Dime Community Bancshares, Inc. Reports Strong Fourth Quarter 2022 Results With Earnings Per Share Increasing By 19% On a Year-Over-Year Basis

January 27, 2023

Robust Loan Originations Drive Over $1.3 Billion in Loan Growth for Fiscal Year 2022

Fourth Quarter Results Highlighted by Strong Non-Interest Income Growth,
Prudent Expense Management and Improved Credit Quality

HAUPPAUGE, N.Y., Jan. 27, 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 $145.3 million for the year ended December 31, 2022, or $3.73 per diluted common share, compared to $96.7 million for the year ended December 31, 2021 or $2.45 per diluted common share.

Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “As we close the book on 2022, we can reflect on an extremely successful year for our Company. Reported net income available to common shareholders for the twelve months ended December 31, 2022 increased by 50% on a year-over-year basis. Importantly, we delivered consistent financial results throughout 2022 as demonstrated by an annual return on assets in excess of 1.20% and an efficiency ratio below 50%. We made numerous investments in our business and people over the year, including a buildout of our middle market commercial lending operations. Finally, we were very proud to achieve an overall “Outstanding” rating for our Community Reinvestment Act rating from the Federal Reserve Bank of New York.”

For the quarter ended December 31, 2022, net income available to common stockholders was $38.2 million, or $0.99 per diluted common share, compared to $37.7 million, or $0.98 per diluted common share, for the quarter ended September 30, 2022, and $33.5 million, or $0.83 per diluted common share, for the quarter ended December 31, 2021.

Highlights for the Fourth Quarter of 2022 Included:

  • Total loans held for investment, net, increased by $450 million or 18% on an annualized basis versus the linked quarter;
  • Total business loan balances increased by $215 million or 43% on an annualized basis versus the linked quarter;
  • Non-interest income increased to $9.5 million during the fourth quarter of 2022. Excluding the impact of a $1.4 million gain on sale of a branch property in the third quarter, non-interest income during the third quarter of 2022 was $8.0 million. The increase in non-interest income was driven by customer-related loan swap revenue and SBA gain on sale revenue;
  • Non-interest expense to average assets remained well controlled at 1.56% for the fourth quarter, compared to 1.54% for the prior quarter and 1.64% for the year-ago quarter; and
  • Credit quality continues to be strong with non-performing assets and loans 90 days past due and accruing declining by 22% versus the linked quarter and representing only 0.26% of total assets as of December 31, 2022.

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income for the fourth quarter of 2022 was $96.8 million compared to $100.4 million for the third quarter of 2022 and $91.7 million for the fourth quarter of 2021.

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)   Q4 2022   Q3 2022   Q4 2021  
Net interest income   $ 96,804     $ 100,438     $ 91,686  
Purchase accounting accretion on loans ("PAA")     (390 )     (57 )     625  
Adjusted net interest income excluding PAA on loans (non-GAAP)   $ 96,414     $ 100,381     $ 92,311  
                     
Average interest-earning assets   $ 12,198,905     $ 11,782,361     $ 11,582,086  
                     
NIM (1)     3.15   %   3.38   %   3.14 %
Adjusted NIM excluding PAA on loans (non-GAAP) (2)     3.14   %   3.38   %   3.16 %

(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 4.76% at December 31, 2022, a 43 basis point increase compared to the ending WAR on the total loan portfolio at September 30, 2022.

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

                                 
    December 31, 2022   September 30, 2022   December 31, 2021  
($ in thousands)   Balance   WAR   Balance   WAR   Balance   WAR  
Loans held for investment balances at period end:                                
Commercial and industrial ("C&I")   $ 1,065,916   7.00 % $ 900,768   5.90 % $ 867,542   4.08 %
Owner-occupied commercial real estate     1,140,145   5.16     1,090,417   4.69     1,030,240   4.05  
Business loans     2,206,061   6.05     1,991,185   5.24     1,897,782   4.06  
One-to-four family residential, including condominium and cooperative apartment     773,321   3.96     722,081   3.77     669,282   3.63  
Multifamily residential and residential mixed-use (2)(3)     4,026,826   4.08     3,968,244   3.83     3,356,346   3.56  
Non-owner-occupied commercial real estate     3,317,485   4.68     3,174,102   4.33     2,915,708   3.69  
Acquisition, development, and construction     229,663   8.19     241,019   6.75     322,628   4.53  
Other loans     7,679   10.22     8,927   7.29     16,898   5.85  
Loans held for investment, excluding PPP loans     10,561,035   4.76     10,105,558   4.33     9,178,644   3.75  
PPP loans     5,796   1.00     11,383   1.00     66,017   1.00  
Total loans held for investment, including PPP loans   $ 10,566,831   4.76 % $ 10,116,941   4.33 % $ 9,244,661   3.73 %

(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 amount of loans in the category.
(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.

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

       
($ in millions)   Q4 2022   Q3 2022      Q4 2021  
Loan originations   $ 638.3   $ 800.9   $ 463.9  

Deposits

Total average deposits for the fourth quarter of 2022 were $10.4 billion, compared to $10.6 billion for the third quarter of 2022. The cost of deposits increased by 46 basis points on a linked quarter basis. CEO O’Connor stated, “Despite the rapid increase in market interest rates and the competitive environment for deposit balances, we were able to maintain average non-interest bearing deposit balances to average total deposit balances at approximately 36.2% for the fourth quarter of 2022.”

Non-Interest Income

Non-interest income was $9.5 million during the fourth quarter of 2022, $9.4 million during the third quarter of 2022, and $10.2 million during the fourth quarter of 2021. Included in non-interest income during the third quarter of 2022 was a $1.4 million gain on the sale of a branch property.

Non-Interest Expense

Total non-interest expense was $50.7 million during the fourth quarter of 2022, $48.3 million during the third quarter of 2022, and $50.8 million during the fourth quarter of 2021. Excluding the impact of merger expenses and transaction costs, branch restructuring, severance expense, loss on extinguishment of debt, and amortization of other intangible assets, adjusted non-interest expense was $50.3 million during the fourth quarter of 2022, $47.9 million during the third quarter of 2022, and $48.7 million during the fourth quarter of 2021 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The ratio of non-interest expense to average assets was 1.56% during the fourth quarter of 2022, compared to 1.54% during the linked quarter and 1.64% for the fourth quarter of 2021. Excluding the impact of merger expenses and transaction costs, branch restructuring, severance expense, loss on extinguishment of debt, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.55% during the fourth quarter of 2022, compared to 1.53% during the linked quarter and 1.57% for the fourth quarter of 2021 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The efficiency ratio was 47.7% during the fourth quarter of 2022, compared to 44.0% during the linked quarter and 49.9% during the fourth quarter of 2021. Excluding the impact of merger expenses and transaction costs, branch restructuring, severance expense, loss on extinguishment of debt, amortization of other intangible assets, and gain on sale of securities and other assets, the adjusted efficiency ratio was 47.3% during the fourth quarter of 2022, compared to 44.2% during the linked quarter and 48.2% during the fourth quarter of 2021 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Income Tax Expense

The reported effective tax rate for the fourth quarter of 2022 was 27.5%, compared to 28.1% for the third quarter of 2022, and 30.9% for the fourth quarter of 2021.

Credit Quality

Non-performing loans at December 31, 2022 were $34.2 million, or 0.32% of total loans.

A credit loss provision of $0.3 million was recorded during the fourth quarter of 2022, compared to a credit loss provision of $6.6 million during the third quarter of 2022, and a credit loss recovery of $132 thousand during the fourth quarter of 2021. The credit loss provision for the fourth quarter of 2022 was associated with growth in the loan portfolio offset by a reduction in reserves on individually evaluated loans and unfunded commitments.

The allowance for credit losses as a percentage of total loans was 0.79% at December 31, 2022 as compared to 0.81% at September 30, 2022 and 0.91% at December 31, 2021.

Capital Management

The Company’s and the Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements as of December 31, 2022.

CEO O’Connor commented, “Our strong internal capital generation allowed us to keep our capital ratios steady in the quarter, while supporting approximately $450 million of quarterly loan growth. Over the course of 2022, we repurchased approximately $47 million of common stock, representing approximately 4% of shares outstanding at the beginning of the year. Our regulatory capital ratios, which exclude the impact of the accumulated other comprehensive loss component of stockholders’ equity, continue to be very strong.”

Dividends per common share were $0.24 during the fourth quarter of 2022.

Book value per common share was $27.41 at December 31, 2022 compared to $26.55 at September 30, 2022. Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by the number of shares outstanding) was $23.20 at December 31, 2022 compared to $22.34 at September 30, 2022. Excluding the impact of accumulated other comprehensive income, the adjusted tangible common book value per share was $25.54 at December 31, 2022 compared to $24.75 at September 30, 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Earnings Call Information

The Company will conduct a conference call at 8:30 a.m. (ET) on Friday, January 27, 2023, during which CEO O’Connor will discuss the Company’s fourth quarter 2022 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/499210648.

Conference Call Details:

Dial-in for Live Call:

United States: 1-844-200-6205
International: +1-929-526-1599
Access code: 269082

Telephone Replay:

A recording will be available until Friday, February 10, 2023.

United States: 1-866-813-9403
International: +44-204-525-0658
Access code: 964093

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 $13.1 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. 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 work remotely. 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)

                   
       December 31,       September 30,       December 31, 
    2022   2022   2021
Assets:                    
Cash and due from banks   $ 169,297     $ 312,996     $ 393,722  
Securities available-for-sale, at fair value     950,587       962,927       1,563,711  
Securities held-to-maturity     585,798       591,403       179,309  
Loans held for sale           289       5,493  
Loans held for investment, net:                   
C&I     1,065,916       900,768       867,542  
Owner-occupied commercial real estate     1,140,145       1,090,417       1,030,240  
Total business loans     2,206,061       1,991,185       1,897,782  
One-to-four family and cooperative/condominium apartment     773,321       722,081       669,282  
Multifamily residential and residential mixed-use (1)(2)     4,026,826       3,968,244       3,356,346  
Non-owner-occupied commercial real estate     3,317,485       3,174,102       2,915,708  
Acquisition, development, and construction     229,663       241,019       322,628  
Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans     5,796       11,383       66,017  
Other loans     7,679       8,927       16,898  
Allowance for credit losses     (83,507 )     (81,935 )     (83,853 )
Total loans held for investment, net     10,483,324       10,035,006       9,160,808  
Premises and fixed assets, net     46,749       47,406       50,368  
Premises held for sale                 556  
Restricted stock     88,745       65,656       37,732  
Bank Owned Life Insurance ("BOLI")     333,292       331,105       295,789  
Goodwill     155,797       155,797       155,797  
Other intangible assets     6,484       6,915       8,362  
Operating lease assets     57,857       57,916       64,258  
Derivative assets     154,485       162,679       45,086  
Accrued interest receivable     48,561       41,567       40,149  
Other assets     113,084       114,241       65,224  
Total assets   $ 13,194,060     $ 12,885,903     $ 12,066,364  
Liabilities:                   
Non-interest-bearing checking   $ 3,519,218     $ 3,830,676     $ 3,920,423  
Interest-bearing checking     827,454       936,082       905,717  
Savings     2,260,101       2,237,409       1,158,040  
Money market     2,532,270       2,553,729       3,621,552  
Certificates of deposit     1,115,364       930,774       853,242  
Total deposits     10,254,407       10,488,670       10,458,974  
FHLBNY advances     1,131,000       620,000       25,000  
Other short-term borrowings     1,360       2,124       1,862  
Subordinated debt, net     200,283       200,305       197,096  
Derivative cash collateral     153,040       158,200       4,550  
Operating lease liabilities     60,340       60,252       66,103  
Derivative liabilities     137,335       144,343       40,728  
Other liabilities     82,573       71,218       79,431  
Total liabilities     12,020,338       11,745,112       10,873,744  
Stockholders' equity:                   
Preferred stock, Series A     116,569       116,569       116,569  
Common stock     416       416       416  
Additional paid-in capital     495,410       495,232       494,125  
Retained earnings     762,762       733,783       654,726  
Accumulated other comprehensive loss ("AOCI"), net of deferred taxes     (90,240 )     (93,036 )     (6,181 )
Unearned equity awards     (8,078 )     (9,177 )     (7,842 )
Treasury stock, at cost     (103,117 )     (102,996 )     (59,193 )
Total stockholders' equity     1,173,722       1,140,791       1,192,620  
Total liabilities and stockholders' equity   $ 13,194,060     $ 12,885,903     $ 12,066,364  

(1)     Includes loans underlying multifamily 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)

    Three Months Ended   Year Ended
       December 31,       September 30,       December 31,       December 31,       December 31, 
    2022   2022   2021   2022   2021
Interest income:                               
Loans   $ 120,773   $ 106,306   $ 89,301     $ 406,601   $ 359,016  
Securities     7,652     7,374     7,097       29,224     22,634  
Other short-term investments     1,444     847     414       3,400     2,976  
Total interest income     129,869     114,527     96,812       439,225     384,626  
Interest expense:                                
Deposits and escrow     22,017     10,154     2,861       38,433     16,527  
Borrowed funds     9,783     3,483     2,265       19,117     10,490  
Derivative cash collateral     1,265     452           1,812      
Total interest expense     33,065     14,089     5,126       59,362     27,017  
Net interest income     96,804     100,438     91,686       379,863     357,609  
Provision (credit) for credit losses     335     6,587     (132 )     5,374     6,212  
Net interest income after provision (credit)     96,469     93,851     91,818       374,489     351,397  
Non-interest income:                                
Service charges and other fees     3,945     3,866     4,621       16,206     15,998  
Title fees     453     474     735       2,031     2,338  
Loan level derivative income     1,397     549     113       3,637     2,909  
BOLI income     2,187     2,177     1,890       10,346     7,071  
Gain on sale of SBA loans     621     211     851       1,797     2,336  
Gain on sale of PPP loans                       20,697  
Gain on sale of residential loans     55     54     225       448     1,758  
Net gain on equity securities                       131  
Net gain on sale of securities and other assets         1,397     975       1,397     1,705  
Loss on termination of derivatives                       (16,505 )
Other     809     634     769       2,294     3,630  
Total non-interest income     9,467     9,362     10,179       38,156     42,068  
Non-interest expense:                                
Salaries and employee benefits     31,632     29,188     27,638       120,108     108,331  
Severance     5               2,198     1,875  
Occupancy and equipment     7,356     7,884     7,784       30,220     30,697  
Data processing costs     4,023     3,434     4,506       15,175     16,638  
Marketing     1,559     1,531     1,959       5,900     4,661  
Professional services     1,831     2,116     2,130       8,069     9,284  
Federal deposit insurance premiums     800     800     1,031       3,900     4,077  
Loss on extinguishment of debt                   740     1,751  
Curtailment loss                       1,543  
Merger expenses and transaction costs             2,574           44,824  
Branch restructuring             (1,118 )         5,059  
Amortization of other intangible assets     431     431     715       1,878     2,622  
Other     3,065     2,918     3,610       12,542     13,937  
Total non-interest expense     50,702     48,302     50,829       200,730     245,299  
Income before taxes     55,234     54,911     51,168       211,915     148,166  
Income tax expense     15,175     15,430     15,811       59,359     44,170  
Net income     40,059     39,481     35,357       152,556     103,996  
Preferred stock dividends     1,821     1,822     1,821       7,286     7,286  
Net income available to common stockholders   $ 38,238   $ 37,659   $ 33,536     $ 145,270   $ 96,710  
Earnings per common share ("EPS"):                                
Basic   $ 0.99   $ 0.98   $ 0.83     $ 3.73   $ 2.45  
Diluted   $ 0.99   $ 0.98   $ 0.83     $ 3.73   $ 2.45  
                               
Average common shares outstanding for diluted EPS     38,123,221     38,165,681     39,876,825       38,538,834     38,903,037  

 

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 Year Ended  
       December 31,       September 30,       December 31,       December 31,       December 31,   
    2022   2022   2021   2022   2021  
Per Share Data:                                
Reported EPS (Diluted)   $ 0.99   $ 0.98   $ 0.83   $ 3.73   $ 2.45  
Cash dividends paid per common share     0.24     0.24     0.24     0.96     0.96  
Book value per common share     27.41     26.55     26.98     27.41     26.98  
Tangible common book value per share (1)     23.20     22.34     22.87     23.20     22.87  
Tangible common book value per share excluding AOCI (1)     25.54     24.75     23.02     25.54     23.02  
Common shares outstanding     38,573     38,572     39,878     38,573     39,878  
Dividend payout ratio     24.24 %     24.49 %   28.92 %   25.74 %   39.18 %
                                 
Performance Ratios (Based upon Reported Net Income):                                 
Return on average assets     1.23 %     1.26 %   1.14 %   1.22 %   0.86 %
Return on average equity     13.72     13.56     11.67     13.05     8.96  
Return on average tangible common equity (1)     17.34     17.15     14.61     16.48     11.09  
Net interest margin     3.15     3.38     3.14     3.25     3.15  
Non-interest expense to average assets     1.56     1.54     1.64     1.61     2.03  
Efficiency ratio (1)     47.7     44.0     49.9     48.0     61.4  
Effective tax rate     27.47     28.10     30.90     28.01     29.81  
                                 
Balance Sheet Data:                                 
Average assets   $ 12,985,248   $ 12,550,626   $ 12,419,184   $ 12,466,774   $ 12,112,800  
Average interest-earning assets     12,198,905     11,782,361     11,582,086     11,684,501     11,354,111  
Average tangible common equity (1)     889,018     885,182     931,503     889,038     888,128  
Loan-to-deposit ratio at end of period     103.0     96.5     88.4     103.0     88.4  
                                 
Capital Ratios and Reserves - Consolidated: (3)                                 
Tangible common equity to tangible assets (1)     6.87 %     6.77 %   7.66 %            
Tangible common equity excluding AOCI to tangible assets (1)     7.51     7.45     7.71              
Tangible equity to tangible assets (1)     7.76     7.69     8.64              
Tangible equity excluding AOCI to tangible assets (1)     8.40     8.36     8.69              
Tier 1 common equity ratio     9.15     9.13     9.49              
Tier 1 risk-based capital ratio     10.23     10.25     10.69              
Total risk-based capital ratio     12.89     12.98     13.45              
Tier 1 leverage ratio     8.53     8.61     8.46              
CRE consolidated concentration ratio (2)     554     555     519              
Allowance for credit losses/ Total loans     0.79     0.81     0.91              
Allowance for credit losses/ Non-performing loans     243.91     199.45     208.04              
                                 

(1)    See "Non-GAAP Reconciliation" tables for reconciliation of tangible equity, tangible common equity, and tangible assets.
(2)    The CRE consolidated 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. December 31, 2022 amounts are preliminary pending completion and filing of the Company’s regulatory reports.
(3)   December 31, 2022 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  
    December 31, 2022   September 30, 2022   December 31, 2021  
                            Average                     Average                  Average  
    Average         Yield/   Average         Yield/   Average         Yield/  
    Balance   Interest   Cost   Balance   Interest   Cost   Balance   Interest   Cost  
Assets:                                                     
Interest-earning assets:                                                     
Real estate loans   $ 9,370,045   $ 104,218   4.41 %   $ 8,981,848   $ 92,309   4.08 % $ 8,293,470   $ 78,367   3.75 %
Commercial and industrial loans     957,151     16,430   6.81     940,628     13,837   5.84     969,338     10,702   4.38  
Other loans     8,269     125   6.00     10,566     160   6.01     18,385     232   5.01  
Securities     1,663,969     7,652   1.82     1,666,398     7,374   1.76     1,729,191     7,097   1.63  
Other short-term investments     199,471     1,444   2.87     182,921     847   1.84     571,702     414   0.29  
Total interest-earning assets     12,198,905     129,869   4.22 %     11,782,361     114,527   3.86 %   11,582,086     96,812   3.32 %
Non-interest-earning assets     786,343                 768,265               837,098            
Total assets   $ 12,985,248               $ 12,550,626             $ 12,419,184            
                                                   
Liabilities and Stockholders' Equity:                                                     
Interest-bearing liabilities:                                                     
Interest-bearing checking   $ 845,530   $ 1,174   0.55 %   $ 833,386   $ 970   0.46 % $ 962,597   $ 455   0.19 %
Money market     2,469,177     6,620   1.06     2,651,459     2,046   0.31     3,652,681     1,087   0.12  
Savings     2,234,968     9,889   1.76     2,243,887     4,951   0.88     1,174,719     108   0.04  
Certificates of deposit     1,063,053     4,334   1.62     988,827     2,187   0.88     915,210     1,211   0.52  
Total interest-bearing deposits     6,612,728     22,017   1.32     6,717,559     10,154   0.60     6,705,207     2,861   0.17  
FHLBNY advances     724,902     6,383   3.49     166,739     430   1.02     25,000     61   0.97  
Subordinated debt, net     200,298     2,553   5.06     200,320     2,553   5.06     197,126     2,204   4.44  
Other short-term borrowings     90,275     847   3.72     75,975     500   2.61     2,484        
Total borrowings     1,015,475     9,783   3.82     443,034     3,483   3.12     224,610     2,265   4.00  
Derivative cash collateral     157,898     1,265   3.18     111,325     452   1.61     3,842        
Total interest-bearing liabilities     7,786,101     33,065   1.68 %     7,271,918     14,089   0.77 %   6,933,659     5,126   0.29 %
Non-interest-bearing checking     3,755,395                 3,894,093               4,092,204            
Other non-interest-bearing liabilities     275,636                 219,883               181,074            
Total liabilities     11,817,132                 11,385,894               11,206,937            
Stockholders' equity     1,168,116                 1,164,732               1,212,247            
Total liabilities and stockholders' equity   $ 12,985,248               $ 12,550,626             $ 12,419,184            
Net interest income          $ 96,804              $ 100,438             $ 91,686      
Net interest rate spread                 2.54 %               3.09 %             3.03 %
Net interest margin                 3.15 %               3.38 %               3.14 %
Deposits (including non-interest-bearing checking accounts)   $ 10,368,123   $ 22,017   0.84 %   $ 10,611,652   $ 10,154   0.38 % $ 10,797,411   $ 2,861   0.11 %

 

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS
(Dollars in thousands)

                   
       At or For the Three Months Ended
    December 31,       September 30,       December 31, 
Asset Quality Detail   2022   2022   2021
Non-performing loans ("NPLs")                   
One-to-four family residential, including condominium and cooperative apartment   $ 3,203     $ 3,219     $ 7,623  
Multifamily residential and residential mixed-use                  
Commercial real estate     8,332       7,673       5,053  
Acquisition, development, and construction     657       657        
C&I     21,946       29,532       27,266  
Other     99             365  
Total Non-accrual loans   $ 34,237     $ 41,081     $ 40,307  
Total Non-performing assets ("NPAs")   $ 34,237     $ 41,081     $ 40,307  
                   
Loans 90 days delinquent and accruing ("90+ Delinquent")                   
One-to-four family residential, including condominium and cooperative apartment   $     $     $ 1,945  
Multifamily residential and residential mixed-use                  
Commercial real estate                  
Acquisition, development, and construction                  
C&I           2,781       1,056  
Other                  
90+ Delinquent   $     $ 2,781     $ 3,001  
                   
NPAs and 90+ Delinquent   $ 34,237     $ 43,862     $ 43,308  
                   
NPAs and 90+ Delinquent / Total assets     0.26 %     0.34 %     0.36 %
Net charge-offs (recoveries) ("NCOs")   $ 185     $ 3,932     $ (108 )
NCOs / Average loans (1)     0.01 %     0.16 %     0.00 %

      (1)   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 provide 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 the Company’s February 2021 merger with Bridge Bancorp, Inc., as well as a gain on sale of a branch property, branch restructuring, gain on sale of PPP loans, severance, and loss on extinguishment of debt:  

                                 
    Three Months Ended   Year Ended  
       December 31,       September 30,       December 31,       December 31,    December 31,   
    2022   2022   2021   2022   2021  
Reconciliation of Reported and Adjusted (non-GAAP) Net Income Available to Common Stockholders                                
Reported net income available to common stockholders   $ 38,238   $ 37,659     $ 33,536     $ 145,270   $ 96,710    
Adjustments to net income (1):                                 
Provision for credit losses - Non-PCD loans (double-count)                         20,278    
Gain on sale of PPP loans                         (20,697 )  
Net gain on sale of securities and other assets         (1,397 )     (975 )     1,397     (1,685 )  
Loss on termination of derivatives                         16,505    
Severance     5                 2,198     1,875    
Loss on extinguishment of debt                     740     1,751    
Curtailment loss                         1,543    
Merger expenses and transaction costs (2)               2,574           44,824    
Branch restructuring               (1,118 )         5,059    
Income tax effect of adjustments and other tax adjustments         440       (234 )     145     (19,421 )  
Adjusted net income available to common stockholders (non-GAAP)   $ 38,243   $ 36,702     $ 33,783     $ 149,750   $ 146,742    
                                 
Adjusted Ratios (Based upon non-GAAP as calculated above)                                
Adjusted EPS (Diluted)   $ 0.99   $ 0.95     $ 0.84     $ 3.77   $ 3.73    
Adjusted return on average assets     1.23  %     1.23   %   1.15   %   1.24  %   1.27   %
Adjusted return on average equity     13.72     13.23       11.75       13.20     13.26    
Adjusted return on average tangible common equity     17.34     16.72       14.72       16.67     16.73    
Adjusted non-interest expense to average assets     1.55     1.53       1.57       1.57     1.55    
Adjusted efficiency ratio     47.3     44.2       48.2       47.0     47.6    

(1)    Adjustments to net income are taxed at the Company's statutory tax rate of approximately 31% unless otherwise noted.
(2)    Certain merger expenses and transaction costs are non-taxable expense.

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     Year Ended
         December 31,      September 30,      December 31,      December 31,         December 31,   
      2022     2022     2021     2022     2021  
Operating expense as a % of average assets - as reported     1.56   %     1.54   %   1.64   %   1.61   %     2.03   %
Loss on extinguishment of debt                       (0.01 )     (0.01 )  
Curtailment loss                             (0.02 )  
Severance                       (0.02 )     (0.02 )  
Merger expenses and transaction costs                 (0.08 )           (0.37 )  
Branch restructuring                 0.03             (0.04 )  
Amortization of other intangible assets     (0.01 )     (0.01 )     (0.02 )     (0.02 )     (0.02 )  
Adjusted operating expense as a % of average assets (non-GAAP)     1.55       1.53       1.57       1.57       1.55    

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

                                 
    Three Months Ended   Year Ended  
       December 31,       September 30,       December 31,       December 31,    December 31,   
    2022   2022   2021   2022   2021  
Efficiency ratio - as reported (non-GAAP) (1)        47.7   %     44.0   %   49.9   %   48.0   %     61.4   %
Non-interest expense - as reported   $ 50,702     $ 48,302     $ 50,829     $ 200,730     $ 245,299    
Severance     (5 )                 (2,198 )     (1,875 )  
Merger expenses and transaction costs                 (2,574 )           (44,824 )  
Branch restructuring                 1,118             (5,059 )  
Loss on extinguishment of debt                       (740 )     (1,751 )  
Curtailment loss                             (1,543 )  
Amortization of other intangible assets     (431 )     (431 )     (715 )     (1,878 )     (2,622 )  
Adjusted non-interest expense (non-GAAP)   $ 50,266     $ 47,871     $ 48,658     $ 195,914     $ 187,625    
Net interest income - as reported   $ 96,804     $ 100,438     $ 91,686     $ 379,863     $ 357,609    
Non-interest income - as reported   $ 9,467     $ 9,362     $ 10,179     $ 38,156     $ 42,068    
Gain on sale of PPP loans                             (20,697 )  
Net gain on sale of securities and other assets           (1,397 )     (975 )     (1,397 )     (1,685 )  
Loss on termination of derivatives                             16,505    
Adjusted non-interest income (non-GAAP)   $ 9,467     $ 7,965     $ 9,204     $ 36,759     $ 36,191    
Adjusted total revenues for adjusted efficiency ratio (non-GAAP)   $ 106,271     $ 108,403     $ 100,890     $ 416,622     $ 393,800    
Adjusted efficiency ratio (non-GAAP) (2)     47.3   %     44.2   %   48.2   %   47.0   %     47.6   %

      (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):

                     
       December 31,       September 30,       December 31,   
    2022   2022   2021  
Reconciliation of Tangible Assets:                    
Total assets   $ 13,194,060     $ 12,885,903     $ 12,066,364    
Goodwill     (155,797 )     (155,797 )     (155,797 )  
Other intangible assets     (6,484 )     (6,915 )     (8,362 )  
Tangible assets (non-GAAP)   $ 13,031,779     $ 12,723,191     $ 11,902,205    
                     
Reconciliation of Tangible Common Equity - Consolidated:                    
Total stockholders' equity   $ 1,173,722     $ 1,140,791     $ 1,192,620    
Goodwill     (155,797 )     (155,797 )     (155,797 )  
Other intangible assets     (6,484 )     (6,915 )     (8,362 )  
Tangible equity (non-GAAP)     1,011,441       978,079       1,028,461    
Preferred stock, net     (116,569 )     (116,569 )     (116,569 )  
Tangible common equity (non-GAAP)   $ 894,872     $ 861,510     $ 911,892    
                     
Tangible common equity (non-GAAP)   $ 894,872     $ 861,510     $ 911,892    
AOCI, net of deferred taxes     90,240       93,036       6,181    
Tangible common equity excluding AOCI (non-GAAP)   $ 985,112     $ 954,546     $ 918,073    
                     
Tangible equity (non-GAAP)   $ 1,011,441     $ 978,079     $ 1,028,461    
AOCI, net of deferred taxes     90,240       93,036       6,181    
Tangible equity excluding AOCI (non-GAAP)   $ 1,101,681     $ 1,071,115     $ 1,034,642    
                     
Common shares outstanding     38,573       38,572       39,878    
                     
Tangible common equity to tangible assets (non-GAAP)     6.87   %     6.77   %   7.66   %
Tangible common equity excluding AOCI to tangible assets (non-GAAP)     7.51       7.45       7.71    
Tangible equity to tangible assets (non-GAAP)     7.76       7.69       8.64    
Tangible equity excluding AOCI to tangible assets (non-GAAP)     8.40       8.36       8.69    
                     
Book value per share   $ 27.41     $ 26.55     $ 26.98    
Tangible common book value per share (non-GAAP)     23.20       22.34       22.87    
Tangible common book value per share excluding AOCI (non-GAAP)     25.54       24.75       23.02    

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Source: Dime Community Bancshares, Inc.