Dime Community Bancshares, Inc. /NY/ [DCOM] Filings

10-Q 1 dcom-20230630x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34096

DIME COMMUNITY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

N/A

(Former name or former address, if changed since last report)


New York		11-2934195
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

898 Veterans Memorial Highway, Suite 560, Hauppauge, NY		11788
(Address of principal executive offices)		(Zip Code)

(631) 537-1000

(Registrant’s telephone number, including area code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	DCOM	The NASDAQ Stock Market
Preferred Stock, Series A, $0.01 Par Value	DCOMP	The NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all the reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer" "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☒	Accelerated Filer ☐
Non-Accelerated Filer ☐	Smaller Reporting Company ☐
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Classes of Common Stock		Number of shares outstanding at July 31, 2023
$0.01 Par Value		38,826,921

Table of Contents


PART I – FINANCIAL INFORMATION		Page
Item 1.	Unaudited Condensed Consolidated Financial Statements
	Consolidated Statements of Financial Condition at June 30, 2023 and December 31, 2022	4
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022	5
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	6
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022	7
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4.	Controls and Procedures	55

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	59
	Signatures	60

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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,” “seek,” “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 Dime Community Bancshares, Inc. (together with its direct and indirect subsidiaries, 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 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 conditions or results to differ materially from those expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on such statements. These factors include, without limitation, the following:

●

increases in competitive pressure among financial institutions or from non-financial institutions;

●

inflation and fluctuation in market interest rates, which may affect demand for our products, interest margins and the fair value of financial instruments;

●

changes in deposit flows, loan demand or real estate values;

●

changes in the quality and composition of our loan or investment portfolios or unanticipated or significant increases in loan losses;

●

changes in accounting principles, policies or guidelines;

●

changes in corporate and/or individual income tax laws or policies;

●

general socio-economic conditions, including conditions caused by COVID-19 pandemic, other public health emergencies, 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;

●

legislative, regulatory or policy changes;

●

technological changes;

●

breaches or failures of the Company’s information technology security systems;

●

difficulties or unanticipated expenses incurred in the consummation of new business initiatives or the integration of any acquired entities;

●

litigation or matters before regulatory agencies; and

●

the risks referred to in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.

Table of Contents

Item 1. Condensed Consolidated Financial Statements

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

(Dollars in thousands except share amounts)


	June 30,		December 31,
	2023		2022
Assets:
Cash and due from banks	$	452,504	$	169,297
Securities available-for-sale, at fair value		894,856		950,587
Securities held-to-maturity		603,960		585,798
Loans held for sale		371		—
Loans held for investment, net of fees and costs		10,876,415		10,566,831
Allowance for credit losses		(75,646)		(83,507)
Total loans held for investment, net		10,800,769		10,483,324
Premises and fixed assets, net		45,890		46,749
Restricted stock		104,724		88,745
Bank Owned Life Insurance ("BOLI")		337,083		333,292
Goodwill		155,797		155,797
Other intangible assets		5,758		6,484
Operating lease assets		54,931		57,857
Derivative assets		147,740		154,485
Accrued interest receivable		51,787		48,561
Other assets		146,692		108,945
Total assets	$	13,802,862	$	13,189,921

Liabilities:
Interest-bearing deposits	$	7,567,874	$	6,734,997
Non-interest-bearing deposits		2,884,184		3,449,763
Deposits (excluding mortgage escrow deposits)		10,452,058		10,184,760
Non-interest-bearing mortgage escrow deposits		70,431		69,455
Interest-bearing mortgage escrow deposits		203		192
Total mortgage escrow deposits		70,634		69,647
Federal Home Loan Bank of New York ("FHLBNY") advances		1,448,000		1,131,000
Other short-term borrowings		—		1,360
Subordinated debt, net		200,240		200,283
Derivative cash collateral		140,160		153,040
Operating lease liabilities		57,547		60,340
Derivative liabilities		131,130		137,335
Other liabilities		100,590		82,573
Total liabilities		12,600,359		12,020,338

Commitments and contingencies		—		—

Stockholders' equity:
Preferred stock, Series A ($0.01 par, $25.00 liquidation value, 10,000,000 shares authorized and 5,299,200 shares issued and outstanding at June 30, 2023 and December 31, 2022)		116,569		116,569
Common stock ($0.01 par, 80,000,000 shares authorized, 41,632,327 and 41,621,772 shares shares issued at June 30, 2023 and December 31, 2022, and 38,803,119 shares and 38,573,000 shares outstanding at June 30, 2023 and December 31, 2022, respectively)		416		416
Additional paid-in capital		493,955		495,410
Retained earnings		804,532		762,762
Accumulated other comprehensive loss, net of deferred taxes		(104,385)		(94,379)
Unearned equity awards		(11,746)		(8,078)
Treasury stock, at cost (2,829,208 shares and 3,048,772 shares at June 30, 2023 and December 31, 2022, respectively)		(96,838)		(103,117)
Total stockholders' equity		1,202,503		1,169,583
Total liabilities and stockholders' equity	$	13,802,862	$	13,189,921

See notes to unaudited condensed consolidated financial statements.

Table of Contents

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Interest income:
Loans	$	138,310	$	93,102	$	266,749	$	179,522
Securities		7,914		7,067		16,345		14,198
Other short-term investments		5,867		741		9,669		1,109
Total interest income		152,091		100,910		292,763		194,829
Interest expense:
Deposits and escrow		52,616		3,731		89,888		6,262
Borrowed funds		17,759		3,573		33,930		5,851
Derivative cash collateral		1,497		94		2,974		95
Total interest expense		71,872		7,398		126,792		12,208
Net interest income		80,219		93,512		165,971		182,621
Provision (recovery) for credit losses		892		44		(2,756)		(1,548)
Net interest income after provision (recovery) for credit losses		79,327		93,468		168,727		184,169

Non-interest income:
Service charges and other fees		4,856		4,337		8,670		8,395
Title fees		246		683		538		1,104
Loan level derivative income		2,437		1,685		5,570		1,691
BOLI income		2,852		4,143		5,015		5,982
Gain on sale of Small Business Administration ("SBA") loans		210		723		726		965
Gain on sale of residential loans		34		191		82		339
Loss on equity securities		(780)		—		(780)		—
Net loss on sale of securities and other assets		—		—		(1,447)		—
Other		550		362		1,032		851
Total non-interest income		10,405		12,124		19,406		19,327
Non-interest expense:
Salaries and employee benefits		29,900		28,454		56,534		59,288
Severance		481		2,193		506		2,193
Occupancy and equipment		7,144		7,396		14,517		14,980
Data processing costs		4,197		3,913		8,435		7,718
Marketing		1,488		1,515		2,937		2,810
Professional services		1,676		2,028		3,599		4,122
Federal deposit insurance premiums		1,874		1,150		3,747		2,300
Loss from extinguishment of debt		—		740		—		740
Amortization of other intangible assets		349		430		726		1,016
Other		5,077		4,019		8,660		6,559
Total non-interest expense		52,186		51,838		99,661		101,726
Income before income taxes		37,546		53,754		88,472		101,770
Income tax expense		10,048		15,269		23,671		28,754
Net income		27,498		38,485		64,801		73,016
Preferred stock dividends		1,822		1,822		3,643		3,643
Net income available to common stockholders	$	25,676	$	36,663	$	61,158	$	69,373
Earnings per common share:
Basic	$	0.66	$	0.94	$	1.58	$	1.76
Diluted	$	0.66	$	0.94	$	1.58	$	1.76

See notes to unaudited condensed consolidated financial statements.

Table of Contents

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income	$	27,498	$	38,485	$	64,801	$	73,016
Other comprehensive income (loss):
Change in unrealized gain (loss) on securities:
Change in net unrealized loss during the period		(11,291)		(33,157)		(13,593)		(103,288)
Reclassification adjustment for net losses included in net loss on sale of securities and other assets		—		—		1,447		—
Accretion of net unrealized loss on securities transferred to held-to-maturity		796		829		1,553		999
Change in pension and other postretirement obligations:
Reclassification adjustment for expense included in other expense		(370)		(936)		(740)		(1,870)
Change in the net actuarial gain		814		998		1,035		1,995
Change in unrealized gain (loss) on derivatives:
Change in net unrealized gain (loss) during the period		1,586		2,309		(525)		9,161
Reclassification adjustment for expense included in interest expense		299		(54)		(14)		(23)
Other comprehensive loss before income taxes		(8,166)		(30,011)		(10,837)		(93,026)
Deferred tax expense		(2,419)		(9,441)		(831)		(29,257)
Total other comprehensive loss, net of tax		(5,747)		(20,570)		(10,006)		(63,769)
Total comprehensive income	$	21,751	$	17,915	$	54,795	$	9,247

See notes to unaudited condensed consolidated financial statements.

Table of Contents

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands)

Six Months Ended June 30, 2023

Accumulated

Other

Comprehensive

Number of

Additional

Loss,

Unearned

Treasury

Total

Shares of

Preferred

Common

Paid-in

Retained

Net of Deferred

Equity

Stock,

Stockholders’

Common Stock

Stock

Capital

Earnings

Taxes

Awards

at cost

Equity

Beginning balance as of January 1, 2023

38,573,000

116,569

416

495,410

762,762

(94,379)

(8,078)

(103,117)

1,169,583

Net income

—

37,303

—

37,303

Other comprehensive loss, net of tax

—

(4,259)

—

(4,259)

Release of shares, net of forfeitures

293,106

—

(1,608)

—

(6,692)

8,507

207

Stock-based compensation

—

1,302

—

1,302

Shares received related to tax withholding

(36,932)

—

(1)

—

(1,112)

(1,113)

Cash dividends declared to preferred stockholders

—

(1,821)

—

(1,821)

Cash dividends declared to common stockholders

—

(9,234)

—

(9,234)

Purchase of treasury stock

(24,813)

—

(715)

Ending balance as of March 31, 2023

38,804,361

116,569

416

493,801

789,010

(98,638)

(13,468)

(96,437)

1,191,253

Net income

—

27,498

—

27,498

Other comprehensive loss, net of tax

—

(5,747)

—

(5,747)

Release of shares, net of forfeitures

13,262

—

154

—

364

(123)

395

Stock-based compensation

—

1,358

—

1,358

Shares received related to tax withholding

(2,504)

—

(46)

Cash dividends declared to preferred stockholders

—

(1,822)

—

(1,822)

Cash dividends declared to common stockholders

—

(10,154)

—

(10,154)

Purchase of treasury stock

(12,000)

—

(232)

Ending balance as of June 30, 2023

38,803,119

116,569

416

493,955

804,532

(104,385)

(

Dime Community Bancshares, Inc. /NY/ [DCOM] Filings

Dime Community Bancshares, Inc. /NY/ [DCOMP] Filings