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Dime Community Bancshares, Inc. Reports 295% Increase in Net Income Year-Over-Year

07/30/2021

Continued Focus on Enhancing Greater Long Island’s Premier Deposit Franchise
Cost of Deposits Declines to 0.17% and Non-Interest-Bearing Deposits Increase to 33.3% of Total Deposits

PPP Sale and Strong Earnings Result in Linked Quarter Increase in Capital Ratios

HAUPPAUGE, N.Y., July 30, 2021 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime” or “its”), the parent company of Dime Community Bank (the “Bank”), today reported net income available to common stockholders of $49.5 million for the quarter ended June 30, 2021, or $1.19 per diluted common share, compared with a net loss available to common stockholders of $22.9 million for the quarter ended March 31, 2021, or $0.66 per diluted common share, and net income available to common stockholders of $11.8 million for the quarter ended June 30, 2020, or $0.55 per diluted common share.

Adjusted net income to common stockholders (non-GAAP) totaled $39.1 million for the quarter ended June 30, 2021, or $0.94 per diluted share1. Adjusted net income to common stockholders includes the following primary adjustments:

  • Gain on sale of Paycheck Protection Program (“PPP”) loans: As previously disclosed, the Company sold PPP loans it originated in 2021; this resulted in a pre-tax gain on sale of PPP loans of $20.7 million;
  • Branch restructuring costs: As previously disclosed, the Company plans to combine five branch locations into other existing branches in October 2021; associated branch restructuring costs were $1.7 million, pre-tax.
  • Merger expenses and transaction costs: The Company recorded merger expenses and transaction costs, associated with its merger of equals transaction, of $1.8 million, pre-tax;
  • Other Adjustments: Severance expense totaled $1.9 million, pre-tax, and loss on extinguishment of debt totaled $0.2 million, pre-tax.

Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “During the second quarter we continued to grow Greater Long Island’s premier deposit franchise. Our high-quality deposit base, with over 33% of deposits in non-interest-bearing accounts, positions us well for the time when the Federal Reserve eventually raises interest rates. The sale of PPP loans along with strong earnings resulted in our tangible equity ratio increasing by 46 basis points on a linked quarter basis to 8.29%. In addition, our non-performing assets declined by approximately 20% on a linked quarter basis and represent only 0.22% of total assets.”

Mr. O’Connor continued, “Importantly, we have successfully executed on the cost savings outlined as part of our merger transaction. This is evidenced by our core efficiency ratio averaging approximately 48% for the last two quarters, which is below the 50% threshold we had outlined at the time of our merger of equals announcement. With the merger integration now behind us, our high quality, core-deposit funded balance sheet and strong pipelines provide me confidence in our future prospects.”

Highlights for the Second Quarter of 2021 Included:

  • The non-interest-bearing deposits to total deposits ratio increased to 33.3% at June 30, 2021 and the cost of deposits for the second quarter of 2021 was proactively managed lower to 0.17%;     
  • Sold $596 million of PPP loans during the second quarter of 2021 resulting in a pre-tax gain of $20.7 million;
  • Sold approximately $50 million of criticized loans in the second quarter of 2021 to de-risk the balance sheet;
  • Excluding the sale of the aforementioned criticized loans, total loans excluding PPP loans increased by 3% on an annualized basis versus the linked quarter;
  • Capital levels were bolstered in the quarter as a result of the PPP sale and strong earnings; the tangible equity to tangible assets ratio increased to 8.29% at June 30, 2021;
  • The Company purchased 403,121 shares of its common stock, at a weighted average price of $34.33 per share;
  • Non-performing assets declined 20% on a linked quarter basis and net charge-offs to average loans were only 0.04%; and
  • The Company’s Adjusted Pre-tax Pre-provision Net Revenue (“PPNR”) for the second quarter was $52.7 million.1

1 See reconciliation of this non-GAAP financial measure provided elsewhere herein.

Management’s Discussion of Quarterly Operating Results

The Company’s results of operations for the second quarter of 2021 include income for the full quarter from the merger with Bridge Bancorp, Inc. (“Bridge”), compared to two months for the first quarter of 2021 following the completion of the merger on February 1, 2021. The Company’s historical information for the second quarter of 2020 does not include the historical GAAP results of Bridge.

Net Interest Income

Net interest income for the second quarter of 2021 was $93.3 million compared to $77.8 million for the first quarter of 2021 and $43.6 million for the second quarter of 2020.

The table below provides a reconciliation of the reported Net Interest Margin (“NIM”), the NIM excluding the impact of PPP loans, and the NIM excluding purchasing accounting accretion on the loan portfolio.

                     
($ in thousands)      Q2 2021      Q1 2021      Q2 2020  
Net interest income   $ 93,254     $ 77,841     $ 43,556    
Less: Net interest income on PPP loans     (5,375 )     (4,092 )     (958 )  
Adjusted net interest income excluding PPP loans, (non-GAAP)   $ 87,879     $ 73,749     $ 42,598    
                     
Average interest-earning assets   $ 11,990,107     $ 10,057,598     $ 6,091,545    
Average PPP loan balances     (1,282,347 )     (1,020,910 )     (192,730 )  
Adjusted average interest-earning assets excluding PPP loans, (non-GAAP)   $ 10,707,760     $ 9,036,688     $ 5,898,815    
                     
NIM (1)     3.12   %     3.14   %     2.86   %
Adjusted NIM excluding PPP loans (non-GAAP) (2)     3.29   %     3.31   %     2.89   %
                     
Adjusted net interest income excluding PPP loans, (non-GAAP)   $ 87,879     $ 73,749     $ 42,598    
Less: Purchase Accounting Accretion on loans ("PAA")     (1,925 )     (1,333 )        
Adjusted net interest income excluding PPP loans and PAA on loans, (non-GAAP)   $ 85,954     $ 72,416     $ 42,598    
Adjusted NIM excluding PPP loans and PAA on loans, (non-GAAP) (3)     3.23   %     3.26   %     2.89   %
                     

(1) NIM represents net interest income divided by average interest-earning assets.
(2) Adjusted NIM excluding PPP represents adjusted net interest income, which excludes net interest income on PPP loans divided by average interest-bearing liabilities excluding PPP loans. The net interest income on PPP loans is calculated using interest income on the PPP balances less an assumed cost of funding the PPP loans, using the overall cost of funds of the Company.
(3) Adjusted NIM excluding PPP and PAA represents adjusted net interest income excluding PPP loans and PAA, divided by adjusted average interest-earning assets, excluding PPP loans.

Loan Portfolio

The ending weighted average rate (“WAR”) on the total loan portfolio was 3.67% at June 30, 2021, a 23 basis point increase compared to the ending WAR on the total loan portfolio at March 31, 2021. Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.80% at June 30, 2021, compared to 3.83% at March 31, 2021.

Outlined below are loan balances and WARs(1) for the current quarter, linked quarter and prior year quarter.

                                 
    June 30, 2021   March 31, 2021   June 30, 2020  
($ in thousands)      Balance      WAR      Balance      WAR      Balance      WAR  
Loan balances at period end:                                      
One-to-four family residential, including condominium and cooperative apartment   $ 704,489   3.74 %   $ 696,415   3.81 %   $ 182,264   3.98 %
Multifamily residential and residential mixed-use (2)(3)     3,503,205   3.59     3,567,207   3.61     2,988,511   3.77  
CRE     3,681,331   3.84     3,631,287   3.85     1,504,020   4.06  
ADC     290,462   4.73     254,170   4.85     136,606   5.08  
C&I     878,331   4.23     898,533   4.27     321,009   4.39  
Other loans     23,275   5.01     24,409   4.97     1,463   7.49  
Loans excluding SBA PPP     9,081,093   3.80     9,072,021   3.83     5,133,873   3.94  
                                 
SBA PPP     465,538   1.00     1,434,077   1.00     310,509   1.00  
Total loans including SBA PPP   $ 9,546,631   3.67 %   $ 10,506,098   3.44 %   $ 5,444,382   3.77 %

(1) Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, divided by the total amount of loans in the category.
(2) Includes multifamily loans underlying cooperatives.
(3) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.

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

                     
    Originations  
($ in millions)      Q2 2021      Q1 2021      Q2 2020  
Loans excluding PPP   $ 425.7   $ 336.4   $ 204.0  
PPP loans   $ 36.4   $ 573.3   $ 319.4  

Deposits and Borrowed Funds

Total deposits increased by $255.4 million on a linked quarter basis to $11.1 billion at June 30, 2021. Non-interest-bearing deposits increased $150.1 million during the second quarter of 2021 to $3.7 billion at June 30, 2021 and now represent 33.3% of total deposits.

The cost of total deposits for the quarter ended June 30, 2021 decreased to 0.17%, representing an 8 basis point linked quarter decline.

As of June 30, 2021, the Company had $437.2 million of certificates of deposit, with a weighted average rate of 0.41%, that were set to mature during the third quarter of 2021.

Total Federal Home Loan Bank advances were reduced to $25.0 million at June 30, 2021, compared to $533.9 million at March 31, 2021. Mr. O’Connor stated, “During the second quarter we paid down our Federal Home Loan Bank advance portfolio and we are now effectively a core deposit-funded institution without any wholesale leverage. This balance sheet structure positions us well for a rising interest rate scenario.”

Non-Interest Income

Non-interest income (loss) was $29.5 million during the second quarter of 2021, $(7.4) million during the first quarter of 2021, and $8.4 million during the second quarter of 2020. Excluding the gain on sale of PPP loans, adjusted non-interest income was $8.8 million during the second quarter of 2021 compared to $8.4 million during the first quarter of 2021 and $5.3 million during the second quarter of 2020. (see “Non-GAAP Reconciliation” table at the end of this news release).

Non-Interest Expense

Total non-interest expense was $54.9 million during the second quarter of 2021, $82.8 million during the first quarter of 2021, and $29.3 million during the second quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, severance expense, loss on extinguishment of debt, and amortization of other intangible assets, adjusted non-interest expense was $48.5 million during the second quarter of 2021, compared to $41.4 million during the first quarter of 2021, and $24.3 million during the second quarter of 2020. (See “Non-GAAP Reconciliation” table at the end of this news release).

The ratio of non-interest expense to average assets was 1.72% during the first quarter of 2021, compared to 3.11% during the linked quarter and 1.84% for the first quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, severance expense, loss on extinguishment of debt, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.52% during the second quarter of 2021, compared to 1.55% during the linked quarter and 1.52% for the second quarter of 2020. (see “Non-GAAP Reconciliation” table at the end of this news release).

The efficiency ratio was 44.7% during the second quarter of 2021, compared to 117.5% during the linked quarter and 56.5% during the second quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, severance expense, loss on extinguishment of debt, amortization of other intangible assets, gain on sale of PPP loans, the adjusted efficiency ratio was 47.5% during the second quarter of 2021, compared to 48.0% during the linked quarter and 49.9% during the second quarter of 2020. (see “Non-GAAP Reconciliation” table at the end of this news release).

Income Tax Expense

The reported effective tax rate for the second quarter of 2021 was 28.9%, compared to 25.2% for the first quarter of 2021, and 21.6% for the second quarter of 2020. The increase in the effective tax rate during the second quarter of 2021 was primarily the result of the increase in taxable income and non-deductible expenses during the period. The effective tax rate for the remainder of 2021 is expected to be approximately 27.5%.

Credit Quality

Non-performing loans at June 30, 2021 were $28.3 million, or 0.30% of total loans. Non-performing loans, excluding acquired PCD loans, would have been $18.5 million, or 0.20% of total loans excluding acquired PCD loans.

A credit loss recovery of $4.2 million was recorded during the second quarter of 2021, compared to a credit loss provision of $15.8 million during the first quarter of 2021, and a credit loss provision of $6.1 million during the second quarter of 2020. The credit loss recovery of $4.2 million for the second quarter of 2021 was primarily associated with the improvement in forecasted macroeconomic conditions.

The allowance for credit losses as a percentage of total loans was 0.97% at June 30, 2021 as compared to 0.93% at March 31, 2021 and 0.78% at June 30, 2020. Excluding PPP loans, the ratio of allowance for credit losses at June 30, 2021 would have been 1.02%.

Loans with Payment Deferrals

On a linked quarter basis, Principal and Interest (“P&I”) deferrals declined by approximately 33% and represent 0.5% of the total loan portfolio.

Capital Management

The Company’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.

Mr. O’Connor commented, “Given our strong balance sheet and the comfort provided by the detailed third-party reviews we conducted on our loan portfolio as part of the merger transaction, we resumed our share repurchase program in the month of May. In the second quarter we repurchased 403,121 shares, totaling $13.8 million, and we continue to be active on the repurchase front into the third quarter.”

Dividends per common share were $0.24 during the second quarter of 2021.

Book value per common share was $26.43 and tangible common book value per share (common equity less goodwill and other intangible assets divided by number of shares outstanding) (see “Non-GAAP Reconciliation” tables at the end of this news release) was $22.41 at June 30, 2021.

Including the impact of the remaining unrecognized fees on PPP loans, net of tax, adjusted tangible common book value per share would have been $22.46. See “Non-GAAP Reconciliation” tables at the end of this news release for details.

Earnings Call Information

The Company will conduct a conference call at 8:30 a.m. (ET) on July 30, 2021, during which CEO, Kevin M. O’Connor will discuss the Company’s second quarter performance, with a question and answer session to follow. Dial-in information for the live call is 1-888-348-2672. Upon dialing in, request to be joined into Dime Community Bancshares, Inc. call with the conference operator.

The conference call will be simultaneously webcast (listen only), and archived for a period of one year, at https://services.choruscall.com/links/dcom210729.html. Dial-in information for the replay is 1-877-344-7529 using access code #10158072. Replay will be available July 30, 2021 (10:30 a.m.) through August 13, 2021 (11:59 p.m.).

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 $12.7 billion in assets and 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 "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 reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company and/or the Bank; unanticipated or significant increases in loan losses may negatively affect the Company’s financial condition or results of operations; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; there may be failures or breaches of information technology security systems; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates; Further, given its ongoing and dynamic nature, it is difficult to predict what effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch closures, work stoppages and unavailability of personnel; and increased cybersecurity risks, as employees increasingly work remotely.

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


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)

                   
       June 30,      March 31,      December 31,
    2021
  2021
  2020
Assets:                     
Cash and due from banks   $ 1,184,183     $ 676,723     $ 243,603  
Mortgage-backed securities available-for-sale, at fair value     863,239       846,529       426,979  
Investment securities available-for-sale, at fair value     398,549       305,964       111,882  
Marketable equity securities, at fair value                 5,970  
Loans held for sale     29,335       23,704       5,903  
Loans held for investment, net:                     
One-to-four family and cooperative/condominium apartment     704,489       696,415       184,989  
Multifamily residential and residential mixed-use (1)(2)     3,503,205       3,567,207       2,758,743  
Commercial real estate ("CRE")     3,681,331       3,631,287       1,878,167  
Acquisition, development, and construction ("ADC")     290,462       254,170       156,296  
Total real estate loans     8,179,487       8,149,079       4,978,195  
Commercial and industrial ("C&I")     878,331       898,533       319,626  
Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans     465,538       1,434,077       321,907  
Other loans     23,275       24,409       2,316  
Allowance for credit losses     (92,760 )     (98,200 )     (41,461 )
Total loans held for investment, net     9,453,871       10,407,898       5,580,583  
Premises and fixed assets, net     51,127       53,829       19,053  
Premises held for sale     2,799              
Restricted stock     22,449       45,063       60,707  
Bank Owned Life Insurance ("BOLI")     293,113       251,521       156,096  
Goodwill     155,339       155,339       55,638  
Other intangible assets     9,792       10,627        
Operating lease assets     69,189       69,094       33,898  
Derivative assets     45,439       45,760       18,932  
Accrued interest receivable     47,209       51,100       34,815  
Other assets     78,052       75,477       27,551  
Total assets   $ 12,703,685     $ 13,018,628     $ 6,781,610  
Liabilities:                     
Non-interest-bearing checking   $ 3,689,072     $ 3,538,936     $ 780,751  
Interest-bearing checking     1,101,038       1,023,164       290,300  
Savings     1,305,028       1,078,687       414,809  
Money market     3,670,090       3,629,709       1,716,624  
Certificates of deposit     1,300,965       1,540,316       1,322,638  
Total deposits     11,066,193       10,810,812       4,525,122  
FHLBNY advances     25,000       533,865       1,204,010  
Other short-term borrowings     1,841       126,763       120,000  
Subordinated debt, net     197,188       197,234       114,052  
Operating lease liabilities     72,170       71,249       39,874  
Derivative liabilities     42,892       41,816       37,374  
Other liabilities     94,125       64,065       40,082  
Total liabilities     11,499,409       11,845,804       6,080,514  
Stockholders' equity:                     
Preferred stock, Series A     116,569       116,569       116,569  
Common stock     416       416       348  
Additional paid-in capital     492,848       492,431       278,295  
Retained earnings     613,791       574,297       600,641  
Accumulated other comprehensive gain (loss), net of deferred taxes     4,576       531       (5,924 )
Unearned equity awards     (8,529 )     (10,107 )      
Common stock held by the Benefit Maintenance Plan                 (1,496 )
Treasury stock, at cost     (15,395 )     (1,313 )     (287,337 )
Total stockholders' equity     1,204,276       1,172,824       701,096  
Total liabilities and stockholders' equity   $ 12,703,685     $ 13,018,628     $ 6,781,610  

(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   Six Months Ended
       June 30,      March 31,      June 30,      June 30,      June 30,
    2021
  2021
  2020   2021
  2020
Interest income:                                   
Loans   $ 94,288     $ 81,382     $ 54,142   $ 175,670     $ 108,319  
Securities     5,126       4,380       3,646     9,506       7,372  
Other short-term investments     987       993       846     1,980       1,848  
Total interest income     100,401       86,755       58,634     187,156       117,539  
Interest expense:                                   
Deposits and escrow     4,803       5,298       9,700     10,101       21,626  
Borrowed funds     2,344       3,616       5,378     5,960       11,833  
Total interest expense     7,147       8,914       15,078     16,061       33,459  
Net interest income     93,254       77,841       43,556     171,095       84,080  
(Credit) provision for credit losses     (4,248 )     15,779       6,060     11,531       14,072  
Net interest income after (credit) provision     97,502       62,062       37,496     159,564       70,008  
                               
Non-interest income:                                   
Service charges and other fees     3,876       2,920       1,083     6,796       2,286  
Title fees     688       433           1,121        
Loan level derivative income     559       1,792       2,494     2,351       3,657  
BOLI income     1,593       1,339       911     2,932       2,798  
Gain on sale of SBA loans excluding PPP     973       164           1,137       164  
Gain on sale of PPP loans     20,697                 20,697        
Gain on sale of residential loans     506       723       206     1,229       357  
Net gain (loss) on equity securities           131       436     131       (36 )
Net gain on sale of securities and other assets     20       710       3,134     730       3,142  
Loss on termination of derivatives           (16,505 )         (16,505 )      
Other     632       910       122     1,542       254  
Total non-interest income (loss)     29,544       (7,383 )     8,386     22,161       12,622  
Non-interest expense:                                  
Salaries and employee benefits     27,598       24,819       15,197     52,417       30,714  
Severance     1,875             3,930     1,875       4,000  
Occupancy and equipment     8,122       6,977       3,959     15,099       8,015  
Data processing costs     5,031       3,528       2,007     8,559       4,031  
Marketing     788       860       218     1,648       795  
Professional services     2,538       1,865       264     4,403       1,778  
Federal deposit insurance premiums     934       939       529     1,873       1,006  
Loss on extinguishment of debt     157       1,594           1,751        
Curtailment loss           1,543           1,543        
Merger expenses and transaction costs     1,836       37,942       1,072     39,778       1,658  
Branch restructuring costs     1,659                 1,659        
Amortization of other intangible assets     835       357           1,192        
Other     3,509       2,381       2,170     5,890       3,389  
Total non-interest expense     54,882       82,805       29,346     137,687       55,386  
                               
Income (loss) income before taxes     72,164       (28,126 )     16,536     44,038       27,244  
Income tax expense (benefit)     20,886       (7,092 )     3,570     13,794       5,886  
Net income (loss)     51,278       (21,034 )     12,966     30,244       21,358  
Preferred stock dividends     1,822       1,821       1,140     3,643       1,140  
Net income (loss) available to common stockholders   $ 49,456     $ (22,855 )   $ 11,826   $ 26,601     $ 20,218  
                               
Earnings per common share ("EPS"):                                   
Basic   $ 1.19     $ (0.66 )   $ 0.55   $ 0.70     $ 0.92  
Diluted   $ 1.19     $ (0.66 )   $ 0.55   $ 0.70     $ 0.91  
                               
Average common shares outstanding for diluted EPS     40,981,585       34,262,005       21,541,918     37,640,404       22,028,192  


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,  
    2021   2021
  2020   2021   2020  
Per Share Data:                                     
Reported EPS (Diluted)   $ 1.19   $ (0.66 )   $ 0.55   $ 0.70   $ 0.91  
Cash dividends paid per common share     0.24     0.24       0.22     0.48     0.43  
Book value per common share     26.43     25.43       26.35              
Tangible common book value per share (1)     22.41     21.43       23.75              
Common shares outstanding     41,160     41,536       21,442              
Dividend payout ratio     20.17  %     (36.36 ) %     40.00  %     68.57  %     47.25  %
                                 
Performance Ratios (Based upon Reported Net Income):                                     
Return on average assets     1.61  %     (0.79 ) %     0.81  %     0.45  %     0.64  %
Return on average equity     17.22     (8.18 )     7.96     4.79     6.32  
Return on average tangible common equity (1)     22.02     (11.58 )     9.23     6.49     7.72  
Net interest margin     3.12     3.14       2.86     3.13     2.79  
Non-interest expense to average assets     1.72     3.11       1.84     2.35     1.76  
Efficiency ratio     44.7     117.5       56.5     71.2     57.3  
Effective tax rate     28.94     25.22       21.59     31.32     21.60  
                                 
Balance Sheet Data:                                     
Average assets   $ 12,756,909   $ 10,666,619     $ 6,389,768   $ 11,717,336   $ 6,298,859  
Average interest-earning assets     11,990,107     10,057,598       6,091,545     11,029,192     6,020,454  
Average tangible common equity (1)     908,747     781,355       512,371     845,298     523,983  
Loan-to-deposit ratio at end of period     86.3     97.2       121.0              
                                 
Capital Ratios and Reserves - Consolidated: (3)                                     
Tangible common equity to tangible assets (1)     7.36  %     6.93   %     7.94  %              
Tangible equity to tangible assets (1)     8.29     7.83       9.76              
Tier 1 common equity ratio     9.93     9.65       10.69              
Tier 1 risk-based capital ratio     11.18     10.91       13.07              
Total risk-based capital ratio     14.26     14.04       16.29              
Tier 1 leverage ratio     8.24     9.62       10.11              
CRE consolidated concentration ratio (2)     506     517       545              
Allowance for credit losses/ Total loans     0.97     0.93       0.78              
Allowance for credit losses/ Non-performing loans     327.94     276.24       276.23              
                                 

(1) See "Non-GAAP Reconciliation" table for reconciliation of tangible equity, tangible common equity, and tangible assets. Average balances are calculated using the ending balance for months during the period indicated.
(2) The CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner occupied commercial real estate, multifamily, and ADC, divided by consolidated capital. June 30, 2021 amounts are preliminary pending completion and filing of the Company’s regulatory reports.
(3) June 30, 2021 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, 2021   March 31, 2021   June 30, 2020  
                               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   $ 8,156,368   $ 74,437   3.66 %   $ 7,039,881   $ 66,144   3.81 %   $ 4,867,970   $ 49,058   4.03 %
Commercial and industrial loans     932,297     13,277   5.71     730,850     9,835   5.46     326,269     3,583   4.39  
SBA PPP loans     1,282,347     6,174   1.93     1,020,910     5,049   2.01     192,730     1,488   3.09  
Other loans     24,349     400   6.59     17,509     354   8.20     870     13   5.98  
Mortgage-backed securities     825,949     3,483   1.69     665,190     3,080   1.88     468,705     3,064   2.61  
Investment securities     312,012     1,643   2.11     199,918     1,300   2.64     65,155     582   3.57  
Other short-term investments     456,785     987   0.87     383,340     993   1.05     169,846     846   1.99  
Total interest-earning assets     11,990,107     100,401   3.36 %     10,057,598     86,755   3.50 %     6,091,545     58,634   3.85 %
Non-interest-earning assets     766,802                 609,021                 298,223              
Total assets   $ 12,756,909               $ 10,666,619               $ 6,389,768              
                                                   
Liabilities and Stockholders' Equity:                                                           
Interest-bearing liabilities:                                                           
Interest-bearing checking   $ 1,067,043   $ 501   0.19 %   $ 662,273   $ 351   0.21 %   $ 222,694   $ 212   0.38 %
Money market     3,712,344     1,941   0.21     2,893,723     1,987   0.28     1,656,394     2,495   0.60  
Savings     1,189,460     212   0.07     863,409     207   0.10     404,389     305   0.30  
Certificates of deposit     1,421,480     2,149   0.61     1,522,017     2,753   0.73     1,511,598     6,688   1.77  
Total interest-bearing deposits     7,390,327     4,803   0.26     5,941,422     5,298   0.36     3,795,075     9,700   1.02  
FHLBNY advances     145,324     132   0.36     853,162     1,711   0.81     962,657     4,047   1.68  
Subordinated debt, net     197,218     2,211   4.50     168,607     1,902   4.57     113,955     1,330   4.67  
Other short-term borrowings     5,514     1   0.07     15,021     3   0.08     2,747     1   0.15  
Total borrowings     348,056     2,344   2.70     1,036,790     3,616   1.41     1,079,359     5,378   1.99  
Total interest-bearing liabilities     7,738,383     7,147   0.37 %     6,978,212     8,914   0.52 %     4,874,434     15,078   1.24 %
Non-interest-bearing checking     3,652,482                 2,494,630                 618,107              
Other non-interest-bearing liabilities     175,031                 164,859                 245,908              
Total liabilities     11,565,896                 9,637,701                 5,738,449              
Stockholders' equity     1,191,013                 1,028,918                 651,319              
Total liabilities and stockholders' equity   $ 12,756,909               $ 10,666,619               $ 6,389,768              
Net interest income          $ 93,254               $ 77,841               $ 43,556       
Net interest rate spread                 2.99 %                 2.98 %                 2.61 %
Net interest margin                 3.12 %                 3.14 %                 2.86 %
Deposits (including non-interest-bearing checking accounts)   $ 11,042,809   $ 4,803   0.17 %   $ 8,436,052   $ 5,298   0.25 %   $ 4,413,182   $ 9,700   0.88 %


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   2021
  2021
  2020
Non-performing loans (NPLs) (1)                     
One-to-four family residential, including condominium and cooperative
apartment
  $ 4,933     $ 5,384     $ 819  
Multifamily residential and residential mixed-use           4,844       1,377  
CRE     9,152       10,595       3,003  
Acquisition, development, and construction ("ADC")           104        
C&I     14,109       14,523       10,176  
Other     92       99       2  
Total Non-accrual loans   $ 28,286     $ 35,549     $ 15,377  
                   
Loans 90 days delinquent and accruing ("90+ Delinquent")                     
One-to-four family residential, including condominium and cooperative
apartment
  $ 5,065     $ 45     $ 44  
Multifamily residential and residential mixed-use     157       2,871       1,480  
CRE           2,259       2,167  
ADC                  
C&I     1,487       3,652        
Other                  
90+ Delinquent   $ 6,709     $ 8,827     $ 3,691  
                   
NPAs and 90+ Delinquent   $ 34,995     $ 44,376     $ 19,068  
                   
NPAs and 90+ Delinquent / Total assets     0.28 %     0.34 %     0.28 %
Net charge-offs (NCOs)   $ 918     $ 4,275     $ 31  
NCOs / Average loans (1)     0.04 %     0.19 %     0.00 %
                   

(1) Excludes 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. 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 merger with Legacy Bridge.

                                 
    Three Months Ended   Six Months Ended  
       June 30,      March 31,      June 30,      June 30,   June 30,  
    2021
  2021
  2020   2021
  2020
 
Reconciliation of Reported and Adjusted (non-GAAP) Net
Income Available to Common Stockholders
                               
Reported net income (loss) available to common stockholders   $ 49,456     $ (22,855 )   $ 11,826     $ 26,601     $ 20,218    
Adjustments to net income (loss)(1):                                   
Provision for credit losses - Non-PCD loans (double-count)           20,278             20,278          
Gain on sale of PPP loans     (20,697 )                 (20,697 )        
Net gain on sale of securities and other assets           (710 )     (3,134 )     (710 )     (3,142 )  
Loss on termination of derivatives           16,505             16,505          
Severance     1,875             3,930       1,875       4,000    
Loss on extinguishment of debt     157       1,594             1,751          
Curtailment loss           1,543             1,543          
Merger expenses and transaction costs (2)     1,836       37,942       1,072       39,778       1,658    
Branch restructuring costs     1,659                   1,659          
Income tax effect of adjustments and other tax adjustments     4,852       (21,848 )     (445 )     (16,996 )     (552 )  
Adjusted net income available to common stockholders (non-GAAP)   $ 39,138     $ 32,449     $ 13,249     $ 71,587     $ 22,182    
                                 
Adjusted Ratios (Based upon non-GAAP as calculated above)                                    
Adjusted EPS (Diluted)   $ 0.94     $ 0.94     $ 0.61     $ 1.88     $ 1.00    
Adjusted return on average assets     1.28   %     1.29   %     0.90   %     1.28   %     0.74   %
Adjusted return on average equity     13.76       13.32       8.84       13.55       7.30    
Adjusted return on average tangible common equity     17.48       16.74       10.34       17.13       8.47    
Adjusted non-interest expense to average assets     1.52       1.55       1.52       1.53       1.58    
Adjusted efficiency ratio     47.5       48.0       49.9       47.7       53.2    

(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 net interest income, non-interest income, and non-interest expense to pre-tax pre-provision net revenue (non-GAAP) and adjusted pre-tax pre-provision net revenue (non-GAAP):

         
    Three Months Ended  
    June 30, 2021  
Net interest income   $ 93,254    
Non-interest income     29,544    
Total revenues     122,798    
Non-interest expense     54,882    
Pre-tax pre-provision net revenue (non-GAAP) (1)   $ 67,916    
         
Adjustments:        
Net gain on sale of PPP loans     (20,697 )  
Severance     1,875    
Loss on extinguishment of debt     157    
Merger expenses and transaction costs     1,836    
Branch restructuring costs     1,659    
Adjusted pre-tax pre-provision net revenue (non-GAAP) (2)   $ 52,746    

(1) The reported pre-tax pre-provision net revenue is a non-GAAP measure calculated by adding GAAP net interest income and GAAP non-interest loss less GAAP non-interest expense.
(2) The adjusted pre-tax pre-provision net revenue is a non-GAAP measure calculated by adding pre-tax pre-provision net revenue less the net gain on sale of PPP loans, severance, loss on extinguishment of debt, merger expenses and transaction costs, and branch restructuring costs.

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,  
      2021     2021     2020     2021     2020  
Operating expense as a % of average assets - as reported     1.72   %     3.11   %     1.84   %     2.35   %     1.76   %
Loss on extinguishment of debt           (0.06 )           (0.03 )        
Curtailment loss           (0.06 )           (0.03 )        
Severance     (0.06 )           (0.25 )     (0.03 )     (0.13 )  
Merger expenses and transaction costs     (0.06 )     (1.43 )     (0.07 )     (0.68 )     (0.05 )  
Branch restructuring costs     (0.05 )                 (0.03 )        
Amortization of other intangible assets     (0.03 )     (0.01 )           (0.02 )        
Adjusted operating expense as a % of average assets (non-GAAP)     1.52       1.55       1.52       1.53       1.58    

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,  
    2021
  2021
  2020
  2021
  2020  
Efficiency ratio - as reported (non-GAAP) (1)        44.7   %     117.5   %     56.5   %     71.2   %     57.3   %
Non-interest expense - as reported   $ 54,882     $ 82,805     $ 29,346     $ 137,687     $ 55,386    
Less: Severance     (1,875 )           (3,930 )     (1,875 )     (4,000 )  
Less: Merger expenses and transaction costs     (1,836 )     (37,942 )     (1,072 )     (39,778 )     (1,658 )  
Less: Branch restructuring costs     (1,659 )                 (1,659 )        
Less: Loss on extinguishment of debt     (157 )     (1,594 )           (1,751 )        
Less: Curtailment loss           (1,543 )           (1,543 )        
Less: Amortization of other intangible assets     (835 )     (357 )           (1,192 )        
Adjusted non-interest expense (non-GAAP)   $ 48,520     $ 41,369     $ 24,344     $ 89,889     $ 49,728    
Net interest income - as reported   $ 93,254     $ 77,841     $ 43,556     $ 171,095     $ 84,080    
Non-interest income (loss) - as reported   $ 29,544     $ (7,383 )   $ 8,386     $ 22,161     $ 12,622    
Less: Gain on sale of PPP loans     (20,697 )                 (20,697 )        
Less: Net gain on sale of securities and other assets           (710 )     (3,134 )     (710 )     (3,142 )  
Less: Loss on termination of derivatives           16,505             16,505          
Adjusted non-interest income (non-GAAP)   $ 8,847     $ 8,412     $ 5,252     $ 17,259     $ 9,480    
Adjusted total revenues for adjusted efficiency ratio (non-GAAP)   $ 102,101     $ 86,253     $ 48,808     $ 188,354     $ 93,560    
Adjusted efficiency ratio (non-GAAP) (2)     47.5   %     48.0   %     49.9   %     47.7   %     53.2   %

(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 (loss) 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 assets, tangible common equity, and adjusted tangible common book value per share calculation (non-GAAP):

                   
       June 30,      March 31,      June 30,
    2021   2021   2020
Reconciliation of Tangible Assets:                    
Total assets   $ 12,703,685   $ 13,018,628   $ 6,467,521
Less:                  
Goodwill     155,339     155,339     55,638
Other intangible assets     9,792     10,627    
Tangible assets (non-GAAP)   $ 12,538,554   $ 12,852,662   $ 6,411,883
                   
Reconciliation of Adjusted Tangible Common Equity - Consolidated:                  
Total stockholders' equity   $ 1,204,276   $ 1,172,824   $ 681,543
Less:                  
Goodwill     155,339     155,339     55,638
Other intangible assets     9,792     10,627    
Tangible equity (non-GAAP)     1,039,145     1,006,858     625,905
Less:                  
Preferred stock, net     116,569     116,569     116,569
Tangible common equity (non-GAAP)   $ 922,576   $ 890,289   $ 509,336
Add:                  
Unamortized deferred fees on PPP loans, net of tax     1,979     16,901     6,191
Adjusted tangible common equity (non-GAAP)   $ 924,555   $ 907,190   $ 515,527
                   
Common shares outstanding     41,160     41,536     21,442
Tangible common book value per share (non-GAAP)   $ 22.41   $ 21.43   $ 23.75
Adjusted tangible common book value per share (non-GAAP)   $ 22.46   $ 21.84   $ 24.04

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