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

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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