Dime Community Bancshares, Inc. Reports Strong Second
Dime Community Bancshares, Inc. Reports Strong Second

Robust Quarterly Loan Originations of $902 Million Drive Broad-Based Loan Growth Across All Major Loan Categories

Net Interest Margin Expands by 10 Basis Points Versus the Prior Quarter

HAUPPAUGE, N.Y., July 29, 2022 (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 $36.7 million for the quarter ended June 30, 2022, or $0.94 per diluted common share, compared to $32.7 million, or $0.82 per diluted common share, for the quarter ended March 31, 2022, and $49.5 million or $1.19 per diluted common share, for the quarter ended June 30, 2021.

Adjusted net income available to common stockholders (non-GAAP) totaled $39.3 million for the quarter ended June 30, 2022, or $1.01 per diluted share. Adjusted net income available to common stockholders for the quarter ended June 30, 2022 included $2.9 million of aggregate pre-tax adjustments related to loss on extinguishment of debt and severance expense (see “Non-GAAP Reconciliation” tables at the end of this news release).

Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “During the second quarter, we experienced record core loan growth of over $400 million driven by robust originations. The high level of non-interest-bearing deposits on our balance sheet allowed us to keep our deposit costs at low levels, and contributed to net interest margin expansion. In addition, we saw a rebound in non-interest income as customer-related loan swap revenue picked up. We continue to prioritize prudent expense management as demonstrated by a core efficiency ratio of 48% on a year-to-date basis.”

“In addition to producing strong financial returns with year-to-date return on assets of approximately 1.2%, I am extremely proud of our employee base for their unwavering focus on being the premier community-based business bank on Greater Long Island. In this regard, I am extremely proud that we recently received an overall Outstanding Community Reinvestment Act (“CRA”) rating from the Federal Reserve Bank of New York.”

Highlights for the Second Quarter of 2022 Included:

  • Total loans held for investment, net, excluding Paycheck Protection Program (“PPP”) loans, increased by 18% on an annualized basis versus the linked quarter;
  • The net interest margin expanded by 10 basis points versus the linked quarter;
  • The cost of deposits remained well-controlled, increasing by only 5 basis points versus the linked quarter;
  • Non-interest income increased to $12.1 million in the second quarter, compared to $7.2 million for the first quarter. The increase in non-interest income was due to an increase in customer-related loan swap income, SBA gain on sale revenue and BOLI income;
  • Credit quality continues to be strong with non-performing assets and loans 90 days past due and accruing remaining stable and representing only 0.30% of total assets as of June 30, 2022;
  • The Company repurchased 717,644 shares of its common stock, which represented approximately 1.8% of shares outstanding at the beginning of the period, at a weighted average price of $31.91 per share; and
  • The Company completed an issuance of $160.0 million of fixed-to-floating rate subordinated notes in the second quarter. Proceeds were used to redeem two legacy tranches of subordinated debt totaling $155.0 million.

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income for the second quarter of 2022 was $93.5 million compared to $89.1 million for the first quarter of 2022 and $93.3 million for the second quarter of 2021.

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

                     
(Dollars in thousands)      Q2 2022      Q1 2022      Q2 2021  
Net interest income   $ 93,512   $ 89,109   $ 93,254  
Less: Purchase accounting accretion on loans (“PAA”)     117     (50)     (1,925)  
Adjusted net interest income excluding PAA on loans (non-GAAP)   $ 93,629   $ 89,059   $ 91,329  
                     
Average interest-earning assets   $ 11,412,350   $ 11,333,805   $ 11,990,108  
                     
NIM (1)     3.29 %     3.19 %     3.12 %
Adjusted NIM excluding PAA on loans (non-GAAP) (2)     3.29 %     3.19 %     3.06 %
                     
(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 3.94% at June 30, 2022, an 18 basis point increase compared to the ending WAR on the total loan portfolio at March 31, 2022. Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.95% at June 30, 2022, compared to 3.77% at March 31, 2022.

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

                                 
    June 30, 2022   March 31, 2022   June 30, 2021  
($ in thousands)      Balance      WAR      Balance      WAR      Balance      WAR  
Loans held for investment balances at period end:                                      
Commercial and industrial (“C&I”)   $ 941,944   4.97 %   $ 888,056   4.19 %   $ 878,331   4.15 %
Owner-occupied commercial real estate     1,043,184   4.20     1,016,804   4.04     983,618   4.24  
Business loans     1,985,128   4.57     1,904,860   4.11     1,861,949   4.20  
One-to-four family residential, including condominium and cooperative apartment     691,586   3.60     669,099   3.53     704,489   3.73  
Multifamily residential and residential mixed-use (2)(3)     3,654,164   3.62     3,371,267   3.56     3,503,205   3.59  
Non-owner-occupied commercial real estate     3,048,188   3.89     2,930,114   3.73     2,699,082   3.69  
Acquisition, development, and construction     252,108   5.41     329,349   4.63     290,462   4.73  
Other loans     10,789   7.16     12,207   6.52     21,906   4.98  
Loans held for investment, excluding PPP loans     9,641,963   3.95     9,216,896   3.77     9,081,093   3.79  
PPP loans     18,944   1.00     32,953   1.00     465,538   1.00  
Total loans held for investment, including PPP loans   $ 9,660,907   3.94 %   $ 9,249,849   3.76 %   $ 9,546,631   3.66 %
                                 
(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, excluding PPP loans, for the quarter ended as indicated.

                     
       
($ in millions)      Q2 2022      Q1 2022      Q2 2021  
Loan originations, excluding PPP loans   $ 901.5   $ 480.4   $ 418.5  
                     

Deposits

Total deposits increased by $135.9 million on a linked quarter basis to $10.57 billion at June 30, 2022. The cost of deposits increased by 5 basis points on a linked quarter basis. CEO O’Connor stated, “Managing our cost of funds appropriately in the current rising rate environment is a firm-wide focus. Importantly, average non-interest-bearing deposits for the second quarter were up $283.3 million on a year-over-year basis to $3.94 billion.”

Non-Interest Income

Non-interest income was $12.1 million during the second quarter of 2022, $7.2 million during the first quarter of 2022, and $29.5 million during the second quarter of 2021. Included in non-interest income for the second quarter of 2022 was $2.2 million of income related to mortality proceeds from a death claim. Excluding a $20.7 million gain on sale of PPP loans during the second quarter of 2021, adjusted non-interest income was $8.8 million during the second quarter of 2021 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Non-Interest Expense

Total non-interest expense was $51.8 million during the second quarter of 2022, $49.9 million during the first quarter of 2022, and $54.9 million during the second quarter of 2021. Excluding the impact of loss on extinguishment of debt, severance expense, and amortization of other intangible assets, adjusted non-interest expense was $48.5 million during the second quarter of 2022. Excluding the impact of amortization of other intangible assets, adjusted non-interest expense was $49.3 million during the first quarter of 2022. 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 $48.5 million during the second 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 1.71% during the second quarter of 2022, compared to 1.64% during the linked quarter and 1.72% for the second 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 1.60% during the second quarter of 2022, compared to 1.62% during the linked quarter and 1.52% for the second quarter of 2021 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The efficiency ratio was 49.1% during the second quarter of 2022, compared to 51.8% during the linked quarter and 44.7% during the second 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 PPP loans, the adjusted efficiency ratio was 45.9% during the second quarter of 2022, compared to 51.2% during the linked quarter and 47.5% during the second 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 second quarter of 2022 was 28.4%, compared to 28.1% for the first quarter of 2022, and 28.9% for the second quarter of 2021.

Credit Quality

Non-performing loans at June 30, 2022 were $36.3 million, or 0.38% of total loans.

A credit loss provision of $44 thousand was recorded during the second quarter of 2022, compared to a credit loss recovery of $1.6 million during the first quarter of 2022, and a credit loss recovery of $4.2 million during the second quarter of 2021. The credit loss provision was associated with growth in the loan portfolio offset by a reduction in reserves on the existing loan portfolio.

The allowance for credit losses as a percentage of total loans was 0.82% at June 30, 2022 as compared to 0.86% at March 31, 2022 and 0.97% at June 30, 2021.

Capital Management

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

CEO O’Connor commented, “During the second quarter, we continued to execute on our share repurchase program and we repurchased $22.9 million of common stock. Our regulatory capital ratios, which exclude the impact of accumulated other comprehensive loss component of stockholders’ equity, continue to be very strong. Our strong balance sheet and internal stress testing analyses continue to provide support for future capital return to shareholders.”

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

Book value per common share was $26.41 at June 30, 2022 compared to $26.32 at March 31, 2022. Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by number of shares outstanding) was $22.20 at June 30, 2022 compared to $22.18 at March 31, 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 July 29, 2022, during which CEO O’Connor will discuss the Company’s second 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/191814872.

Conference Call Details:

Dial-in for Live Call:    
   
United States: 1-844-200-6205
International: +1-929-526-1599
Access code: 414481
   
Telephone Replay:  
   
A recording will be available until Friday, August 12, 2022.  
   
United States: 1-866-813-9403
International: +44-204-525-0658
Access code:  280675
   

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 $12.3 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 reduce interest margins; 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 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; 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)

                   
       June 30,       March 31,       December 31, 
    2022   2022    2021 
Assets:                     
Cash and due from banks   $ 281,487     $ 432,994     $ 393,722  
Securities available-for-sale, at fair value     1,007,757       1,277,036       1,563,711  
Securities held-to-maturity     579,965       383,922       179,309  
Loans held for sale     530       17,053       5,493  
Loans held for investment, net:                     
C&I     941,944       888,056       867,542  
Owner-occupied commercial real estate     1,043,184       1,016,804       1,030,240  
Total business loans     1,985,128       1,904,860       1,897,782  
One-to-four family and cooperative/condominium apartment     691,586       669,099       669,282  
Multifamily residential and residential mixed-use (1)(2)     3,654,164       3,371,267       3,356,346  
Non-owner-occupied commercial real estate     3,048,188       2,930,114       2,915,708  
Acquisition, development, and construction     252,108       329,349       322,628  
Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans     18,944       32,953       66,017  
Other loans     10,789       12,207       16,898  
Allowance for credit losses     (79,426 )     (79,615 )     (83,853 )
Total loans held for investment, net     9,581,481       9,170,234       9,160,808  
Premises and fixed assets, net     48,686       49,940       50,368  
Premises held for sale     556       556       556  
Restricted stock     42,110       38,898       37,732  
Bank Owned Life Insurance (“BOLI”)     328,928       297,628       295,789  
Goodwill     155,797       155,797       155,797  
Other intangible assets     7,346       7,776       8,362  
Operating lease assets     59,511       61,467       64,258  
Derivative assets     106,917       71,826       45,086  
Accrued interest receivable     38,382       38,456       40,149  
Other assets     107,632       74,662       65,224  
Total assets   $ 12,347,085     $ 12,078,245     $ 12,066,364  
Liabilities:                     
Non-interest-bearing checking   $ 3,839,724     $ 3,953,627     $ 3,920,423  
Interest-bearing checking     870,974       902,360       905,717  
Savings     2,011,609       1,376,092       1,158,040  
Money market     2,884,382       3,416,249       3,621,552  
Certificates of deposit     959,312       781,775       853,242  
Total deposits     10,566,001       10,430,103       10,458,974  
FHLBNY advances     100,000       50,000       25,000  
Other short-term borrowings     2,162       2,853       1,862  
Subordinated debt, net     200,327       197,050       197,096  
Derivative cash collateral     115,790       64,450       4,550  
Operating lease liabilities     61,850       63,600       66,103  
Derivative liabilities     93,420       60,586       40,728  
Other liabilities     67,013       54,316       79,431  
Total liabilities     11,206,563       10,922,958       10,873,744  
Stockholders’ equity:                     
Preferred stock, Series A     116,569       116,569       116,569  
Common stock     416       416       416  
Additional paid-in capital     495,266       494,969       494,125  
Retained earnings     705,371       677,990       654,726  
Accumulated other comprehensive loss, net of deferred taxes     (69,950 )     (49,380 )     (6,181 )
Unearned equity awards     (10,260 )     (10,562 )     (7,842 )
Treasury stock, at cost     (96,890 )     (74,715 )     (59,193 )
Total stockholders’ equity     1,140,522       1,155,287       1,192,620  
Total liabilities and stockholders’ equity   $ 12,347,085     $ 12,078,245     $ 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   Six Months Ended
       June 30,       March 31,       June 30,       June 30,       June 30, 
    2022   2022   2021    2022    2021
Interest income:                                   
Loans   $ 93,102   $ 86,420     $ 94,288     $ 179,522     $ 175,670  
Securities     7,067     7,131       5,127       14,198       9,507  
Other short-term investments     741     368       986       1,109       1,979  
Total interest income     100,910     93,919       100,401       194,829       187,156  
Interest expense:                                  
Deposits and escrow     3,731     2,531       4,803       6,262       10,101  
Borrowed funds     3,573     2,278       2,344       5,851       5,960  
Derivative cash collateral     94     1             95        
Total interest expense     7,398     4,810       7,147       12,208       16,061  
Net interest income     93,512     89,109       93,254       182,621       171,095  
Provision (credit) for credit losses     44     (1,592 )     (4,248 )     (1,548 )     11,531  
Net interest income after provision (credit)     93,468     90,701       97,502       184,169       159,564  
Non-interest income:                                  
Service charges and other fees     4,337     4,058       3,876       8,395       6,796  
Title fees     683     421       688       1,104       1,121  
Loan level derivative income     1,685     6       559       1,691       2,351  
BOLI income     4,143     1,839       1,593       5,982       2,932  
Gain on sale of SBA loans     723     242       973       965       1,137  
Gain on sale of PPP loans               20,697             20,697  
Gain on sale of residential loans     191     148       506       339       1,229  
Net gain on equity securities                           131  
Net gain on sale of securities and other assets               20             730  
Loss on termination of derivatives                           (16,505 )
Other     362     489       632       851       1,542  
Total non-interest income     12,124     7,203       29,544       19,327       22,161  
Non-interest expense:                                 
Salaries and employee benefits     28,454     30,834       27,598       59,288       52,417  
Severance     2,193           1,875       2,193       1,875  
Occupancy and equipment     7,396     7,584       8,122       14,980       15,099  
Data processing costs     3,913     3,805       5,031       7,718       8,559  
Marketing     1,515     1,295       788       2,810       1,648  
Professional services     2,028     2,094       2,538       4,122       4,403  
Federal deposit insurance premiums     1,150     1,150       934       2,300       1,873  
Loss on extinguishment of debt     740           157       740       1,751  
Curtailment loss                           1,543  
Merger expenses and transaction costs               1,836             39,778  
Branch restructuring               1,659             1,659  
Amortization of other intangible assets     430     586       835       1,016       1,192  
Other     4,019     2,540       3,509       6,559       5,890  
Total non-interest expense     51,838     49,888       54,882       101,726       137,687  
Income before taxes     53,754     48,016       72,164       101,770       44,038  
Income tax expense     15,269     13,485       20,886       28,754       13,794  
Net income     38,485     34,531       51,278       73,016       30,244  
Preferred stock dividends     1,822     1,821       1,822       3,643       3,643  
Net income available to common stockholders   $ 36,663   $ 32,710     $ 49,456     $ 69,373     $ 26,601  
Earnings per common share (“EPS”):                                   
Basic   $ 0.94   $ 0.82     $ 1.19     $ 1.76     $ 0.70  
Diluted   $ 0.94   $ 0.82     $ 1.19     $ 1.76     $ 0.70  
                               
Average common shares outstanding for diluted EPS     38,631,683     39,251,246       40,981,585       38,939,753       37,640,404  
                                       

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,   
    2022   2022   2021   2022   2021  
Per Share Data:                                     
Reported EPS (Diluted)   $ 0.94   $ 0.82   $ 1.19   $ 1.76   $ 0.70  
Cash dividends paid per common share     0.24     0.24     0.24     0.48     0.48  
Book value per common share     26.41     26.32     26.43     26.41     26.43  
Tangible common book value per share (1)     22.20     22.18     22.41     22.20     22.41  
Common shares outstanding     38,769     39,460     41,160     38,769     41,160  
Dividend payout ratio     25.53 %     29.27 %     20.17 %     27.27 %     68.57 %
                                 
Performance Ratios (Based upon Reported Net Income):                                     
Return on average assets     1.27 %     1.13 %     1.61 %     1.20 %     0.45 %
Return on average equity     13.44     11.53     17.22     12.47     4.79  
Return on average tangible common equity (1)     17.08     14.44     22.02     15.73     6.49  
Net interest margin     3.29     3.19     3.12     3.24     3.13  
Non-interest expense to average assets     1.71     1.64     1.72     1.67     2.35  
Efficiency ratio     49.1     51.8     44.7     50.4     71.2  
Effective tax rate     28.41     28.08     28.94     28.25     31.32  
                                 
Balance Sheet Data:                                     
Average assets   $ 12,121,949   $ 12,199,721   $ 12,756,959   $ 12,160,620   $ 11,717,336  
Average interest-earning assets     11,412,350     11,333,805     11,990,108     11,373,294     11,029,192  
Average tangible common equity (1)     865,329     916,971     908,747     891,007     845,298  
Loan-to-deposit ratio at end of period     91.4     88.7     86.3     91.4     86.3  
                                 
Capital Ratios and Reserves – Consolidated: (3)                                     
Tangible common equity to tangible assets (1)     7.07 %     7.35 %     7.36 %              
Tangible equity to tangible assets (1)     8.02     8.32     8.29              
Tier 1 common equity ratio     9.28     9.56     10.06              
Tier 1 risk-based capital ratio     10.44     10.76     11.34              
Total risk-based capital ratio     13.26     13.48     14.45              
Tier 1 leverage ratio     8.71     8.65     8.24              
CRE consolidated concentration ratio (2)     534     519     506              
Allowance for credit losses/ Total loans     0.82     0.86     0.97              
Allowance for credit losses/ Non-performing loans     218.80     221.39     327.94              
                                 
(1)    See “Non-GAAP Reconciliation” tables for reconciliation of tangible equity, tangible common equity, and tangible assets.
(2)    The CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner-occupied commercial real estate, multifamily, and acquisition, development, and construction, divided by consolidated capital. June 30, 2022 amounts are preliminary pending completion and filing of the Company’s regulatory reports.
(3)   June 30, 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  
    June 30, 2022   March 31, 2022   June 30, 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   $ 8,532,979   $ 81,454   3.83 %   $ 8,296,732   $ 76,437   3.74 %   $ 8,208,378   $ 75,083   3.67 %
Commercial and industrial loans     935,813     11,503   4.93     916,090     9,786   4.33     2,163,837     18,805   3.49  
Other loans     11,571     145   5.03     15,658     197   5.10     23,147     400   6.93  
Securities     1,695,702     7,067   1.67     1,726,189     7,131   1.68     1,137,961     5,127   1.81  
Other short-term investments     236,285     741   1.26     379,136     368   0.39     456,785     986   0.87  
Total interest-earning assets     11,412,350     100,910   3.55 %     11,333,805     93,919   3.36 %     11,990,108     100,401   3.36 %
Non-interest-earning assets     709,599                 865,916                766,851             
Total assets   $ 12,121,949               $ 12,199,721              $ 12,756,959             
                                                   
Liabilities and Stockholders’ Equity:                                                         
Interest-bearing liabilities:                                                         
Interest-bearing checking   $ 858,402   $ 604   0.28 %   $ 870,889   $ 367   0.17 %   $ 1,067,043   $ 501   0.19 %
Money market     3,148,472     1,240   0.16     3,632,438     973   0.11     3,712,344     1,941   0.21  
Savings     1,509,776     859   0.23     1,256,701     207   0.07     1,189,460     212   0.07  
Certificates of deposit     827,286     1,028   0.50     824,883     984   0.48     1,421,480     2,149   0.61  
Total interest-bearing deposits     6,343,936     3,731   0.24     6,584,911     2,531   0.16     7,390,327     4,803   0.26  
FHLBNY advances     79,176     172   0.87     33,889     77   0.92     145,324     132   0.36  
Subordinated debt, net     273,470     3,309   4.85     197,080     2,201   4.53     197,218     2,211   4.50  
Other short-term borrowings     54,229     92   0.68     2,459           5,514     1   0.07  
Total borrowings     406,875     3,573   3.52     233,428     2,278   3.96     348,056     2,344   2.70  
Derivative cash collateral     98,995     94   0.38     14,335     1       2,353        
Total interest-bearing liabilities     6,849,806     7,398   0.43 %     6,832,674     4,810   0.29 %     7,740,736     7,147   0.37 %
Non-interest-bearing checking     3,935,765                 3,979,741                 3,652,482              
Other non-interest-bearing liabilities     191,066                 189,843                 172,678              
Total liabilities     10,976,637                 11,002,258                 11,565,896              
Stockholders’ equity     1,145,312                 1,197,463                 1,191,063              
Total liabilities and stockholders’ equity   $ 12,121,949               $ 12,199,721               $ 12,756,959              
Net interest income          $ 93,512               $ 89,109               $ 93,254       
Net interest rate spread                 3.12 %                 3.07 %                 2.99 %
Net interest margin                 3.29 %                 3.19 %                 3.12 %
Deposits (including non-interest-bearing checking accounts)   $ 10,279,701   $ 3,731   0.15 %   $ 10,564,652   $ 2,531   0.10 %   $ 11,042,809   $ 4,803   0.17 %
                                                   

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   2022    2022    2021 
Non-performing loans (“NPLs”) (1)                     
One-to-four family residential, including condominium and cooperative apartment   $ 3,128     $ 5,241     $ 4,933  
Multifamily residential and residential mixed-use                  
Commercial real estate     5,020       4,972       9,152  
Acquisition, development, and construction     657       665        
C&I     27,365       25,000       14,109  
Other     131       84       92  
Total Non-accrual loans   $ 36,301     $ 35,962     $ 28,286  
Total Non-performing assets (“NPAs”)   $ 36,301     $ 35,962     $ 28,286  
                   
Loans 90 days delinquent and accruing (“90+ Delinquent”)                     
One-to-four family residential, including condominium and cooperative apartment   $ 341     $ 341     $ 5,065  
Multifamily residential and residential mixed-use                 157  
Commercial real estate                  
Acquisition, development, and construction                  
C&I     24       839       1,487  
Other                  
90+ Delinquent   $ 365     $ 1,180     $ 6,709  
                   
NPAs and 90+ Delinquent   $ 36,666     $ 37,142     $ 34,995  
                   
NPAs and 90+ Delinquent / Total assets     0.30%       0.31%       0.29%  
Net charge-offs (recoveries) (“NCOs”)   $ 555     $ 2,583     $ 918  
NCOs / Average loans (1)     0.02%       0.11%       0.04%  
                         
(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 merger with Bridge, as well as branch restructuring, gain on sale of PPP loans, severance, and loss on extinguishment of debt:  

                                 
    Three Months Ended   Six Months Ended  
       June 30,       March 31,       June 30,       June 30,    June 30,   
    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   $ 36,663   $ 32,710   $ 49,456   $ 69,373   $ 26,601  
Adjustments to net income (1):                                   
Provision for credit losses – Non-PCD loans (double-count)                     20,278  
Gain on sale of PPP loans             (20,697)         (20,697)  
Net gain on sale of securities and other assets                     (710  
Loss on termination of derivatives                     16,505  
Severance     2,193         1,875     2,193     1,875  
Loss on extinguishment of debt     740         157     740     1,751  
Curtailment loss                     1,543  
Merger expenses and transaction costs (2)             1,836         39,778  
Branch restructuring             1,659         1,659  
Income tax effect of adjustments and other tax adjustments     (295)         4,852     (295)     (16,996)  
Adjusted net income available to common stockholders (non-GAAP)   $ 39,301   $ 32,710   $ 39,138   $ 72,011   $ 71,587  
                                 
Adjusted Ratios (Based upon non-GAAP as calculated above)                                    
Adjusted EPS (Diluted)   $ 1.01   $ 0.82   $ 0.94   $ 1.83   $ 1.88  
Adjusted return on average assets     1.36 %     1.13 %     1.28 %     1.24 %     1.28 %
Adjusted return on average equity     14.36     11.53     13.76     12.92     13.55  
Adjusted return on average tangible common equity     18.30     14.44     17.48     16.32     17.13  
Adjusted non-interest expense to average assets     1.60     1.62     1.52     1.61     1.53  
Adjusted efficiency ratio     45.9     51.2     47.5     48.4     47.7  
                                 
(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     Six Months Ended
         June 30,      March 31,      June 30,      June 30,         June 30,   
      2022      2022      2021      2022      2021   
Operating expense as a % of average assets – as reported     1.71   %     1.64   %     1.72   %     1.67   %     2.35   %
Loss on extinguishment of debt     (0.03 )                 (0.01 )     (0.03 )  
Curtailment loss                             (0.03 )  
Severance     (0.07 )           (0.06 )     (0.03 )     (0.03 )  
Merger expenses and transaction costs                 (0.06 )           (0.68 )  
Branch restructuring                 (0.05 )           (0.03 )  
Amortization of other intangible assets     (0.01 )     (0.02 )     (0.03 )     (0.02 )     (0.02 )  
Adjusted operating expense as a % of average assets (non-GAAP)     1.60       1.62       1.52       1.61       1.53    
                                           

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,   
    2022    2022    2021    2022    2021   
Efficiency ratio – as reported (non-GAAP) (1)        49.1   %     51.8   %     44.7   %     50.4   %     71.2   %
Non-interest expense – as reported   $ 51,838     $ 49,888     $ 54,882     $ 101,726     $ 137,687    
Less: Severance     (2,193 )           (1,875 )     (2,193 )     (1,875 )  
Less: Merger expenses and transaction costs                 (1,836 )           (39,778 )  
Less: Branch restructuring                 (1,659 )           (1,659 )  
Less: Loss on extinguishment of debt     (740 )           (157 )     (740 )     (1,751 )  
Less: Curtailment loss                             (1,543 )  
Less: Amortization of other intangible assets     (430 )     (586 )     (835 )     (1,016 )     (1,192 )  
Adjusted non-interest expense (non-GAAP)   $ 48,475     $ 49,302     $ 48,520     $ 97,777     $ 89,889    
Net interest income – as reported   $ 93,512     $ 89,109     $ 93,254     $ 182,621     $ 171,095    
Non-interest income – as reported   $ 12,124     $ 7,203     $ 29,544     $ 19,327     $ 22,161    
Less: Gain on sale of PPP loans                 (20,697 )           (20,697 )  
Less: Net gain on sale of securities and other assets                             (710 )  
Less: Loss on termination of derivatives                             16,505    
Adjusted non-interest income (non-GAAP)   $ 12,124     $ 7,203     $ 8,847     $ 19,327     $ 17,259    
Adjusted total revenues for adjusted efficiency ratio (non-GAAP)   $ 105,636     $ 96,312     $ 102,101     $ 201,948     $ 188,354    
Adjusted efficiency ratio (non-GAAP) (2)     45.9   %     51.2   %     47.5   %     48.4   %     47.7   %
                                           
(1)  The reported efficiency ratio is a non-GAAP measure calculated by dividing GAAP non-interest expense by the sum of GAAP net interest income and GAAP non-interest income.
(2)  The adjusted efficiency ratio is a non-GAAP measure calculated by dividing adjusted non-interest expense by the sum of GAAP net interest income and adjusted non-interest income.
 

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

                     
       June 30,       March 31,       June 30,   
    2022    2022    2021   
Reconciliation of Tangible Assets:                      
Total assets   $ 12,347,085     $ 12,078,245     $ 12,703,685    
Less:                    
Goodwill     (155,797 )     (155,797 )     (155,339 )  
Other intangible assets     (7,346 )     (7,776 )     (9,792 )  
Tangible assets (non-GAAP)   $ 12,183,942     $ 11,914,672     $ 12,538,554    
                     
Reconciliation of Tangible Common Equity – Consolidated:                    
Total stockholders’ equity   $ 1,140,522     $ 1,155,287     $ 1,204,276    
Less:                    
Goodwill     (155,797 )     (155,797 )     (155,339 )  
Other intangible assets     (7,346 )     (7,776 )     (9,792 )  
Tangible equity (non-GAAP)     977,379       991,714       1,039,145    
Less:                    
Preferred stock, net     (116,569 )     (116,569 )     (116,569 )  
Tangible common equity (non-GAAP)   $ 860,810     $ 875,145     $ 922,576    
                     
Common shares outstanding     38,769       39,460       41,160    
                     
Tangible common equity to tangible assets (non-GAAP)     7.07   %     7.35   %     7.36   %  
Tangible equity to tangible assets (non-GAAP)     8.02       8.32       8.29    
                     
Book value per share   $ 26.41     $ 26.32     $ 26.43    
Tangible common book value per share (non-GAAP)     22.20       22.18       22.41    

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