Dime Community Bancshares, Inc. Reports Strong Third Quarter 2020 Results

Company Release - 10/27/2020 4:56 PM ET

Revenues Increased 29% Year-over-Year

Earnings Per Share Increased 223% Year-over-Year

BROOKLYN, N.Y., Oct. 27, 2020 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime” or “its”), the parent company of Dime Community Bank (the “Bank”), today reported net income to common stockholders of $14.0 million for the quarter ended September 30, 2020, or $0.42 per diluted common share, compared with net income to common stockholders of $11.8 million for the quarter ended June 30, 2020, or $0.35 per diluted common share, and net income to common stockholders of $4.7 million for the quarter ended September 30, 2019, or $0.13 per diluted common share.

Excluding the pre-tax impact of $0.8 million of merger related expenses and $0.2 million of income from gain on sale of securities, earnings per share (“EPS”) for the quarter ended September 30, 2020 would have been $0.44 per diluted share.

Mr. Kenneth J. Mahon, Chief Executive Officer (“CEO”) of the Company, stated, “Third quarter of 2020 EPS of $0.44 (on a core basis) represents a record for Dime in our history as a publicly traded company. We had solid growth in our loan portfolio and continued net interest margin expansion. In addition, expenses remained well controlled and non-performing assets declined. Our earnings profile and robust capital base helps position us well to serve our customers and communities, our employees and investors. Our merger integration teams are making good progress on the previously announced transaction with Bridge Bancorp, Inc. We are well on our way to create a foundational franchise that has the opportunity to become one of the elite regional bank competitors in New York and on Long Island.”

Highlights for the Third Quarter of 2020 Included:

  • Linked quarter net interest margin (“NIM”) expansion of 6 basis points primarily driven by a 28 basis point linked quarter decrease in the cost of deposits;
  • Strong growth in checking account balances. Compared to the third quarter of 2019, the sum of average non-interest-bearing checking account balances and average interest-bearing checking account balances for the third quarter of 2020 increased by 61.1% to $894.1 million;
  • The efficiency ratio declined to 49.0% in the third quarter of 2020;
  • Total non-interest income increased by 83% on a year-over-year basis to $6.1 million, driven by $1.5 million of customer-related loan level swap income, $0.8 million of income from the sale of Small Business Administration (“SBA”) loans, and $0.6 million from the sale of residential mortgage loans;
  • Capital levels remain strong; our tangible equity to tangible assets ratio was 9.73% at September 30, 2020 (see “Non-GAAP Reconciliation” tables at the end of this news release). Excluding the impact of SBA Paycheck Protection Program (“PPP”) loans, the ratio would have been 10.22%; and
  • Non-performing assets declined by 19.2% on a linked quarter basis and represent only 0.19% of total assets.

Loans with Payment Deferrals

The Company is seeing positive trends as an increasing number of loans exit deferment.

As of September 30, 2020, Principal and Interest (“P&I”) deferrals decreased to $272.0 million or 4.9% of the total loan portfolio. Furthermore, an additional 1.1% of our portfolio is currently comprised of loans that are paying full interest and escrow, and only deferring principal payments.

($ in millions)As of September 30, 2020
          
 Total Loan Portfolio P&I Deferrals
       % of Loan  
 Balance LTV Balance Category LTV
One-to-four family and coop/condo$184.8 51.9% $8.8 4.7% 55.2%
Multifamily residential and residential mixed-use 2,915.0 51.7   192.3 6.6  60.5 
Commercial mixed-use 362.0 46.4   16.1 4.4  51.4 
          
Pure commercial real estate (“CRE”):         
Retail 309.7 53.4   13.4 4.3  65.8 
Office 322.1 61.1   10.5 3.3  56.7 
Hotels 171.4 65.7   - -  - 
Warehouse 134.3 64.6   - -  - 
Single Tenant 80.8 45.4   8.9 11.1  50.9 
Shopping Center 79.7 43.3   - -  - 
Industrial 65.1 60.9   - -  - 
All Other 147.8 56.1   10.1 6.8  43.5 
Total Pure CRE 1,310.9 56.6   42.9 3.3  55.2 
          
Acquisition, Development, and Construction 151.9 n/a   - -  - 
          - 
Commercial and industrial (“C&I”) 650.0 n/a   12.0 1.9  n/a 
Other Loans 1.4 n/a   - -  - 
          
Total$5,576.0   $272.0 4.9%  
          
Note: Loan balances exclude deferred fees and costs.

As of September 30, 2020, the Company had 15 loans aggregating $25.6 million to restaurants. As of September 30, 2020, there were no loans with P&I deferrals to restaurants. The Company does not have any exposure to the energy industry, airline industry, leveraged lending, shared national credits, credits card loans, or auto loans.

Mr. Mahon commented, “We are encouraged by the positive trends we are seeing across our loan portfolio. The multigenerational nature of our multifamily borrower base, coupled with the low loan-to-value (“LTV”) nature of our multifamily portfolio (weighted average LTV of approximately 51.7% at September 30, 2020) and our capital strength and earnings profile provides me confidence in our prospects.”

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income in the third quarter of 2020 was $44.9 million, an increase of $1.4 million (3.2%) from the second quarter of 2020 and an increase of $8.7 million (24.2%) from the third quarter of 2019. The table below provides a reconciliation of the reported NIM and the NIM excluding the impact of loan prepayment fees.

($ in millions)Q3 2020Q2 2020Q3 2019
NIM 2.92% 2.86% 2.34%
Net Interest Income$44,944 $43,556 $36,196 
Income from Loan Prepayment Activity$524 $1,737 $830 
Net Interest Income Excluding Prepayment Fee Income$44,399 $41,819 $35,366 
NIM, Excluding Prepayment Fee  2.88% 2.75% 2.28%

Mr. Mahon commented, “Our NIM (excluding the impact of prepayment fees) has now increased for eight consecutive quarters. Our successful business model transformation (from thrift to commercial bank) continues to produce the expected trends on NIM.”

Average interest-earning assets were $6.16 billion for the third quarter of 2020, a 4.8% (annualized) increase from $6.09 billion for the second quarter of 2020, and a 0.4% decrease from $6.19 billion for the third quarter of 2019. For the third quarter of 2020, the average yield on interest-earning assets was 3.72%, a decrease of 13 basis points compared with the second quarter of 2020, and a decrease of 17 basis points compared to the third quarter of 2019. The linked quarter decline in yield was primarily attributable to a decline in income from loan prepayment activity.

The ending weighted average rate (“WAR”) on the total loan portfolio was 3.76% at September 30, 2020, a one basis point decline compared to the ending WAR on the total loan portfolio at June 30, 2020, and a 26 basis point decrease versus the ending WAR on the total loan portfolio at September 30, 2019. The WAR on the total loan portfolio as of September 30, 2020 was negatively impacted by PPP loans ($318.6 million of loans at September 30, 2020). Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.94% at September 30, 2020, compared to 3.94% at June 30, 2020, and 4.02% at September 30, 2019.

The average cost of borrowed funds (which primarily consist of Federal Home Loan Bank advances) was 1.98% for the third quarter of 2020, a decrease of 2 basis points versus the second quarter of 2020, and a decrease of 41 basis points versus the third quarter of 2019.

Loans

The real estate loan portfolio increased by $122.1 million (10.2% annualized) during the third quarter of 2020. Total real estate loan originations were $277.7 million during the third quarter of 2020, at a weighted average interest rate of 3.53%. Real estate loan amortization and satisfactions totaled $113.9 million, or 9.4% (annualized) of the portfolio balance, at an average rate of 3.65%. The annualized real estate loan payoff rate of 9.4% for the third quarter of 2020 was lower than both the second quarter of 2020 (23.1% annualized) and the third quarter of 2019 (15.1% annualized).

Average real estate loans were $4.87 billion in the third quarter of 2020, flat compared to the second quarter of 2020, and a decrease of $314.2 million (6.1%) from the third quarter of 2019.

Average C&I loans were $643.4 million in the third quarter of 2020 (including average SBA PPP loans of $316.7 million), an increase of $124.4 million (95.9% annualized) from the second quarter of 2020, and an increase of $330.9 million (105.9%) from the third quarter of 2019.

Outlined below are the loan originations for the current quarter, linked quarter and prior year quarter.

($s in millions)Originations/ Weighted Average Rate
 Q3 2020Q2 2020Q3 2019
Real Estate Originations$277.7/3.53%$208.8/2.91%$166.0/4.93%
C&I Originations$41.2/4.93%$15.0/4.19%$26.5/6.07%
SBA PPP Originations$7.1/1.00%$319.4/1.00%n/a

Deposits and Borrowed Funds

The Company continues to focus on growing relationship-based business deposits. Mr. Mahon commented, “Importantly, we continue to improve the quality of our deposit base, as evidenced by the non-interest- bearing deposits to total deposits ratio increasing to approximately 15.1% at September 30, 2020, compared to 9.5% at September 30, 2019.”

Total deposits decreased by $65.9 million on a linked quarter basis to $4.37 billion at September 30, 2020. Mr. Mahon commented, “The decrease in total deposits was due to pro-active downward pricing adjustments on certain higher-cost deposit segments. We remain steadfast in our commitment to grow lower cost relationship based deposits.”

The cost of total deposits for the quarter ended September 30, 2020 decreased 28 basis points on a linked quarter basis. As of September 30, 2020, the Company had $483.3 million of certificates of deposits, with a weighted average rate of 1.03%, that were set to mature during the fourth quarter of 2020. Mr. Mahon commented, “Given the repricing opportunity for certificates of deposits in the fourth quarter of 2020, we expect our deposit costs to continue trending downwards.”

Total borrowings (excluding subordinated debt securities) increased to $1.20 billion at September 30, 2020, compared to $1.02 billion at the second quarter of 2020, and $1.20 billion at the third quarter of 2019.

Non-Interest Income

Non-interest income was $6.1 million during the third quarter of 2020, $8.4 million during the second quarter of 2020, and $3.4 million during the third quarter of 2019. Excluding gains and losses on equity securities and from sales of securities and other assets, non-interest income was $5.8 million during the third quarter of 2020 compared to $4.8 million during the second quarter of 2020 and $3.3 million during the third quarter of 2019.

Mr. Mahon commented, “Our commercial bank operation continues to produce the desired results on fee income growth, especially as it relates to gaining significant traction with our commercial customers on interest rate swap products. In addition, our business line diversification into SBA and residential lending produced strong gain-on-sale revenue.”

Non-Interest Expense Remains Well Controlled

Total non-interest expense was $24.9 million during the third quarter of 2020, $29.3 million during the second quarter of 2020, and $22.8 million during the third quarter of 2019. Excluding the impact of severance and merger-related expenses, non-interest expense was $24.1 million during the third quarter of 2020, $24.3 million during the second quarter of 2020, and $22.8 million during the third quarter of 2019.

The ratio of non-interest expense to average assets was 1.53% during the third quarter of 2020, compared to 1.84% during the linked quarter and 1.41% for the third quarter of 2019. Excluding the impact of severance and merger-related expenses, the ratio of non-interest expense to average assets was 1.48% during the third quarter of 2020, compared to 1.52% during the linked quarter and 1.41% for the third quarter of 2019.

The efficiency ratio was 49.0% during the third quarter of 2020, compared to 60.7% during the linked quarter and 57.7% during the third quarter of 2019. Excluding the impact of severance and merger-related expenses and gain on sale of securities, the efficiency ratio was 47.5% during the third quarter of 2020, compared to 50.3% during the linked quarter and 57.7% during the third quarter of 2019.

Income Tax Expense

The reported effective tax rate for the third quarter of 2020 was 21.9%, compared to 21.6% for the second quarter of 2020, and 15.3% for the third quarter of 2019.

Credit Quality

Non-performing loans at September 30, 2020 declined to $12.4 million, or 0.22% of total loans, compared to $15.4 million, or 0.28% of total loans, at June 30, 2020.

Under Section 4014 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act), financial institutions had the option to delay the adoption of the Current Expected Credit Loss (“CECL”) framework until the earlier of December 31, 2020 or when the national emergency is lifted. The Bank elected to defer adoption of CECL and is utilizing its existing incurred loss framework.

A loan loss provision of $5.9 million was recorded during the third quarter of 2020, compared to a loan loss provision of $6.1 million during the second quarter of 2020, and a loan loss provision of $11.2 million during the third quarter of 2019. The $5.9 million provision for the third quarter of 2020 was primarily associated with an increase in the general loan loss reserve due to the adjustment of qualitative factors tied to the Bank’s existing incurred loss framework, to account for the effects of the COVID-19 pandemic and related economic disruption.

The allowance for loan losses was 0.87% of total loans at September 30, 2020 as compared to 0.78% of total loans at June 30, 2020. Excluding $318.6 million of PPP loans, the ratio of allowance for losses to total loans at September 30, 2020 would have been 0.92%.

At September 30, 2020, non-performing assets represented 2.1% of the sum of tangible equity plus the allowance for loan losses and reserve for contingent liabilities (see “Problem Assets as a Percentage of Tangible Equity and Reserves” table and “Non-GAAP Reconciliation” table at the end of this news release).

Capital Management

The Company’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements. At September 30, 2020, the Consolidated Tier 1 capital to average assets (“leverage ratio”) was 10.10%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 13.02% and 16.30%, respectively.

The Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements. At September 30, 2020, the Bank’s leverage ratio was 9.97%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 12.88% and 13.87%, respectively.

Mr. Mahon commented, “Excluding the impact of the PPP loans, our tangible equity to tangible assets ratio would have been 10.22% at September 30, 2020; this is well above the previously communicated 9.25% minimum target for this ratio that we disclosed during our first quarter earnings call.”

Diluted earnings per common share of $0.42 exceeded the quarterly $0.14 cash dividend per share by 200.0% during the third quarter of 2020, equating to a 33.3% dividend payout ratio.

Book value per common share increased to $17.48 and tangible common book value per share (common equity less goodwill divided by number of shares outstanding) (see “Non-GAAP Reconciliation” tables at the end of this news release) increased to $15.79 at September 30, 2020.

Earnings Call Information

The Company will conduct a conference call at 8:00 a.m. (ET) on October 28, 2020, during which Chief Executive Officer, Kenneth J. Mahon, will discuss the Company’s third quarter performance, with a Q&A session to follow. Dial-in information for the live call is 1-888-348-2672. Upon dialing in, request to be joined into Dime Community Bancshares, Inc. call with the conference operator.

The conference call will be simultaneously webcast (listen only), and archived for a period of one year, at https://services.choruscall.com/links/dcom201028.html. Dial-in information for the replay is 1-877-344-7529 using access code #10148582. Replay will be available October 28, 2020 (10:00 a.m.) through November 4, 2020 (11:59 p.m.).

ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company had $6.62 billion in consolidated assets as of September 30, 2020. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has 28 retail branches located throughout Brooklyn, Queens, the Bronx, Nassau and Suffolk Counties, New York. More information on the Company and the Bank can be found on Dime's website at www.dime.com.

This news release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," “continue,” "could," "estimate," "expect," "intend," “likely,” "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.

Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These include statements regarding the proposed merger of the Company with Bridge Bancorp, Inc. (the “Merger”). These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on such statements. Factors that could affect our results include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company and/or the Bank; unanticipated or significant increases in loan losses may negatively affect the Company’s financial condition or results of operations; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; there may be failures or breaches of information technology security systems; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates; we may incur unexpected expenses and delays related to the Merger; or we may be unable to obtain regulatory approvals or satisfy other closing conditions required to complete the Merger. Further, given its ongoing and dynamic nature, it is difficult to predict what effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch closures, work stoppages and unavailability of personnel; and increased cybersecurity risks, as employees increasingly work remotely.

Contact: Avinash Reddy
Senior Executive Vice President – Chief Financial Officer
718-782-6200 extension 5909



DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share amounts)
         
  September 30,    June 30,    December 31,   
  2020    2020    2019  
ASSETS:        
Cash and due from banks$147,283  $117,013  $155,488 
Mortgage-backed securities available-for-sale, at fair value443,824  464,279  502,464 
Investment securities available-for-sale, at fair value81,773  77,728  48,531 
Marketable equity securities, at fair value5,759  5,707  5,894 
Real Estate Loans:        
One-to-four family and cooperative/condominium apartment186,975  182,264  148,429 
Multifamily residential and residential mixed-use (1)(2)2,919,186  2,988,511  3,385,375 
Commercial real estate and commercial mixed-use1,675,488  1,504,020  1,350,185 
Acquisition, development, and construction ("ADC")151,866  136,606  118,365 
Total real estate loans4,933,515  4,811,401  5,002,354 
Commercial and industrial ("C&I")323,972  321,009  336,412 
Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans318,568  310,509  - 
Other loans1,448  1,463  1,772 
Allowance for credit losses(48,492) (42,492) (28,441)
Total loans, net5,529,011  5,401,890  5,312,097 
Premises and fixed assets, net20,539  21,423  21,692 
Premises held for sale-  -  514 
Loans held for sale2,625  1,794  500 
Federal Home Loan Bank of New York ("FHLBNY") capital stock57,305  52,305  56,019 
Bank Owned Life Insurance ("BOLI")155,068  154,036  114,257 
Goodwill55,638  55,638  55,638 
Operating lease assets35,503  36,813  37,858 
Derivative assets19,845  18,475  2,443 
Accrued Interest Receivable33,774  27,506  18,891 
Other assets31,444  32,914  22,174 
TOTAL ASSETS$6,619,391  $6,467,521  $6,354,460 
LIABILITIES AND STOCKHOLDERS' EQUITY:        
Deposits:        
Non-interest-bearing checking$658,297  $664,323  $478,549 
Interest-bearing checking244,696  231,201  151,491 
Savings403,262  406,771  374,265 
Money Market1,708,757  1,742,563  1,705,451 
Sub-total3,015,012  3,044,858  2,709,756 
Certificates of deposit1,357,510  1,393,554  1,572,869 
Total Due to Depositors4,372,522  4,438,412  4,282,625 
Escrow and other deposits119,626  87,646  76,481 
FHLBNY advances1,128,400  1,017,300  1,092,250 
Subordinated notes payable, net114,016  113,979  113,906 
Other borrowings70,000  5,000  110,000 
Operating lease liabilities41,314  42,733  44,098 
Derivative liabilities47,955  48,979  9,080 
Other liabilities31,400  31,929  29,262 
TOTAL LIABILITIES5,925,233  5,785,978  5,757,702 
STOCKHOLDERS' EQUITY:        
Preferred stock, Series A ($0.01 par, $25.00 liquidation value, 9,000,000 shares authorized, 5,299,200 shares        
shares issued and outstanding at September 30, 2020 and June 30, 2020, and none issued or outstanding at December 31, 2019)116,569  116,569  - 
Common stock ($0.01 par, 125,000,000 shares authorized, 53,724,233 shares, 53,724,233 shares and 53,721,189 shares issued at        
September 30, 2020, June 30, 2020, and December 31, 2019, respectively, and 33,049,822 shares, 33,089,585 shares and 35,154,642       
shares outstanding at September 30, 2020, June 30, 2020, and December 31, 2019, respectively)537  537  537 
Additional paid-in capital278,580  278,581  279,322 
Retained earnings601,913  592,497  581,817 
Accumulated other comprehensive loss, net of deferred taxes(11,539) (14,403) (5,940)
Unearned equity awards(6,695) (7,549) (6,731)
Common Stock held by the Benefit Maintenance Plan(1,496) (1,496) (1,496)
Treasury stock, at cost (20,674,411 shares, 20,634,648 shares and 18,566,547 shares at September 30, 2020, June 30, 2020 and        
December 31, 2019, respectively)(283,711) (283,193) (250,751)
TOTAL STOCKHOLDERS' EQUITY694,158  681,543  596,758 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$6,619,391  $6,467,521  $6,354,460 
         
(1) Includes loans underlying cooperatives.        
(2) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately       
from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant  component of the total loan portfolio.        



DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except share and per share amounts)
            
 For the Three Months Ended  For the Nine Months Ended 
 September 30, June 30, September 30,  September 30, September 30, 
 2020 2020 2019  2020 2019 
Interest income:           
Loans secured by real estate$47,482 $49,058 $50,732  $146,657 $150,720 
Commercial and industrial ("C&I") loans5,752 5,071 4,442  14,868 12,012 
Other loans11 13 18  39 54 
Mortgage-backed securities2,707 3,064 2,973  9,076 9,131 
Investment securities715 582 626  1,718 1,616 
Other short-term investments729 846 1,488  2,577 4,392 
Total interest  income57,396 58,634 60,279  174,935 177,925 
Interest expense:           
Deposits and escrow6,672 9,700 16,582  28,298 47,870 
Borrowed funds5,780 5,378 7,501  17,613 22,031 
Total interest expense12,452 15,078 24,083  45,911 69,901 
Net interest income44,944 43,556 36,196  129,024 108,024 
Provision for loan losses  5,931 6,060 11,228  20,003 11,100 
Net interest income after  provision for loan losses39,013 37,496 24,968  109,021 96,924 
            
Non-interest income:           
Service charges and other fees1,632 1,083 1,780  3,918 4,143 
Mortgage banking income, net71 52 77  189 206 
Gain on equity securities175 436 14  139 430 
Gain (loss) on sale of securities and other assets215 3,134 66  3,357 (67)
Gain on sale of loans1,425 206 443  1,946 1,037 
Income from BOLI1,033 911 723  3,831 2,124 
Loan level derivative income1,544 2,494 197  5,201 488 
Other54 70 61  190 180 
Total non-interest income6,149 8,386 3,361  18,771 8,541 
Non-interest expense:           
Salaries and employee benefits13,512 14,719 12,948  43,077 36,893 
Severance pay- 3,930 -  4,000 - 
Stock benefit plan compensation expense804 478 574  1,953 1,349 
Occupancy and equipment4,046 3,959 3,970  12,061 11,666 
Data processing costs2,146 2,007 1,803  6,177 5,777 
Marketing134 136 466  667 1,397 
Federal deposit insurance premiums761 529 (506) 1,767 534 
Merger expenses769 1,072 -  2,427 - 
Other2,681 2,516 3,519  8,110 9,506 
Total non-interest expense24,853 29,346 22,774  80,239 67,122 
            
Income before taxes20,309 16,536 5,555  47,553 38,343 
Income tax expense4,441 3,570 850  10,327 9,102 
            
Net income15,868 12,966 4,705  37,226 29,241 
Preferred stock dividends1,822 1,140 -  2,962 - 
Net income available to common stockholders$14,046 $11,826 $4,705  $34,264 $29,241 
            
Earnings per Common Share ("EPS"):            
Basic $ 0.43 $ 0.36 $ 0.13  $ 1.02 $ 0.81 
Diluted $ 0.42 $ 0.35 $ 0.13  $ 1.01 $ 0.81 
            
Average common shares outstanding for Diluted EPS           32,907,696            33,243,700             35,769,461         33,628,210         35,866,059 



DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share amounts)
               
 At or For the Three Months Ended At or For the Nine Months Ended
 September 30,  June 30,  September 30,  September 30,  September 30, 
 2020  2020  2019  2020  2019 
Per Share Data:              
Reported EPS (Diluted)$0.42  $0.35  $0.13  $1.01  $0.81 
Cash dividends paid per common share0.14  0.14  0.14  0.42  0.42 
Book value per common share17.48  17.07  16.94  17.48  16.94 
Tangible common book value per share (1)15.79  15.39  15.39  15.79  15.39 
Dividend payout ratio33.33% 40.00% 107.69% 41.58% 51.85%
               
Performance Ratios (Based upon Reported Net Income):              
Return on average assets0.98% 0.81% 0.29% 0.78% 0.61%
Return on average equity9.22  7.96  3.08  7.59  6.42%
Return on average tangible equity (1)10.03  8.71  3.39  8.27  7.07%
Return on average tangible common equity (1)10.88  9.23  3.39  8.76  7.07%
Net interest spread2.72  2.61  2.07  2.53  2.06%
Net interest margin2.92  2.86  2.34  2.79  2.34%
Average interest-earning assets to average interest-bearing liabilities125.10  124.97  118.38  123.68  118.70%
Non-interest expense to average assets1.53  1.84  1.41  1.68  1.40%
Efficiency ratio49.02  60.67  57.69  55.61  57.76%
Loan-to-deposit ratio at end of period127.56  122.67  124.86  127.56  124.86%
CRE consolidated concentration ratio (2)545.10  544.90  678.90  545.10  678.90%
Effective tax rate21.87  21.59  15.30  21.72  23.74%
               
Average Balance Data:              
Average assets$6,492,173  $6,389,768  $6,446,382  $6,363,767  $6,400,652 
Average interest-earning assets6,164,452  6,091,545  6,191,299  6,069,114  6,145,701 
Average loans5,519,607  5,387,839  5,503,233  5,397,425  5,480,330 
Average deposits4,421,090  4,413,182  4,416,143  4,337,594  4,378,729 
Average equity688,396  651,319  610,487  654,104  607,238 
Average tangible equity (1)632,758  595,681  554,849  600,048  551,600 
Average tangible common equity (1)516,189  512,371  554,849  521,385  551,600 
               
Asset Quality Summary:              
Non-performing loans (excluding loans held for sale)$12,424  $15,383  $16,378  $12,424  $16,378 
Non-performing assets12,424  15,383  16,378  12,424  16,378 
Loans delinquent 30 to 89 days at period end16,826  6,278  139  16,826  139 
Net (recoveries) charge-offs(69) 31  5,068  (48) 5,588 
Non-performing assets/ Total assets0.19% 0.24% 0.25% 0.19% 0.25%
Non-performing loans/ Total loans0.22  0.28  0.30  0.22  0.30 
Allowance for loan loss/ Total loans0.87  0.78  0.50  0.87  0.50 
Allowance for loan loss/ Non-performing loans390.31  276.23  166.65  390.31  166.65 
               
Capital Ratios - Consolidated:              
Tangible common equity to tangible assets (1)7.95% 7.94% 8.69% 7.95% 8.69%
Tangible equity to tangible assets (1)9.73  9.76  8.69  9.73  8.69 
Tier 1 common equity ratio10.69  10.69  10.62  10.69  10.62 
Tier 1 risk-based capital ratio13.02  13.07  10.62  13.02  10.62 
Total risk-based capital ratio16.30  16.29  13.33  16.30  13.33 
Tier 1 leverage ratio10.10  10.11  8.76  10.10  8.76 
               
Capital Ratios - Bank Only:              
Tier 1 common equity ratio12.88% 12.97% 11.86% 12.88% 11.86%
Tier 1 risk-based capital ratio12.88  12.97  11.86  12.88  11.86 
Total risk-based capital ratio13.87  13.85  12.38  13.87  12.38 
Tier 1 leverage ratio9.97  9.98  9.81  9.97  9.81 
               
(1) See "Non-GAAP Reconciliation" table for reconciliation of tangible equity, tangible common equity, and tangible assets. Average balances are calculated using the ending balance for months during the period indicated.
(2) The CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner occupied commercial real estate, multifamily, and ADC, divided by consolidated capital.



DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)
 
 For the Three Months Ended
 September 30, 2020 June 30, 2020 September 30, 2019
    Average     Average     Average 
 Average  Yield/  Average  Yield/  Average  Yield/ 
 BalanceInterest Cost  BalanceInterest Cost  BalanceInterest Cost 
Assets:                 
Interest-earning assets:                 
Real estate loans$4,874,780$47,482 3.90% $4,867,970$49,058 4.03% $5,188,967$50,732 3.91%
Commercial and industrial loans643,3835,752 3.58  518,9995,071 3.91  312,4724,442 5.69 
Other loans1,44411 3.16  87013 5.98  1,79418 4.01 
Mortgage-backed securities435,9202,707 2.48  468,7053,064 2.61  432,0712,973 2.75 
Investment securities78,405715 3.65  65,155582 3.57  74,349626 3.37 
Other short-term investments130,520729 2.23  169,846846 1.99  181,6461,488 3.28 
Total interest-earning assets6,164,45257,396 3.72% 6,091,54558,634 3.85% 6,191,29960,279 3.89%
Non-interest-earning assets327,721     298,223     255,083    
Total assets$6,492,173     $6,389,768     $6,446,382    
                  
Liabilities and Stockholders' Equity:                 
Interest-bearing liabilities:                 
Interest-bearing checking accounts$241,248$186 0.31% $222,694$212 0.38% $125,310$56 0.18%
Money market accounts1,696,2971,858 0.44  1,656,3942,495 0.61  1,845,5946,883 1.48 
Savings accounts405,582170 0.17  404,389305 0.30  341,170158 0.18 
Certificates of deposit1,425,0834,458 1.24  1,511,5986,688 1.78  1,674,4789,485 2.25 
Total interest-bearing deposits3,768,2106,672 0.70  3,795,0759,700 1.03  3,986,55216,582 1.65 
FHLBNY advances1,040,1274,448 1.70  962,6574,047 1.69  1,127,3796,159 2.17 
Subordinated notes payable, net113,9921,330 4.64  113,9551,330 4.69  113,8451,330 4.64 
Other borrowings5,2832 0.12  2,7471 0.15  2,33712 1.99 
Borrowed Funds1,159,4025,780 1.98  1,079,3595,378 2.00  1,243,5617,501 2.39 
Total interest-bearing liabilities4,927,61212,452 1.01% 4,874,43415,078 1.24% 5,230,11324,083 1.83%
Non-interest-bearing checking accounts652,880     618,107     429,591    
Other non-interest-bearing liabilities223,285     245,908     176,191    
Total liabilities5,803,777     5,738,449     5,835,895    
Stockholders' equity688,396     651,319     610,487    
Total liabilities and stockholders' equity$6,492,173     $6,389,768     $6,446,382    
Net interest income $44,944     $43,556     $36,196   
Net interest spread   2.72%    2.61%    2.07%
Net interest-earning assets$1,236,839     $1,217,111     $961,186    
Net interest margin   2.92%    2.86%    2.34%
Ratio of interest-earning assets to interest-bearing liabilities 125.10%    124.97%    118.38%  
                  
Deposits (including non-interest-bearing checking accounts)$4,421,090$6,672 0.60% $4,413,182$9,700 0.88% $4,416,143$16,582 1.49%



DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF LOAN COMPOSITION AND WEIGHTED AVERAGE RATES ("WAR") (1)
(Dollars in thousands)
            
 At September 30, 2020 At June 30, 2020 At September 30, 2019
 BalanceWAR  BalanceWAR  BalanceWAR 
Loan balances at period end:           
One-to-four family residential, including condominium and cooperative apartment$186,9753.97% $182,2643.98% $134,3614.38%
Multifamily residential and residential mixed-use (2)(3)2,919,1863.77  2,988,5113.77  3,608,1563.72 
Commercial real estate and commercial mixed-use1,675,4884.00  1,504,0204.06  1,333,7634.31 
Acquisition, development, and construction ("ADC")151,8665.04  136,6065.08  95,7676.00 
Total real estate loans4,933,5153.90  4,811,4013.91  5,172,0473.93 
Commercial and industrial ("C&I")323,9724.49  321,0094.39  309,5935.46 
Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans318,5681.00  310,5091.00  -- 
Total$5,576,0553.76% $5,442,9193.77% $5,481,6404.02%
            
(1) Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, divided by the total amount of loans in the category.
(2) Includes loans underlying cooperatives.
(3) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately
from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.



DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS ("TDRs")
    (Dollars in thousands)
  
  
 At September 30, At June 30, At September 30,
 2020 2020 2019
Non-Performing Loans     
One-to-four family residential, including condominium and cooperative apartment$867 $819 $1,161
Multifamily residential and residential mixed-use (1)(2)1,213 1,377 153
Commercial real estate and commercial mixed-use real estate (2)47 3,003 63
C&I10,287 10,176 15,000
Other10 8 1
Total Non-Performing Loans (3)$ 12,424 $ 15,383 $ 16,378
Total Non-Performing Assets$ 12,424 $ 15,383 $ 16,378
      
Performing TDR Loans     
One-to-four family and cooperative/condominium apartment$- $- $9
Total Performing TDRs$- $- $ 9
      
(1) Includes loans underlying cooperatives.     
(2) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately
from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.
(3)  There were no non-accruing TDRs for the periods indicated.


PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE EQUITY AND RESERVES
(Dollars in thousands)
 
 At September 30,  At June 30,  At September 30, 
 2020  2020  2019 
Total Non-Performing Assets$12,424  $15,383  $16,378 
Loans 90 days or more past due on accrual status (4)1,939  3,691  380 
TOTAL PROBLEM ASSETS$14,363  $19,074  $16,758 
         
Tangible equity  (5)$638,520  $625,905  $553,266 
Allowance for loan losses and reserves for contingent liabilities48,517  42,517  27,319 
TANGIBLE EQUITY PLUS RESERVES$687,037  $668,422  $580,585 
         
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE EQUITY AND RESERVES2.1% 2.9% 2.9%
         
(4) These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed in the near future, and were not expected
to result in any loss of contractual principal or interest. These loans are not included in non-performing loans.
(5) See "Non-GAAP Reconciliation" table for reconciliation of tangible common equity and tangible assets.

 



DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(Dollars in thousands except per share amounts)
 
 For the Three Months Ended For the Nine Months Ended
 September 30,  June 30,  September 30,  September 30,  September 30, 
 2020  2020  2019  2020  2019 
Reconciliation of Reported and Adjusted ("non-GAAP") Net Income:              
Reported net income$                15,868  $            12,966  $                4,705  $                 37,226  $                  29,241 
Adjustments to net income, net of tax (1):              
Add: Merger expenses (2)617  879  -  1,994  - 
Add: Severance-  2,686  -  2,734  - 
Less: Loss (Gain) on sale of securities(147) (2,142) (45) (2,294) 46 
Adjusted ("non-GAAP") net income$                16,338  $            14,389  $                4,660  $                 39,660  $                  29,287 
               
Adjusted Ratios (Based upon "non-GAAP Net Income" as calculated above):              
Adjusted EPS (Diluted)$0.44  $0.40  $0.13  $1.09  $0.82 
Adjusted return on average assets1.01% 0.90% 0.29% 0.83% 0.61%
Adjusted return on average equity9.49  8.84  3.05  8.08  6.43 
Adjusted return on average tangible equity10.33  9.66  3.36  8.81  7.08 
Adjusted return on average tangible common equity11.25  10.34  3.36  9.38  7.08 
Adjusted non-interest expense to average assets1.48  1.52  1.41  1.55  1.40 
Adjusted efficiency ratio47.50  50.33  57.69  51.15  57.76 
               
 September 30,  June 30,  September 30,       
 2020  2020  2019       
Reconciliation of Tangible Assets:              
Total assets$           6,619,391  $      6,467,521  $        6,425,335       
Less:              
Goodwill55,638  55,638  55,638       
Tangible assets$           6,563,753  $      6,411,883  $        6,369,697       
               
Reconciliation of Tangible Common Equity - Consolidated:              
Total stockholders' equity$              694,158  $         681,543  $            608,904       
Less:              
Goodwill55,638  55,638  55,638       
Tangible equity638,520  625,905  553,266       
               
Less:              
Preferred Stock, net116,569  116,569  -       
Tangible common equity$              521,951  $         509,336  $            553,266       
               
               
(1)  Adjustments to net income are taxed at the Company's statutory tax rate of approximately 32% unless otherwise noted.
(2)  Certain merger expenses are non-taxable expense.

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Source: Dime Community Bancshares, Inc.