Bay Street News

Dime Community Bancshares, Inc. Reports Fourth Quarter 2023 Results

Total Deposits Grow By Over $276 Million on a Year-Over-Year Basis; Growth Driven By Deposit Gathering Group Hires

Capital Ratios Continue to Increase and Asset Quality Remains Stable

HAUPPAUGE, N.Y., Jan. 26, 2024 (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 $88.8 million for the year ended December 31, 2023, or $2.29 per diluted common share, compared to net income available to common stockholders of $145.3 million for the year ended December 31, 2022, or $3.73 per diluted common share.

Stuart H. Lubow, President and Chief Executive Officer (“CEO”) of the Company, stated, “Our fourth quarter results were marked by a continued stabilization in our non-interest-bearing deposit base, a continued reduction in the pace of net interest margin compression, a steady build-up in our capital ratios and stable asset quality. As we close the book on 2023, we are pleased with the initial results of a number of initiatives that we undertook during the year. Specifically, we built out our Private and Commercial Bank via the hiring of several productive groups, we added a new Healthcare lending vertical that will help diversify our asset base over time and we upgraded numerous areas of our technology and treasury management capabilities. I would like to thank all of our employees for contributing to these achievements and look forward to continuing to grow our franchise. As we look forward to 2024, we have strategically positioned our balance sheet to benefit from projected Federal Reserve rate cuts.”

For the quarter ended December 31, 2023, net income available to common stockholders was $14.5 million, or $0.37 per diluted common share, compared to $13.2 million, or $0.34 per diluted common share, for the quarter ended September 30, 2023, and $38.2 million, or $0.99 per diluted common share, for the quarter ended December 31, 2022. Fourth quarter 2023 results included $1.0 million of pre-tax expense related to the FDIC special assessment for the recovery of losses related to the closures of Silicon Valley Bank and Signature Bank. Third quarter 2023 results included $8.6 million of pre-tax severance expense. The Company had an elevated effective tax rate in the second half of 2023 of approximately 35%; the tax rate is expected to normalize in 2024 to approximately 27%.

Highlights for the Fourth Quarter of 2023 Included:

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income for the fourth quarter of 2023 was $74.1 million compared to $76.5 million for the third quarter of 2023 and $96.8 million for the fourth quarter of 2022.

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

                     
(Dollars in thousands)   Q4 2023   Q3 2023   Q4 2022  
Net interest income   $ 74,121     $ 76,479   $ 96,804    
Purchase accounting amortization (accretion) on loans (“PAA”)     (55 )     186     (390 )  
Adjusted net interest income excluding PAA on loans (non-GAAP)   $ 74,066     $ 76,665   $ 96,414    
                     
Average interest-earning assets   $ 12,828,060     $ 12,984,061   $ 12,198,905    
                     
NIM(1)     2.29   %   2.34 %   3.15   %
Adjusted NIM excluding PAA on loans (non-GAAP)(2)     2.29   %   2.34 %   3.14   %

_______________________________ 

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

Loan Portfolio

The ending weighted average rate (“WAR”) (1) on the total loan portfolio was 5.29% at December 31, 2023, a 9 basis point increase compared to the ending WAR of 5.20% on the total loan portfolio at September 30, 2023.

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

                                 
    December 31, 2023   September 30, 2023   December 31, 2022  
(Dollars in thousands)   Balance   WAR   Balance   WAR   Balance   WAR  
Loans held for investment balances at period end:                                
Business loans(2)   $ 2,310,379   6.81 % $ 2,271,768   6.72 % $ 2,211,857   6.05 %
One-to-four family residential, including condominium and cooperative apartment     889,236   4.47     892,869   4.39     773,321   3.96  
Multifamily residential and residential mixed-use(3)(4)     4,017,703   4.53     4,102,024   4.45     4,026,826   4.08  
Non-owner-occupied commercial real estate     3,381,842   5.19     3,374,281   5.09     3,317,485   4.68  
Acquisition, development, and construction     168,513   8.71     203,402   8.92     229,663   8.19  
Other loans     5,755   6.75     6,267   6.28     7,679   10.22  
Loans held for investment   $ 10,773,428   5.29 % $ 10,850,611   5.20 % $ 10,566,831   4.76 %

_______________________________ 

(1) Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, adjusted for non-accrual loans, divided by the total balance of loans in the category.
(2) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and Small Business Administration Paycheck Protection Program (“PPP”) loans.
(3) Includes loans underlying multifamily cooperatives.
(4) While the loans within this category are often considered “commercial real estate” in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.

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

       
(Dollars in millions)   Q4 2023   Q3 2023   Q4 2022  
Loan originations   $ 195.9   $ 153.4   $ 638.3  


Deposits and Borrowed Funds

Period end total deposits (including mortgage escrow deposits) at December 31, 2023 were $10.53 billion, compared to $10.64 billion at September 30, 2023 and $10.25 billion at December 31, 2022. CEO Lubow commented, “Despite the impacts of reduced liquidity in the banking system, we were pleased to grow deposits on a year-over-year basis. Hires that we made in the second quarter of 2023 have already generated approximately $333 million of deposits, with 50% of the balances being in non-interest-bearing deposits.”

Total Federal Home Loan Bank advances were $1.31 billion at December 31, 2023 compared to $1.12 billion at September 30, 2023 and $1.13 billion at December 31, 2022.

Non-Interest Income

Non-interest income was $8.9 million during the fourth quarter of 2023, $7.9 million during the third quarter of 2023, and $9.5 million during the fourth quarter of 2022.

Non-Interest Expense

Total non-interest expense was $53.9 million during the fourth quarter of 2023, $59.5 million during the third quarter of 2023, and $50.7 million during the fourth quarter of 2022. Excluding the impact of severance expense, the FDIC special assessment, loss on extinguishment of debt, and amortization of other intangible assets, adjusted non-interest expense was $52.6 million during the fourth quarter of 2023, $50.6 million during the third quarter of 2023, and $50.3 million during the fourth quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The ratio of non-interest expense to average assets was 1.58% during the fourth quarter of 2023, compared to 1.73% during the linked quarter and 1.56% for the fourth quarter of 2022. Excluding the impact of severance expense, the FDIC special assessment, loss on extinguishment of debt, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.54% during the fourth quarter of 2023, compared to 1.48% during the linked quarter and 1.55% for the fourth quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The efficiency ratio was 65.0% during the fourth quarter of 2023, compared to 70.5% during the linked quarter and 47.7% during the fourth quarter of 2022. Excluding the impact of net loss on equity securities, net loss on sale of securities and other assets, severance expense, the FDIC special assessment, loss on extinguishment of debt and amortization of other intangible assets the adjusted efficiency ratio was 63.6% during the fourth quarter of 2023, compared to 59.7% during the linked quarter and 47.3% during the fourth quarter of 2022 (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 2023 was 35.6% compared to 35.1% for the third quarter of 2023, and 27.5% for the fourth quarter of 2022. The tax rate for 2024 is expected to be approximately 27%.

Credit Quality

Non-performing loans were $29.1 million at December 31, 2023 compared to $23.3 million at September 30, 2023 and $34.2 million at December 31, 2022.

A credit loss provision of $3.7 million was recorded during the fourth quarter of 2023, compared to a credit loss provision of $1.8 million during the third quarter of 2023, and a credit loss provision of $335 thousand during the fourth quarter of 2022. The credit loss provision in the fourth quarter of 2023 was primarily associated with provisioning for individually analyzed loans.

Capital Management

The Company’s and the Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements as of December 31, 2023. All of the Company’s and the Bank’s risk-based regulatory capital ratios increased in the fourth quarter of 2023.

Dividends per common share were $0.25 during the fourth and third quarters of 2023, respectively.

Book value per common share was $28.58 at December 31, 2023 compared to $28.03 at September 30, 2023.

Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by the number of shares outstanding) was $24.44 at December 31, 2023 compared to $23.87 at September 30, 2023 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Earnings Call Information

The Company will conduct a conference call at 8:00 a.m. (ET) on Friday, January 26, 2024, during which CEO Lubow will discuss the Company’s fourth quarter 2023 financial performance, with a question-and-answer session to follow.

Participants may access the conference call via webcast using this link: Webcast Link Here. To participate via telephone, please register in advance using this Registration Link. Upon registration, all telephone participants will receive a one-time confirmation email detailing how to join the conference call, including the dial-in number along with a unique PIN that can be used to access the call. All participants are encouraged to dial-in 10 minutes prior to the start time.

A replay of the conference call and webcast will be available on-demand for 12 months.

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 $13.6 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, the cost of funds, 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, public health emergencies, international conflict, inflation, and recessionary pressures, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates and may adversely affect our customers, our financial results and our operations; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; there may be failures or breaches of information technology security systems; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; and litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections entitled “Forward-Looking Statements” and “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and updates set forth in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

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

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
                   
    December 31,   September 30,   December 31,
    2023   2023   2022
Assets:                  
Cash and due from banks   $ 457,547     $ 358,824     $ 169,297  
Securities available-for-sale, at fair value     886,240       869,879       950,587  
Securities held-to-maturity     594,639       600,291       585,798  
Loans held for sale     10,159       3,924        
Loans held for investment, net:                  
Business loans(1)     2,310,379       2,271,768       2,211,857  
One-to-four family and cooperative/condominium apartment     889,236       892,869       773,321  
Multifamily residential and residential mixed-use(2)(3)     4,017,703       4,102,024       4,026,826  
Non-owner-occupied commercial real estate     3,381,842       3,374,281       3,317,485  
Acquisition, development and construction     168,513       203,402       229,663  
Other loans     5,755       6,267       7,679  
Allowance for credit losses     (71,743 )     (72,563 )     (83,507 )
Total loans held for investment, net     10,701,685       10,778,048       10,483,324  
Premises and fixed assets, net     44,868       45,064       46,749  
Premises held for sale     905       905        
Restricted stock     98,750       90,085       88,745  
Bank Owned Life Insurance (“BOLI”)     349,816       347,400       333,292  
Goodwill     155,797       155,797       155,797  
Other intangible assets     5,059       5,409       6,484  
Operating lease assets     52,729       55,600       57,857  
Derivative assets     122,132       177,369       154,485  
Accrued interest receivable     55,666       53,608       48,561  
Other assets     100,013       109,202       108,945  
Total assets   $ 13,636,005     $ 13,651,405     $ 13,189,921  
Liabilities:                  
Non-interest-bearing checking (excluding mortgage escrow deposits)   $ 2,884,378     $ 2,935,156     $ 3,449,763  
Interest-bearing checking     515,987       630,686       827,454  
Savings (excluding mortgage escrow deposits)     2,335,354       2,309,440       2,259,909  
Money market     3,125,996       3,211,197       2,532,270  
Certificates of deposit     1,607,683       1,442,299       1,115,364  
Deposits (excluding mortgage escrow deposits)     10,469,398       10,528,778       10,184,760  
Non-interest-bearing mortgage escrow deposits     61,121       107,545       69,455  
Interest-bearing mortgage escrow deposits     136       223       192  
Total mortgage escrow deposits     61,257       107,768       69,647  
FHLBNY advances     1,313,000       1,123,000       1,131,000  
Other short-term borrowings                 1,360  
Subordinated debt, net     200,196       200,218       200,283  
Derivative cash collateral     108,100       185,620       153,040  
Operating lease liabilities     55,454       58,281       60,340  
Derivative liabilities     121,265       160,712       137,335  
Other liabilities     81,110       82,684       82,573  
Total liabilities     12,409,780       12,447,061       12,020,338  
Stockholders’ equity:                  
Preferred stock, Series A     116,569       116,569       116,569  
Common stock     416       416       416  
Additional paid-in capital     494,454       494,470       495,410  
Retained earnings     813,007       808,235       762,762  
Accumulated other comprehensive loss (“AOCI”), net of deferred taxes     (91,579 )     (106,913 )     (94,379 )
Unearned equity awards     (8,622 )     (10,170 )     (8,078 )
Treasury stock, at cost     (98,020 )     (98,263 )     (103,117 )
Total stockholders’ equity     1,226,225       1,204,344       1,169,583  
Total liabilities and stockholders’ equity   $ 13,636,005     $ 13,651,405     $ 13,189,921  

_______________________________ 

(1) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
(2) Includes loans underlying multifamily cooperatives.
(3While 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,
    2023   2023   2022   2023   2022
Interest income:                              
Loans   $ 144,744   $ 142,995     $ 120,773   $ 554,488     $ 406,601
Securities     7,918     7,916       7,652     32,179       29,224
Other short-term investments     6,094     6,930       1,444     22,693       3,400
Total interest income     158,756     157,841       129,869     609,360       439,225
Interest expense:                              
Deposits and escrow     66,650     62,507       22,017     219,045       38,433
Borrowed funds     15,617     16,925       9,783     66,472       19,117
Derivative cash collateral     2,368     1,930       1,265     7,272       1,812
Total interest expense     84,635     81,362       33,065     292,789       59,362
Net interest income     74,121     76,479       96,804     316,571       379,863
Provision for credit losses     3,720     1,806       335     2,770       5,374
Net interest income after provision     70,401     74,673       96,469     313,801       374,489
Non-interest income:                              
Service charges and other fees     3,804     3,963       3,945     16,437       16,206
Title fees     466     291       453     1,295       2,031
Loan level derivative income     728     783       1,397     7,081       3,637
BOLI income     2,416     2,317       2,187     9,748       10,346
Gain on sale of SBA loans     531     335       621     1,592       1,797
Gain on sale of residential loans     12     21       55     115       448
Net gain (loss) on equity securities     321     (299 )         (758 )    
Net (loss) gain on sale of securities and other assets         (22 )         (1,469 )     1,397
Other     594     539       809     2,165       2,294
Total non-interest income     8,872     7,928       9,467     36,206       38,156
Non-interest expense:                              
Salaries and employee benefits     30,383     30,520       31,632     117,437       120,108
Severance     25     8,562       5     9,093       2,198
Occupancy and equipment     7,261     7,277       7,356     29,055       30,220
Data processing costs     3,730     4,309       4,023     16,474       15,175
Marketing     1,765     2,079       1,559     6,781       5,900
Professional services     1,279     1,277       1,831     6,155       8,069
Federal deposit insurance premiums(1)     3,240     1,866       800     8,853       3,900
Loss on extinguishment of debt                         740
Amortization of other intangible assets     350     349       431     1,425       1,878
Other     5,911     3,284       3,065     17,855       12,542
Total non-interest expense     53,944     59,523       50,702     213,128       200,730
Income before taxes     25,329     23,078       55,234     136,879       211,915
Income tax expense     9,021     8,093       15,175     40,785       59,359
Net income     16,308     14,985       40,059     96,094       152,556
Preferred stock dividends     1,821     1,822       1,821     7,286       7,286
Net income available to common stockholders   $ 14,487   $ 13,163     $ 38,238   $ 88,808     $ 145,270
Earnings per common share (“EPS”):                              
Basic   $ 0.37   $ 0.34     $ 0.99   $ 2.29     $ 3.73
Diluted   $ 0.37   $ 0.34     $ 0.99   $ 2.29     $ 3.73
                               
Average common shares outstanding for diluted EPS     38,216,476     38,203,961       38,123,221     38,187,477       38,538,834

_______________________________ 

(1) Fourth quarter of 2023 included $1.0 million of pre-tax expense related to the FDIC special assessment for the recovery of losses related to the closures of Silicon Valley Bank and Signature Bank.

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,   
    2023   2023   2022   2023   2022  
Per Share Data:                                     
Reported EPS (Diluted)   $ 0.37   $ 0.34   $ 0.99   $ 2.29   $ 3.73  
Cash dividends paid per common share     0.25     0.25     0.24     0.99     0.96  
Book value per common share     28.58     28.03     27.30     28.58     27.30  
Tangible common book value per share (1)     24.44     23.87     23.09     24.44     23.09  
Common shares outstanding     38,823     38,811     38,573     38,823     38,573  
Dividend payout ratio     67.57 %     73.53 %     24.24 %     43.23 %     25.74 %
                                 
Performance Ratios (Based upon Reported Net Income):                                     
Return on average assets     0.48 %     0.44 %     1.23 %     0.71 %     1.22 %
Return on average equity     5.32     4.91     13.72     7.91     13.05  
Return on average tangible common equity (1)     6.20     5.69     17.34     9.59     16.49  
Net interest margin     2.29     2.34     3.15     2.46     3.25  
Non-interest expense to average assets     1.58     1.73     1.56     1.56     1.61  
Efficiency ratio     65.0     70.5     47.7     60.4     48.0  
Effective tax rate     35.62     35.07     27.47     29.80     28.01  
                                 
Balance Sheet Data:                                     
Average assets   $ 13,630,096   $ 13,759,493   $ 12,985,203   $ 13,625,215   $ 12,466,762  
Average interest-earning assets     12,828,060     12,984,061     12,198,905     12,847,238     11,684,501  
Average tangible common equity (1)     948,024     943,805     888,973     936,840     889,026  
Loan-to-deposit ratio at end of period (2)     102.3     102.0     103.0     102.3     103.0  
                                 
Capital Ratios and Reserves – Consolidated: (3)                                     
Tangible common equity to tangible assets (1)     7.04 %     6.87 %     6.84 %              
Tangible equity to tangible assets (1)     7.91     7.73     7.73              
Tier 1 common equity ratio     9.84     9.67     9.15              
Tier 1 risk-based capital ratio     10.94     10.76     10.23              
Total risk-based capital ratio     13.54     13.33     12.89              
Tier 1 leverage ratio     8.51     8.38     8.53              
Consolidated CRE concentration ratio (4)     538     547     554              
Allowance for credit losses/ Total loans     0.67     0.67     0.79              
Allowance for credit losses/ Non-performing loans     246.55     311.16     243.91              

_______________________________ 

(1) See “Non-GAAP Reconciliation” tables for reconciliation of tangible equity, tangible common equity, and tangible assets.
(2) Total deposits include mortgage escrow deposits, which fluctuate seasonally.
(3) December 31, 2023 ratios are preliminary pending completion and filing of the Company’s regulatory reports.
(4The Consolidated CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner-occupied commercial real estate, multifamily, and acquisition, development, and construction, divided by consolidated capital. December 31, 2023 is 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, 2023   September 30, 2023   December 31, 2022  
                Average               Average               Average  
    Average         Yield/   Average         Yield/   Average         Yield/  
    Balance   Interest   Cost   Balance   Interest   Cost   Balance   Interest   Cost  
Assets:                                                  
Interest-earning assets:                                                  
Business loans(1)   $ 2,264,401   $ 38,740   6.79 % $ 2,260,203   $ 38,384   6.74 % $ 2,070,440   $ 30,387   5.82 %
One-to-four family residential, including condo and coop     893,008     9,706   4.31     879,688     9,165   4.13     750,849     6,892   3.64  
Multifamily residential and residential mixed-use     4,070,327     46,715   4.55     4,114,476     46,099   4.45     3,998,478     40,658   4.03  
Non-owner-occupied commercial real estate     3,376,581     45,037   5.29     3,382,927     44,184   5.18     3,263,917     37,769   4.59  
Acquisition, development, and construction     188,022     4,459   9.41     222,039     5,075   9.07     243,512     4,942   8.05  
Other loans     5,837     87   5.91     6,156     88   5.67     8,269     125   6.00  
Securities     1,599,724     7,918   1.96     1,619,960     7,916   1.94     1,663,969     7,652   1.82  
Other short-term investments     430,160     6,094   5.62     498,612     6,930   5.51     199,471     1,444   2.87  
Total interest-earning assets     12,828,060     158,756   4.91 %   12,984,061     157,841   4.82 %   12,198,905     129,869   4.22 %
Non-interest-earning assets     802,036               775,432               786,298            
Total assets   $ 13,630,096             $ 13,759,493             $ 12,985,203            
                                                   
Liabilities and Stockholders’ Equity:                                                  
Interest-bearing liabilities:                                                  
Interest-bearing checking(2)   $ 524,573   $ 1,063   0.80 % $ 786,892   $ 2,896   1.46 % $ 845,530   $ 1,174   0.55 %
Money market     3,136,891     27,541   3.48     2,975,267     24,275   3.24     2,469,177     6,620   1.06  
Savings(2)     2,295,882     20,979   3.63     2,342,424     20,316   3.44     2,234,968     9,889   1.76  
Certificates of deposit     1,564,817     17,067   4.33     1,494,491     15,020   3.99     1,063,053     4,334   1.62  
Total interest-bearing deposits     7,522,163     66,650   3.52     7,599,074     62,507   3.26     6,612,728     22,017   1.32  
FHLBNY advances     1,174,848     13,064   4.41     1,250,717     14,370   4.56     724,902     6,383   3.49  
Subordinated debt, net     200,210     2,553   5.06     200,232     2,553   5.06     200,298     2,553   5.06  
Other short-term borrowings               120     2   6.61     90,275     847   3.72  
Total borrowings     1,375,058     15,617   4.51     1,451,069     16,925   4.63     1,015,475     9,783   3.82  
Derivative cash collateral     161,535     2,368   5.82     156,795     1,930   4.88     157,898     1,265   3.18  
Total interest-bearing liabilities     9,058,756     84,635   3.71 %   9,206,938     81,362   3.51 %   7,786,101     33,065   1.68 %
Non-interest-bearing checking(2)     3,059,289               3,065,186               3,755,395            
Other non-interest-bearing liabilities     286,373               265,559               275,636            
Total liabilities     12,404,418               12,537,683               11,817,132            
Stockholders’ equity     1,225,678               1,221,810               1,168,071            
Total liabilities and stockholders’ equity   $ 13,630,096             $ 13,759,493             $ 12,985,203            
Net interest income         $ 74,121             $ 76,479             $ 96,804      
Net interest rate spread               1.20 %             1.31 %             2.54 %
Net interest margin               2.29 %             2.34 %             3.15 %
Deposits (including non-interest-bearing checking accounts)(2)   $ 10,581,452   $ 66,650   2.50 % $ 10,664,260   $ 62,507   2.33 % $ 10,368,123   $ 22,017   0.84 %

_______________________________ 

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

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS
(Dollars in thousands)
       At or For the Three Months Ended
    December 31,       September 30,       December 31, 
Asset Quality Detail   2023    2023    2022 
Non-performing loans (“NPLs”)                     
Business loans (1)   $ 18,574     $ 19,555     $ 27,787  
One-to-four family residential, including condominium and cooperative apartment     3,248       2,874       3,203  
Multifamily residential and residential mixed-use                  
Non-owner-occupied commercial real estate     6,620       15       2,491  
Acquisition, development, and construction     657       657       657  
Other loans           219       99  
Total Non-accrual loans   $ 29,099     $ 23,320     $ 34,237  
Total Non-performing assets (“NPAs”)   $ 29,099     $ 23,320     $ 34,237  
                   
Loans 90 days delinquent and accruing (“90+ Delinquent”)                     
Business loans   $     $     $  
One-to-four family residential, including condominium and cooperative apartment                  
Multifamily residential and residential mixed-use                  
Non-owner-occupied commercial real estate                  
Acquisition, development, and construction                  
Other loans                  
90+ Delinquent   $     $     $  
                   
NPAs and 90+ Delinquent   $ 29,099     $ 23,320     $ 34,237  
                   
NPAs and 90+ Delinquent / Total assets     0.21 %     0.17 %     0.26 %
Net charge-offs (“NCOs”)   $ 4,555     $ 4,864     $ 185  
NCOs / Average loans (2)     0.17 %     0.18 %     0.01 %

_______________________________ 

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


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION
(Dollars in thousands except per share amounts)

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

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

                                 
    Three Months Ended   Year Ended  
    December 31,   September 30,   December 31,   December 31,   December 31,  
    2023   2023   2022   2023   2022  
Reconciliation of Reported and Adjusted (non-GAAP) Net Income Available to Common Stockholders                                
Reported net income available to common stockholders   $ 14,487     $ 13,163     $ 38,238   $ 88,808     $ 145,270    
Adjustments to net income(1):                                
Net (gain) loss on equity securities     (321 )     299           758          
Net loss (gain) on sale of securities and other assets           22           1,469       (1,397 )  
Severance     25       8,562       5     9,093       2,198    
FDIC special assessment     999                 999          
Loss on extinguishment of debt                           740    
Income tax effect of adjustments     (208 )     (176 )         (1,193 )     145    
Adjusted net income available to common stockholders (non-GAAP)   $ 14,982     $ 21,870     $ 38,243   $ 99,934     $ 146,956    
                                 
Adjusted Ratios (Based upon Adjusted (non-GAAP) Net Income as calculated above)                                
Adjusted EPS (Diluted)   $ 0.39     $ 0.56     $ 0.99   $ 2.58     $ 3.77    
Adjusted return on average assets     0.49   %   0.69   %   1.23 %   0.79   %   1.24   %
Adjusted return on average equity     5.48       7.76       13.72     8.82       13.20    
Adjusted return on average tangible common equity     6.41       9.38       17.34     10.77       16.67    
Adjusted non-interest expense to average assets     1.54       1.48       1.55     1.48       1.57    
Adjusted efficiency ratio     63.6       59.7       47.3     56.8       47.0    

_______________________________ 

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

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

                                 
      Three Months Ended     Year Ended
      December 31,     September 30,     December 31,     December 31,     December 31,  
      2023     2023     2022     2023     2022  
Operating expense as a % of average assets – as reported     1.58   %   1.73   %   1.56   %   1.56   %   1.61   %
Loss on extinguishment of debt                             (0.01 )  
Severance           (0.25 )           (0.06 )     (0.02 )  
FDIC special assessment     (0.03 )                 (0.01 )        
Amortization of other intangible assets     (0.01 )           (0.01 )     (0.01 )     (0.01 )  
Adjusted operating expense as a % of average assets (non-GAAP)     1.54   %   1.48   %   1.55   %   1.48   %   1.57   %

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,  
    2023   2023   2022   2023     2022  
Efficiency ratio – as reported (non-GAAP)(1)     65.0   %   70.5   %   47.7   %   60.4   %   48.0   %
Non-interest expense – as reported   $ 53,944     $ 59,523     $ 50,702     $ 213,128     $ 200,730    
Severance     (25 )     (8,562 )     (5 )     (9,093 )     (2,198 )  
FDIC special assessment     (999 )                 (999 )        
Loss on extinguishment of debt                             (740 )  
Amortization of other intangible assets     (350 )     (349 )     (431 )     (1,425 )     (1,878 )  
Adjusted non-interest expense (non-GAAP)   $ 52,570     $ 50,612     $ 50,266     $ 201,611     $ 195,914    
Net interest income – as reported   $ 74,121     $ 76,479     $ 96,804     $ 316,571     $ 379,863    
Non-interest income – as reported   $ 8,872     $ 7,928     $ 9,467     $ 36,206     $ 38,156    
Net (gain) loss on equity securities     (321 )     299             758          
Net loss (gain) on sale of securities and other assets           22             1,469       (1,397 )  
Adjusted non-interest income (non-GAAP)   $ 8,551     $ 8,249     $ 9,467     $ 38,433     $ 36,759    
Adjusted total revenues for adjusted efficiency ratio (non-GAAP)   $ 82,672     $ 84,728     $ 106,271     $ 355,004     $ 416,622    
Adjusted efficiency ratio (non-GAAP)(2)     63.6   %   59.7   %   47.3   %   56.8   %   47.0   %

_______________________________

(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,  
    2023   2023   2022  
Reconciliation of Tangible Assets:                    
Total assets   $ 13,636,005     $ 13,651,405     $ 13,189,921    
Goodwill     (155,797 )     (155,797 )     (155,797 )  
Other intangible assets     (5,059 )     (5,409 )     (6,484 )  
Tangible assets (non-GAAP)   $ 13,475,149     $ 13,490,199     $ 13,027,640    
                     
Reconciliation of Tangible Common Equity – Consolidated:                    
Total stockholders’ equity   $ 1,226,225     $ 1,204,344     $ 1,169,583    
Goodwill     (155,797 )     (155,797 )     (155,797 )  
Other intangible assets     (5,059 )     (5,409 )     (6,484 )  
Tangible equity (non-GAAP)     1,065,369       1,043,138       1,007,302    
Preferred stock, net     (116,569 )     (116,569 )     (116,569 )  
Tangible common equity (non-GAAP)   $ 948,800     $ 926,569     $ 890,733    
                     
Common shares outstanding     38,823       38,811       38,573    
                     
Tangible common equity to tangible assets (non-GAAP)     7.04   %   6.87   %   6.84   %
Tangible equity to tangible assets (non-GAAP)     7.91       7.73       7.73    
                     
Book value per common share   $ 28.58     $ 28.03     $ 27.30    
Tangible common book value per share (non-GAAP)     24.44       23.87       23.09    


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