DCOMP - Dime Community Bancshares Inc. Reports Strong First Quarter 2023 Results With Earnings Per Share Increasing by 12.2% On a Year-Over-Year Basis

Total Deposits Increased by $316 Million Versus Year-End 2022

Results Marked By Prudent Expense Control and Increases in Liquidity and Risk-Based Regulatory Capital Ratios

Announces Hiring of 4 Deposit Focused Groups, Capitalizing on Recent Market Disruption

HAUPPAUGE, N.Y., April 28, 2023 (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 $35.5 million for the quarter ended March 31, 2023, or $0.92 per diluted common share, compared to $32.7 million for the quarter ended March 31, 2022 or $0.82 per diluted common share.

Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “Despite the volatile environment in the first quarter, including the failure of two sizable banks, Dime increased earnings per share by 12.2% on a year-over-year basis. Importantly, we grew deposits, and increased our on balance sheet liquidity and regulatory capital ratios versus year-end levels. The granularity of our deposit base is evidenced by non-insured deposits (excludes deposits with pass through insurance and collateralized deposits) representing only 30% of total deposits at the end of the first quarter. Our business model is that of a plain-vanilla community commercial bank and we are well positioned to continue growing our franchise one relationship at a time."

Stuart H. Lubow, President and Chief Operating Officer of the Company, stated, “The recent disruption in our marketplace caused by the failure of a local competitor has provided a significant opportunity for Dime to grow our deposit franchise. We are pleased to announce that over the course of the last few weeks we have hired four seasoned deposit-focused Groups, who were previously employed with Signature Bank.”

Highlights for the First Quarter of 2023 Included:

• Cash and due from banks was $663 million at the end of the first quarter, representing a $494 million increase versus year-end. Cash and total securities, as a percent of total assets, was 15.9% at the end of the first quarter, compared to 12.9% at year-end;
• The ratio of average non-interest bearing deposits to average total deposits for the first quarter of 2023 was 32%, compared to 36% for the fourth quarter of 2022.
• Total loans held for investment, net, increased by $170 million or 6% on an annualized basis versus the linked quarter;
• Total Business Loans increased by $47 million or 8.6% on an annualized basis versus the linked quarter;
• Non-interest expense to average assets improved to 1.41% for the first quarter, compared to 1.56% for the prior quarter and 1.64% for the year-ago quarter;
• Credit quality continues to be strong with non-performing assets and loans 90 days past due and accruing declining by 8% versus the linked quarter and representing only 0.23% of total assets as of March 31, 2023; and
• The Company’s Tier 1 Risk Based Capital Ratio of 10.39% was 16 basis points higher than year-end levels.
  

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income for the first quarter of 2023 was $85.8 million compared to $89.1 million for the first quarter of 2022.

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

Loan Portfolio

The ending weighted average rate (“WAR”) ⁽¹⁾ on the total loan portfolio was 4.96% at March 31, 2023, a 20 basis point increase compared to the ending WAR on the total loan portfolio at December 31, 2022.

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

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

Deposits

Period end total deposits at March 31, 2023 were $10.57 billion, compared to $10.25 billion at December 31, 2022. The ratio of non-insured deposits (excluding deposits with pass through insurance and collateralized deposits) to total deposits was 30% at the end of the first quarter of 2023.

Non-Interest Income

Non-interest income was $9.0 million during the first quarter of 2023, $9.5 million during the fourth quarter of 2022, and $7.2 million during the first quarter of 2022. Excluding the impact of $1.4 million of net loss on sale of securities and other assets, non-interest income for the first quarter would have been $10.4 million. CEO O’Connor stated, “We had a strong first quarter for non-interest income, driven by increases in customer-related loan swap revenue.”

Non-Interest Expense

Total non-interest expense was $47.5 million during the first quarter of 2023, $50.7 million during the fourth quarter of 2022, and $49.9 million during the first quarter of 2022. Excluding the impact of severance expense, and amortization of other intangible assets, adjusted non-interest expense was $47.1 million during the first quarter of 2023, $50.3 million during the fourth quarter of 2022, and $49.3 million during the first quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The ratio of non-interest expense to average assets was 1.41% during the first quarter of 2023, compared to 1.56% during the linked quarter and 1.64% for the first quarter of 2022. Excluding the impact of severance expense, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.40% during the first quarter of 2023, compared to 1.55% during the linked quarter and 1.62% for the first quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

The efficiency ratio was 50.1% during the first quarter of 2023, compared to 47.7% during the linked quarter and 51.8% during the first quarter of 2022. Excluding the impact of severance expense, amortization of other intangible assets and the net loss on sale of securities and other assets the adjusted efficiency ratio was 48.9% during the first quarter of 2023, compared to 47.3% during the linked quarter and 51.2% during the first quarter of 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Income Tax Expense

The reported effective tax rate for the first quarter of 2023 was 26.8%, compared to 27.5% for the fourth quarter of 2022, and 28.1% for the first quarter of 2022.

Credit Quality

Non-performing loans at March 31, 2023 were $31.5 million, 8% lower than the prior quarter.

A credit loss recovery of $3.6 million was recorded during the first quarter of 2023, compared to a credit loss provision of $0.3 million during the fourth quarter of 2022, and a credit loss recovery of $1.6 million during the first quarter of 2022. The credit loss recovery in the first quarter of 2023 was primarily associated with a reduction in reserves on pooled Purchased Credit Deteriorated ("PCD”) loans that were acquired as part of the Company’s merger of equals transaction in 2021.

Capital Management

The Company’s and the Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements as of March 31, 2023.

During the first quarter of 2023, the Company repurchased 24,813 shares of its common stock, at a weighted average price of $29.33 per share.

Dividends per common share were $0.24 during the first quarter of 2023.

On March 9, 2023, the Company announced that its Board of Directors declared that the next quarterly cash dividend payable on April 24, 2023 (to common stockholders of record as of April 17, 2023) would be $0.25 per share. The dividend increase reflects Dime’s strong financial position.

Book value per common share was $27.70 at March 31, 2023 compared to $27.30 at December 31, 2022.

Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by the number of shares outstanding) was $23.52 at March 31, 2023 compared to $23.09 at December 31, 2022. Excluding the impact of accumulated other comprehensive loss, the adjusted tangible common book value per share was $26.06 at March 31, 2023 compared to $25.54 at December 31, 2022 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Earnings Call Information

The Company will conduct a conference call at 8:30 a.m. (ET) on Friday, April 28, 2023, during which CEO O’Connor will discuss the Company’s first quarter 2023 financial performance, with a question-and-answer session to follow.

The conference call will be simultaneously webcast (listen only) and archived for a period of one year at https://events.q4inc.com/attendee/220992518.

Conference Call Details :

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 $13.8 billion in assets and the number one deposit market share among community banks on Greater Long Island ⁽¹⁾ .

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

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

Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on such statements. Factors that could affect our results include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may affect demand for our products and reduce interest margins and the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company; changes in the quality and composition of the Company’s loan or investment portfolios or unanticipated or significant increases in loan losses may negatively affect the Company’s financial condition or results of operations; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general socio- economic conditions, including conditions caused by the COVID-19 pandemic and any other public health emergency, international conflict, inflation, and recessionary pressures, 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 and may adversely affect our customers, our financial results and our operations; 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. 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.