BROOKLYN, N.Y., April 28, 2020 (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 of $8.4 million for the quarter ended March 31, 2020, or $0.24 per diluted common share, compared with net income of $6.9 million for the quarter ended December 31, 2019, or $0.19 per diluted common share, and net income of $11.5 million for the quarter ended March 31, 2019, or $0.32 per diluted common share.
Mr. Kenneth J. Mahon, President and Chief Executive Officer of the Company, stated, “Core trends in our underlying business were extremely strong. Our Net Interest Margin (“NIM”) expanded by 12 basis points on a linked quarter basis, and our non-interest income grew by approximately 80% on a year-over-year basis. Excluding the impact of loan loss provisions, pre-tax income for the quarter ended March 31, 2020 would have been $18.7 million, or 26.8% higher than the linked quarter pre-tax income of $14.8 million excluding loan loss provisions, and 19.8% higher than the year-ago pre-tax income of $15.6 million excluding loan loss provisions. These results clearly validate the progress made on our business model transformation to-date. Importantly, we successfully raised $72 million as a result of our preferred stock issuance in the first quarter of 2020, supplementing already very strong capital ratios. While no one can predict what our economy and our country will look like once the COVID‐19 pandemic passes, I believe our strong capital base helps position us well to serve our customers and communities, our employees, and our investors. I have been very encouraged by our collective resiliency, and I am confident that this resiliency will carry us through this crisis.”
Highlights for the first quarter of 2020 included:
- The Company raised $72 million and issued 2,999,200 shares of perpetual preferred stock in the first quarter of 2020. Outlined below are the Company’s Consolidated Capital Ratios.
| Q1 2020 | Q4 2019 | Q1 2019 | |
| Total Equity to Total Assets | 10.17% | 9.39% | 9.36% |
| Tangible Equity to Tangible Assets (1) | 9.38% | 8.59% | 8.58% |
| Tier 1 Leverage Ratio | 9.80% | 8.79% | 8.81% |
| Total Risk-Based Capital Ratio | 15.21% | 14.08% | 13.77% |
| (1) See "Non-GAAP Reconciliation" tables for reconciliation of tangible equity and tangible assets. | |||
- Linked quarter NIM expansion of 12 basis points primarily driven by a 14 basis point linked quarter decrease in the cost of deposits;
- The Business Banking division’s loan portfolio reached $1.41 billion (or 27% of total loans) at March 31, 2020, versus $1.28 billion (or 24% of total loans) at December 31, 2019. The Business Banking portfolio’s growth continues to be accretive to our overall NIM;
- Strong growth in checking account balances. Compared to the first quarter of 2019, the sum of average non-interest-bearing checking account balances and average interest-bearing checking account balances for the first quarter of 2020 increased by 22% to $626.5 million;
- Loan-to-deposit ratio declined to 122.8% at March 31, 2020, versus 124.9% at March 31, 2019;
- Our Municipal Banking division, which began operations in the fourth quarter of 2019, grew its deposit portfolio to approximately $78 million at March 31, 2020;
- Total non-interest income grew to $4.2 million in the first quarter of 2020, driven by $1.2 million of customer-related loan level swap income and $1.9 million of BOLI income (which included $1.1 million of income from death benefits), versus $2.4 million for the first quarter of 2019; and
- The Company repurchased 1,274,679 shares of its common stock, which represented 3.6% of beginning period shares outstanding, in the first quarter of 2020, at a weighted average price of $16.22.
COVID-19 Pandemic
The COVID-19 pandemic has caused substantial disruptions to the global economy and the communities we serve. In response to the pandemic, we implemented our contingency plans, which included company-wide remote working arrangements, and modified hours and operations in our branches.
- Over 200 employees, which represents 100% of our non‐branch staff, are currently working remotely.
- 24 of our 28 branches continue to operate and service our customers.
We are focused on supporting our clients who may be experiencing financial hardships due to COVID-19, including making loan modifications as needed. Our modifications programs, which formally began in the month of April, primarily consist of short-term deferrals of interest and principal payments to be collected at the maturity of the loan. As of April 21, 2020, we have formally approved the following loans for deferral.
| ($ in millions) | # of Loans | Balance |
| 1-4 Family Residential | 15 | $17,690 |
| Multifamily Residential and Residential Mixed-Use | 72 | 279,419 |
| Commercial Real Estate and Commercial Mixed-Use | 62 | 234,788 |
| Commercial and Industrial | 10 | 27,093 |
We are closely monitoring the rapid developments and uncertainties regarding the pandemic, including various segments of our loan portfolio that may be disproportionately impacted by the pandemic. As of March 31, 2020, the Company had 8 loans aggregating $26.7 million to Restaurants and 12 loans aggregating $172.8 million to Hotels. The Company does not have any exposure to the Energy Industry, Airline Industry, Leveraged Lending, Shared National Credits, Credits Card Loans, or Auto Loans.
Mr. Mahon commented, “We are deeply committed to being a source of capital to businesses in our geographic footprint. Over the past several years, we have taken numerous steps, including hiring personnel and adding new processes and systems, that have enabled us to help our business customers, primarily small and mid‐size businesses. Of note, we have been a very active participant in the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). As of April 21st, we received over 1,000 applications and we have registered approximately $163 million of loans with the SBA as part of the PPP; total fee income from processing PPP loans is expected to be approximately $5 million.”
Mr. Mahon concluded, “We remain confident in our long-term underlying strength and stability, and our ability to navigate these challenging conditions. The largest segment within our loan portfolio (approximately 61% at March 31, 2020) remains in multifamily loans. New York City multifamily loans were one of the best performing credits during the financial crisis of 2008. Year after year, Dime had one of the lowest loss rates in the nation. Given the low loan-to-value (“LTV”) nature of our multifamily portfolio (weighted average of approximately 52% at March 31, 2020), we anticipate our track record will continue.”
Management’s Discussion of Quarterly Operating Results
Net Interest Income
Net interest income in the first quarter of 2020 was $40.5 million, an increase of $1.1 million (2.9%) from the fourth quarter of 2019 and an increase of $5.2 million (14.7%) from the first quarter of 2019. The table below provides a reconciliation of the reported NIM and the NIM excluding the impact of loan prepayment fees.
| ($ in millions) | Q1 2020 | Q4 2019 | Q1 2019 |
| NIM | 2.72% | 2.60% | 2.31% |
| Net Interest Income | $40,524 | $39,397 | $35,324 |
| Income from Loan Prepayment Activity | $1,975 | $1,979 | $820 |
| Net Interest Income Excluding Prepayment Fee Income | $38,549 | $37,418 | $34,504 |
| NIM, Excluding Prepayment Fee | 2.59% | 2.47% | 2.26% |
Mr. Mahon commented, “Our NIM (excluding the impact of prepayment fees) has now increased for six consecutive quarters. As anticipated, our business model transformation is producing the desired results on NIM.”
Average interest-earning assets were $5.95 billion for the first quarter of 2020, a 7.0% (annualized) decrease from $6.06 billion for the fourth quarter of 2019, and a 2.6% decrease from $6.11 billion for the first quarter of 2019. For the first quarter of 2020, the average yield on interest-earning assets was 3.96%, a decrease of 3 basis points compared with the fourth quarter of 2019, and an increase of 18 basis points compared to the first quarter of 2019.
The ending weighted average rate (“WAR”) on the total loan portfolio was 4.00% at March 31, 2020, which represents a 4 basis point decrease, versus the ending WAR on the total loan portfolio at December 31, 2019, and a 10 basis point increase versus the ending WAR on the total loan portfolio at March 31, 2019. Commenting on the linked quarter decline in the WAR on the loan portfolio, Mr. Mahon said “As a result of the Federal Reserve rate cuts in March, the WAR on our loan portfolio declined modestly on a linked quarter basis. This decline in loan rates was more than offset by a 14 basis point linked quarter decline in the cost of deposits.”
The average cost of borrowed funds (which primarily consists of Federal Home Loan Bank advances) was 2.15% for the first quarter of 2020, a decrease of 20 basis points versus the fourth quarter of 2019, and a decrease of 28 basis points versus the first quarter of 2019.
Loans
The real estate loan portfolio decreased by $127.9 million (10.2% annualized) during the first quarter of 2020, primarily due to managed run-off in the Bank’s lower-yielding legacy multifamily business. Total real estate loan originations were $166.8 million during the first quarter of 2020, at a weighted average interest rate of 4.05%. Real estate loan amortization and satisfactions totaled $289.1 million, or 23.5% (annualized) of the portfolio balance, at an average rate of 3.86%. The annualized real estate loan payoff rate of 23.5% for the first quarter of 2020 was lower than the fourth quarter of 2019 (24.5% annualized) and higher than the first quarter of 2019 (11.6% annualized).
Average real estate loans were $4.95 billion in the first quarter of 2020, a decrease of $127.8 million (-10.1% annualized) from the fourth quarter of 2019, and a decrease of $241.6 million (-4.6%) from the first quarter of 2019.
Average C&I loans were $327.7 million in the first quarter of 2020, an increase of $8.1 million (10.1% annualized) from the fourth quarter of 2019, and an increase of $79.4 million (32.0%) from the first quarter of 2019.
Outlined below are the loan originations for the current quarter, linked quarter and year-ago quarter.
| ($s in millions) | Originations/ Weighted Average Rate | ||
| Real Estate Originations | Q1 2020 | Q4 2019 | Q1 2019 |
| Business Banking | $122.0/4.10% | $84.6/5.11% | $147.8/5.02% |
| All Other | $44.8/3.91% | $65.3/4.08% | $86.1/4.99% |
| Total Real Estate | $166.8/4.05% | $149.9/4.66% | $233.9/5.01% |
| C&I Originations | $51.9/4.95% | $60.5/5.78% | $52.6/5.66% |
Deposits and Borrowed Funds
The Company continues to focus on growing relationship-based business deposits sourced from its retail branches and its Business Banking division. The Business Banking division ended the first quarter of 2020 with approximately $185.6 million of low-cost relationship-based checking and leasehold deposits at an average rate of approximately six basis points and total deposits of $386.1 million at an average rate of 49 basis points.
The cost of total deposits decreased 14 basis points on a linked quarter basis. Mr. Mahon commented, “Importantly, we continue to improve the quality of our deposit base, as evidenced by the non-interest- bearing deposits to total deposits ratio increasing to 11.3% at March 31, 2020, compared to 9.5% at March 31, 2019.”
Total deposits decreased by $42.8 million on a linked quarter basis to $4.24 billion at March 31, 2020. Mr. Mahon commented, “We continue to proactively adjust pricing on various deposit categories and we managed downward higher-cost, more rate sensitive deposit balances.”
The loan-to-deposit ratio was 122.8% at March 31, 2020, compared to 124.7% at December 31, 2019 and 124.9% at March 31, 2019.
Total borrowings, excluding subordinated debt securities, was $1.11 billion at March 31, 2020, compared to $1.20 billion at the fourth quarter of 2019, and $1.13 billion at the first quarter of 2019.
Non-Interest Income
Non-interest income was $4.2 million during the first quarter of 2020, $3.6 million during the fourth quarter of 2019, and $2.4 million during the first quarter of 2019. Excluding gains and losses on equity securities and from sales of securities and other assets, and BOLI death benefit proceeds ($1.1 million of BOLI death benefit proceeds was recognized in the first quarter of 2020), non-interest income was $3.6 million during the first quarter of 2020 compared to $3.4 million during the fourth quarter of 2019 and $2.2 million during the first quarter of 2019.
Mr. Mahon commented, “We continue to gain traction with our commercial customers on our interest rate swap products. Fees associated with customer level swaps were $1.2 million for the first quarter of 2020 versus $0.4 million for the fourth quarter of 2019.”
Non-Interest Expense
Total non-interest expense was $26.0 million during the first quarter of 2020, $28.3 million during the fourth quarter of 2019, and $22.1 million during the first quarter of 2019. During the fourth quarter of 2019, the Company recognized $3.8 million of expenses related to the extinguishment of FHLB borrowings and $0.2 million of non-recurring expenses associated with a branch consolidation. Excluding the non-recurring item in the fourth quarter of 2019, non-interest expense was $24.3 million. The increase in the current quarter compared to the linked quarter, excluding the loss from the extinguishment of debt, was primarily due to a $1.6 million increase in salaries and benefits expense.
The ratio of non-interest expense to average assets was 1.68% during the first quarter of 2020, compared to 1.80% for the fourth quarter of 2019 and 1.39% for the first quarter of 2019. The efficiency ratio was 57.6% during the first quarter of 2020, compared to 66.0% during the linked quarter and 59.2% during the first quarter of 2019. Excluding the expenses related to the extinguishment of FHLB borrowings and the non-recurring branch consolidation expense, the ratio of non-interest expense to average assets was 1.55% and the efficiency ratio was 56.7% during the fourth quarter of 2019.
Income Tax Expense
The reported effective tax rate for the first quarter of 2020 was 21.6% versus 18.5% for the fourth quarter of 2019, as a result of higher pre-tax income in 2020.
Credit Quality
Non-performing loans at March 31, 2020 were $18.2 million, or 0.4% of total loans, compared to $11.1 million, or 0.2% of total loans, at December 31, 2019. The increase in non-performing loans was due to a single real estate relationship, totaling $7.1 million with an LTV of 36%, that moved into non-performing status in the first quarter of 2020. During April 2020, the Bank entered into a contract to sell the loan notes and does not anticipate any losses from the sale.
Under Section 4014 of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act), financial institutions had the option to delay the adoption of the Current Expected Credit Loss (“CECL”) framework until the earlier of December 31, 2020 or when the national emergency is lifted. The Bank elected to defer adoption of CECL and is still utilizing its existing incurred loss framework.
A loan loss provision of $8.0 million was recorded during the first quarter of 2020, compared to a loan loss provision of $6.2 million during the fourth quarter of 2019, and a loan loss provision of $0.3 million during the first quarter of 2019. The $8.0 million provision for the first quarter of 2020 was associated with an increase in the general loan loss reserve due to the adjustment of qualitative factors tied to the Bank’s existing incurred loss framework, to account for the effects of the COVID-19 pandemic and related economic disruption.
The allowance for loan losses was 0.70% of total loans at March 31, 2020 as compared to 0.53% of total loans at December 31, 2019.
At March 31, 2020, non-performing assets represented 3.1% of the sum of tangible equity plus the allowance for loan losses and reserve for contingent liabilities (see “Problem Assets as a Percentage of Tangible Equity and Reserves” table and “Non-GAAP Reconciliation” table at the end of this news release).
Capital Management
The Company’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements. At March 31, 2020, the Consolidated Tier 1 capital to average assets (“leverage ratio”) was 9.80%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 12.15% and 15.21%, respectively.
The Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements. At March 31, 2020, the Bank’s leverage ratio was 9.93%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 12.72% and 13.47%, respectively.
Diluted earnings per common share of $0.24 exceeded the quarterly $0.14 cash dividend per share by 71% during the first quarter of 2020, equating to a 58.3% dividend payout ratio.
Book value per common share was $16.93 and tangible common book value per share (common equity less goodwill divided by number of shares outstanding) (see “Non-GAAP Reconciliation” tables at the end of this news release) was $15.29 at March 31, 2020.
Earnings Call Information
The Company will conduct a conference call at 8:30 a.m. (ET) on April 28, 2020, during which the President and Chief Executive Officer, Kenneth J. Mahon, will discuss the Company’s first quarter performance, with a Q&A 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/dcom200428.html. Dial-in information for the replay is 1-877-344-7529 using access code #10142673. Replay will be available April 28, 2020 (9:30 a.m. (ET)) through May 5, 2020 (11:59 p.m. (ET)).
ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company had $6.35 billion in consolidated assets as of March 31, 2020. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has 28 retail branches located throughout Brooklyn, Queens, the Bronx, Nassau and Suffolk Counties, New York. More information on the Company and the Bank can be found on Dime's website at www.dime.com.
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; or 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 | |||||||
| (Dollars in thousands except share amounts) | |||||||
| March 31, | December 31, | ||||||
| 2020 | 2019 | ||||||
| ASSETS: | |||||||
| Cash and due from banks | $246,153 | $155,488 | |||||
| Mortgage-backed securities available-for-sale, at fair value | 500,758 | 502,464 | |||||
| Investment securities available-for-sale, at fair value | 57,067 | 48,531 | |||||
| Marketable equity securities, at fair value | 5,398 | 5,894 | |||||
| Real Estate Loans: | |||||||
| One-to-four family and cooperative/condominium apartment | 176,755 | 148,429 | |||||
| Multifamily residential and residential mixed-use (1)(2) | 3,160,248 | 3,385,375 | |||||
| Commercial real estate and commercial mixed-use | 1,403,985 | 1,350,185 | |||||
| Acquisition, development, and construction ("ADC") | 133,514 | 118,365 | |||||
| Total real estate loans | 4,874,502 | 5,002,354 | |||||
| Commercial and industrial ("C&I") | 331,816 | 336,412 | |||||
| Other loans | 956 | 1,772 | |||||
| Allowance for credit losses | (36,463 | ) | (28,441 | ) | |||
| Total loans, net | 5,170,811 | 5,312,097 | |||||
| Premises and fixed assets, net | 21,631 | 21,692 | |||||
| Premises held for sale | 514 | 514 | |||||
| Loans held for sale | 1,430 | 500 | |||||
| Federal Home Loan Bank of New York ("FHLBNY") capital stock | 57,146 | 56,019 | |||||
| Bank Owned Life Insurance ("BOLI") | 133,128 | 114,257 | |||||
| Goodwill | 55,638 | 55,638 | |||||
| Operating lease assets | 36,582 | 37,858 | |||||
| Other assets | 61,569 | 43,508 | |||||
| TOTAL ASSETS | $6,347,825 | $6,354,460 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||
| Deposits: | |||||||
| Non-interest-bearing checking | $479,376 | $478,549 | |||||
| Interest-bearing checking | 162,198 | 151,491 | |||||
| Savings | 390,994 | 374,265 | |||||
| Money Market | 1,565,761 | 1,705,451 | |||||
| Sub-total | 2,598,329 | 2,709,756 | |||||
| Certificates of deposit | 1,641,497 | 1,572,869 | |||||
| Total Due to Depositors | 4,239,826 | 4,282,625 | |||||
| Escrow and other deposits | 116,097 | 76,481 | |||||
| FHLBNY advances | 1,117,300 | 1,092,250 | |||||
| Subordinated notes payable, net | 113,942 | 113,906 | |||||
| Other borrowings | - | 110,000 | |||||
| Operating lease liabilities | 42,614 | 44,098 | |||||
| Other liabilities | 72,398 | 38,342 | |||||
| TOTAL LIABILITIES | 5,702,177 | 5,757,702 | |||||
| STOCKHOLDERS' EQUITY: | |||||||
| Preferred stock, Series A ($0.01 par, $25.00 liquidation value, 9,000,000 shares authorized, 2,992,200 shares issued and | |||||||
| outstanding at March 31, 2020, and none issued or outstanding at December 31, 2019) | 72,224 | - | |||||
| Common stock ($0.01 par, 125,000,000 shares authorized, 53,721,189 shares and 53,721,189 shares issued at March 31, 2020 | |||||||
| and December 31, 2019, respectively, and 33,875,386 shares and 35,154,642 shares outstanding at March 31, 2020 and | |||||||
| December 31, 2019, respectively) | 537 | 537 | |||||
| Additional paid-in capital | 279,327 | 279,322 | |||||
| Retained earnings | 585,294 | 581,817 | |||||
| Accumulated other comprehensive loss, net of deferred taxes | (12,632 | ) | (5,940 | ) | |||
| Unearned equity awards | (6,067 | ) | (6,731 | ) | |||
| Common Stock held by the Benefit Maintenance Plan | (1,496 | ) | (1,496 | ) | |||
| Treasury stock, at cost (19,845,803 shares and 18,566,547 shares at March 31, 2020 and December 31, 2019, respectively) | (271,539 | ) | (250,751 | ) | |||
| TOTAL STOCKHOLDERS' EQUITY | 645,648 | 596,758 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $6,347,825 | $6,354,460 | |||||
| (1) Includes loans underlying 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) | |||||||
| For the Three Months Ended | |||||||
| March 31, | December 31, | March 31, | |||||
| 2020 | 2019 | 2019 | |||||
| Interest income: | |||||||
| Loans secured by real estate | $50,117 | $51,390 | $49,177 | ||||
| Commercial and industrial ("C&I") loans | 4,045 | 3,968 | 3,436 | ||||
| Other loans | 15 | 16 | 18 | ||||
| Mortgage-backed securities | 3,305 | 3,135 | 3,197 | ||||
| Investment securities | 421 | 636 | 420 | ||||
| Other short-term investments | 1,002 | 1,198 | 1,447 | ||||
| Total interest income | 58,905 | 60,343 | 57,695 | ||||
| Interest expense: | |||||||
| Deposits and escrow | 11,926 | 14,209 | 15,017 | ||||
| Borrowed funds | 6,455 | 6,737 | 7,354 | ||||
| Total interest expense | 18,381 | 20,946 | 22,371 | ||||
| Net interest income | 40,524 | 39,397 | 35,324 | ||||
| Provision for loan losses | 8,012 | 6,240 | 321 | ||||
| Net interest income after provision for loan losses | 32,512 | 33,157 | 35,003 | ||||
| Non-interest income: | |||||||
| Service charges and other fees | 1,203 | 1,662 | 1,099 | ||||
| Mortgage banking income, net | 66 | 80 | 68 | ||||
| Gain (loss) on equity securities | (472 | ) | 101 | 268 | |||
| Gain (loss) on sale of securities and other assets | 8 | 98 | (76 | ) | |||
| Gain on sale of loans | 315 | 503 | 255 | ||||
| Income from BOLI | 1,887 | 706 | 694 | ||||
| Loan level derivative income | 1,163 | 422 | - | ||||
| Other | 66 | 55 | 52 | ||||
| Total non-interest income | 4,236 | 3,627 | 2,360 | ||||
| Non-interest expense: | |||||||
| Salaries and employee benefits | 14,916 | 13,361 | 11,884 | ||||
| Stock benefit plan compensation expense | 671 | 494 | 284 | ||||
| Occupancy and equipment | 4,056 | 4,509 | 3,869 | ||||
| Data processing costs | 2,024 | 2,039 | 2,066 | ||||
| Marketing | 397 | 595 | 466 | ||||
| Federal deposit insurance premiums | 477 | 75 | 454 | ||||
| Loss from extinguishment of debt | - | 3,780 | - | ||||
| Other | 3,499 | 3,412 | 3,029 | ||||
| Total non-interest expense | 26,040 | 28,265 | 22,052 | ||||
| Income before taxes | 10,708 | 8,519 | 15,311 | ||||
| Income tax expense | 2,316 | 1,574 | 3,810 | ||||
| Net income | 8,392 | 6,945 | 11,501 | ||||
| Preferred stock dividends | - | - | - | ||||
| Net income available to common stockholders | $8,392 | $6,945 | $11,501 | ||||
| Earnings per Common Share ("EPS"): | |||||||
| Basic | $ 0.24 | $ 0.20 | $ 0.32 | ||||
| Diluted | $ 0.24 | $ 0.19 | $ 0.32 | ||||
| Average common shares outstanding for Diluted EPS | 34,631,965 | 35,567,196 | 35,976,915 | ||||
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES | ||||||||
| UNAUDITED SELECTED FINANCIAL HIGHLIGHTS | ||||||||
| (Dollars in thousands except per share amounts) | ||||||||
| At or For the Three Months Ended | ||||||||
| March 31, | December 31, | March 31, | ||||||
| 2020 | 2019 | 2019 | ||||||
| Per Share Data: | ||||||||
| Reported EPS (Diluted) | $0.24 | $0.19 | $0.32 | |||||
| Cash dividends paid per common share | 0.14 | 0.14 | 0.14 | |||||
| Book value per common share | 16.93 | 16.98 | 16.83 | |||||
| Tangible common book value per share (1) | 15.29 | 15.39 | 15.29 | |||||
| Dividend payout ratio | 58.33% | 73.68% | 43.75% | |||||
| Performance Ratios (Based upon Reported Net Income): | ||||||||
| Return on average assets | 0.54% | 0.44% | 0.72% | |||||
| Return on average equity | 5.35 | 4.58 | 7.62 | |||||
| Return on average tangible equity (1) | 5.87 | 5.05 | 8.39 | |||||
| Return on average tangible common equity (1) | 6.48 | 5.05 | 8.39 | |||||
| Net interest spread | 2.46 | 2.34 | 2.02 | |||||
| Net interest margin | 2.72 | 2.60 | 2.31 | |||||
| Average interest-earning assets to average interest-bearing liabilities | 120.93 | 120.29 | 118.14 | |||||
| Non-interest expense to average assets | 1.68 | 1.80 | 1.39 | |||||
| Efficiency ratio | 57.58 | 66.00 | 59.22 | |||||
| Loan-to-deposit ratio at end of period | 122.82 | 124.70 | 124.93 | |||||
| CRE consolidated concentration ratio (2) | 588.64 | 663.40 | 706.70 | |||||
| Effective tax rate | 21.63 | 18.48 | 24.88 | |||||
| Average Balance Data: | ||||||||
| Average assets | $6,207,949 | $6,279,715 | $6,364,098 | |||||
| Average interest-earning assets | 5,949,363 | 6,055,922 | 6,111,293 | |||||
| Average loans | 5,283,487 | 5,403,147 | 5,445,301 | |||||
| Average deposits | 4,177,592 | 4,355,122 | 4,341,045 | |||||
| Average equity | 627,344 | 606,084 | 604,074 | |||||
| Average tangible equity (1) | 571,706 | 550,446 | 548,436 | |||||
| Average tangible common equity (1) | 517,787 | 550,446 | 548,436 | |||||
| Asset Quality Summary: | ||||||||
| Non-performing loans (excluding loans held for sale) | $18,157 | $11,091 | $5,425 | |||||
| Non-performing assets | 18,157 | 11,091 | 5,425 | |||||
| Loans delinquent 30 to 89 days at period end | 13 | 682 | 338 | |||||
| Net (recoveries) charge-offs | (10 | ) | 5,093 | 162 | ||||
| Non-performing loans/ Total loans | 0.35% | 0.21% | 0.10% | |||||
| Non-performing assets/ Total assets | 0.29 | 0.17 | 0.08 | |||||
| Allowance for loan loss/ Total loans | 0.70 | 0.53 | 0.40 | |||||
| Allowance for loan loss/ Non-performing loans | 200.82 | 256.43 | 404.44 | |||||
| Capital Ratios - Consolidated: | ||||||||
| Tangible common equity to tangible assets (1) | 8.23% | 8.59% | 8.58% | |||||
| Tangible equity to tangible assets (1) | 9.38 | 8.59 | 8.58 | |||||
| Tier 1 common equity ratio | 10.69 | 11.15 | 11.04 | |||||
| Tier 1 risk-based capital ratio | 12.15 | 11.15 | 11.04 | |||||
| Total risk-based capital ratio | 15.21 | 14.08 | 13.77 | |||||
| Tier 1 leverage ratio | 9.80 | 8.79 | 8.81 | |||||
| Capital Ratios - Bank Only: | ||||||||
| Tier 1 common equity ratio | 12.72% | 12.85% | 12.39% | |||||
| Tier 1 risk-based capital ratio | 12.72 | 12.85 | 12.39 | |||||
| Total risk-based capital ratio | 13.47 | 13.44 | 12.84 | |||||
| Tier 1 leverage ratio | 9.93 | 10.15 | 9.77 | |||||
| (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. | ||||||||
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES | |||||||||||
| UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME | |||||||||||
| (Dollars in thousands) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||||
| 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 | $4,954,391 | $50,117 | 4.05% | $5,082,206 | $51,390 | 4.04% | $5,195,951 | $49,177 | 3.79% | ||
| Commercial and industrial loans | 327,653 | 4,045 | 4.94 | 319,553 | 3,968 | 4.97 | 248,267 | 3,436 | 5.54 | ||
| Other loans | 1,443 | 15 | 4.16 | 1,388 | 16 | 4.61 | 1,083 | 18 | 6.65 | ||
| Mortgage-backed securities | 486,722 | 3,305 | 2.72 | 454,384 | 3,135 | 2.76 | 464,303 | 3,197 | 2.75 | ||
| Investment securities | 47,060 | 421 | 3.58 | 66,544 | 636 | 3.82 | 47,177 | 420 | 3.56 | ||
| Other short-term investments | 132,094 | 1,002 | 3.03 | 131,847 | 1,198 | 3.63 | 154,512 | 1,447 | 3.75 | ||
| Total interest-earning assets | 5,949,363 | 58,905 | 3.96% | 6,055,922 | 60,343 | 3.99% | 6,111,293 | 57,695 | 3.78% | ||
| Non-interest-earning assets | 258,586 | 223,793 | 252,805 | ||||||||
| Total assets | $6,207,949 | $6,279,715 | $6,364,098 | ||||||||
| Liabilities and Stockholders' Equity: | |||||||||||
| Interest-bearing liabilities: | |||||||||||
| Interest-bearing checking accounts | $159,027 | $87 | 0.22% | $147,510 | $83 | 0.22% | $115,243 | $22 | 0.08% | ||
| Money market accounts | 1,580,779 | 3,586 | 0.91 | 1,780,485 | 5,062 | 1.13 | 2,029,794 | 7,640 | 1.53 | ||
| Savings accounts | 383,769 | 367 | 0.38 | 366,234 | 290 | 0.31 | 331,662 | 45 | 0.06 | ||
| Certificates of deposit | 1,586,549 | 7,886 | 2.00 | 1,603,921 | 8,774 | 2.17 | 1,466,439 | 7,310 | 2.02 | ||
| Total interest-bearing deposits | 3,710,124 | 11,926 | 1.29 | 3,898,150 | 14,209 | 1.45 | 3,943,138 | 15,017 | 1.54 | ||
| FHLBNY advances | 1,085,553 | 5,085 | 1.88 | 1,008,398 | 5,348 | 2.10 | 1,105,546 | 5,959 | 2.19 | ||
| Subordinated notes payable, net | 113,918 | 1,330 | 4.70 | 113,882 | 1,330 | 4.63 | 113,772 | 1,330 | 4.74 | ||
| Other borrowings | 9,890 | 40 | 1.63 | 14,097 | 59 | 1.66 | 10,289 | 65 | 2.56 | ||
| Borrowed Funds | 1,209,361 | 6,455 | 2.15 | 1,136,377 | 6,737 | 2.35 | 1,229,607 | 7,354 | 2.43 | ||
| Total interest-bearing liabilities | 4,919,485 | 18,381 | 1.50% | 5,034,527 | 20,946 | 1.65% | 5,172,745 | 22,371 | 1.75% | ||
| Non-interest-bearing checking accounts | 467,468 | 456,972 | 397,907 | ||||||||
| Other non-interest-bearing liabilities | 193,652 | 182,132 | 189,372 | ||||||||
| Total liabilities | 5,580,605 | 5,673,631 | 5,760,024 | ||||||||
| Stockholders' equity | 627,344 | 606,084 | 604,074 | ||||||||
| Total liabilities and stockholders' equity | $6,207,949 | $6,279,715 | $6,364,098 | ||||||||
| Net interest income | $40,524 | $39,397 | $35,324 | ||||||||
| Net interest spread | 2.46% | 2.34% | 2.02% | ||||||||
| Net interest-earning assets | $1,029,878 | $1,021,395 | $938,548 | ||||||||
| Net interest margin | 2.72% | 2.60% | 2.31% | ||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 120.93% | 120.29% | 118.14% | ||||||||
| Deposits (including non-interest-bearing checking accounts) | $4,177,592 | $11,926 | 1.15% | $4,355,122 | $14,209 | 1.29% | $4,341,045 | $15,017 | 1.40% | ||
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES | ||||||||
| UNAUDITED SCHEDULE OF LOAN COMPOSITION AND WEIGHTED AVERAGE RATES ("WAR") (1) | ||||||||
| (Dollars in thousands) | ||||||||
| At March 31, 2020 | At December 31, 2019 | At March 31, 2019 | ||||||
| Balance | WAR | Balance | WAR | Balance | WAR | |||
| Loan balances at period end: | ||||||||
| One-to-four family residential, including condominium and cooperative apartment | $176,755 | 3.89% | $148,429 | 4.28% | $107,709 | 4.58% | ||
| Multifamily residential and residential mixed-use (2)(3) | 3,160,248 | 3.78 | 3,385,375 | 3.75 | 3,831,145 | 3.61 | ||
| Commercial real estate and commercial mixed-use | 1,403,985 | 4.28 | 1,350,185 | 4.31 | 1,245,806 | 4.23 | ||
| Acquisition, development, and construction ("ADC") | 133,514 | 5.11 | 118,365 | 5.82 | 54,222 | 6.61 | ||
| Total real estate loans | 4,874,502 | 3.96 | 5,002,354 | 3.96 | 5,238,882 | 3.81 | ||
| Commercial and industrial ("C&I") | 331,816 | 4.49 | 336,412 | 5.18 | 266,415 | 5.72 | ||
| Total | $5,206,318 | 4.00% | $5,338,766 | 4.04% | $5,505,297 | 3.90% | ||
| (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 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. | ||||||||
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES | |||||
| UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS ("TDRs") | |||||
| (Dollars in thousands) | |||||
| At March 31, | At December 31, | At March 31, | |||
| 2020 | 2019 | 2019 | |||
| Non-Performing Loans | |||||
| One-to-four family residential, including condominium and cooperative apartment | $6,685 | $794 | $706 | ||
| Multifamily residential and residential mixed-use (1)(2) | 1,332 | 153 | 276 | ||
| Commercial real estate and commercial mixed-use real estate (2) | 56 | 60 | 4,205 | ||
| C&I | 10,082 | 10,082 | 232 | ||
| Other | 2 | 2 | 6 | ||
| Total Non-Performing Loans (3) | $ 18,157 | $ 11,091 | $ 5,425 | ||
| Total Non-Performing Assets | $ 18,157 | $ 11,091 | $ 5,425 | ||
| Performing TDR Loans | |||||
| One-to-four family and cooperative/condominium apartment | $- | $- | $12 | ||
| Multifamily residential and mixed-use residential real estate (1)(2) | - | - | 261 | ||
| Commercial real estate and commercial mixed-use real estate (2) | - | - | 4,061 | ||
| Total Performing TDRs | $- | $- | $ 4,334 | ||
| (1) Includes loans underlying 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. | |||||
| (3) There were no non-accruing TDRs for the periods indicated. | |||||
| PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE EQUITY AND RESERVES | |||||
| (Dollars in thousands) | |||||
| At March 31, | At December 31, | At March 31, | |||
| 2020 | 2019 | 2019 | |||
| Total Non-Performing Assets | $18,157 | $11,091 | $5,425 | ||
| Loans 90 days or more past due on accrual status (4) | 1,033 | 1,533 | 6,955 | ||
| TOTAL PROBLEM ASSETS | $19,190 | $12,624 | $12,380 | ||
| Tangible equity (5) | $590,010 | $541,120 | $550,636 | ||
| Allowance for loan losses and reserves for contingent liabilities | 36,488 | 28,466 | 21,966 | ||
| TANGIBLE EQUITY PLUS RESERVES | $626,498 | $569,586 | $572,602 | ||
| PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE EQUITY AND RESERVES | 3.1% | 2.2% | 2.2% | ||
| (4) These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed in the near future, and were not expected | |||||
| to result in any loss of contractual principal or interest. These loans are not included in non-performing loans. | |||||
| (5) See "Non-GAAP Reconciliation" table for reconciliation of tangible common equity and tangible assets. | |||||
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES | |||||||||||
| NON-GAAP RECONCILIATION | |||||||||||
| (Dollars in thousands except per share amounts) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2020 | 2019 | 2019 | |||||||||
| Reconciliation of Reported and Adjusted ("non-GAAP") Net Income: | |||||||||||
| Reported net income | $ | 8,392 | $ | 6,945 | $ | 11,501 | |||||
| Adjustments to net income, net of tax (1): | |||||||||||
| Add: Loss from extinguishment of debt | - | 2,584 | - | ||||||||
| Add: Branch consolidation | - | 126 | - | ||||||||
| Less: Loss (Gain) on sale of securities | (5 | ) | (67 | ) | 52 | ||||||
| Adjusted ("non-GAAP") net income | $ | 8,387 | $ | 9,588 | $ | 11,553 | |||||
| Adjusted Ratios (Based upon "non-GAAP Net Income" as calculated above): | |||||||||||
| Adjusted EPS (Diluted) | $ | 0.24 | $ | 0.27 | $ | 0.32 | |||||
| Adjusted return on average assets | 0.54% | 0.61% | 0.73% | ||||||||
| Adjusted return on average equity | 5.35 | 6.33 | 7.65 | ||||||||
| Adjusted return on average tangible equity | 5.87 | 6.97 | 8.43 | ||||||||
| Adjusted return on average tangible common equity | 6.48 | 6.97 | 8.43 | ||||||||
| Adjusted non-interest expense to average assets | 1.68 | 1.55 | 1.39 | ||||||||
| Adjusted efficiency ratio | 57.58 | 56.74 | 59.22 | ||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2020 | 2019 | 2019 | |||||||||
| Reconciliation of Tangible Assets: | |||||||||||
| Total assets | $ | 6,347,825 | $ | 6,354,460 | $ | 6,475,301 | |||||
| Less: | |||||||||||
| Goodwill | 55,638 | 55,638 | 55,638 | ||||||||
| Tangible assets | $ | 6,292,187 | $ | 6,298,822 | $ | 6,419,663 | |||||
| Reconciliation of Tangible Common Equity - Consolidated: | |||||||||||
| Total common equity | $ | 645,648 | $ | 596,758 | $ | 606,274 | |||||
| Less: | |||||||||||
| Goodwill | 55,638 | 55,638 | 55,638 | ||||||||
| Tangible equity | 590,010 | 541,120 | 550,636 | ||||||||
| Less: | |||||||||||
| Preferred Stock, net | 72,224 | - | - | ||||||||
| Tangible common equity | $ | 517,786 | $ | 541,120 | $ | 550,636 | |||||
| (1) Adjustments to net income are taxed at the Company's statutory tax rate of approximately 32% unless otherwise noted. | |||||||||||