Dime Community Bancshares Inc.

01/28/2022 | Press release | Distributed by Public on 01/28/2022 06:22

Dime Community Bancshares, Inc. Increases Fourth Quarter Net Income Available to Common Stockholders By 925% Year-Over-Year - Form 8-K

Dime Community Bancshares, Inc. Increases Fourth Quarter Net Income Available to Common Stockholders By 925% Year-Over-Year

Continued Increase in Non-Interest-Bearing Deposits Positions the Company Well for A Rising Interest Rate Scenario

Robust Quarterly Loan Originations in Excess of $500 Million

Hauppauge, NY, January 28, 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 $96.7 million for the year ended December 31, 2021, or $2.45 per diluted common share.

For the quarter ended December 31, 2021, net income available to common stockholders was $33.5 million, or $0.83 per diluted common share, compared to net income available to common stockholders of $3.3 million for the quarter ended December 31, 2020, or $0.16 per diluted common share. Adjusted net income available to common stockholders (non-GAAP)totaled $33.8 million for the quarter ended December 31, 2021, or $0.84 per diluted share. Adjusted net income available to common stockholders includes $0.5 million of aggregate pre-tax adjustments related to merger expenses and transaction costs, branch restructuring, and net gain on sale of securities and other assets (see "Non-GAAP Reconciliation" table at the end of this news release).

​

Kevin M. O'Connor, Chief Executive Officer ("CEO") of the Company, stated, "As we close the book on 2021, we can reflect on a successful year for our Company. We integrated our merger transaction seamlessly and delivered on our financial goals as it relates to return on assets and efficiency. During the fourth quarter of 2021, our loan originations increased to $505 million (representing a linked quarter increase of approximately 9%). In addition, we grew our non-interest-bearing deposits to total deposits ratio to 37.5% and have positioned our balance sheet favorably for a rising rate scenario."

Highlights for the Fourth Quarter of 2021 Included:

● The non-interest-bearing deposits to total deposits ratio increased to 37.5% at December 31, 2021;
● The cost of deposits for the fourth quarter of 2021 declined to 0.11%;
● Total loans held for investment, net, excluding Paycheck Protection Program ("PPP") loans increased by 1% on an annualized basis versus the linked quarter;
● The reported efficiency ratio for the fourth quarter of 2021 was 49.9%; excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, the adjusted efficiency ratio was 48.2%;
● The Company repurchased 850,901 shares of its common stock, which represented approximately 2% of shares outstanding at the beginning of the period, at a weighted average price of $34.44; and
● Non-performing assets represented only 0.33% of total assets as of December 31, 2021.

Management's Discussion of Quarterly Operating Results

The Company's results of operations for the third and fourth quarters of 2021 include income for the full quarter from the merger with Bridge Bancorp, Inc. ("Bridge"). The Company's historical information for the fourth quarter of 2020 does not include the historical GAAP results of Bridge.

​

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Net Interest Income

Net interest income for the fourth quarter of 2021 was $91.7 million compared to $94.8 million for the third quarter of 2021 and $48.7 million for the fourth quarter of 2020.

The table below provides a reconciliation of the reported Net Interest Margin ("NIM"), the adjusted NIM excluding the impact of PPP loans, and the adjusted NIM excluding the combined impact of PPP loans and purchasing accounting accretion on the loan portfolio.

($ in thousands)

Q4 2021

Q3 2021

Q4 2020

Net interest income

$

91,686

$

94,828

$

48,680

Less: Net interest income on PPP loans

(539)

(2,502)

(1,678)

Adjusted net interest income excluding PPP loans, (non-GAAP)

$

91,147

$

92,326

$

47,002

Average interest-earning assets

$

11,582,086

$

11,765,298

$

6,281,488

Average PPP loan balances

(96,065)

(266,472)

(318,793)

Adjusted average interest-earning assets excluding PPP loans, (non-GAAP)

$

11,486,021

$

11,498,826

$

5,962,695

NIM (1)

3.14

%

3.20

%

3.10

%

Adjusted NIM excluding PPP loans (non-GAAP) (2)

3.15

%

3.19

%

3.15

%

Adjusted net interest income excluding PPP loans, (non-GAAP)

$

91,147

$

92,326

$

47,002

Less: Purchase Accounting Accretion on loans ("PAA")

625

(2,541)

-

Adjusted net interest income excluding PPP loans and PAA on loans, (non-GAAP)

$

91,772

$

89,785

$

47,002

Adjusted NIM excluding PPP loans and PAA on loans, (non-GAAP) (3)

3.17

%

3.10

%

3.15

%

(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-earning assets 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, which excludes net interest income on PPP loans and PAA, divided by adjusted average interest-earning assets excluding PPP loans.

Loan Portfolio

The ending weighted average rate ("WAR")(1) on the total loan portfolio was 3.73% at December 31, 2021, a 1 basis point increase compared to the ending WAR on the total loan portfolio at September 30, 2021. Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.75% at December 31, 2021, compared to 3.76% at September 30, 2021.

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

December 31, 2021

September 30, 2021

December 31, 2020

($ in thousands)

Balance

WAR

Balance

WAR

Balance

WAR

Loans held for investment balances at period end:

One-to-four family residential, including condominium and cooperative apartment

$

669,282

3.63

%

$

683,665

3.68

%

$

184,989

3.76

%

Multifamily residential and residential mixed-use (2)(3)

3,356,346

3.56

3,468,262

3.57

2,758,743

3.75

Non-owner-occupied commercial real estate ("CRE")

2,915,693

3.69

2,844,171

3.70

1,560,811

3.86

Owner-occupied CRE

1,030,255

4.05

970,266

4.11

317,356

4.14

Acquisition, development, and construction ("ADC")

322,628

4.53

285,379

4.69

156,296

5.02

Commercial and industrial ("C&I")

867,542

4.08

878,332

4.10

319,626

4.49

Other loans

16,898

5.85

20,713

4.97

2,316

7.63

Loans held for investment excluding PPP

9,178,644

3.75

9,150,788

3.76

5,300,137

3.89

PPP

66,017

1.00

134,083

1.00

321,907

1.00

Total loans held for investment including PPP

$

9,244,661

3.73

%

$

9,284,871

3.72

%

$

5,622,044

3.73

%

(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 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.

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

($ in millions)

Q4 2021

Q3 2021

Q4 2020

Loan originations, excluding PPP

$

505.1

$

464.9

$

223.8

Deposits

Total deposits decreased by $215.1 million on a linked quarter basis to $10.5 billion at December 31, 2021. The decline in total deposits was primarily due to the Bank not renewing higher-cost certificates of deposit accounts.

CEO O' Connor stated, "We continued to focus on reducing higher-rate, promotional or rate-sensitive deposits in our portfolio as we prepare for higher interest rates. The weighted-average rate on our deposit portfolio declined to 0.09% at December 31, 2021."

Non-interest-bearing deposits increased $98.6 million during the fourth quarter of 2021 to $3.9 billion at December 31, 2021, representing 37.5% of total deposits.

As of December 31, 2021, the Company had $324.9 million of certificates of deposits, with a weighted average rate of 0.29%, that were set to mature during the first quarter of 2022 and $376.3 million of certificates of deposits, with a weighted average rate of 0.69%, that were set to mature during the remainder of 2022.

Non-Interest Income

Non-interest income was $10.2 million during the fourth quarter of 2021, $9.7 million during the third quarter of 2021, and $2.5 million during the fourth quarter of 2020. Excluding the net gain on sale of securities and other assets, adjusted non-interest income was $9.2 million during the fourth quarter of 2021. The net gain on sale of securities and other assets during the fourth quarter of 2021 was primarily due to the sale of a branch property. Excluding the loss on termination of derivatives and net gain on sale of securities and other assets, adjusted non-interest income was $7.9 million during the fourth quarter of 2020 (see "Non-GAAP Reconciliation" table at the end of this news release).

Non-Interest Expense

Total non-interest expense was $50.8 million during the fourth quarter of 2021, $56.8 million during the third quarter of 2021, and $37.6 million during the fourth quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, adjusted non-interest expense was $48.7 million during the fourth quarter of 2021, compared to $49.1 million during the third quarter of 2021, and $25.3 million during the fourth 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 1.64% during the fourth quarter of 2021, compared to 1.80% during the linked quarter and 2.28% for the fourth quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.57% during the fourth quarter of 2021, compared to 1.56% during the linked quarter and 1.53% for the fourth quarter of 2020 (see "Non-GAAP Reconciliation" table at the end of this news release).

The efficiency ratio was 49.9% during the fourth quarter of 2021, compared to 54.3% during the linked quarter and 73.4% during the fourth quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, the adjusted efficiency ratio was 48.2% during the fourth quarter of 2021, compared to 46.9% during the linked quarter and 44.8% during the fourth 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 fourth quarter of 2021 was 30.9%, compared to 27.5% for the third quarter of 2021, and 31.5% for the fourth quarter of 2020. The increase in the effective tax rate during the fourth quarter of 2021 was primarily the result of higher non-deductible expenses during the period.

Credit Quality

Non-performing loans at December 31, 2021 were $40.3 million, or 0.44% of total loans.

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Excluding the impact of purchased loans with credit deterioration ("PCD loans"), non-performing loans would have been $32.2 million, or 0.36% of total loans (excluding PCD loans).

A credit loss recovery of $132 thousand was recorded during the fourth quarter of 2021, compared to a credit loss recovery of $5.2 million during the third quarter of 2021, and a credit loss provision of $6.2 million during the fourth quarter of 2020.

The allowance for credit losses as a percentage of total loans was 0.91% at December 31, 2021 as compared to 0.88% at September 30, 2021 and 0.74% at December 31, 2020.

Loans with Payment Deferrals

Loans subject to full principal and interest ("P&I") payment deferrals declined to $5.7 million and represented 0.1% of the total loan portfolio at December 31, 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 fourth quarter, we continued to execute on our share repurchase program and we repurchased $29.3 million of common stock. Our tangible equity to tangible assets ratio increased by 14 basis points in the quarter to 8.64%. Our strong balance sheet and internal stress testing analyses continue to provide support for future capital return to shareholders" (see "Non-GAAP Reconciliation" tables at the end of this news release).

Dividends per common share were $0.24 during the fourth quarter of 2021.

Book value per common share was $26.98 and tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by number of shares outstanding) was $22.87 at December 31, 2021 (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 January 28, 2022, during which CEO O'Connor will discuss the Company's fourth quarter and fiscal year 2021 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/dcom220128.html. Dial-in information for the replay is 1-877-344-7529 using access code #6633695. Replay will be available beginning on January 28, 2022 at 10:30 a.m. through February 11, 2022 at 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 $12.0 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 "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; unanticipated or significant increases in loan losses may negatively affect the Company's financial condition or results of operations; changes in accounting

Page 5

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 Annual Report on Form 10-K and subsequent updates set forth in the Company's 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

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DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands)

December 31,

September 30,

December 31,

2021

2021

2020

Assets:

Cash and due from banks

$

393,722

$

629,011

$

243,603

Securities available-for-sale, at fair value

1,563,711

1,709,063

538,861

Securities held-to-maturity

179,309

40,303

-

Marketable equity securities, at fair value

-

-

5,970

Loans held for sale

5,493

14,720

5,903

Loans held for investment, net:

One-to-four family and cooperative/condominium apartment

669,282

683,665

184,989

Multifamily residential and residential mixed-use (1)(2)

3,356,346

3,468,262

2,758,743

CRE

3,945,948

3,814,437

1,878,167

ADC

322,628

285,379

156,296

Total real estate loans

8,294,204

8,251,743

4,978,195

C&I

867,542

878,332

319,626

Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans

66,017

134,083

321,907

Other loans

16,898

20,713

2,316

Allowance for credit losses

(83,853)

(81,255)

(41,461)

Total loans held for investment, net

9,160,808

9,203,616

5,580,583

Premises and fixed assets, net

50,368

49,615

19,053

Premises held for sale

556

2,799

-

Restricted stock

37,732

37,719

60,707

Bank Owned Life Insurance ("BOLI")

295,789

293,898

156,096

Goodwill

155,797

155,339

55,638

Other intangible assets

8,362

9,077

-

Operating lease assets

64,258

56,836

33,898

Derivative assets

45,086

41,700

18,932

Accrued interest receivable

40,149

43,284

34,815

Other assets

65,224

77,401

27,551

Total assets

$

12,066,364

$

12,364,381

$

6,781,610

Liabilities:

Non-interest-bearing checking

$

3,920,423

$

3,821,832

$

780,751

Interest-bearing checking

905,717

989,526

290,300

Savings

1,158,040

1,188,794

414,809

Money market

3,621,552

3,657,669

1,716,624

Certificates of deposit

853,242

1,016,216

1,322,638

Total deposits

10,458,974

10,674,037

4,525,122

FHLBNY advances

25,000

25,000

1,204,010

Other short-term borrowings

1,862

2,629

120,000

Subordinated debt, net

197,096

197,142

114,052

Operating lease liabilities

66,103

62,870

39,874

Derivative liabilities

40,728

38,889

37,374

Other liabilities

83,981

162,697

40,082

Total liabilities

10,873,744

11,163,264

6,080,514

Stockholders' equity:

Preferred stock, Series A

116,569

116,569

116,569

Common stock

416

416

348

Additional paid-in capital

494,125

493,775

278,295

Retained earnings

654,726

630,744

600,641

Accumulated other comprehensive loss, net of deferred taxes

(6,181)

(1,042)

(5,924)

Unearned equity awards

(7,842)

(9,417)

-

Common stock held by the Benefit Maintenance Plan

-

-

(1,496)

Treasury stock, at cost

(59,193)

(29,928)

(287,337)

Total stockholders' equity

1,192,620

1,201,117

701,096

Total liabilities and stockholders' equity

$

12,066,364

$

12,364,381

$

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.

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DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands except share and per share amounts)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2021

2021

2020

2021

2020

Interest income:

Loans

$

89,301

$

94,045

$

55,002

$

359,016

$

216,566

Securities

7,097

6,030

3,365

22,634

14,159

Other short-term investments

414

583

705

2,976

3,282

Total interest income

96,812

100,658

59,072

384,626

234,007

Interest expense:

Deposits and escrow

2,861

3,565

4,740

16,527

33,038

Borrowed funds

2,265

2,265

5,652

10,490

23,265

Total interest expense

5,126

5,830

10,392

27,017

56,303

Net interest income

91,686

94,828

48,680

357,609

177,704

(Credit) provision for credit losses

(132)

(5,187)

6,162

6,212

26,165

Net interest income after (credit) provision

91,818

100,015

42,518

351,397

151,539

Non-interest income:

Service charges and other fees

4,621

4,581

1,653

15,998

5,571

Title fees

735

482

-

2,338

-

Loan level derivative income

113

445

3,671

2,909

8,872

BOLI income

1,890

2,249

1,028

7,071

4,859

Gain on sale of SBA loans excluding PPP

851

348

146

2,336

1,118

Gain on sale of PPP loans

-

-

-

20,697

-

Gain on sale of residential loans

225

304

910

1,758

1,884

Net gain on equity securities

-

-

222

131

361

Net gain on sale of securities and other assets

975

-

1,235

1,705

4,592

Loss on termination of derivatives

-

-

(6,596)

(16,505)

(6,596)

Other

769

1,319

233

3,630

612

Total non-interest income

10,179

9,728

2,502

42,068

21,273

Non-interest expense:

Salaries and employee benefits

27,638

28,276

15,726

108,331

60,756

Severance

-

-

-

1,875

4,000

Occupancy and equipment

7,784

7,814

4,116

30,697

16,177

Data processing costs

4,506

3,573

2,152

16,638

8,329

Marketing

1,959

1,054

318

4,661

1,458

Professional services

2,130

2,751

681

9,284

3,394

Federal deposit insurance premiums

1,031

1,173

490

4,077

2,257

Loss on extinguishment of debt

-

-

1,104

1,751

1,104

Curtailment (gain) loss

-

-

(1,651)

1,543

(1,651)

Merger expenses and transaction costs

2,574

2,472

12,829

44,824

15,256

Branch restructuring

(1,118)

4,518

-

5,059

-

Amortization of other intangible assets

715

715

-

2,622

-

Other

3,610

4,437

1,824

13,937

6,748

Total non-interest expense

50,829

56,783

37,589

245,299

117,828

Income before taxes

51,168

52,960

7,431

148,166

54,984

Income tax expense

15,811

14,565

2,339

44,170

12,666

Net income

35,357

38,395

5,092

103,996

42,318

Preferred stock dividends

1,821

1,822

1,821

7,286

4,783

Net income available to common stockholders

$

33,536

$

36,573

$

3,271

$

96,710

$

37,535

Earnings per common share ("EPS"):

Basic

$

0.83

$

0.89

$

0.16

$

2.45

$

1.74

Diluted

$

0.83

$

0.89

$

0.16

$

2.45

$

1.74

Average common shares outstanding for diluted EPS

39,876,825

40,426,161

21,233,018

38,903,037

21,538,448

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DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

UNAUDITED SELECTED FINANCIAL HIGHLIGHTS

(Dollars in thousands except per share amounts)

At or For the Three Months Ended

At or For the Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2021

2021

2020

2021

2020

Per Share Data:

Reported EPS (Diluted)

$

0.83

$

0.89

$

0.16

$

2.45

$

1.74

Cash dividends paid per common share

0.24

0.24

0.22

0.96

0.86

Book value per common share

26.98

26.64

27.53

26.98

27.53

Tangible common book value per share (1)

22.87

22.60

24.91

22.87

24.91

Common shares outstanding

39,878

40,715

21,233

39,878

21,233

Dividend payout ratio

28.92

%

26.97

%

135.03

%

39.18

%

49.79

%

Performance Ratios (Based upon Reported Net Income):

Return on average assets

1.14

%

1.22

%

0.31

%

0.86

%

0.66

%

Return on average equity

11.67

12.69

2.89

8.96

6.30

Return on average tangible common equity (1)

14.61

15.96

2.45

11.09

7.14

Net interest margin

3.14

3.20

3.10

3.15

2.90

Non-interest expense to average assets

1.64

1.80

2.28

2.03

1.83

Efficiency ratio

49.9

54.3

73.4

61.4

59.2

Effective tax rate

30.90

27.50

31.48

29.81

23.04

Balance Sheet Data:

Average assets

$

12,419,184

$

12,584,372

$

6,604,409

$

12,112,800

$

6,424,251

Average interest-earning assets

11,582,086

11,765,298

6,281,488

11,354,111

6,122,643

Average tangible common equity (1)

931,503

929,131

533,476

888,128

525,817

Loan-to-deposit ratio at end of period

88.4

87.0

124.2

88.4

124.2

Capital Ratios and Reserves - Consolidated: (3)

Tangible common equity to tangible assets (1)

7.66

%

7.54

%

7.86

%

Tangible equity to tangible assets (1)

8.64

8.50

9.60

Tier 1 common equity ratio

9.50

9.92

10.22

Tier 1 risk-based capital ratio

10.71

11.17

12.44

Total risk-based capital ratio

13.47

14.13

15.44

Tier 1 leverage ratio

8.46

8.37

9.95

CRE consolidated concentration ratio (2)

519

516

554

Allowance for credit losses/ Total loans

0.91

0.88

0.74

Allowance for credit losses/ Non-performing loans

208.04

238.84

231.26

(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. December 31, 2021 amounts are preliminary pending completion and filing of the Company's regulatory reports.

(3)

December 31, 2021 amounts are preliminary pending completion and filing of the Company's regulatory reports.

Page 9

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME

(Dollars in thousands)

Three Months Ended

December 31, 2021

September 30, 2021

December 31, 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

$

8,293,470

$

78,367

3.75

%

$

8,289,973

$

78,820

3.77

%

$

4,966,327

$

49,487

3.99

%

Commercial and industrial loans

873,273

10,119

4.60

868,508

12,143

5.55

328,754

3,252

3.96

SBA PPP loans

96,065

583

2.41

266,472

2,643

3.94

318,793

2,252

2.83

Other loans

18,385

232

5.01

21,391

439

8.14

1,318

11

3.34

Securities

1,729,191

7,097

1.63

1,438,348

6,030

1.66

498,861

3,365

2.70

Other short-term investments

571,702

414

0.29

880,606

583

0.26

167,435

705

1.68

Total interest-earning assets

11,582,086

96,812

3.32

%

11,765,298

100,658

3.39

%

6,281,488

59,072

3.76

%

Non-interest-earning assets

837,098

819,074

322,921

Total assets

$

12,419,184

$

12,584,372

$

6,604,409

Liabilities and Stockholders' Equity:

Interest-bearing liabilities:

Interest-bearing checking

$

962,597

$

455

0.19

%

$

1,000,435

$

388

0.15

%

$

259,155

$

142

0.22

%

Money market

3,652,681

1,087

0.12

3,698,124

1,467

0.16

1,679,578

1,285

0.30

Savings

1,174,719

108

0.04

1,335,310

170

0.05

408,241

141

0.14

Certificates of deposit

915,210

1,211

0.52

1,138,853

1,540

0.54

1,333,079

3,172

0.95

Total interest-bearing deposits

6,705,207

2,861

0.17

7,172,722

3,565

0.20

3,680,053

4,740

0.51

FHLBNY advances

25,000

61

0.97

25,000

59

0.94

1,172,191

4,319

1.47

Subordinated debt, net

197,126

2,204

4.44

197,172

2,206

4.44

114,028

1,330

4.64

Other short-term borrowings

2,484

-

-

2,290

-

-

4,424

3

0.27

Total borrowings

224,610

2,265

4.00

224,462

2,265

4.00

1,290,643

5,652

1.74

Total interest-bearing liabilities

6,929,817

5,126

0.29

%

7,397,184

5,830

0.31

%

4,970,696

10,392

0.83

%

Non-interest-bearing checking

4,096,046

3,789,623

795,204

Other non-interest-bearing liabilities

181,074

186,977

132,826

Total liabilities

11,206,937

11,373,784

5,898,726

Stockholders' equity

1,212,247

1,210,588

705,683

Total liabilities and stockholders' equity

$

12,419,184

$

12,584,372

$

6,604,409

Net interest income

$

91,686

$

94,828

$

48,680

Net interest rate spread

3.03

%

3.08

%

2.93

%

Net interest margin

3.14

%

3.20

%

3.10

%

Deposits (including non-interest-bearing checking accounts)

$

10,801,253

$

2,861

0.11

%

$

10,962,345

$

3,565

0.13

%

$

4,475,257

$

4,740

0.42

%

Page 10

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS

(Dollars in thousands)

At or For the Three Months Ended

December 31,

September 30,

December 31,

Asset Quality Detail

2021

2021

2020

Non-performing loans ("NPLs") (1)

One-to-four family residential, including condominium and cooperative apartment

$

7,623

$

4,938

$

858

Multifamily residential and residential mixed-use

-

859

1,863

CRE

5,053

4,122

2,704

ADC

-

-

-

C&I

27,266

23,727

12,502

Other

365

374

1

Total Non-accrual loans

$

40,307

$

34,020

$

17,928

Total Non-performing assets ("NPAs")

$

40,307

$

34,020

$

17,928

Loans 90 days delinquent and accruing ("90+ Delinquent")

One-to-four family residential, including condominium and cooperative apartment

$

1,945

$

5,021

$

44

Multifamily residential and residential mixed-use

-

-

437

CRE

-

1,004

-

ADC

-

-

-

C&I

1,056

257

2,848

Other

-

-

-

90+ Delinquent

$

3,001

$

6,282

$

3,329

NPAs and 90+ Delinquent

$

43,308

$

40,302

$

21,257

NPAs and 90+ Delinquent / Total assets

0.36%

0.33%

0.31%

Net charge-offs (recoveries) ("NCOs")

$

(108)

$

4,191

$

13,193

NCOs / Average loans (1)

0.00%

0.18%

0.94%

(1) Excludes loans held for sale

Page 11

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, and gain on sale of PPP loans.

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2021

2021

2020

2021

2020

Reconciliation of Reported and Adjusted (non-GAAP) Net Income Available to Common Stockholders

Reported net income available to common stockholders

$

33,536

$

36,573

$

3,271

$

96,710

$

37,535

Adjustments to net income (1):

Provision for credit losses - Non-PCD loans (double-count)

-

-

-

20,278

-

Gain on sale of PPP loans

-

-

-

(20,697)

-

Net gain on sale of securities and other assets

(975)

-

(1,235)

(1,685)

(4,592)

Loss on termination of derivatives

-

-

6,596

16,505

6,596

Severance

-

-

-

1,875

4,000

Loss on extinguishment of debt

-

-

1,104

1,751

1,104

Curtailment (gain) loss

-

-

(1,651)

1,543

(1,651)

Merger expenses and transaction costs (2)

2,574

2,472

12,829

44,824

15,256

Branch restructuring

(1,118)

4,518

-

5,059

-

Income tax effect of adjustments and other tax adjustments

(234)

(2,191)

(4,901)

(19,421)

(5,537)

Adjusted net income available to common stockholders (non-GAAP)

$

33,783

$

41,372

$

16,013

$

146,742

$

52,711

Adjusted Ratios (Based upon non-GAAP as calculated above)

Adjusted EPS (Diluted)

$

0.84

$

1.01

$

0.76

$

3.73

$

2.44

Adjusted return on average assets

1.15

%

1.37

%

1.08

%

1.27

%

0.89

%

Adjusted return on average equity

11.75

14.27

10.11

13.26

8.56

Adjusted return on average tangible common equity

14.72

18.02

12.01

16.73

10.02

Adjusted non-interest expense to average assets

1.57

1.56

1.53

1.55

1.54

Adjusted efficiency ratio

48.2

46.9

44.8

47.6

49.3

(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.

Page 12

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

Three Months Ended

Year Ended

​

December 31,

September 30,

December 31,

December 31,

December 31,

​

2021

2021

2020

2021

2020

Operating expense as a % of average assets - as reported

1.64

%

1.80

%

2.28

%

2.03

%

1.83

%

Loss on extinguishment of debt

-

-

(0.07)

(0.01)

(0.02)

Curtailment gain (loss)

-

-

0.10

(0.02)

0.03

Severance

-

-

-

(0.02)

(0.06)

Merger expenses and transaction costs

(0.08)

(0.08)

(0.78)

(0.37)

(0.24)

Branch restructuring

0.03

(0.14)

-

(0.04)

-

Amortization of other intangible assets

(0.02)

(0.02)

-

(0.02)

-

Adjusted operating expense as a % of average assets (non-GAAP)

1.57

1.56

1.53

1.55

1.54

The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP):

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2021

2021

2020

2021

2020

Efficiency ratio - as reported (non-GAAP) (1)

49.9

%

54.3

%

73.4

%

61.4

%

59.2

%

Non-interest expense - as reported

$

50,829

$

56,783

$

37,589

$

245,299

$

117,828

Less: Severance

-

-

-

(1,875)

(4,000)

Less: Merger expenses and transaction costs

(2,574)

(2,472)

(12,829)

(44,824)

(15,256)

Less: Branch restructuring

1,118

(4,518)

-

(5,059)

-

Less: Loss on extinguishment of debt

-

-

(1,104)

(1,751)

(1,104)

Less: Curtailment gain (loss)

-

-

1,651

(1,543)

1,651

Less: Amortization of other intangible assets

(715)

(715)

-

(2,622)

-

Adjusted non-interest expense (non-GAAP)

$

48,658

$

49,078

$

25,307

$

187,625

$

99,119

Net interest income - as reported

$

91,686

$

94,828

$

48,680

$

357,609

$

177,704

Non-interest income - as reported

$

10,179

$

9,728

$

2,502

$

42,068

$

21,273

Less: Gain on sale of PPP loans

-

-

-

(20,697)

-

Less: Net gain on sale of securities and other assets

(975)

-

(1,235)

(1,685)

(4,592)

Less: Loss on termination of derivatives

-

-

6,596

16,505

6,596

Adjusted non-interest income (non-GAAP)

$

9,204

$

9,728

$

7,863

$

36,191

$

23,277

Adjusted total revenues for adjusted efficiency ratio (non-GAAP)

$

100,890

$

104,556

$

56,543

$

393,800

$

200,981

Adjusted efficiency ratio (non-GAAP) (2)

48.2

%

46.9

%

44.8

%

47.6

%

49.3

%

(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.

Page 13

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

December 31,

September 30,

December 31,

2021

2021

2020

Reconciliation of Tangible Assets:

Total assets

$

12,066,364

$

12,364,381

$

6,781,610

Less:

Goodwill

(155,797)

(155,339)

(55,638)

Other intangible assets

(8,362)

(9,077)

-

Tangible assets (non-GAAP)

$

11,902,205

$

12,199,965

$

6,725,972

Reconciliation of Tangible Common Equity - Consolidated:

Total stockholders' equity

$

1,192,620

$

1,201,117

$

701,096

Less:

Goodwill

(155,797)

(155,339)

(55,638)

Other intangible assets

(8,362)

(9,077)

-

Tangible equity (non-GAAP)

1,028,461

1,036,701

645,458

Less:

Preferred stock, net

(116,569)

(116,569)

(116,569)

Tangible common equity (non-GAAP)

$

911,892

$

920,132

$

528,889

Common shares outstanding

39,878

40,715

21,233

Tangible common equity to tangible assets (non-GAAP)

7.66

%

7.54

%

7.86

Tangible equity to tangible assets (non-GAAP)

8.64

8.50

9.60

Book value per share

$

26.98

$

26.64

$

27.53

Tangible common book value per share (non-GAAP)

22.87

22.60

24.91