Dime Community Bancshares, Inc. Reports Fourth Quarter 2024 Results

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Strong Growth in Deposits, Business Loans and Capital Ratios on a Year-Over-Year Basis

Net Interest Margin Expands by 29 basis points on a Linked Quarter Basis to 2.79%

HAUPPAUGE, N.Y., Jan. 23, 2025 (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 $21.8 million for the year ended December 31, 2024, or $0.55 per diluted common share, compared to net income available to common stockholders of $88.8 million, or $2.29 per diluted common share, for the year ended December 31, 2023.

Stuart H. Lubow, President and Chief Executive Officer ("CEO”) of the Company, stated, "Our fourth quarter results were marked by continued core deposit growth and Net Interest Margin ("NIM”) expansion. In addition, we successfully executed on several important initiatives in the fourth quarter, including a follow-on common equity offering. The proceeds from the offering were utilized to re-position our available-for-sale securities portfolio and Bank Owned Life Insurance ("BOLI”) portfolio and supplement our capital base. These transactions will contribute towards a stronger balance sheet, enhanced earnings power and support future growth. I would like to thank all of our employees for their tremendous efforts throughout the year that led to substantial year-over-year growth in core deposits and business loans as well as the Bank achieving an "Outstanding” rating on our recent Community Reinvestment Act examination.”

For the quarter ended December 31, 2024, net loss available to common stockholders was $22.2 million, or $(0.54) per diluted common share, compared to net income available to common stockholders of $11.5 million, or $0.29 per diluted common share, for the quarter ended September 30, 2024, and net income available to common stockholders of $14.5 million, or $0.37 per diluted common share, for the quarter ended December 31, 2023. Fourth quarter 2024 results included: $42.8 million of pre-tax loss-on-sale of securities, $1.3 million of pre-tax severance expense and $1.2 million of pre-tax expense related to the termination of a legacy pension plan. In addition, the fourth quarter 2024 results included $9.1 million of income tax expense related to the taxable gain and Modified Endowment Contract Tax ("MEC Tax”) on the surrender of legacy BOLI assets.

Adjusted net income available to common stockholders (non-GAAP) totaled $17.4 million for the quarter ended December 31, 2024, an increase of 52% versus the prior quarter and an increase of 16% versus the year ago quarter (see "Non-GAAP Reconciliation” tables at the end of this news release). Adjusted EPS (non-GAAP) totaled $0.42 per share for the quarter ended December 31, 2024, an increase of 45% versus the prior quarter and an increase of 8% versus the year ago quarter.

Highlights for the Fourth Quarter of 2024 Included:

• Total deposits increased $268.8 million compared to the third quarter of 2024;
• Core deposits (excluding brokered and time deposits) increased $513.4 million compared to the third quarter of 2024;
• The ratio of average non-interest-bearing deposits to average total deposits for the fourth quarter increased to 30.0%;
• The cost of total deposits declined by 37 basis points versus the prior quarter;
• The net interest margin increased to 2.79% for the fourth quarter of 2024 compared to 2.50% for the prior quarter;
• The loan to deposit ratio declined to 93.0% at the end of the fourth quarter compared to 95.4% for the prior quarter;
• The allowance for credit losses to total loans increased to 0.82% at the end of the fourth quarter compared to 0.78% for the prior quarter;
• The Company's Common Equity Tier 1 Ratio increased to 11.07% at the end of the fourth quarter; and
• The Bank received an "Outstanding” overall rating as well as an "Outstanding” rating on each of the individual components (Lending, Investment and Service tests) for its recently concluded Community Reinvestment Act examination.

Management's Discussion of Quarterly Operating Results

Net Interest Income

Net interest income for the fourth quarter of 2024 was $91.1 million compared to $79.9 million for the third quarter of 2024 and $74.1 million for the fourth quarter of 2023.

Mr. Lubow commented, "Strong growth in core deposits as well as proactive management of deposit rates led to strong linked quarter growth in our net interest margin. We anticipate the full quarter impact of the securities repositioning (which was completed towards the end of November) to positively benefit the NIM in 2025.”

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.

⁽¹⁾   NIM represents net interest income divided by average interest-earning assets.

⁽²⁾   Adjusted NIM excluding PAA on loans represents adjusted net interest income, which excludes PAA amortization on acquired loans divided by average interest-earning assets.

Loan Portfolio

The ending weighted average rate ("WAR”) on the total loan portfolio was 5.26% at December 31, 2024, a 14 basis point decrease compared to the ending WAR of 5.40% on the total loan portfolio at September 30, 2024. The linked quarter decline in the WAR on the loan portfolio was primarily due to floating rate loans adjusting lower as a result of the Federal Reserve's rate cuts.

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

⁽¹⁾    WAR 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 balance of loans in the category.

⁽²⁾    Business loans include commercial and industrial loans and owner-occupied commercial real estate loans.

⁽³⁾    Includes loans underlying multifamily cooperatives.

⁽⁴⁾    While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are 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, for the quarter ended as indicated.

Deposits and Borrowed Funds

Period end total deposits (including mortgage escrow deposits) at December 31, 2024 were $11.69 billion, compared to $11.42 billion at September 30, 2024 and $10.53 billion at December 31, 2023.

Total Federal Home Loan Bank advances were $608.0 million at December 31, 2024 compared to $508.0 million at September 30, 2024 and $1.31 billion at December 31, 2023.

Mr. Lubow commented, "Over the course of 2024, we made significant progress in re-creating a core-deposit funded balance sheet. Strong growth in core business deposits allowed us to reduce our FHLB advance position by approximately $700 million on a year-over-year basis and our brokered deposit position by approximately $475 million on a year-over-year basis.”

Non-Interest Income

Non-interest income was a loss of $33.9 million during the fourth quarter of 2024, compared to income of $7.6 million during the third quarter of 2024, and income of $8.9 million during the fourth quarter of 2023. Fourth quarter 2024 results included $42.8 million of pre-tax loss-on-sale of securities related to the re-positioning of the available-for-sale securities portfolio.

Non-Interest Expense

Total non-interest expense was $60.6 million during the fourth quarter of 2024, $57.7 million during the third quarter of 2024, and $53.9 million during the fourth quarter of 2023. Excluding the impact of the loss on extinguishment of debt, amortization of other intangible assets, severance expense, settlement loss related to the termination of a legacy pension plan, and the FDIC special assessment, adjusted non-interest expense was $57.7 million during the fourth quarter of 2024, $57.4 million during the third quarter of 2024, and $52.6 million during the fourth quarter of 2023 (see "Non-GAAP Reconciliation” tables at the end of this news release).

Mr. Lubow commented, "In line with our previous guidance, our adjusted non-interest expense base was relatively flat in the fourth quarter of 2024 compared to the prior quarter.”

The ratio of non-interest expense to average assets was 1.76% during the fourth quarter of 2024, compared to 1.71% during the linked quarter and 1.58% for the fourth quarter of 2023. Excluding the impact of the loss on extinguishment of debt, amortization of other intangible assets, severance expense, the FDIC special assessment and settlement loss related to the termination of a legacy pension plan, the ratio of adjusted non-interest expense to average assets was 1.68% during the fourth quarter of 2024, compared to 1.70% during the linked quarter and 1.54% for the fourth quarter of 2023 (see "Non-GAAP Reconciliation” tables at the end of this news release).

The efficiency ratio was 105.9% during the fourth quarter of 2024, compared to 65.9% during the linked quarter and 65.0% during the fourth quarter of 2023. Excluding the impact of net (gain) loss on sale of securities and other assets, fair value change in equity securities and loans held for sale, severance expense, the FDIC special assessment, settlement loss related to the termination of a legacy pension plan, loss on extinguishment of debt and amortization of other intangible assets the adjusted efficiency ratio was 58.0% during the fourth quarter of 2024, compared to 65.6% during the linked quarter and 63.6% during the fourth quarter of 2023 (see "Non-GAAP Reconciliation” tables at the end of this news release).

Income Tax Expense

The fourth quarter of 2024 income tax expense was $3.3 million, inclusive of $9.1 million of income tax expense related to the taxable gain and MEC Tax on the surrender of legacy BOLI assets. Excluding the tax impact of the BOLI surrender, the fourth quarter 2024 effective rate was a tax benefit of 33.5%. This compares to an effective tax rate of 26.9% for the third quarter of 2024, and 35.6% for the fourth quarter of 2023.

Credit Quality

Non-performing loans were $49.5 million at December 31, 2024, compared to $49.5 million at September 30, 2024 and $29.1 million at December 31, 2023.

A credit loss provision of $13.7 million was recorded during the fourth quarter of 2024, compared to a credit loss provision of $11.6 million during the third quarter of 2024, and a credit loss provision of $3.7 million during the fourth quarter of 2023.

Capital Management

Stockholders' equity increased $170.3 million to $1.40 billion at December 31, 2024, compared to $1.23 billion at December 31, 2023. The growth primarily reflects retained earnings and the $135.8 million in net proceeds raised in connection with the November 2024 common equity offering.

The Company's and the Bank's regulatory capital ratios continued to be in excess of all applicable regulatory requirements as of December 31, 2024. All risk-based regulatory capital ratios increased in the fourth quarter of 2024.

Mr. Lubow commented, "During the fourth quarter we raised $136 million of net proceeds from a common equity offering. Our capital ratios are now best-in-class when compared to other community and regional banks in our footprint with over $10 billion of assets.”

Dividends per common share were $0.25 during the fourth and third quarters of 2024, respectively.

Book value per common share was $29.34 at December 31, 2024 compared to $29.31 at September 30, 2024.

Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by the number of shares outstanding) was $25.68 at December 31, 2024 compared to $25.22 at September 30, 2024 (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 Thursday, January 23, 2025, during which CEO Lubow will discuss the Company's fourth quarter 2024 financial performance, with a question-and-answer session to follow.

Participants may access the conference call via webcast using this link: https://edge.media-server.com/mmc/p/sjcchcex. To participate via telephone, please register in advance using this link: https://register.vevent.com/register/BIe30c4b35e36b49dfa2d4bdc94b8528b3. Upon registration, all telephone participants will receive a one-time confirmation email detailing how to join the conference call, including the dial-in number along with a unique PIN that can be used to access the call. All participants are encouraged to dial-in 10 minutes prior to the start time.

A replay of the conference call and webcast will be available on-demand for 12 months at https://edge.media-server.com/mmc/p/sjcchcex.

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 $14.4 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 with 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, the cost of funds, 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, 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 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; there may be difficulties or unanticipated expense incurred in the consummation of new business initiatives or the integration of any acquired entities; 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.