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

Friday, 30. July 2021 12:00

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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