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Dime Community Bancshares, Inc. Reports Strong Second Quarter 2022 Results With Net Income Available to Common Stockholders Increasing By 12% Versus the Prior Quarter
Source: Nasdaq GlobeNewswire / 29 Jul 2022 05:00:01 America/Chicago
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 
