-
Dime Community Bancshares, Inc. Increases Fourth Quarter Net Income Available to Common Stockholders By 925% Year-Over-Year
Source: Nasdaq GlobeNewswire / 28 Jan 2022 06:00:01 America/New_York
Continued Increase in Non-Interest-Bearing Deposits Positions the Company Well for A Rising Interest Rate Scenario
Robust Quarterly Loan Originations in Excess of $500 Million
HAUPPAUGE, N.Y., Jan. 28, 2022 (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 $96.7 million for the year ended December 31, 2021, or $2.45 per diluted common share.
For the quarter ended December 31, 2021, net income available to common stockholders was $33.5 million, or $0.83 per diluted common share, compared to net income available to common stockholders of $3.3 million for the quarter ended December 31, 2020, or $0.16 per diluted common share. Adjusted net income available to common stockholders (non-GAAP) totaled $33.8 million for the quarter ended December 31, 2021, or $0.84 per diluted share. Adjusted net income available to common stockholders includes $0.5 million of aggregate pre-tax adjustments related to merger expenses and transaction costs, branch restructuring, and net gain on sale of securities and other assets (see “Non-GAAP Reconciliation” table at the end of this news release).
Kevin M. O’Connor, Chief Executive Officer (“CEO”) of the Company, stated, “As we close the book on 2021, we can reflect on a successful year for our Company. We integrated our merger transaction seamlessly and delivered on our financial goals as it relates to return on assets and efficiency. During the fourth quarter of 2021, our loan originations increased to $505 million (representing a linked quarter increase of approximately 9%). In addition, we grew our non-interest-bearing deposits to total deposits ratio to 37.5% and have positioned our balance sheet favorably for a rising rate scenario.”
Highlights for the Fourth Quarter of 2021 Included:
- The non-interest-bearing deposits to total deposits ratio increased to 37.5% at December 31, 2021;
- The cost of deposits for the fourth quarter of 2021 declined to 0.11%;
- Total loans held for investment, net, excluding Paycheck Protection Program (“PPP”) loans increased by 1% on an annualized basis versus the linked quarter;
- The reported efficiency ratio for the fourth quarter of 2021 was 49.9%; excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, the adjusted efficiency ratio was 48.2%;
- The Company repurchased 850,901 shares of its common stock, which represented approximately 2% of shares outstanding at the beginning of the period, at a weighted average price of $34.44; and
- Non-performing assets represented only 0.33% of total assets as of December 31, 2021.
Management’s Discussion of Quarterly Operating Results
The Company’s results of operations for the third and fourth quarters of 2021 include income for the full quarter from the merger with Bridge Bancorp, Inc. (“Bridge”). The Company’s historical information for the fourth quarter of 2020 does not include the historical GAAP results of Bridge.
Net Interest Income
Net interest income for the fourth quarter of 2021 was $91.7 million compared to $94.8 million for the third quarter of 2021 and $48.7 million for the fourth quarter of 2020.
The table below provides a reconciliation of the reported Net Interest Margin (“NIM”), the adjusted NIM excluding the impact of PPP loans, and the adjusted NIM excluding the combined impact of PPP loans and purchasing accounting accretion on the loan portfolio.
($ in thousands) Q4 2021 Q3 2021 Q4 2020 Net interest income $ 91,686 $ 94,828 $ 48,680 Less: Net interest income on PPP loans (539 ) (2,502 ) (1,678 ) Adjusted net interest income excluding PPP loans, (non-GAAP) $ 91,147 $ 92,326 $ 47,002 Average interest-earning assets $ 11,582,086 $ 11,765,298 $ 6,281,488 Average PPP loan balances (96,065 ) (266,472 ) (318,793 ) Adjusted average interest-earning assets excluding PPP loans, (non-GAAP) $ 11,486,021 $ 11,498,826 $ 5,962,695 NIM (1) 3.14 % 3.20 % 3.10 % Adjusted NIM excluding PPP loans (non-GAAP) (2) 3.15 % 3.19 % 3.15 % Adjusted net interest income excluding PPP loans, (non-GAAP) $ 91,147 $ 92,326 $ 47,002 Less: Purchase Accounting Accretion on loans ("PAA") 625 (2,541 ) — Adjusted net interest income excluding PPP loans and PAA on loans, (non-GAAP) $ 91,772 $ 89,785 $ 47,002 Adjusted NIM excluding PPP loans and PAA on loans, (non-GAAP) (3) 3.17 % 3.10 % 3.15 % (1) NIM represents net interest income divided by average interest-earning assets.
(2) Adjusted NIM excluding PPP represents adjusted net interest income, which excludes net interest income on PPP loans divided by average interest-earning assets excluding PPP loans. The net interest income on PPP loans is calculated using interest income on the PPP balances less an assumed cost of funding the PPP loans, using the overall cost of funds of the Company.
(3) Adjusted NIM excluding PPP and PAA represents adjusted net interest income, which excludes net interest income on PPP loans and PAA, divided by adjusted average interest-earning assets excluding PPP loans.Loan Portfolio
The ending weighted average rate (“WAR”)(1) on the total loan portfolio was 3.73% at December 31, 2021, a 1 basis point increase compared to the ending WAR on the total loan portfolio at September 30, 2021. Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.75% at December 31, 2021, compared to 3.76% at September 30, 2021.
Outlined below are loan balances and WARs for the period ended as indicated.
December 31, 2021 September 30, 2021 December 31, 2020 ($ in thousands) Balance WAR Balance WAR Balance WAR Loans held for investment balances at period end: One-to-four family residential, including condominium and cooperative apartment $ 669,282 3.63 % $ 683,665 3.68 % $ 184,989 3.76 % Multifamily residential and residential mixed-use (2)(3) 3,356,346 3.56 3,468,262 3.57 2,758,743 3.75 Non-owner-occupied commercial real estate ("CRE") 2,915,693 3.69 2,844,171 3.70 1,560,811 3.86 Owner-occupied CRE 1,030,255 4.05 970,266 4.11 317,356 4.14 Acquisition, development, and construction ("ADC") 322,628 4.53 285,379 4.69 156,296 5.02 Commercial and industrial ("C&I") 867,542 4.08 878,332 4.10 319,626 4.49 Other loans 16,898 5.85 20,713 4.97 2,316 7.63 Loans held for investment excluding PPP 9,178,644 3.75 9,150,788 3.76 5,300,137 3.89 PPP 66,017 1.00 134,083 1.00 321,907 1.00 Total loans held for investment including PPP $ 9,244,661 3.73 % $ 9,284,871 3.72 % $ 5,622,044 3.73 % (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 amount of loans in the category.
(2) Includes multifamily loans underlying 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.Outlined below are the loan originations, excluding PPP, for the quarter ended as indicated.
($ in millions) Q4 2021 Q3 2021 Q4 2020 Loan originations, excluding PPP $ 505.1 $ 464.9 $ 223.8 Deposits
Total deposits decreased by $215.1 million on a linked quarter basis to $10.5 billion at December 31, 2021. The decline in total deposits was primarily due to the Bank not renewing higher-cost certificates of deposit accounts.
CEO O’Connor stated, “We continued to focus on reducing higher-rate, promotional or rate-sensitive deposits in our portfolio as we prepare for higher interest rates. The weighted-average rate on our deposit portfolio declined to 0.09% at December 31, 2021.”
Non-interest-bearing deposits increased $98.6 million during the fourth quarter of 2021 to $3.9 billion at December 31, 2021, representing 37.5% of total deposits.
As of December 31, 2021, the Company had $324.9 million of certificates of deposits, with a weighted average rate of 0.29%, that were set to mature during the first quarter of 2022 and $376.3 million of certificates of deposits, with a weighted average rate of 0.69%, that were set to mature during the remainder of 2022.
Non-Interest Income
Non-interest income was $10.2 million during the fourth quarter of 2021, $9.7 million during the third quarter of 2021, and $2.5 million during the fourth quarter of 2020. Excluding the net gain on sale of securities and other assets, adjusted non-interest income was $9.2 million during the fourth quarter of 2021. The net gain on sale of securities and other assets during the fourth quarter of 2021 was primarily due to the sale of a branch property. Excluding the loss on termination of derivatives and net gain on sale of securities and other assets, adjusted non-interest income was $7.9 million during the fourth quarter of 2020 (see “Non-GAAP Reconciliation” table at the end of this news release).
Non-Interest Expense
Total non-interest expense was $50.8 million during the fourth quarter of 2021, $56.8 million during the third quarter of 2021, and $37.6 million during the fourth quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, adjusted non-interest expense was $48.7 million during the fourth quarter of 2021, compared to $49.1 million during the third quarter of 2021, and $25.3 million during the fourth quarter of 2020 (see “Non-GAAP Reconciliation” table at the end of this news release).
The ratio of non-interest expense to average assets was 1.64% during the fourth quarter of 2021, compared to 1.80% during the linked quarter and 2.28% for the fourth quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, the ratio of adjusted non-interest expense to average assets was 1.57% during the fourth quarter of 2021, compared to 1.56% during the linked quarter and 1.53% for the fourth quarter of 2020 (see “Non-GAAP Reconciliation” table at the end of this news release).
The efficiency ratio was 49.9% during the fourth quarter of 2021, compared to 54.3% during the linked quarter and 73.4% during the fourth quarter of 2020. Excluding the impact of merger expenses and transaction costs, branch restructuring, and amortization of other intangible assets, the adjusted efficiency ratio was 48.2% during the fourth quarter of 2021, compared to 46.9% during the linked quarter and 44.8% during the fourth quarter of 2020 (see “Non-GAAP Reconciliation” table at the end of this news release).
Income Tax Expense
The reported effective tax rate for the fourth quarter of 2021 was 30.9%, compared to 27.5% for the third quarter of 2021, and 31.5% for the fourth quarter of 2020. The increase in the effective tax rate during the fourth quarter of 2021 was primarily the result of higher non-deductible expenses during the period.
Credit Quality
Non-performing loans at December 31, 2021 were $40.3 million, or 0.44% of total loans.
Excluding the impact of purchased loans with credit deterioration (“PCD loans”), non-performing loans would have been $32.2 million, or 0.36% of total loans (excluding PCD loans).
A credit loss recovery of $132 thousand was recorded during the fourth quarter of 2021, compared to a credit loss recovery of $5.2 million during the third quarter of 2021, and a credit loss provision of $6.2 million during the fourth quarter of 2020.
The allowance for credit losses as a percentage of total loans was 0.91% at December 31, 2021 as compared to 0.88% at September 30, 2021 and 0.74% at December 31, 2020.
Loans with Payment Deferrals
Loans subject to full principal and interest (“P&I”) payment deferrals declined to $5.7 million and represented 0.1% of the total loan portfolio at December 31, 2021.
Capital Management
The Company’s and the Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.
CEO O’Connor commented, “During the fourth quarter, we continued to execute on our share repurchase program and we repurchased $29.3 million of common stock. Our tangible equity to tangible assets ratio increased by 14 basis points in the quarter to 8.64%. Our strong balance sheet and internal stress testing analyses continue to provide support for future capital return to shareholders” (see “Non-GAAP Reconciliation” tables at the end of this news release).
Dividends per common share were $0.24 during the fourth quarter of 2021.
Book value per common share was $26.98 and tangible common book value per share (which represents common equity less goodwill and other intangible assets, divided by number of shares outstanding) was $22.87 at December 31, 2021 (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 January 28, 2022, during which CEO O’Connor will discuss the Company’s fourth quarter and fiscal year 2021 performance, with a question and answer session to follow. Dial-in information for the live call is 1-888-348-2672. Upon dialing in, request to be joined into Dime Community Bancshares, Inc. call with the conference operator.
The conference call will be simultaneously webcast (listen only), and archived for a period of one year, at https://services.choruscall.com/links/dcom220128.html. Dial-in information for the replay is 1-877-344-7529 using access code #6633695. Replay will be available beginning on January 28, 2022 at 10:30 a.m. through February 11, 2022 at 11:59 p.m.
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 $12.0 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 "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 reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company; 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 economic conditions, 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; 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. Further, given its ongoing and dynamic nature, it is difficult to predict what effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch closures, work stoppages and unavailability of personnel; and increased cybersecurity risks, as employees work remotely. 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 Annual Report on Form 10-K and subsequent updates set forth in the Company’s 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 5909DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)December 31, September 30, December 31, 2021 2021 2020 Assets: Cash and due from banks $ 393,722 $ 629,011 $ 243,603 Securities available-for-sale, at fair value 1,563,711 1,709,063 538,861 Securities held-to-maturity 179,309 40,303 — Marketable equity securities, at fair value — — 5,970 Loans held for sale 5,493 14,720 5,903 Loans held for investment, net: One-to-four family and cooperative/condominium apartment 669,282 683,665 184,989 Multifamily residential and residential mixed-use (1)(2) 3,356,346 3,468,262 2,758,743 CRE 3,945,948 3,814,437 1,878,167 ADC 322,628 285,379 156,296 Total real estate loans 8,294,204 8,251,743 4,978,195 C&I 867,542 878,332 319,626 Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans 66,017 134,083 321,907 Other loans 16,898 20,713 2,316 Allowance for credit losses (83,853 ) (81,255 ) (41,461 ) Total loans held for investment, net 9,160,808 9,203,616 5,580,583 Premises and fixed assets, net 50,368 49,615 19,053 Premises held for sale 556 2,799 — Restricted stock 37,732 37,719 60,707 Bank Owned Life Insurance ("BOLI") 295,789 293,898 156,096 Goodwill 155,797 155,339 55,638 Other intangible assets 8,362 9,077 — Operating lease assets 64,258 56,836 33,898 Derivative assets 45,086 41,700 18,932 Accrued interest receivable 40,149 43,284 34,815 Other assets 65,224 77,401 27,551 Total assets $ 12,066,364 $ 12,364,381 $ 6,781,610 Liabilities: Non-interest-bearing checking $ 3,920,423 $ 3,821,832 $ 780,751 Interest-bearing checking 905,717 989,526 290,300 Savings 1,158,040 1,188,794 414,809 Money market 3,621,552 3,657,669 1,716,624 Certificates of deposit 853,242 1,016,216 1,322,638 Total deposits 10,458,974 10,674,037 4,525,122 FHLBNY advances 25,000 25,000 1,204,010 Other short-term borrowings 1,862 2,629 120,000 Subordinated debt, net 197,096 197,142 114,052 Operating lease liabilities 66,103 62,870 39,874 Derivative liabilities 40,728 38,889 37,374 Other liabilities 83,981 162,697 40,082 Total liabilities 10,873,744 11,163,264 6,080,514 Stockholders' equity: Preferred stock, Series A 116,569 116,569 116,569 Common stock 416 416 348 Additional paid-in capital 494,125 493,775 278,295 Retained earnings 654,726 630,744 600,641 Accumulated other comprehensive loss, net of deferred taxes (6,181 ) (1,042 ) (5,924 ) Unearned equity awards (7,842 ) (9,417 ) — Common stock held by the Benefit Maintenance Plan — — (1,496 ) Treasury stock, at cost (59,193 ) (29,928 ) (287,337 ) Total stockholders' equity 1,192,620 1,201,117 701,096 Total liabilities and stockholders' equity $ 12,066,364 $ 12,364,381 $ 6,781,610 (1) Includes loans underlying multifamily cooperatives.
(2) 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.DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except share and per share amounts)Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2021 2021 2020 2021 2020 Interest income: Loans $ 89,301 $ 94,045 $ 55,002 $ 359,016 $ 216,566 Securities 7,097 6,030 3,365 22,634 14,159 Other short-term investments 414 583 705 2,976 3,282 Total interest income 96,812 100,658 59,072 384,626 234,007 Interest expense: Deposits and escrow 2,861 3,565 4,740 16,527 33,038 Borrowed funds 2,265 2,265 5,652 10,490 23,265 Total interest expense 5,126 5,830 10,392 27,017 56,303 Net interest income 91,686 94,828 48,680 357,609 177,704 (Credit) provision for credit losses (132 ) (5,187 ) 6,162 6,212 26,165 Net interest income after (credit) provision 91,818 100,015 42,518 351,397 151,539 Non-interest income: Service charges and other fees 4,621 4,581 1,653 15,998 5,571 Title fees 735 482 — 2,338 — Loan level derivative income 113 445 3,671 2,909 8,872 BOLI income 1,890 2,249 1,028 7,071 4,859 Gain on sale of SBA loans excluding PPP 851 348 146 2,336 1,118 Gain on sale of PPP loans — — — 20,697 — Gain on sale of residential loans 225 304 910 1,758 1,884 Net gain on equity securities — — 222 131 361 Net gain on sale of securities and other assets 975 — 1,235 1,705 4,592 Loss on termination of derivatives — — (6,596 ) (16,505 ) (6,596 ) Other 769 1,319 233 3,630 612 Total non-interest income 10,179 9,728 2,502 42,068 21,273 Non-interest expense: Salaries and employee benefits 27,638 28,276 15,726 108,331 60,756 Severance — — — 1,875 4,000 Occupancy and equipment 7,784 7,814 4,116 30,697 16,177 Data processing costs 4,506 3,573 2,152 16,638 8,329 Marketing 1,959 1,054 318 4,661 1,458 Professional services 2,130 2,751 681 9,284 3,394 Federal deposit insurance premiums 1,031 1,173 490 4,077 2,257 Loss on extinguishment of debt — — 1,104 1,751 1,104 Curtailment (gain) loss — — (1,651 ) 1,543 (1,651 ) Merger expenses and transaction costs 2,574 2,472 12,829 44,824 15,256 Branch restructuring (1,118 ) 4,518 — 5,059 — Amortization of other intangible assets 715 715 — 2,622 — Other 3,610 4,437 1,824 13,937 6,748 Total non-interest expense 50,829 56,783 37,589 245,299 117,828 Income before taxes 51,168 52,960 7,431 148,166 54,984 Income tax expense 15,811 14,565 2,339 44,170 12,666 Net income 35,357 38,395 5,092 103,996 42,318 Preferred stock dividends 1,821 1,822 1,821 7,286 4,783 Net income available to common stockholders $ 33,536 $ 36,573 $ 3,271 $ 96,710 $ 37,535 Earnings per common share ("EPS"): Basic $ 0.83 $ 0.89 $ 0.16 $ 2.45 $ 1.74 Diluted $ 0.83 $ 0.89 $ 0.16 $ 2.45 $ 1.74 Average common shares outstanding for diluted EPS 39,876,825 40,426,161 21,233,018 38,903,037 21,538,448 DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share amounts)At or For the Three Months Ended At or For the Year Ended December 31, September 30, December 31, December 31, December 31, 2021 2021 2020 2021 2020 Per Share Data: Reported EPS (Diluted) $ 0.83 $ 0.89 $ 0.16 $ 2.45 $ 1.74 Cash dividends paid per common share 0.24 0.24 0.22 0.96 0.86 Book value per common share 26.98 26.64 27.53 26.98 27.53 Tangible common book value per share (1) 22.87 22.60 24.91 22.87 24.91 Common shares outstanding 39,878 40,715 21,233 39,878 21,233 Dividend payout ratio 28.92 % 26.97 % 135.03 % 39.18 % 49.79 % Performance Ratios (Based upon Reported Net Income): Return on average assets 1.14 % 1.22 % 0.31 % 0.86 % 0.66 % Return on average equity 11.67 12.69 2.89 8.96 6.30 Return on average tangible common equity (1) 14.61 15.96 2.45 11.09 7.14 Net interest margin 3.14 3.20 3.10 3.15 2.90 Non-interest expense to average assets 1.64 1.80 2.28 2.03 1.83 Efficiency ratio 49.9 54.3 73.4 61.4 59.2 Effective tax rate 30.90 27.50 31.48 29.81 23.04 Balance Sheet Data: Average assets $ 12,419,184 $ 12,584,372 $ 6,604,409 $ 12,112,800 $ 6,424,251 Average interest-earning assets 11,582,086 11,765,298 6,281,488 11,354,111 6,122,643 Average tangible common equity (1) 931,503 929,131 533,476 888,128 525,817 Loan-to-deposit ratio at end of period 88.4 87.0 124.2 88.4 124.2 Capital Ratios and Reserves - Consolidated: (3) Tangible common equity to tangible assets (1) 7.66 % 7.54 % 7.86 % Tangible equity to tangible assets (1) 8.64 8.50 9.60 Tier 1 common equity ratio 9.50 9.92 10.22 Tier 1 risk-based capital ratio 10.71 11.17 12.44 Total risk-based capital ratio 13.47 14.13 15.44 Tier 1 leverage ratio 8.46 8.37 9.95 CRE consolidated concentration ratio (2) 519 516 554 Allowance for credit losses/ Total loans 0.91 0.88 0.74 Allowance for credit losses/ Non-performing loans 208.04 238.84 231.26 (1) See "Non-GAAP Reconciliation" table for reconciliation of tangible equity, tangible common equity, and tangible assets. Average balances are calculated using the ending balance for months during the period indicated.
(2) The CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner occupied commercial real estate, multifamily, and ADC, divided by consolidated capital. December 31, 2021 amounts are preliminary pending completion and filing of the Company’s regulatory reports.
(3) December 31, 2021 amounts are preliminary pending completion and filing of the Company’s regulatory reports.DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)Three Months Ended December 31, 2021 September 30, 2021 December 31, 2020 Average Average Average Average Yield/ Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Balance Interest Cost Assets: Interest-earning assets: Real estate loans $ 8,293,470 $ 78,367 3.75 % $ 8,289,973 $ 78,820 3.77 % $ 4,966,327 $ 49,487 3.99 % Commercial and industrial loans 873,273 10,119 4.60 868,508 12,143 5.55 328,754 3,252 3.96 SBA PPP loans 96,065 583 2.41 266,472 2,643 3.94 318,793 2,252 2.83 Other loans 18,385 232 5.01 21,391 439 8.14 1,318 11 3.34 Securities 1,729,191 7,097 1.63 1,438,348 6,030 1.66 498,861 3,365 2.70 Other short-term investments 571,702 414 0.29 880,606 583 0.26 167,435 705 1.68 Total interest-earning assets 11,582,086 96,812 3.32 % 11,765,298 100,658 3.39 % 6,281,488 59,072 3.76 % Non-interest-earning assets 837,098 819,074 322,921 Total assets $ 12,419,184 $ 12,584,372 $ 6,604,409 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest-bearing checking $ 962,597 $ 455 0.19 % $ 1,000,435 $ 388 0.15 % $ 259,155 $ 142 0.22 % Money market 3,652,681 1,087 0.12 3,698,124 1,467 0.16 1,679,578 1,285 0.30 Savings 1,174,719 108 0.04 1,335,310 170 0.05 408,241 141 0.14 Certificates of deposit 915,210 1,211 0.52 1,138,853 1,540 0.54 1,333,079 3,172 0.95 Total interest-bearing deposits 6,705,207 2,861 0.17 7,172,722 3,565 0.20 3,680,053 4,740 0.51 FHLBNY advances 25,000 61 0.97 25,000 59 0.94 1,172,191 4,319 1.47 Subordinated debt, net 197,126 2,204 4.44 197,172 2,206 4.44 114,028 1,330 4.64 Other short-term borrowings 2,484 — — 2,290 — — 4,424 3 0.27 Total borrowings 224,610 2,265 4.00 224,462 2,265 4.00 1,290,643 5,652 1.74 Total interest-bearing liabilities 6,929,817 5,126 0.29 % 7,397,184 5,830 0.31 % 4,970,696 10,392 0.83 % Non-interest-bearing checking 4,096,046 3,789,623 795,204 Other non-interest-bearing liabilities 181,074 186,977 132,826 Total liabilities 11,206,937 11,373,784 5,898,726 Stockholders' equity 1,212,247 1,210,588 705,683 Total liabilities and stockholders' equity $ 12,419,184 $ 12,584,372 $ 6,604,409 Net interest income $ 91,686 $ 94,828 $ 48,680 Net interest rate spread 3.03 % 3.08 % 2.93 % Net interest margin 3.14 % 3.20 % 3.10 % Deposits (including non-interest-bearing checking accounts) $ 10,801,253 $ 2,861 0.11 % $ 10,962,345 $ 3,565 0.13 % $ 4,475,257 $ 4,740 0.42 % DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS
(Dollars in thousands)At or For the Three Months Ended December 31, September 30, December 31, Asset Quality Detail 2021 2021 2020 Non-performing loans ("NPLs") (1) One-to-four family residential, including condominium and cooperative apartment $ 7,623 $ 4,938 $ 858 Multifamily residential and residential mixed-use — 859 1,863 CRE 5,053 4,122 2,704 ADC — — — C&I 27,266 23,727 12,502 Other 365 374 1 Total Non-accrual loans $ 40,307 $ 34,020 $ 17,928 Total Non-performing assets ("NPAs") $ 40,307 $ 34,020 $ 17,928 Loans 90 days delinquent and accruing ("90+ Delinquent") One-to-four family residential, including condominium and cooperative apartment $ 1,945 $ 5,021 $ 44 Multifamily residential and residential mixed-use — — 437 CRE — 1,004 — ADC — — — C&I 1,056 257 2,848 Other — — — 90+ Delinquent $ 3,001 $ 6,282 $ 3,329 NPAs and 90+ Delinquent $ 43,308 $ 40,302 $ 21,257 NPAs and 90+ Delinquent / Total assets 0.36 % 0.33 % 0.31 % Net charge-offs (recoveries) ("NCOs") $ (108 ) $ 4,191 $ 13,193 NCOs / Average loans (1) 0.00 % 0.18 % 0.94 % (1) Excludes 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 provide 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 the Company’s merger with Bridge, as well as branch restructuring, and gain on sale of PPP loans.
Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2021 2021 2020 2021 2020 Reconciliation of Reported and Adjusted (non-GAAP) Net Income Available to Common Stockholders Reported net income available to common stockholders $ 33,536 $ 36,573 $ 3,271 $ 96,710 $ 37,535 Adjustments to net income (1): Provision for credit losses - Non-PCD loans (double-count) — — — 20,278 — Gain on sale of PPP loans — — — (20,697 ) — Net gain on sale of securities and other assets (975 ) — (1,235 ) (1,685 ) (4,592 ) Loss on termination of derivatives — — 6,596 16,505 6,596 Severance — — — 1,875 4,000 Loss on extinguishment of debt — — 1,104 1,751 1,104 Curtailment (gain) loss — — (1,651 ) 1,543 (1,651 ) Merger expenses and transaction costs (2) 2,574 2,472 12,829 44,824 15,256 Branch restructuring (1,118 ) 4,518 — 5,059 — Income tax effect of adjustments and other tax adjustments (234 ) (2,191 ) (4,901 ) (19,421 ) (5,537 ) Adjusted net income available to common stockholders (non-GAAP) $ 33,783 $ 41,372 $ 16,013 $ 146,742 $ 52,711 Adjusted Ratios (Based upon non-GAAP as calculated above) Adjusted EPS (Diluted) $ 0.84 $ 1.01 $ 0.76 $ 3.73 $ 2.44 Adjusted return on average assets 1.15 % 1.37 % 1.08 % 1.27 % 0.89 % Adjusted return on average equity 11.75 14.27 10.11 13.26 8.56 Adjusted return on average tangible common equity 14.72 18.02 12.01 16.73 10.02 Adjusted non-interest expense to average assets 1.57 1.56 1.53 1.55 1.54 Adjusted efficiency ratio 48.2 46.9 44.8 47.6 49.3 (1) Adjustments to net income are taxed at the Company's statutory tax rate of approximately 31% unless otherwise noted.
(2) Certain merger expenses and transaction costs are non-taxable expense.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):
Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2021 2021 2020 2021 2020 Operating expense as a % of average assets - as reported 1.64 % 1.80 % 2.28 % 2.03 % 1.83 % Loss on extinguishment of debt — — (0.07 ) (0.01 ) (0.02 ) Curtailment gain (loss) — — 0.10 (0.02 ) 0.03 Severance — — — (0.02 ) (0.06 ) Merger expenses and transaction costs (0.08 ) (0.08 ) (0.78 ) (0.37 ) (0.24 ) Branch restructuring 0.03 (0.14 ) — (0.04 ) — Amortization of other intangible assets (0.02 ) (0.02 ) — (0.02 ) — Adjusted operating expense as a % of average assets (non-GAAP) 1.57 1.56 1.53 1.55 1.54 The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP):
Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2021 2021 2020 2021 2020 Efficiency ratio - as reported (non-GAAP) (1) 49.9 % 54.3 % 73.4 % 61.4 % 59.2 % Non-interest expense - as reported $ 50,829 $ 56,783 $ 37,589 $ 245,299 $ 117,828 Less: Severance — — — (1,875 ) (4,000 ) Less: Merger expenses and transaction costs (2,574 ) (2,472 ) (12,829 ) (44,824 ) (15,256 ) Less: Branch restructuring 1,118 (4,518 ) — (5,059 ) — Less: Loss on extinguishment of debt — — (1,104 ) (1,751 ) (1,104 ) Less: Curtailment gain (loss) — — 1,651 (1,543 ) 1,651 Less: Amortization of other intangible assets (715 ) (715 ) — (2,622 ) — Adjusted non-interest expense (non-GAAP) $ 48,658 $ 49,078 $ 25,307 $ 187,625 $ 99,119 Net interest income - as reported $ 91,686 $ 94,828 $ 48,680 $ 357,609 $ 177,704 Non-interest income - as reported $ 10,179 $ 9,728 $ 2,502 $ 42,068 $ 21,273 Less: Gain on sale of PPP loans — — — (20,697 ) — Less: Net gain on sale of securities and other assets (975 ) — (1,235 ) (1,685 ) (4,592 ) Less: Loss on termination of derivatives — — 6,596 16,505 6,596 Adjusted non-interest income (non-GAAP) $ 9,204 $ 9,728 $ 7,863 $ 36,191 $ 23,277 Adjusted total revenues for adjusted efficiency ratio (non-GAAP) $ 100,890 $ 104,556 $ 56,543 $ 393,800 $ 200,981 Adjusted efficiency ratio (non-GAAP) (2) 48.2 % 46.9 % 44.8 % 47.6 % 49.3 % _______________
(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 (loss) 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):
December 31, September 30, December 31, 2021 2021 2020 Reconciliation of Tangible Assets: Total assets $ 12,066,364 $ 12,364,381 $ 6,781,610 Less: Goodwill (155,797 ) (155,339 ) (55,638 ) Other intangible assets (8,362 ) (9,077 ) — Tangible assets (non-GAAP) $ 11,902,205 $ 12,199,965 $ 6,725,972 Reconciliation of Tangible Common Equity - Consolidated: Total stockholders' equity $ 1,192,620 $ 1,201,117 $ 701,096 Less: Goodwill (155,797 ) (155,339 ) (55,638 ) Other intangible assets (8,362 ) (9,077 ) — Tangible equity (non-GAAP) 1,028,461 1,036,701 645,458 Less: Preferred stock, net (116,569 ) (116,569 ) (116,569 ) Tangible common equity (non-GAAP) $ 911,892 $ 920,132 $ 528,889 Common shares outstanding 39,878 40,715 21,233 Tangible common equity to tangible assets (non-GAAP) 7.66 % 7.54 % 7.86 % Tangible equity to tangible assets (non-GAAP) 8.64 8.50 9.60 Book value per share $ 26.98 $ 26.64 $ 27.53 Tangible common book value per share (non-GAAP) 22.87 22.60 24.91 
