inc. - OH	1/11/17	CCSB-OTC Pink		57.3	%		96.0	x		8.1	%		0.1	%		14.1	%		0.6	%	$	10.00	$	10.00		0.0	%	$	14.00		40.0	%	$	15.25		52.5	%	$	15.25		52.5	%
Averages - Standard Conversions:				63.7	%		60.5	x		9.6	%		0.3	%		15.0	%		1.7	%	$	10.00	$	11.84		18.4	%	$	14.04		40.4	%	$	14.64		46.4	%	$	14.64		46.4	%
Medians - Standard Conversions:				63.7	%		60.5	x		9.6	%		0.3	%		15.0	%		1.7	%	$	10.00	$	11.84		18.4	%	$	14.04		40.4	%	$	14.64		46.4	%	$	14.64		46.4	%

Note: * - Appraisal performed by RP Financial; BOLD = RP Fin. Did the business plan, “NT” - Not Traded; “NA” - Not Applicable, Not Available; C/S-Cash/Stock.
(1)    As a percent of MHC offering for MHC transactions.	(5)    Mutual holding company pro forma data on full conversion basis.
(2)    Does not take into account the adoption of SOP 93-6.	(6)    Simultaneously completed acquisition of another financial institution.
(3)    Latest price if offering is less than one week old.	(7)    Simultaneously converted to a commercial bank charter.
(4)    Latest price if offering is more than one week but less than one month old.	(8)    Former credit union.

January 20, 2017

Board of Directors

Boards of Trustees

January 20, 2017

Page 14

Table 6

Market Pricing Comparatives

As of January 20, 2017

			Market				Per Share Data
			Capitalization				Core		Book																	Dividends(3)
			Price/		Market		12 Month		Value/		Pricing Ratios(2)															Amount/					Payout
			Share		Value		EPS(1)		Share		P/E			P/B			P/A			P/TB			P/Core			Share		Yield			Ratio(4)
			($)		($Mil)		($)		($)		(x)			(%)			(%)			(%)			(x)			($)		(%)			(%)
All Non-MHC Public Companies(6)
Averages			$	22.19	$	572.97	$	1.09	$	16.20		19.85	x		129.20	%		15.86	%		140.32	%		20.27	x	$	0.35		1.55	%		47.86	%
Median			$	17.45	$	150.20	$	0.79	$	14.60		19.59	x		121.44	%		15.89	%		126.83	%		19.86	x	$	0.24		1.37	%		39.21	%
Comparable Group
Averages			$	14.02	$	30.59	$	0.40	$	14.25		34.20	x		98.39	%		15.70	%		98.39	%		35.05	x	$	0.00		0.00	%		NM
Medians			$	14.02	$	30.59	$	0.40	$	14.25		34.20	x		98.39	%		15.70	%		98.39	%		35.05	x	$	0.00		0.00	%		NM
Comparable Group
HVBC	HV Bancorp Inc.	PA	$	14.02	$	30.59	$	0.40	$	14.25		34.20	x		98.39	%		15.70	%		98.39	%		35.05	x	$	0.00		0.00	%		NM

			Financial Characteristics(5)
			Total		Equity/			Tang. Eq./			NPAs/			Reported						Core
			Assets		Assets			T. Assets			Assets			ROAA			ROAE			ROAA			ROAE
			($Mil)		(%)			(%)			(%)			(%)			(%)			(%)			(%)
All Non-MHC Public Companies(6)
Averages			$	3,317		12.76	%		12.10	%		1.05	%		0.70	%		5.92	%		0.72	%		6.02	%
Median			$	984		11.52	%		10.95	%		0.84	%		0.62	%		5.14	%		0.64	%		5.24	%
Comparable Group
Averages			$	195		15.95	%		15.95	%		0.76	%		0.46	%		2.88	%		0.45	%		2.81	%
Medians			$	195		15.95	%		15.95	%		0.76	%		0.46	%		2.88	%		0.45	%		2.81	%
Comparable Group
HVBC	HV Bancorp Inc.	PA	$	195		15.95	%		15.95	%		0.76	%		0.46	%		2.88	%		0.45	%		2.81	%

(1) Core income, on a diluted per-share basis. Core income is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of securities, amortization of intangibles, goodwill and nonrecurring items. Assumed tax rate is 35%.

(2) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings. P/E and P/Core =NM if the ratio is negative or above 35x.

(3) Indicated 12 month dividend, based on last quarterly dividend declared.

(4) Indicated 12 month dividend as a percent of trailing 12 month earnings.

(5) ROAA (return on average assets) and ROAE (return on average equity) are indicated ratios based on trailing 12 month earnings and average equity and assets balances.

(6) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.

Source: SNL Financial, LC. and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2017 by RP^® Financial, LC.

Board of Directors

Boards of Trustees

January 20, 2017

Page 15

Consistent with the broader stock market, the general market for thrift stocks was up since the date of the Original Appraisal. The DJIA increased 5.20% since the date of the Original Appraisal, which slightly exceeded the 4.79% increase recorded in the SNL Index for all publicly-traded thrifts. Likewise, the updated pricing measures for the Peer Group were generally higher since the date of the Original Appraisal, with the Peer Group’s updated pricing measures generally reflecting increases that were slightly above the increase recorded in the SNL Index for all publicly-traded thrifts. Two standard conversion offerings have been completed during the past three months and, as of January 20, 2017, showed an average price increase of 46.4% from their respective IPO prices.

Overall, taking into account the foregoing factors, we believe that an increase in the Bank’s estimated pro market value as set forth in the Original Appraisal is appropriate.

Valuation Approaches

In applying the accepted valuation methodology promulgated by the regulatory agencies, i.e., the pro forma market value approach, we considered the three key pricing ratios in valuing PCSB Bank’s to-be-issued stock — price/earnings (“P/E”), price/book (“P/B”), and price/assets (“P/A”) approaches — all performed on a pro forma basis including the effects of the conversion proceeds.

In computing the pro forma impact of the offering and the related pricing ratios, the valuation parameters utilized in the Original Appraisal were updated with financial data as of December 31, 2016.

Consistent with the Original Appraisal, this updated appraisal continues to be based primarily on fundamental analysis techniques applied to the Peer Group, including the P/E approach, the P/B approach and the P/A approach. Also consistent with the Original Appraisal, this updated appraisal incorporates a “technical” analysis of recently completed offerings, including principally the P/B approach which (as discussed in the Original Appraisal) is the most meaningful pricing ratio as the pro forma P/E ratios reflect an assumed reinvestment rate and do not yet reflect the actual use of proceeds.

The Bank will adopt “Employers’ Accounting for Employee Stock Ownership Plans” (“ASC 718-40”), which will cause earnings per share computations to be based on shares issued and outstanding excluding unreleased ESOP shares. For purposes of preparing the pro forma pricing analyses, we have reflected all shares issued in the offering, including all ESOP shares, to capture the full dilutive impact, particularly since the ESOP shares are economically dilutive, receive dividends and can be voted. However, we did consider the impact of the adoption of ASC 718-40 in the valuation.

Board of Directors

Boards of Trustees

January 20, 2017

Page 16

Based on the foregoing, we have concluded that an increase in PCSB Bank’s value is appropriate. Therefore, as of January 20, 2017, the pro forma market value of PCSB Bank’s conversion stock, taking into account the dilutive impact of the stock contribution to the Foundation, equaled $178,325,000 at the midpoint, equal to 17,832,500 at $10.00 per share. The updated midpoint value represents an increase of 9.16% from the pro forma market value set forth in the Original Appraisal.

1.    P/E Approach. In applying the P/E approach, RP Financial’s valuation conclusions considered both reported earnings and a recurring or “core” earnings base, that is, earnings adjusted to exclude any one time non-operating gains and losses and extraordinary items, plus the estimated after tax-earnings benefit from reinvestment of net stock proceeds. The Bank’s reported earnings equaled $4.071 million for the twelve months ended December 31, 2016. In deriving PCSB Bank’s core earnings, the adjustments made to reported earnings were to eliminate income of $1.615 million realized from a loan settlement and $629,000 of merger and acquisition related expenses. As shown below, on a tax effected basis, assuming application of an effective marginal tax rate of 34.0%, the Bank’s core earnings were determined to equal $3.420 million for the twelve months ended December 31, 2016.

	Amount
	($000)
Net income	$	4,071
Deduct: Loan settlement(1)		(1,066	)
Add: Merger and acquisition related expenses(1)		415
Core earnings estimate	$	3,420

(1) Tax effected at 34.0%.

Based on PCSB Bank’s reported and estimated core earnings, and incorporating the impact of the pro forma assumptions discussed previously, the Bank’s reported and core P/E multiples at the $178.3 million updated midpoint value equaled 62.42 times and 80.85 times, respectively. The Bank’s updated reported and core P/E multiples provided for premiums of 218.79% and 306.49% relative to the Peer Group’s average reported and core P/E multiples of 19.58 times and 19.89 times, respectively (versus premiums of 290.13% and 223.94% relative to the Peer Group’s average reported and core P/E multiples as indicated in the Original Appraisal). The Bank’s updated reported and core P/E multiples indicated premiums of 203.60% and 278.87% relative to the Peer Group’s median reported and core P/E multiples, which equaled 20.56 times and 21.34 times, respectively (versus premiums of 286.10% and 214.88% relative to the Peer Group’s median reported and core P/E multiples as indicated in the Original Appraisal). The Bank’s pro forma P/E ratios based on reported earnings at the minimum and the super maximum equaled 50.01 times and 95.03 times, respectively, and based on core earnings at the minimum and the super maximum equaled 63.68 times and 128.83 times, respectively. The Bank’s implied conversion pricing ratios relative to the Peer Group’s pricing ratios are indicated in Table 7, and the pro forma calculations are detailed in Exhibits 2 and 3.

2.    P/B Approach. P/B ratios have generally served as a useful benchmark in the valuation of thrift stocks, with the greater determinant of long term value being earnings. In applying the P/B approach, we considered both reported book value and tangible book value. Based on the $178.3 million updated midpoint value, the Bank’s P/B and P/TB ratios equaled 67.75% and 69.54%, respectively. In comparison to the average P/B and P/TB ratios indicated for the Peer Group of 122.77% and 127.76%, respectively, PCSB Bank’s updated ratios indicated discounts of 44.82% on a P/B basis and 45.57% on a P/TB basis (versus discounts of 43.22% and 43.95% from the Peer Group’s average P/B and P/TB ratios as indicated in the Original Appraisal). In comparison to the median P/B and P/TB ratios indicated for the Peer Group of 121.20% and 124.13%, respectively, PCSB Bank’s updated ratios at the updated midpoint value indicated discounts of 44.10% and 43.98% (versus discounts of 43.55% and 44.91% from the Peer Group’s median P/B and P/TB ratios as indicated in the Original Appraisal). At the top of the super range, the Bank’s P/B and P/TB ratios equaled 75.30% and 76.92%, respectively. In comparison to the Peer Group’s average P/B and P/TB ratios, the Bank’s P/B and P/TB ratios at the top of the super range indicated discounts of 38.67% and 39.79%, respectively. In comparison to the Peer Group’s median P/B and P/TB ratios, the Bank’s updated P/B and P/TB ratios at the top of the super range indicated discounts of 37.87% and 38.03%, respectively.

Board of Directors

Boards of Trustees

January 20, 2017

Page 17

Table 7

Public Market Pricing Versus Peer Group

PCSB Bank

As of January 20, 2017

			Market				Per Share Data
			Capitalization				Core		Book																	Dividends(3)
			Price/		Market		12 Month		Value/		Pricing Ratios(2)															Amount/					Payout
			Share		Value		EPS(1)		Share		P/E			P/B			P/A			P/TB			P/Core			Share		Yield			Ratio(4)
			($)		($Mil)		($)		($)		(x)			(%)			(%)			(%)			(x)			($)		(%)			(%)
PCSB Bank		PA
Supermaximum			$	10.00	$	235.83	$	0.08	$	13.28		95.03	x		75.30	%		16.36	%		76.92	%		128.83	x	$	0.00		0.00	%		0.00	%
Maximum			$	10.00	$	205.07	$	0.10	$	13.97		76.46	x		71.58	%		14.50	%		73.31	%		100.96	x	$	0.00		0.00	%		0.00	%
Midpoint			$	10.00	$	178.33	$	0.12	$	14.76		62.42	x		67.75	%		12.82	%		69.54	%		80.85	x	$	0.00		0.00	%		0.00	%
Minimum			$	10.00	$	151.58	$	0.16	$	15.82		50.01	x		63.21	%		11.08	%		65.02	%		63.68	x	$	0.00		0.00	%		0.00	%
All Non-MHC Public Companies(6)
Averages			$	22.19	$	572.97	$	1.09	$	16.20		19.85	x		129.20	%		15.86	%		140.32	%		20.27	x	$	0.35		1.55	%		47.86	%
Median			$	17.45	$	150.20	$	0.79	$	14.60		19.59	x		121.44	%		15.89	%		126.83	%		19.86	x	$	0.24		1.37	%		39.21	%
All Non-MHC State of NY(8)
Averages			$	14.35	$	1,414.62	$	0.64	$	12.11		18.54	x		124.65	%		11.10	%		145.83	%		19.67	x	$	0.40		2.42	%		42.00	%
Medians			$	14.95	$	412.43	$	0.66	$	14.35		19.02	x		121.16	%		11.73	%		144.78	%		19.28	x	$	0.26		2.75	%		27.40	%
Comparable Group
Averages			$	20.28	$	194.23	$	1.05	$	16.39		19.58	x		122.77	%		15.14	%		127.76	%		19.89	x	$	0.24		1.23	%		32.92	%
Medians			$	17.68	$	157.68	$	1.01	$	14.95		20.56	x		121.20	%		11.92	%		124.13	%		21.34	x	$	0.18		1.26	%		28.79	%
Comparable Group
BLMT	BSB Bancorp, Inc.	MA	$	27.55	$	250.91	$	1.20	$	17.23		23.15	x		159.91	%		12.09	%		159.91	%		23.50	x	$	0.00		0.00	%		0.00	%
CSBK	Clifton Bancorp Inc.	NJ	$	15.87	$	365.75	$	0.19	$	13.12		NM			120.96	%		27.92	%		120.96	%		NM		$	0.24		1.51	%		126.32	%
ESSA	ESSA Bancorp, Inc.	PA	$	15.74	$	179.56	$	0.71	$	15.48		21.56	x		101.70	%		10.12	%		112.04	%		22.02	x	$	0.36		2.29	%		49.32	%
FCAP	First Capital, Inc.	IN	$	31.55	$	105.30	$	2.04	$	23.55		16.52	x		133.97	%		14.19	%		148.67	%		15.46	x	$	0.84		2.66	%		43.98	%
HMNF	HMN Financial, Inc.	MN	$	17.70	$	79.45	$	1.23	$	16.67		14.51	x		106.17	%		11.59	%		108.02	%		14.37	x	$	0.00		0.00	%		0.00	%
MLVF	Malvern Bancorp, Inc.	PA	$	20.70	$	135.80	$	1.80	$	14.42		11.13	x		143.57	%		16.54	%		143.57	%		11.48	x	$	0.00		0.00	%		0.00	%
PBHC	Pathfinder Bancorp, Inc.	NY	$	13.94	$	58.96	$	0.65	$	13.91		19.09	x		100.19	%		8.23	%		108.97	%		21.34	x	$	0.20		1.43	%		27.40	%
SIFI	SI Financial Group, Inc.	CT	$	14.80	$	180.71	$	0.53	$	13.08		27.92	x		113.12	%		11.75	%		127.16	%		28.40	x	$	0.16		1.08	%		30.19	%
WSBF	Waterstone Financial, Inc.	WI	$	17.65	$	518.66	$	0.81	$	13.94		21.79	x		126.64	%		28.89	%		126.83	%		21.79	x	$	0.48		2.72	%		40.74	%
WEBK	Wellesley Bancorp, Inc.	MA	$	27.35	$	67.24	$	1.32	$	22.52		20.56	x		121.44	%		10.09	%		121.44	%		20.64	x	$	0.16		0.59	%		11.28	%

			Financial Characteristics(5)
			Total		Equity/			Tang. Eq./			NPAs/			Reported						Core						Offering
			Assets		Assets			T. Assets			Assets			ROAA			ROAE			ROAA			ROAE			Range
			($Mil)		(%)			(%)			(%)			(%)			(%)			(%)			(%)			($ Mil)
PCSB Bank		PA
Supermaximum			$	1,441		21.73	%		21.27	%		1.36	%		0.17	%		0.79	%		0.13	%		0.58	%	$	231.44
Maximum			$	1,415		20.25	%		19.77	%		1.38	%		0.19	%		0.94	%		0.14	%		0.71	%	$	201.25
Midpoint			$	1,391		18.91	%		18.43	%		1.41	%		0.21	%		1.09	%		0.16	%		0.84	%	$	175.00
Minimum			$	1,368		17.53	%		17.04	%		1.43	%		0.22	%		1.26	%		0.17	%		0.99	%	$	148.75
All Non-MHC Public Companies(6)
Averages			$	3,317		12.76	%		12.10	%		1.05	%		0.70	%		5.92	%		0.72	%		6.02	%
Median			$	984		11.52	%		10.95	%		0.84	%		0.62	%		5.14	%		0.64	%		5.24	%
All Non-MHC State of NY(8)
Averages			$	9,645		10.05	%		8.90	%		0.90	%		0.54	%		5.53	%		0.56	%		5.44	%
Medians			$	2,765		9.69	%		8.25	%		0.88	%		0.49	%		4.64	%		0.62	%		5.99	%
Comparable Group
Averages			$	1,212		12.34	%		11.98	%		0.79	%		0.74	%		6.37	%		0.75	%		6.23	%
Medians			$	1,067		10.50	%		9.51	%		0.93	%		0.54	%		5.70	%		0.50	%		5.59	%
Comparable Group
BLMT	BSB Bancorp, Inc.	MA	$	2,074		7.56	%		7.56	%		0.41	%		0.57	%		7.15	%		NA			NA
CSBK	Clifton Bancorp Inc.	NJ	$	1,312		23.08	%		23.08	%		0.38	%		0.36	%		1.40	%		0.36	%		1.38	%
ESSA	ESSA Bancorp, Inc.	PA	$	1,772		9.95	%		9.11	%		1.26	%		0.45	%		4.40	%		0.44	%		4.31	%
FCAP	First Capital, Inc.	IN	$	742		10.61	%		9.66	%		1.25	%		0.89	%		8.39	%		0.95	%		8.90	%
HMNF	HMN Financial, Inc.	MN	$	686		10.91	%		10.75	%		1.04	%		0.89	%		8.02	%		0.90	%		8.10	%
MLVF	Malvern Bancorp, Inc.	PA	$	821		11.52	%		11.52	%		0.45	%		1.59	%		14.05	%		1.54	%		13.62	%
PBHC	Pathfinder Bancorp, Inc.	NY	$	717		8.27	%		7.66	%		0.89	%		0.48	%		4.88	%		0.43	%		4.41	%
SIFI	SI Financial Group, Inc.	CT	$	1,538		10.39	%		9.35	%		1.13	%		0.42	%		3.98	%		0.42	%		3.98	%
WSBF	Waterstone Financial, Inc.	WI	$	1,795		22.82	%		22.79	%		0.96	%		1.26	%		5.59	%		1.26	%		5.59	%
WEBK	Wellesley Bancorp, Inc.	MA	$	666		8.31	%		8.31	%		0.09	%		0.50	%		5.81	%		0.50	%		5.79	%

(1) Core income, on a diluted per-share basis. Core income is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of securities, amortization of intangibles, goodwill and nonrecurring items. Assumed tax rate is 35%.

(2) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings. P/E and P/Core =NM if the ratio is negative or above 35x.

(3) Indicated 12 month dividend, based on last quarterly dividend declared.

(4) Indicated 12 month dividend as a percent of trailing 12 month earnings.

(5) ROAA (return on average assets) and ROAE (return on average equity) are indicated ratios based on trailing 12 month earnings and average equity and assets balances.

(6) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.

Source: SNL Financial, LC. and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2017 by RP^® Financial, LC.

Board of Directors

Boards of Trustees

January 20, 2017

Page 18

In addition to the fundamental analysis applied to the Peer Group, RP Financial utilized a technical analysis of recent conversion offerings. As indicated in the Original Appraisal, the pricing characteristics of recent conversion offerings are not the primary determinate of value. Consistent with the Original Appraisal, particular focus was placed on the P/TB approach in this analysis since the P/E multiples do not reflect the actual impact of reinvestment and the source of the conversion funds (i.e., external funds versus deposit withdrawals).

As discussed previously, two standard conversion offerings were completed during the past three months. In comparison to the 63.70% average closing forma P/TB ratio of the recent standard conversions, the Bank’s P/TB ratio of 69.54% at the midpoint value reflects an implied premium of 9.17%. At the top of the super range, the Bank’s P/TB ratio of 76.92% reflects an implied premium of 20.75% relative to the recent standard conversions average P/TB ratio at closing. The current P/TB ratio of the one recent standard conversion that is publicly-traded equaled 98.39%, based on closing stock prices as of January 20, 2017. In comparison to the current P/TB ratio of the recent publicly-traded standard conversion, the Bank’s P/TB ratio at the midpoint value reflects an implied discount of 29.32% and at the top of the super range reflects an implied discount of 21.82%.

3.    P/A Approach. P/A ratios are generally not as a reliable indicator of market value, as investors do not place significant weight on total assets as a determinant of market value. Investors place significantly greater weight on book value and earnings — which have received greater weight in our valuation analysis. At the $178.3 million updated midpoint value, PCSB Bank’s pro forma P/A ratio equaled 12.82%. In comparison to the Peer Group’s average P/A ratio of 15.14%, PCSB Bank’s P/A ratio indicated a discount of 15.32% (versus a discount of 19.93% at the midpoint valuation in the Original Appraisal). In comparison to the Peer Group’s median P/A ratio of 11.92%, PCSB Bank’s P/A ratio at the $178.30 million updated midpoint value indicated a premium of 7.55% (versus a premium of 3.71% at the midpoint valuation in the Original Appraisal).

Board of Directors

Boards of Trustees

January 20, 2017

Page 19

Valuation Conclusion

We have concluded that the Bank’s estimated pro forma market value should be increased since the date of the Original Appraisal. Accordingly, it is our opinion, as of January 20, 2017, the estimated aggregate pro forma market value of the shares to be issued immediately following the conversion, including shares to be issued to the Foundation, equaled $178,325,000 at the midpoint, equal to 17,832,500 shares offered at a per share value of $10.00. Pursuant to conversion guidelines, the 15% valuation range indicates a minimum value of $151,576,250 and a maximum value of $205,073,750. Based on the $10.00 per share offering price determined by the Board, this valuation range equates to total shares outstanding of 15,157,625 at the minimum and 20,507,375 at the maximum. In the event the appraised value is subject to an increase, the aggregate pro forma market value may be increased up to a super maximum value of $235,834,810 without a resolicitation. Based on the $10.00 per share offering price, the super maximum value would result in total shares outstanding of 23,583,481. Based on this valuation range, the offering range is as follows: $148,750,000 at the minimum, $175,000,000 at the midpoint, $201,250,000 at the maximum and $231,437,500 at the super maximum. Based on the $10.00 per share offering price, the number of offering shares is as follows: 14,875,000 at the minimum, 17,500,000 at the midpoint, 20,125,000 at the maximum and 23,143,750 at the super maximum. The pro forma valuation calculations relative to the Peer Group are shown in Table 7 and are detailed in Exhibit 2 and Exhibit 3.

Respectfully submitted,

RP^® FINANCIAL, LC.

Ronald S. Riggins

President and Managing Director

Gregory E. Dunn

Director

EXHIBITS

LIST OF EXHIBITS

Exhibit Number	Description
1	Stock Prices: As of January 20, 2017
2	Pro Forma Analysis Sheet
3	Pro Forma Effect of Conversion Proceeds
4	Firm Qualifications Statement

EXHIBIT 1

Stock Prices

As of January 20, 2017

RP^® Financial, LC.

Exhibit 1A

Weekly Thrift Market Line - Part One

Prices As of January 20, 2017

			Market Capitalization						Price Change Data												Current Per Share Financials
			Price/		Shares		Market		52 Week (1)						% Change From						LTM		LTM Core		BV/		TBV/		Assets/
			Share(1)		Outstanding		Capitalization		High		Low		Last Wk		Last Wk		52 Wks (2)		MRY (2)		EPS (3)		EPS (3)		Share		Share (4)		Share
			($)		(000)		($Mil)		($)		($)		($)		(%)		(%)		(%)		($)		($)		($)		($)		($)
Companies
ANCB	Anchor Bancorp	WA		26.05		2,505		65.3		27.50		22.61		26.20		-0.57		6.54		-4.23		0.29		0.29		25.46		25.46		174.02
ASBB	ASB Bancorp, Inc.	NC		30.58		3,787		115.8		31.00		24.07		30.02		1.85		21.35		2.79		1.47		1.21		24.12		24.12		210.50
AF	Astoria Financial Corporation	NY		18.73		101,329		1,897.9		19.25		14.09		18.75		-0.11		29.44		0.43		0.64		0.67		15.57		13.74		146.20
BCTF	Bancorp 34, Inc.	NM		12.90		3,438		44.4		13.45		7.91		12.84		0.47		54.00		2.46		0.34		0.35		9.01		8.92		95.43
BKMU	Bank Mutual Corporation	WI		9.50		45,692		434.1		9.75		7.08		9.55		-0.52		29.78		0.53		0.37		0.37		6.27		6.27		57.96
BYBK	Bay Bancorp, Inc.	MD		7.10		10,370		73.6		7.20		4.65		6.80		4.41		47.30		7.58		0.14		0.18		6.28		5.96		58.47
BNCL	Beneficial Bancorp, Inc.	PA		17.40		75,914		1,320.9		19.00		12.30		18.05		-3.60		36.90		-5.43		0.31		0.40		13.41		11.13		73.51
BHBK	Blue Hills Bancorp, Inc.	MA		17.45		26,782		467.3		19.00		13.22		17.85		-2.24		20.34		-6.93		0.28		0.27		14.43		14.03		86.39
BOFI	BofI Holding, Inc.	CA		27.14		63,299		1,717.9		30.27		13.47		29.15		-6.90		53.33		-4.94		1.91		1.89		11.32		11.32		124.09
BYFC	Broadway Financial Corporation	CA		1.56		27,301		42.6		2.50		1.37		1.62		-3.70		6.16		-4.59		0.23		0.23		1.63		1.63		15.14
BLMT	BSB Bancorp, Inc.	MA		27.55		9,108		250.9		30.05		20.72		28.20		-2.30		24.55		-4.84		1.19		NA		17.23		17.23		227.69
CFFN	Capitol Federal Financial, Inc.	KS		15.92		137,899		2,195.3		17.04		11.70		16.19		-1.67		35.03		-3.28		0.63		0.63		10.13		10.13		67.20
CARV	Carver Bancorp, Inc.	NY		3.02		3,696		11.2		5.99		1.92		3.45		-12.46		29.61		-6.34		-0.19		-0.42		2.51		2.51		189.86
CHFN	Charter Financial Corporation	GA		16.51		15,031		248.2		17.10		12.34		16.71		-1.20		26.71		-0.96		0.79		0.86		13.52		11.36		95.70
CSBK	Clifton Bancorp Inc.	NJ		15.87		23,046		365.7		17.49		13.38		16.47		-3.64		16.69		-6.21		0.19		0.19		13.12		13.12		56.94
CWAY	Coastway Bancorp, Inc.	RI		16.26		4,467		72.6		16.50		12.10		16.10		0.96		32.69		3.87		0.79		0.79		15.52		15.52		141.70
DCOM	Dime Community Bancshares, Inc.	NY		20.40		37,544		765.9		20.65		15.61		20.15		1.24		24.16		1.49		2.26		1.05		14.79		13.31		155.07
ESBK	Elmira Savings Bank	NY		20.50		2,741		56.2		22.25		16.83		21.45		-4.43		7.84		0.24		1.26		1.23		16.80		12.29		207.03
ENFC	Entegra Financial Corp.	NC		21.05		6,468		136.1		21.60		16.11		21.25		-0.94		25.75		2.18		0.98		1.09		20.57		20.10		199.90
EQFN	Equitable Financial Corp.	NE		10.05		3,477		34.9		10.15		8.15		10.00		0.50		17.41		1.52		0.31		0.32		10.43		10.43		65.53
ESSA	ESSA Bancorp, Inc.	PA		15.74		11,408		179.6		16.84		12.69		15.99		-1.56		17.51		0.13		0.73		0.71		15.48		14.05		155.37
FCAP	First Capital, Inc.	IN		31.55		3,338		105.3		35.00		23.50		31.90		-1.10		31.35		-2.68		1.91		2.04		23.55		21.22		222.34
FBNK	First Connecticut Bancorp, Inc.	CT		21.20		15,809		335.2		25.00		14.42		21.80		-2.75		30.22		-6.40		0.89		0.87		16.17		16.17		179.13
FDEF	First Defiance Financial Corp.	OH		47.77		8,981		429.0		52.31		34.80		48.00		-0.48		27.45		-5.85		3.08		3.10		32.53		25.49		272.80
FNWB	First Northwest Bancorp	WA		15.02		13,008		195.4		16.75		11.99		15.39		-2.40		16.61		-3.72		0.29		0.27		14.60		14.60		80.61
FBC	Flagstar Bancorp, Inc.	MI		26.03		56,606		1,473.5		29.29		17.25		26.32		-1.10		29.25		-3.38		2.60		3.24		22.72		22.72		252.14
FSBW	FS Bancorp, Inc.	WA		35.38		3,058		108.2		38.81		22.48		35.00		1.09		51.46		-1.59		3.35		3.58		26.02		24.65		270.62
FSBC	FSB Bancorp, Inc.	NY		14.09		1,942		27.4		14.90		9.19		14.32		-1.61		36.32		-0.77		0.30		0.28		16.20		16.20		133.76
HBK	Hamilton Bancorp, Inc.	MD		14.50		3,414		49.5		14.75		13.19		14.53		-0.17		2.11		1.75		-0.01		0.15		18.10		15.34		151.50
HIFS	Hingham Institution for Savings	MA		190.48		2,133		406.2		203.01		115.80		188.25		1.18		51.32		-3.20		10.89		10.79		75.50		75.50		944.60
HMNF	HMN Financial, Inc.	MN		17.70		4,489		79.5		18.55		10.81		17.90		-1.12		58.18		1.14		1.22		1.23		16.67		16.39		152.75
HFBL	Home Federal Bancorp, Inc. of Louisiana	LA		27.24		1,966		53.5		29.85		21.20		27.00		0.87		18.67		1.40		1.80		1.80		22.44		22.44		198.13
IROQ	IF Bancorp, Inc.	IL		19.14		3,950		75.6		19.74		17.25		19.10		0.20		6.62		3.45		1.08		0.98		21.12		21.12		149.02
ISBC	Investors Bancorp, Inc.	NJ		13.82		309,294		4,274.4		14.39		10.67		14.12		-2.12		21.12		-0.93		0.58		0.58		10.03		9.75		72.86
JXSB	Jacksonville Bancorp, Inc.	IL		29.20		1,798		52.5		30.50		23.20		30.00		-2.65		14.52		-2.65		1.70		1.55		25.69		24.17		177.55
KRNY	Kearny Financial Corp.	NJ		14.40		88,521		1,274.7		16.10		11.31		14.80		-2.70		22.66		-7.40		0.19		0.19		12.57		11.34		51.10
MLVF	Malvern Bancorp, Inc.	PA		20.70		6,560		135.8		21.25		15.00		20.95		-1.19		26.45		-2.13		1.86		1.80		14.42		14.42		125.19
MELR	Melrose Bancorp, Inc.	MA		17.50		2,602		45.5		18.10		14.60		17.91		-2.32		15.06		-2.51		0.41		0.28		16.61		16.61		102.50
EBSB	Meridian Bancorp, Inc.	MA		18.30		53,714		983.0		20.55		12.49		18.60		-1.61		42.63		-3.17		0.56		0.56		11.12		10.86		77.69
CASH	Meta Financial Group, Inc.	SD		103.10		9,302		959.0		106.90		36.22		105.30		-2.09		176.56		0.19		3.92		4.65		39.30		31.57		430.72
MSBF	MSB Financial Corp.	NJ		14.45		5,711		82.5		14.95		12.25		14.30		1.05		17.48		-1.70		0.12		0.12		12.71		12.71		75.93
NYCB	New York Community Bancorp, Inc.	NY		15.81		487,057		7,700.4		17.68		13.74		15.73		0.51		6.54		-0.63		-0.08		1.20		12.50		7.50		101.55
NFBK	Northfield Bancorp, Inc.	NJ		18.45		48,333		891.7		20.59		14.31		18.99		-2.84		24.83		-7.61		0.52		0.58		12.84		12.00		78.30
NWBI	Northwest Bancshares, Inc.	PA		17.50		101,303		1,772.8		19.10		11.78		17.85		-1.96		42.74		-2.94		NA		NA		11.51		8.17		95.00
OCFC	OceanFirst Financial Corp.	NJ		29.43		32,156		946.4		30.70		15.98		30.10		-2.23		63.50		-2.00		1.07		1.41		16.14		13.42		129.09
ORIT	Oritani Financial Corp.	NJ		17.25		45,244		780.5		19.00		15.11		17.75		-2.82		11.08		-8.00		1.12		0.87		11.94		11.94		83.87
OTTW	Ottawa Bancorp, Inc.	IL		12.79		3,456		44.2		12.98		8.39		12.64		1.19		51.71		0.47		0.39		0.41		9.23		8.93		79.88
PBHC	Pathfinder Bancorp, Inc.	NY		13.94		4,230		59.0		14.46		10.76		13.40		4.02		14.72		3.33		0.73		0.65		13.91		12.79		169.54
PBBI	PB Bancorp, Inc.	CT		10.15		7,880		80.0		10.40		8.20		10.15		0.00		14.30		2.56		0.12		0.12		10.85		9.97		64.27
PBSK	Poage Bankshares, Inc.	KY		19.40		3,714		72.0		20.90		15.50		19.25		0.78		8.50		3.19		0.52		0.60		18.78		18.14		120.88
PROV	Provident Financial Holdings, Inc.	CA		18.80		7,990		150.2		20.66		16.73		19.11		-1.62		1.02		-7.02		0.80		0.81		16.70		16.70		155.52
PFS	Provident Financial Services, Inc.	NJ		26.71		66,043		1,764.0		28.92		17.71		27.70		-3.57		45.56		-5.62		1.37		1.40		18.84		12.44		142.18
PBIP	Prudential Bancorp, Inc.	PA		17.32		9,017		156.2		17.50		13.80		17.18		0.81		16.71		1.17		0.36		0.35		14.17		14.17		62.05
RNDB	Randolph Bancorp, Inc.	MA		14.60		5,869		85.7		16.50		12.06		15.40		-5.19		NA		-9.43		NA		NA		14.63		14.61		83.42
RVSB	Riverview Bancorp, Inc.	WA		7.83		22,508		176.2		8.16		4.15		7.86		-0.38		75.96		11.86		0.29		0.30		4.93		3.79		43.72
SVBI	Severn Bancorp, Inc.	MD		7.10		12,104		85.9		8.08		4.99		7.50		-5.33		33.96		-10.13		1.14		1.14		6.90		6.87		64.25
SIFI	SI Financial Group, Inc.	CT		14.80		12,210		180.7		16.23		12.30		15.05		-1.66		8.82		-3.90		0.53		NA		13.08		11.64		125.97
SBCP	Sunshine Bancorp, Inc.	FL		18.00		7,995		143.9		18.24		13.84		17.99		0.06		22.12		5.02		-0.35		-0.33		13.82		11.92		70.54
TBNK	Territorial Bancorp Inc.	HI		32.40		9,764		316.4		33.39		24.87		33.28		-2.64		22.08		-1.34		1.69		1.66		23.39		23.39		189.33
TSBK	Timberland Bancorp, Inc.	WA		20.54		6,951		142.8		21.15		12.14		20.48		0.29		64.45		-0.58		1.43		1.42		13.95		13.13		128.23
TRST	TrustCo Bank Corp NY	NY		8.35		95,705		799.1		9.00		5.17		8.55		-2.34		55.78		-4.57		0.44		0.43		4.56		4.55		50.29
UCBA	United Community Bancorp	IN		16.35		4,198		68.6		17.00		12.95		16.35		0.00		15.14		-2.10		0.86		0.81		16.83		16.17		125.78
UCFC	United Community Financial Corp.	OH		8.10		46,550		377.1		9.50		5.28		8.40		-3.57		47.54		-9.40		0.38		0.37		5.51		5.48		46.41
UBNK	United Financial Bancorp, Inc.	CT		17.08		50,512		862.7		18.66		10.28		17.71		-3.56		46.36		-5.95		0.90		1.02		13.00		10.60		129.57
WSBF	Waterstone Financial, Inc.	WI		17.65		29,386		518.7		19.30		13.30		17.85		-1.12		29.30		-4.08		0.81		0.81		13.94		13.92		61.08
WAYN	Wayne Savings Bancshares, Inc.	OH		17.31		2,782		48.2		17.90		11.90		17.00		1.82		28.22		4.91		0.92		0.92		14.88		14.27		160.25
WCFB	WCF Bancorp, Inc.	IA		9.82		2,563		25.2		10.97		8.15		9.75		0.73		10.69		-1.79		0.10		0.07		11.54		11.51		48.40
WEBK	Wellesley Bancorp, Inc.	MA		27.35		2,459		67.2		27.75		18.05		27.50		-0.55		47.35		-1.44		1.33		1.32		22.52		22.52		271.01
WBB	Westbury Bancorp, Inc.	WI		21.44		4,073		87.3		22.00		17.72		21.00		2.10		21.06		3.57		0.93		0.83		19.43		19.43		172.53
WNEB	Western New England Bancorp, Inc.	MA		9.15		30,250		276.8		9.75		7.35		9.30		-1.61		10.37		-2.14		0.25		0.30		7.92		7.92		45.55
WBKC	Wolverine Bancorp, Inc.	MI		32.08		2,099		67.3		33.10		25.26		32.00		0.25		25.78		1.52		2.14		2.14		29.97		29.97		175.88

RP^® Financial, LC.

Exhibit 1A

Weekly Thrift Market Line - Part One

Prices As of January 20, 2017

			Market Capitalization						Price Change Data												Current Per Share Financials
			Price/		Shares		Market		52 Week (1)						% Change From						LTM		LTM Core		BV/		TBV/		Assets/
			Share(1)		Outstanding		Capitalization		High		Low		Last Wk		Last Wk		52 Wks (2)		MRY (2)		EPS (3)		EPS (3)		Share		Share (4)		Share
			($)		(000)		($Mil)		($)		($)		($)		(%)		(%)		(%)		($)		($)		($)		($)		($)
Companies
WSFS	WSFS Financial Corporation	DE		44.95		31,324		1,408.0		47.65		26.40		45.30		-0.77		55.59		-3.02		1.97		2.22		22.08		16.59		211.58
WVFC	WVS Financial Corp.	PA		14.57		2,008		29.3		15.40		10.73		14.57		-0.03		25.60		-1.05		0.74		0.73		16.44		16.44		166.85
MHCs
GCBC	Greene County Bancorp, Inc. (MHC)	NY		20.50		8,503		174.3		25.20		15.23		22.95		-10.68		28.33		-10.48		1.10		1.10		9.00		9.00		105.04
HONE	HarborOne Bancorp, Inc. (MHC)	MA		19.17		32,121		615.8		20.19		12.53		19.43		-1.34		NA		-0.88		NA		NA		10.21		9.79		73.07
KFFB	Kentucky First Federal Bancorp (MHC)	KY		9.55		8,439		80.6		9.80		8.00		9.70		-1.56		3.02		6.27		0.16		0.16		7.96		6.25		34.97
LSBK	Lake Shore Bancorp, Inc. (MHC)	NY		15.85		6,098		96.6		16.59		12.97		16.00		-0.94		18.72		-2.57		0.71		0.51		12.68		12.68		78.46
MGYR	Magyar Bancorp, Inc. (MHC)	NJ		13.24		5,821		77.1		13.24		9.51		12.40		6.77		38.64		10.33		0.19		0.18		8.20		8.20		100.40
OFED	Oconee Federal Financial Corp. (MHC)	SC		22.14		5,803		128.5		24.25		18.21		22.08		0.25		20.00		-5.78		0.87		0.86		14.70		14.13		83.44
PVBC	Provident Bancorp, Inc. (MHC)	MA		17.80		9,499		169.1		19.15		12.80		18.20		-2.20		37.13		-0.56		NA		NA		11.41		11.41		80.87
TFSL	TFS Financial Corporation (MHC)	OH		18.25		283,518		5,174.2		19.89		15.58		18.88		-3.34		6.79		-4.15		0.28		NA		5.84		5.81		45.52
Under Acquisition
EVER	EverBank Financial Corp	FL		19.41		126,643		2,458.1		19.49		12.32		19.41		0.00		47.94		-0.21		0.96		NA		13.92		13.53		226.65
GTWN	Georgetown Bancorp, Inc.	MA		25.65		1,841		47.2		26.00		18.55		25.75		-0.39		32.28		-0.77		0.43		0.46		17.62		17.62		171.09

(1) Average of High/Low or Bid/Ask price per share.    

(2) Or since offering price if converted of first listed in the past 52 weeks. Percent change figures are actual year-to-date and are not annualized.    

(3) EPS (earnings per share) is based on actual trailing 12 month data and is not shown on a pro forma basis.     

(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).     

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing 12 month common earnings and average common equity and total assets balances.    

(6) Annualized based on last regular quarterly cash dividend announcement.    

(7) Indicated dividend as a percent of trailing 12 month earnings.    

(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.    

(9) For MHC institutions, market value reflects share price multiplied by public (non-MHC) shares.    

Source: SNL Financial, LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2017 by RP^® Financial, LC.

RP^® Financial, LC.

Exhibit 1B

Weekly Thrift Market Line - Part Two

Prices As of January 20, 2017

			Key Financial Ratios												Asset Quality Ratios				Pricing Ratios										Dividend Data (6)
			Equity/		Tang Equity/		Reported Earnings				Core Earnings				NPAs/		Rsvs/		Price/		Price/		Price/		Price/		Price/		Div/		Dividend		Payout
			Assets(1)		Assets(1)		ROA(5)		ROE(5)		ROA(5)		ROE(5)		Assets		NPLs		Earnings		Book		Assets		Tang Book		Core Earnings		Share		Yield		Ratio (7)
			(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(x)		(%)		(%)		(%)		(x)		($)		(%)		(%)
Companies
ANCB	Anchor Bancorp	WA		14.63		14.63		0.17		1.14		0.17		1.14		NA		39.88		NM		102.33		14.97		102.33		89.83		NA		NA		NM
ASBB	ASB Bancorp, Inc.	NC		11.46		11.46		0.70		5.91		0.57		4.87		1.31		114.00		20.80		126.80		14.53		126.80		25.23		NA		NA		NM
AF	Astoria Financial Corporation	NY		11.53		10.41		0.49		4.41		0.51		4.56		1.69		37.20		29.27		120.28		12.92		136.27		28.15		0.16		0.85		25.00
BCTF	Bancorp 34, Inc.	NM		9.44		9.36		0.41		3.85		0.43		4.04		0.37		179.30		37.73		143.15		13.52		144.55		36.43		0.59		0.00		NM
BKMU	Bank Mutual Corporation	WI		10.82		10.82		0.66		5.93		0.66		5.93		NA		NA		25.68		151.43		16.39		151.43		25.68		0.22		2.32		58.11
BYBK	Bay Bancorp, Inc.	MD		10.76		10.27		0.33		2.49		0.41		3.15		2.19		21.03		50.71		113.06		12.14		119.03		40.41		0.00		0.00		NM
BNCL	Beneficial Bancorp, Inc.	PA		18.34		15.70		0.44		2.13		0.56		2.73		0.30		286.82		56.13		129.74		23.79		156.37		43.34		0.24		1.38		38.71
BHBK	Blue Hills Bancorp, Inc.	MA		16.84		16.45		0.33		1.78		0.32		1.73		0.35		221.90		62.32		120.89		20.36		124.35		64.08		0.12		0.69		39.29
BOFI	BofI Holding, Inc.	CA		9.19		9.19		1.70		18.81		1.68		18.63		0.56		89.01		14.21		239.67		21.88		239.67		14.35		NA		NA		NM
BYFC	Broadway Financial Corporation	CA		11.50		11.50		1.74		15.02		1.71		14.81		2.91		38.17		6.78		95.45		10.97		95.45		6.88		0.04		0.00		NM
BLMT	BSB Bancorp, Inc.	MA		7.56		7.56		0.57		7.15		NA		NA		0.41		152.33		23.15		159.91		12.09		159.91		NA		NA		NA		NM
CFFN	Capitol Federal Financial, Inc.	KS		15.03		15.03		0.74		5.95		0.74		5.91		0.60		16.33		25.27		157.13		23.62		157.13		25.42		0.34		2.14		139.68
CARV	Carver Bancorp, Inc.	NY		7.75		7.75		-0.06		-0.80		-0.18		-2.36		2.45		29.93		NM		120.09		1.70		120.09		NM		0.00		0.00		NM
CHFN	Charter Financial Corporation	GA		14.12		12.14		0.98		5.90		1.07		6.43		0.77		124.65		20.90		122.16		17.25		145.37		19.17		0.22		1.33		25.95
CSBK	Clifton Bancorp Inc.	NJ		23.08		23.08		0.36		1.40		0.36		1.38		0.38		129.90		NM		120.96		27.92		120.96		84.47		0.24		1.51		126.32
CWAY	Coastway Bancorp, Inc.	RI		10.95		10.95		0.59		4.83		0.59		4.83		2.20		18.19		20.58		104.75		11.47		104.75		20.58		NA		NA		NM
DCOM	Dime Community Bancshares, Inc.	NY		9.54		8.67		1.57		15.89		0.73		7.42		0.24		158.94		9.03		137.93		13.16		153.29		19.34		0.56		2.75		24.78
ESBK	Elmira Savings Bank	NY		9.83		7.83		0.77		7.81		0.75		7.67		NA		NA		16.27		122.04		10.07		166.78		16.72		0.92		4.49		73.02
ENFC	Entegra Financial Corp.	NC		10.29		10.08		0.55		4.72		0.61		5.25		NA		NA		21.48		102.31		10.53		104.71		19.28		NA		NA		NM
EQFN	Equitable Financial Corp.	NE		15.92		15.92		0.46		3.00		0.47		3.08		NA		NA		32.42		96.35		15.34		96.35		31.56		NA		NA		NM
ESSA	ESSA Bancorp, Inc.	PA		9.95		9.11		0.45		4.40		0.44		4.31		1.26		45.86		21.56		101.70		10.12		112.04		22.02		0.36		2.29		49.32
FCAP	First Capital, Inc.	IN		10.61		9.66		0.89		8.39		0.95		8.90		1.25		65.73		16.52		133.97		14.19		148.67		15.46		0.84		2.66		43.98
FBNK	First Connecticut Bancorp, Inc.	CT		9.03		9.03		0.49		5.34		0.48		5.22		1.01		73.97		23.82		131.09		11.83		131.09		24.37		0.36		1.70		34.83
FDEF	First Defiance Financial Corp.	OH		11.92		9.59		1.19		9.93		1.20		10.00		1.14		94.92		15.51		146.85		17.51		187.42		15.40		0.88		1.84		21.43
FNWB	First Northwest Bancorp	WA		18.05		18.05		0.34		1.79		0.32		1.67		0.83		89.70		51.79		102.90		18.58		102.90		55.82		NA		NA		NM
FBC	Flagstar Bancorp, Inc.	MI		9.01		9.01		1.30		11.55		1.17		10.40		0.92		123.28		10.01		114.56		10.32		114.56		8.03		0.00		0.00		NM
FSBW	FS Bancorp, Inc.	WA		9.61		9.16		1.32		13.33		1.41		14.26		0.08		NM		10.56		135.98		13.07		143.50		9.88		0.40		1.13		11.04
FSBC	FSB Bancorp, Inc.	NY		12.11		12.11		0.22		2.52		0.21		2.42		0.01		NM		47.70		86.98		10.53		86.98		49.70		NA		NA		NM
HBK	Hamilton Bancorp, Inc.	MD		11.95		10.32		-0.01		-0.04		0.11		0.78		1.16		34.98		NM		80.09		9.57		94.50		97.25		NA		NA		NM
HIFS	Hingham Institution for Savings	MA		7.99		7.99		1.22		15.59		1.21		15.44		NA		NA		17.49		252.29		20.17		252.29		17.66		1.28		0.67		14.33
HMNF	HMN Financial, Inc.	MN		10.91		10.75		0.89		8.02		0.90		8.10		1.04		162.38		14.51		106.17		11.59		108.02		14.37		0.00		0.00		NM
HFBL	Home Federal Bancorp, Inc. of Louisiana	LA		11.29		11.29		0.92		7.63		0.92		7.63		0.24		331.61		15.13		121.36		13.70		121.36		15.13		0.36		1.32		19.44
IROQ	IF Bancorp, Inc.	IL		14.23		14.23		0.70		4.93		0.64		4.46		0.82		118.60		17.72		90.60		12.89		90.60		19.55		0.16		0.84		14.81
ISBC	Investors Bancorp, Inc.	NJ		13.82		13.49		0.83		5.44		0.83		5.44		0.49		210.34		23.83		137.76		19.04		141.75		23.84		0.32		2.32		44.83
JXSB	Jacksonville Bancorp, Inc.	IL		14.47		13.73		0.98		6.48		0.89		5.92		NA		NA		17.18		113.68		16.45		120.81		18.78		0.40		1.37		23.53
KRNY	Kearny Financial Corp.	NJ		24.75		22.89		0.39		1.51		0.39		1.52		0.57		102.49		NM		114.57		28.36		126.93		75.35		0.08		0.56		42.11
MLVF	Malvern Bancorp, Inc.	PA		11.52		11.52		1.59		14.05		1.54		13.62		0.45		148.63		11.13		143.57		16.54		143.57		11.48		0.11		0.00		NM
MELR	Melrose Bancorp, Inc.	MA		16.23		16.23		0.42		2.26		0.29		1.55		0.00		NM		42.68		105.37		17.10		105.37		62.47		NA		NA		NM
EBSB	Meridian Bancorp, Inc.	MA		14.31		14.03		0.80		5.05		0.79		5.02		0.69		134.22		32.68		164.64		23.55		168.50		32.92		0.12		0.66		21.43
CASH	Meta Financial Group, Inc.	SD		8.36		6.83		1.10		10.80		1.30		12.80		0.02		945.47		26.30		262.34		21.93		326.53		22.20		0.52		0.50		13.27
MSBF	MSB Financial Corp.	NJ		16.74		16.74		0.18		0.90		0.26		1.34		3.53		26.42		NM		113.71		19.03		113.71		120.42		0.00		0.00		NM
NYCB	New York Community Bancorp, Inc.	NY		12.31		7.77		-0.05		-0.39		1.16		9.56		0.12		380.89		NM		126.43		15.57		210.76		13.23		0.68		4.30		NM
NFBK	Northfield Bancorp, Inc.	NJ		16.40		15.50		0.66		3.93		0.74		4.41		0.83		77.25		35.48		143.73		23.56		153.70		31.72		0.32		1.73		59.62
NWBI	Northwest Bancshares, Inc.	PA		12.16		8.95		0.55		4.28		NA		NA		0.80		NA		35.71		152.03		NA		214.22		NA		0.60		3.43		122.45
OCFC	OceanFirst Financial Corp.	NJ		10.05		8.50		0.69		6.95		0.91		9.22		1.25		36.40		27.50		182.34		18.33		219.26		20.94		0.60		2.04		50.47
ORIT	Oritani Financial Corp.	NJ		14.22		14.22		1.37		9.19		1.07		7.19		0.30		273.73		15.40		144.44		20.54		144.44		19.74		0.70		4.06		107.14
OTTW	Ottawa Bancorp, Inc.	IL		11.54		11.21		0.59		4.15		0.62		4.37		2.00		42.36		33.15		138.52		15.98		143.16		31.42		0.00		0.00		NM
PBHC	Pathfinder Bancorp, Inc.	NY		8.27		7.66		0.48		4.88		0.43		4.41		0.89		106.87		19.09		100.19		8.23		108.97		21.34		0.20		1.43		27.40
PBBI	PB Bancorp, Inc.	CT		16.87		15.72		0.18		1.23		0.19		1.27		NA		NA		NM		93.59		15.79		101.83		81.96		0.12		1.18		116.67
PBSK	Poage Bankshares, Inc.	KY		15.54		15.09		0.43		2.68		0.50		3.08		1.78		33.13		37.31		103.29		16.05		106.92		32.32		0.24		1.24		53.85
PROV	Provident Financial Holdings, Inc.	CA		10.72		10.72		0.56		4.88		0.57		4.93		1.09		87.14		23.50		112.59		12.07		112.59		23.26		0.52		2.77		62.50
PFS	Provident Financial Services, Inc.	NJ		13.25		9.16		0.96		7.12		0.98		7.28		0.76		99.95		19.50		141.74		18.78		214.69		19.06		0.72		2.70		51.82
PBIP	Prudential Bancorp, Inc.	PA		20.38		20.38		0.51		2.36		0.49		2.29		3.39		17.79		48.11		122.23		24.91		122.23		49.51		0.12		0.69		33.33
RNDB	Randolph Bancorp, Inc.	MA		17.54		17.52		NA		2.73		NA		3.81		1.41		47.29		NA		99.80		17.50		99.93		NA		NA		NA		NA
RVSB	Riverview Bancorp, Inc.	WA		11.28		8.91		0.71		5.94		0.72		6.11		1.48		71.92		27.00		158.79		17.91		206.33		26.46		0.08		1.02		27.59
SVBI	Severn Bancorp, Inc.	MD		11.16		11.12		2.00		17.36		2.00		17.36		4.11		29.33		6.23		102.89		11.10		103.30		6.23		0.00		0.00		NM
SIFI	SI Financial Group, Inc.	CT		10.39		9.35		0.42		3.98		NA		NA		1.13		72.00		27.92		113.12		11.75		127.16		NA		0.16		1.08		30.19
SBCP	Sunshine Bancorp, Inc.	FL		12.89		11.32		-0.26		-1.85		-0.29		-2.04		0.41		126.26		NM		130.22		16.79		151.03		NM		NA		NA		NM
TBNK	Territorial Bancorp Inc.	HI		12.36		12.36		0.85		7.00		0.84		6.86		0.38		39.11		19.17		138.50		17.11		138.50		19.55		0.72		2.22		54.44
TSBK	Timberland Bancorp, Inc.	WA		10.86		10.29		1.19		11.00		1.19		10.94		1.72		93.56		14.36		147.29		16.00		156.42		14.44		0.36		1.75		23.78
TRST	TrustCo Bank Corp NY	NY		9.05		9.04		0.88		9.92		0.87		9.82		0.88		117.51		19.02		183.28		16.59		183.51		19.22		0.26		3.14		59.79
UCBA	United Community Bancorp	IN		13.38		12.92		0.68		5.14		0.63		4.83		1.02		84.53		19.01		97.12		13.00		101.13		20.25		0.24		1.47		27.91
UCFC	United Community Financial Corp.	OH		11.87		11.81		0.89		7.33		0.86		7.09		1.96		45.00		21.32		147.03		17.45		147.92		22.06		0.12		1.48		28.95
UBNK	United Financial Bancorp, Inc.	CT		10.03		8.32		0.72		7.12		0.82		8.08		0.84		78.87		18.98		131.34		13.17		161.20		16.72		0.48		2.81		53.33
WSBF	Waterstone Financial, Inc.	WI		22.82		22.79		1.26		5.59		1.26		5.59		0.96		90.49		21.79		126.64		28.89		126.83		21.79		0.48		2.72		40.74
WAYN	Wayne Savings Bancshares, Inc.	OH		9.29		8.94		0.57		6.20		0.57		6.20		0.96		68.18		18.82		116.30		10.80		121.34		18.82		0.36		2.08		39.13
WCFB	WCF Bancorp, Inc.	IA		23.85		23.80		0.19		1.44		0.13		0.98		NA		105.80		NM		85.10		20.29		85.30		141.40		0.20		2.04		147.33
WEBK	Wellesley Bancorp, Inc.	MA		8.31		8.31		0.50		5.81		0.50		5.79		NA		NA		20.56		121.44		10.09		121.44		20.64		0.16		0.59		11.28
WBB	Westbury Bancorp, Inc.	WI		11.33		11.33		0.51		4.49		0.46		4.02		0.52		146.36		23.05		110.35		12.51		110.35		25.74		NA		NA		NM
WNEB	Western New England Bancorp, Inc.	MA		10.54		10.54		0.33		3.11		0.39		3.71		0.59		122.46		36.60		115.49		12.17		115.49		30.69		0.12		1.31		48.00
WBKC	Wolverine Bancorp, Inc.	MI		17.20		17.20		1.13		7.00		1.13		7.00		1.92		132.93		14.99		107.05		18.41		107.05		14.99		1.60		4.99		74.77

RP^® Financial, LC.

Exhibit 1B

Weekly Thrift Market Line - Part Two

Prices As of January 20, 2017

			Key Financial Ratios												Asset Quality Ratios				Pricing Ratios										Dividend Data (6)
			Equity/		Tang Equity/		Reported Earnings				Core Earnings				NPAs/		Rsvs/		Price/		Price/		Price/		Price/		Price/		Div/		Dividend		Payout
			Assets(1)		Assets(1)		ROA(5)		ROE(5)		ROA(5)		ROE(5)		Assets		NPLs		Earnings		Book		Assets		Tang Book		Core Earnings		Share		Yield		Ratio (7)
			(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(x)		(%)		(%)		(%)		(x)		($)		(%)		(%)
Companies
WSFS	WSFS Financial Corporation	DE		10.44		8.05		1.04		9.85		1.18		11.12		0.64		100.10		22.82		203.54		21.25		270.97		20.23		0.28		0.62		12.69
WVFC	WVS Financial Corp.	PA		9.85		9.85		0.42		4.32		0.42		4.26		0.08		149.21		19.69		88.63		8.73		88.63		19.98		0.16		1.10		27.03
MHCs
GCBC	Greene County Bancorp, Inc. (MHC)	NY		8.56		8.56		1.12		12.84		1.12		12.84		0.61		193.63		18.64		227.70		19.48		227.70		18.64		0.38		1.85		34.32
HONE	HarborOne Bancorp, Inc. (MHC)	MA		13.97		13.47		0.20		1.99		0.34		3.29		2.17		32.29		NA		187.78		26.23		195.91		NA		NA		NA		NA
KFFB	Kentucky First Federal Bancorp (MHC)	KY		22.87		18.88		0.43		1.86		0.43		1.86		NA		NA		59.69		120.05		27.45		152.92		59.69		0.40		4.19		187.50
LSBK	Lake Shore Bancorp, Inc. (MHC)	NY		16.16		16.16		0.88		5.56		0.64		4.03		1.38		36.15		22.32		124.99		20.20		124.99		30.79		0.28		1.77		39.44
MGYR	Magyar Bancorp, Inc. (MHC)	NJ		8.17		8.17		0.19		2.28		0.18		2.19		3.69		32.31		69.68		161.48		13.19		161.48		72.82		NA		NA		NM
OFED	Oconee Federal Financial Corp. (MHC)	SC		17.59		17.03		1.05		6.21		1.04		6.16		1.15		19.69		25.45		150.61		26.49		156.69		25.66		0.40		1.81		45.98
PVBC	Provident Bancorp, Inc. (MHC)	MA		14.10		14.10		0.82		5.71		0.78		5.42		0.65		168.33		NA		156.06		22.01		156.06		NA		NA		NA		NA
TFSL	TFS Financial Corporation (MHC)	OH		12.87		12.80		0.65		4.73		NA		NA		1.58		31.39		65.18		312.38		40.19		314.23		NA		0.50		2.74		160.71
Under Acquisition
EVER	EverBank Financial Corp	FL		6.60		6.45		0.49		7.07		NA		NA		0.74		45.16		20.22		139.48		8.53		143.43		NA		0.24		1.24		25.00
GTWN	Georgetown Bancorp, Inc.	MA		10.30		10.30		0.25		2.39		0.27		2.55		NA		NA		59.65		145.56		14.99		145.56		55.96		0.20		0.78		45.93

(1) Average of High/Low or Bid/Ask price per share.    

(2) Or since offering price if converted of first listed in the past 52 weeks. Percent change figures are actual year-to-date and are not annualized.    

(3) EPS (earnings per share) is based on actual trailing 12 month data and is not shown on a pro forma basis.     

(4) Exludes intangibles (such as goodwill, value of core deposits, etc.).     

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing 12 month common earnings and average common equity and total assets balances.    

(6) Annualized based on last regular quarterly cash dividend announcement.    

(7) Indicated dividend as a percent of trailing 12 month earnings.    

(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.    

(9) For MHC institutions, market value reflects share price multiplied by public (non-MHC) shares.    

Source: SNL Financial, LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2017 by RP^® Financial, LC.    

EXHIBIT 2

Pro Forma Analysis Sheet

Exhibit 2

PRO FORMA ANALYSIS SHEET

PCSB Bank

Prices as of January 20, 2017

						Peer Group						New York Companies						All Publicly-Traded
Price Multiple		Symbol	Subject (1)			Average			Median			Average			Median			Average			Median
Price-earnings ratio (x)		P/E		62.42	x		19.58	x		20.56	x		18.54	x		19.02	x		19.85	x		19.59	x
Price-core earnings ratio (x)		P/Core		80.85	x		19.89	x		21.34	x		19.67	x		19.28	x		20.27	x		19.86	x
Price-book ratio (%)	=	P/B		67.75	%		122.77	%		124.65	%		124.65	%		121.16	%		129.20	%		121.44	%
Price-tangible book ratio (%)	=	P/TB		69.54	%		127.76	%		124.13	%		145.83	%		144.78	%		140.32	%		126.83	%
Price-assets ratio (%)	=	P/A		12.82	%		15.14	%		11.92	%		11.10	%		11.73	%		15.86	%		15.89	%

Valuation Parameters
Pre-Conversion Earnings (Y)	$	4,071,000		ESOP Stock Purchases (E)	8.00	%	(5)
Pre-Conversion Earnings (CY)	$	3,420,000		Cost of ESOP Borrowings (S)	0.00	%	(4)
Pre-Conversion Book Value (B)	$	112,757,000		ESOP Amortization (T)	15.00		years
Pre-Conv. Tang. Book Val. (TB)	$	106,022,000		RRP Amount (M)	4.00	%
Pre-Conversion Assets (A)	$	1,240,883,000		RRP Vesting (N)	5.00		years (5)
Reinvestment Rate (2)(R)		1.14	%	Foundation (F)	2.86	%
Est. Conversion Expenses (3)(X)		1.86	%	Tax Benefit (Z)	1,700,000
Tax Rate (TAX)		34.00	%	Percentage Sold (PCT)	100.00	%
Shares Tax	$	0		Option (O1)	10.00	%	(6)
				Estimated Option Value (O2)	23.40	%	(6)
				Option vesting (O3)	5.00		(6)
				Option pct taxable (O4)	25.00	%	(6)

Calculation of Pro Forma Value After Conversion
1.    V=	P/E * (Y)	V=	$	178,325,000
	1 - P/E * PCT *  ((1-X-E-M-F)*R*(1-TAX) - (1-TAX)*E/T - (1-TAX)*M/N) - (1-(TAX*O4))*(O1*O2)/O3)
2.    V=	P/Core * (Y)	V=	$	178,325,000
	1 - P/core * PCT *  ((1-X-E-M-F)*R*(1-TAX) - (1-TAX)*E/T - (1-TAX)*M/N) - (1-(TAX*O4))*(O1*O2)/O3)
3.    V=	P/B * (B+Z)	V=	$	178,325,000
	1 - P/B * PCT * (1-X-E-M-F)
4.    V=	P/TB * (TB+Z)	V=	$	178,325,000
	1 - P/TB * PCT * (1-X-E-M-F)
5.    V=	P/A * (A+Z)	V=	$	178,325,000
	1 - P/A * PCT * (1-X-E-M-F)

Conclusion	Shares Issued To the Public		Price Per Share		Gross Offering Proceeds		Shares Issued To Foundation		Total Shares Issued		Aggregate Market Value of Shares Issued
Supermaximum		23,143,750		10.00	$	231,437,500		439,731		23,583,481	$	235,834,810
Maximum		20,125,000		10.00		201,250,000		382,375		20,507,375		205,073,750
Midpoint		17,500,000		10.00		175,000,000		332,500		17,832,500		178,325,000
Minimum		14,875,000		10.00		148,750,000		282,625		15,157,625		151,576,250

(1) Pricing ratios shown reflect the midpoint value.

(2) Net return reflects a reinvestment rate of 1.14 percent and a tax rate of 34.0 percent.

(3) Offering expenses shown at estimated midpoint value.

(4) No cost is applicable since holding company will fund the ESOP loan.

(5) ESOP and MRP amortize over 15 years and 5 years, respectively; amortization expenses tax effected at 34.0 percent.

(6) 10 percent option plan with an estimated Black-Scholes valuation of 23.40 percent of the exercise price, including a 5 year vesting with 25 percent of the options (granted to directors) tax effected at 34.0 percent.

EXHIBIT 3

Pro Forma Effect of Conversion Proceeds

Exhibit 3

PRO FORMA EFFECT OF CONVERSION PROCEEDS

PCSB Bank

At the Minimum

1.	Pro Forma Market Capitalization	$	151,576,250
	Less: Foundation Shares		2,826,250
2.	Offering Proceeds	$	148,750,000
	Less: Estimated Offering Expenses		3,038,070
	Net Conversion Proceeds	$	145,711,930
3.	Estimated Additional Income from Conversion Proceeds
	Net Conversion Proceeds	$	145,711,930
	Less: Cash Contribution to Foundation		2,173,750
	Less: Non-Cash Stock Purchases (1)		18,189,150
	Net Proceeds Reinvested	$	125,349,030
	Estimated net incremental rate of return		0.75	%
	Reinvestment Income	$	943,126
	Less: Shares Tax		0
	Less: Estimated cost of ESOP borrowings (2)		0
	Less: Amortization of ESOP borrowings (3)		533,548
	Less: Amortization of Options (4)		649,080
	Less: Recognition Plan Vesting (5)		800,323
	Net Earnings Impact	($	1,039,825	)

				Before Conversion		Net Earnings Increase			After Conversion
4.	Pro Forma Earnings
	12 Months ended December 31, 2016 (reported)			$	4,071,000	($	1,039,825	)	$	3,031,175
	12 Months ended December 31, 2016 (core)			$	3,420,000	($	1,039,825	)	$	2,380,175
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
5.	Pro Forma Net Worth
	December 31, 2016	$	112,757,000	$	125,349,030	$	1,700,000		$	239,806,030
	December 31, 2016(Tangible)	$	106,022,000	$	125,349,030	$	1,700,000		$	233,071,030
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
6.	Pro Forma Assets
	December 31, 2016	$	1,240,883,000	$	125,349,030	$	1,700,000		$	1,367,932,030

(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.

(2) ESOP stock purchases are internally financed by a loan from the holding company.

(3) ESOP borrowings are amortized over 15 years, amortization expense is tax-effected at a 34.0 percent rate.

(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.

(5) RRP is amortized over 5 years, and amortization expense is tax effected at 34.0 percent.

Exhibit 3

PRO FORMA EFFECT OF CONVERSION PROCEEDS

PCSB Bank

At the Midpoint

1.	Pro Forma Market Capitalization	$	178,325,000
	Less: Foundation Shares		3,325,000
2.	Offering Proceeds	$	175,000,000
	Less: Estimated Offering Expenses		3,255,061
	Net Conversion Proceeds	$	171,744,939
3.	Estimated Additional Income from Conversion Proceeds
	Net Conversion Proceeds	$	171,744,939
	Less: Cash Contribution to Foundation		1,675,000
	Less: Non-Cash Stock Purchases (1)		21,399,000
	Net Proceeds Reinvested	$	148,670,939
	Estimated net incremental rate of return		0.75	%
	Reinvestment Income	$	1,118,600
	Less: Shares Tax		0
	Less: Estimated cost of ESOP borrowings (2)		0
	Less: Amortization of ESOP borrowings (3)		627,704
	Less: Amortization of Options (4)		763,623
	Less: Recognition Plan Vesting (5)		941,556
	Net Earnings Impact	($	1,214,283	)

				Before Conversion		Net Earnings Increase			After Conversion
4.	Pro Forma Earnings
	12 Months ended December 31, 2016 (reported)			$	4,071,000	($	1,214,283	)	$	2,856,717
	12 Months ended December 31, 2016 (core)			$	3,420,000	($	1,214,283	)	$	2,205,717
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
5.	Pro Forma Net Worth
	December 31, 2016	$	112,757,000	$	148,670,939	$	1,700,000		$	263,127,939
	December 31, 2016(Tangible)	$	106,022,000	$	148,670,939	$	1,700,000		$	256,392,939
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
6.	Pro Forma Assets
	December 31, 2016	$	1,240,883,000	$	148,670,939	$	1,700,000		$	1,391,253,939

(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.

(2) ESOP stock purchases are internally financed by a loan from the holding company.

(3) ESOP borrowings are amortized over 15 years, amortization expense is tax-effected at a 34.0 percent rate.

(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.

(5) RRP is amortized over 5 years, and amortization expense is tax effected at 34.0 percent.

Exhibit 3

PRO FORMA EFFECT OF CONVERSION PROCEEDS

PCSB Bank

At the Maximum Value

1.	Pro Forma Market Capitalization	$	205,073,750
	Less: Foundation Shares		3,823,750
2.	Offering Proceeds	$	201,250,000
	Less: Estimated Offering Expenses		3,472,052
	Net Conversion Proceeds	$	197,777,948
3.	Estimated Additional Income from Conversion Proceeds
	Net Conversion Proceeds	$	197,777,948
	Less: Cash Contribution to Foundation		1,176,250
	Less: Non-Cash Stock Purchases (1)		24,608,850
	Net Proceeds Reinvested	$	171,992,848
	Estimated net incremental rate of return		0.75	%
	Reinvestment Income	$	1,294,074
	Less: Shares Tax		0
	Less: Estimated cost of ESOP borrowings (2)		0
	Less: Amortization of ESOP borrowings (3)		721,860
	Less: Amortization of Options (4)		878,167
	Less: Recognition Plan Vesting (5)		1,082,789
	Net Earnings Impact	($	1,388,742	)

				Before Conversion		Net Earnings Increase			After Conversion
4.	Pro Forma Earnings
	12 Months ended December 31, 2016 (reported)			$	4,071,000	($	1,388,742	)	$	2,682,258
	12 Months ended December 31, 2016 (core)			$	3,420,000	($	1,388,742	)	$	2,031,258
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
5.	Pro Forma Net Worth
	December 31, 2016	$	112,757,000	$	171,992,848	$	1,700,000		$	286,449,848
	December 31, 2016(Tangible)	$	106,022,000	$	171,992,848	$	1,700,000		$	279,714,848
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
6.	Pro Forma Assets
	December 31, 2016	$	1,240,883,000	$	171,992,848	$	1,700,000		$	1,414,575,848

(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.

(2) ESOP stock purchases are internally financed by a loan from the holding company.

(3) ESOP borrowings are amortized over 15 years, amortization expense is tax-effected at a 34.0 percent rate.

(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.

(5) RRP is amortized over 5 years, and amortization expense is tax effected at 34.0 percent.

Exhibit 3

PRO FORMA EFFECT OF CONVERSION PROCEEDS

PCSB Bank

At the Supermaximum Value

1.	Pro Forma Market Capitalization	$	235,834,810
	Less: Foundation Shares		4,397,310
2.	Offering Proceeds	$	231,437,500
	Less: Estimated Offering Expenses		3,721,591
	Net Conversion Proceeds	$	227,715,909
3.	Estimated Additional Income from Conversion Proceeds
	Net Conversion Proceeds	$	227,715,909
	Less: Cash Contribution to Foundation		602,690
	Less: Non-Cash Stock Purchases (1)		28,300,177
	Net Proceeds Reinvested	$	198,813,042
	Estimated net incremental rate of return		0.75	%
	Reinvestment Income	$	1,495,869
	Less: Shares Tax		0
	Less: Estimated cost of ESOP borrowings (2)		0
	Less: Amortization of ESOP borrowings (3)		830,139
	Less: Amortization of Options (4)		1,009,892
	Less: Recognition Plan Vesting (5)		1,245,208
	Net Earnings Impact	($	1,589,369	)

				Before Conversion		Net Earnings Increase			After Conversion
4.	Pro Forma Earnings
	12 Months ended December 31, 2016 (reported)			$	4,071,000	($	1,589,369	)	$	2,481,631
	12 Months ended December 31, 2016 (core)			$	3,420,000	($	1,589,369	)	$	1,830,631
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
5.	Pro Forma Net Worth
	December 31, 2016	$	112,757,000	$	198,813,042	$	1,700,001		$	313,270,043
	December 31, 2016(Tangible)	$	106,022,000	$	198,813,042	$	1,700,001		$	306,535,043
		Before Conversion		Net Cash Proceeds		Tax Benefit Of Contribution			After Conversion
6.	Pro Forma Assets
	December 31, 2016	$	1,240,883,000	$	198,813,042	$	1,700,001		$	1,441,396,043

(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.

(2) ESOP stock purchases are internally financed by a loan from the holding company.

(3) ESOP borrowings are amortized over 15 years, amortization expense is tax-effected at a 34.0 percent rate.

(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.

(5) RRP is amortized over 5 years, and amortization expense is tax effected at 34.0 percent.

EXHIBIT 4

Firm Qualifications Statement

RP FINANCIAL, LC.

Advisory | Planning | Valuation

FIRM QUALIFICATION STATEMENT

RP^® Financial, LC. (“RP Financial”) provides financial and management consulting, merger advisory and valuation services to the financial services companies, including banks, thrifts, credit unions, insurance companies, mortgage companies and others. We offer a broad array of services, high quality and prompt service, hands-on involvement by our senior staff, careful structuring of strategic initiatives and sophisticated valuation and other analyses consistent with industry practices and regulatory requirements. Our staff has extensive consulting, valuation, financial advisory and industry backgrounds.

STRATEGIC PLANNING SERVICES

RP Financial’s strategic planning services, for established or de novo banking companies, provide effective feasible plans with quantifiable results to enhance shareholder value, achieve regulatory approval or realize other objectives. We conduct situation analyses; establish mission/vision statements, develope strategic goals and objectives; and identify strategies to enhance value, address capital, increase earnings, manage risk and tackle operational or organizational matters. Our proprietary financial simulation models facilitate the evaluation of the feasibility, impact and merit of alternative financial strategies.

MERGER ADVISORY SERVICES

RP Financial’s merger advisory services include targeting buyers and sellers, assessing acquisition merit, conducting due diligence, negotiating and structuring deal terms, preparing merger business plans and financial simulations, rendering fairness opinions, preparing fair valuation analyses and supporting post-merger strategies. RP Financial is also expert in de novo charters, shelf charters and failed bank deals with loss sharing or other assistance. Through financial simulations, valuation proficiency and regulatory familiarity, RP Financial’s merger advisory services center on enhancing shareholder returns.

VALUATION SERVICES

RP Financial’s extensive valuation practice includes mergers, thrift stock conversions, insurance company demutualizations, merger valuation and goodwill impairment, ESOPs, going private, secondary offerings and other purposes. We are highly experienced in performing appraisals conforming with regulatory guidelines and appraisal standards. RP Financial is the nation’s leading valuation firm for thrift stock conversions, with offerings ranging up to $4 billion.

MANAGEMENT STUDIES

RP Financial provides effective organizational planning, and we are often engaged to prepare independent management studies required for regulatory enforcement actions. We evaluate Board, management and staffing needs, assess existing talent and capabilities and make strategic recommendations for new positions, replacement, succession and other organizational matters.

ENTERPRISE RISK ASSESSMENT SERVICES

RP Financial provides effective enterprise risk assessment consulting services to assist our clients in evaluating the degree to which they have properly identified, understood, measured, monitored and controlled enterprise risk as part of a deliberate risk/reward strategy and to help them implement strategies to mitigate risk, enhance performance, ensure effective reporting and compliance with laws and regulations and avoid potential future damage to their reputation and associated consequences and to mitigate residual risk and unanticipated losses.

OTHER CONSULTING SERVICES

RP Financial provides other consulting services including evaluating regulatory changes, development diversification and branching strategies, conducting feasibility studies and other research, and preparing management studies in response to regulatory enforcement actions. We assist clients with CRA plans and revising policies and procedures. Our other consulting services are aided by proprietary valuation and financial simulation models.

KEY PERSONNEL (Years of Relevant Experience & Contact Information)

Ronald S. Riggins, Managing Director (36)	(703) 647-6543	rriggins@rpfinancial.com
William E. Pommerening, Managing Director (33)	(703) 647-6546	wpommerening@rpfinancial.com
Marcus Faust, Director (29)	(703) 647-6553	mfaust@rpfinancial.com
Gregory E. Dunn, Director (34)	(703) 647-6548	gdunn@rpfinancial.com
James P. Hennessey, Director (31)	(703) 647-6544	jhennessey@rpfinancial.com
James J. Oren, Director (30)	(703) 647-6549	joren@rpfinancial.com
Carla H. Pollard, Senior Vice President (28)	(703) 647-6556	cpollard@rpfinancial.com

RP Financial, LC.	Phone: (703) 528-1700
1100 North Glebe Road, Suite 600	Fax: (703) 528-1788
Arlington, VA 22201	www.rpfinancial.com