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 to common stockholders of $11.8 million for the quarter ended June 30, 2020, or $0.35 per diluted common share, compared with net income to common stockholders of $8.4 million for the quarter ended March 31, 2020, or $0.24 per diluted common share, and net income to common stockholders of $13.0 million for the quarter ended June 30, 2019, or $0.36 per diluted common share.

Excluding the pre-tax impact of $3.9 million of severance expenses related to an organizational restructuring, $1.1 million of merger related expenses, and $3.1 million of income from gain on sale of securities, earnings per share (“EPS”) for the quarter ended June 30, 2020 would have been $0.39 per diluted share.

Mr. Kenneth J. Mahon, Chief Executive Officer (“CEO”) of the Company, stated, “Our extremely strong second quarter results were underpinned by linked quarter net interest margin (“NIM”) expansion of 14 basis points and year-over-year non-interest income growth (excluding gain on sale of securities) of 83%. In the month of June we fortified already very strong capital ratios through the issuance of perpetual preferred stock. During this challenging period in the midst of the pandemic and economic downturn, Dime’s earnings profile and robust capital base helps position us well to serve our customers and communities, our employees and investors. Earlier this month, we announced our intention to merge with Bridge Bancorp, Inc. and create a premier community-based business bank with over $11 billion in assets. I am proud of the hard work and collaboration from our respective integration teams and am extremely excited that we are on our way to create a foundational franchise that has the opportunity to dominate the New York community banking landscape in the years ahead.”

Highlights for the Second Quarter of 2020 Included:

  • The Company raised net proceeds of $44 million from its perpetual preferred stock offering in the second quarter of 2020. The Company had previously raised net proceeds of $72 million from its perpetual preferred stock offering in the first quarter of 2020.  Outlined below are the Company’s consolidated capital ratios.
  Q2 2020 Q1 2020 Q2 2019
Total Equity to Total Assets 10.54% 10.17% 9.37%
Tangible Equity to Tangible Assets (1) 9.76% 9.38% 8.58%
Tier 1 Risk-Based Capital Ratio 13.07% 12.15% 10.94%
Total Risk-Based Capital Ratio 16.29% 15.21% 13.58%
(1)  See "Non-GAAP Reconciliation" tables for reconciliation of tangible equity and tangible assets.
  • Linked quarter NIM expansion of 14 basis points primarily driven by a 27 basis point linked quarter decrease in the cost of deposits;
  • Strong growth in checking account balances. Compared to the second quarter of 2019, the sum of average non-interest-bearing checking account balances and average interest-bearing checking account balances for the second quarter of 2020 increased by 53.7% to $840.8 million;
  • Loans to small businesses under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) totaled $310.5 million at June 30, 2020. Total potential unrecognized income from processing these loans is approximately $8.9 million;
  • Loan-to-deposit ratio declined to 122.7% at June 30, 2020, versus 124.7% at June 30, 2019. Excluding the $310.5 million of PPP loans, the loan-to-deposit ratio would have been 115.7% at June 30, 2020;  
  • Our Municipal Banking division, which began operations in the fourth quarter of 2019, grew its deposit portfolio to approximately $351 million at June 30, 2020; 
  • Total non-interest income grew to $8.4 million in the second quarter of 2020, driven by $2.5 million of customer-related loan level swap income, $0.9 million of BOLI income (the Company purchased $20.0 million of additional BOLI in the month of June) and $3.1 million of gain on sale of securities, versus $2.8 million of non-interest income for the second quarter of 2019; and
  • The Company repurchased 975,064 shares of its common stock, which represented 2.9% of beginning period shares outstanding, in the second quarter of 2020, at a weighted average price of $14.62.

Loans with Payment Deferrals

We are focused on supporting our clients who may be experiencing financial hardships due to COVID-19, including making deferrals on payments as needed. Our deferral program began in April 2020. Total loans with payment deferrals as of June 30, 2020, declined to $916.3 million versus $1.09 billion as of May 31, 2020. Of the tranche of $489.1 million of loans that were provided payment deferrals in the month of April, $120.1 million are now paying full interest and escrow (i.e., only principal is being deferred on these loans) and $194.9 million are no longer requiring any form of payment relief.

We continue to closely monitor segments of our loan portfolio that may be disproportionately impacted by the pandemic. As of June 30, 2020, the Company had 15 loans aggregating $27.0 million to restaurants and 13 loans aggregating $176.3 million to hotels. As of June 30, 2020, loans with payment deferrals to restaurants totaled $12.4 million and loans with payment deferrals to hotels totaled $43.1 million. 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 concluded, “Our capital strength, earnings profile and the nature of our asset classes provides me confidence that we will be able to navigate through the pandemic. The largest segment within our loan portfolio remains multifamily loans, which constituted 55% of our loan portfolio at June 30, 2020. New York City multifamily loans were one of the best performing asset classes 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 50% at June 30, 2020), we anticipate our track record will continue.”

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income in the second quarter of 2020 was $43.6 million, an increase of $3.0 million (7.5%) from the first quarter of 2020 and an increase of $7.1 million (19.3%) from the second 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) Q2 2020 Q1 2020 Q2 2019
NIM 2.86% 2.72% 2.38%
Net Interest Income $43,556 $40,524 $36,504
Income from Loan Prepayment Activity $1,737 $1,975 $1,581
Net Interest Income Excluding Prepayment Fee Income $41,819 $38,549 $34,923
NIM, Excluding Prepayment Fee 2.75% 2.59% 2.28%

Mr. Mahon commented, “Our NIM (excluding the impact of prepayment fees) has now increased for seven consecutive quarters. As anticipated, our business model transformation is producing the desired trends on NIM.”

Average interest-earning assets were $6.10 billion for the second quarter of 2020, a 9.6% (annualized) increase from $5.95 billion for the first quarter of 2020, and a 0.7% decrease from $6.13 billion for the second quarter of 2019. For the second quarter of 2020, the average yield on interest-earning assets was 3.85%, a decrease of 11 basis points compared with the first quarter of 2020, and a decrease of 6 basis points compared to the second quarter of 2019.  The decline in the yield on earning assets reflected the full quarter impact of the 150 basis point reduction in the federal funds rate by the Federal Reserve in March 2020 and the related decline in market interest rates.

The ending weighted average rate (“WAR”) on the total loan portfolio was 3.77% at June 30, 2020, which represents a 23 basis point decrease versus the ending WAR on the total loan portfolio at March 31, 2020, and a 22 basis point decrease versus the ending WAR on the total loan portfolio at June 30, 2019. The WAR on the total loan portfolio as of June 30, 2020 was negatively impacted by PPP loans ($310.5 million of loans at June 30, 2020 with a WAR of 1.00%). Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.94% at June 30, 2020, which represents a 6 basis point decrease versus the ending WAR on the total loan portfolio at March 31, 2020, and a 5 basis point decrease versus the ending WAR on the total loan portfolio at June 30, 2019.

The average cost of borrowed funds (which primarily consist of Federal Home Loan Bank advances) was 2.00% for the second quarter of 2020, a decrease of 15 basis points versus the first quarter of 2020, and a decrease of 44 basis points versus the second quarter of 2019.

Loans

The real estate loan portfolio decreased by $63.1 million (5.2% annualized) during the second quarter of 2020, primarily due to managed run-off in the Bank’s lower-yielding legacy multifamily business. Total real estate loan originations were $208.8 million during the second quarter of 2020, at a weighted average interest rate of 2.91%. Real estate loan amortization and satisfactions totaled $278.6 million, or 23.1% (annualized) of the portfolio balance, at an average rate of 3.65%. The annualized real estate loan payoff rate of 23.1% for the second quarter of 2020 was comparable to the first quarter of 2020 (23.5% annualized) and higher than the second quarter of 2019 (20.6% annualized).

Average real estate loans were $4.87 billion in the second quarter of 2020, a decrease of $86.4 million (-7.0% annualized) from the first quarter of 2020, and a decrease of $333.4 million (-6.4%) from the second quarter of 2019.

Average C&I loans were $519.0 million in the second quarter of 2020 (including average SBA PPP loans of $192.8 million), an increase of $191.3 million (233.6% annualized) from the first quarter of 2020, and an increase of $229.2 million (79.1%) from the second quarter of 2019.

Outlined below are the loan originations for the current quarter, linked quarter and prior year quarter.

($s in millions) Originations/ Weighted Average Rate
  Q2 2020 Q1 2020 Q2 2019
Real Estate Originations $208.8/2.91% $166.8/4.05% $249.6/4.94%
C&I Originations $15.0/4.19% $51.9/4.95% $89.9/5.97%
SBA PPP Originations $319.4/1.00% n/a n/a

Deposits and Borrowed Funds

The Company continues to focus on growing relationship-based business deposits. 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 approximately 15.0% at June 30, 2020, compared to 9.6% at June 30, 2019.”

Total deposits increased by $198.6 million on a linked quarter basis to $4.44 billion at June 30, 2020. Mr. Mahon commented, “The increase in total deposits was driven by strength in our municipal deposit business and an inflow of PPP-related deposits. PPP-related deposits were approximately $104 million at June 30, 2020.”

The cost of total deposits decreased 27 basis points on a linked quarter basis. As of June 30, 2020, the Company had $875.6 million of certificates of deposits (19.7% of total deposits), with a weighted average rate of 1.52%, that were set to mature in the second half of 2020. Mr. Mahon commented, “Given the significant repricing opportunity for certificates of deposits in the second half of the year, we expect our deposit costs to continue trending downwards.”

Given the increase in deposit funding, total borrowings (excluding subordinated debt securities) were reduced to $1.02 billion at June 30, 2020, compared to $1.12 billion at the first quarter of 2020, and $1.17 billion at the second quarter of 2019.

Non-Interest Income

Non-interest income was $8.4 million during the second quarter of 2020, $4.2 million during the first quarter of 2020, and $2.8 million during the second quarter of 2019. Excluding gains and losses on equity securities and from sales of securities and other assets, non-interest income was $4.8 million during the second quarter of 2020 compared to $4.7 million during the first quarter of 2020 and $2.7 million during the second quarter of 2019.

Mr. Mahon commented, “Our commercial bank operation has produced the desired results on fee income growth, especially as it relates to gaining significant traction with our commercial customers on interest rate swap products. Fees associated with customer level swaps were $2.5 million for the second quarter of 2020 versus $1.2 million for the first quarter of 2020 and $0.3 million for the second quarter of 2019.”

Non-Interest Expense (Excluding Non-recurring Items) Down Slightly

Total non-interest expense was $29.3 million during the second quarter of 2020, $26.0 million during the first quarter of 2020, and $22.3 million during the second quarter of 2019. Excluding the impact of severance and merger-related expenses, non-interest expense was $24.3 million during the second quarter of 2020, $25.4 million during the first quarter of 2020, and $22.3 million during the second quarter of 2019.

The ratio of non-interest expense to average assets was 1.84% during the second quarter of 2020, compared to 1.68% during the linked quarter and 1.40% for the second quarter of 2019. Excluding the impact of severance and merger-related expenses, the ratio of non-interest expense to average assets was 1.52% during the second quarter of 2020, compared to 1.64% during the linked quarter and 1.40% for the second quarter of 2019.

The efficiency ratio was 60.7% during the second quarter of 2020, compared to 57.6% during the linked quarter and 56.8% during the second quarter of 2019. Excluding the impact of severance and merger-related expenses and gain on sale of securities, the efficiency ratio was 50.3% during the second quarter of 2020, compared to 56.1% during the linked quarter and 56.8% during the second quarter of 2019.

Income Tax Expense

The reported effective tax rate for the second quarter of 2020 was 21.6%, compared to 21.6% for the first quarter of 2020, and 25.4% for the second quarter of 2019.

Credit Quality

Non-performing loans at June 30, 2020 were $15.4 million, or 0.3% of total loans, compared to $18.2 million, or 0.4% of total loans, at March 31, 2020.

Under Section 4014 of the 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 utilizing its existing incurred loss framework.

A loan loss provision of $6.1 million was recorded during the second quarter of 2020, compared to a loan loss provision of $8.0 million during the first quarter of 2020, and a loan loss credit of $0.4 million during the second quarter of 2019. The $6.1 million provision for the second quarter of 2020 was primarily 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 0.78% of total loans at June 30, 2020 as compared to 0.70% of total loans at March 31, 2020. Excluding $310.5 million of PPP loans, the ratio of allowance for losses to total loans at June 30, 2020 would have been 0.83%.

At June 30, 2020, non-performing assets represented 2.9% 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 June 30, 2020, the Consolidated Tier 1 capital to average assets (“leverage ratio”) was 10.11%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 13.07% and 16.29%, respectively.

The Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.  At June 30, 2020, the Bank’s leverage ratio was 9.98%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 12.97% and 13.85%, respectively.

Mr. Mahon commented, “Over the course of 2020, we have raised approximately $117 million from the issuance of perpetual preferred stock. As a result, our capital position is very strong as demonstrated by a tangible equity to tangible assets ratio of 9.76% at June 30, 2020. Excluding the impact of the PPP loans, our tangible equity to tangible assets ratio would have been 10.26% at June 30, 2020; this is well above the previously communicated 9.25% minimum target for this ratio that we disclosed during our first quarter earnings call.”

Diluted earnings per common share of $0.35 exceeded the quarterly $0.14 cash dividend per share by 150.0% during the second quarter of 2020, equating to a 40.0% dividend payout ratio.

Book value per common share increased to $17.07 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) increased to $15.39 at June 30, 2020.

Earnings Call Information

The Company will conduct a conference call at 8:00 a.m. (ET) on July 29, 2020, during which Chief Executive Officer, Kenneth J. Mahon, will discuss the Company’s second 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/dcom200729.html. Dial-in information for the replay is 1-877-344-7529 using access code #10146095. Replay will be available July 29, 2020 (9:30 a.m. (ET)) through August 5, 2020 (11:59 p.m. (ET)).

ABOUT DIME COMMUNITY BANCSHARES, INC.The Company had $6.47 billion in consolidated assets as of June 30, 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 include statements regarding the proposed merger of the Company with Bridge Bancorp, Inc. (the “Merger”).  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; we may incur unexpected expenses and delays related to the Merger; or we may be unable to obtain regulatory approvals or satisfy other closing conditions required to complete the Merger. 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 ReddySenior Executive Vice President – Chief Financial Officer718-782-6200 extension 5909

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share amounts)
             
  June 30,   March 31,   December 31,  
    2020       2020       2019    
ASSETS:            
Cash and due from banks $ 117,013     $ 246,153     $ 155,488    
Mortgage-backed securities available-for-sale, at fair value   464,279       500,758       502,464    
Investment securities available-for-sale, at fair value   77,728       57,067       48,531    
Marketable equity securities, at fair value   5,707       5,398       5,894    
Real Estate Loans:            
  One-to-four family and cooperative/condominium apartment   182,264       176,755       148,429    
Multifamily residential and residential mixed-use (1)(2)   2,988,509       3,160,248       3,385,375    
  Commercial real estate and commercial mixed-use   1,504,020       1,403,985       1,350,185    
  Acquisition, development, and construction ("ADC")   136,606       133,514       118,365    
  Total real estate loans   4,811,399       4,874,502       5,002,354    
  Commercial and industrial ("C&I")   321,009       331,816       336,412    
  Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans   310,509       -       -    
  Other loans   1,463       956       1,772    
  Allowance for credit losses   (42,492 )     (36,463 )     (28,441 )  
Total loans, net   5,401,890       5,170,811       5,312,097    
Premises and fixed assets, net   21,423       21,631       21,692    
Premises held for sale   -       514       514    
Loans held for sale   1,794       1,430       500    
Federal Home Loan Bank of New York ("FHLBNY") capital stock   52,305       57,146       56,019    
Bank Owned Life Insurance ("BOLI")   154,036       133,128       114,257    
Goodwill   55,638       55,638       55,638    
Operating lease assets   36,813       36,582       37,858    
Other assets   78,895       61,569       43,508    
TOTAL ASSETS $ 6,467,521     $ 6,347,825     $ 6,354,460    
LIABILITIES AND STOCKHOLDERS' EQUITY:            
Deposits:            
Non-interest-bearing checking $ 664,323     $ 479,376     $ 478,549    
Interest-bearing checking   231,201       162,198       151,491    
Savings   406,771       390,994       374,265    
Money Market   1,742,563       1,565,761       1,705,451    
  Sub-total   3,044,858       2,598,329       2,709,756    
Certificates of deposit   1,393,554       1,641,497       1,572,869    
Total Due to Depositors   4,438,412       4,239,826       4,282,625    
Escrow and other deposits   87,646       116,097       76,481    
FHLBNY advances   1,017,300       1,117,300       1,092,250    
Subordinated notes payable, net   113,979       113,942       113,906    
Other borrowings   5,000       -       110,000    
Operating lease liabilities   42,733       42,614       44,098    
Other liabilities   80,908       72,398       38,342    
TOTAL LIABILITIES   5,785,978       5,702,177       5,757,702    
STOCKHOLDERS' EQUITY:            
Preferred stock, Series A ($0.01 par, $25.00 liquidiation value, 9,000,000 shares authorized, 5,299,200 shares and 2,999,200            
  shares issued and outstanding at June 30, 2020 and March 31, 2020, respectively, and none issued or outstanding at December 31, 2019)   116,569       72,224       -    
Common stock ($0.01 par, 125,000,000 shares authorized, 53,724,233 shares, 53,721,189 shares and 53,721,189 shares issued at            
  June 30, 2020, March 31, 2020 and December 31, 2019, respectively, and 33,089,585 shares, 33,875,386 shares and 35,154,642            
  shares outstanding at June 30, 2020, March 31, 2020 and Decmeber 31, 2019, respectively)   537       537       537    
Additional paid-in capital   278,581       279,327       279,322    
Retained earnings   592,497       585,294       581,817    
Accumulated other comprehensive loss, net of deferred taxes   (14,403 )     (12,632 )     (5,940 )  
Unearned equity awards   (7,549 )     (6,067 )     (6,731 )  
Common Stock held by the Benefit Maintenance Plan   (1,496 )     (1,496 )     (1,496 )  
Treasury stock, at cost (20,634,648 shares, 19,845,803 shares and 18,566,547 shares at June 30, 2020, March 31, 2020 and            
December 31, 2019, respectively)   (283,193 )     (271,539 )     (250,751 )  
TOTAL STOCKHOLDERS' EQUITY   681,543       645,648       596,758    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,467,521     $ 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   For the Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
    2020     2020       2019       2020       2019  
Interest income:                  
  Loans secured by real estate $ 49,058   $ 50,117     $ 50,811     $ 99,175     $ 99,988  
  Commercial and industrial ("C&I") loans   5,071     4,045       4,134       9,116       7,570  
  Other loans   13     15       18       28       36  
  Mortgage-backed securities   3,064     3,305       2,961       6,369       6,158  
  Investment securities   582     421       570       1,003       990  
  Other short-term investments   846     1,002       1,457       1,848       2,904  
  Total interest income   58,634     58,905       59,951       117,539       117,646  
Interest expense:                  
  Deposits and escrow   9,700     11,926       16,271       21,626       31,288  
  Borrowed funds   5,378     6,455       7,176       11,833       14,530  
  Total interest expense   15,078     18,381       23,447       33,459       45,818  
  Net interest income   43,556     40,524       36,504       84,080       71,828  
Provision for loan losses   6,060     8,012       (449 )     14,072       (128 )
Net interest income after provision for loan losses   37,496     32,512       36,953       70,008       71,956  
                   
Non-interest income:                  
  Service charges and other fees   1,083     1,203       1,264       2,286       2,363  
  Mortgage banking income, net   52     66       61       118       129  
  Gain (loss) on equity securities   436     (472 )     148       (36 )     416  
  Gain (loss) on sale of securities and other assets   3,134     8       (57 )     3,142       (133 )
  Gain on sale of loans   206     315       339       521       594  
  Income from BOLI   911     1,887       707       2,798       1,401  
  Loan level derivative income   2,494     1,163       291       3,657       291  
  Other   70     66       67       136       119  
  Total non-interest income   8,386     4,236       2,820       12,622       5,180  
Non-interest expense:                  
  Salaries and employee benefits   14,719     14,846       12,061       29,565       23,945  
  Severance pay   3,930     70       -       4,000       -  
  Stock benefit plan compensation expense   478     671       491       1,149       775  
  Occupancy and equipment   3,959     4,056       3,827       8,015       7,696  
  Data processing costs   2,007     2,024       1,908       4,031       3,974  
  Marketing   136     397       465       533       931  
  Federal deposit insurance premiums   529     477       586       1,006       1,040  
  Merger expenses   1,072     586       -       1,658       -  
  Other   2,516     2,913       2,958       5,429       5,987  
  Total non-interest expense   29,346     26,040       22,296       55,386       44,348  
                   
  Income before taxes   16,536     10,708       17,477       27,244       32,788  
Income tax expense   3,570     2,316       4,442       5,886       8,252  
                   
Net income   12,966     8,392       13,035       21,358     $ 24,536  
Preferred stock dividends   1,140     -       -       1,140       -  
Net income available to common stockholders $ 11,826   $ 8,392     $ 13,035     $ 20,218     $ 24,536  
                   
Earnings per Common Share ("EPS"):                  
  Basic $ 0.36   $ 0.24     $ 0.36     $ 0.60     $ 0.68  
  Diluted $ 0.35   $ 0.24     $ 0.36     $ 0.59     $ 0.68  
                   
Average common shares outstanding for Diluted EPS   33,243,700     34,631,965       35,864,389       33,994,124       35,944,361  
                   
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,
    2020       2020       2019       2020       2019  
Per Share Data:                  
Reported EPS (Diluted) $ 0.35     $ 0.24     $ 0.36     $ 0.59     $ 0.68  
Cash dividends paid per common share   0.14       0.14       0.14       0.28       0.28  
Book value per common share   17.07       16.93       16.96       17.07       16.96  
Tangible common book value per share (1)   15.39       15.29       15.41       15.39       15.41  
Dividend payout ratio   40.00 %     58.33 %     38.89 %     47.46 %     41.18 %
                   
Performance Ratios (Based upon Reported Net Income):                  
Return on average assets   0.81 %     0.54 %     0.82 %     0.68 %     0.77 %
Return on average equity   7.96       5.35       8.59       6.68       8.10  
Return on average tangible equity (1)   8.71       5.87       9.45       7.32       8.92  
Return on average tangible common equity (1)   9.23       6.27       9.45       7.72       8.92  
Net interest spread   2.61       2.46       2.08       2.53       2.05  
Net interest margin   2.86       2.72       2.38       2.79       2.35  
Average interest-earning assets to average interest-bearing liabilities   124.97       120.93       119.47       122.94       118.80  
Non-interest expense to average assets   1.84       1.68       1.40       1.76       1.39  
Efficiency ratio   60.67       57.58       56.83       59.18       58.25  
Loan-to-deposit ratio at end of period   122.67       122.82       124.71       122.67       124.71  
CRE consolidated concentration ratio (2)   544.90       588.64       697.30       544.90       697.30  
Effective tax rate   21.59       21.63       25.42       21.60       25.17  
                   
Average Balance Data:                  
Average assets $ 6,389,768     $ 6,207,949     $ 6,391,476     $ 6,298,859     $ 6,377,787  
Average interest-earning assets   6,091,545       5,949,363       6,134,510       6,020,454       6,122,902  
Average loans   5,387,839       5,286,487       5,492,455       5,335,663       5,468,878  
Average deposits   4,413,182       4,177,592       4,378,999       4,295,387       4,360,022  
Average equity   651,319       627,344       607,152       639,332       605,613  
Average tangible equity (1)   595,681       571,706       551,515       583,694       549,976  
Average tangible common equity (1)   512,371       535,594       551,515       523,983       549,976  
                   
Asset Quality Summary:                  
Non-performing loans (excluding loans held for sale) $ 15,383     $ 18,157     $ 2,538     $ 15,383     $ 2,538  
Non-performing assets   15,383       18,157       2,538       15,383       2,538  
Loans delinquent 30 to 89 days at period end   6,278       13       105       6,278       105  
Net (recoveries) charge-offs   31       (10 )     358       21       520  
Non-performing assets/ Total assets   0.24 %     0.29 %     0.04 %     0.24 %     0.04 %
Non-performing loans/ Total loans   0.28       0.35       0.05       0.28       0.05  
Allowance for loan loss/ Total loans   0.78       0.70       0.38       0.78       0.38  
Allowance for loan loss/ Non-performing loans   276.23       200.82       832.70       276.23       832.70  
                   
Capital Ratios - Consolidated:                  
Tangible common equity to tangible assets (1)   7.94 %     8.23 %     8.58 %     7.94 %     8.58 %
Tangible equity to tangible assets (1)   9.76       9.38       8.58       9.76       8.58  
Tier 1 common equity ratio   10.69       10.69       10.94       10.69       10.94  
Tier 1 risk-based capital ratio   13.07       12.15       10.94       13.07       10.94  
Total risk-based capital ratio   16.29       15.21       13.58       16.29       13.58  
Tier 1 leverage ratio   10.11       9.80       8.83       10.11       8.83  
                   
Capital Ratios - Bank Only:                  
Tier 1 common equity ratio   12.97 %     12.72 %     12.14 %     12.97 %     12.14 %
Tier 1 risk-based capital ratio   12.97       12.72       12.14       12.97       12.14  
Total risk-based capital ratio   13.85       13.47       12.56       13.85       12.56  
Tier 1 leverage ratio   9.98       9.93       9.77       9.98       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  
  June 30, 2020   March 31, 2020   June 30, 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 $ 4,867,970 $ 49,058   4.03 %   $ 4,954,391 $ 50,117   4.05 %   $ 5,201,395 $ 50,811   3.91 %  
  Commercial and industrial loans   518,999   5,071   3.91       327,653   4,045   4.94       289,843   4,134   5.71    
  Other loans   870   13   5.98       1,443   15   4.16       1,217   18   5.92    
  Mortgage-backed securities   468,705   3,064   2.61       486,722   3,305   2.72       423,387   2,961   2.80    
  Investment securities   65,155   582   3.57       47,060   421   3.58       64,488   570   3.54    
  Other short-term investments   169,846   846   1.99       132,094   1,002   3.03       154,180   1,457   3.78    
  Total interest-earning assets   6,091,545   58,634   3.85 %     5,949,363   58,905   3.96 %     6,134,510   59,951   3.91 %  
  Non-interest-earning assets   298,223         258,586         256,966      
Total assets $ 6,389,768       $ 6,207,949       $ 6,391,476      
                         
Liabilities and Stockholders' Equity:                        
  Interest-bearing liabilities:                        
  Interest-bearing checking accounts $ 222,694 $ 212   0.38 %   $ 159,027 $ 87   0.22 %   $ 125,041 $ 91   0.29 %  
  Money market accounts   1,656,394   2,495   0.61       1,580,779   3,586   0.91       1,908,737   7,397   1.55    
  Savings accounts   404,389   305   0.30       383,769   367   0.38       327,312   46   0.06    
  Certificates of deposit   1,511,598   6,688   1.78       1,586,549   7,886   2.00       1,595,849   8,737   2.20    
  Total interest-bearing deposits   3,795,075   9,700   1.03       3,710,124   11,926   1.29       3,956,939   16,271   1.65    
  FHLBNY advances   962,657   4,047   1.69       1,085,553   5,085   1.88       1,050,824   5,756   2.20    
  Subordinated notes payable, net   113,955   1,330   4.69       113,918   1,330   4.70       113,808   1,330   4.69    
  Other borrowings   2,747   1   0.15       9,890   40   1.63       13,308   90   2.71    
  Borrowed Funds   1,079,359   5,378   2.00       1,209,361   6,455   2.15       1,177,940   7,176   2.44    
  Total interest-bearing liabilities   4,874,434   15,078   1.24 %     4,919,485   18,381   1.50 %     5,134,879   23,447   1.83 %  
  Non-interest-bearing checking accounts   618,107         467,468         422,060      
  Other non-interest-bearing liabilities   245,908         193,652         227,385      
  Total liabilities   5,738,449         5,580,605         5,784,324      
  Stockholders' equity   651,319         627,344         607,152      
Total liabilities and stockholders' equity $ 6,389,768       $ 6,207,949       $ 6,391,476      
Net interest income   $ 43,556         $ 40,524         $ 36,504      
Net interest spread     2.61 %       2.46 %       2.08 %  
Net interest-earning assets $ 1,217,111       $ 1,029,878       $ 999,631      
Net interest margin     2.86 %       2.72 %       2.38 %  
Ratio of interest-earning assets to interest-bearing liabilities     124.97 %         120.93 %         119.47 %    
                         
Deposits (including non-interest-bearing checking accounts) $ 4,413,182 $ 9,700   0.88 %   $ 4,177,592 $ 11,926   1.15 %   $ 4,378,999 $ 16,271   1.49 %  
                         
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES  
UNAUDITED SCHEDULE OF LOAN COMPOSITION AND WEIGHTED AVERAGE RATES ("WAR") (1)  
  (Dollars in thousands)  
     
                   
  At June 30, 2020   At March 31, 2020   At June 30, 2019  
  Balance WAR   Balance WAR   Balance WAR  
Loan balances at period end:                  
  One-to-four family residential, including condominium and cooperative apartment $ 182,264 3.98 %   $ 176,755 3.89 %   $ 120,523 4.60 %  
Multifamily residential and residential mixed-use (2)(3)   2,988,509 3.77       3,160,248 3.78       3,736,500 3.69    
  Commercial real estate and commercial mixed-use   1,504,020 4.06       1,403,985 4.28       1,279,188 4.26    
  Acquisition, development, and construction ("ADC")   136,606 5.08       133,514 5.11       77,479 6.57    
  Total real estate loans   4,811,399 3.91       4,874,502 3.96       5,213,690 3.88    
  Commercial and industrial ("C&I")   321,009 4.39       331,816 4.49       316,061 5.78    
  Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans   310,509 1.00       - -       - -    
Total $ 5,442,917 3.77 %   $ 5,206,318 4.00 %   $ 5,529,751 3.99 %  
                   
(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 June 30,   At March 31,   At June 30,  
    2020       2020       2019    
Non-Performing Loans            
One-to-four family residential, including condominium and cooperative apartment $ 819     $ 6,685     $ 832    
Multifamily residential and residential mixed-use (1)(2)   1,377       1,332       428    
Commercial real estate and commercial mixed-use real estate (2)   3,003       56       1,274    
C&I   10,176       10,082       -    
Other   8       2       4    
Total Non-Performing Loans (3) $ 15,383     $ 18,157     $ 2,538    
Total Non-Performing Assets $ 15,383     $ 18,157     $ 2,538    
             
Performing TDR Loans            
  One-to-four family and cooperative/condominium apartment $ -     $ -     $ 11    
Multifamily residential and mixed-use residential real estate (1)(2)   -       -       252    
Commercial real estate and commercial mixed-use real estate (2)   -       -       4,037    
Total Performing TDRs $ -     $ -     $ 4,300    
             
(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 June 30,   At March 31,   At June 30,  
    2020       2020       2019    
Total Non-Performing Assets $ 15,383     $ 18,157     $ 2,538    
Loans 90 days or more past due on accrual status (4)   3,691       1,033       1,531    
  TOTAL PROBLEM ASSETS $ 19,074     $ 19,190     $ 4,069    
             
Tangible equity (5) $ 625,905     $ 590,010     $ 553,063    
Allowance for loan losses and reserves for contingent liabilities   42,517       36,488       21,159    
  TANGIBLE EQUITY PLUS RESERVES $ 668,422     $ 626,498     $ 574,222    
             
  PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE EQUITY AND RESERVES   2.9 %     3.1 %     0.7 %  
             
(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   For the Six Months Ended  
  June 30,   March 31,   June 30,   June 30,   June 30,  
    2020       2020       2019       2020       2019    
Reconciliation of Reported and Adjusted ("non-GAAP") Net Income:                    
Reported net income $ 12,966     $ 8,392     $ 13,035     $ 21,358     $ 24,536    
Adjustments to net income, net of tax (1):                    
Add: Merger expenses   733       400       -       1,133       -    
Add: Severance   2,686       48       -       2,734       -    
Less: Loss (Gain) on sale of securities   (2,142 )     (5 )     39       (2,147 )     91    
Adjusted ("non-GAAP") net income $ 14,243     $ 8,835     $ 13,074     $ 23,078     $ 24,627    
                     
Adjusted Ratios (Based upon "non-GAAP Net Income" as calculated above):                    
Adjusted EPS (Diluted) $ 0.39     $ 0.26     $ 0.36     $ 0.64     $ 0.68    
Adjusted return on average assets   0.89 %     0.57 %     0.82 %     0.73 %     0.77 %  
Adjusted return on average equity   8.75       5.63       8.61       7.22       8.13    
Adjusted return on average tangible equity   9.56       6.18       9.48       7.91       8.96    
Adjusted return on average tangible common equity   10.23       6.60       9.48       8.37       8.96    
Adjusted non-interest expense to average assets   1.52       1.64       1.40       1.58       1.39    
Adjusted efficiency ratio   50.33       56.13       56.83       53.13       57.80    
                     
  June 30,   March 31,   June 30,          
    2020       2020       2019            
Reconciliation of Tangible Assets:                    
Total assets $ 6,467,521     $ 6,347,825     $ 6,498,362            
Less:                    
Goodwill   55,638       55,638       55,638            
Tangible assets $ 6,411,883     $ 6,292,187     $ 6,442,724            
                     
Reconciliation of Tangible Common Equity - Consolidated:                    
Total stockholders' equity $ 681,543     $ 645,648     $ 608,701            
Less:                    
Goodwill   55,638       55,638       55,638            
Tangible equity   625,905       590,010       553,063            
                     
Less:                    
Preferred Stock, net   116,569       72,224       -            
Tangible common equity $ 509,336     $ 517,786     $ 553,063            
                     
                     
(1) Adjustments to net income are taxed at the Company's statutory tax rate of approximately 32% unless otherwise noted.                  
                     
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