Columbia Financial (CLBK) Risk Analysis

The dilution caused by the issuance of the new shares of Columbia Financial, Inc. common stock to Northfield Bancorp stockholders in connection with the payment of the merger consideration may result in fluctuations in the market price of Columbia Financial, Inc. common stock, including a stock price decrease, following the closing of the conversion.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the merger, holders of Northfield Bancorp's common stock will receive shares of our common stock as merger consideration. The combined company's business and financial position will differ from the business and financial position of us and Northfield before the completion of the merger and, accordingly, the results of operations of the combined company will be affected by some factors that are different from those currently affecting our results of operations and those currently affecting the results of operations of Northfield Bancorp. Accordingly, the market price and performance of the surviving corporation's common stock is likely to be different from the performance of our common stock in the absence of the merger. In addition, general fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, our common stock, regardless of actual operating performance.

When we acquire a business, a portion of the purchase price of the acquisition typically is allocated to goodwill and other identifiable intangible assets. The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired determines the amount of the purchase price that is allocated to goodwill acquired. As of December 31, 2025, goodwill and other identifiable intangible assets were $120.3 million. Under current accounting guidance, if we determine that goodwill or intangible assets are impaired, we would be required to write down the value of these assets. We conduct an annual review to determine whether goodwill and other identifiable intangible assets are impaired. We conduct a quarterly review for indicators of impairment of goodwill and other identifiable intangible assets. Our management recently completed these reviews and concluded that no impairment charge was necessary for the year ended December 31, 2025. We cannot provide assurance whether we will be required to take an impairment charge in the future. Any impairment charge would have a negative effect on our shareholders' equity and financial results and may cause a decline in our stock price.

Most of our investment securities portfolio is designated as available-for-sale. Accordingly, unrealized gains and losses, net of tax, in the estimated fair value of the available-for-sale portfolio is recorded as other comprehensive income, a separate component of stockholders' equity. Due to increases in interest rates in 2022 and 2023, the fair value of our investment portfolio declined, causing a corresponding decline in stockholders' equity. Future increases in interest rates could lead to a corresponding decline in stockholders' equity. Management believes that several factors will affect the fair values of the investment portfolio, including, but not limited to, changes in interest rates or expectations of changes, the degree of volatility in the securities markets, inflation rates or expectations of inflation and the slope of the interest rate yield curve. In addition, any adverse development in the factors used to assess credit related impairment could require us to recognize an impairment in the value of our investment securities portfolio, which could have an adverse effect on our results of operations in future periods

Following the completion of the merger, the size of the business of the combined company will increase significantly beyond the current size of our combined business. The combined company's future success will depend, in part, upon its ability to manage this expanded business, including its expansion into the Staten Island and Brooklyn markets currently served by Northfield Bancorp, which may pose challenges for management, including challenges related to the management and monitoring of new operations markets, as well as associated increased costs and complexity. The combined company may also face increased scrutiny from governmental authorities as a result of the significant increase in the size of its business.

Uncertainty about the effect of the merger on employees and customers may have an adverse effect on us and Northfield Bancorp. These uncertainties may impair our ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with us to seek to change existing business relationships with Columbia Financial.

Specified conditions set forth in the Merger Agreement must be satisfied or waived to complete the Merger. If the conditions are not satisfied or, subject to applicable law, waived, the merger will not occur or will be delayed and each of us or Northfield may lose some or all of the intended benefits of the merger. The obligations of the Company and Northfield Bancorp to complete the merger are subject to (i) the approval of the Merger Agreement by the stockholders of each of the Company and Northfield Bancorp, (ii) the authorization for listing on the Nasdaq Global Select Market of the shares of Columbia Financial Inc. common stock that will be issued as merger consideration; (iii) the receipt or provision of all non-governmental notices, consents or waivers by non-governmental third parties, except as would not reasonably be expected to have a material adverse effect on us or Northfield Bancorp (iv) the effectiveness of the Registration Statement on Form S-4 with respect to the merger and the absence of any stop order by the SEC suspending such effectiveness; (v) the receipt of all required regulatory approvals, in each case without the imposition of any materially burdensome regulatory condition; (vi) no order, injunction or decree issued by any court or governmental entity or other legal restraint or prohibition preventing the completion of the merger; (vii) the deposit of cash and certificates representing sufficient shares of our common stock sufficient to pay the merger consideration; (viii) approval of the conversion by the stockholders of Columbia Financial and by the members of Columbia MHC; (ix) the completion of the conversion; x) the absence of any event that,individually or in the aggregate, has had or will reasonably be likely to have a material adverse effect on Northfield Bancorp or any of its subsidiaries; (xi) the accuracy of the representations and warranties of Columbia Financial, Inc., Columbia Financial, and Northfield Bancorp contained in the Merger Agreement, both as of the date of the Merger Agreement and as of the closing of the merger, subject to the materiality standards provided for in the Merger Agreement; (xii) the performance in all material respects by Columbia Financial, Inc., Columbia Financial and Northfield Bancorp of their respective obligations, covenants and agreements required to be performed under the Merger Agreement; and (xii) the receipt by each of the parties of an opinion of legal counsel that the merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code.

A successful integration of Northfield's business with our business will depend substantially on the ability to consolidate operations, corporate cultures, systems and procedures and to eliminate redundancies and costs. We may not be able to combine each company's business without encountering difficulties that could adversely affect the ability to maintain relationships with existing clients, customers, depositors and employees, such as: - the loss of key employees;- the disruption of operations and business;- the inability to maintain and increase competitive presence;- loan and deposit attrition, customer loss and revenue loss;- possible inconsistencies in standards, control procedures and policies;- additional costs or unexpected problems with operations, personnel, technology and credit; and/or - problems with the assimilation of new operations, systems, sites or personnel, which could divert resources from regular banking operations. Any disruption to the businesses could cause customers to remove their accounts and move their business to a competing financial institution. Integration efforts between the two companies may also divert management attention and resources. Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit the successful integration of Northfield. Further, we entered into the Merger Agreement with the expectation that the acquisition of Northfield will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the surviving corporation, cross selling opportunities, technological efficiencies, cost savings and operating efficiencies. Achieving the anticipated benefits of the transactions contemplated by the Merger Agreement is subject to a number of uncertainties, including whether the integration is completed in an efficient, effective and timely manner, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits on the anticipated timeframe, or at all, could result in a reduction in the price of our common stock as well as increased costs, decreases in the amount of expected revenues and diversion of management's time and energy and could materially and adversely affect our business, financial condition and operating results. Additionally, upon consummation of the transactions contemplated by the Merger Agreement, the Holding Company will make fair value estimates of certain assets and liabilities in recording the acquisition. Actual values of these assets and liabilities could differ from such estimates, which could result in us not achieving the anticipated benefits of the acquisition. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings

We and Northfield have incurred and expect to incur significant non-recurring costs associated with combining the operations of Northfield with our operations. These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employment-related costs, public company filing fees and other regulatory fees, printing costs and other related costs. We will also incur significant costs relating to contract termination fees for vendor contracts currently utilized by Northfield Bancorp in its operations. We have begun collecting information in order to formulate detailed integration plans to deliver anticipated cost savings; however, many of the costs that will be incurred are, by their nature, difficult to estimate accurately. Additional unanticipated costs may be incurred in the integration of our businesses with the business of Northfield, and there are many factors beyond our and Northfield's control that could affect the total amount or timing of integration costs. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and transaction-related costs over time, this net benefit may not be achieved in the near term, or at all. Whether or not the merger is consummated, we, Northfield and the combined company will incur substantial expenses in pursuing the merger and may adversely impact our and the combined company's earnings. The completion of the merger is conditioned upon customary closing conditions, including the receipt of required governmental authorizations, consents, orders and approvals, including approval by certain federal banking regulators and required approvals from the stockholders of the Company and Northfield. We intend to pursue all required approvals in accordance with the Merger Agreement. However, these approvals could be delayed or not obtained at all, and there can be no assurance that such approvals will be obtained without additional cost, on the anticipated timeframe, or at all.

Our acquisition of Northfield Bancorp depends upon our successful conversion from the mutual holding company form of organization to stock form of organization. The conversion requires stockholder and member approvals as well as the approval of the federal banking regulatory authorities, one or more of which we may not obtain in a timely manner, or at all. The conversion also depends upon the successful implementation of our plan of conversion as described in the section entitled "Plan of Conversion and Reorganization." If we are unable to consummate the conversion, our acquisition of Northfield Bancorp will not take place. Our failure to acquire Northfield Bancorp could effect our ability to generate profits and grow our franchise, which could have a material adverse affect on our pro forma results of operations and financial condition if we determined to terminate the conversion.

We anticipate simultaneously completing the conversion, the stock offering and the Northfield Bancorp acquisition in the third quarter of 2026. At this time, we are not aware of any circumstances that are likely to cause the acquisition not to occur. However, certain conditions to the merger have not yet been satisfied, including regulatory approvals and stockholder approvals. Also, a material adverse change in Northfield Bancorp may preclude consummation of the acquisition. If the Northfield Bancorp acquisition were not to occur, we may terminate the conversion or delay the conversion. If we were to delay the conversion, the timing and manner of the conversion would be subject to significant modification in the event the acquisition were terminated. The offering documents would be revised and subscribers in the offering would be re-solicited with an amended proxy statement and prospectus. As a result, if we were to proceed with the conversion without the merger the conversion and the stock offering would be delayed.