Dime Community Bancshares, Inc. Provides Update on Investment Portfolio Repositioning and Pension Termination

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Dime Community Bancshares (NASDAQ: DCOM) has completed a strategic repositioning of its available-for-sale investment securities portfolio in Q4 2024. The company sold $379 million of lower-yielding securities with a 1.20% weighted average yield and 3.3-year duration, replacing them with new securities offering a 5.08% weighted average yield and 4.2-year duration. This repositioning will result in a one-time pre-tax loss of approximately $43 million in Q4 2024.

Additionally, DCOM initiated the termination of a legacy pension plan, expecting a $1 million expense in Q4 2024 and an additional $2 million expense in Q1 2025 when remaining benefit obligations are distributed.

Dime Community Bancshares (NASDAQ: DCOM) ha completado un reposicionamiento estratégico de su cartera de valores disponibles para la venta en el cuarto trimestre de 2024. La compañía vendió valores de bajo rendimiento por un total de 379 millones de dólares, con un rendimiento promedio ponderado del 1.20% y una duración de 3.3 años, reemplazándolos con nuevos valores que ofrecen un rendimiento promedio ponderado del 5.08% y una duración de 4.2 años. Este reposicionamiento resultará en una pérdida antes de impuestos de aproximadamente 43 millones de dólares en el cuarto trimestre de 2024.
Además, DCOM inició la terminación de un plan de pensiones legado, con una expectativa de un gasto de 1 millón de dólares en el cuarto trimestre de 2024 y un gasto adicional de 2 millones de dólares en el primer trimestre de 2025 cuando se distribuyan las obligaciones de beneficios restantes.

다임 커뮤니티 뱅크쉐어스(DIME Community Bancshares, NASDAQ: DCOM)는 2024년 4분기에 판매 가능한 투자 증권 포트폴리오의 전략적 재조정을 완료했습니다. 이 회사는 1.20%의 가중 평균 수익률과 3.3년의 기간을 가진 수익률이 낮은 증권 3억 7천 9백만 달러를 매각하고, 5.08%의 가중 평균 수익률과 4.2년의 기간을 제공하는 새로운 증권으로 교체했습니다. 이러한 재조정으로 인해 2024년 4분기에 약 4천 3백만 달러의 세전 손실이 발생할 것입니다.
추가로, DCOM은 레거시 연금 제도의 종료를 시작했으며, 2024년 4분기에 100만 달러의 비용과 2025년 1분기에 잔여 복리후생 의무가 분배될 때 200만 달러의 추가 비용이 발생할 것으로 예상하고 있습니다.

Dime Community Bancshares (NASDAQ: DCOM) a complété un repositionnement stratégique de son portefeuille de valeurs mobilières disponibles à la vente au quatrième trimestre 2024. La société a vendu pour 379 millions de dollars de valeurs mobilières à faible rendement avec un rendement moyen pondéré de 1,20 % et une durée de 3,3 ans, les remplaçant par de nouvelles valeurs mobilières offrant un rendement moyen pondéré de 5,08 % et une durée de 4,2 ans. Ce repositionnement entraînera une perte pré-imposition unique d'environ 43 millions de dollars au quatrième trimestre 2024.
De plus, DCOM a initié la résiliation d'un plan de pension hérité, s'attendant à une dépense d'un million de dollars au quatrième trimestre 2024 et à une dépense supplémentaire de deux millions de dollars au premier trimestre 2025 lorsque les obligations de prestations restantes seront distribuées.

Dime Community Bancshares (NASDAQ: DCOM) hat im vierten Quartal 2024 eine strategische Neupositionierung seines Portfolios an verfügbaren Wertpapieren zum Verkauf abgeschlossen. Das Unternehmen hat Wertpapiere mit niedrigem Ertrag im Wert von 379 Millionen Dollar verkauft, die eine gewichtete durchschnittliche Rendite von 1,20 % und eine Laufzeit von 3,3 Jahren aufwiesen, und diese durch neue Wertpapiere ersetzt, die eine gewichtete durchschnittliche Rendite von 5,08 % und eine Laufzeit von 4,2 Jahren bieten. Diese Neupositionierung wird zu einem einmaligen vorsteuerlichen Verlust von etwa 43 Millionen Dollar im vierten Quartal 2024 führen.
Zusätzlich hat DCOM die Beendigung eines Legacy-Pensionsplans eingeleitet und erwartet im vierten Quartal 2024 einen Aufwand von 1 Million Dollar sowie einen weiteren Aufwand von 2 Millionen Dollar im ersten Quartal 2025, wenn die verbleibenden Leistungsansprüche ausgeschüttet werden.

Positive

Portfolio repositioning improved yield from 1.20% to 5.08% on $379 million in securities

Negative

One-time pre-tax loss of $43 million in Q4 2024 from securities sale

Additional $3 million in expenses from pension plan termination across Q4 2024 and Q1 2025

Insights

The portfolio repositioning represents a strategic move to enhance net interest income in the current rate environment. The exchange of $379 million in securities from a 1.20% yield to 5.08% yield should generate approximately $14.7 million in additional annual interest income. While the $43 million one-time loss is substantial, the improved yield profile will provide better returns going forward.
The pension plan termination, totaling about $3 million in expenses spread across two quarters, is a prudent move to eliminate ongoing administrative costs and remove future liability uncertainty from the balance sheet. The combined actions demonstrate management's proactive approach to optimizing the bank's financial structure, though near-term earnings will be impacted by the restructuring charges.

12/12/2024 - 05:00 PM
HAUPPAUGE, N.Y., Dec. 12, 2024 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime”), the parent company of Dime Community Bank (the “Bank”), today announced the completion of a repositioning of its available-for-sale investment securities portfolio. During the fourth quarter:

The Company executed the sale of $379 million of lower-yielding available-for-sale debt securities. The securities sold had a weighted average yield of 1.20% and a weighted average duration of 3.3 years.
The Company purchased $379 million of debt securities. The securities purchased had a weighted average yield of 5.08% and a weighted average duration of 4.2 years.

The Company expects to recognize a one-time pre-tax loss on sale of securities of approximately $43 million in the quarter ending December 31, 2024.

The Company also began the distribution of payments to eligible participants of a legacy pension plan, that its Board of Directors had approved for termination. The termination, undertaken to support prudent expense management, is expected to result in an expense of approximately $1 million in the quarter ending December 31, 2024. The remaining benefit obligations of the plan are expected to be distributed in the first quarter of 2025 at which time the Company will recognize an additional expense of approximately $2 million.

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 $13.7 billion in assets and the number one deposit market share among community banks on Greater Long Island ⁽¹⁾.

Dime Community Bancshares, Inc.
Investor Relations Contact:
Avinash Reddy
Senior Executive Vice President – Chief Financial Officer
Phone: 718-782-6200; Ext. 5909
Email: avinash.reddy@dime.com

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

FAQ

What is the expected financial impact of DCOM's investment portfolio repositioning in Q4 2024?

The portfolio repositioning will result in a one-time pre-tax loss of approximately $43 million in Q4 2024, but improves the yield from 1.20% to 5.08% on $379 million in securities.

How much will DCOM's pension plan termination cost in total?

The pension plan termination will cost approximately $3 million total, with $1 million in Q4 2024 and an additional $2 million in Q1 2025.

What is the new yield on DCOM's repositioned securities portfolio?

The newly purchased securities have a weighted average yield of 5.08% with a weighted average duration of 4.2 years.

How much in securities did DCOM sell and purchase in Q4 2024?

DCOM sold and purchased $379 million in securities as part of its portfolio repositioning strategy.