Dime Community Bancshares, Inc. Reports Strong Second Quarter 2022 Results With Net Income Available to Common Stockholders Increasing By 12% Versus the Prior Quarter


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