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Dime Community Bancshares, Inc. Increases Net Income Available to Common Stockholders By 160% Year-Over-Year
ソース: Nasdaq GlobeNewswire / 29 10 2021 06:00:01 America/New_York
HAUPPAUGE, N.Y., Oct. 29, 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 $36.6 million for the quarter ended September 30, 2021, or $0.89 per diluted common share, compared with net income available to common stockholders of $14.0 million for the quarter ended September 30, 2020, or $0.65 per diluted common share. For the quarter ended June 30, 2021, net income available to common stockholders was $49.5 million, or $1.19 per diluted common share.
Adjusted net income to common stockholders (non-GAAP) totaled $41.4 million for the quarter ended September 30, 2021, or $1.01 per diluted share1. Adjusted net income to common stockholders includes the following primary adjustments:
- Branch restructuring costs: As previously disclosed, the Company combined five branch locations into other existing branches in October 2021; associated branch restructuring costs were $4.5 million during the quarter, pre-tax; and
- Merger expenses and transaction costs: The Company recorded merger expenses and transaction costs, associated with its February 2021 merger of equals transaction, of $2.5 million, pre-tax, during the quarter.
Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “We continue to improve the quality of our deposit base, as evidenced by non-interest-bearing accounts growing to 36% of total deposits. Our high level of non-interest-bearing deposits, coupled with a balance sheet that does not rely on wholesale leverage, positions us well for the time when the Federal Reserve begins raising interest rates. In the third quarter, we saw a resumption of loan growth (excluding Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans) and we continue to maintain healthy pipelines. Finally, we continue to focus on prudent expense management as demonstrated by a core efficiency ratio of 47% for the third quarter.”
Highlights for the Third Quarter of 2021 Included:
- The non-interest-bearing deposits to total deposits ratio increased to 35.8% at September 30, 2021;
- The cost of deposits for the third quarter of 2021 declined to 0.13%;
- Total loans held for investment, net, excluding PPP loans increased by 4% on an annualized basis versus the linked quarter;
- The Company purchased 480,039 shares of its common stock, at a weighted average price of $32.15 per share;
- Non-performing assets represent only 0.28% of total assets as of September 30, 2021; and
- The Company’s Adjusted Pre-tax Pre-provision Net Revenue (“PPNR”) for the third quarter was $54.8 million compared to $52.7 million for the second quarter.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 and third quarters of 2021 include income for the full quarter from the merger with Bridge Bancorp, Inc. (“Bridge”). The Company’s historical information for the third quarter of 2020 does not include the historical GAAP results of Bridge.
Net Interest Income
Net interest income for the third quarter of 2021 was $94.8 million compared to $93.3 million for the second quarter of 2021 and $44.9 million for the third quarter of 2020.
The table below provides a reconciliation of the reported Net Interest Margin (“NIM”), the adjusted NIM excluding the impact of PPP loans, and the adjusted NIM excluding the combined impact of PPP loans and purchasing accounting accretion on the loan portfolio.
($ in thousands) Q3 2021 Q2 2021 Q3 2020 Net interest income $ 94,828 $ 93,254 $ 44,944 Less: Net interest income on PPP loans (2,502 ) (5,375 ) (1,471 ) Adjusted net interest income excluding PPP loans, (non-GAAP) $ 92,326 $ 87,879 $ 43,473 Average interest-earning assets $ 11,765,298 $ 11,990,107 $ 6,164,452 Average PPP loan balances (266,472 ) (1,282,347 ) (316,747 ) Adjusted average interest-earning assets excluding PPP loans, (non-GAAP) $ 11,498,826 $ 10,707,760 $ 5,847,705 NIM (1) 3.20 % 3.12 % 2.92 % Adjusted NIM excluding PPP loans (non-GAAP) (2) 3.19 % 3.29 % 2.95 % Adjusted net interest income excluding PPP loans, (non-GAAP) $ 92,326 $ 87,879 $ 43,473 Less: Purchase Accounting Accretion on loans ("PAA") (2,541 ) (1,925 ) — Adjusted net interest income excluding PPP loans and PAA on loans, (non-GAAP) $ 89,785 $ 85,954 $ 43,473 Adjusted NIM excluding PPP loans and PAA on loans, (non-GAAP) (3) 3.10 % 3.23 % 2.95 % (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 3.72% at September 30, 2021, a 6 basis point increase compared to the ending WAR on the total loan portfolio at June 30, 2021. Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.76% at September 30, 2021, compared to 3.79% at June 30, 2021.
Outlined below are loan balances and WARs(1) for the current quarter, linked quarter and prior year quarter.
September 30, 2021 June 30, 2021 September 30, 2020 ($ in thousands) Balance WAR Balance WAR Balance WAR Loans held for investment balances at period end: One-to-four family residential, including condominium and cooperative apartment $ 683,665 3.68 % $ 704,489 3.72 % $ 186,975 3.97 % Multifamily residential and residential mixed-use (2)(3) 3,468,262 3.57 3,503,205 3.59 2,919,186 3.77 CRE 3,814,437 3.80 3,681,331 3.83 1,675,488 4.00 ADC 285,379 4.69 290,462 4.73 151,866 5.04 C&I 878,332 4.10 878,331 4.16 323,972 4.49 Other loans 20,713 4.97 23,275 4.99 1,448 7.56 Loans held for investment excluding PPP 9,150,788 3.76 9,081,093 3.79 5,258,935 3.93 PPP 134,083 1.00 465,538 1.00 318,568 1.00 Total loans held for investment including PPP $ 9,284,871 3.72 % $ 9,546,631 3.66 % $ 5,577,503 3.76 % (1) Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, adjusted for non-accrual loans, divided by the total amount of loans in the category. (2) Includes 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, excluding PPP, for the current quarter, linked quarter and prior year.
($ in millions) Q3 2021 Q2 2021 Q3 2020 Loan originations, excluding PPP $ 464.9 $ 425.7 $ 318.9 Deposits and Borrowed Funds
Total deposits decreased by $392.2 million on a linked quarter basis to $10.7 billion at September 30, 2021. The decline in total deposits was primarily due to the Company not renewing higher-cost certificates of deposit accounts. Mr. O’ Connor stated, “We continue to focus on reducing any high-rate, promotional or rate-sensitive deposits from our portfolio as we prepare for higher interest rates. The weighted average rate on our deposit portfolio declined to 0.11% at September 30, 2021.”
Non-interest-bearing deposits increased $132.8 million during the third quarter of 2021 to $3.8 billion at September 30, 2021, representing 35.8% of total deposits.
As of September 30, 2021, the Company had $311.7 million of certificates of deposits, with a weighted average rate of 0.33%, that were set to mature during the fourth quarter of 2021.
Total Federal Home Loan Bank advances were $25.0 million at September 30, 2021 and June 30, 2021.
Non-Interest Income
Non-interest income was $9.7 million during the third quarter of 2021, $29.5 million during the second quarter of 2021, and $6.1 million during the third quarter of 2020. Excluding a $20.7 million gain on sale of PPP loans during the second quarter of 2021, adjusted non-interest income was $8.8 million during the second quarter of 2021. Excluding the gain on sale of securities and other assets, adjusted non-interest income was $5.9 million during the third quarter of 2020 (see “Non-GAAP Reconciliation” table at the end of this news release).
Non-Interest Expense
Total non-interest expense was $56.8 million during the third quarter of 2021, $54.9 million during the second quarter of 2021, and $24.9 million during the third quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, and amortization of other intangible assets, adjusted non-interest expense was $49.1 million during the third quarter of 2021, compared to $48.5 million during the second quarter of 2021, and $24.1 million during the third 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 1.80% during the third quarter of 2021, compared to 1.72% during the linked quarter and 1.53% for the third quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.56% during the third quarter of 2021, compared to 1.52% during the linked quarter and 1.48% for the third quarter of 2020 (see “Non-GAAP Reconciliation” table at the end of this news release).
The efficiency ratio was 54.3% during the third quarter of 2021, compared to 44.7% during the linked quarter and 48.6% during the third quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring costs, and amortization of other intangible assets, the adjusted efficiency ratio was 46.9% during the third quarter of 2021, compared to 47.5% during the linked quarter and 47.3% during the third 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 third quarter of 2021 was 27.5%, compared to 28.9% for the second quarter of 2021, and 21.9% for the third quarter of 2020. The decrease in the effective tax rate during the third quarter of 2021 was primarily the result of the decrease in taxable income and lower 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 September 30, 2021 were $34.0 million, or 0.37% of total loans. Non-performing loans, excluding acquired PCD loans, would have been $30.1 million, or 0.34% of total loans excluding acquired PCD loans.
A credit loss recovery of $5.2 million was recorded during the third quarter of 2021, compared to a credit loss recovery of $4.2 million during the second quarter of 2021, and a credit loss provision of $5.9 million during the third quarter of 2020. The credit loss recovery of $5.2 million for the third quarter of 2021 was primarily associated with a reduction in reserves on acquired PCD loans, given the improvement in economic conditions since the time of the merger closing.
The allowance for credit losses as a percentage of total loans was 0.88% at September 30, 2021 as compared to 0.97% at June 30, 2021 and 0.87% at September 30, 2020. Excluding PPP loans, the ratio of allowance for credit losses at September 30, 2021 would have been 0.89%.
Loans with Payment Deferrals
Full principal and interest (“P&I”) deferrals declined to $26.6 million and represented 0.3% of the total loan portfolio at September 30, 2021.
Capital Management
The Company’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.
Mr. O’Connor commented, “In August, our Board of Directors approved a new stock repurchase program which authorized the purchase of 5% of outstanding common stock. Our strong balance sheet and internal stress testing analysis results have allowed us to return excess capital to our shareholders. In the third quarter we repurchased 480,039 shares, totaling $15.4 million and we continue to be active on the repurchase front into the fourth quarter.”
Dividends per common share were $0.24 during the third quarter of 2021.
Book value per common share was $26.64 and tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by number of shares outstanding) was $22.60 at September 30, 2021 (see “Non-GAAP Reconciliation” tables at the end of this news release).
Including the impact of the remaining unrecognized fees on PPP loans, net of tax, adjusted tangible common book value per share would have been $22.61 (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 October 29, 2021, during which Kevin M. O’Connor, CEO, will discuss the Company’s third 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/dcom211029.html. Dial-in information for the replay is 1-877-344-7529 using access code #10160977. Replay will be available October 29, 2021 (10:30 a.m.) through November 12, 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 $12.3 billion in assets and the number one deposit market share among community banks on Greater Long Island(1).(1) Aggregate deposit market share for Kings, Queens, Nassau & Suffolk counties for community banks less than $20 billion in assets.
This news release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "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; 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 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)September 30, June 30, December 31, 2021 2021 2020 Assets: Cash and due from banks $ 629,011 $ 1,184,183 $ 243,603 Mortgage-backed securities available-for-sale, at fair value 1,212,383 863,239 426,979 Investment securities available-for-sale, at fair value 496,680 398,549 111,882 Investment securities held-to-maturity 40,303 — — Marketable equity securities, at fair value — — 5,970 Loans held for sale 14,720 29,335 5,903 Loans held for investment, net: One-to-four family and cooperative/condominium apartment 683,665 704,489 184,989 Multifamily residential and residential mixed-use (1)(2) 3,468,262 3,503,205 2,758,743 Commercial real estate ("CRE") 3,814,437 3,681,331 1,878,167 Acquisition, development, and construction ("ADC") 285,379 290,462 156,296 Total real estate loans 8,251,743 8,179,487 4,978,195 Commercial and industrial ("C&I") 878,332 878,331 319,626 Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans 134,083 465,538 321,907 Other loans 20,713 23,275 2,316 Allowance for credit losses (81,255 ) (92,760 ) (41,461 ) Total loans held for investment, net 9,203,616 9,453,871 5,580,583 Premises and fixed assets, net 49,615 51,127 19,053 Premises held for sale 2,799 2,799 — Restricted stock 37,719 22,449 60,707 Bank Owned Life Insurance ("BOLI") 293,898 293,113 156,096 Goodwill 155,339 155,339 55,638 Other intangible assets 9,077 9,792 — Operating lease assets 56,836 69,189 33,898 Derivative assets 41,700 45,439 18,932 Accrued interest receivable 43,284 47,209 34,815 Other assets 77,401 78,052 27,551 Total assets $ 12,364,381 $ 12,703,685 $ 6,781,610 Liabilities: Non-interest-bearing checking $ 3,821,832 $ 3,689,072 $ 780,751 Interest-bearing checking 989,526 1,101,038 290,300 Savings 1,188,794 1,305,028 414,809 Money market 3,657,669 3,670,090 1,716,624 Certificates of deposit 1,016,216 1,300,965 1,322,638 Total deposits 10,674,037 11,066,193 4,525,122 FHLBNY advances 25,000 25,000 1,204,010 Other short-term borrowings 2,629 1,841 120,000 Subordinated debt, net 197,142 197,188 114,052 Operating lease liabilities 62,870 72,170 39,874 Derivative liabilities 38,889 42,892 37,374 Other liabilities 162,697 94,125 40,082 Total liabilities 11,163,264 11,499,409 6,080,514 Stockholders' equity: Preferred stock, Series A 116,569 116,569 116,569 Common stock 416 416 348 Additional paid-in capital 493,775 492,848 278,295 Retained earnings 630,744 613,791 600,641 Accumulated other comprehensive (loss) gain, net of deferred taxes (1,042 ) 4,576 (5,924 ) Unearned equity awards (9,417 ) (8,529 ) — Common stock held by the Benefit Maintenance Plan — — (1,496 ) Treasury stock, at cost (29,928 ) (15,395 ) (287,337 ) Total stockholders' equity 1,201,117 1,204,276 701,096 Total liabilities and stockholders' equity $ 12,364,381 $ 12,703,685 $ 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2021 2021 2020 2021 2020 Interest income: Loans $ 94,045 $ 94,288 $ 53,245 $ 269,715 $ 161,564 Securities 6,030 5,126 3,422 15,536 10,794 Other short-term investments 583 987 729 2,563 2,577 Total interest income 100,658 100,401 57,396 287,814 174,935 Interest expense: Deposits and escrow 3,565 4,803 6,672 13,666 28,298 Borrowed funds 2,265 2,344 5,780 8,225 17,613 Total interest expense 5,830 7,147 12,452 21,891 45,911 Net interest income 94,828 93,254 44,944 265,923 129,024 (Credit) provision for credit losses (5,187 ) (4,248 ) 5,931 6,344 20,003 Net interest income after (credit) provision 100,015 97,502 39,013 259,579 109,021 Non-interest income: Service charges and other fees 4,581 3,876 1,632 11,377 3,918 Title fees 482 688 — 1,603 — Loan level derivative income 445 559 1,544 2,796 5,201 BOLI income 2,249 1,593 1,033 5,181 3,831 Gain on sale of SBA loans excluding PPP 348 973 808 1,485 972 Gain on sale of PPP loans — 20,697 — 20,697 — Gain on sale of residential loans 304 506 617 1,533 974 Net gain on equity securities — — 175 131 139 Net gain on sale of securities and other assets — 20 215 730 3,357 Loss on termination of derivatives — — — (16,505 ) — Other 1,319 632 125 2,861 379 Total non-interest income 9,728 29,544 6,149 31,889 18,771 Non-interest expense: Salaries and employee benefits 28,276 27,598 14,316 80,693 45,030 Severance — 1,875 — 1,875 4,000 Occupancy and equipment 7,814 8,122 4,046 22,913 12,061 Data processing costs 3,573 5,031 2,146 12,132 6,177 Marketing 1,054 788 345 2,702 1,140 Professional services 2,751 2,538 935 7,154 2,713 Federal deposit insurance premiums 1,173 934 761 3,046 1,767 Loss on extinguishment of debt — 157 — 1,751 — Curtailment loss — — — 1,543 — Merger expenses and transaction costs 2,472 1,836 769 42,250 2,427 Branch restructuring costs 4,518 1,659 — 6,177 — Amortization of other intangible assets 715 835 — 1,907 — Other 4,437 3,509 1,535 10,327 4,924 Total non-interest expense 56,783 54,882 24,853 194,470 80,239 Income before taxes 52,960 72,164 20,309 96,998 47,553 Income tax expense 14,565 20,886 4,441 28,359 10,327 Net income 38,395 51,278 15,868 68,639 37,226 Preferred stock dividends 1,822 1,822 1,822 5,465 2,962 Net income available to common stockholders $ 36,573 $ 49,456 $ 14,046 $ 63,174 $ 34,264 Earnings per common share ("EPS"): Basic $ 0.89 $ 1.19 $ 0.66 $ 1.62 $ 1.57 Diluted $ 0.89 $ 1.19 $ 0.65 $ 1.62 $ 1.56 Average common shares outstanding for diluted EPS 40,426,161 40,981,585 21,324,187 38,574,857 21,791,080 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2021 2021 2020 2021 2020 Per Share Data: Reported EPS (Diluted) $ 0.89 $ 1.19 $ 0.65 $ 1.62 $ 1.56 Cash dividends paid per common share 0.24 0.24 0.22 0.72 0.65 Book value per common share 26.64 26.43 26.97 Tangible common book value per share (1) 22.60 22.41 24.37 Common shares outstanding 40,715 41,160 21,416 Dividend payout ratio 26.97 % 20.17 % 33.33 % 44.44 % 41.58 % Performance Ratios (Based upon Reported Net Income): Return on average assets 1.22 % 1.61 % 0.98 % 0.76 % 0.78 % Return on average equity 12.69 17.22 9.22 8.00 7.59 Return on average tangible common equity (1) 15.96 22.02 10.88 9.84 8.76 Net interest margin 3.20 3.12 2.92 3.15 2.83 Non-interest expense to average assets 1.80 1.72 1.53 2.16 1.68 Efficiency ratio 54.3 44.7 48.6 65.3 54.3 Effective tax rate 27.50 28.94 21.87 29.24 21.72 Balance Sheet Data: Average assets $ 12,584,372 $ 12,756,909 $ 6,492,173 $ 12,009,522 $ 6,363,768 Average interest-earning assets 11,765,298 11,990,107 6,164,452 11,277,257 6,069,115 Average tangible common equity (1) 929,131 908,747 516,189 873,481 521,385 Loan-to-deposit ratio at end of period 87.0 86.3 125.3 Capital Ratios and Reserves - Consolidated: (3) Tangible common equity to tangible assets (1) 7.54 % 7.36 % 7.95 % Tangible equity to tangible assets (1) 8.50 8.29 9.73 Tier 1 common equity ratio 9.92 10.06 10.69 Tier 1 risk-based capital ratio 11.17 11.34 13.02 Total risk-based capital ratio 14.13 14.45 16.30 Tier 1 leverage ratio 8.37 8.24 10.10 CRE consolidated concentration ratio (2) 516 506 545 Allowance for credit losses/ Total loans 0.88 0.97 0.87 Allowance for credit losses/ Non-performing loans 238.84 327.94 390.31 (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. September 30, 2021 amounts are preliminary pending completion and filing of the Company’s regulatory reports. (3) September 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 September 30, 2021 June 30, 2021 September 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 $ 8,234,182 $ 78,626 3.79 % $ 8,156,368 $ 74,437 3.66 % $ 4,874,780 $ 47,482 3.90 % Commercial and industrial loans 923,698 12,337 5.30 932,297 13,277 5.71 326,636 3,574 4.38 SBA PPP loans 266,472 2,643 3.94 1,282,347 6,174 1.93 316,747 2,178 2.75 Other loans 21,992 439 7.92 24,349 400 6.59 1,444 11 3.05 Mortgage-backed securities 976,198 3,999 1.63 825,949 3,483 1.69 435,920 2,707 2.48 Investment securities 462,150 2,031 1.74 312,012 1,643 2.11 78,405 715 3.65 Other short-term investments 880,606 583 0.26 456,785 987 0.87 130,520 729 2.23 Total interest-earning assets 11,765,298 100,658 3.39 % 11,990,107 100,401 3.36 % 6,164,452 57,396 3.72 % Non-interest-earning assets 819,074 766,802 327,721 Total assets $ 12,584,372 $ 12,756,909 $ 6,492,173 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest-bearing checking $ 1,000,435 $ 388 0.15 % $ 1,067,043 $ 501 0.19 % $ 241,248 $ 186 0.31 % Money market 3,698,124 1,467 0.16 3,712,344 1,941 0.21 1,696,297 1,858 0.44 Savings 1,335,310 170 0.05 1,189,460 212 0.07 405,582 170 0.17 Certificates of deposit 1,138,853 1,540 0.54 1,421,480 2,149 0.61 1,425,083 4,458 1.24 Total interest-bearing deposits 7,172,722 3,565 0.20 7,390,327 4,803 0.26 3,768,210 6,672 0.70 FHLBNY advances 25,000 59 0.94 145,324 132 0.36 1,040,127 4,448 1.70 Subordinated debt, net 197,172 2,206 4.44 197,218 2,211 4.50 113,992 1,330 4.64 Other short-term borrowings 2,290 — — 5,514 1 0.07 5,283 2 0.12 Total borrowings 224,462 2,265 4.00 348,056 2,344 2.70 1,159,402 5,780 1.99 Total interest-bearing liabilities 7,397,184 5,830 0.31 % 7,738,383 7,147 0.37 % 4,927,612 12,452 1.01 % Non-interest-bearing checking 3,789,623 3,652,482 652,880 Other non-interest-bearing liabilities 186,977 175,031 223,285 Total liabilities 11,373,784 11,565,896 5,803,777 Stockholders' equity 1,210,588 1,191,013 688,396 Total liabilities and stockholders' equity $ 12,584,372 $ 12,756,909 $ 6,492,173 Net interest income $ 94,828 $ 93,254 $ 44,944 Net interest rate spread 3.08 % 2.99 % 2.71 % Net interest margin 3.20 % 3.12 % 2.92 % Deposits (including non-interest-bearing checking accounts) $ 10,962,345 $ 3,565 0.13 % $ 11,042,809 $ 4,803 0.17 % $ 4,421,090 $ 6,672 0.60 % DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS
(Dollars in thousands)At or For the Three Months Ended September 30, June 30, September 30, Asset Quality Detail 2021 2021 2020 Non-performing loans (NPLs) (1) One-to-four family residential, including condominium and cooperative apartment $ 4,938 $ 4,933 $ 867 Multifamily residential and residential mixed-use 859 — 1,213 CRE 4,122 9,152 47 Acquisition, development, and construction ("ADC") — — — C&I 23,727 14,109 10,287 Other 374 92 10 Total Non-accrual loans $ 34,020 $ 28,286 $ 12,424 Loans 90 days delinquent and accruing ("90+ Delinquent") One-to-four family residential, including condominium and cooperative apartment $ 5,021 $ 5,065 $ 470 Multifamily residential and residential mixed-use — 157 — CRE 1,004 — — ADC — — 1,470 C&I 257 1,487 — Other — — — 90+ Delinquent $ 6,282 $ 6,709 $ 1,940 NPAs and 90+ Delinquent $ 40,302 $ 34,995 $ 14,364 NPAs and 90+ Delinquent / Total assets 0.33 % 0.28 % 0.21 % Net charge-offs (recoveries) (NCOs) $ 4,191 $ 918 $ (69 ) NCOs / Average loans (1) 0.18 % 0.04 % (0.01 )% (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 measures. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.
The following non-GAAP financial measures exclude pre-tax income and expenses associated with the Company’s merger with Bridge, as well as branch restructuring costs, and gain on sale of PPP loans.
Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2021 2021 2020 2021 2020 Reconciliation of Reported and Adjusted (non-GAAP) Net Income Available to Common Stockholders Reported net income (loss) available to common stockholders $ 36,573 $ 49,456 $ 14,046 $ 63,174 $ 34,264 Adjustments to net income (1): Provision for credit losses - Non-PCD loans (double-count) — — — 20,278 — Gain on sale of PPP loans — (20,697 ) — (20,697 ) — Net gain on sale of securities and other assets — — (215 ) (710 ) (3,357 ) Loss on termination of derivatives — — — 16,505 — Severance — 1,875 — 1,875 4,000 Loss on extinguishment of debt — 157 — 1,751 — Curtailment loss — — — 1,543 — Merger expenses and transaction costs (2) 2,472 1,836 769 42,250 2,427 Branch restructuring costs 4,518 1,659 — 6,177 — Income tax effect of adjustments and other tax adjustments (2,191 ) 4,852 (84 ) (19,187 ) (636 ) Adjusted net income available to common stockholders (non-GAAP) $ 41,372 $ 39,138 $ 14,516 $ 112,959 $ 36,698 Adjusted Ratios (Based upon non-GAAP as calculated above) Adjusted EPS (Diluted) $ 1.01 $ 0.94 $ 0.68 $ 2.90 $ 1.68 Adjusted return on average assets 1.37 % 1.28 % 1.01 % 1.31 % 0.83 % Adjusted return on average equity 14.27 13.76 9.49 13.80 8.08 Adjusted return on average tangible common equity 18.02 17.48 11.25 17.44 9.38 Adjusted non-interest expense to average assets 1.56 1.52 1.48 1.54 1.55 Adjusted efficiency ratio 46.9 47.5 47.3 47.4 51.1 (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 September 30, 2021 June 30, 2021 Net interest income $ 94,828 $ 93,254 Non-interest income 9,728 29,544 Total revenues 104,556 122,798 Non-interest expense 56,783 54,882 Pre-tax pre-provision net revenue (non-GAAP) (1) $ 47,773 $ 67,916 Adjustments: Gain on sale of PPP loans — (20,697 ) Severance — 1,875 Loss on extinguishment of debt — 157 Merger expenses and transaction costs 2,472 1,836 Branch restructuring costs 4,518 1,659 Adjusted pre-tax pre-provision net revenue (non-GAAP) (2) $ 54,763 $ 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2021 2021 2020 2021 2020 Operating expense as a % of average assets - as reported 1.80 % 1.72 % 1.53 % 2.16 % 1.68 % Loss on extinguishment of debt — — — (0.02 ) — Curtailment loss — — — (0.02 ) — Severance — (0.06 ) — (0.02 ) (0.08 ) Merger expenses and transaction costs — (0.06 ) (0.05 ) (0.47 ) (0.05 ) Branch restructuring costs (0.08 ) (0.05 ) — (0.07 ) — Amortization of other intangible assets (0.14 ) (0.03 ) — (0.02 ) — Adjusted operating expense as a % of average assets (non-GAAP) 1.56 1.52 1.48 1.54 1.55 The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP):
Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2021 2021 2020 2021 2020 Efficiency ratio - as reported (non-GAAP) (1) 54.3 % 44.7 % 48.6 % 65.3 % 54.3 % Non-interest expense - as reported $ 56,783 $ 54,882 $ 24,853 $ 194,470 $ 80,239 Less: Severance — (1,875 ) — (1,875 ) (4,000 ) Less: Merger expenses and transaction costs (2,472 ) (1,836 ) (769 ) (42,250 ) (2,427 ) Less: Branch restructuring costs (4,518 ) (1,659 ) — (6,177 ) — Less: Loss on extinguishment of debt — (157 ) — (1,751 ) — Less: Curtailment loss — — — (1,543 ) — Less: Amortization of other intangible assets (715 ) (835 ) — (1,907 ) — Adjusted non-interest expense (non-GAAP) $ 49,078 $ 48,520 $ 24,084 $ 138,967 $ 73,812 Net interest income - as reported $ 94,828 $ 93,254 $ 44,944 $ 265,923 $ 129,024 Non-interest income (loss) - as reported $ 9,728 $ 29,544 $ 6,149 $ 31,889 $ 18,771 Less: Gain on sale of PPP loans — (20,697 ) — (20,697 ) — Less: Net gain on sale of securities and other assets — — (215 ) (710 ) (3,357 ) Less: Loss on termination of derivatives — — — 16,505 — Adjusted non-interest income (non-GAAP) $ 9,728 $ 8,847 $ 5,934 $ 26,987 $ 15,414 Adjusted total revenues for adjusted efficiency ratio (non-GAAP) $ 104,556 $ 102,101 $ 50,878 $ 292,910 $ 144,438 Adjusted efficiency ratio (non-GAAP) (2) 46.9 % 47.5 % 47.3 % 47.4 % 51.1 % (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):
September 30, June 30, September 30, 2021 2021 2020 Reconciliation of Tangible Assets: Total assets $ 12,364,381 $ 12,703,685 $ 6,619,391 Less: Goodwill 155,339 155,339 55,638 Other intangible assets 9,077 9,792 — Tangible assets (non-GAAP) $ 12,199,965 $ 12,538,554 $ 6,563,753 Reconciliation of Adjusted Tangible Common Equity - Consolidated: Total stockholders' equity $ 1,201,117 $ 1,204,276 $ 694,158 Less: Goodwill 155,339 155,339 55,638 Other intangible assets 9,077 9,792 — Tangible equity (non-GAAP) 1,036,701 1,039,145 638,520 Less: Preferred stock, net 116,569 116,569 116,569 Tangible common equity (non-GAAP) $ 920,132 $ 922,576 $ 521,951 Add: Unamortized deferred fees on PPP loans, net of tax 612 1,979 5,435 Adjusted tangible common equity (non-GAAP) $ 920,744 $ 924,555 $ 527,386 Common shares outstanding 40,715 41,160 21,416 Tangible common book value per share (non-GAAP) $ 22.60 $ 22.41 $ 24.37 Adjusted tangible common book value per share (non-GAAP) $ 22.61 $ 22.46 $ 24.63