Dime Community Bancshares, Inc. Reports Strong Third Quarter 2020 Results

Rhea-AI Impact

(Neutral)

Rhea-AI Sentiment

(Positive)

Tags

Rhea-AI Summary

Dime Community Bancshares reported a 29% increase in revenues and a 223% rise in earnings per share for Q3 2020, achieving net income of $14.0 million, or $0.42 per diluted share. Excluding merger expenses, EPS would be $0.44, a record for the company. The bank experienced non-performing assets decline by 19.2% and strong growth in checking account balances, up 61.1% year-over-year. The net interest margin expanded by 6 basis points, driven by reduced deposit costs. Management highlighted positive trends in loans exiting deferment, indicating robust recovery prospects.

Positive

29% year-over-year revenue increase.
223% year-over-year EPS increase.
Non-performing assets decreased by 19.2%.
Strong growth in checking account balances, up 61.1%.
Net interest margin expanded by 6 basis points.

Negative

None.

10/27/2020 - 04:56 PM

Revenues Increased 29% Year-over-Year

Earnings Per Share Increased 223% Year-over-Year

BROOKLYN, N.Y., Oct. 27, 2020 (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 to common stockholders of $14.0 million for the quarter ended September 30, 2020, or $0.42 per diluted common share, compared with net income to common stockholders of $11.8 million for the quarter ended June 30, 2020, or $0.35 per diluted common share, and net income to common stockholders of $4.7 million for the quarter ended September 30, 2019, or $0.13 per diluted common share.

Excluding the pre-tax impact of $0.8 million of merger related expenses and $0.2 million of income from gain on sale of securities, earnings per share (“EPS”) for the quarter ended September 30, 2020 would have been $0.44 per diluted share.

Mr. Kenneth J. Mahon, Chief Executive Officer (“CEO”) of the Company, stated, “Third quarter of 2020 EPS of $0.44 (on a core basis) represents a record for Dime in our history as a publicly traded company. We had solid growth in our loan portfolio and continued net interest margin expansion. In addition, expenses remained well controlled and non-performing assets declined. Our earnings profile and robust capital base helps position us well to serve our customers and communities, our employees and investors. Our merger integration teams are making good progress on the previously announced transaction with Bridge Bancorp, Inc. We are well on our way to create a foundational franchise that has the opportunity to become one of the elite regional bank competitors in New York and on Long Island.”

Highlights for the Third Quarter of 2020 Included:

Linked quarter net interest margin (“NIM”) expansion of 6 basis points primarily driven by a 28 basis point linked quarter decrease in the cost of deposits;
Strong growth in checking account balances. Compared to the third quarter of 2019, the sum of average non-interest-bearing checking account balances and average interest-bearing checking account balances for the third quarter of 2020 increased by 61.1% to $894.1 million;
The efficiency ratio declined to 49.0% in the third quarter of 2020;
Total non-interest income increased by 83% on a year-over-year basis to $6.1 million, driven by $1.5 million of customer-related loan level swap income, $0.8 million of income from the sale of Small Business Administration (“SBA”) loans, and $0.6 million from the sale of residential mortgage loans;
Capital levels remain strong; our tangible equity to tangible assets ratio was 9.73% at September 30, 2020 (see “Non-GAAP Reconciliation” tables at the end of this news release). Excluding the impact of SBA Paycheck Protection Program (“PPP”) loans, the ratio would have been 10.22%; and
Non-performing assets declined by 19.2% on a linked quarter basis and represent only 0.19% of total assets.

Loans with Payment Deferrals

The Company is seeing positive trends as an increasing number of loans exit deferment.

As of September 30, 2020, Principal and Interest (“P&I”) deferrals decreased to $272.0 million or 4.9% of the total loan portfolio. Furthermore, an additional 1.1% of our portfolio is currently comprised of loans that are paying full interest and escrow, and only deferring principal payments.

($ in millions)	As of September 30, 2020

	Total Loan Portfolio				P&I Deferrals
							% of Loan
	Balance		LTV		Balance		Category		LTV
One-to-four family and coop/condo	$	184.8	51.9	%	$	8.8	4.7	%	55.2	%
Multifamily residential and residential mixed-use		2,915.0	51.7			192.3	6.6		60.5
Commercial mixed-use		362.0	46.4			16.1	4.4		51.4

Pure commercial real estate (“CRE”):
Retail		309.7	53.4			13.4	4.3		65.8
Office		322.1	61.1			10.5	3.3		56.7
Hotels		171.4	65.7			-	-		-
Warehouse		134.3	64.6			-	-		-
Single Tenant		80.8	45.4			8.9	11.1		50.9
Shopping Center		79.7	43.3			-	-		-
Industrial		65.1	60.9			-	-		-
All Other		147.8	56.1			10.1	6.8		43.5
Total Pure CRE		1,310.9	56.6			42.9	3.3		55.2

Acquisition, Development, and Construction		151.9	n/a			-	-		-
									-
Commercial and industrial (“C&I”)		650.0	n/a			12.0	1.9		n/a
Other Loans		1.4	n/a			-	-		-

Total	$	5,576.0			$	272.0	4.9	%

Note: Loan balances exclude deferred fees and costs.

As of September 30, 2020, the Company had 15 loans aggregating $25.6 million to restaurants. As of September 30, 2020, there were no loans with P&I deferrals to restaurants. The Company does not have any exposure to the energy industry, airline industry, leveraged lending, shared national credits, credits card loans, or auto loans.

Mr. Mahon commented, “We are encouraged by the positive trends we are seeing across our loan portfolio. The multigenerational nature of our multifamily borrower base, coupled with the low loan-to-value (“LTV”) nature of our multifamily portfolio (weighted average LTV of approximately 51.7% at September 30, 2020) and our capital strength and earnings profile provides me confidence in our prospects.”

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income in the third quarter of 2020 was $44.9 million, an increase of $1.4 million (3.2%) from the second quarter of 2020 and an increase of $8.7 million (24.2%) from the third quarter of 2019. The table below provides a reconciliation of the reported NIM and the NIM excluding the impact of loan prepayment fees.

($ in millions)

Q3 2020

Q2 2020

Q3 2019

NIM

2.92

{ "@context": "https://schema.org", "@type": "FAQPage", "name": "Dime Community Bancshares, Inc. Reports Strong Third Quarter 2020 Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were DCOM's earnings per share for Q3 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Dime Community Bancshares reported earnings per share of $0.42 for Q3 2020, or $0.44 on a core basis." } }, { "@type": "Question", "name": "How much did DCOM's revenues increase year-over-year?", "acceptedAnswer": { "@type": "Answer", "text": "Dime Community Bancshares experienced a 29% increase in revenues year-over-year for the third quarter of 2020." } }, { "@type": "Question", "name": "What was the net income for DCOM in Q3 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Dime Community Bancshares reported a net income of $14.0 million for the quarter ending September 30, 2020." } }, { "@type": "Question", "name": "How did DCOM's non-performing assets change?", "acceptedAnswer": { "@type": "Answer", "text": "Non-performing assets for Dime Community Bancshares decreased by 19.2% in the third quarter of 2020." } }, { "@type": "Question", "name": "What is the status of DCOM's loan deferrals?", "acceptedAnswer": { "@type": "Answer", "text": "As of September 30, 2020, principal and interest deferrals decreased to $272.0 million, representing 4.9% of the total loan portfolio." } } ] }