DCOMP - Dime Community Bancshares Inc. Reports First Quarter 2022 Results

Quarterly Net Income to Common Stockholders Increases by $55.6 Million on a Year-Over-Year Basis

Non-Interest-Bearing Deposits Increase to 38% of Total Deposits
Positioning the Company Well for a Rising Interest Rate Scenario

Net Interest Margin Expands by 5 Basis Points Versus the Prior Quarter

HAUPPAUGE, N.Y., April 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 $32.7 million for the quarter ended March 31, 2022, or $0.82 per diluted common share, compared to net income available to common stockholders of $33.5 million for the quarter ended December 31, 2021, or $0.83 per diluted common share. For the quarter ended March 31, 2021, net loss available to common stockholders was $22.9 million, or $0.66 per diluted common share.

Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “During the first quarter, we executed well on each of our strategic plan priorities – growing non-interest-bearing deposits, managing our cost of funds appropriately and prioritizing net interest margin expansion, prudent expense discipline, and maintaining solid asset quality. Importantly, we recently announced several key hires in our lending division by capitalizing on merger-related disruption in our marketplace. As the year progresses, we expect loan growth and non-interest income to pick-up. Our high level of non-interest-bearing deposits, coupled with a balance sheet that does not rely on wholesale leverage, positions us well for a rising interest rate scenario.”

Highlights for the First Quarter of 2022 Included:

• The non-interest-bearing deposits to total deposits ratio increased to 37.9% at March 31, 2022;
• The cost of deposits declined to 0.10% during the first quarter of 2022;
• The net interest margin expanded by 5 basis points versus the linked quarter;
• Total loans held for investment, net, excluding Paycheck Protection Program (“PPP”) loans increased by 2% on an annualized basis versus the linked quarter;
• Non-interest expenses for the first quarter of 2022 were down 2% versus the linked quarter;
• The Company repurchased 505,005 shares of its common stock, which represented approximately 1.3% of shares outstanding at the beginning of the period, at a weighted average price of $34.44 per share; and
• Non-performing assets and loans 90 days past due and accruing declined by 14% versus the linked quarter and represented only 0.31% of total assets as of March 31, 2022.
  

Management’s Discussion of Quarterly Operating Results

The Company’s results of operations for the first quarter of 2022 and fourth 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.

Net Interest Income

Net interest income for the first quarter of 2022 was $89.1 million compared to $91.7 million for the fourth quarter of 2021 and $77.8 million for the first quarter of 2021.

The table below provides a reconciliation of the reported net interest margin (“NIM”), the adjusted NIM excluding the impact of PPP loans, and the adjusted NIM excluding the combined impact of PPP loans and purchase accounting accretion on the loan portfolio.

Loan Portfolio

The ending weighted average rate (“WAR”) ^{( 1)} on the total loan portfolio was 3.76% at March 31, 2022, a 3 basis point increase compared to the ending WAR on the total loan portfolio at December 31, 2021. Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.77% at March 31, 2022, compared to 3.75% at December 31, 2021.

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

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

Deposits

Total deposits decreased by $28.9 million on a linked quarter basis to $10.43 billion at March 31, 2022. The decline in total deposits was primarily due to the Bank not renewing higher-cost certificates of deposit accounts and maintaining pricing discipline on consumer money market accounts.

CEO O’Connor stated, “The weighted-average rate on our deposit portfolio declined to 0.09% at March 31, 2022. We continue to have strong success in growing non-interest-bearing deposit balances from our business customers.”

Non-interest-bearing deposits increased $33.2 million during the first quarter of 2022 to $3.95 billion at March 31, 2022, representing 37.9% of total deposits.

Outlined below are certificates of deposit balances set to mature in 2022 for the quarter ended as indicated.

Non-Interest Income

Non-interest income (loss) was $7.2 million during the first quarter of 2022, $10.2 million during the fourth quarter of 2021, and $(7.4) million during the first quarter of 2021. Excluding net gain on sale of securities and other assets, adjusted non-interest income was $9.2 million during the fourth quarter of 2021. Excluding the loss on termination of derivatives and net gain on sale of securities and other assets, adjusted non-interest income was $8.4 million during the first quarter of 2021 (see “Non-GAAP Reconciliation” table at the end of this news release).

CEO O’Connor stated, “Given our current pipelines, we expect the level of customer-related loan swap revenue and SBA gain on sale revenue to pick-up starting in the second quarter of the year.”

Non-Interest Expense

Total non-interest expense was $49.9 million during the first quarter of 2022, $50.8 million during the fourth quarter of 2021, and $82.8 million during the first quarter of 2021. Excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, adjusted non-interest expense was $48.7 million during the fourth quarter of 2021. Excluding the impact of merger expenses and transaction costs, loss on extinguishment of debt, curtailment loss, and amortization of other intangible assets, adjusted non-interest expense was $41.4 million during the first quarter of 2021 (see “Non-GAAP Reconciliation” table at the end of this news release).

The ratio of non-interest expense to average assets was 1.64% during the first quarter of 2022, compared to 1.64% during the linked quarter and 3.11% for the first quarter of 2021. Excluding the impact of merger expenses and transaction costs, branch restructuring, loss on extinguishment of debt, curtailment loss, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.57% during the linked quarter and 1.55% for the first quarter of 2021 (see “Non-GAAP Reconciliation” table at the end of this news release).

The efficiency ratio was 51.8% during the first quarter of 2022, compared to 49.9% during the linked quarter and 117.5% during the first quarter of 2021. Excluding the impact of merger expenses and transaction costs, branch restructuring, loss on extinguishment of debt, curtailment loss, amortization of other intangible assets, loss on termination of derivatives, and net gain on sale of securities and other assets, the adjusted efficiency ratio was 48.2% during the linked quarter and 48.0% during the first quarter of 2021 (see “Non-GAAP Reconciliation” table at the end of this news release).

Income Tax Expense

The reported effective tax rate for the first quarter of 2022 was 28.1%, compared to 30.9% for the fourth quarter of 2021, and 25.2% for the first quarter of 2021.

Credit Quality

Non-performing loans at March 31, 2022 were $36.0 million, or 0.39% of total loans.

A credit loss recovery of $1.6 million was recorded during the first quarter of 2022, compared to a credit loss recovery of $132 thousand during the fourth quarter of 2021, and a credit loss provision of $15.8 million during the first quarter of 2021. The credit loss recovery was associated with the improvement in forecasted macroeconomic conditions as well as a reduction in reserves on individually evaluated loans.

The allowance for credit losses as a percentage of total loans was 0.86% at March 31, 2022 as compared to 0.91% at December 31, 2021 and 0.93% at March 31, 2021.

Capital Management

The Company’s and the Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.

CEO O’Connor commented, “During the first quarter, we continued to execute on our share repurchase program and we repurchased $17.4 million of common stock. Our Tier 1 Risk-Based Capital Ratio increased by 7 basis points in the quarter to 10.76%. 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 first quarter of 2022.

Book value per common share was $26.32 at March 31, 2022 compared to $26.98 at December 31, 2021. Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by number of shares outstanding) was $22.18 at March 31, 2022 compared to $22.87 at December 31, 2021 (see “Non-GAAP Reconciliation” tables at the end of this news release). The linked quarter declines in book value per share and tangible common book value per share were primarily due to the increase in the accumulated other comprehensive loss component of stockholders’ equity. The accumulated other comprehensive loss component of stockholders’ equity increased on a linked quarter basis due to the increase in market interest rates over the course of the first quarter of 2022.

Earnings Call Information

The Company will conduct a conference call at 8:30 a.m. (ET) on April 29, 2022, during which CEO O’Connor will discuss the Company’s first quarter 2022 financial performance, with a question and answer session to follow. Dial-in information for the live call is 1-844-200-6205. Upon dialing in, request to be joined into the 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://events.q4inc.com/attendee/980319168. Dial-in information for the replay is 1-866-813-9403 using access code 178273. Replay will be available beginning on April 29, 2022 at 10:30 a.m. through May 13, 2022 at 11:59 p.m.

ABOUT DIME COMMUNITY BANCSHARES, INC.
Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company with over $12.0 billion in assets and the number one deposit market share among community banks on Greater Long Island ^{( 1)} .

⁽¹⁾ Aggregate deposit market share for Kings, Queens, Nassau & Suffolk counties for community banks less than $20 billion in assets.

This news release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," “continue,” "could," "estimate," "expect," "intend," “likely,” "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.

Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on such statements. Factors that could affect our results include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company; unanticipated or significant increases in loan losses may negatively affect the Company’s financial condition or results of operations; changes in accounting 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.

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
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DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
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DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
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