UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended June 30, 2024

or

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

Commission File Number 001-38456

Columbia Financial, Inc.

(Exact name of registrant as specified in its charter)

Delaware		22-3504946
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
19-01 Route 208 North,	Fair Lawn,
New Jersey		07140
(Address of principal executive offices)		(Zip Code)

(800) 522-4167

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

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

Large accelerated filer	☐	Accelerated filer	☒	Smaller reporting company	☐
Non-accelerated filer	☐	Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

As of August 6, 2024, there were 104,727,144 shares issued and outstanding of the Registrant's common stock, par value $0.01 per share (including 76,016,524 shares held by Columbia Bank, MHC).

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Index to Form 10-Q                                

Item Number		Page Number
PART I.	Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Financial Condition as of June 30, 2024 (Unaudited) and December 31, 2023	2
	Consolidated Statements of Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	4
	Consolidated Statements of Changes in Stockholder's Equity for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)	9
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	60
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 4.	Controls and Procedures	72
PART II.	Other Information
	Item 1. Legal Proceedings	73
	Item 1A. Risk Factors	73
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	73
	Item 3. Defaults Upon Senior Securities	73
	Item 4. Mine Safety Disclosures	73
	Item 5. Other Information	73
	Item 6. Exhibits	73
	Exhibit Index	74
	SIGNATURES	75

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(In thousands, except share and per share data)

	June 30,		December 31,
	2024		2023
Assets	(Unaudited)
Cash and due from banks	$	391,004	$	423,140
Short-term investments	110		109
Total cash and cash equivalents	391,114		423,249
Debt securities available for sale, at fair value	1,263,459		1,093,557
Debt securities held to maturity, at amortized cost (fair value of $365,344 and $357,177 at June 30, 2024 and December 31, 2023, respectively)	411,300		401,154
Equity securities, at fair value	4,531		4,079
Federal Home Loan Bank stock	87,618		81,022
Loans receivable	7,819,011		7,874,537
Less: allowance for credit losses	57,062		55,096
Loans receivable, net	7,761,949		7,819,441
Accrued interest receivable	41,338		39,345
Office properties and equipment, net	82,547		83,577
Bank-owned life insurance ("BOLI")	271,300		268,362
Goodwill and intangible assets	122,102		123,350
Other real estate owned	1,974		—
Other assets	324,358		308,432
Total assets	$	10,763,590	$	10,645,568
Liabilities and Stockholders' Equity
Liabilities:
Deposits	$	7,781,547	$	7,846,556
Borrowings	1,683,899		1,528,695
Advance payments by borrowers for taxes and insurance	47,842		43,509
Accrued expenses and other liabilities	203,568		186,473
Total liabilities	9,716,856		9,605,233
Stockholders' equity:
Preferred stock, $0.01 par value. 10,000,000 shares authorized; none issued and outstanding at June 30, 2024 and December 31, 2023	—		—
Common stock, $0.01 par value. 500,000,000 shares authorized; 131,370,633 shares issued and 104,755,270 shares outstanding at June 30, 2024 and 131,155,268 shares issued and 104,918,905 shares outstanding at December 31, 2023	1,314		1,312
Additional paid-in capital	796,432		791,450
Retained earnings	896,989		893,604
Accumulated other comprehensive loss	(155,482)		(158,735)
Treasury stock, at cost; 26,615,363 shares at June 30, 2024 and 26,236,363 shares at December 31, 2023	(460,291)		(454,128)
Common stock held by the Employee Stock Ownership Plan	(31,349)		(32,478)
Stock held by Rabbi Trust	(3,106)		(2,955)
Deferred compensation obligations	2,227		2,265
Total stockholders' equity	1,046,734		1,040,335
Total liabilities and stockholders' equity	$	10,763,590	$	10,645,568
See accompanying notes to unaudited consolidated financial statements.

2

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Loss)

(In thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Interest income:	(Unaudited)
Loans receivable	$	95,252	$	84,188	$	188,201	$	164,478
Debt securities available for sale and equity securities	9,241		6,445		17,026		14,896
Debt securities held to maturity	2,502		2,447		4,871		4,904
Federal funds and interest-earning deposits	4,459		1,801		8,022		2,613
Federal Home Loan Bank stock dividends	1,832		1,262		3,793		2,132
Total interest income	113,286		96,143		221,913		189,023
Interest expense:
Deposits	49,826		28,727		98,244		45,815
Borrowings	19,380		16,265		37,389		31,193
Total interest expense	69,206		44,992		135,633		77,008
Net interest income	44,080		51,151		86,280		112,015
Provision for credit losses	2,194		1,078		7,472		1,253
Net interest income after provision for credit losses	41,886		50,073		78,808		110,762
Non-interest income:
Demand deposit account fees	1,590		1,291		3,003		2,467
Bank-owned life insurance	1,804		1,675		3,584		3,656
Title insurance fees	744		624		1,247		1,211
Loan fees and service charges	1,378		1,325		2,339		2,397
Loss on securities transactions	—		(9,552)		(1,256)		(10,847)
Change in fair value of equity securities	101		162		452		330
Gain on sale of loans	181		(128)		366		663
Other non-interest income	3,382		4,057		6,897		7,651
Total non-interest income	9,180		(546)		16,632		7,528
Non-interest expense:
Compensation and employee benefits	27,659		32,460		55,172		63,618
Occupancy	6,054		5,738		12,027		11,492
Federal deposit insurance premiums	1,879		1,734		4,234		2,423
Advertising	661		786		1,287		1,473
Professional fees	4,509		2,376		9,143		4,251
Data processing and software expenses	3,914		3,601		7,881		7,426
Merger-related expenses	692		266		714		266
Other non-interest expense, net	879		645		1,447		559
Total non-interest expense	46,247		47,606		91,905		91,508
Income before income tax expense	4,819		1,921		3,535		26,782
Income tax expense	279		257		150		6,395
Net Income	$	4,540	$	1,664	$	3,385	$	20,387
Earnings per share-basic	$	0.04	$	0.02	$	0.03	$	0.20
Earnings per share-diluted	$	0.04	$	0.02	$	0.03	$	0.20
Weighted average shares outstanding-basic	101,651,511		102,409,035		101,699,126		103,514,169
Weighted average shares outstanding-diluted	101,651,511		102,517,584		101,804,386		103,835,235
See accompanying notes to unaudited consolidated financial statements.

3

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(Unaudited)
Net income	$	4,540	$	1,664	$	3,385	$	20,387
Other comprehensive income (loss), net of tax:
Unrealized (loss) gain on debt securities available for sale	(450)		3,165		(5,442)		16,234
Accretion of unrealized gain (loss) on debt securities reclassified as held to maturity	2		(1)		6		(9)
Reclassification adjustment for (loss) gain included in net income	—		(6,851)		(903)		(7,779)
	(448)		(3,687)		(6,339)		8,446
Derivatives, net of tax:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges	298		2,883		4,058		2,018
	298		2,883		4,058		2,018
Employee benefit plans, net of tax:
Amortization of prior service cost included in net income	(10)		(10)		(20)		(20)
Reclassification adjustment of actuarial net (loss) gain included in net income	(394)		1		(778)		1
Change in funded status of retirement obligations	5,909		2,500		6,332		2,680
	5,505		2,491		5,534		2,661
Total other comprehensive income	5,355		1,687		3,253		13,125
Total comprehensive income, net of tax	$	9,895	$	3,351	$	6,638	$	33,512
See accompanying notes to unaudited consolidated financial statements.

4

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (continued)

Three Months Ended June 30, 2024 and 2023 (In thousands)

	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Stock		Common Stock Held by the Employee Stock Ownership Plan		Stock Held by Rabbi Trust		Deferred Compensation Obligations		Total Stockholders' Equity
Balance at March 31, 2024	$	1,314	$	793,878	$	892,449	$	(160,837)	$	(455,948)	$	(31,914)	$	(3,041)	$	2,124	$	1,038,025
Net income	—		—		4,540		—		—		—		—		—		4,540
Other comprehensive (loss)	—		—		—		5,355		—		—		—		—		5,355
Stock based compensation	—		2,241		—		—		—		—		—		—		2,241
Purchase of treasury stock (263,600 shares)	—		—		—		—		(4,242)		—		—		—		(4,242)
Restricted stock forfeitures (150 shares)	—		3		—		—		(3)		—		—		—		—
Repurchase shares for taxes (3,786 shares)	—		—		—		—		(56)		—		—		—		(56)
Excise tax on net stock repurchases	—		—		—		—		(42)		—		—		—		(42)
Employee Stock Ownership Plan shares committed to be released	—		310		—		—		—		565		—		—		875
Funding of deferred compensation obligations	—		—		—		—		—		—		(65)		103		38
Balance at June 30, 2024	$	1,314	$	796,432	$	896,989	$	(155,482)	$	(460,291)	$	(31,349)	$	(3,106)	$	2,227	$	1,046,734
See accompanying notes to unaudited consolidated financial statements.

5

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (continued)

Three Months Ended June 30, 2024 and 2023 (In thousands)

	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Stock		Common Stock Held by the Employee Stock Ownership Plan		Stock Held by Rabbi Trust		Deferred Compensation Obligations		Total Stockholders' Equity
Balance at March 31, 2023	$	1,309	$	783,642	$	876,241	$	(167,858)	$	(419,678)	$	(34,190)	$	(2,668)	$	2,092	$	1,038,890
Net income	—		—		1,664		—		—		—		—		—		1,664
Other comprehensive (loss)	—		—		—		1,687		—		—		—		—		1,687
Issuance of common stock allocated to restricted stock award grants (226,574 shares)	2		7		—		—		—		—		—		—		9
Stock based compensation	—		2,028		—		—		—		—		—		—		2,028
Purchase of treasury stock (1,207,100 shares)	—		—		—		—		(21,998)		—		—		—		(21,998)
Exercise of stock options (37,234 shares)	—		(33)		—		—		—		—		—		—		(33)
Restricted stock forfeitures (10,425 shares)	—		186		—		—		(186)		—		—		—		—
Excise tax on net stock repurchases	—		—		—		—		(222)				—		—		(222)
Employee Stock Ownership Plan shares committed to be released	—		418		—		—		—		567		—		—		985
Funding of deferred compensation obligations	—		—		—		—		—		—		(112)		(110)		(222)
Balance at June 30, 2023	$	1,311	$	786,248	$	877,905	$	(166,171)	$	(442,084)	$	(33,623)	$	(2,780)	$	1,982	$	1,022,788
See accompanying notes to unaudited consolidated financial statements.

6

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (continued)

Six Months Ended June 30, 2024 and 2023 (In thousands)

	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Stock		Common Stock Held by the Employee Stock Ownership Plan		Stock Held by Rabbi Trust		Deferred Compensation Obligations		Total Stockholders' Equity
Balance at December 31, 2023	$	1,312	$	791,450	$	893,604	$	(158,735)	$	(454,128)	$	(32,478)	$	(2,955)	$	2,265	$	1,040,335
Net (loss) income	—		—		3,385		—		—		—		—		—		3,385
Other comprehensive (loss)	—		—		—		3,253		—		—		—		—		3,253
Issuance of common stock allocated to restricted stock award grants (212,441 shares)	2		(2)		—		—		—		—		—		—		—
Stock based compensation	—		4,270		—		—		—		—		—		—		4,270
Purchase of treasury stock (365,116 shares)	—		—		—		—		(5,894)		—		—		—		(5,894)
Exercise of stock options (28,051shares)	—		(49)		—		—		—		—		—		—		(49)
Restricted stock forfeitures (1,695 shares)	—		30		—		—		(30)		—		—		—		—
Repurchase shares for taxes (12,189 shares)	—		—		—		—		(195)		—		—		—		(195)
Excise tax on net stock repurchases	—		—		—		—		(44)								(44)
Employee Stock Ownership Plan shares committed to be released	—		733		—		—		—		1,129		—		—		1,862
Funding of deferred compensation obligations	—		—		—		—		—		—		(151)		(38)		(189)
Balance at June 30, 2024	$	1,314	$	796,432	$	896,989	$	(155,482)	$	(460,291)	$	(31,349)	$	(3,106)	$	2,227	$	1,046,734
See accompanying notes to unaudited consolidated financial statements.

7

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (continued)

Six Months Ended June 30, 2024 and 2023 (In thousands)

	Common Stock		Additional Paid-in-Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Stock		Common Stock Held by the Employee Stock Ownership Plan		Stock Held by Rabbi Trust		Deferred Compensation Obligations		Total Stockholders' Equity
Balance at December 31, 2022	$	1,309	$	781,165	$	857,518	$	(179,296)	$	(371,708)	$	(34,750)	$	(3,149)	$	2,506	$	1,053,595
Net income	—		—		20,387		—		—		—		—		—		20,387
Other comprehensive (loss)	—		—		—		13,125		—		—		—		—		13,125
Issuance of common stock allocated to restricted stock award grants (226,574 shares)	2		7		—		—		—		—		—		—		9
Stock based compensation	—		3,873		—		—		—		—		—		—		3,873
Purchase of treasury stock (3,585,534 shares)	—		—		—		—		(69,321)		—		—		—		(69,321)
Exercise of stock options (40,852 shares)	—		(22)		—		—		—		—		—		—		(22)
Restricted stock forfeitures (12,354 shares)	—		225		—		—		(225)		—		—		—		—
Repurchase shares for taxes (7,068 shares)	—		—		—		—		(133)		—		—		—		(133)
Excise tax on net stock repurchases	—		—		—		—		(697)		—		—		—		(697)
Employee Stock Ownership Plan shares committed to be released	—		1,000		—		—		—		1,127		—		—		2,127
Funding of deferred compensation obligations	—		—		—		—		—		—		369		(524)		(155)
Balance at June 30, 2023	$	1,311	$	786,248	$	877,905	$	(166,171)	$	(442,084)	$	(33,623)	$	(2,780)	$	1,982	$	1,022,788
See accompanying notes to unaudited consolidated financial statements.

8

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

	Six Months Ended June 30,
	2024		2023
	(In thousands, unaudited)
Cash flows from operating activities:
Net income	$	3,385	$	20,387
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred loan costs, fees and purchased premiums and discounts	2,095		2,777
Net amortization of premiums and discounts on securities	(216)		1,090
Net amortization of mortgage servicing rights	134		112
Amortization of intangible assets	1,116		1,194
Depreciation and amortization of office properties and equipment	4,078		3,823
Amortization of operating lease right-of-use assets	1,958		1,954
Provision for credit losses	7,472		1,253
Loss on securities transactions	1,256		10,847
Change in fair value of equity securities	(452)		(330)
Gain on sale of loans, net	(366)		(663)
Net loss on disposal of office properties and equipment	—		25
Deferred tax expense (benefit)	1,688		(2,762)
Increase in accrued interest receivable	(1,993)		(1,261)
Increase in other assets	(8,123)		(10,226)
Increase (decrease) in accrued expenses and other liabilities	18,319		(483)
Income on bank-owned life insurance	(3,584)		(3,656)
Employee stock ownership plan expense	1,862		2,127
Stock based compensation	4,270		3,873
(Increase) decrease in deferred compensation obligations under Rabbi Trust	(189)		(155)
Net cash provided by operating activities	32,710		29,926
Cash flows from investing activities:
Proceeds from sales of debt securities available for sale	3,495		277,022
Proceeds from paydowns/maturities/calls of debt securities available for sale	62,990		53,365
Proceeds from paydowns/maturities/calls of debt securities held to maturity	6,483		6,135
Purchases of debt securities available for sale	(246,244)		—
Purchases of debt securities held to maturity	(16,635)		—
Proceeds from sales of loans held-for-sale	6,896		93,639
Purchases of loans receivable	—		(14,729)
Net decrease (increase) in loans receivable	39,419		(165,198)
Proceeds from bank-owned life insurance death benefits	5		605
Proceeds from redemptions of Federal Home Loan Bank stock	17,553		67,107
Purchases of Federal Home Loan Bank stock	(24,149)		(70,270)
Additions to office properties and equipment	(3,048)		(2,814)
Net cash (used in) provided by investing activities	$	(153,235)	$	244,862

9

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (continued)

	Six Months Ended June 30,
	2024		2023
	(In thousands, unaudited)
Cash flows from financing activities:
Net decrease in deposits	$	(65,009)	$	(287,003)
Proceeds from long-term borrowings	210,000		261,113
Payments on long-term borrowings	(70,000)		(11,300)
Net increase (decrease) in short-term borrowings	15,204		(256,600)
Increase in advance payments by borrowers for taxes and insurance	4,333		2,716
Issuance of common stock for restricted stock awards	—		9
Exercise of stock options	(49)		(22)
Purchase of treasury stock	(5,894)		(69,321)
Repurchase of shares for taxes	(195)		(133)
Net cash provided by (used in) financing activities	$	88,390	$	(360,541)
Net (decrease) in cash and cash equivalents	$	(32,135)	$	(85,753)
Cash and cash equivalents at beginning of year	423,249		179,228
Cash and cash equivalents at end of period	$	391,114	$	93,475
Cash paid during the period for:
Interest on deposits and borrowings	$	134,745	$	73,700
Income tax payments, net of refunds	$	664	$	6,047
Non-cash investing and financing activities:
Transfer of loans receivable to other real estate owned	$	1,974	$	—
Transfer of loans receivable to loans held-for-sale	$	6,532	$	93,678
Excise tax on net stock repurchases	$	44	$	697
See accompanying notes to unaudited consolidated financial statements.

10

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

1.Basis of Financial Statement Presentation

    The accompanying consolidated financial statements include the accounts of Columbia Financial, Inc. ("Columbia Financial"), its wholly-owned subsidiaries, Columbia Bank ("Columbia") and Freehold Bank ("Freehold"), and Columbia's wholly-owned subsidiaries, Columbia Investment Services, Inc., 1901 Residential Management Co. LLC, First Jersey Title Services, Inc., 1901 Commercial Management Co. LLC, Stewardship Realty LLC, RSI Insurance Agency, Inc., and 19-01 Community Development Corporation (inactive), (collectively, the “Company”). In May 2024, Columbia dissolved its wholly-owned subsidiary 2500 Broadway Corp. In consolidation, all intercompany accounts and transactions are eliminated.

    Columbia Financial, Inc. is a majority-owned subsidiary of Columbia Bank, MHC (the "MHC"). The accounts of the MHC are not consolidated in the accompanying consolidated financial statements of the Company.

    In preparing the interim unaudited consolidated financial statements, management is required to make estimates, significant judgments and assumptions that affect the reported amounts of assets and liabilities as of the dates of the Consolidated Statements of Financial Condition and Consolidated Statements of Income for the periods presented. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations. Material estimates that involve significant judgments and assumptions that are particularly susceptible to change are the determination of the adequacy of the allowance for credit losses, evaluation of the need for valuation allowances on deferred tax assets, and determination of liabilities related to retirement and other post-retirement benefits. These estimates, significant judgments and assumptions are evaluated on an ongoing basis and are adjusted when facts and circumstances dictate.

    The interim unaudited consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three and six months periods ended June 30, 2024 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year or any other period.

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

    These unaudited consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and the audited consolidated financial statements included therein.

2.    Acquisitions

Freehold Bank

On December 1, 2021, the Company completed its acquisition of Freehold Bancorp, MHC, Freehold Bancorp, Inc. and Freehold Bank (collectively, the "Freehold Entities" or "Freehold"). Pursuant to the terms of the merger agreement, Freehold Bancorp, MHC merged with and into the MHC, with the MHC as the surviving entity; and Freehold Bancorp, Inc. merged with and into Columbia Financial, with Columbia Financial as the surviving entity. In connection with the merger, Freehold Bank converted to a federal savings bank and operates as a wholly-owned subsidiary of Columbia Financial. The Company intends to merge Freehold Bank into Columbia Bank at a future date that has not yet been determined. Under the terms of the merger agreement, upon the subsequent merger of the two banks, depositors of Freehold Bank will become depositors of Columbia Bank and will have the same rights and privileges in the MHC as if their accounts had been established at Columbia Bank on the date established at Freehold Bank. The Company issued 2,591,007 shares of its common stock to the MHC, representing an amount equal to the fair value of the Freehold Entities as determined by an independent appraiser, at the effective time of the holding company mergers.

Merger-related expenses are recorded in the Consolidated Statements of Income and are expensed as incurred. Direct acquisition and other charges incurred in connection with the acquisition of the Freehold Entities totaled $692,000 and $714,000 during the three and six months ended June 30, 2024, and $73,866 recorded during both the three and six months ended June 30, 2023.

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

3.        Earnings per Share

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

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

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and six months ended June 30, 2024 and 2023:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands, except per share data)
Net income	$	4,540	$	1,664	$	3,385	$	20,387
Shares:
Weighted average shares outstanding - basic	101,651,511		102,409,035		101,699,126		103,514,169
Weighted average diluted shares outstanding	—		108,549		105,260		321,066
Weighted average shares outstanding - diluted	101,651,511		102,517,584		101,804,386		103,835,235
Earnings per share:
Basic	$	0.04	$	0.02	$	0.03	$	0.20
Diluted	$	0.04	$	0.02	$	0.03	$	0.20

    During the three and six months ended June 30, 2024 and 2023, the average number of stock options which could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive totaled 3,834,101 and 949,748, and 527,338 and 438,712, respectively.

4.    Stock Repurchase Program

On December 14, 2022, the Company announced that its Board of Directors authorized the Company's fifth stock repurchase program to acquire up to 3,000,000 shares, or approximately 2.7% of the Company's then issued and outstanding common stock, commencing upon the completion of the Company’s fourth stock repurchase program. As of June 30, 2024, all shares were repurchased under this program.

On May 25, 2023, the Company announced that its Board of Directors authorized the Company's sixth stock repurchase program to acquire up to 2,000,000 shares, or approximately 1.9% of the Company's then issued and outstanding common stock. As of June 30, 2024, there were 741,725 shares remaining to be purchased under this program.

During the three and six months ended June 30, 2024, the Company repurchased 263,600 shares at a cost of approximately $4.2 million, or $16.09 per share, and 365,116 shares at a cost of approximately $5.9 million, or $16.14 per share, respectively, under these programs. During the three and six months ended June 30, 2023, the Company repurchased 1,207,100 shares at a cost of approximately $22.0 million, or $18.22 per share, and 3,585,534 shares at a cost of approximately $69.3 million, or $19.33 per share, respectively, under these programs. Repurchases have been paused to retain capital. Repurchased shares are held as treasury stock and are available for general corporate purposes.

12

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

5.    Summary of Significant Accounting Policies

Accounting Pronouncements Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280); Improvements to Reportable Segment Disclosures. ASU 2023-07 enhances segment reporting under Topic 820 by expanding the breadth and frequency of segment disclosures. The ASU requires a public entity to disclose entity-wide and segment information in the notes to the financial statements. Disclosures include the measure of profit or loss that the chief operating decision maker uses to assess segment performance and decide how to allocate resources, as well as certain specified amounts included in that measure. This ASU was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company adopted this ASU on January 1, 2024 on a retrospective basis for all periods presented. As it is only disclosure related, this ASU did not have an impact on the Company's consolidated financial statements.

6.    Debt Securities Available for Sale

    Debt securities available for sale at June 30, 2024 and December 31, 2023 are summarized as follows:

	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
	(In thousands)
U.S. government and agency obligations	$	273,209	$	251	$	(2,638)	$	270,822
Mortgage-backed securities and collateralized mortgage obligations	1,056,441		98		(149,957)		906,582
Municipal obligations	2,767		—		(47)		2,720
Corporate debt securities	97,530		30		(14,225)		83,335
	$	1,429,947	$	379	$	(166,867)	$	1,263,459

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
			(In thousands)
U.S. government and agency obligations	$	146,387	$	924	$	(1,810)	$	145,501
Mortgage-backed securities and collateralized mortgage obligations	1,009,508		20		(141,943)		867,585
Municipal obligations	2,770		—		(68)		2,702
Corporate debt securities	92,565		2		(14,798)		77,769
	$	1,251,230	$	946	$	(158,619)	$	1,093,557

13

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

6.    Debt Securities Available for Sale (continued)

The amortized cost and fair value of debt securities available for sale at June 30, 2024, by contractual final maturity, is shown below. Expected maturities may differ from contractual maturities due to prepayment or early call options exercised by the issuer.

	June 30, 2024
	Amortized Cost		Fair Value
	(In thousands)
One year or less	$	80,740	$	80,372
More than one year to five years	214,258		211,496
More than five years to ten years	78,508		65,009
	$	373,506	$	356,877
Mortgage-backed securities and collateralized mortgage obligations	1,056,441		906,582
	$	1,429,947	$	1,263,459

Mortgage-backed securities and collateralized mortgage obligations totaling $1.1 billion at amortized cost, and $906.6 million at fair value, are not classified by maturity in the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

    During the three months ended June 30, 2024, there were no sales, calls or maturities of debt securities available for sale. During the six months ended June 30, 2024, proceeds from the sale of a debt security available for sale totaled $3.5 million, resulting in no gross gains and $1.3 million of gross losses. There was one matured debt security available for sale totaling $10.0 million, during the six months ended June 30, 2024.

During the three months ended June 30, 2023, proceeds from the sale of debt securities available for sale totaled $234.4 million, resulting in no gross gains and $9.6 million of gross losses. During the six months ended June 30, 2023, proceeds from the sale of debt securities available for sale totaled $277.0 million, resulting in no gross gains and $10.8 million of gross losses. There were no calls or matured debt securities available for sale during the three and six months ended June 30, 2023.

Debt securities available for sale having a carrying value of $230.6 million and $211.5 million, at June 30, 2024 and December 31, 2023, respectively, were pledged as security for public funds on deposit at Columbia Bank as required and permitted by law, pledged for outstanding borrowings at the Federal Home Loan Bank, and pledged for potential borrowings at the Federal Reserve Bank of New York. Debt securities available for sale having a carrying value of $63.9 million and $75.1 million, at June 30, 2024 and December 31, 2023, respectively, were pledged by Freehold Bank for outstanding borrowings at the Federal Home Loan Bank, and for potential borrowings at the Federal Reserve Bank of New York.

    The following tables summarize the fair value and gross unrealized losses of those securities that reported an unrealized loss at June 30, 2024 and December 31, 2023 and if the unrealized loss position was continuous for the twelve months prior to those respective dates:

	June 30, 2024
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)
	(In thousands)
U.S. government and agency obligations	$	166,186	$	(827)	$	20,883	$	(1,811)	$	187,069	$	(2,638)
Mortgage-backed securities and collateralized mortgage obligations	32,535		(287)		814,739		(149,670)		847,274		(149,957)
Municipal obligations	—		—		2,720		(47)		2,720		(47)
Corporate debt securities	—		—		78,304		(14,225)		78,304		(14,225)
	$	198,721	$	(1,114)	$	916,646	$	(165,753)	$	1,115,367	$	(166,867)

14

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

6.    Debt Securities Available for Sale (continued)

	December 31, 2023
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)
	(In thousands)
U.S. government and agency obligations	$	—	$	—	$	21,344	$	(1,810)	$	21,344	$	(1,810)
Mortgage-backed securities and collateralized mortgage obligations	54		(4)		863,026		(141,939)		863,080		(141,943)
Municipal obligations	—		—		2,702		(68)		2,702		(68)
Corporate debt securities	—		—		75,765		(14,798)		75,765		(14,798)
	$	54	$	(4)	$	962,837	$	(158,615)	$	962,891	$	(158,619)

The number of securities in an unrealized loss position at June 30, 2024 totaled 357, compared with 329 at December 31, 2023. All temporarily impaired securities were investment grade as of June 30, 2024 and December 31, 2023, except two corporate debt securities which were rated BB+, totaling approximately $8.3 million and $8.1 million at June 30, 2024 and December 31, 2023, respectively.

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

There was no activity in the allowance for credit losses on debt securities available for sale for the three and six months ended June 30, 2024 and 2023.

The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of debt securities available for sale. Accrued interest receivable on debt securities available for sale is reported as a component of accrued interest receivable on the Consolidated Statement of Financial Condition, which totaled $4.9 million and $3.7 million at June 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses.

7.    Debt Securities Held to Maturity

    Debt securities held to maturity at June 30, 2024 and December 31, 2023 are summarized as follows:

	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Allowance for Credit Losses		Fair Value
U.S. government and agency obligations	$	49,872	$	—	$	(5,906)	$	—	$	43,966
Mortgage-backed securities and collateralized mortgage obligations	361,428		21		(40,071)		—		321,378
	$	411,300	$	21	$	(45,977)	$	—	$	365,344

15

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

7.    Debt Securities Held to Maturity (continued)

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Allowance for Credit Losses		Fair Value
	(In thousands)
U.S. government and agency obligations	$	49,871	$	—	$	(5,902)	$	—	$	43,969
Mortgage-backed securities and collateralized mortgage obligations	351,283		—		(38,075)		—		313,208
	$	401,154	$	—	$	(43,977)	$	—	$	357,177

The amortized cost and fair value of debt securities held to maturity at June 30, 2024, by contractual final maturity, is shown below. Expected maturities may differ from contractual maturities due to prepayment or early call options exercised by the issuer.

	June 30, 2024
	Amortized Cost		Fair Value
	(In thousands)
More than one year to five years	$	29,875	$	27,699
More than five years to ten years	9,997		8,576
More than ten years	10,000		7,691
	49,872		43,966
Mortgage-backed securities and collateralized mortgage obligations	361,428		321,378
	$	411,300	$	365,344

Mortgage-backed securities and collateralized mortgage obligations totaling $361.4 million at amortized cost, and $321.4 million at fair value at June 30, 2024, are not classified by maturity as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

    During the three and six months ended June 30, 2024 and 2023 there were no sales, calls or maturities of debt securities held to maturity.

Debt securities held to maturity having a carrying value of $210.2 million and $202.9 million, at June 30, 2024 and December 31, 2023, respectively, were pledged as security for public funds on deposit at Columbia Bank as required and permitted by law, pledged for outstanding borrowings at the Federal Home Loan Bank, and pledged for potential borrowings at the Federal Reserve Bank of New York.

16

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

7.    Debt Securities Held to Maturity (continued)

The following tables summarize the fair value and gross unrealized losses of those securities that reported an unrealized loss at June 30, 2024 and December 31, 2023 and if the unrealized loss position was continuous for the twelve months prior to those respective dates:

	June 30, 2024
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)
	(In thousands)
U.S. government and agency obligations	$	—	$	—	$	43,966	$	(5,906)	$	43,966	$	(5,906)
Mortgage-backed securities and collateralized mortgage obligations	—		—		314,784		(40,071)		314,784		(40,071)
	$	—	$	—	$	358,750	$	(45,977)	$	358,750	$	(45,977)

	December 31, 2023
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)
	(In thousands)
U.S. government and agency obligations	$	—	$	—	$	43,969	$	(5,902)	$	43,969	$	(5,902)
Mortgage-backed securities and collateralized mortgage obligations	—		—		313,208		(38,075)		313,208		(38,075)
	$	—	$	—	$	357,177	$	(43,977)	$	357,177	$	(43,977)

    The number of securities in an unrealized loss position at June 30, 2024 totaled 111, compared with 108 at December 31, 2023. All temporarily impaired securities were investment grade as of June 30, 2024 and December 31, 2023.

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

The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of debt securities held to maturity. Accrued interest receivable on debt securities held to maturity is reported as a component of accrued interest receivable on the Consolidated Statement of Financial Condition, which totaled $991,000 and $997,000 at June 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses.

8.    Equity Securities at Fair Value

    The Company has an equity securities portfolio which consists of stock in other financial institutions, a payment technology company, a community bank correspondent services company, preferred stock in U.S. Government agencies, and a Community Reinvestment Act qualifying bond fund which are reported at fair value on the Company's Consolidated Statements of Financial Condition. The fair value of the equities portfolio at June 30, 2024 and December 31, 2023 was $4.5 million and $4.1 million, respectively.

17

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

8.    Equity Securities at Fair Value (continued)

    The Company recorded a net increase in the fair value of equity securities of $101,000 and $162,000, and $452,000 and $330,000 during the three and six months ended June 30, 2024 and 2023, respectively, as a component of non-interest income.

    During the three and six months ended June 30, 2024 and 2023, there were no sales of equity securities.

9.    Loans Receivable and Allowance for Credit Losses

Loans receivable at June 30, 2024 and December 31, 2023 are summarized as follows:

	June 30,		December 31,
	2024		2023
	(In thousands)
Real estate loans:
One-to-four family	$	2,764,177	$	2,792,833
Multifamily	1,409,316		1,409,187
Commercial real estate	2,316,252		2,377,077
Construction	462,880		443,094
Commercial business loans	554,768		533,041
Consumer loans:
Home equity loans and advances	260,427		266,632
Other consumer loans	2,689		2,801
Total gross loans	7,770,509		7,824,665
Purchased credit-deteriorated ("PCD") loans	12,150		15,089
Net deferred loan costs, fees and purchased premiums and discounts	36,352		34,783
Loans receivable	$	7,819,011	$	7,874,537

    The Company had no loans held-for-sale at June 30, 2024 and December 31, 2023. During the three months ended June 30, 2024, the Company sold $1.9 million and $1.3 million of Small Business Administration ("SBA") loans included in commercial business loans, and construction loans held-for-sale, respectively, resulting in gross gains of $181,000 and no gross losses. During the six months ended June 30, 2024, the Company sold $236,000, $4.0 million, and $2.7 million of one-to-four family real estate loans, SBA loans included in commercial business loans, and construction loans held-for-sale, respectively, resulting in gross gains of $366,000 and no gross losses.

During the three months ended June 30, 2023, the Company sold $48.0 million, $6.1 million, $1.9 million, and $3.2 million, of one-to-four family real estate loans, commercial real estate loans, SBA loans included in commercial business loans, and construction loans held-for-sale, respectively, resulting in gross gains of $177,000 and gross losses of $305,000. During the six months ended June 30, 2023, the Company sold $57.8 million, $21.4 million, $11.3 million, and $3.8 million, of one-to-four family real estate loans and home equity loans and advances, commercial real estate loans, SBA loans included in commercial business loans, and construction loans held-for-sale, respectively, resulting in gross gains of $968,000 and gross losses of $305,000.

During the three and six months ended June 30, 2024, no loans were purchased by the Company. During the six months ended June 30, 2023, the Company purchased a $14.7 million commercial real estate participation loan from a third party financial institution. During the three months ended June 30, 2023 no loans were purchased by the Company.

At June 30, 2024 and December 31, 2023, commercial business loans included $624,000 and $809,000, respectively, in SBA Payroll Protection Program ("PPP") loans.

At June 30, 2024 and December 31, 2023, the carrying value of loans serviced by the Company for investors was $534.2 million and $551.0 million, respectively. These loans are not included in the Consolidated Statements of Financial Condition.

18

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following tables summarize the aging of loans receivable by portfolio segment, including non-accrual loans and excluding PCD loans at June 30, 2024 and December 31, 2023:

	June 30, 2024
	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Non-accrual		Current		Total
	(In thousands)
Real estate loans:
One-to-four family	$	12,171	$	6,652	$	2,597	$	21,420	$	5,756	$	2,742,757	$	2,764,177
Multifamily	—		—		—		—		—		1,409,316		1,409,316
Commercial real estate	3,088		544		149		3,781		8,066		2,312,471		2,316,252
Construction	—		—		—		—		—		462,880		462,880
Commercial business loans	2,340		5,542		2,419		10,301		11,284		544,467		554,768
Consumer loans:
Home equity loans and advances	630		32		75		737		175		259,690		260,427
Other consumer loans	—		—		—		—		—		2,689		2,689
Total loans	$	18,229	$	12,770	$	5,240	$	36,239	$	25,281	$	7,734,270	$	7,770,509

	December 31, 2023
	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Non-accrual		Current		Total
	(In thousands)
Real estate loans:
One-to-four family	$	11,079	$	4,254	$	1,558	$	16,891	$	3,139	$	2,775,942	$	2,792,833
Multifamily	—		—		—		—		—		1,409,187		1,409,187
Commercial real estate	1,711		2,472		2,740		6,923		2,740		2,370,154		2,377,077
Construction	—		—		—		—		—		443,094		443,094
Commercial business loans	1,727		4,917		6,518		13,162		6,518		519,879		533,041
Consumer loans:
Home equity loans and advances	779		14		170		963		221		265,669		266,632
Other consumer loans	1		—		—		1		—		2,800		2,801
Total loans	$	15,297	$	11,657	$	10,986	$	37,940	$	12,618	$	7,786,725	$	7,824,665

The Company considers a loan to be delinquent when we have not received a payment within 30 days of its contractual due date. Generally, a loan is designated as a non-accrual loan when the payment of interest is 90 days or more in arrears of its contractual due date. Non-accruing loans are returned to accrual status after there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible. The Company identifies loans that may need to be charged-off as a loss, by reviewing all delinquent loans, classified loans and other loans for which management may have concerns about collectability. At June 30, 2024 and December 31, 2023, non-accrual loans totaled $25.3 million and $12.6 million, respectively. Included in non-accrual loans at June 30, 2024 and December 31, 2023, are 23 and 10 loans totaling $20.0 million and $1.6 million, respectively, which are less than 90 days in arrears.

19

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

At June 30, 2024 and December 31, 2023, there were no loans past due 90 days or more still accruing interest.

Purchased credit-deteriorated ("PCD") loans were loans acquired at a discount primarily due to deteriorated credit quality. These loans were initially recorded at fair value at acquisition, based upon the present value of expected future cash flows, with no related allowance for credit losses. Loans acquired in a business combination are recorded in accordance with ASC Topic 326, which requires loans as of the acquisition date, that have experienced a more than insignificant deterioration in credit quality since origination, to be classified as PCD loans.

At June 30, 2024 and December 31, 2023, PCD loans acquired in the Stewardship Financial Corporation ("Stewardship") acquisition totaled $1.5 million and $1.7 million, respectively, PCD loans acquired in the Freehold Bank acquisition totaled $254,000 and $2.8 million, respectively, and PCD loans acquired in the RSI Bank acquisition totaled $10.4 million and $10.6 million, respectively.

    We may obtain physical possession of real estate collateralizing a residential mortgage loan via foreclosure or through an in-substance repossession. At June 30, 2024, the Company held one commercial property with a carrying value of $2.0 million in other real estate owned that was acquired through foreclosure on a nonresidential mortgage loan. At December 31, 2023, the Company had no real estate owned. At June 30, 2024 we had four residential mortgage loans with a carrying value of $1.3 million and two home equity loans with a carrying value of $75,000, collateralized by residential real estate, which were in the process of foreclosure. At December 31, 2023, we had one residential mortgage loan and one home equity loan with carrying values of $576,000 and $93,000, respectively, collateralized by residential real estate which were in the process of foreclosure.

The Company has made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans receivable. Accrued interest receivable on loans receivable is reported as a component of accrued interest receivable in the Consolidated Statement of Financial Condition, which totaled $33.2 million and $32.9 million at June 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses.

The determination of the allowance for credit losses (“ACL”) on loans is considered a critical accounting estimate by management because of the high degree of judgment involved in determining qualitative loss factors, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment. The ACL is maintained at a level management considers adequate to provide for estimated losses and impairment based upon an evaluation of known and inherent risk in the loan portfolio. The ACL consists of two elements: (1) identification of loans that must be individually analyzed for impairment and (2) establishment of an ACL for loans collectively analyzed.

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

We maintain a loan review system that provides a periodic review of the loan portfolio and the identification of individually analyzed loans. The ACL for individually analyzed loans is based on the fair value of collateral or cash flows. While management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluations.

The ACL quantitative allowance for each segment is measured using a discounted cash flow methodology incorporating an econometric, probability of default (“PD”) and loss given default (“LGD”) with distinct segment-specific multi-variate regression models applied. Expected credit losses are estimated over the life of the loans by measuring the difference between the net present value of modeled cash flows and amortized cost basis. Contractual cash flows over the contractual life of the loans are the basis for the modeled cash flows, adjusted for model defaults and expected prepayments and discounted at the loan-level effective interest rate. The contractual term excludes expected extensions, renewals, and modifications.

20

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The ACL quantitative allowance for each segment is measured using a discounted cash flow methodology incorporating an econometric, probability of default (“PD”) and loss given default (“LGD”) with distinct segment-specific multi-variate regression models applied. Expected credit losses are estimated over the life of the loans by measuring the difference between the net present value of modeled cash flows and amortized cost basis. Contractual cash flows over the contractual life of the loans are the basis for the modeled cash flows, adjusted for model defaults and expected prepayments and discounted at the loan-level effective interest rate. The contractual term excludes expected extensions, renewals, and modifications.

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

Using the historical relationship between economic conditions and loan performance, management’s expectation of future loan performance is incorporated using a single economic forecast of macroeconomic variables (i.e., unemployment, gross domestic product, vacancy, and home price index). This forecast is applied over a period that management has determined to be reasonable and supportable. Beyond the period over which management can develop or source a reasonable and supportable forecast, the model reverts to long-term average historical loss rates using a straight-line, time-based methodology. The Company's current forecast period is six quarters, with a four-quarter reversion period to long-term average historical loss rates.

After quantitative considerations, management applies additional qualitative adjustments that consider the expected impact of certain factors not fully captured in the quantitative reserve. Qualitative adjustments include but are not limited to concentrations of large loan balances, delinquency trends, change in collateral values within segments, and other considerations.

The ACL is established through the provision for credit losses that are charged to income, which is based upon an evaluation of estimated losses in the current loan portfolio, including the evaluation of individually analyzed loans. Charge-offs against the ACL are taken on loans where management determines that the collection of loan principal and interest is unlikely. Recoveries made on loans that have been charged-off are credited to the ACL. Although we believe we have established and maintained the ACL on loans at appropriate levels, changes in reserves may be necessary if actual economic and other conditions differ substantially from the forecast used in estimating the ACL.

Our financial results are affected by the changes in and the level of the ACL. This process involves our analysis of internal and external variables, and it requires that we exercise judgment to estimate an appropriate ACL. As a result of the uncertainty associated with this subjectivity, we cannot assure the precision of the amount reserved, should we experience sizable loan losses in any particular period and/or significant changes in assumptions or economic condition. We believe the primary risks inherent in the portfolio are a general decline in the economy, a decline in real estate market values, rising unemployment, increasing vacancy rates, and increases in interest rates in the absence of economic improvement or any other such factors. Any one or a combination of these events may adversely affect a borrower's ability to repay its loan, resulting in increased delinquencies and loan losses. Accordingly, we have recorded loan credit losses at a level which is estimated to represent the current risk in its loan portfolio.

Most of our non-performing assets are collateral dependent loans which are written down to the fair value of the collateral less estimated costs to sell. We continue to assess the collateral of these loans and update our appraisals on these loans on an annual basis. To the extent the property values decline, there could be additional losses on these non-performing assets, which may be material. Management considered these market conditions in deriving the estimated ACL. Should economic difficulties occur, the ultimate amount of loss could vary from our current estimate.

21

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

    The following tables summarize loans receivable (including PCD loans) and allowance for credit losses by portfolio segment and impairment method at June 30, 2024 and December 31, 2023:

	June 30, 2024
	One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total
	(In thousands)
Allowance for credit losses:
Individually analyzed loans	$	—	$	—	$	—	$	—	$	76	$	—	$	—	$	76
Collectively analyzed loans	14,883		8,391		15,048		8,549		7,416		2,652		6		56,945
Loans acquired with deteriorated credit quality	5		—		32		—		2		2		—		41
Total	$	14,888	$	8,391	$	15,080	$	8,549	$	7,494	$	2,654	$	6	$	57,062
Total loans:
Individually analyzed loans	$	378	$	—	$	8,938	$	—	$	10,892	$	14	$	—	$	20,222
Collectively analyzed loans	2,763,799		1,409,316		2,307,314		462,880		543,876		260,413		2,689		7,750,287
Loans acquired with deteriorated credit quality	1,853		—		9,823		—		327		147		—		12,150
Total loans	$	2,766,030	$	1,409,316	$	2,326,075	$	462,880	$	555,095	$	260,574	$	2,689	$	7,782,659

22

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

	December 31, 2023
	One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total
	(In thousands)
Allowance for credit losses:
Individually analyzed loans	$	186	$	7	$	237	$	—	$	154	$	30	$	—	$	614
Collectively analyzed loans	12,827		8,735		15,378		7,758		7,742		1,862		7		54,309
Loans acquired with deteriorated credit quality	4		—		142		—		27		—		—		173
Total	$	13,017	$	8,742	$	15,757	$	7,758	$	7,923	$	1,892	$	7	$	55,096
Total loans:
Individually analyzed loans	$	4,063	$	382	$	15,360	$	—	$	11,550	$	601	$	—	$	31,956
Collectively analyzed loans	2,788,770		1,408,805		2,361,717		443,094		521,491		266,031		2,801		7,792,709
Loans acquired with deteriorated credit quality	1,893		—		12,689		—		369		138		—		15,089
Total loans	$	2,794,726	$	1,409,187	$	2,389,766	$	443,094	$	533,410	$	266,770	$	2,801	$	7,839,754

    On January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures, which eliminated the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Modifications made to borrowers experiencing financial difficulty may include principal or interest forgiveness, forbearance, interest rate reductions, term extensions, or a combination of these events intended to minimize economic loss and to avoid foreclosure or repossession of collateral.

23

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following table presents the modifications of loans to borrowers experiencing financial difficulty that were modified

during the three and six months ended June 30, 2024 and 2023:

	For the Six Months Ended June 30, 2024
	Amortized Cost		Term Extension		Combination of Term Extension, Interest Rate Reduction, and Principal Forgiveness		% of Total Class of Loans Receivable
	(In thousands)
Commercial business	$	3,700	$	3,700	$	—	0.67	%
Total loans	$	3,700	$	3,700	$	—	0.05	%

For the three months ended June 30, 2024, the Company had no modifications in accordance with the ASU.

	For the Three and Six Months Ended June 30, 2023
	Amortized Cost		Term Extension		Combination of Term Extension, Interest Rate Reduction, and Principal Forgiveness		% of Total Class of Loans Receivable
	(In thousands)
Construction	$	2,317	$	2,317	$	—	0.61	%
Commercial business	240		240		—		0.05
Total loans	$	2,557	$	2,557	$	—	0.03	%

The following table describes the types of modifications of loans to borrowers experiencing financial difficulty during the

three and six months ended June 30, 2024 and 2023:

For the Six Months Ended June 30, 2024
	Type of Modifications
Commercial business	15 month term extension

For the Three and Six Months Ended June 30, 2023
	Type of Modifications
Construction	12 month term extension
Commercial business	12 month term extension

24

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The Company closely monitors the performance of modifications of loans to borrowers experiencing financial difficulty to understand the effectiveness of these modification efforts. The Company did not extend any commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified during the three and six months ended June 30, 2024.

The following tables present the aging analysis of modifications of loans to borrowers experiencing financial difficulty at June 30, 2024 and December 31, 2023:

	June 30, 2024
	Current		30-59 Days		60-89 Days		90 Days or More		Non-accrual		Total
	(In thousands)
Commercial real estate	$	—	$	1,029	$	—	$	—	$	—	$	1,029
Commercial business	—		—		—		—		4,119		4,119
Total loans	$	—	$	1,029	$	—	$	—	$	4,119	$	5,148

	December 31, 2023
	Current		30-59 Days		60-89 Days		90 Days or More		Non-accrual		Total
	(In thousands)
Commercial real estate	$	1,035	$	—	$	—	$	—	$	—	$	1,035
Construction	2,317		—		—		—		—		2,317
Commercial business	—		—		4,917		—		237		5,154
Total loans	$	3,352	$	—	$	4,917	$	—	$	237	$	8,506

25

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2024 and 2023 are as follows:

	For the Three Months Ended June 30,
	One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Totals
	(In thousands)
2024
Balance at beginning of period	$	13,840	$	8,670	$	15,232	$	8,068	$	7,711	$	1,873	$	7	$	55,401
Provision for (reversal of) credit losses	1,046		(279)		(32)		480		144		777		58		2,194
Recoveries	2		—		—		1		262		4		1		270
Charge-offs	—		—		(120)		—		(623)		—		(60)		(803)
Balance at end of period	$	14,888	$	8,391	$	15,080	$	8,549	$	7,494	$	2,654	$	6	$	57,062
2023
Balance at beginning of period	$	12,789	$	8,145	$	16,257	$	6,739	$	7,320	$	1,614	$	9	$	52,873
Provision for (reversal of) credit losses	(1,763)		1,247		19		196		764		575		40		1,078
Recoveries	—		—		—		—		56		4		—		60
Charge-offs	—		—		(64)		—		(450)		—		(41)		(555)
Balance at end of period	$	11,026	$	9,392	$	16,212	$	6,935	$	7,690	$	2,193	$	8	$	53,456

26

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

	For the Six Months Ended June 30,
	One-to-Four Family		Multifamily		Commercial Real Estate		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Totals
	(In thousands)
2024
Balance at beginning of period	$	13,017	$	8,742	$	15,757	$	7,758	$	7,923	$	1,892	$	7	$	55,096
Provision for (reversal of) credit losses	1,871		(351)		(557)		789		4,809		753		158		7,472
Recoveries	2		—		—		2		405		9		1		419
Charge-offs	(2)		—		(120)		—		(5,643)		—		(160)		(5,925)
Balance at end of period	$	14,888	$	8,391	$	15,080	$	8,549	$	7,494	$	2,654	$	6	$	57,062
2023
Balance at beginning of period	$	11,802	$	7,877	$	18,111	$	6,425	$	6,897	$	1,681	$	10	$	52,803
Provision for (reversal of) credit losses	(642)		1,515		(1,749)		510		1,037		514		68		1,253
Recoveries	—		—		—		—		206		24		6		236
Charge-offs	(134)		—		(150)		—		(450)		(26)		(76)		(836)
Balance at end of period	$	11,026	$	9,392	$	16,212	$	6,935	$	7,690	$	2,193	$	8	$	53,456

27

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following tables present individually analyzed loans by segment, excluding PCD loans, at June 30, 2024 and December 31, 2023:

	At June 30, 2024
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	378	$	426	$	—
Commercial real estate	8,938		9,598		—
Commercial business loans	10,816		14,514		—
Consumer loans:
Home equity loans and advances	14		14		—
	20,146		24,552		—
With a specific allowance recorded:
Real estate loans:
Commercial business loans	76		76		76
	76		76		76
Total:
Real estate loans:
One-to-four family	378		426		—
Commercial real estate	8,938		9,598		—
Commercial business loans	10,892		14,590		76
Consumer loans:
Home equity loans and advances	14		14		—
Total loans	$	20,222	$	24,628	$	76

28

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

	At December 31, 2023
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	1,170	$	1,519	$	—
Multifamily	49		52		—
Commercial real estate	12,741		14,364		—
Commercial business loans	5,814		6,764		—
Consumer loans:
Home equity loans and advances	145		163		—
	19,919		22,862		—
With a specific allowance recorded:
Real estate loans:
One-to-four family	2,893		2,911		186
Multifamily	333		333		7
Commercial real estate	2,619		2,622		237
Commercial business loans	5,736		5,736		154
Consumer loans:
Home equity loans and advances	456		456		30
	12,037		12,058		614
Total:
Real estate loans:
One-to-four family	4,063		4,430		186
Multifamily	382		385		7
Commercial real estate	15,360		16,986		237
Commercial business loans	11,550		12,500		154
Consumer loans:
Home equity loans and advances	601		619		30
	$	31,956	$	34,920	$	614

    Specific allocations of the allowance for credit losses attributable to individually analyzed loans totaled $76,000 and $614,000 at June 30, 2024 and December 31, 2023, respectively. At June 30, 2024 and December 31, 2023, impaired loans for which there was no related allowance for credit losses totaled $20.1 million and $19.9 million, respectively.

29

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

    The following table presents interest income recognized for individually analyzed loans by loan segment, excluding PCD loans and non-accrual loans, for the three and six months ended June 30, 2024 and 2023:

	For the Three Months Ended June 30,
	2024				2023
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Real estate loans:
One-to-four family	$	1,053	$	—	$	4,722	$	56
Multifamily	23		—		429		5
Commercial real estate	9,317		20		16,156		163
Commercial business loans	10,004		—		3,128		18
Consumer loans:
Home equity loans and advances	62		—		660		10
Total loans	$	20,459	$	20	$	25,095	$	252

	For the Six Months Ended June 30,
	2024				2023
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Real estate loans:
One-to-four family	$	2,056	$	13	$	4,536	$	101
Multifamily	143		1		438		10
Commercial real estate	11,331		39		16,347		314
Commercial business loans	10,519		—		2,476		67
Consumer loans:
Home equity loans and advances	242		1		672		17
Total loans	$	24,291	$	54	$	24,469	$	509

Management prepares an analysis each quarter that categorizes the entire loan portfolio by certain risk characteristics such as loan type (residential mortgage, commercial mortgage, construction, commercial business, etc.) and loan risk rating. The categorization of loans into risk categories is based upon relevant information about the borrower's ability to service their debt.

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

30

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The following table summarizes the Company's loans by year of origination and internally assigned credit risk rating, excluding PCD loans, at June 30, 2024 and December 31, 2023:

	Loans by Year of Origination at June 30, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
	(In thousands)
One-to-Four Family
Pass	$	57,856	$	156,340	$	780,416	$	770,807	$	260,718	$	730,906	$	—	$	—	$	2,757,043
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		749		1,671		1,337		603		2,774		—		—		7,134
Total One-to-Four Family	57,856		157,089		782,087		772,144		261,321		733,680		—		—		2,764,177
Gross charge-offs	—		—		—		—		—		2		—		—		2
Multifamily
Pass	6,948		116,125		323,476		344,834		167,286		444,915		—		—		1,403,584
Special mention	—		—		—		—		—		4,511		—		—		4,511
Substandard	—		—		—		—		—		1,221		—		—		1,221
Total Multifamily	6,948		116,125		323,476		344,834		167,286		450,647		—		—		1,409,316
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial Real Estate
Pass	67,199		178,405		420,779		369,648		156,603		1,027,279		—		—		2,219,913
Special mention	—		—		1,443		1		2,819		25,494		—		—		29,757
Substandard	—		—		11,372		—		3,760		51,450		—		—		66,582
Total Commercial Real Estate	67,199		178,405		433,594		369,649		163,182		1,104,223		—		—		2,316,252
Gross charge-offs	—		—		—		—		—		120		—		—		120
Construction
Pass	20,757		137,704		257,764		46,655		—		—		—		—		462,880
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Total Construction	20,757		137,704		257,764		46,655		—		—		—		—		462,880
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

31

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

	Loans by Year of Origination at June 30, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
	(In thousands)
Commercial Business
Pass	$	36,609	$	58,214	$	56,977	$	28,712	$	24,450	$	47,279	$	267,253	$	—	$	519,494
Special mention	—		—		1,447		—		273		835		8,022		—		10,577
Substandard	—		358		582		76		40		7,183		16,060		—		24,299
Doubtful	—		—		—		—		—		398		—		—		398
Total Commercial Business	36,609		58,572		59,006		28,788		24,763		55,695		291,335		—		554,768
Gross charge-offs	—		—		—		2,352		—		3,291		—		—		5,643
Home Equity Loans and Advances
Pass	6,756		18,596		19,862		17,202		10,712		84,990		35,296		66,837		260,251
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		176		—		—		176
Total Home Equity Loans and Advances	6,756		18,596		19,862		17,202		10,712		85,166		35,296		66,837		260,427
Gross charge-offs	—		—		—		—		—		—		—		—		—
Other Consumer Loans
Pass	2,043		123		118		14		2		67		322		—		2,689
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Total Other Consumer Loans	2,043		123		118		14		2		67		322		—		2,689
Gross charge-offs	—		32		95		32		—		1		—		—		160
Total Loans	198,168		666,614		1,875,907		1,579,286		627,266		2,429,478		326,953		66,837		7,770,509
Total gross charge-offs	$	—	$	32	$	95	$	2,384	$	—	$	3,414	$	—	$	—	$	5,925

32

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

	Loans by Year of Origination at December 31, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
	(In thousands)
One-to-Four Family
Pass	$	156,279	$	786,735	$	793,074	$	272,215	$	165,337	$	614,351	$	—	$	—	$	2,787,991
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		1,176		769		283		629		1,985		—		—		4,842
Total One-to-Four family	156,279		787,911		793,843		272,498		165,966		616,336		—		—		2,792,833
Gross charge-offs	—		208		197		—		29		151		—		—		585
Multifamily
Pass	111,612		317,277		359,983		157,294		202,923		255,578		—		—		1,404,667
Special mention	—		—		—		—		—		4,520		—		—		4,520
Substandard	—		—		—		—		—		—		—		—		—
Total Multifamily	111,612		317,277		359,983		157,294		202,923		260,098		—		—		1,409,187
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial Real Estate
Pass	191,030		422,058		371,578		174,705		236,263		930,740		—		—		2,326,374
Special mention	—		—		465		—		871		24,405		—		—		25,741
Substandard	—		5,743		905		1,799		—		16,515		—		—		24,962
Total Commercial Real Estate	191,030		427,801		372,948		176,504		237,134		971,660		—		—		2,377,077
Gross charge-offs	—		—		—		—		64		86		—		—		150
Construction
Pass	99,634		270,397		65,374		4,933		439		2,317		—		—		443,094
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Total Construction	99,634		270,397		65,374		4,933		439		2,317		—		—		443,094
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

33

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

	Loans by Year of Origination at December 31, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
	(In thousands)
Commercial Business
Pass	$	67,529	$	58,118	$	28,989	$	27,194	$	15,499	$	38,954	$	272,698	$	—	$	508,981
Special mention	127		303		—		97		14		1,389		4,587		—		6,517
Substandard	—		76		88		6		1,081		6,150		10,142		—		17,543
Total Commercial Business	67,656		58,497		29,077		27,297		16,594		46,493		287,427		—		533,041
Gross charge-offs	—		—		31		34		2,249		304		—		—		2,618
Home Equity Loans and Advances
Pass	20,198		20,713		18,139		11,368		9,877		84,261		37,261		64,558		266,375
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		257		—		—		257
Total Home Equity Loans and Advances	20,198		20,713		18,139		11,368		9,877		84,518		37,261		64,558		266,632
Gross charge-offs	—		—		—		—		—		26		—		—		26
Other Consumer Loans
Pass	2,199		151		38		6		18		68		321		—		2,801
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Total Other Consumer Loans	2,199		151		38		6		18		68		321		—		2,801
Gross charge-offs	—		61		52		—		—		2		—		—		115
Total Loans	648,608		1,882,747		1,639,402		649,900		632,951		1,981,490		325,009		64,558		7,824,665
Total gross charge-offs	$	—	$	269	$	280	$	34	$	2,342	$	569	$	—	$	—	$	3,494

34

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

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

The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancellable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. To determine the expected funding rate, the Company uses a historical utilization rate for each segment. The allowance for credit losses for off-balance-sheet exposures is reported in other liabilities in the Consolidated Statements of Financial Condition. The liability represents an estimate of expected credit losses arising from off-balance-sheet exposures such as unfunded commitments. At June 30, 2024 and December 31, 2023, the balance of the allowance for credit losses on unfunded commitments, included in other liabilities, totaled $4.0 million and $5.5 million, respectively. The Company recorded a reversal of provision for credit losses on unfunded commitments, included in other non-interest expense in the Consolidated Statements of Income, of $666,000 and $112,000 and $1.5 million and $640,000 during the three and six months ended June 30, 2024 and 2023, respectively.

The following table presents the activity in the allowance for credit losses on off-balance-sheet exposures for the three and six months ended June 30, 2024 and 2023:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Allowance for Credit Losses:
Beginning balance	$	4,654	$	6,442	$	5,484	$	6,970
(Reversal of) provision for credit losses	(666)		(112)		(1,496)		(640)
Balance at end of period	$	3,988	$	6,330	$	3,988	$	6,330

10.    Leases

    The Company leases real estate property for branches and office space. At June 30, 2024 and December 31, 2023, all of the Company's leases are classified as operating leases.

    The Company determines if an arrangement is a lease at inception. Topic 842 requires lessees to recognize a right-of-use asset and a lease liability, measured at the present value of the future minimum lease payments, at the lease commencement date. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of minimum lease payments.

    At June 30, 2024 and December 31, 2023, the weighted average remaining lease term for operating leases was 6.0 years and 5.9 years, respectively, and the weighted average discount rate used in the measurement of operating lease liabilities was 3.19% and 2.70%, respectively.

    The Company accounts for the lease and non-lease components separately since such amounts are readily determinable under the Company's lease contracts. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Variable lease payments include common area maintenance charges, real estate taxes, repairs and maintenance costs and utilities. Operating and variable lease expenses are recorded in occupancy expense in the Consolidated Statements of Income. During the three and six months ended June 30, 2024 and 2023, operating and variable lease expenses totaled approximately $737,000 and $1.4 million, and $680,000 and $1.3 million, respectively.

    There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three and six months ended June 30, 2024 and 2023. At June 30, 2024, the Company had no leases which had not yet commenced.

35

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

10.    Leases (continued)

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

	Lease Payment Obligations at
	June 30,		December 31,
	2024		2023
	(In thousands)
One year or less	$	2,265	$	4,204
After one year to two years	4,312		3,536
After two years to three years	3,855		3,154
After three years to four years	2,977		2,271
After four years to five years	2,514		1,807
Thereafter	4,345		2,974
Total undiscounted cash flows	20,268		17,946
Discount on cash flows	(1,925)		(1,411)
Total lease liability	$	18,343	$	16,535

11.    Deposits

    Deposits at June 30, 2024 and December 31, 2023 are summarized as follows:

	June 30,		December 31,
	2024		2023
	(In thousands)
Non-interest-bearing demand	$	1,405,441	$	1,437,361
Interest-bearing demand	1,904,483		1,966,463
Money market accounts	1,246,663		1,255,528
Savings and club deposits	673,031		700,348
Certificates of deposit	2,551,929		2,486,856
Total deposits	$	7,781,547	$	7,846,556

The aggregate amount of certificates of deposit that meet or exceed $100,000 totaled approximately $1.5 billion at both June 30, 2024 and December 31, 2023. Interest expense on deposits for the three months ended June 30, 2024 and 2023 totaled $49.8 million and $28.7 million, respectively. Interest expense on deposits for the six months ended June 30, 2024 and 2023 totaled $98.2 million and $45.8 million, respectively.

36

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

11.    Deposits (continued)

Scheduled maturities of certificates of deposit accounts at June 30, 2024 and December 31, 2023 are summarized as follows:

	June 30,		December 31,
	2024		2023
	(In thousands)
One year or less	$	2,258,665	$	2,077,863
After one year to two years	237,020		321,271
After two years to three years	29,416		57,836
After three years to four years	11,325		13,427
After four years	15,503		16,459
	$	2,551,929	$	2,486,856

12.    Stock Based Compensation

    At the Company's annual meeting of stockholders held on June 6, 2019, stockholders approved the Columbia Financial, Inc. 2019 Equity Incentive Plan ("2019 Plan") which provides for the issuance of up to 7,949,996 shares (2,271,427 restricted stock awards and 5,678,569 stock options) of common stock.

    On March 7, 2024, 27,162 shares of restricted stock were awarded, with a grant date fair value of $16.57 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares.

On March 6, 2024, 185,279 shares of restricted stock were awarded, with a grant date fair value of $16.49 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares.

On May 1, 2023, 201,887 shares of restricted stock were awarded, with a grant date fair value of $15.94 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares.

On June 20, 2023, 24,687 shares of restricted stock were awarded, with a grant date fair value of $18.23 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares.

At June 30, 2024, there were 367,717 shares remaining available for future restricted stock awards and 1,430,335 shares remaining available for future stock option grants under the 2019 Plan.

Restricted shares granted under the 2019 Plan generally vest in equal installments, over performance or service periods ranging from 1 year to 5 years, beginning 1 year from the date of grant. A portion of restricted shares awarded are performance awards, which vest upon the satisfactory attainment of certain corporate financial targets. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite performance or service period. During the three months ended June 30, 2024 and 2023, approximately $1.5 million and $1.1 million, respectively, in expense was recognized in regard to these awards. During the six months ended June 30, 2024 and 2023, approximately $2.8 million and $2.0 million, respectively, in expense was recognized in regard to these awards. The expected future compensation expense related to the 575,409 non-vested restricted shares outstanding at June 30, 2024 is approximately $3.4 million over a weighted average period of 1.6 years.

37

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

12.    Stock Based Compensation (continued)

    The following is a summary of the Company's restricted stock activity during the three and six months ended June 30, 2024 and 2023:

	Number of Restricted Shares	Weighted Average Grant Date Fair Value
Non-vested at January 1, 2024	435,541	$	16.77
Grants	212,441	16.50
Vested	(25,890)	20.14
Forfeited	(1,545)	16.54
Non-vested at March 31, 2024	620,547	$	16.54
Vested	(44,988)	17.20
Forfeited	(150)	20.54
Non-vested at June 30, 2024	575,409	$	16.49

	Number of Restricted Shares	Weighted Average Grant Date Fair Value
Non-vested at January 1, 2023	430,954	$	17.31
Vested	(26,424)	21.16
Forfeited	(1,929)	21.12
Non-vested at March 31, 2023	402,601	$	17.10
Grants	226,574	16.19
Forfeited	(10,425)	18.51
Non-vested at June 30, 2023	618,750	$	16.74

On March 6, 2024, options to purchase 286,265 shares of Company common stock were awarded with a grant date fair value of $6.13 per option. Stock options granted under the 2019 Plan generally vest in equal installments over the service period of 3 years beginning 1 year from the date of grant. These stock options were granted at an exercise price of $16.49, which represents the fair value of the Company's common stock price on the grant date based on the closing market price and have an expiration period of approximately 10 years. The fair value of stock options granted was estimated utilizing the Black-Scholes option pricing model using the following assumptions: expected life of 6 years, risk-free rate of return of 4.12%, volatility of 29.13%, and a dividend yield of 0.00%.

On May 1, 2023, options to purchase 286,016 shares of Company common stock were awarded with a grant date fair value of $5.48 per option. Stock options granted under the 2019 Plan generally vest in equal installments over the service period of 3 years beginning 1 year from the date of grant. These stock options were granted at an exercise price of $15.94, which represents the fair value of the Company's common stock price on the grant date based on the closing market price and have an expiration period of approximately 10 years. The fair value of stock options granted was estimated utilizing the Black-Scholes option pricing model using the following assumptions: expected life of 6 years, risk-free rate of return of 3.60%, volatility of 27.07%, and a dividend yield of 0.00%.

The expected life of the options represents the period of time that stock options are expected to be outstanding and is estimated using the simplified approach, which assumes that all outstanding options will be exercised at the midpoint of the vesting date and full contractual term. The risk-free rate of return is based on the rates on the grant date of a U.S. Treasury Note with a term equal to the expected option life. The expected volatility is based on the historical daily stock prices of the Company stock. The Company has not paid any cash dividends on its common stock.

38

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

12.    Stock Based Compensation (continued)

Management recognizes expense for the fair value of these awards on a straight-line basis over the requisite service period. During the three months ended June 30, 2024 and 2023, approximately $1.0 million and $954,000 in expense was recognized in regard to these awards. During the six months ended June 30, 2024 and 2023, approximately $2.0 million and $1.9 million in expense was recognized in regard to these awards. The expected future compensation expense related to the 1,174,549 non-vested options outstanding at June 30, 2024 is $3.2 million over a weighted average period of 2.1 years.

The following is a summary of the Company's option activity during the three and six months ended June 30, 2024 and 2023:

	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2024	3,584,069	$	16.20	6.1	$	11,602,267
Granted	286,265	16.49		—	—
Exercised	(28,051)	15.60		—	—
Expired	(1,412)	15.60		—	—
Forfeited	(5,832)	17.29		—	—
Outstanding, March 31, 2024	3,835,039	$	16.22	6.2	$	5,050,150
Expired	(1,924)	17.82		—	—
Forfeited	(1,274)	20.54		—	—
Outstanding, June 30, 2024	3,831,841	$	16.22	6.0	$	—
Options exercisable at June 30, 2024	2,657,292	$	16.11	5.5	$	—

	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2023	3,436,869	$	16.26	6.9	$	18,435,239
Exercised	(3,618)	15.60		—	—
Expired	(2,117)	15.60		—	—
Forfeited	(8,055)	20.03		—	—
Outstanding, March 31, 2023	3,423,079	$	16.25	6.7	$	7,893,117
Granted	286,016	15.94		—	—
Exercised	(37,234)	15.60		—	—
Expired	(1,853)	15.60		—	—
Forfeited	(42,598)	17.72		—	—
Outstanding, June 30, 2023	3,627,410	$	16.22	6.7	$	5,186,690
Options exercisable at June 30, 2023	1,841,606	$	15.85	6.2	$	2,861,956

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

    During the six months ended June 30, 2024, the aggregate intrinsic value of options exercised was $106,001. During the three months ended June 30, 2024, there were no exercises. During the three and six months ended June 30, 2023, the aggregate intrinsic value of options exercised was approximately $127,158 and, $146,443, respectively.

39

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

13.    Components of Net Periodic Benefit Cost

    Pension Plan, Retirement Income Maintenance Plan (the "RIM Plan") Post-retirement Plan, and Split-Dollar Life Insurance Plans

    The Company maintains a single employer, tax-qualified defined benefit pension plan (the "Pension Plan") which covers full-time employees that satisfy the Pension Plan's eligibility requirements. The benefits are based on years of service and the employee's average compensation for the highest five consecutive years of employment. Effective October 1, 2018, newly hired employees are not eligible to participate in the Pension Plan as the Pension Plan has been closed to new employees as of that date.

    The Company also maintains a Retirement Income Maintenance Plan (the "RIM Plan") which is a non-qualified defined benefit plan which provides benefits to all employees of the Company if their benefits under the Pension Plan are limited by Internal Revenue Code Sections 415 and 401(a)(17).    

    In addition, the Company provides certain health care and life insurance benefits to eligible retired employees under a Post-retirement Plan. The Company accrues the cost of retiree health care and other benefits during the employee's period of active service. Effective January 1, 2019, the Post-retirement Plan has been closed to new hires.

The Company also provides life insurance benefits to eligible employees under an endorsement split-dollar life insurance program. The Company recognizes a liability for future benefits applicable to endorsement split-dollar life insurance arrangements that provide death benefits post-retirement. Through its mergers, the Company recognized additional liability for future benefits applicable to endorsement split-dollar life insurance arrangements that provide death benefits post-retirement under those respective Bank's program.

Net periodic (income) benefit cost for the Pension Plan, RIM Plan, Post-retirement Plan and Split-Dollar Life Insurance plan benefits for the three and six months ended June 30, 2024 and 2023, includes the following components:

	For the Three Months Ended June 30,
	Pension Plan(1)				RIM Plan				Post-retirement Plan				Split-Dollar Life Insurance
	2024		2023		2024		2023		2024		2023		2024		2023		Affected Line Item in the Consolidated Statements of Income
	(In thousands)
Service cost	$	1,212	$	1,199	$	61	$	69	$	54	$	54	$	57	$	69	Compensation and employee benefits
Interest cost	3,100		2,790		162		158		248		242		208		204		Other non-interest expense
Expected return on plan assets	(8,119)		(7,480)		—		—		—		—		—		—		Other non-interest expense
Amortization:
Prior service cost	—		—		—		—		—		—		14		14		Other non-interest expense
Net loss	512		—		28		14		—		—		—		—		Other non-interest expense
Net periodic (income) benefit cost	$	(3,295)	$	(3,491)	$	251	$	241	$	302	$	296	$	279	$	287
(1) Effective September 30, 2023, the RSI Pension Plan was merged into the Columbia Bank Pension Plan.

40

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

13.    Components of Net Periodic Benefit Cost (continued)

	For the Six Months Ended June 30,
	Pension Plan(1)				RIM Plan				Post-retirement Plan				Split-Dollar Life Insurance
	2024		2023		2024		2023		2024		2023		2024		2023		Affected Line Item in the Consolidated Statements of Income
	(In thousands)
Service cost	$	2,424	$	2,398	$	122	$	138	$	108	$	108	$	114	$	139	Compensation and employee benefits
Interest cost	6,200		5,581		324		316		496		485		416		409		Other non-interest expense
Expected return on plan assets	(16,239)		(14,960)		—		—		—		—		—		—		Other non-interest expense
Amortization:
Prior service cost	—		—		—		—		—		—		28		28		Other non-interest expense
Net loss	1,024		—		56		28		—		—		—		—		Other non-interest expense
Net periodic (income) benefit cost	$	(6,591)	$	(6,981)	$	502	$	482	$	604	$	593	$	558	$	576
(1) Effective September 30, 2023, the RSI Pension Plan was merged into the Columbia Bank Pension Plan.

41

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

13.    Components of Net Periodic Benefit Cost (continued)

Through the acquisition of RSI Bank on May 1, 2022, the Company acquired a funded pension plan and a non-funded post-retirement plan (the "RSI Pension Plan"). The benefits are based on years of plan service and the employee’s compensation, as defined in the RSI Pension Plan. The RSI Pension Plan was amended effective March 31, 2011, to freeze the plan so that no employee shall commence or recommence participation in the plan, to cease further benefit accruals under the plan, and to provide that compensation received after the effective date shall not be recognized for any purpose under the plan. Effective September 30, 2023, the RSI Pension Plan was merged, and all assets were transferred into the Columbia Bank Pension Plan. The defined benefit post-retirement healthcare plan covers substantially all retirees and employees.

Net periodic (income) benefit cost for the Pension Plan and Post-retirement Plan for the three and six months ended June 30, 2024 and 2023, includes the following components:

	For the Three Months Ended June 30,
	Pension Plan(1)				Post-retirement Plan				Affected Line Item in the Consolidated Statements of Income
	2024		2023		2024		2023
	(In thousands)
Service cost	$	—	$	—	$	13	$	17	Compensation and employee benefits
Interest cost	—		76		31		27		Other non-interest expense
Expected return on plan assets	—		(122)		—		—		Other non-interest expense
Amortization:
Net (gain)	—		—		(5)		(15)		Other non-interest expense
Net periodic (income) benefit cost	$	—	$	(46)	$	39	$	29
(1) Effective September 30, 2023, the RSI Pension Plan was merged into the Columbia Bank Pension Plan.

	For the Six Months Ended June 30,
	Pension Plan (1)				Post-retirement Plan				Affected Line Item in the Consolidated Statements of Income
	2024		2023		2024		2023
	(In thousands)
Service cost	$	—	$	—	$	26	$	34	Compensation and employee benefits
Interest cost	—		152		62		53		Other non-interest expense
Expected return on plan assets	—		(243)		—		—		Other non-interest expense
Amortization:
Net (gain)	—		—		(10)		(30)		Other non-interest expense
Net periodic (income) benefit cost	$	—	$	(91)	$	78	$	57
(1) Effective September 30, 2023, the RSI Pension Plan was merged into the Columbia Bank Pension Plan.

For the three and six months ended June 30, 2024 and 2023, no contributions were made to either Pension Plan. The net periodic (income) cost for pension benefits, other post-retirement and split-dollar life insurance benefits for the three and six months ended June 30, 2024 was calculated using the most recent available benefit valuations.

42

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements

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

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

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

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

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

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

    The methods described below were used to measure fair value of financial instruments as reflected in the tables below on a recurring basis at June 30, 2024 and December 31, 2023.

Debt Securities Available for Sale, at Fair Value

    For debt securities available for sale, fair value was estimated using a market approach. The majority of these securities are fixed income instruments that are not quoted on an exchange but are traded in active markets. Prices for these instruments are obtained through third-party data service providers or dealer market participants with which the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations, matrix pricing and discounted cash flow pricing. Matrix pricing, a Level 2 input, is a mathematical technique used principally to value certain securities to a benchmark or to comparable securities. The Company evaluates the quality of Level 2 matrix pricing through comparison to similar assets with greater liquidity and evaluation of projected cash flows. Discounted cash flows, a Level 3 input, is estimated by discounting the expected future cash flows using the current rates for securities with similar credit ratings and similar remaining maturities. As the Company is responsible for the determination of fair value, it performs quarterly analysis on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, the Company compares the prices received from the pricing service to a secondary pricing source. Additionally, the Company compares changes in the reported market values and returns to relevant market indices to assess the reasonableness of the reported prices. The Company’s internal price verification procedures and review of fair value methodology documentation provided by independent pricing services has not historically resulted in an adjustment in the prices obtained from the pricing service. The Company may hold debt instruments issued by the U.S. government and U.S. government-sponsored agencies that are traded in active markets with readily accessible quoted market prices that are considered Level 1 inputs. The Company classifies the estimated fair value of its loan portfolio as Level 3.

Equity Securities, at Fair Value

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

43

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

Derivatives

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

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

    The following tables present the assets and liabilities reported on the Consolidated Statements of Financial Condition at their fair values at June 30, 2024 and December 31, 2023, by level within the fair value hierarchy:

	June 30, 2024
			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Debt securities available for sale:
U.S. government and agency obligations	$	270,822	$	263,640	$	7,182	$	—
Mortgage-backed securities and collateralized mortgage obligations	906,582		—		906,582		—
Municipal obligations	2,720		—		889		1,831
Corporate debt securities	83,335		—		75,425		7,910
Total debt securities available for sale	1,263,459		263,640		990,078		9,741
Equity securities	4,531		4,209		322		—
Derivative assets	26,189		—		26,189		—
	$	1,294,179	$	267,849	$	1,016,589	$	9,741
Derivative liabilities	$	18,132	$	—	$	18,132	$	—

44

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

	December 31, 2023
			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Debt securities available for sale:
U.S. government and agency obligations	$	145,501	$	137,800	$	7,701	$	—
Mortgage-backed securities and collateralized mortgage obligations	867,585		—		867,585		—
Municipal obligations	2,702		—		892		1,810
Corporate debt securities	77,769		—		69,842		7,927
Total debt securities available for sale	1,093,557		137,800		946,020		9,737
Equity securities	4,079		3,758		321
Derivative assets	18,898		—		18,898		—
	$	1,116,534	$	141,558	$	965,239	$	9,737
Derivative liabilities	$	25,025	$	—	$	25,025	$	—

The table below provides activity of assets reported as Level 3 during the three and six months ended June 30, 2024 and 2023:

	Significant Unobservable Inputs (Level 3)
	(In thousands)
Debt securities available for sale:
Balance of recurring Level 3 assets -December 31, 2023	$	9,737
Change in fair value of Level 3 assets	174
Balance of recurring Level 3 assets - March 31, 2024	$	9,911
Change in fair value of Level 3 assets	(170)
Balance of recurring Level 3 assets -June 30, 2024	$	9,741

	Significant Unobservable Inputs (Level 3)
	(In thousands)
Debt securities available for sale:
Balance of recurring Level 3 assets -December 31, 2022	$	12,123
Change in fair value of Level 3 assets	(1,523)
Balance of recurring Level 3 assets - March 31, 2023	$	10,600
Change in fair value of Level 3 assets	481
Balance of recurring Level 3 assets - June 30, 2023	$	11,081

45

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

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

Expected cash flows were projected based on contractual cash flows. At both June 30, 2024 and December 31, 2023, two private placement corporate debt securities classified as available for sale, and two private placement municipal obligations classified as available for sale were included in Level 3 assets.

There were no transfers to Level 3 assets during the three and six months ended June 30, 2024 and 2023.

At June 30, 2024, private placement corporate debt security cash flows were discounted to a market yield of 13.00% (weighted average is 13.00%), and the cash flows for private placement municipal obligations were discounted to a market yield ranging from 3.78% to 4.56% (weighted average is 4.17%).

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

Assets Measured at Fair Value on a Non-Recurring Basis

    The valuation techniques described below were used to estimate fair value of financial instruments measured on a non-recurring basis at June 30, 2024 and December 31, 2023.

Individually Analyzed Collateral Dependent Loans/Impaired Loans

    The fair value of collateral dependent loans that are individually analyzed or were previously deemed impaired is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. For individually analyzed loans measured for impairment based on the fair value of the underlying collateral, fair value was estimated using a market approach. The Company measures the fair value of collateral underlying impaired loans primarily through obtaining independent appraisals that rely upon quoted market prices for similar assets in active markets. These appraisals include adjustments, on an individual case-by-case basis, to comparable assets based on the appraisers’ market knowledge and experience, as well as adjustments for estimated costs to sell between 6% and 8%. For non-collateral dependent loans, management estimates fair value using discounted cash flows based on inputs that are largely unobservable. The Company classifies these loans as Level 3 within the fair value hierarchy.

Other Real Estate Owned

    Other real estate owned is initially recorded at the lower of the recorded investment in the loan at the time of foreclosure or at fair value, less estimated costs to sell, when acquired. Fair value is generally based on an independent appraisal which includes adjustments to comparable assets based on the appraisers' market knowledge and experience. Subsequent write-downs in the value of other real estate owned is recorded though expense as incurred. Other real estate owned is considered Level 3 within the fair value hierarchy.

Mortgage Servicing Rights, Net ("MSR's")

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

46

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

The following tables present the assets and liabilities reported on the Consolidated Statements of Financial Condition at their fair values on a non-recurring basis at June 30, 2024 and December 31, 2023, by level within the fair value hierarchy:

	June 30, 2024
			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Impaired loans	$	5,568	—		—		$	5,568
Other real estate owned	1,974		—		—		1,974
Mortgage servicing rights	2,675		—		—		2,675
	$	10,217	$	—	$	—	$	10,217

	December 31, 2023
			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Impaired loans	$	5,000	$	—	$	—	$	5,000
Mortgage servicing rights	2,908		—		—		2,908
	$	7,908	$	—	$	—	$	7,908

The following table presents information for Level 3 assets measured at fair value on a non-recurring basis at June 30, 2024 and December 31, 2023:

	June 30, 2024
	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs		Weighted Average Rate
	(Dollars in thousands)
Impaired loans	$	5,568	Other	A/R aging schedule	—		—
Other real estate owned	$	1,974	Appraised value(1)	Discount for costs to sell(2)	6.0	%	6.0	%
Mortgage servicing rights	$	2,675	Discounted cash flow	Prepayment speeds and discount rates (3)	4.8% - 27.7%		8.6	%

47

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

	December 31, 2023
	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs		Weighted Average Rate
	(Dollars in thousands)
Impaired loans	$	5,000	Other	Contracted modification agreement.	—	%	—	%
Mortgage servicing rights	$	2,908	Discounted cash flow	Prepayment speeds and discount rates (3)	4.3% - 27.2%		8.1	%
(1) Value based on an independent appraisal of the property's fair value.
(2) Value based on management's estimate of selling costs including real estate brokerage commissions and title transfer fees.
(3) Value of SBA servicing rights based on a discount rate of 15.50%.

Other Fair Value Disclosures

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

Cash and Cash Equivalents

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

Debt Securities Held to Maturity

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

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

Federal Home Loan Bank Stock ("FHLB")

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

48

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

Loans Receivable

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

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

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

Deposits

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

Borrowings

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

Commitments to Extend Credit and Letters of Credit

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

49

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

The following tables present the assets and liabilities reported on the Consolidated Statements of Financial Condition at their fair values at June 30, 2024 and December 31, 2023:

	June 30, 2024
			Fair Value Measurements
	Carrying Value		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Financial assets:
Cash and cash equivalents	$	391,114	$	391,114	$	391,114	$	—	$	—
Debt securities available for sale	1,263,459		1,263,459		263,640		990,078		9,741
Debt securities held to maturity	411,300		365,344		—		365,344		—
Equity securities	4,531		4,531		4,209		322		—
Federal Home Loan Bank stock	87,618		87,618		—		87,618		—
Loans receivable, net	7,761,949		7,189,901		—		—		7,189,901
Derivative assets	26,189		26,189		—		26,189		—
Financial liabilities:
Deposits	$	7,781,547	$	7,764,824	$	—	$	7,764,824	$	—
Borrowings	1,683,899		1,679,284		—		1,679,284		—
Derivative liabilities	18,132		18,132		—		18,132		—

	December 31, 2023
			Fair Value Measurements
	Carrying Value		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Financial assets:
Cash and cash equivalents	$	423,249	$	423,249	$	423,249	$	—	$	—
Debt securities available for sale	1,093,557		1,093,557		137,800		946,020		9,737
Debt securities held to maturity	401,154		357,177		—		357,177		—
Equity securities	4,079		4,079		3,758		321		—
Federal Home Loan Bank stock	81,022		81,022		—		81,022		—
Loans receivable, net	7,819,441		7,366,184		—		—		7,366,184
Derivative assets	18,898		18,898		—		18,898		—
Financial liabilities:
Deposits	$	7,846,556	$	7,828,259	$	—	$	7,828,259	$	—
Borrowings	1,528,695		1,531,179		—		1,531,179		—
Derivative liabilities	25,025		25,025		—		25,025		—

50

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

14.    Fair Value Measurements (continued)

Limitations

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

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

51

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss)

    The following tables present the components of other comprehensive income (loss), both gross and net of tax, for the three and six months ended June 30, 2024 and 2023:

	For the Three Months Ended June 30,
	2024						2023
	Before Tax		Tax Effect		After Tax		Before Tax		Tax Effect		After Tax
	(In thousands)
Components of other comprehensive income (loss):
Unrealized (loss) gain on debt securities available for sale:	$	(626)	$	176	$	(450)	$	4,413	$	(1,248)	$	3,165
Accretion of unrealized gain (loss) on debt securities reclassified as held to maturity	3		(1)		2		(2)		1		(1)
Reclassification adjustment for (loss) included in net income	—		—		—		(9,552)		2,701		(6,851)
	(623)		175		(448)		(5,141)		1,454		(3,687)
Derivatives:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges	414		(116)		298		4,020		(1,137)		2,883
	414		(116)		298		4,020		(1,137)		2,883
Employee benefit plans:
Amortization of prior service cost included in net income	(14)		4		(10)		(14)		4		(10)
Reclassification adjustment of actuarial net (loss) gain included in net income	(548)		154		(394)		1		—		1
Change in funded status of retirement obligations	8,224		(2,315)		5,909		3,486		(986)		2,500
	7,662		(2,157)		5,505		3,473		(982)		2,491
Total other comprehensive income (loss)	$	7,453	$	(2,098)	$	5,355	$	2,352	$	(665)	$	1,687

52

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss) (continued)

	For the Six Months Ended June 30,
	2024						2023
	Before Tax		Tax Effect		After Tax		Before Tax		Tax Effect		After Tax
	(In thousands)
Components of other comprehensive income (loss):
Unrealized (loss) gain on debt securities available for sale:	$	(7,575)	$	2,133	$	(5,442)	$	21,954	$	(5,720)	$	16,234
Accretion of unrealized gain (loss) on debt securities reclassified as held to maturity	8		(2)		6		(13)		4		(9)
Reclassification adjustment for (loss) included in net income	(1,256)		353		(903)		(10,847)		3,068		(7,779)
	(8,823)		2,484		(6,339)		11,094		(2,648)		8,446
Derivatives:
Unrealized gain (loss) on swap contracts accounted for as cash flow hedges	5,647		(1,589)		4,058		2,816		(798)		2,018
	5,647		(1,589)		4,058		2,816		(798)		2,018
Employee benefit plans:
Amortization of prior service cost included in net income	(28)		8		(20)		(28)		8		(20)
Reclassification adjustment of actuarial net (loss) gain included in net income	(1,082)		304		(778)		2		(1)		1
Change in funded status of retirement obligations	8,813		(2,481)		6,332		3,512		(832)		2,680
	7,703		(2,169)		5,534		3,486		(825)		2,661
Total other comprehensive income (loss)	$	4,527	$	(1,274)	$	3,253	$	17,396	$	(4,271)	$	13,125

53

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss) (continued)

    The following tables present the changes in the components of accumulated other comprehensive income (loss), net of tax, for the three and six months ended June 30, 2024 and 2023:

	For the Three Months Ended June 30,
	2024								2023
	Unrealized (Losses) on Debt Securities Available for Sale		Unrealized Gains (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)		Unrealized (Losses) on Debt Securities Available for Sale		Unrealized Gains (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)
	(In thousands)
Balance at beginning of period	$	(119,540)	$	3,346	$	(44,643)	$	(160,837)	$	(123,349)	$	(361)	$	(44,148)	$	(167,858)
Current period changes in other comprehensive income (loss)	(448)		298		5,505		5,355		(3,687)		2,883		2,491		1,687
Total other comprehensive income (loss)	$	(119,988)	$	3,644	$	(39,138)	$	(155,482)	$	(127,036)	$	2,522	$	(41,657)	$	(166,171)

	For the Six Months Ended June 30,
	2024								2023
	Unrealized (Losses) on Debt Securities Available for Sale		Unrealized Gains (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)		Unrealized (Losses) on Debt Securities Available for Sale		Unrealized Gains (Losses) on Swaps		Employee Benefit Plans		Accumulated Other Comprehensive (Loss)
	(In thousands)
Balance at beginning of period	$	(113,649)	$	(414)	$	(44,672)	$	(158,735)	$	(135,482)	$	504	$	(44,318)	$	(179,296)
Current period changes in other comprehensive income (loss)	(6,339)		4,058		5,534		3,253		8,446		2,018		2,661		13,125
Total other comprehensive income (loss)	$	(119,988)	$	3,644	$	(39,138)	$	(155,482)	$	(127,036)	$	2,522	$	(41,657)	$	(166,171)

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

15.    Other Comprehensive Income (Loss) (continued)

The following tables reflect amounts reclassified from accumulated other comprehensive income (loss) to the Consolidated Statements of Income and the affected line item in the statement where net income is presented for the three and six months ended June 30, 2024 and 2023:

	Accumulated Other Comprehensive Income (Loss) Components
	For the Three Months Ended June 30,				Affected Line Items in the Consolidated Statements of Income
	2024		2023
	(In thousands)
Reclassification adjustment for loss included in net income	$	—	$	(9,552)	Loss on securities transactions
Reclassification adjustment of actuarial net (loss) gain included in net income	(548)		1		Other non-interest expense
Total before tax	(548)		(9,551)
Income tax benefit	154		2,701
Net of tax	$	(394)	$	(6,850)

	Accumulated Other Comprehensive Income (Loss) Components
	For the Six Months Ended June 30,				Affected Line Items in the Consolidated Statements of Income
	2024		2023
	(In thousands)
Reclassification adjustment for loss included in net income	$	(1,256)	$	(10,847)	Loss on securities transactions
Reclassification adjustment of actuarial net (loss) gain included in net income	(1,082)		2		Other non-interest expense
Total before tax	(2,338)		(10,845)
Income tax benefit	657		3,067
Net of tax	$	(1,681)	$	(7,778)

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

16.    Derivatives and Hedging Activities

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

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

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

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

    Interest Rate Swaps. At June 30, 2024 and December 31, 2023, the Company had 86 and 80 interest rate swaps in place with commercial banking customers executed by offsetting interest rate swaps with third parties, with aggregated notional amounts of $308.2 million and $277.8 million, respectively. These derivatives are not designated as hedges and are not speculative. These interest rate swaps do not meet hedge accounting requirements.

    At June 30, 2024 and December 31, 2023, the Company had 31 and 30 interest rate swaps with notional amounts of $378.7 million and $380.0 million, respectively, hedging certain FHLB advances. These interest rate swaps meet the cash flow hedge accounting requirements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counter-party in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount.

At December 31, 2023, the Company had two interest rate swaps hedged against pools of floating rate commercial loans with notional amounts totaling $100.0 million. These swaps meet the cash flow hedge accounting requirements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counter-party in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. At June 30, 2024, the Company did not have any interest rate swaps hedged against pools of floating rate commercial loans.

At June 30, 2024 and December 31, 2023, the Company had ten and eight interest rate fair value swaps with notional amounts totaling $850.0 million and $700.0 million, respectively. The Company is exposed to changes in the fair value of certain of its fixed-rate pools of assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate, the Secured Overnight Financing Rate ("SOFR").

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Notes to Unaudited Consolidated Financial Statements

16.    Derivatives and Hedging Activities (continued)

Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For the three and six months ended June 30, 2024 and 2023, the Company recorded hedge ineffectiveness associated with these contracts totaling $11,000 and $23,000, $47,000 and $27,000, respectively.

    The tables below present the fair value of the Company’s derivative financial instruments as well as their classification in the Consolidated Statements of Financial Condition at June 30, 2024 and December 31, 2023:

	June 30, 2024
	Asset Derivative			Liability Derivative
	Consolidated Statements of Financial Condition	Fair Value		Consolidated Statements of Financial Condition	Fair Value
		(In thousands)
Derivatives:
Interest rate products - designated hedges	Other Assets	$	9,116	Other Liabilities	$	1,118
Interest rate products - non-designated hedges	Other Assets	17,073		Other Liabilities	17,014
Total derivative instruments		$	26,189		$	18,132

	December 31, 2023
	Asset Derivative			Liability Derivative
	Consolidated Statements of Financial Condition	Fair Value		Consolidated Statements of Financial Condition	Fair Value
		(In thousands)
Derivatives:
Interest rate products - designated hedges	Other Assets	$	5,394	Other Liabilities	$	11,530
Interest rate products - non-designated hedges	Other Assets	13,504		Other Liabilities	13,495
Total derivative instruments		$	18,898		$	25,025

For the three months ended June 30, 2024 and 2023, (losses) of $(43,000) and $(9,000), respectively, were recorded for changes in fair value of interest rate swaps with third parties. For the six months ended June 30, 2024 and 2023, gains (losses) of $50,000 and $(202,000), respectively, were recorded for changes in fair value of interest rate swaps with third parties.

    At June 30, 2024 and December 31, 2023, accrued interest was $1.6 million and $1.2 million.

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

    At June 30, 2024, the termination value of derivatives in a net asset position, which includes accrued interest, was $8.1 million. The Company normally has collateral posting thresholds with certain of its derivative counterparties, but as of June 30, 2024 had no posted collateral against its obligations under these agreements.

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

16.    Derivatives and Hedging Activities (continued)

Fair Value Hedges of Interest Rate Risk. The Company is exposed to changes in the fair value of certain of its fixed-rate pools of assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate, SOFR. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in interest income.

At June 30, 2024, the following amounts were recorded on the Consolidated Statements of Financial Condition related to cumulative basis adjustment for fair value hedges:

	Carrying Amount of Hedged Assets/(Liabilities)		Cumulative Amount of Fair Value Hedging Adjustment included in the Carrying Amount of Hedged Assets/(Liabilities)		Carrying Amount of Hedged Assets/(Liabilities)		Cumulative Amount of Fair Value Hedging Adjustment included in the Carrying Amount of Hedged Assets/(Liabilities)
	At June 30, 2024				At December 31, 2023
	(In thousands)
Fair value interest rate products	$	848,297	$	(1,703)	$	706,412	$	6,412

17.    Revenue Recognition

The Company's revenue includes net interest income on financial instruments and non-interest income. Most of the Company's revenue is not within the scope of Accounting Standards Codification Topic 606 which does not apply to revenue associated with financial instruments, including interest income on loans and securities, which comprise the majority of the Company's revenue. Revenue-generating activities that are within the scope of this guidance are components of non-interest income. These revenue streams can generally be classified as demand deposit account fees, title insurance fees, insurance agency income and other fees.

The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 2024 and 2023.

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Non-interest income
In-scope of Topic 606:
Demand deposit account fees	$	1,590	$	1,291	$	3,003	$	2,467
Title insurance fees	744		624		1,247		1,211
Insurance agency income	60		40		107		77
Other non-interest income	1,430		2,448		2,908		4,964
Total in-scope non-interest income	3,824		4,403		7,265		8,719
Total out-of-scope non-interest income	5,356		(4,949)		9,367		(1,191)
Total non-interest income	$	9,180	$	(546)	$	16,632	$	7,528

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COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

17.    Revenue Recognition (continued)

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

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

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

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

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

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

18.    Subsequent Events

    The Company has evaluated events subsequent to June 30, 2024 and through the financial statement issuance date of August 9, 2024, and concluded that no material events occurred that would require disclosure.

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

Forward-Looking Statements

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

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

Comparison of Financial Condition at June 30, 2024 and December 31, 2023

Total assets increased $118.0 million, or 1.1%, to $10.8 billion at June 30, 2024 as compared to December 31, 2023. The increase in total assets was primarily attributable to an increase in debt securities available for sale of $169.9 million, an increase in debt securities held to maturity of $10.1 million, and an increase in other assets of $15.9 million, partially offset by a decrease in cash and cash equivalents of $32.1 million, and a decrease in loans receivable, net, of $57.5 million.

Cash and cash equivalents decreased $32.1 million, or 7.6%, to $391.1 million at June 30, 2024 from $423.2 million at December 31, 2023. The decrease was primarily attributable to purchases of debt securities available for sale of $246.2 million, repurchases of common stock under our stock repurchase program of $5.9 million and a decrease in total deposits of $65.0 million, partially offset by proceeds from principal repayments on securities of $59.5 million, and repayments on loans receivable.

Debt securities available for sale increased $169.9 million, or 15.5%, to $1.3 billion at June 30, 2024 from $1.1 billion at December 31, 2023. The increase was attributable to the purchases of debt securities available for sale of $246.2 million, consisting primarily of U.S. government obligations and mortgage-backed securities, partially offset by repayments on securities of $53.0 million, maturities of securities of $10.0 million, an increase in the gross unrealized loss on securities of $8.8 million, and the sale of one corporate debt security with a carrying value of $4.8 million, resulting in a loss of $1.3 million.

Loans receivable, net, decreased $57.5 million, or 0.7%, with a balance of $7.8 billion at both June 30, 2024 and December 31, 2023. One-to-four family real estate loans, commercial real estate loans, and home equity loans and advances decreased $28.7 million, $60.8 million, and $6.2 million, respectively, partially offset by increases in construction loans of $19.8 million and commercial business loans of $21.7 million. The allowance for credit losses for loans increased $2.0 million to $57.1 million at June 30, 2024 from $55.1 million at December 31, 2023.

Total liabilities increased $111.6 million, or 1.2%, to $9.7 billion at June 30, 2024 as compared to $9.6 billion at December 31, 2023. The increase was primarily attributable to an increase in borrowings of $155.2 million, or 10.2%, and an increase in accrued expenses and other liabilities of $17.1 million, or 9.2%, partially offset by a decrease in total deposits of $65.0 million, or 0.8%. The $155.2 million increase in borrowings was primarily driven by a net increase in short-term borrowings of $15.2 million and an increase in long-term borrowings of $210.0 million, partially offset by repayments of $70.0 million in maturing long-term borrowings. The $17.1 million increase in accrued expenses and other liabilities was primarily attributable to an $18.3 million net increase in balances related to our interest rate swap program. The decrease in total deposits primarily consisted of decreases in non-interest-bearing demand deposits, interest-bearing demand deposits, money market accounts, and savings and club accounts of $31.9 million, $62.0 million, $8.9 million, and $27.3 million, respectively, partially offset by an increase in certificates of deposit of $65.1 million.

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

Total stockholders’ equity increased $6.4 million, or 0.6%, with a balance of $1.0 billion at both June 30, 2024 and December 31, 2023. The increase in total stockholders' equity was primarily attributable to net income of $3.4 million, a $4.3 million increase in stock based compensation and an increase of $3.3 million in other comprehensive income, which includes changes in unrealized losses on debt securities available for sale and unrealized gains on swap contracts, net of taxes, included in other comprehensive income. These increases were partially offset by the repurchase of 365,116 shares of common stock at a cost of approximately $5.9 million, or $16.14 per share, under our stock repurchase program. Repurchases have been paused in order to retain capital.

Comparison of Results of Operations for the Three Months Ended June 30, 2024 and June 30, 2023

Net income of $4.5 million was recorded for the quarter ended June 30, 2024, an increase of $2.9 million, or 172.8%, compared to $1.7 million for the quarter ended June 30, 2023. The increase in net income was primarily attributable to a $9.7 million increase in non-interest income, mainly due to the 2023 period including a $9.6 million loss on securities transactions, and a $1.4 million decrease in non-interest expense, partially offset by a $7.1 million decrease in net interest income, and a $1.1 million increase in provision for credit losses.

Net interest income was $44.1 million for the quarter ended June 30, 2024, a decrease of $7.1 million, or 13.8%, from $51.2 million for the quarter ended June 30, 2023. The decrease in net interest income was primarily attributable to a $24.2 million increase in interest expense on deposits and borrowings, partially offset by a $17.1 million increase in interest income. The increase in interest income was primarily due to an increase in the average balance of total interest-earning assets coupled with an increase in average yields due to market interest rate increases that occurred over the previous year, and adjustable rate securities and loans tied to various indexes that repriced higher in the 2024 period. The increase in interest expense on deposits was driven by these same rate increases and an increase in the average balance of interest-bearing deposits, coupled with intense competition for deposits in the market and the repricing of existing deposits into higher cost products. The increase in interest expense on borrowings was also impacted by an increase in the average balance of borrowings and the increase in interest rates for new borrowings. Prepayment penalties, which are included in interest income on loans, totaled $436,000 for the quarter ended June 30, 2024, compared to $116,000 for the quarter ended June 30, 2023.

The average yield on loans for the quarter ended June 30, 2024 increased 57 basis points to 4.93%, as compared to 4.36% for the quarter ended June 30, 2023, as interest income was influenced by rising interest rates and loan growth. The average yield on securities for the quarter ended June 30, 2024 increased 56 basis points to 2.89%, as compared to 2.33% for the quarter ended June 30, 2023, as new securities purchased during the 2024 period were at higher rates. The average yield on other interest-earning assets for the quarter ended June 30, 2024 increased 22 basis points to 6.30%, as compared to 6.08% for the quarter ended June 30, 2023, due to the rise in average balances and interest rates paid on cash balances and an increase in the dividend rate paid on Federal Home Loan Bank stock.

Total interest expense was $69.2 million for the quarter ended June 30, 2024, an increase of $24.2 million, or 53.8%, from $45.0 million for the quarter ended June 30, 2023. The increase in interest expense was primarily attributable to a 124 basis point increase in the average cost of interest-bearing deposits, coupled with an increase in the average balance of interest-bearing deposits, along with a 20 basis point increase in the average cost of borrowings, coupled with an increase in the average balance of borrowings. Interest expense on deposits increased $21.1 million, or 73.4%, and interest expense on borrowings increased $3.1 million, or 19.2%.

The Company's net interest margin for the quarter ended June 30, 2024 decreased 36 basis points to 1.81%, when compared to 2.17% for the quarter ended June 30, 2023. The weighted average yield on interest-earning assets increased 57 basis points to 4.64% for the quarter ended June 30, 2024, as compared to 4.07% for the quarter ended June 30, 2023. The average cost of interest-bearing liabilities increased 107 basis points to 3.49% for the quarter ended June 30, 2024, as compared to 2.42% for the quarter ended June 30, 2023. The increase in yields for the quarter ended June 30, 2024 was due to the impact of market interest rate increases between periods. The net interest margin decreased for the quarter ended June 30, 2024, as the increase in the average cost of interest-bearing liabilities outweighed the increase in the average yield on interest-earning assets. The Company's net interest margin for the quarter ended June 30, 2024 when compared to the quarter ended March 31, 2024 increased 6 basis points from 1.75% to 1.81%.

The provision for credit losses for the quarter ended June 30, 2024 was $2.2 million, an increase of $1.1 million, from $1.1 million for the quarter ended June 30, 2023. The increase in provision for credit losses during the quarter was primarily attributable to net charge-offs totaling $533,000 and an increase in quantitative loss rates.

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

Non-interest income was $9.2 million for the quarter ended June 30, 2024, an increase of $9.7 million, from $(546,000) for the quarter ended June 30, 2023. The increase was primarily attributable to a decrease in the loss on securities transactions of $9.6 million.

Non-interest expense was $46.2 million for the quarter ended June 30, 2024, a decrease of $1.4 million, from $47.6 million for the quarter ended June 30, 2023. The decrease was primarily attributable to a decrease in compensation and employee benefits expense of $4.8 million, partially offset by an increase in professional fees of $2.1 million, and an increase in merger expenses of $426,000. The decrease in compensation and employee benefits expense was the result of workforce reduction and other related employee expense cutting strategies implemented during 2023 and 2024. Professional fees included an increase in legal, regulatory and compliance-related costs.

Income tax expense was $279,000 for the quarter ended June 30, 2024, an increase of $22,000, as compared to income tax expense of $257,000 for the quarter ended June 30, 2023, mainly due to an increase in pre-tax income. The Company's effective tax rate was 5.8% and 13.4% for the quarters ended June 30, 2024 and 2023, respectively. The effective tax rate for the 2024 period was primarily impacted by permanent income tax differences, and the effective tax rate for the 2023 period was primarily impacted by the loss on the sale of securities.

Results of Operations for the Six Months Ended June 30, 2024 and June 30, 2023

Net income of $3.4 million was recorded for the six months ended June 30, 2024, a decrease of $17.0 million, or 83.4%, compared to $20.4 million for the six months ended June 30, 2023. The decrease in net income was primarily attributable to a $25.7 million decrease in net interest income, a $6.2 million increase in provision for credit losses, and a $397,000 increase in non-interest expense, partially offset by a $9.1 million increase in non-interest income and a $6.2 million decrease in income tax expense.

Net interest income was $86.3 million for the six months ended June 30, 2024, a decrease of $25.7 million, or 23.0%, from $112.0 million for the six months ended June 30, 2023. The decrease in net interest income was primarily attributable to a $58.6 million increase in interest expense on deposits and borrowings, partially offset by a $32.9 million increase in interest income. The increase in interest income was primarily due to an increase in the average balance of total interest-earning assets coupled with an increase in average yields due to market interest rate increases that occurred over the previous year and adjustable rate securities and loans tied to various indexes that repriced higher in the 2024 period. The increase in interest expense on deposits was driven by these same rate increases coupled with intense competition for deposits in the market, an increase in average balances of deposits, and the repricing of existing deposits into higher cost products. The increase in interest expense on borrowings was also impacted by an increase in the average balance of borrowings and the increase in interest rates for new borrowings. Prepayment penalties, which are included in interest income on loans, totaled $703,000 for the six months ended June 30, 2024, compared to $315,000 for the six months ended June 30, 2023.

The average yield on loans for the six months ended June 30, 2024 increased 56 basis points to 4.86%, as compared to 4.30% for the six months ended June 30, 2023, as interest income was influenced by higher interest rates and loan growth. The average yield on securities for the six months ended June 30, 2024 increased 33 basis points to 2.77%, as compared to 2.44% for the six months ended June 30, 2023, as a number of adjustable rate securities tied to various indexes repriced higher during the six months, and new securities purchased during the 2024 period were at higher yields. The average yield on other interest-earning assets for the six months ended June 30, 2024 increased 93 basis points to 6.19%, as compared to 5.26% for the six months ended June 30, 2023, due to the rise in average balances and interest rates paid on cash balances and an increase in the dividend rate paid on Federal Home Loan Bank stock.

Total interest expense was $135.6 million for the six months ended June 30, 2024, an increase of $58.6 million, 76.1%, from $77.0 million for the six months ended June 30, 2023. The increase in interest expense was primarily attributable to a 157 basis point increase in the average cost of interest-bearing deposits, coupled with an increase in the average balance of interest-bearing deposits, along with a 29 basis point increase in the average cost of borrowings, and an increase in the average balance of borrowings. Interest expense on deposits increased $52.4 million, or 114.4%, and interest expense on borrowings increased $6.2 million, or 19.9%.

The Company's net interest margin for the six months ended June 30, 2024 decreased 59 basis points to 1.78%, when compared to 2.37% for the six months ended June 30, 2023. The weighted average yield on interest-earning assets increased 57 basis points to 4.57% for the six months ended June 30, 2024, as compared to 4.00% for the six months ended June 30, 2023. The average cost of interest-bearing liabilities increased 136 basis points to 3.44% for the six months ended June 30, 2024, as compared to 2.08% for the six months ended June 30, 2023. The increase in yields for the six months ended June 30, 2024 was due to the impact of market interest rate increases between periods. The net interest margin decreased for the six months ended June 30, 2024, as the increase in the average cost of interest-bearing liabilities outweighed the increase in the average yield on interest-earning assets.

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

The provision for credit losses for the six months ended June 30, 2024 was $7.5 million, an increase of $6.2 million, from $1.3 million for the six months ended June 30, 2023. The increase in provision for credit losses during the six months was primarily attributable to net charge-offs totaling $5.5 million and an increase in quantitative loss rates.

Non-interest income was $16.6 million for the six months ended June 30, 2024, an increase of $9.1 million, from $7.5 million for the six months ended June 30, 2023. The increase was primarily attributable to a decrease in the loss on securities transactions of $9.6 million.

Non-interest expense was $91.9 million for the six months ended June 30, 2024, an increase of $397,000, from $91.5 million for the six months ended June 30, 2023. The increase was primarily attributable to an increase in federal deposit insurance premiums of $1.8 million, due to the 2024 period including an increase in a one-time special assessment charge, an increase in professional fees of $4.9 million, and an increase in other non-interest expense of $888,000, partially offset by a decrease in compensation and employee benefits expense of $8.4 million. Professional fees included an increase in legal, regulatory and compliance-related costs. The decrease in compensation and employee benefits expense was the result of workforce reduction and other related employee expense cutting strategies implemented during 2023 and 2024.

Income tax expense was $150,000 for the six months ended June 30, 2024, a decrease of $6.2 million, as compared to income tax expense of $6.4 million for the six months ended June 30, 2023, mainly due to a decrease in pre-tax income. The Company's effective tax rate was 4.2% and 23.9% for the six months ended June 30, 2024 and 2023, respectively. The effective tax rate for the 2024 period was also impacted by permanent income tax differences.

Asset Quality

The Company's non-performing loans at June 30, 2024 totaled $25.3 million, or 0.33% of total gross loans, as compared to $12.6 million, or 0.16% of total gross loans, at December 31, 2023. The $12.7 million increase in non-performing loans was primarily attributable to an increase in non-performing one-to-four family real estate loans of $2.6 million, an increase in non-performing commercial real estate loans of $5.3 million, and an increase in non-performing commercial business loans of $4.8 million. One borrower with an outstanding $5.7 million commercial real estate loan and a related $2.6 million commercial business loan was placed on non-accrual status, representing approximately 66% of the increase in non-performing loans, during the 2024 period. The borrower is a healthcare facility that is in the process of being acquired. The Company has the first lien on the healthcare facility which has a 2024 appraised value of approximately $18.5 million along with additional collateral. The acquiring entity, which has strong cash flow, has partially guaranteed the commercial business loan and has provided cash collateral. One commercial real estate loan for $2.0 million secured by a medical condominium was transferred to other real estate owned in May 2024, and a related commercial business loan to the same borrower for $54,000 was charged-off during the quarter ended June 30, 2024.

The increase in non-performing one-to-four family real estate loans was due to an increase in the number of loans from 17 non-performing loans at December 31, 2023 to 21 loans at June 30, 2024. Non-performing assets as a percentage of total assets totaled 0.25% and 0.12% at June 30, 2024 and December 31, 2023, respectively.

For the quarter ended June 30, 2024, net charge-offs totaled $533,000, as compared to $495,000 in net charge-offs recorded for the quarter ended June 30, 2023. For the six months ended June 30, 2024, net charge-offs totaled $5.5 million, as compared to $600,000 in net charge-offs recorded for the six months ended June 30, 2023. Net charge-offs recorded for the six months ended June 30, 2024 included charge-offs related to seven commercial business loans totaling $5.6 million. Three of the seven loans represented $4.9 million of charge-offs and two of these borrowers continue making monthly payments. Management expects some additional recoveries from these borrowers on a go forward basis.

The Company's allowance for credit losses on loans was $57.1 million, or 0.73% of total gross loans, at June 30, 2024, compared to $55.1 million, or 0.70% of total gross loans, at December 31, 2023.

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

Additional Liquidity, Loan, Deposit and Capital Information

The Company services a diverse retail and commercial deposit base through its 68 branches. With over 216,000 accounts, the average deposit account balance was approximately $36,000 at June 30, 2024.

The Company had uninsured deposits totaling $2.1 billion at June 30, 2024 and $1.9 billion at March 31, 2024, excluding municipal deposits of $831.2 million and $826.5 million, respectively, which are collateralized, and intercompany deposits of $13.8 million at June 30, 2024 compared to $3.5 billion at March 31, 2024, a decrease of 99.6%. Intercompany deposits significantly decreased as the Company dissolved subsidiaries during the quarter ended June 30, 2024.

The Company had uninsured deposits as summarized below:

	At June 30, 2024			At March 31, 2024
	(Dollars in thousands)
Uninsured deposits	$	2,070,601		$	1,888,443
Uninsured deposits to total deposits	26.6		%	24.1		%

Deposit balances are summarized as follows:

	At June 30, 2024				At March 31, 2024
	Balance		Weighted Average Rate		Balance		Weighted Average Rate
	(Dollars in thousands)
Non-interest-bearing demand	$	1,405,441	—	%	$	1,415,909	—	%
Interest-bearing demand	1,904,483		2.37		1,929,490		2.23
Money market accounts	1,246,663		3.17		1,228,098		3.26
Savings and club deposits	673,031		0.83		687,303		0.73
Certificates of deposit	2,551,929		4.34		2,568,603		4.20
Total deposits	$	7,781,547	2.56	%	$	7,829,403	2.50	%

The Company continues to maintain strong liquidity and capital positions. The Company had no outstanding borrowings from the Federal Reserve Discount Window at June 30, 2024. As of June 30, 2024, the Company had immediate access to approximately $2.3 billion of funding, with additional unpledged loan collateral in excess of $1.6 billion.

At June 30, 2024, the Company's non-performing commercial real estate loans totaled $8.1 million, or 0.10%, of the total loans receivable loan portfolio balance.

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

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

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

	At June 30, 2024
	(Dollars in thousands)
	Balance		% of Gross Loans		Weighted Average Loan to Value Ratio		Weighted Average Debt Service Coverage
Multifamily Real Estate	$	1,409,316	18.1	%	62.0	%	1.61x
Owner Occupied Commercial Real Estate	$	699,807	9.0	%	55.0	%	2.10x
Investor Owned Commercial Real Estate:
Retail / Shopping centers	$	498,623	6.4	%	52.3	%	1.59x
Mixed Use	211,550		2.7		58.6		1.61
Industrial / Warehouse	381,154		4.9		55.9		1.70
Non-Medical Office	197,009		2.5		54.8		1.47
Medical Office	126,566		1.6		57.9		1.50
Single Purpose	70,315		0.9		53.1		3.69
Other	131,228		1.7		51.9		1.68
Total	$	1,616,445	20.8	%	54.7	%	1.69x
Total Multifamily and Commercial Real Estate Loans	$	3,725,568	48.0	%	57.5	%	1.74x

As of June 30, 2024, the Company had less than $1.0 million in loan exposure to office or rent stabilized multifamily loans in New York City.

Critical Accounting Policies

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

▪Adequacy of the allowance for credit losses

▪Valuation of deferred tax assets

▪Valuation of retirement and post-retirement benefits

The determination of the allowance for credit losses (“ACL”) on loans is considered a critical accounting estimate by management because of the high degree of judgment involved in determining qualitative loss factors, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment The ACL is maintained at a level management considers adequate to provide for estimated losses and impairment based upon an evaluation of known and inherent risk in the loan portfolio. The ACL consists of two elements: (1) identification of loans that must be individually analyzed for impairment and (2) establishment of an ACL for loans collectively analyzed.

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

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

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

We maintain a loan review system that provides a periodic review of the loan portfolio and the identification of individually analyzed loans. The ACL for individually analyzed loans is based on the fair value of collateral or cash flows. While management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluations.

The ACL quantitative allowance for each segment is measured using a discounted cash flow methodology incorporating an econometric, probability of default (“PD”) and loss given default (“LGD”) with distinct segment-specific multi-variate regression models applied. Expected credit losses are estimated over the life of the loans by measuring the difference between the net present value of modeled cash flows and amortized cost basis. Contractual cash flows over the contractual life of the loans are the basis for the modeled cash flows, adjusted for model defaults and expected prepayments and discounted at the loan-level effective interest rate. The contractual term excludes expected extensions, renewals, and modifications.

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

Using the historical relationship between economic conditions and loan performance, management’s expectation of future loan performance is incorporated using a single economic forecast of macroeconomic variables (i.e., unemployment, gross domestic product, vacancy, and home price index). This forecast is applied over a period that management has determined to be reasonable and supportable. Beyond the period over which management can develop or source a reasonable and supportable forecast, the model reverts to long-term average historical loss rates using a straight-line, time-based methodology. The Company's current forecast period is six quarters, with a four-quarter reversion period to long-term average historical loss rates.

After quantitative considerations, management applies additional qualitative adjustments that consider the expected impact of certain factors not fully captured in the quantitative reserve. Qualitative adjustments include but are not limited to concentrations of large loan balances, delinquency trends, change in collateral values within segments, and other considerations.

The ACL is established through the provision for credit losses that are charged to income, which is based upon an evaluation of estimated losses in the current loan portfolio, including the evaluation of individually analyzed loans. Charge-offs against the ACL are taken on loans where management determines that the collection of loan principal and interest is unlikely. Recoveries made on loans that have been charged-off are credited to the ACL. Although we believe we have established and maintained the ACL on loans at appropriate levels, changes in reserves may be necessary if actual economic and other conditions differ substantially from the forecast used in estimating the ACL.

Our financial results are affected by the changes in and the level of the ACL. This process involves our analysis of internal and external variables, and it requires that we exercise judgment to estimate an appropriate ACL. As a result of the uncertainty associated with this subjectivity, we cannot assure the precision of the amount reserved, should we experience sizable loan losses in any particular period and/or significant changes in assumptions or economic condition. We believe the primary risks inherent in the portfolio are a general decline in the economy, a decline in real estate market values, rising unemployment, increasing vacancy rates, and increases in interest rates in the absence of economic improvement or any other such factors. Any one or a combination of these events may adversely affect a borrower's ability to repay its loan, resulting in increased delinquencies and loan losses. Accordingly, we have recorded loan credit losses at a level which is estimated to represent the current risk in its loan portfolio.

Most of our non-performing assets are collateral dependent loans which are written down to the fair value of the collateral less estimated costs to sell. We continue to assess the collateral of these loans and update our appraisals on these loans on an annual

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

basis. To the extent the property values decline, there could be additional losses on these non-performing assets, which may be material. Management considered these market conditions in deriving the estimated ACL. Should economic difficulties occur, the ultimate amount of loss could vary from our current estimate.

    The determination of whether deferred tax assets will be realizable is predicated on the reversal of existing deferred tax liabilities, utilization against carry-back years, and projections of future taxable income. These estimates are subject to management’s judgment. A valuation allowance is established when management is unable to conclude that it is more likely than not that it will realize deferred tax assets based on the nature and timing of these items. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period enacted. Management believes, based on current facts, that it is more likely than not that there will be sufficient taxable income in future years to realize federal deferred tax assets and that it is more likely than not that the benefits from certain state temporary differences will not be realized. At June 30, 2024 and December 31, 2023, the Company's net deferred tax assets totaled $25.9 million and $25.5 million, respectively, which included a valuation allowance totaling $26,000 at both period end dates. Based upon projections of future taxable income and the ability to carryforward operating losses indefinitely, management believes it is more likely than not the Company will realize the remaining deferred tax assets.

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

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

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

    Assumptions used in the simulation model may include but are not limited to:

•Securities pricing from third parties;

•Loan pricing indications from third parties;

•Loan and depository spread assumptions based upon the Company's product offerings;

•Securities and borrowing spreads based upon third party indications; and

•Prepayment assumptions derived from the Company's actual results and third party surveys.

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

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

    The table below sets forth, as of June 30, 2024, the net portfolio value, the estimated changes in the net portfolio value, and the net interest income that would result from the designated instantaneous parallel changes in market interest rates. This data is for Columbia Bank and Freehold Bank and its subsidiaries only and does not include any assets of the Company.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

	Twelve Months Net Interest Income						Net Portfolio Value ("NPV")
Change in Interest Rates (Basis Points)	Amount		Dollar Change		Percent Change		Estimated NPV		Present Value Ratio		Percent Change
					(Dollars in thousands)
+400	$	196,731	$	(6,696)	(3.29)	%	$	754,671	8.37	%	(36.75)	%
+300	199,083		(4,344)		(2.14)		867,714		9.37		(27.28)
+200	201,125		(2,302)		(1.13)		980,515		10.31		(17.82)
+100	202,609		(818)		(0.40)		1,090,156		11.17		(8.63)
Base	203,427		—		—		1,193,184		11.90		—
-100	204,185		758		0.37		1,289,562		12.51		8.08
-200	204,163		736		0.36		1,368,363		12.93		14.68
-300	204,347		920		0.45		1,432,788		13.17		20.08
-400	197,979		(5,448)		(2.68)		1,434,753		12.84		20.25

    As of June 30, 2024, based on the scenarios above, net interest income would decrease by approximately 1.13% if rates were to rise 200 basis points, and would increase by 0.36% if rates were to decrease 200 basis points over a one-year time horizon.

    Another measure of interest rate sensitivity is to model changes in net portfolio value through the use of immediate and sustained interest rate shocks. As of June 30, 2024, based on the scenarios above, in the event of an immediate and sustained 200 basis point increase in interest rates, the NPV is projected to decrease 17.82%. If rates were to decrease 200 basis points, the model forecasts a 14.68% increase in the NPV.

    Overall, our June 30, 2024 results indicate that we are adequately positioned with an acceptable net interest income and economic value at risk in all scenarios and that all interest rate risk results continue to be within our policy guidelines.

Liquidity Management and Capital Resources:

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

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

    We mitigate liquidity risk by attempting to structure our balance sheet prudently and by maintaining diverse borrowing resources to fund potential cash needs. For example, we structure our balance sheet so that we fund less liquid assets, such as loans, with stable funding sources, such as retail deposits, long-term debt, wholesale borrowings, and capital. We assess liquidity needs arising from asset growth, maturing obligations, and deposit withdrawals, taking into account operations in both the normal course of business and times of unusual events. In addition, we consider our off-balance sheet arrangements and commitments that may impact liquidity in certain business environments.

Our Asset/Liability Committee measures liquidity risks, sets policies to manage these risks, and reviews adherence to those policies at its quarterly meetings. For example, we manage the use of short-term unsecured borrowings as well as total wholesale funding through policies established and reviewed by our Asset/Liability Committee. In addition, the Risk Committee of our Board of Directors reviews liquidity limits and reviews current and forecasted liquidity positions at each of its regularly scheduled meetings.

We have contingency funding plans that assess liquidity needs that may arise from certain stress events such as rapid asset growth or financial market disruptions. Our contingency plans also provide for continuous monitoring of net borrowed funds and dependence and available sources of contingent liquidity. These sources of contingent liquidity include cash and cash equivalents, capacity to borrow at the Federal Reserve discount window and through the FHLB system, fed funds purchased from other banks and the ability to sell, pledge or borrow against unencumbered securities in our securities portfolio. As of June 30, 2024, the potential liquidity from these sources is an amount we believe currently exceeds any contingent liquidity need.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Capital Resources. The Company and its subsidiary banks (Columbia Bank and Freehold Bank) are subject to various regulatory capital requirements administered by the federal banking regulators, including a risk-based capital measure. The Federal Reserve establishes capital requirements, including well capitalized standards, for the consolidated financial holding company, and the Office of the Comptroller of the Currency (the "OCC") has similar requirements for the Company's subsidiary banks. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's Consolidated Statements of Financial Condition.

Federal regulators require federally insured depository institutions to meet several minimum capital standards: (1) total capital to risk-weighted assets of 8.0%; (2) tier 1 capital to risk-weighted assets of 6.0%; (3) common equity tier 1 capital to risk-weighted assets of 4.5%; and (4) tier 1 capital to adjusted total assets of 4.0%. In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements. The regulators established a framework for the classification of savings institutions into five categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Generally, an institution is considered well capitalized if it has: a total capital to risk-weighted assets ratio of at least 10.0%, a tier 1 capital to risk-weighted assets ratio of at least 8.0%, a common tier 1 capital to risk-weighted assets ratio of at least 6.5%, and a tier 1 capital to adjusted total assets ratio of at least 5.0%. As of June 30, 2024 and December 31, 2023, each of the Company and Columbia Bank and Freehold Bank exceeded all capital adequacy requirements to which it was subject.

    The following tables presents the Company's, Columbia Bank's and Freehold Bank's actual capital amounts and ratios at June 30, 2024 and December 31, 2023 compared to the Federal Reserve Bank minimum capital adequacy requirements and the Federal Reserve Bank requirements for classification as a well-capitalized institution:

	Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount	Ratio
Company	(In thousands, except ratio data)
At June 30, 2024:
Total capital (to risk-weighted assets)	$	1,125,355	14.22	%	$	633,177	8.00	%	$	831,045	10.50	%	N/A	N/A
Tier 1 capital (to risk-weighted assets)	1,064,386		13.45		474,883		6.00		672,751		8.50		N/A	N/A
Common equity tier 1 capital (to risk-weighted assets)	1,057,169		13.36		356,162		4.50		554,030		7.00		N/A	N/A
Tier 1 capital (to adjusted total assets)	1,064,386		9.94		428,115		4.00		428,115		4.00		N/A	N/A
At December 31, 2023:
Total capital (to risk-weighted assets)	$	1,120,849	14.08	%	$	636,767	8.00	%	$	835,757	10.50	%	N/A	N/A
Tier 1 capital (to risk-weighted assets)	1,060,490		13.32		477,575		6.00		676,565		8.50		N/A	N/A
Common equity tier 1 capital (to risk-weighted assets)	1,053,273		13.23		358,182		4.50		557,171		7.00		N/A	N/A
Tier 1 capital (to adjusted total assets)	1,060,490		10.04		422,441		4.00		422,441		4.00		N/A	N/A

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Item 4. CONTROLS AND PROCEDURES

	Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Columbia Bank	(In thousands, except ratio data)
At June 30, 2024:
Total capital (to risk-weighted assets)	$	1,041,252	14.32	%	$	581,572	8.00	%	$	763,313	10.50	%	$	726,965	10.00	%
Tier 1 capital (to risk-weighted assets)	981,618		13.50		436,179		6.00		617,920		8.50		581,572		8.00
Common equity tier 1 capital (to risk-weighted assets)	981,618		13.50		327,134		4.50		508,876		7.00		472,527		6.50
Tier 1 capital (to adjusted total assets)	981,618		9.42		416,916		4.00		416,916		4.00		521,145		5.00
At December 31, 2023:
Total capital (to risk-weighted assets)	$	1,033,138	14.02	%	$	589,622	8.00	%	$	773,879	10.50	%	$	737,028	10.00	%
Tier 1 capital (to risk-weighted assets)	974,127		13.22		442,217		6.00		626,474		8.50		589,622		8.00
Common equity tier 1 capital (to risk-weighted assets)	974,127		13.22		331,663		4.50		515,920		7.00		479,068		6.50
Tier 1 capital (to adjusted total assets)	974,127		9.48		411,126		4.00		411,126		4.00		513,908		5.00

	Actual				Minimum Capital Adequacy Requirements				Minimum Capital Adequacy Requirements with Capital Conservation Buffer				To be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Freehold Bank	(In thousands, except ratio data)
At June 30, 2024:
Total capital (to risk-weighted assets)	$	45,859	23.84	%	$	15,392	8.00	%	$	20,202	10.50	%	$	19,240	10.00	%
Tier 1 capital (to risk-weighted assets)	44,522		23.14		11,544		6.00		16,354		8.50		15,392		8.00
Common equity tier 1 capital (to risk-weighted assets)	44,522		23.14		8,658		4.50		13,468		7.00		12,506		6.50
Tier 1 capital (to adjusted total assets)	44,522		16.02		11,116		4.00		11,116		4.00		13,896		5.00
At December 31, 2023:
Total capital (to risk-weighted assets)	$	45,417	22.50	%	$	16,152	8.00	%	$	21,199	10.50	%	$	20,189	10.00	%
Tier 1 capital (to risk-weighted assets)	44,045		21.82		12,114		6.00		17,161		8.50		16,152		8.00
Common equity tier 1 capital (to risk-weighted assets)	44,045		21.82		9,085		4.50		14,133		7.00		13,123		6.50
Tier 1 capital (to adjusted total assets)	44,045		15.27		11,539		4.00		11,539		4.00		14,424		5.00

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    An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of June 30, 2024. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well-designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

    During the quarter ended June 30, 2024, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

73

PART II – OTHER INFORMATION

Item 1.     Legal Proceedings

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

Item 1A.     Risk Factors

    For information regarding the Company’s risk factors, refer to the Risk Factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 29, 2024. As of June 30, 2024, the risk factors of the Company have not materially changed from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

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

    The following table reports information regarding repurchases of the Company's common stock, excluding excise tax during the quarter ended June 30, 2024:

Period	Total Number of Shares (2)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 - 30, 2024	159,150	$	16.43	159,000	846,325
May 1 - 31, 2024	108,386	15.55		104,600	741,725
June 1 - 30, 2024	—	—		—	741,725
Total	267,536	$	16.09	263,600
(1) On May 25, 2023, the Company announced that its Board of Directors authorized the Company's sixth stock repurchase program to acquire up to 2,000,000 shares, or approximately 1.9% of the Company's then issued and outstanding common stock. Repurchases have been paused in order to retain capital.
(2) During the three months ended June 30, 2024, 3,786 shares were repurchased for taxes related to the 2019 Equity Incentive Plan and 150 shares were repurchased pursuant to forfeitures and not as part of a share repurchase program.

Item 3.     Defaults Upon Senior Securities

    Not Applicable.

Item 4.     Mine Safety Disclosures

    Not Applicable.

Item 5.     Other Information

    During the fiscal quarter ended June 30, 2024, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.

Item 6.     Exhibits

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

74

Exhibit Index

3.2	Amended Bylaws of Columbia Financial, Inc.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.0	The following materials from the Company’s Quarterly Report to Stockholders on Form 10-Q for the quarter ended June 30, 2024, formatted in inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements.
101. INS	The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101. SCH	Inline XBRL Taxonomy Extension Schema Document
101. CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101. LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101. PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover page Interactive Data File (embedded within the Inline XBRL document)

75

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Columbia Financial, Inc.
Date:	August 9, 2024	/s/Thomas J. Kemly
		Thomas J. Kemly
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:	August 9, 2024	/s/Dennis E. Gibney
		Dennis E. Gibney
		Senior Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)