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Total Deposits Grow By Over $276 Million on a Year-Over-Year Basis; Growth Driven By Deposit Gathering Group Hires

Capital Ratios Continue to Increase and Asset Quality Remains Stable

HAUPPAUGE, N.Y., Jan. 26, 2024 (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 $88.8 million for the year ended December 31, 2023, or $2.29 per diluted common share, compared to net income available to common stockholders of $145.3 million for the year ended December 31, 2022, or $3.73 per diluted common share.

Stuart H. Lubow, President and Chief Executive Officer ("CEO") of the Company, stated, "Our fourth quarter results were marked by a continued stabilization in our non-interest-bearing deposit base, a continued reduction in the pace of net interest margin compression, a steady build-up in our capital ratios and stable asset quality. As we close the book on 2023, we are pleased with the initial results of a number of initiatives that we undertook during the year. Specifically, we built out our Private and Commercial Bank via the hiring of several productive groups, we added a new Healthcare lending vertical that will help diversify our asset base over time and we upgraded numerous areas of our technology and treasury management capabilities. I would like to thank all of our employees for contributing to these achievements and look forward to continuing to grow our franchise. As we look forward to 2024, we have strategically positioned our balance sheet to benefit from projected Federal Reserve rate cuts."

For the quarter ended December 31, 2023, net income available to common stockholders was $14.5 million, or $0.37 per diluted common share, compared to $13.2 million, or $0.34 per diluted common share, for the quarter ended September 30, 2023, and $38.2 million, or $0.99 per diluted common share, for the quarter ended December 31, 2022. Fourth quarter 2023 results included $1.0 million of pre-tax expense related to the FDIC special assessment for the recovery of losses related to the closures of Silicon Valley Bank and Signature Bank. Third quarter 2023 results included $8.6 million of pre-tax severance expense. The Company had an elevated effective tax rate in the second half of 2023 of approximately 35%; the tax rate is expected to normalize in 2024 to approximately 27%.

Highlights for the Fourth Quarter of 2023 Included:

• Total deposits increased $276 million on a year-over-year basis;
• The ratio of average non-interest-bearing deposits to average total deposits for the fourth quarter was 29%;
• The pace of NIM compression continued to slow in the fourth quarter; on a linked quarter basis, the NIM declined by 5 basis points in the fourth quarter of 2023 compared to a 16 basis point decline for the third quarter of 2023 and a 24 basis point decline for the second quarter of 2023;
• Loan originations increased to $195.9 million for the fourth quarter of 2023, compared to $153.4 million in the prior quarter;
• Credit quality continues to be stable with non-performing assets and loans 90 days past due representing only 0.21% of total assets as of December 31, 2023; and
• Capital ratios continue to build, with the Company's Tier 1 Risk Based Capital Ratio increasing to 10.94% at December 31, 2023.

Management's Discussion of Quarterly Operating Results

Net Interest Income

Net interest income for the fourth quarter of 2023 was $74.1 million compared to $76.5 million for the third quarter of 2023 and $96.8 million for the fourth 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.

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⁽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 net interest income on PAA loans divided by average interest-earning assets.

Loan Portfolio

The ending weighted average rate ("WAR") ⁽¹⁾ on the total loan portfolio was 5.29% at December 31, 2023, a 9 basis point increase compared to the ending WAR of 5.20% on the total loan portfolio at September 30, 2023.

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

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⁽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 balance of loans in the category.
⁽²⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and Small Business Administration Paycheck Protection Program ("PPP") 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 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, for the quarter ended as indicated.

Deposits and Borrowed Funds

Period end total deposits (including mortgage escrow deposits) at December 31, 2023 were $10.53 billion, compared to $10.64 billion at September 30, 2023 and $10.25 billion at December 31, 2022. CEO Lubow commented, "Despite the impacts of reduced liquidity in the banking system, we were pleased to grow deposits on a year-over-year basis. Hires that we made in the second quarter of 2023 have already generated approximately $333 million of deposits, with 50% of the balances being in non-interest-bearing deposits."

Total Federal Home Loan Bank advances were $1.31 billion at December 31, 2023 compared to $1.12 billion at September 30, 2023 and $1.13 billion at December 31, 2022.

Non-Interest Income

Non-interest income was $8.9 million during the fourth quarter of 2023, $7.9 million during the third quarter of 2023, and $9.5 million during the fourth quarter of 2022.

Non-Interest Expense

Total non-interest expense was $53.9 million during the fourth quarter of 2023, $59.5 million during the third quarter of 2023, and $50.7 million during the fourth quarter of 2022. Excluding the impact of severance expense, the FDIC special assessment, loss on extinguishment of debt, and amortization of other intangible assets, adjusted non-interest expense was $52.6 million during the fourth quarter of 2023, $50.6 million during the third quarter of 2023, and $50.3 million during the fourth 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 1.58% during the fourth quarter of 2023, compared to 1.73% during the linked quarter and 1.56% for the fourth quarter of 2022. Excluding the impact of severance expense, the FDIC special assessment, loss on extinguishment of debt, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.54% during the fourth quarter of 2023, compared to 1.48% during the linked quarter and 1.55% for the fourth quarter of 2022 (see "Non-GAAP Reconciliation" tables at the end of this news release).

The efficiency ratio was 65.0% during the fourth quarter of 2023, compared to 70.5% during the linked quarter and 47.7% during the fourth quarter of 2022. Excluding the impact of net loss on equity securities, net loss on sale of securities and other assets, severance expense, the FDIC special assessment, loss on extinguishment of debt and amortization of other intangible assets the adjusted efficiency ratio was 63.6% during the fourth quarter of 2023, compared to 59.7% during the linked quarter and 47.3% during the fourth 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 fourth quarter of 2023 was 35.6% compared to 35.1% for the third quarter of 2023, and 27.5% for the fourth quarter of 2022. The tax rate for 2024 is expected to be approximately 27%.

Credit Quality

Non-performing loans were $29.1 million at December 31, 2023 compared to $23.3 million at September 30, 2023 and $34.2 million at December 31, 2022.

A credit loss provision of $3.7 million was recorded during the fourth quarter of 2023, compared to a credit loss provision of $1.8 million during the third quarter of 2023, and a credit loss provision of $335 thousand during the fourth quarter of 2022. The credit loss provision in the fourth quarter of 2023 was primarily associated with provisioning for individually analyzed loans.

Capital Management

The Company's and the Bank's regulatory capital ratios continued to be in excess of all applicable regulatory requirements as of December 31, 2023. All of the Company's and the Bank's risk-based regulatory capital ratios increased in the fourth quarter of 2023.

Dividends per common share were $0.25 during the fourth and third quarters of 2023, respectively.

Book value per common share was $28.58 at December 31, 2023 compared to $28.03 at September 30, 2023.

Tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by the number of shares outstanding) was $24.44 at December 31, 2023 compared to $23.87 at September 30, 2023 (see "Non-GAAP Reconciliation" tables at the end of this news release).

Earnings Call Information

The Company will conduct a conference call at 8:00 a.m. (ET) on Friday, January 26, 2024, during which CEO Lubow will discuss the Company's fourth quarter 2023 financial performance, with a question-and-answer session to follow.

Participants may access the conference call via webcast using this link: Webcast Link Here. To participate via telephone, please register in advance using this Registration Link. 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.

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 $13.6 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, 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; 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.

Contact: Avinash Reddy
Senior Executive Vice President – Chief Financial Officer
718-782-6200 extension 5909

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⁽¹⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
⁽²⁾ Includes loans underlying multifamily 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.

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⁽¹⁾ Fourth quarter of 2023 included $1.0 million of pre-tax expense related to the FDIC special assessment for the recovery of losses related to the closures of Silicon Valley Bank and Signature Bank.

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⁽¹⁾ See "Non-GAAP Reconciliation" tables for reconciliation of tangible equity, tangible common equity, and tangible assets.
⁽²⁾ Total deposits include mortgage escrow deposits, which fluctuate seasonally.
⁽³⁾ December 31, 2023 ratios are preliminary pending completion and filing of the Company's regulatory reports.
⁽⁴⁾ The Consolidated CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner-occupied commercial real estate, multifamily, and acquisition, development, and construction, divided by consolidated capital. December 31, 2023 is preliminary pending completion and filing of the Company's regulatory reports.

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⁽¹⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
⁽²⁾ Includes mortgage escrow deposits.

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⁽¹⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
⁽²⁾ Calculated based on annualized NCOs to average loans, excluding 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 provides 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 net loss on equity securities, net loss on sale of securities and other assets, severance, the FDIC special assessment and loss on extinguishment of debt:

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⁽¹⁾ Adjustments to net income are taxed at the Company's statutory tax rate of approximately 30% unless otherwise noted.

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):

The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP):

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⁽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 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 common equity to tangible assets, tangible equity to tangible assets, and tangible common book value per share calculations (non-GAAP):