Dime Community Bancshares, Inc. Reports Second Quarter 2023 Results

July 28, 2023

Average Deposits Increased By Over $150 Million On A Linked Quarter Basis

Successfully Onboarded 7 Deposit Groups, Capitalizing on Moment-In-Time Opportunity to Enhance Deposit Franchise

Capital Ratios and Asset Quality Continue to Be Strong

Announces CEO Succession Plan; Stuart H. Lubow named Successor

HAUPPAUGE, N.Y., July 28, 2023 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime”), the parent company of Dime Community Bank (the “Bank”), today reported net income available to common stockholders of $25.7 million for the quarter ended June 30, 2023, or $0.66 per diluted common share, compared to net income available to common stockholders of $35.5 million for the quarter ended March 31, 2023 or $0.92 per diluted common share, and net income available to common stockholders of $36.7 million for the quarter ended June 30, 2022, or $0.94 per diluted common share.

Adjusted net income available to common stockholders (non-GAAP) totaled $26.6 million for the quarter ended June 30, 2023, or $0.68 per diluted share. Adjusted net income available to common stockholders for the quarter ended June 30, 2023 included $1.3 million of aggregate pre-tax adjustments related to loss on equity securities and severance expense (see “Non-GAAP Reconciliation” tables at the end of this news release).

Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “Despite the challenges posed by the interest rate environment and volatility stemming from bank failures in March, Dime has increased deposits, capital and on balance sheet liquidity versus year-end levels; our year-to-date return on assets was approximately 1%. I am extremely proud of our employees for their unwavering focus on our customers and enabling us to be the premier community-based business bank on Greater Long Island.”

Stuart H. Lubow, President and Chief Operating Officer of the Company, stated, “We successfully onboarded seven prolific deposit-focused Groups in the second quarter, comprising 21 individuals. Hiring these Groups was a validation of Dime’s customer-first mindset, high-touch and relationship-based model, flat organizational structure, best-in-class technology platform and solid financial prospects. Initial results for these Groups have been very positive, with over 600 new customers onboarded and over 1,000 accounts opened in a very short period of time. Building on our success, we continue to receive significant interest from additional Groups looking to join Dime. During the second quarter, we were also pleased to receive affirmations of our investment grade rating from KBRA and Moody’s.”

Highlights for the Second Quarter of 2023 Included:

  • Average total deposits were $10.54 billion for the second quarter of 2023 compared to $10.38 billion for the first quarter of 2023;
  • Non-insured deposits (excluding deposits with pass through insurance and collateralized deposits) represented only 28% of total deposits at the end of the second quarter;
  • The ratio of average non-interest bearing deposits to average total deposits for the second quarter of 2023 was 29%;
  • Total loans held for investment, net, increased by $147 million or 6% on an annualized basis versus the linked quarter;
  • The pace of Net Interest Margin (“NIM”) compression slowed in the second quarter; on a linked quarter basis, the NIM declined by 24 basis points in the second quarter of 2023 compared to 41 basis points for the first quarter of 2023;
  • Expenses remained well-controlled, with non-interest expense to average assets of 1.53% for the second quarter of 2023, compared to 1.71% for the year-ago quarter;
  • Credit quality continues to be strong with non-performing assets and loans 90 days past due and accruing declining by 12% versus the linked quarter and representing only 0.20% of total assets as of June 30, 2023; and
  • The Company’s Tier 1 Risk Based Capital Ratio of 10.50% was 11 basis points higher compared to the prior quarter.

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income for the second quarter of 2023 was $80.2 million compared to $85.8 million for the first quarter of 2023 and $93.5 million for the second quarter of 2022.

The table below provides a reconciliation of the reported net interest margin (“NIM”) and adjusted NIM excluding the impact of purchase accounting accretion on the loan portfolio.

                     
(Dollars in thousands)   Q2 2023   Q1 2023   Q2 2022  
Net interest income   $ 80,219   $ 85,752   $ 93,512  
Purchase accounting amortization (accretion) on loans ("PAA")     58     586     117  
Adjusted net interest income excluding PAA on loans (non-GAAP)   $ 80,277   $ 86,338   $ 93,629  
                     
Average interest-earning assets   $ 12,888,522   $ 12,685,235   $ 11,412,350  
                     
NIM (1)     2.50 %   2.74 %   3.29 %
Adjusted NIM excluding PAA on loans (non-GAAP) (2)     2.50 %   2.76 %   3.29 %
                     

(1) NIM represents net interest income divided by average interest-earning assets.
(2) Adjusted NIM excluding PAA on loans represents adjusted net interest income, which excludes net interest income on PAA loans divided by average interest-earning assets.

Loan Portfolio

The ending weighted average rate (“WAR”)(1) on the total loan portfolio was 5.12% at June 30, 2023, a 16 basis point increase compared to the ending WAR on the total loan portfolio at March 31, 2023.

Outlined below are loan balances and WARs for the period ended as indicated.

                                     
    June 30, 2023     March 31, 2023     June 30, 2022  
(Dollars in thousands)   Balance   WAR     Balance   WAR     Balance   WAR  
Loans held for investment balances at period end:                                    
Business loans (2)   $ 2,250,108   6.56 %   $ 2,255,316   6.41 %   $ 2,004,072   4.57 %
One-to-four family residential, including condominium and cooperative apartment     855,980   4.17       799,321   4.06       691,586   3.60  
Multifamily residential and residential mixed-use (3)(4)     4,132,358   4.38       4,118,439   4.23       3,654,164   3.62  
Non-owner-occupied commercial real estate     3,406,232   5.04       3,330,582   4.85       3,048,188   3.89  
Acquisition, development, and construction     225,580   8.99       221,015   8.62       252,108   5.41  
Other loans     6,157   6.74       7,172   11.03       10,789   7.16  
Loans held for investment   $ 10,876,415   5.12 %   $ 10,731,845   4.96 %   $ 9,660,907   3.94 %
                                     

(1) Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, adjusted for non-accrual loans, divided by the total balance of loans in the category.
(2) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and Small Business Administration Paycheck Protection Program (“PPP”) loans.
(3) Includes loans underlying multifamily cooperatives.
(4) 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.

Outlined below are the loan originations, for the quarter ended as indicated.

(Dollars in millions)   Q2 2023   Q1 2023   Q2 2022  
Loan originations   $ 296.6   $ 351.9   $ 901.5  
                     

Deposits

Period end total deposits (excluding mortgage escrow deposits) at June 30, 2023 were $10.45 billion, compared to $10.46 billion at March 31, 2023 and $10.18 billion at December 31, 2022. Period end total mortgage escrow deposits at June 30, 2023 were $70.6 million, compared to $110.1 million at March 31, 2023 and $69.6 million at December 31, 2022, reflecting normal seasonal escrow payment activity.

Non-Interest Income

Non-interest income was $10.4 million during the second quarter of 2023, $9.0 million during the first quarter of 2023, and $12.1 million during the second quarter of 2022. Included in non-interest income was income related to mortality proceeds from a death claim of $645 thousand and $2.2 million for the second quarter of 2023 and 2022, respectively.

Non-Interest Expense

Total non-interest expense was $52.2 million during the second quarter of 2023, $47.5 million during the first quarter of 2023, and $51.8 million during the second quarter of 2022. Excluding the impact of severance expense, loss on extinguishment of debt, and amortization of other intangible assets, adjusted non-interest expense was $51.4 million during the second quarter of 2023, $47.1 million during the first quarter of 2023, and $48.5 million during the second quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release). The increase in adjusted non-interest expense on a linked quarter basis was primarily due to annual merit increases and expenses associated with hiring the previously mentioned seven deposit-focused Groups.

The ratio of non-interest expense to average assets was 1.53% during the second quarter of 2023, compared to 1.41% during the linked quarter and 1.71% for the second quarter of 2022. Excluding the impact of severance expense, loss on extinguishment of debt, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.51% during the second quarter of 2023, compared to 1.40% during the linked quarter and 1.60% for the second quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The efficiency ratio was 57.6% during the second quarter of 2023, compared to 50.1% during the linked quarter and 49.1% during the second quarter of 2022. Excluding the impact of loss on equity securities, net loss on sale of securities and other assets, severance expense, loss on extinguishment of debt and amortization of other intangible assets the adjusted efficiency ratio was 56.2% during the second quarter of 2023, compared to 48.9% during the linked quarter and 45.9% during the first quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Income Tax Expense

The reported effective tax rate for both the second and first quarter of 2023 was 26.8%, compared to 28.4% for the second quarter of 2022.

Credit Quality

Non-performing loans at June 30, 2023 were $27.7 million, 12% lower than the prior quarter.

A credit loss provision of $0.9 million was recorded during the second quarter of 2023, compared to a credit loss recovery of $3.6 million during the first quarter of 2023, and a credit loss provision of $44 thousand during the second quarter of 2022. The credit loss provision in the second quarter of 2023 was associated with growth in the loan portfolio and deterioration in forecasted macroeconomic conditions offset by a reduction in the reserve on Purchased Credit Deteriorated ("PCD”) loans that were acquired as part of the Company’s merger of equals transaction in 2021. The credit loss recovery in the first quarter of 2023 was primarily associated with a reduction in reserves on the PCD loans.

Capital Management

The Company’s and the Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements as of June 30, 2023. All of the Company’s and Bank’s risk-based regulatory capital ratios increased in the second quarter of 2023.

Dividends per common share were $0.25 during the second quarter of 2023 compared to $0.24 during the first quarter of 2023. The dividend increase reflected Dime’s strong financial position.

Book value per common share was $27.99 at June 30, 2023 compared to $27.70 at March 31, 2023.

Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by the number of shares outstanding) was $23.82 at June 30, 2023 compared to $23.52 at March 31, 2023. Excluding the impact of accumulated other comprehensive loss, the adjusted tangible common book value per share was $26.51 at June 30, 2023 compared to $26.06 at March 31, 2023 (see “Non-GAAP Reconciliation” tables at the end of this news release).

CEO Succession

The Company announced today that Kevin M. O’Connor will step down as CEO effective August 31, 2023 and that Stuart H. Lubow, the Company’s current President and Chief Operating Officer, will succeed Mr. O’Connor as CEO. Mr. O’Connor will continue to serve on the Board of Directors until December 31, 2023. Mr. Lubow will be added to the Board of Directors simultaneous with his appointment as CEO.

Mr. O’Connor has been CEO of the Company since Bridge Bancorp, Inc. (“Bridge”) and Dime Community Bancshares, Inc. (“Dime”) merged on February 1, 2021 (the “Merger”). Before the Merger, Mr. O’Connor was President and CEO of Bridge. He joined Bridge in October 2007 as President and Chief Executive Officer and director. Mr. Lubow has been President and Chief Operating Officer of the Company since the Merger. Before the Merger, Mr. Lubow served as President of Dime. Before joining Dime in 2017, Mr. Lubow was a founder, Chairman, President, and CEO of each of Community National Bank and Community State Bank. Mr. Lubow has prior community bank CEO experience of over 17 years.

"Under Kevin’s leadership, we successfully completed a transformational merger, creating the premier business bank on Greater Long Island, driving superior financial results for shareholders and providing tremendous support to our customers and communities," said Executive Chairman, Kenneth J. Mahon, on behalf of the Company's and Bank's Boards of Directors. "We are grateful for Kevin’s strong leadership and are very excited to promote Stu Lubow to CEO. The appointment of Stu as CEO has been under consideration since the beginning of the year and is the culmination of a thoughtful and well-planned succession process. Stu has a proven track record throughout his career of delivering value for customers and shareholders alike. Most recently, he was instrumental in the hiring and onboarding of seven deposit- focused Groups that are already contributing to significant customer growth. The Board of Directors is confident that he will provide a steady, uninterrupted mission and culture of service to our staff and customers. Having admirably weathered the challenges caused by the recent bank failures, evidenced by an increase in deposits on a year-to-date basis, we believe now is the ideal time to execute on the succession plan. We are very excited about our future under Stu’s leadership.”

“I applaud and congratulate the accomplishments of our entire team and am proud of what we have built together. Our focus on developing and strengthening relationships while supporting and serving our communities has served our constituents well, leading to our recognition as the preeminent community bank in our footprint,” said Kevin O’Connor. “I want to thank and commend all of my colleagues, past and present, and personally wish Stu and the entire Dime team well. I have full confidence that they will reach greater heights as they continue building on our past successes.”

“I am thankful for the opportunity the Board has granted me to lead Dime and would also like to express my gratitude to Kevin for his leadership and support over the years,” said Stuart H. Lubow. “Dime has a proud history of being rooted in the communities we serve, and I look forward to working with all of our dedicated employees to add value to our customers and our shareholders. I will draw upon my prior CEO experience to lead Dime into the next chapter of our growth as the preeminent community bank in our footprint.”

Earnings Call Information

The Company will conduct a conference call at 8:30 a.m. (ET) on Friday, July 28, 2023, during which CEO O’Connor will discuss the Company’s second quarter 2023 financial performance, with a question-and-answer session to follow.

The conference call will be simultaneously webcast (listen only) and archived for a period of one year at https://events.q4inc.com/attendee/893173701.

Conference Call Details:

Dial-in for Live Call:

United States: 1-833-470-1428
International +1-929-526-1599
Access code: 236348
   

Telephone Replay:

A recording will be available until Friday, August 11, 2023.

United States: 1-866-813-9403
International +44-204-525-0658
Access code: 786213
   

ABOUT DIME COMMUNITY BANCSHARES, INC.
Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company with over $13.8 billion in assets and the number one deposit market share among community banks on Greater Long Island(1).

(1) Aggregate deposit market share for Kings, Queens, Nassau & Suffolk counties for community banks less than $20 billion in assets.

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 “annualized," “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 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 affect demand for our products and reduce interest margins and the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company; changes in the quality and composition of the Company’s loan or investment portfolios or 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 socio-economic conditions, including conditions caused by the COVID-19 pandemic and any other public health emergency, international conflict, inflation, and recessionary pressures, 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 and may adversely affect our customers, our financial results and our operations; 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; and 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. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections entitled “Forward-Looking Statements” and “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and updates set forth in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

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
(In thousands)
                   
    June 30,    March 31,    December 31, 
    2023   2023   2022
Assets:                  
Cash and due from banks   $ 452,504     $ 663,132     $ 169,297  
Securities available-for-sale, at fair value     894,856       926,812       950,587  
Securities held-to-maturity     603,960       605,642       585,798  
Loans held for sale     371       2,171        
Loans held for investment, net:                  
Business loans (1)     2,250,108       2,255,316       2,211,857  
One-to-four family and cooperative/condominium apartment     855,980       799,321       773,321  
Multifamily residential and residential mixed-use (2)(3)     4,132,358       4,118,439       4,026,826  
Non-owner-occupied commercial real estate     3,406,232       3,330,582       3,317,485  
Acquisition, development and construction     225,580       221,015       229,663  
Other loans     6,157       7,172       7,679  
Allowance for credit losses     (75,646 )     (78,335 )     (83,507 )
Total loans held for investment, net     10,800,769       10,653,510       10,483,324  
Premises and fixed assets, net     45,890       45,863       46,749  
Restricted stock     104,724       105,258       88,745  
Bank Owned Life Insurance ("BOLI")     337,083       335,455       333,292  
Goodwill     155,797       155,797       155,797  
Other intangible assets     5,758       6,107       6,484  
Operating lease assets     54,931       57,204       57,857  
Derivative assets     147,740       130,294       154,485  
Accrued interest receivable     51,787       49,926       48,561  
Other assets     146,692       104,553       108,945  
Total assets   $ 13,802,862     $ 13,841,724     $ 13,189,921  
Liabilities:                  
Non-interest-bearing checking (excluding mortgage escrow deposits)   $ 2,884,184     $ 3,012,378     $ 3,449,763  
Interest-bearing checking     960,465       908,988       827,454  
Savings (excluding mortgage escrow deposits)     2,275,008       2,333,196       2,259,909  
Money market     2,801,652       2,686,290       2,532,270  
Certificates of deposit     1,530,749       1,519,267       1,115,364  
Deposits (excluding mortgage escrow deposits)     10,452,058       10,460,119       10,184,760  
Non-interest-bearing mortgage escrow deposits     70,431       109,867       69,455  
Interest-bearing mortgage escrow deposits     203       249       192  
Total mortgage escrow deposits     70,634       110,116       69,647  
FHLBNY advances     1,448,000       1,498,000       1,131,000  
Other short-term borrowings           2,068       1,360  
Subordinated debt, net     200,240       200,261       200,283  
Derivative cash collateral     140,160       120,680       153,040  
Operating lease liabilities     57,547       59,757       60,340  
Derivative liabilities     131,130       115,568       137,335  
Other liabilities     100,590       83,902       82,573  
Total liabilities     12,600,359       12,650,471       12,020,338  
Stockholders' equity:                   
Preferred stock, Series A     116,569       116,569       116,569  
Common stock     416       416       416  
Additional paid-in capital     493,955       493,801       495,410  
Retained earnings     804,532       789,010       762,762  
Accumulated other comprehensive loss ("AOCI"), net of deferred taxes     (104,385 )     (98,638 )     (94,379 )
Unearned equity awards     (11,746 )     (13,468 )     (8,078 )
Treasury stock, at cost     (96,838 )     (96,437 )     (103,117 )
Total stockholders' equity     1,202,503       1,191,253       1,169,583  
Total liabilities and stockholders' equity   $ 13,802,862     $ 13,841,724     $ 13,189,921  
                         

(1) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
(2) Includes loans underlying multifamily 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 CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except share and per share amounts)
                               
    Three Months Ended   Six Months Ended
    June 30,    March 31,    June 30,    June 30,    June 30, 
    2023   2023   2022   2023   2022
Interest income:                               
Loans   $ 138,310     $ 128,439     $ 93,102   $ 266,749     $ 179,522  
Securities     7,914       8,431       7,067     16,345       14,198  
Other short-term investments     5,867       3,802       741     9,669       1,109  
Total interest income     152,091       140,672       100,910     292,763       194,829  
Interest expense:                                
Deposits and escrow     52,616       37,272       3,731     89,888       6,262  
Borrowed funds     17,759       16,171       3,573     33,930       5,851  
Derivative cash collateral     1,497       1,477       94     2,974       95  
Total interest expense     71,872       54,920       7,398     126,792       12,208  
Net interest income     80,219       85,752       93,512     165,971       182,621  
Provision (recovery) for credit losses     892       (3,648 )     44     (2,756 )     (1,548 )
Net interest income after provision (recovery)     79,327       89,400       93,468     168,727       184,169  
Non-interest income:                                
Service charges and other fees     4,856       3,814       4,337     8,670       8,395  
Title fees     246       292       683     538       1,104  
Loan level derivative income     2,437       3,133       1,685     5,570       1,691  
BOLI income     2,852       2,163       4,143     5,015       5,982  
Gain on sale of SBA loans     210       516       723     726       965  
Gain on sale of residential loans     34       48       191     82       339  
Loss on equity securities     (780 )               (780 )      
Net loss on sale of securities and other assets           (1,447 )         (1,447 )      
Other     550       482       362     1,032       851  
Total non-interest income     10,405       9,001       12,124     19,406       19,327  
Non-interest expense:                                
Salaries and employee benefits     29,900       26,634       28,454     56,534       59,288  
Severance     481       25       2,193     506       2,193  
Occupancy and equipment     7,144       7,373       7,396     14,517       14,980  
Data processing costs     4,197       4,238       3,913     8,435       7,718  
Marketing     1,488       1,449       1,515     2,937       2,810  
Professional services     1,676       1,923       2,028     3,599       4,122  
Federal deposit insurance premiums     1,874       1,873       1,150     3,747       2,300  
Loss on extinguishment of debt                 740           740  
Amortization of other intangible assets     349       377       430     726       1,016  
Other     5,077       3,583       4,019     8,660       6,559  
Total non-interest expense     52,186       47,475       51,838     99,661       101,726  
Income before taxes     37,546       50,926       53,754     88,472       101,770  
Income tax expense     10,048       13,623       15,269     23,671       28,754  
Net income     27,498       37,303       38,485     64,801       73,016  
Preferred stock dividends     1,822       1,821       1,822     3,643       3,643  
Net income available to common stockholders   $ 25,676     $ 35,482     $ 36,663   $ 61,158     $ 69,373  
Earnings per common share ("EPS"):                                
Basic   $ 0.66     $ 0.92     $ 0.94   $ 1.58     $ 1.76  
Diluted   $ 0.66     $ 0.92     $ 0.94   $ 1.58     $ 1.76  
                               
Average common shares outstanding for diluted EPS     38,175,993       38,151,465       38,631,683     38,164,359       38,939,753  

 

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 Six Months Ended  
    June 30,    March 31,    June 30,    June 30,    June 30,   
    2023   2023   2022   2023   2022  
Per Share Data:                                
Reported EPS (Diluted)   $ 0.66   $ 0.92   $ 0.94   $ 1.58   $ 1.76  
Cash dividends paid per common share     0.25     0.24     0.24     0.49     0.48  
Book value per common share     27.99     27.70     26.41     27.99     26.41  
Tangible common book value per share (1)     23.82     23.52     22.20     23.82     22.20  
Tangible common book value per share excluding AOCI (1)     26.51     26.06     24.01     26.51     24.01  
Common shares outstanding     38,803     38,804     38,769     38,803     38,769  
Dividend payout ratio     37.88 %   26.09 %   25.53 %   31.01 %   27.27 %
                                 
Performance Ratios (Based upon Reported Net Income):                                 
Return on average assets     0.81 %   1.11 %   1.27 %   0.96 %   1.20 %
Return on average equity     9.03     12.50     13.44     10.75     12.47  
Return on average tangible common equity (1)     11.04     15.62     17.08     13.30     15.73  
Net interest margin     2.50     2.74     3.29     2.62     3.24  
Non-interest expense to average assets     1.53     1.41     1.71     1.47     1.67  
Efficiency ratio     57.6     50.1     49.1     53.8     50.4  
Effective tax rate     26.76     26.75     28.41     26.76     28.25  
                                 
Balance Sheet Data:                                 
Average assets   $ 13,658,068   $ 13,449,746   $ 12,121,949   $ 13,554,483   $ 12,160,620  
Average interest-earning assets     12,888,522     12,685,235     11,412,350     12,787,441     11,373,294  
Average tangible common equity (1)     940,054     914,994     865,329     927,592     891,007  
Loan-to-deposit ratio at end of period (2)     103.4     101.5     91.4     103.4     91.4  
                                 
Capital Ratios and Reserves - Consolidated: (3)                                 
Tangible common equity to tangible assets (1)     6.78 %   6.67 %   7.07 %            
Tangible common equity excluding AOCI to tangible assets (1)     7.54     7.39     7.64              
Tangible equity to tangible assets (1)     7.63     7.52     8.02              
Tangible equity excluding AOCI to tangible assets (1)     8.40     8.25     8.60              
Tier 1 common equity ratio     9.44     9.32     9.28              
Tier 1 risk-based capital ratio     10.50     10.39     10.44              
Total risk-based capital ratio     13.06     12.98     13.26              
Tier 1 leverage ratio     8.42     8.43     8.71              
Consolidated CRE concentration ratio (4)     555     554     534              
Allowance for credit losses/ Total loans     0.70     0.73     0.82              
Allowance for credit losses/ Non-performing loans     273.42     248.34     218.80              
                                 

(1) See "Non-GAAP Reconciliation" tables for reconciliation of tangible equity, tangible common equity, and tangible assets.
(2) Total deposits include mortgage escrow deposits, which fluctuate seasonally.
(3) June 30, 2023 amounts are preliminary pending completion and filing of the Company’s regulatory reports.

( 4 ) The Consolidated CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner-occupied commercial real estate, multifamily, and acquisition, development, and construction, divided by consolidated capital. June 30, 2023 amounts are preliminary pending completion and filing of the Company’s regulatory reports.

 

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)
                                                   
    Three Months Ended  
    June 30, 2023   March 31, 2023   June 30, 2022  
                Average               Average               Average  
    Average         Yield/   Average         Yield/   Average         Yield/  
    Balance   Interest   Cost   Balance   Interest   Cost   Balance   Interest   Cost  
Assets:                                                     
Interest-earning assets:                                                     
Business loans (1)   $ 2,259,769   $ 35,558   6.31 % $ 2,200,543   $ 32,451   5.98 % $ 1,982,020   $ 21,787   4.41 %
One-to-four family residential, including condo and coop     828,324     9,818   4.75     788,302     8,857   4.56     683,615     6,771   3.97  
Multifamily residential and residential mixed-use     4,125,119     45,123   4.39     4,074,011     42,348   4.22     3,510,377     32,024   3.66  
Non-owner-occupied commercial real estate     3,337,689     42,559   5.11     3,317,049     39,695   4.85     2,990,246     28,466   3.82  
Acquisition, development, and construction     220,795     5,149   9.35     225,898     4,973   8.93     302,534     3,909   5.18  
Other loans     6,536     103   6.32     7,550     115   6.18     11,571     145   5.03  
Securities     1,642,057     7,914   1.93     1,699,846     8,431   2.01     1,695,702     7,067   1.67  
Other short-term investments     468,233     5,867   5.03     372,036     3,802   4.14     236,285     741   1.26  
Total interest-earning assets     12,888,522     152,091   4.73 %   12,685,235     140,672   4.50 %   11,412,350     100,910   3.55 %
Non-interest-earning assets     769,546                 764,511               709,599            
Total assets   $ 13,658,068               $ 13,449,746             $ 12,121,949            
                                                   
Liabilities and Stockholders' Equity:                                                     
Interest-bearing liabilities:                                                     
Interest-bearing checking (2)   $ 952,424   $ 3,081   1.30 % $ 843,108   $ 1,523   0.73 % $ 858,402   $ 604   0.28 %
Money market     2,713,816     18,284   2.70     2,699,640     13,849   2.08     3,148,472     1,240   0.16  
Savings (2)     2,279,670     17,376   3.06     2,327,126     14,599   2.54     1,509,776     859   0.23  
Certificates of deposit     1,546,257     13,875   3.60     1,167,736     7,301   2.54     827,286     1,028   0.50  
Total interest-bearing deposits     7,492,167     52,616   2.82     7,037,610     37,272   2.15     6,343,936     3,731   0.24  
FHLBNY advances     1,327,121     15,206   4.60     1,255,700     13,500   4.36     79,176     172   0.87  
Subordinated debt, net     200,254     2,553   5.11     200,276     2,553   5.17     273,470     3,309   4.85  
Other short-term borrowings     814           11,827     118   4.05     54,229     92   0.68  
Total borrowings     1,528,189     17,759   4.66     1,467,803     16,171   4.47     406,875     3,573   3.52  
Derivative cash collateral     120,542     1,497   4.98     135,641     1,477   4.42     98,995     94   0.38  
Total interest-bearing liabilities     9,140,898     71,872   3.15 %   8,641,054     54,920   2.58 %   6,849,806     7,398   0.43 %
Non-interest-bearing checking (2)     3,043,899                 3,341,707               3,935,765            
Other non-interest-bearing liabilities     254,826                 273,281               191,066            
Total liabilities     12,439,623                 12,256,042               10,976,637            
Stockholders' equity     1,218,445                 1,193,704               1,145,312            
Total liabilities and stockholders' equity   $ 13,658,068               $ 13,449,746             $ 12,121,949            
Net interest income          $ 80,219              $ 85,752             $ 93,512      
Net interest rate spread                 1.58 %             1.92 %             3.12 %
Net interest margin                 2.50 %             2.74 %               3.29 %
Deposits (including non-interest-bearing checking accounts) (2)   $ 10,536,066   $ 52,616   2.00 % $ 10,379,317   $ 37,272   1.46 % $ 10,279,701   $ 3,731   0.15 %
                                                   

(1) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
(2) Includes mortgage escrow deposits.

 

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS
(Dollars in thousands)
                   
    At or For the Three Months Ended
    June 30,    March 31,    June 30, 
Asset Quality Detail   2023    2023    2022 
Non-performing loans ("NPLs")                   
Business loans (1)   $ 23,470     $ 25,512     $ 29,866  
One-to-four family residential, including condominium and cooperative apartment     3,305       2,808       3,128  
Multifamily residential and residential mixed-use                  
Non-owner-occupied commercial real estate     15       2,468       2,519  
Acquisition, development, and construction     657       657       657  
Other loans     220       99       131  
Total Non-accrual loans   $ 27,667     $ 31,544     $ 36,301  
Total Non-performing assets ("NPAs")   $ 27,667     $ 31,544     $ 36,301  
                   
Loans 90 days delinquent and accruing ("90+ Delinquent")                   
Business loans   $     $     $ 24  
One-to-four family residential, including condominium and cooperative apartment                 341  
Multifamily residential and residential mixed-use                  
Non-owner-occupied commercial real estate                  
Acquisition, development, and construction                  
Other loans                  
90+ Delinquent   $     $     $ 365  
                   
NPAs and 90+ Delinquent   $ 27,667     $ 31,544     $ 36,666  
                   
NPAs and 90+ Delinquent / Total assets     0.20 %     0.23 %     0.30 %
Net charge-offs ("NCOs")   $ 3,679     $ 1,541     $ 555  
NCOs / Average loans (2)     0.14 %     0.06 %     0.02 %
                         

(1) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
(2) Calculated based on annualized NCOs to average loans, excluding loans held for sale.

                     

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(Dollars in thousands except per share amounts)

The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP measures. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company’s management believes the presentation of non-GAAP financial measures provides investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.

The following non-GAAP financial measures exclude pre-tax income and expenses associated with loss on equity securities, net loss on sale of securities and other assets, severance and loss on extinguishment of debt:

                                 
    Three Months Ended   Six Months Ended  
    June 30,    March 31,    June 30,    June 30,    June 30,   
    2023   2023   2022   2023   2022  
Reconciliation of Reported and Adjusted (non-GAAP) Net Income Available to Common Stockholders                                
Reported net income available to common stockholders   $ 25,676     $ 35,482     $ 36,663     $ 61,158     $ 69,373    
Adjustments to net income (1):                                 
Loss on equity securities     780                   780          
Net loss on sale of securities and other assets           1,447             1,447          
Severance     481       25       2,193       506       2,193    
Loss on extinguishment of debt                 740             740    
Income tax effect of adjustments and other tax adjustments     (373 )     (436 )     (295 )     (809 )     (295 )  
Adjusted net income available to common stockholders (non-GAAP)   $ 26,564     $ 36,518     $ 39,301     $ 63,082     $ 72,011    
                                 
Adjusted Ratios (Based upon Adjusted (non-GAAP) Net Income as calculated above)                                
Adjusted EPS (Diluted)   $ 0.68     $ 0.95     $ 1.01     $ 1.63     $ 1.83    
Adjusted return on average assets     0.83   %   1.14   %   1.36   %   0.98   %   1.24   %
Adjusted return on average equity     9.32       12.85       14.36       11.06       12.92    
Adjusted return on average tangible common equity     11.42       16.08       18.30       13.72       16.32    
Adjusted non-interest expense to average assets     1.51       1.40       1.60       1.45       1.61    
Adjusted efficiency ratio     56.2       48.9       45.9       52.5       48.4    
                                           

(1) Adjustments to net income are taxed at the Company's statutory tax rate of approximately 30% unless otherwise noted.

The following table presents a reconciliation of operating expense as a percentage of average assets (as reported) and adjusted operating expense as a percentage of average assets (non-GAAP):

                                 
      Three Months Ended     Six Months Ended
      June 30,      March 31,      June 30,      June 30,      June 30,   
      2023     2023     2022     2023     2022  
Operating expense as a % of average assets - as reported     1.53   %   1.41   %   1.71   %   1.47   %   1.67   %
Loss on extinguishment of debt                 (0.03 )           (0.01 )  
Severance     (0.01 )           (0.07 )     (0.01 )     (0.03 )  
Amortization of other intangible assets     (0.01 )     (0.01 )     (0.01 )     (0.01 )     (0.02 )  
Adjusted operating expense as a % of average assets (non-GAAP)     1.51   %   1.40   %   1.60   %   1.45   %   1.61   %
                                           

The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP):

                                 
    Three Months Ended   Six Months Ended  
    June 30,    March 31,    June 30,    June 30,    June 30,   
    2023   2023   2022   2023   2022  
Efficiency ratio - as reported (non-GAAP) (1)     57.6   %   50.1   %   49.1   %   53.8   %   50.4   %
Non-interest expense - as reported   $ 52,186     $ 47,475     $ 51,838     $ 99,661     $ 101,726    
Severance     (481 )     (25 )     (2,193 )     (506 )     (2,193 )  
Loss on extinguishment of debt                 (740 )           (740 )  
Amortization of other intangible assets     (349 )     (377 )     (430 )     (726 )     (1,016 )  
Adjusted non-interest expense (non-GAAP)   $ 51,356     $ 47,073     $ 48,475     $ 98,429     $ 97,777    
Net interest income - as reported   $ 80,219     $ 85,752     $ 93,512     $ 165,971     $ 182,621    
Non-interest income - as reported   $ 10,405     $ 9,001     $ 12,124     $ 19,406     $ 19,327    
Loss on equity securities     780                   780          
Net loss on sale of securities and other assets           1,447             1,447          
Adjusted non-interest income (non-GAAP)   $ 11,185     $ 10,448     $ 12,124     $ 21,633     $ 19,327    
Adjusted total revenues for adjusted efficiency ratio (non-GAAP)   $ 91,404     $ 96,200     $ 105,636     $ 187,604     $ 201,948    
Adjusted efficiency ratio (non-GAAP) (2)     56.2   %   48.9   %   45.9   %   52.5     48.4   %
                                           

(1) The reported efficiency ratio is a non-GAAP measure calculated by dividing GAAP non-interest expense by the sum of GAAP net interest income and GAAP non-interest income.
(2) The adjusted efficiency ratio is a non-GAAP measure calculated by dividing adjusted non-interest expense by the sum of GAAP net interest income and adjusted non-interest income.

The following table presents the tangible common equity to tangible assets, tangible equity to tangible assets, and tangible common book value per share calculations (non-GAAP):

                     
    June 30,    March 31,    June 30,   
    2023   2023   2022  
Reconciliation of Tangible Assets:                    
Total assets   $ 13,802,862     $ 13,841,724     $ 12,347,085    
Goodwill     (155,797 )     (155,797 )     (155,797 )  
Other intangible assets     (5,758 )     (6,107 )     (7,346 )  
Tangible assets (non-GAAP)   $ 13,641,307     $ 13,679,820     $ 12,183,942    
                     
Reconciliation of Tangible Common Equity - Consolidated:                    
Total stockholders' equity   $ 1,202,503     $ 1,191,253     $ 1,140,522    
Goodwill     (155,797 )     (155,797 )     (155,797 )  
Other intangible assets     (5,758 )     (6,107 )     (7,346 )  
Tangible equity (non-GAAP)     1,040,948       1,029,349       977,379    
Preferred stock, net     (116,569 )     (116,569 )     (116,569 )  
Tangible common equity (non-GAAP)   $ 924,379     $ 912,780     $ 860,810    
                     
Tangible common equity (non-GAAP)   $ 924,379     $ 912,780     $ 860,810    
AOCI, net of deferred taxes     104,385       98,638       69,950    
Tangible common equity excluding AOCI (non-GAAP)   $ 1,028,764     $ 1,011,418     $ 930,760    
                     
Tangible equity (non-GAAP)   $ 1,040,948     $ 1,029,349     $ 977,379    
AOCI, net of deferred taxes     104,385       98,638       69,950    
Tangible equity excluding AOCI (non-GAAP)   $ 1,145,333     $ 1,127,987     $ 1,047,329    
                     
Common shares outstanding     38,803       38,804       38,769    
                     
Tangible common equity to tangible assets (non-GAAP)     6.78   %   6.67   %   7.07   %
Tangible common equity excluding AOCI to tangible assets (non-GAAP)     7.54       7.39       7.64    
Tangible equity to tangible assets (non-GAAP)     7.63       7.52       8.02    
Tangible equity excluding AOCI to tangible assets (non-GAAP)     8.40       8.25       8.60    
                     
Book value per share   $ 27.99     $ 27.70     $ 26.41    
Tangible common book value per share (non-GAAP)     23.82       23.52       22.20    
Tangible common book value per share excluding AOCI (non-GAAP)     26.51       26.06       24.01    

 

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Source: Dime Community Bancshares, Inc.