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Dime Community Bancshares, Inc. Reports 295% Increase in Net Income Year-Over-Year
Источник: Nasdaq GlobeNewswire / 30 июл 2021 06:00:01 America/New_York
Continued Focus on Enhancing Greater Long Island’s Premier Deposit Franchise
Cost of Deposits Declines to 0.17% and Non-Interest-Bearing Deposits Increase to 33.3% of Total DepositsPPP Sale and Strong Earnings Result in Linked Quarter Increase in Capital Ratios
HAUPPAUGE, N.Y., July 30, 2021 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime” or “its”), the parent company of Dime Community Bank (the “Bank”), today reported net income available to common stockholders of $49.5 million for the quarter ended June 30, 2021, or $1.19 per diluted common share, compared with a net loss available to common stockholders of $22.9 million for the quarter ended March 31, 2021, or $0.66 per diluted common share, and net income available to common stockholders of $11.8 million for the quarter ended June 30, 2020, or $0.55 per diluted common share.
Adjusted net income to common stockholders (non-GAAP) totaled $39.1 million for the quarter ended June 30, 2021, or $0.94 per diluted share1. Adjusted net income to common stockholders includes the following primary adjustments:
- Gain on sale of Paycheck Protection Program (“PPP”) loans: As previously disclosed, the Company sold PPP loans it originated in 2021; this resulted in a pre-tax gain on sale of PPP loans of $20.7 million;
- Branch restructuring costs: As previously disclosed, the Company plans to combine five branch locations into other existing branches in October 2021; associated branch restructuring costs were $1.7 million, pre-tax.
- Merger expenses and transaction costs: The Company recorded merger expenses and transaction costs, associated with its merger of equals transaction, of $1.8 million, pre-tax;
- Other Adjustments: Severance expense totaled $1.9 million, pre-tax, and loss on extinguishment of debt totaled $0.2 million, pre-tax.
Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “During the second quarter we continued to grow Greater Long Island’s premier deposit franchise. Our high-quality deposit base, with over 33% of deposits in non-interest-bearing accounts, positions us well for the time when the Federal Reserve eventually raises interest rates. The sale of PPP loans along with strong earnings resulted in our tangible equity ratio increasing by 46 basis points on a linked quarter basis to 8.29%. In addition, our non-performing assets declined by approximately 20% on a linked quarter basis and represent only 0.22% of total assets.”
Mr. O’Connor continued, “Importantly, we have successfully executed on the cost savings outlined as part of our merger transaction. This is evidenced by our core efficiency ratio averaging approximately 48% for the last two quarters, which is below the 50% threshold we had outlined at the time of our merger of equals announcement. With the merger integration now behind us, our high quality, core-deposit funded balance sheet and strong pipelines provide me confidence in our future prospects.”
Highlights for the Second Quarter of 2021 Included:
- The non-interest-bearing deposits to total deposits ratio increased to 33.3% at June 30, 2021 and the cost of deposits for the second quarter of 2021 was proactively managed lower to 0.17%;
- Sold $596 million of PPP loans during the second quarter of 2021 resulting in a pre-tax gain of $20.7 million;
- Sold approximately $50 million of criticized loans in the second quarter of 2021 to de-risk the balance sheet;
- Excluding the sale of the aforementioned criticized loans, total loans excluding PPP loans increased by 3% on an annualized basis versus the linked quarter;
- Capital levels were bolstered in the quarter as a result of the PPP sale and strong earnings; the tangible equity to tangible assets ratio increased to 8.29% at June 30, 2021;
- The Company purchased 403,121 shares of its common stock, at a weighted average price of $34.33 per share;
- Non-performing assets declined 20% on a linked quarter basis and net charge-offs to average loans were only 0.04%; and
- The Company’s Adjusted Pre-tax Pre-provision Net Revenue (“PPNR”) for the second quarter was $52.7 million.1
1 See reconciliation of this non-GAAP financial measure provided elsewhere herein.
Management’s Discussion of Quarterly Operating Results
The Company’s results of operations for the second quarter of 2021 include income for the full quarter from the merger with Bridge Bancorp, Inc. (“Bridge”), compared to two months for the first quarter of 2021 following the completion of the merger on February 1, 2021. The Company’s historical information for the second quarter of 2020 does not include the historical GAAP results of Bridge.
Net Interest Income
Net interest income for the second quarter of 2021 was $93.3 million compared to $77.8 million for the first quarter of 2021 and $43.6 million for the second quarter of 2020.
The table below provides a reconciliation of the reported Net Interest Margin (“NIM”), the NIM excluding the impact of PPP loans, and the NIM excluding purchasing accounting accretion on the loan portfolio.
($ in thousands) Q2 2021 Q1 2021 Q2 2020 Net interest income $ 93,254 $ 77,841 $ 43,556 Less: Net interest income on PPP loans (5,375 ) (4,092 ) (958 ) Adjusted net interest income excluding PPP loans, (non-GAAP) $ 87,879 $ 73,749 $ 42,598 Average interest-earning assets $ 11,990,107 $ 10,057,598 $ 6,091,545 Average PPP loan balances (1,282,347 ) (1,020,910 ) (192,730 ) Adjusted average interest-earning assets excluding PPP loans, (non-GAAP) $ 10,707,760 $ 9,036,688 $ 5,898,815 NIM (1) 3.12 % 3.14 % 2.86 % Adjusted NIM excluding PPP loans (non-GAAP) (2) 3.29 % 3.31 % 2.89 % Adjusted net interest income excluding PPP loans, (non-GAAP) $ 87,879 $ 73,749 $ 42,598 Less: Purchase Accounting Accretion on loans ("PAA") (1,925 ) (1,333 ) — Adjusted net interest income excluding PPP loans and PAA on loans, (non-GAAP) $ 85,954 $ 72,416 $ 42,598 Adjusted NIM excluding PPP loans and PAA on loans, (non-GAAP) (3) 3.23 % 3.26 % 2.89 % (1) NIM represents net interest income divided by average interest-earning assets.
(2) Adjusted NIM excluding PPP represents adjusted net interest income, which excludes net interest income on PPP loans divided by average interest-bearing liabilities excluding PPP loans. The net interest income on PPP loans is calculated using interest income on the PPP balances less an assumed cost of funding the PPP loans, using the overall cost of funds of the Company.
(3) Adjusted NIM excluding PPP and PAA represents adjusted net interest income excluding PPP loans and PAA, divided by adjusted average interest-earning assets, excluding PPP loans.
Loan PortfolioThe ending weighted average rate (“WAR”) on the total loan portfolio was 3.67% at June 30, 2021, a 23 basis point increase compared to the ending WAR on the total loan portfolio at March 31, 2021. Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.80% at June 30, 2021, compared to 3.83% at March 31, 2021.
Outlined below are loan balances and WARs(1) for the current quarter, linked quarter and prior year quarter.
June 30, 2021 March 31, 2021 June 30, 2020 ($ in thousands) Balance WAR Balance WAR Balance WAR Loan balances at period end: One-to-four family residential, including condominium and cooperative apartment $ 704,489 3.74 % $ 696,415 3.81 % $ 182,264 3.98 % Multifamily residential and residential mixed-use (2)(3) 3,503,205 3.59 3,567,207 3.61 2,988,511 3.77 CRE 3,681,331 3.84 3,631,287 3.85 1,504,020 4.06 ADC 290,462 4.73 254,170 4.85 136,606 5.08 C&I 878,331 4.23 898,533 4.27 321,009 4.39 Other loans 23,275 5.01 24,409 4.97 1,463 7.49 Loans excluding SBA PPP 9,081,093 3.80 9,072,021 3.83 5,133,873 3.94 SBA PPP 465,538 1.00 1,434,077 1.00 310,509 1.00 Total loans including SBA PPP $ 9,546,631 3.67 % $ 10,506,098 3.44 % $ 5,444,382 3.77 % (1) Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, divided by the total amount of loans in the category.
(2) Includes multifamily loans underlying cooperatives.
(3) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.Outlined below are the loan originations for the current quarter, linked quarter and prior year.
Originations ($ in millions) Q2 2021 Q1 2021 Q2 2020 Loans excluding PPP $ 425.7 $ 336.4 $ 204.0 PPP loans $ 36.4 $ 573.3 $ 319.4 Deposits and Borrowed Funds
Total deposits increased by $255.4 million on a linked quarter basis to $11.1 billion at June 30, 2021. Non-interest-bearing deposits increased $150.1 million during the second quarter of 2021 to $3.7 billion at June 30, 2021 and now represent 33.3% of total deposits.
The cost of total deposits for the quarter ended June 30, 2021 decreased to 0.17%, representing an 8 basis point linked quarter decline.
As of June 30, 2021, the Company had $437.2 million of certificates of deposit, with a weighted average rate of 0.41%, that were set to mature during the third quarter of 2021.
Total Federal Home Loan Bank advances were reduced to $25.0 million at June 30, 2021, compared to $533.9 million at March 31, 2021. Mr. O’Connor stated, “During the second quarter we paid down our Federal Home Loan Bank advance portfolio and we are now effectively a core deposit-funded institution without any wholesale leverage. This balance sheet structure positions us well for a rising interest rate scenario.”
Non-Interest Income
Non-interest income (loss) was $29.5 million during the second quarter of 2021, $(7.4) million during the first quarter of 2021, and $8.4 million during the second quarter of 2020. Excluding the gain on sale of PPP loans, adjusted non-interest income was $8.8 million during the second quarter of 2021 compared to $8.4 million during the first quarter of 2021 and $5.3 million during the second quarter of 2020. (see “Non-GAAP Reconciliation” table at the end of this news release).
Non-Interest Expense
Total non-interest expense was $54.9 million during the second quarter of 2021, $82.8 million during the first quarter of 2021, and $29.3 million during the second quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, severance expense, loss on extinguishment of debt, and amortization of other intangible assets, adjusted non-interest expense was $48.5 million during the second quarter of 2021, compared to $41.4 million during the first quarter of 2021, and $24.3 million during the second quarter of 2020. (See “Non-GAAP Reconciliation” table at the end of this news release).
The ratio of non-interest expense to average assets was 1.72% during the first quarter of 2021, compared to 3.11% during the linked quarter and 1.84% for the first quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, severance expense, loss on extinguishment of debt, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.52% during the second quarter of 2021, compared to 1.55% during the linked quarter and 1.52% for the second quarter of 2020. (see “Non-GAAP Reconciliation” table at the end of this news release).
The efficiency ratio was 44.7% during the second quarter of 2021, compared to 117.5% during the linked quarter and 56.5% during the second quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, severance expense, loss on extinguishment of debt, amortization of other intangible assets, gain on sale of PPP loans, the adjusted efficiency ratio was 47.5% during the second quarter of 2021, compared to 48.0% during the linked quarter and 49.9% during the second quarter of 2020. (see “Non-GAAP Reconciliation” table at the end of this news release).
Income Tax Expense
The reported effective tax rate for the second quarter of 2021 was 28.9%, compared to 25.2% for the first quarter of 2021, and 21.6% for the second quarter of 2020. The increase in the effective tax rate during the second quarter of 2021 was primarily the result of the increase in taxable income and non-deductible expenses during the period. The effective tax rate for the remainder of 2021 is expected to be approximately 27.5%.
Credit Quality
Non-performing loans at June 30, 2021 were $28.3 million, or 0.30% of total loans. Non-performing loans, excluding acquired PCD loans, would have been $18.5 million, or 0.20% of total loans excluding acquired PCD loans.
A credit loss recovery of $4.2 million was recorded during the second quarter of 2021, compared to a credit loss provision of $15.8 million during the first quarter of 2021, and a credit loss provision of $6.1 million during the second quarter of 2020. The credit loss recovery of $4.2 million for the second quarter of 2021 was primarily associated with the improvement in forecasted macroeconomic conditions.
The allowance for credit losses as a percentage of total loans was 0.97% at June 30, 2021 as compared to 0.93% at March 31, 2021 and 0.78% at June 30, 2020. Excluding PPP loans, the ratio of allowance for credit losses at June 30, 2021 would have been 1.02%.
Loans with Payment Deferrals
On a linked quarter basis, Principal and Interest (“P&I”) deferrals declined by approximately 33% and represent 0.5% of the total loan portfolio.
Capital Management
The Company’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.
Mr. O’Connor commented, “Given our strong balance sheet and the comfort provided by the detailed third-party reviews we conducted on our loan portfolio as part of the merger transaction, we resumed our share repurchase program in the month of May. In the second quarter we repurchased 403,121 shares, totaling $13.8 million, and we continue to be active on the repurchase front into the third quarter.”
Dividends per common share were $0.24 during the second quarter of 2021.
Book value per common share was $26.43 and tangible common book value per share (common equity less goodwill and other intangible assets divided by number of shares outstanding) (see “Non-GAAP Reconciliation” tables at the end of this news release) was $22.41 at June 30, 2021.
Including the impact of the remaining unrecognized fees on PPP loans, net of tax, adjusted tangible common book value per share would have been $22.46. See “Non-GAAP Reconciliation” tables at the end of this news release for details.
Earnings Call Information
The Company will conduct a conference call at 8:30 a.m. (ET) on July 30, 2021, during which CEO, Kevin M. O’Connor will discuss the Company’s second quarter performance, with a question and answer session to follow. Dial-in information for the live call is 1-888-348-2672. Upon dialing in, request to be joined into Dime Community Bancshares, Inc. call with the conference operator.
The conference call will be simultaneously webcast (listen only), and archived for a period of one year, at https://services.choruscall.com/links/dcom210729.html. Dial-in information for the replay is 1-877-344-7529 using access code #10158072. Replay will be available July 30, 2021 (10:30 a.m.) through August 13, 2021 (11:59 p.m.).
ABOUT DIME COMMUNITY BANCSHARES, INC.
Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company with over $12.7 billion in assets and number one deposit market share among community banks on Greater Long Island(1).(1) Aggregate deposit market share for Kings, Queens, Nassau & Suffolk counties for community banks less than $20 billion in assets.
This news release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," “continue,” "could," "estimate," "expect," "intend," “likely,” "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.
Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on such statements. Factors that could affect our results include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company and/or the Bank; unanticipated or significant increases in loan losses may negatively affect the Company’s financial condition or results of operations; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; there may be failures or breaches of information technology security systems; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates; Further, given its ongoing and dynamic nature, it is difficult to predict what effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch closures, work stoppages and unavailability of personnel; and increased cybersecurity risks, as employees increasingly work remotely.
Contact: Avinash Reddy Senior Executive Vice President – Chief Financial Officer 718-782-6200 extension 5909 DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)June 30, March 31, December 31, 2021 2021 2020 Assets: Cash and due from banks $ 1,184,183 $ 676,723 $ 243,603 Mortgage-backed securities available-for-sale, at fair value 863,239 846,529 426,979 Investment securities available-for-sale, at fair value 398,549 305,964 111,882 Marketable equity securities, at fair value — — 5,970 Loans held for sale 29,335 23,704 5,903 Loans held for investment, net: One-to-four family and cooperative/condominium apartment 704,489 696,415 184,989 Multifamily residential and residential mixed-use (1)(2) 3,503,205 3,567,207 2,758,743 Commercial real estate ("CRE") 3,681,331 3,631,287 1,878,167 Acquisition, development, and construction ("ADC") 290,462 254,170 156,296 Total real estate loans 8,179,487 8,149,079 4,978,195 Commercial and industrial ("C&I") 878,331 898,533 319,626 Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans 465,538 1,434,077 321,907 Other loans 23,275 24,409 2,316 Allowance for credit losses (92,760 ) (98,200 ) (41,461 ) Total loans held for investment, net 9,453,871 10,407,898 5,580,583 Premises and fixed assets, net 51,127 53,829 19,053 Premises held for sale 2,799 — — Restricted stock 22,449 45,063 60,707 Bank Owned Life Insurance ("BOLI") 293,113 251,521 156,096 Goodwill 155,339 155,339 55,638 Other intangible assets 9,792 10,627 — Operating lease assets 69,189 69,094 33,898 Derivative assets 45,439 45,760 18,932 Accrued interest receivable 47,209 51,100 34,815 Other assets 78,052 75,477 27,551 Total assets $ 12,703,685 $ 13,018,628 $ 6,781,610 Liabilities: Non-interest-bearing checking $ 3,689,072 $ 3,538,936 $ 780,751 Interest-bearing checking 1,101,038 1,023,164 290,300 Savings 1,305,028 1,078,687 414,809 Money market 3,670,090 3,629,709 1,716,624 Certificates of deposit 1,300,965 1,540,316 1,322,638 Total deposits 11,066,193 10,810,812 4,525,122 FHLBNY advances 25,000 533,865 1,204,010 Other short-term borrowings 1,841 126,763 120,000 Subordinated debt, net 197,188 197,234 114,052 Operating lease liabilities 72,170 71,249 39,874 Derivative liabilities 42,892 41,816 37,374 Other liabilities 94,125 64,065 40,082 Total liabilities 11,499,409 11,845,804 6,080,514 Stockholders' equity: Preferred stock, Series A 116,569 116,569 116,569 Common stock 416 416 348 Additional paid-in capital 492,848 492,431 278,295 Retained earnings 613,791 574,297 600,641 Accumulated other comprehensive gain (loss), net of deferred taxes 4,576 531 (5,924 ) Unearned equity awards (8,529 ) (10,107 ) — Common stock held by the Benefit Maintenance Plan — — (1,496 ) Treasury stock, at cost (15,395 ) (1,313 ) (287,337 ) Total stockholders' equity 1,204,276 1,172,824 701,096 Total liabilities and stockholders' equity $ 12,703,685 $ 13,018,628 $ 6,781,610 (1) Includes loans underlying multifamily cooperatives.
(2) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except share and per share amounts)Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2021 2021 2020 2021 2020 Interest income: Loans $ 94,288 $ 81,382 $ 54,142 $ 175,670 $ 108,319 Securities 5,126 4,380 3,646 9,506 7,372 Other short-term investments 987 993 846 1,980 1,848 Total interest income 100,401 86,755 58,634 187,156 117,539 Interest expense: Deposits and escrow 4,803 5,298 9,700 10,101 21,626 Borrowed funds 2,344 3,616 5,378 5,960 11,833 Total interest expense 7,147 8,914 15,078 16,061 33,459 Net interest income 93,254 77,841 43,556 171,095 84,080 (Credit) provision for credit losses (4,248 ) 15,779 6,060 11,531 14,072 Net interest income after (credit) provision 97,502 62,062 37,496 159,564 70,008 Non-interest income: Service charges and other fees 3,876 2,920 1,083 6,796 2,286 Title fees 688 433 — 1,121 — Loan level derivative income 559 1,792 2,494 2,351 3,657 BOLI income 1,593 1,339 911 2,932 2,798 Gain on sale of SBA loans excluding PPP 973 164 — 1,137 164 Gain on sale of PPP loans 20,697 — — 20,697 — Gain on sale of residential loans 506 723 206 1,229 357 Net gain (loss) on equity securities — 131 436 131 (36 ) Net gain on sale of securities and other assets 20 710 3,134 730 3,142 Loss on termination of derivatives — (16,505 ) — (16,505 ) — Other 632 910 122 1,542 254 Total non-interest income (loss) 29,544 (7,383 ) 8,386 22,161 12,622 Non-interest expense: Salaries and employee benefits 27,598 24,819 15,197 52,417 30,714 Severance 1,875 — 3,930 1,875 4,000 Occupancy and equipment 8,122 6,977 3,959 15,099 8,015 Data processing costs 5,031 3,528 2,007 8,559 4,031 Marketing 788 860 218 1,648 795 Professional services 2,538 1,865 264 4,403 1,778 Federal deposit insurance premiums 934 939 529 1,873 1,006 Loss on extinguishment of debt 157 1,594 — 1,751 — Curtailment loss — 1,543 — 1,543 — Merger expenses and transaction costs 1,836 37,942 1,072 39,778 1,658 Branch restructuring costs 1,659 — — 1,659 — Amortization of other intangible assets 835 357 — 1,192 — Other 3,509 2,381 2,170 5,890 3,389 Total non-interest expense 54,882 82,805 29,346 137,687 55,386 Income (loss) income before taxes 72,164 (28,126 ) 16,536 44,038 27,244 Income tax expense (benefit) 20,886 (7,092 ) 3,570 13,794 5,886 Net income (loss) 51,278 (21,034 ) 12,966 30,244 21,358 Preferred stock dividends 1,822 1,821 1,140 3,643 1,140 Net income (loss) available to common stockholders $ 49,456 $ (22,855 ) $ 11,826 $ 26,601 $ 20,218 Earnings per common share ("EPS"): Basic $ 1.19 $ (0.66 ) $ 0.55 $ 0.70 $ 0.92 Diluted $ 1.19 $ (0.66 ) $ 0.55 $ 0.70 $ 0.91 Average common shares outstanding for diluted EPS 40,981,585 34,262,005 21,541,918 37,640,404 22,028,192 DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share amounts)At or For the Three Months Ended At or For the Six Months Ended June 30, March 31, June 30, June 30, June 30, 2021 2021 2020 2021 2020 Per Share Data: Reported EPS (Diluted) $ 1.19 $ (0.66 ) $ 0.55 $ 0.70 $ 0.91 Cash dividends paid per common share 0.24 0.24 0.22 0.48 0.43 Book value per common share 26.43 25.43 26.35 Tangible common book value per share (1) 22.41 21.43 23.75 Common shares outstanding 41,160 41,536 21,442 Dividend payout ratio 20.17 % (36.36 ) % 40.00 % 68.57 % 47.25 % Performance Ratios (Based upon Reported Net Income): Return on average assets 1.61 % (0.79 ) % 0.81 % 0.45 % 0.64 % Return on average equity 17.22 (8.18 ) 7.96 4.79 6.32 Return on average tangible common equity (1) 22.02 (11.58 ) 9.23 6.49 7.72 Net interest margin 3.12 3.14 2.86 3.13 2.79 Non-interest expense to average assets 1.72 3.11 1.84 2.35 1.76 Efficiency ratio 44.7 117.5 56.5 71.2 57.3 Effective tax rate 28.94 25.22 21.59 31.32 21.60 Balance Sheet Data: Average assets $ 12,756,909 $ 10,666,619 $ 6,389,768 $ 11,717,336 $ 6,298,859 Average interest-earning assets 11,990,107 10,057,598 6,091,545 11,029,192 6,020,454 Average tangible common equity (1) 908,747 781,355 512,371 845,298 523,983 Loan-to-deposit ratio at end of period 86.3 97.2 121.0 Capital Ratios and Reserves - Consolidated: (3) Tangible common equity to tangible assets (1) 7.36 % 6.93 % 7.94 % Tangible equity to tangible assets (1) 8.29 7.83 9.76 Tier 1 common equity ratio 9.93 9.65 10.69 Tier 1 risk-based capital ratio 11.18 10.91 13.07 Total risk-based capital ratio 14.26 14.04 16.29 Tier 1 leverage ratio 8.24 9.62 10.11 CRE consolidated concentration ratio (2) 506 517 545 Allowance for credit losses/ Total loans 0.97 0.93 0.78 Allowance for credit losses/ Non-performing loans 327.94 276.24 276.23 (1) See "Non-GAAP Reconciliation" table for reconciliation of tangible equity, tangible common equity, and tangible assets. Average balances are calculated using the ending balance for months during the period indicated.
(2) The CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner occupied commercial real estate, multifamily, and ADC, divided by consolidated capital. June 30, 2021 amounts are preliminary pending completion and filing of the Company’s regulatory reports.
(3) June 30, 2021 amounts are preliminary pending completion and filing of the Company’s regulatory reports.DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)Three Months Ended June 30, 2021 March 31, 2021 June 30, 2020 Average Average Average Average Yield/ Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Balance Interest Cost Assets: Interest-earning assets: Real estate loans $ 8,156,368 $ 74,437 3.66 % $ 7,039,881 $ 66,144 3.81 % $ 4,867,970 $ 49,058 4.03 % Commercial and industrial loans 932,297 13,277 5.71 730,850 9,835 5.46 326,269 3,583 4.39 SBA PPP loans 1,282,347 6,174 1.93 1,020,910 5,049 2.01 192,730 1,488 3.09 Other loans 24,349 400 6.59 17,509 354 8.20 870 13 5.98 Mortgage-backed securities 825,949 3,483 1.69 665,190 3,080 1.88 468,705 3,064 2.61 Investment securities 312,012 1,643 2.11 199,918 1,300 2.64 65,155 582 3.57 Other short-term investments 456,785 987 0.87 383,340 993 1.05 169,846 846 1.99 Total interest-earning assets 11,990,107 100,401 3.36 % 10,057,598 86,755 3.50 % 6,091,545 58,634 3.85 % Non-interest-earning assets 766,802 609,021 298,223 Total assets $ 12,756,909 $ 10,666,619 $ 6,389,768 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest-bearing checking $ 1,067,043 $ 501 0.19 % $ 662,273 $ 351 0.21 % $ 222,694 $ 212 0.38 % Money market 3,712,344 1,941 0.21 2,893,723 1,987 0.28 1,656,394 2,495 0.60 Savings 1,189,460 212 0.07 863,409 207 0.10 404,389 305 0.30 Certificates of deposit 1,421,480 2,149 0.61 1,522,017 2,753 0.73 1,511,598 6,688 1.77 Total interest-bearing deposits 7,390,327 4,803 0.26 5,941,422 5,298 0.36 3,795,075 9,700 1.02 FHLBNY advances 145,324 132 0.36 853,162 1,711 0.81 962,657 4,047 1.68 Subordinated debt, net 197,218 2,211 4.50 168,607 1,902 4.57 113,955 1,330 4.67 Other short-term borrowings 5,514 1 0.07 15,021 3 0.08 2,747 1 0.15 Total borrowings 348,056 2,344 2.70 1,036,790 3,616 1.41 1,079,359 5,378 1.99 Total interest-bearing liabilities 7,738,383 7,147 0.37 % 6,978,212 8,914 0.52 % 4,874,434 15,078 1.24 % Non-interest-bearing checking 3,652,482 2,494,630 618,107 Other non-interest-bearing liabilities 175,031 164,859 245,908 Total liabilities 11,565,896 9,637,701 5,738,449 Stockholders' equity 1,191,013 1,028,918 651,319 Total liabilities and stockholders' equity $ 12,756,909 $ 10,666,619 $ 6,389,768 Net interest income $ 93,254 $ 77,841 $ 43,556 Net interest rate spread 2.99 % 2.98 % 2.61 % Net interest margin 3.12 % 3.14 % 2.86 % Deposits (including non-interest-bearing checking accounts) $ 11,042,809 $ 4,803 0.17 % $ 8,436,052 $ 5,298 0.25 % $ 4,413,182 $ 9,700 0.88 % DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS
(Dollars in thousands)At or For the Three Months Ended June 30, March 31, June 30, Asset Quality Detail 2021 2021 2020 Non-performing loans (NPLs) (1) One-to-four family residential, including condominium and cooperative
apartment$ 4,933 $ 5,384 $ 819 Multifamily residential and residential mixed-use — 4,844 1,377 CRE 9,152 10,595 3,003 Acquisition, development, and construction ("ADC") — 104 — C&I 14,109 14,523 10,176 Other 92 99 2 Total Non-accrual loans $ 28,286 $ 35,549 $ 15,377 Loans 90 days delinquent and accruing ("90+ Delinquent") One-to-four family residential, including condominium and cooperative
apartment$ 5,065 $ 45 $ 44 Multifamily residential and residential mixed-use 157 2,871 1,480 CRE 2,259 2,167 ADC — — — C&I 1,487 3,652 — Other — — — 90+ Delinquent $ 6,709 $ 8,827 $ 3,691 NPAs and 90+ Delinquent $ 34,995 $ 44,376 $ 19,068 NPAs and 90+ Delinquent / Total assets 0.28 % 0.34 % 0.28 % Net charge-offs (NCOs) $ 918 $ 4,275 $ 31 NCOs / Average loans (1) 0.04 % 0.19 % 0.00 % (1) Excludes loans held for sale
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(Dollars in thousands except per share amounts)The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.
The following non-GAAP financial measures exclude pre-tax income and expenses associated with the Company’s merger with Legacy Bridge.
Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2021 2021 2020 2021 2020 Reconciliation of Reported and Adjusted (non-GAAP) Net
Income Available to Common StockholdersReported net income (loss) available to common stockholders $ 49,456 $ (22,855 ) $ 11,826 $ 26,601 $ 20,218 Adjustments to net income (loss)(1): Provision for credit losses - Non-PCD loans (double-count) — 20,278 — 20,278 — Gain on sale of PPP loans (20,697 ) — — (20,697 ) — Net gain on sale of securities and other assets — (710 ) (3,134 ) (710 ) (3,142 ) Loss on termination of derivatives — 16,505 — 16,505 — Severance 1,875 — 3,930 1,875 4,000 Loss on extinguishment of debt 157 1,594 — 1,751 — Curtailment loss — 1,543 — 1,543 — Merger expenses and transaction costs (2) 1,836 37,942 1,072 39,778 1,658 Branch restructuring costs 1,659 — — 1,659 — Income tax effect of adjustments and other tax adjustments 4,852 (21,848 ) (445 ) (16,996 ) (552 ) Adjusted net income available to common stockholders (non-GAAP) $ 39,138 $ 32,449 $ 13,249 $ 71,587 $ 22,182 Adjusted Ratios (Based upon non-GAAP as calculated above) Adjusted EPS (Diluted) $ 0.94 $ 0.94 $ 0.61 $ 1.88 $ 1.00 Adjusted return on average assets 1.28 % 1.29 % 0.90 % 1.28 % 0.74 % Adjusted return on average equity 13.76 13.32 8.84 13.55 7.30 Adjusted return on average tangible common equity 17.48 16.74 10.34 17.13 8.47 Adjusted non-interest expense to average assets 1.52 1.55 1.52 1.53 1.58 Adjusted efficiency ratio 47.5 48.0 49.9 47.7 53.2 (1) Adjustments to net income are taxed at the Company's statutory tax rate of approximately 31% unless otherwise noted.
(2) Certain merger expenses and transaction costs are non-taxable expense.The following table presents a reconciliation of net interest income, non-interest income, and non-interest expense to pre-tax pre-provision net revenue (non-GAAP) and adjusted pre-tax pre-provision net revenue (non-GAAP):
Three Months Ended June 30, 2021 Net interest income $ 93,254 Non-interest income 29,544 Total revenues 122,798 Non-interest expense 54,882 Pre-tax pre-provision net revenue (non-GAAP) (1) $ 67,916 Adjustments: Net gain on sale of PPP loans (20,697 ) Severance 1,875 Loss on extinguishment of debt 157 Merger expenses and transaction costs 1,836 Branch restructuring costs 1,659 Adjusted pre-tax pre-provision net revenue (non-GAAP) (2) $ 52,746 (1) The reported pre-tax pre-provision net revenue is a non-GAAP measure calculated by adding GAAP net interest income and GAAP non-interest loss less GAAP non-interest expense.
(2) The adjusted pre-tax pre-provision net revenue is a non-GAAP measure calculated by adding pre-tax pre-provision net revenue less the net gain on sale of PPP loans, severance, loss on extinguishment of debt, merger expenses and transaction costs, and branch restructuring costs.The following table presents a reconciliation of operating expense as a percentage of average assets (as reported) and adjusted operating expense as a percentage of average assets (non-GAAP):
Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2021 2021 2020 2021 2020 Operating expense as a % of average assets - as reported 1.72 % 3.11 % 1.84 % 2.35 % 1.76 % Loss on extinguishment of debt — (0.06 ) — (0.03 ) — Curtailment loss — (0.06 ) — (0.03 ) — Severance (0.06 ) — (0.25 ) (0.03 ) (0.13 ) Merger expenses and transaction costs (0.06 ) (1.43 ) (0.07 ) (0.68 ) (0.05 ) Branch restructuring costs (0.05 ) — — (0.03 ) — Amortization of other intangible assets (0.03 ) (0.01 ) — (0.02 ) — Adjusted operating expense as a % of average assets (non-GAAP) 1.52 1.55 1.52 1.53 1.58 The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP):
Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2021 2021 2020 2021 2020 Efficiency ratio - as reported (non-GAAP) (1) 44.7 % 117.5 % 56.5 % 71.2 % 57.3 % Non-interest expense - as reported $ 54,882 $ 82,805 $ 29,346 $ 137,687 $ 55,386 Less: Severance (1,875 ) — (3,930 ) (1,875 ) (4,000 ) Less: Merger expenses and transaction costs (1,836 ) (37,942 ) (1,072 ) (39,778 ) (1,658 ) Less: Branch restructuring costs (1,659 ) — — (1,659 ) — Less: Loss on extinguishment of debt (157 ) (1,594 ) — (1,751 ) — Less: Curtailment loss — (1,543 ) — (1,543 ) — Less: Amortization of other intangible assets (835 ) (357 ) — (1,192 ) — Adjusted non-interest expense (non-GAAP) $ 48,520 $ 41,369 $ 24,344 $ 89,889 $ 49,728 Net interest income - as reported $ 93,254 $ 77,841 $ 43,556 $ 171,095 $ 84,080 Non-interest income (loss) - as reported $ 29,544 $ (7,383 ) $ 8,386 $ 22,161 $ 12,622 Less: Gain on sale of PPP loans (20,697 ) — — (20,697 ) — Less: Net gain on sale of securities and other assets — (710 ) (3,134 ) (710 ) (3,142 ) Less: Loss on termination of derivatives — 16,505 — 16,505 — Adjusted non-interest income (non-GAAP) $ 8,847 $ 8,412 $ 5,252 $ 17,259 $ 9,480 Adjusted total revenues for adjusted efficiency ratio (non-GAAP) $ 102,101 $ 86,253 $ 48,808 $ 188,354 $ 93,560 Adjusted efficiency ratio (non-GAAP) (2) 47.5 % 48.0 % 49.9 % 47.7 % 53.2 % (1) The reported efficiency ratio is a non-GAAP measure calculated by dividing GAAP non-interest expense by the sum of GAAP net interest income and GAAP non-interest (loss) income.
(2) The adjusted efficiency ratio is a non-GAAP measure calculated by dividing adjusted non-interest expense by the sum of GAAP net interest income and adjusted non-interest income.The following table presents the tangible assets, tangible common equity, and adjusted tangible common book value per share calculation (non-GAAP):
June 30, March 31, June 30, 2021 2021 2020 Reconciliation of Tangible Assets: Total assets $ 12,703,685 $ 13,018,628 $ 6,467,521 Less: Goodwill 155,339 155,339 55,638 Other intangible assets 9,792 10,627 — Tangible assets (non-GAAP) $ 12,538,554 $ 12,852,662 $ 6,411,883 Reconciliation of Adjusted Tangible Common Equity - Consolidated: Total stockholders' equity $ 1,204,276 $ 1,172,824 $ 681,543 Less: Goodwill 155,339 155,339 55,638 Other intangible assets 9,792 10,627 — Tangible equity (non-GAAP) 1,039,145 1,006,858 625,905 Less: Preferred stock, net 116,569 116,569 116,569 Tangible common equity (non-GAAP) $ 922,576 $ 890,289 $ 509,336 Add: Unamortized deferred fees on PPP loans, net of tax 1,979 16,901 6,191 Adjusted tangible common equity (non-GAAP) $ 924,555 $ 907,190 $ 515,527 Common shares outstanding 41,160 41,536 21,442 Tangible common book value per share (non-GAAP) $ 22.41 $ 21.43 $ 23.75 Adjusted tangible common book value per share (non-GAAP) $ 22.46 $ 21.84 $ 24.04