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2023 Annual Report
DIME COMMUNITY BANCSHARES, INC.
898 Veterans Memorial Highway, Suite 560, Hauppauge, NY 11788
dime.com
2023
Fellow Shareholders:
Our vision at Dime Community Bank is to become the premier
community commercial bank from Montauk to Manhattan, by
partnering and building trusted relationships with our
colleagues and customers and providing solutions for their
financial success. Our customers value our local decisioning,
and our single point of contact approach, matched with best-in-
class technology.
They also value Dime’s long history of financial strength. Since
opening our doors in 1864, Dime has endured the great
depression, two world wars, the financial crisis of 2008, and a
global pandemic. At each point, Dime has leaned into the
communities we serve to support their needs and provided a
safe harbor during these times.
2023 in Review
2023 was marked by the failure of several regional banks. While
these events shook the confidence of banking customers
nationwide, Dime stood firm. As a result of our strong balance
sheet, which is supported by over $1.0 Billion in Tier 1 capital,
we grew both loans and deposits in 2023.
We took our Private and Commercial Bank operations to the
next level and seized the opportunity to hire several productive
banking teams. Importantly, we made numerous enhancements
to our systems and processes and created a best-in-class
customer experience. I would like to thank all our employees
for this bank-wide initiative, which will serve us well in the years
ahead.
The initial results of the expansion of the Private and Commercial
Bank are well documented. Dime’s Private and Commercial
Bank booked over $500 Million of low-cost deposits in less than
twelve months. As we continue to execute on our growth plan,
we expect to remain active on the recruitment front.
5-Year Total Asset Trend
$ in Billions1
$11.3
$11.9
$12.1
$13.2
$13.6
$15
$12
$9
$6
$3
$0
Customer Focused and Community Driven in 2024
As we continue our journey of recruitment and growth, we
have also focused on diversifying our balance sheet with the
addition of a new Healthcare lending vertical. We believe we
have state-of-the-art and customer centric technology: some
examples include Dime Escrow Express for Law Firms & Title
Companies, Positive Pay for Fraud Prevention, and Smart Safe
Remote Deposit with next-day credit for specialized industries.
Our commitment to the communities we serve remains just as
strong as our commitment to growth. Our 60 branch locations,
now including Staten Island, remain as foundational pillars of
strength and stability in our communities; our branch network
is a valuable source of low-cost, granular deposits. We have not
slowed down after receiving an “Outstanding” rating for our
efforts pertaining to the Community Reinvestment Act of 1977.
In fact, in classic Dime fashion, we have leaned in to work
harder. We now have over 200 employee volunteers for
community efforts. This is a testament to our dedicated
employees.
In closing, we are steadfast in our commitment to become the
premier community commercial bank, from Montauk to
Manhattan and delivering value
for our shareholders,
customers, and communities alike.
Sincerely,
$15
$12
$11.3
$11.9
$12.1
$13.2
$13.6
Stuart H. Lubow
President & Chief Executive Officer
$9
$6
$3
$0
$12
$10
$8
2019
2020
2021
2022
2023
5-Year Deposit & Loan Trend
$ in Billions1
$10.5
$10.5 $10.5
$10.3
$10.7
$10.0
$9.0
$9.1
$9.2
$8.2
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
1Totals represent combined historical data for the merged entities as of year-end.
Deposits
Loans
$12
$10
$10.5
$10.5 $10.5
$10.3
$10.7
$10.0
$9.0
$9.1
$9.2
FORM 10-K
2023
[(cid:100)(cid:346)(cid:349)(cid:400)(cid:3)(cid:393)(cid:258)(cid:336)(cid:286)(cid:3)(cid:349)(cid:374)(cid:410)(cid:286)(cid:374)(cid:415)(cid:381)(cid:374)(cid:258)(cid:367)(cid:367)(cid:455)(cid:3)(cid:367)(cid:286)(cid:332)(cid:3)(cid:271)(cid:367)(cid:258)(cid:374)(cid:364)]
(cid:1409)(cid:1409)
(cid:1407)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Year Ended December 31, 2023
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
Commission file number 001-34096
Dime Community Bancshares, Inc.
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation or organization)
11-2934195
(I.R.S. employer identification number)
898 Veterans Memorial Highway, Suite 560, Hauppauge, NY
(Address of principal executive offices)
11788
(Zip Code)
Registrant’s telephone number, including area code: (631) 537-1000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $0.01 per share
Preferred Stock, Series A, par value $0.01 per share
Trading
Symbol(s)
DCOM
DCOMP
Name of exchange on which registered
The Nasdaq Stock Market
The Nasdaq Stock Market
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES (cid:1409) NO (cid:1407)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES (cid:1407) NO (cid:1409)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES (cid:1409) NO (cid:1407)
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). YES (cid:1409) NO (cid:1407)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer (cid:1409)
Non-accelerated filer (cid:1407)
Accelerated filer (cid:1407)
Smaller reporting company (cid:1407)
Emerging growth company (cid:1407)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:1407)
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 USC. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. (cid:1409)
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements. (cid:1407)
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). (cid:1407)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes (cid:1407) No (cid:1409)
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2023 was approximately $610.4 million based
upon the $17.63 closing price on the NASDAQ National Market for a share of the registrant’s common stock on June 30, 2023.
The registrant had 38,826,981 shares of common stock, $0.01 par value, outstanding as of February 15, 2024.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement to be distributed on behalf of the Board of Directors of Registrant in connection with the Annual Meeting
of Shareholders to be held on May 23, 2024 and any adjournment thereof, are incorporated by reference in Part III.
TABLE OF CONTENTS
PART I
Business
Risk Factors
Unresolved Staff Comments
Cybersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Exhibits, Financial Statement Schedules
Form 10-K Summary
Signatures
PART IV
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Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.
3
Cautionary Note Regarding Forward-Looking Statements
This report contains statements relating to our future results (including certain projections and business trends) that are
considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the
“PSLRA”). Such forward-looking statements, in addition to historical information, which involve risk and uncertainties,
are based on the beliefs, assumptions and expectations of our management. Words such as “expects,” “believes,” “should,”
“plans,” “anticipates,” “will,” “potential,” “could,” “intend,” “may,” “outlook,” “predict,” “project,” “would,”
“estimated,” “assumes,” “likely,” and variations of such similar expressions are intended to identify such forward-looking
statements. Examples of forward-looking statements include, but are not limited to, possible or assumed estimates with
respect to the financial condition, expected or anticipated revenue, and results of operations and our business, including
earnings growth; revenue growth in retail banking, lending and other areas; origination volume in the consumer,
commercial and other lending businesses; current and future capital management programs; non-interest income levels,
including fees from the title insurance subsidiary and banking services as well as product sales; tangible capital generation;
market share; expense levels; and other business operations and strategies. We claim the protection of the safe harbor for
forward-looking statements contained in the PSLRA.
Forward-looking statements are based upon various assumptions and analyses made by Dime Community Bancshares, Inc.
together with its direct and indirect subsidiaries, (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 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 conditions or results to differ
materially from those expressed or implied by such forward-looking statements. Accordingly, you should not place undue
reliance on such statements. These factors include, without limitation, the following:
(cid:120)
(cid:120)
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there may be increases in competitive pressure among financial institutions or from non-financial institutions;
inflation and fluctuation in market interest rates may affect demand for our products, operating costs, interest
margins and the fair value of financial instruments;
our net interest margin is subject to material short-term fluctuation based upon market rates;
changes in deposit flows, loan demand or real estate values may affect the business of Dime Community Bank
(the “Bank”);
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 or policies may adversely affect the Company’s business
or financial condition or results of operations;
socio-economic conditions, including conditions caused by the COVID-19 pandemic and any other public health
emergency, 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 different than the Company currently anticipates and may adversely affect our customers, financials
results and operations;
legislative, regulatory or policy changes may adversely affect the Company’s business or results of operations;
technological changes may be more difficult or expensive than the Company anticipates;
the Company may experiences breaches or failures of its information technology security systems;
success or consummation of new business initiatives or the integration of any acquired entities may be more
difficult or expensive than the Company anticipates;
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; and
the Company may be subject to other risks, as enumerated under Item 1A. Risk Factors in this Annual Report on
Form 10-K and in quarterly and other reports filed by us with the Securities and Exchange Commission.
The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date
of this document.
4
Item 1. Business
General
PART I
Dime Community Bancshares, Inc. (the “Company”) is a bank holding company engaged in commercial banking and
financial services through its wholly-owned subsidiary, Dime Community Bank (the “Bank”). The Bank was established
in 1910 and is headquartered in Hauppauge, New York. The Holding Company was incorporated under the laws of the
State of New York in 1988 to serve as the holding company for the Bank. The Company functions primarily as the holder
of all of the Bank’s common stock. Our bank operations include Dime Community Inc., a real estate investment trust
subsidiary, and Dime Abstract LLC (“Dime Abstract”), a wholly-owned subsidiary of the Bank, which is a broker of title
insurance services.
For over a century, we have maintained our focus on building customer relationships in our market area. Our mission is to
grow through the provision of exceptional service to our customers, our employees, and the community. We strive to
achieve excellence in financial performance and build long-term shareholder value. We engage in providing full service
commercial and consumer banking services, including accepting time, savings and demand deposits from the businesses,
consumers, and local municipalities in our market area. These deposits, together with funds generated from operations and
borrowings, are invested primarily in: (1) commercial real estate loans (“CRE”); (2) multi-family mortgage loans;
(3) residential mortgage loans; (4) secured and unsecured commercial and consumer loans; (5) home equity loans;
(6) construction and land loans; (7) Federal Home Loan Bank (“FHLB”), Federal National Mortgage Association (“Fannie
Mae”), Government National Mortgage Association (“Ginnie Mae”) and Federal Home Loan Mortgage Corporation
(“Freddie Mac”) mortgage-backed securities, collateralized mortgage obligations and other asset backed securities; (8)
U.S. Treasury securities; (9) New York State and local municipal obligations; (10) U.S. government-sponsored enterprise
(“U.S. GSE”) securities; and (11) corporate bonds. We also offer the Certificate of Deposit Account Registry Service
(“CDARS”) and Insured Cash Sweep (“ICS”) programs, providing multi-millions of dollars of Federal Deposit Insurance
Corporation (“FDIC”) insurance on deposits to our customers. In addition, we offer merchant credit and debit card
processing, automated teller machines, cash management services, lockbox processing, online banking services, remote
deposit capture, safe deposit boxes, and individual retirement accounts as well as investment services through Dime
Financial Services LLC, which offers a full range of investment products and services through a third-party broker dealer.
Through its title insurance subsidiary, the Bank acts as a broker for title insurance services. Our customer base is comprised
principally of small and medium sized businesses, municipal relationships and consumer relationships.
On February 1, 2021, Dime Community Bancshares, Inc., a Delaware corporation (“Legacy Dime”) merged with and into
Bridge Bancorp, Inc., a New York corporation (“Bridge”) (the “Merger”), with Bridge as the surviving corporation under
the name “Dime Community Bancshares, Inc.” (the “Holding Company”). At the effective time of the Merger (the
“Effective Time”), each outstanding share of Legacy Dime common stock, par value $0.01 per share, was converted into
the right to receive 0.6480 shares of the Holding Company’s common stock, par value $0.01 per share.
At the Effective Time, each outstanding share of Legacy Dime’s Series A preferred stock, par value $0.01 (the “Dime
Preferred Stock”), was converted into the right to receive one share of a newly created series of the Holding Company’s
preferred stock having the same powers, preferences and rights as the Dime Preferred Stock.
Immediately following the Merger, Dime Community Bank, a New York-chartered commercial bank and a wholly-owned
subsidiary of Legacy Dime, merged with and into BNB Bank, a New York-chartered trust company and a wholly-owned
subsidiary of Bridge, with BNB Bank as the surviving bank, under the name “Dime Community Bank” (the “Bank”).
As of December 31, 2023, we operated 60 branch locations throughout Long Island and the New York City boroughs of
Brooklyn, Queens, Manhattan, Staten Island, and the Bronx.
Human Capital Resources
Demographics and Culture
As of December 31, 2023, we employed 851 full-time equivalent employees. Our employees are not represented by a
collective bargaining agreement. Our culture in the workplace encourages employees to care about each other, the
5
communities they serve, and the work they do. We believe strong community ties, customer focus, accountability, and
development of the communities in which we operate will have a favorable long-term impact on our business performance.
Our employees are passionate and empowered to build relationships and provide customized banking solutions to the
communities we serve. We believe in hiring well-qualified people from a wide range of backgrounds who align to values
like integrity, innovation, and teamwork. As an equal opportunity employer, our decisions to select and promote employees
are unbiased as we seek to build a diverse and inclusive team of employees.
Labor Policies and Benefits
We offer our employees a comprehensive benefits package that will support, maintain, and protect their physical, mental,
and financial health. We sponsor various wellness programs that promote the health and wellness of our employees.
Training, Development and Retention
We are committed to retaining employees by being competitive in providing cash and non-cash rewards, benefits,
recognition, and professional development opportunities. We offer an 8-week summer internship program through local
colleges that provide students with valuable experience in the professional fields they are considering career paths. It also
provides a post-graduation pipeline of future employees. In addition, we maintain equity incentive plans under which we
may issue shares of our common stock. Refer to Note 20. “Stock-Based Compensation” of the Notes to the Consolidated
Financial Statements included in Item 8 of this Annual Report on Form 10-K for further details of our equity incentive
plans. We promote career development and continuing education by offering internal training programs and tuition
reimbursement for programs that develop skills related to our business.
Competition and Principal Market Areas
All phases of our business are highly competitive. We face direct competition from a significant number of financial
institutions operating in our market area, many with a statewide or regional presence, and in some cases, a national
presence. There is also competition for banking business from competitors outside of our market areas. Most of these
competitors are significantly larger than us, and therefore have greater financial and marketing resources and lending limits
than us. The fixed cost of regulatory compliance remains high for community banks as compared to their larger competitors
that are able to achieve economies of scale. We consider our major competition to be local commercial banks as well as
other commercial banks with branches in our market area. Other competitors include savings banks, credit unions,
mortgage brokers and other financial services firms, such as investment and insurance companies. Increased competition
within our market areas may limit growth and profitability. The title insurance subsidiary also faces competition from
other title insurance brokers as well as directly from the companies that underwrite title insurance. In New York State, title
insurance is obtained on most transfers of real estate and mortgage transactions.
Our principal market area is Greater Long Island, which includes the counties of Kings, Queens, Nassau and Suffolk, and
Manhattan. Industries represented across the principal market areas include retail establishments; construction and trades;
restaurants and bars; lodging and recreation; professional entities; real estate; health services; passenger transportation;
high-tech manufacturing; and agricultural and related businesses. Given its proximity, Long Island’s economy is closely
linked with New York City’s and major employers in the area include municipalities, school districts, hospitals, and
financial institutions.
Taxation
The Holding Company, the Bank and its subsidiaries, report their income on a consolidated basis using the accrual method
of accounting and are subject to federal taxation as well as income tax of the State and City of New York, and the State of
New Jersey. In general, banks are subject to federal income tax in the same manner as other corporations. However, gains
and losses realized by banks from the sale of available-for-sale securities are generally treated as ordinary income, rather
than capital gains or losses. The taxation of net income is similar to federal taxable income subject to certain modifications.
6
Regulation and Supervision
Dime Community Bank
The Bank is a New York State-chartered trust company and a member of the Federal Reserve System (a “member bank”).
The lending, investment, and other business operations of the Bank are governed by New York and federal laws and
regulations. The Bank is subject to extensive regulation by the New York State Department of Financial Services
(“NYSDFS”) and, as a member bank, by the Board of Governors of the Federal Reserve System (“FRB”). The Bank’s
deposit accounts are insured up to applicable limits by the FDIC under its Deposit Insurance Fund (“DIF”) and the FDIC
has certain regulatory authority as deposit insurer. A summary of the primary laws and regulations that govern the Bank’s
operations are set forth below.
Loans and Investments
The powers of a New York commercial bank (which include, for this purpose, trust companies such as the Bank) are
established by New York law and applicable federal law. New York commercial banks have authority to originate and
purchase any type of loan, including commercial, commercial real estate, residential mortgage, and consumer loans.
Aggregate loans by a state commercial bank to any single borrower or group of related borrowers are generally limited to
15% of the Bank’s capital and surplus, plus an additional 10% if secured by specified readily marketable collateral.
Federal and state law and regulations limit the Bank’s investment authority. Generally, a state member bank is prohibited
from investing in corporate equity securities for its own account other than the equity securities of companies through
which the bank conducts its business. Under federal and state regulations, a New York state member bank may invest in
investment securities for its own account up to a specified limit depending upon the type of security. “Investment
Securities” are generally defined as marketable obligations that are investment grade and not predominantly speculative
in nature. Applicable regulations classify investment securities into five different types and, depending on its type, a state
member bank may have the authority to deal in and underwrite the security. New York state member banks may also
purchase certain non-investment securities that can be reclassified and underwritten as loans.
Lending Standards
The federal banking agencies adopted uniform regulations prescribing standards for extensions of credit that are secured
by liens on interests in real estate or made for the purpose of financing the construction of a building or other improvements
to real estate. Under these regulations, all insured depository institutions, like the Bank, adopted and maintain written
policies that establish appropriate limits and standards for extensions of credit that are secured by liens or interests in real
estate or are made for the purpose of financing permanent improvements to real estate. These policies must establish loan
portfolio diversification standards, prudent underwriting standards (including loan-to-value limits) that are clear and
measurable, loan administration procedures, and documentation, approval and reporting requirements. The real estate
lending policies must reflect consideration of the Interagency Guidelines for Real Estate Lending Policies that have been
adopted by the federal bank regulators.
Federal Deposit Insurance
The Bank is a member of the DIF, which is administered by the FDIC. Our deposit accounts are insured by the FDIC. The
deposit insurance available on all deposit accounts is $250,000.
The FDIC assesses insured depository institutions to maintain the DIF. Under the FDIC’s risk-based assessment system,
institutions deemed less risky pay lower assessments. Assessments for institutions with $10 billion or more of assets are
primarily based on a scorecard approach by the FDIC, including factors such as examination ratings, financial measures,
and modeling measuring the institution’s ability to withstand asset-related and funding-related stress and potential loss to
the DIF in the event of the institution’s failure. The assessment range (inclusive of possible adjustments specified by the
regulations) for institutions with total assets of more than $10 billion is 2.5 to 42 basis points, effective January 1, 2023.
In 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the DIF associated with
the closures of Silicon Valley Bank and Signature Bank.
7
Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound
practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order
or condition imposed by the FDIC. The Company does not know of any practice, condition or violation that might lead to
termination of deposit insurance.
Capitalization
Federal regulations require FDIC insured depository institutions, including state member banks, to meet several minimum
capital standards: a common equity tier 1 capital to risk-based assets ratio of 4.5%, a tier 1 capital to risk-based assets
ratio of 6.0%, a total capital to risk-based assets ratio of 8.0%, and a tier 1 capital to total assets leverage ratio of 4.0%.
The existing capital requirements were effective January 1, 2015 and are the result of a final rule implementing regulatory
amendments based on recommendations of the Basel Committee on Banking Supervision and certain requirements of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Common equity tier 1 capital is
generally defined as common stockholders’ equity and retained earnings. Tier 1 capital is generally defined as common
equity tier 1 and additional tier 1 capital. Additional tier 1 capital generally includes certain noncumulative perpetual
preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries. Total capital
includes tier 1 capital (common equity tier 1 capital plus additional tier 1 capital) and tier 2 capital. Tier 2 capital is
comprised of capital instruments and related surplus meeting specified requirements, and may include cumulative preferred
stock, mandatory convertible securities, and subordinated debt. Also included in tier 2 capital is the allowance for credit
losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions that have exercised an opt-out election
regarding the treatment of accumulated other comprehensive income (“AOCI”), up to 45% of net unrealized gains on
available-for-sale equity securities with readily determinable fair market values. Institutions that have not exercised the
AOCI opt-out have AOCI incorporated into common equity tier 1 capital (including unrealized gains and losses on
available-for-sale-securities). The Bank has exercised this opt-out election. Calculation of all types of regulatory capital is
subject to deductions and adjustments specified in the regulations.
In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, assets, including
certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests), are multiplied by a
risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset. Higher levels of
capital are required for asset categories believed to present greater risk. For example, a risk weight of 0% is assigned to
cash and U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien one-
to-four family residential mortgages, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight
of 150% is assigned to certain past due loans and a risk weight of between 0% to 600% is assigned to permissible equity
interests, depending on certain specified factors.
In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and
certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer”
consisting of 2.5% of common equity tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum
risk-based capital requirements.
Safety and Soundness Standards
Each federal banking agency, including the FRB, has adopted guidelines establishing general standards relating to internal
controls, information and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, asset quality, earnings and compensation, fees, and benefits. In general, the guidelines require, among other things,
appropriate systems and practices to identify and manage the risks and exposures specified in the guidelines. The
guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive
when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee,
director, or principal shareholder.
On April 26, 2016, the federal regulatory agencies approved a second proposed joint rulemaking to implement Section 956
of the Dodd-Frank Act, which prohibits incentive-based compensation that encourages inappropriate risk taking. In
addition, the NYSDFS issued guidance applicable to incentive compensation in October 2016.
8
Prompt Corrective Action
Federal law requires, among other things, that federal bank regulatory authorities take “prompt corrective action” with
respect to institutions that do not meet minimum capital requirements. For these purposes, the statute establishes five
capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically
undercapitalized.
The FRB may order member banks which have insufficient capital to take corrective actions. For example, a bank which
is categorized as “undercapitalized” would be subject to other growth limitations, would be required to submit a capital
restoration plan, and a holding company that controls such a bank would be required to guarantee that the bank complies
with the capital restoration plan. A “significantly undercapitalized” bank would be subject to additional restrictions.
Member banks deemed by the FRB to be “critically undercapitalized” would be subject to the appointment of a receiver
or conservator.
The final rule that increased regulatory capital standards adjusted the prompt corrective action tiers as of January 1, 2015.
The various categories were revised to incorporate the new common equity tier 1 capital requirement, the increase in the
tier 1 to risk-based assets requirement and other changes. Under the revised prompt corrective action requirements, insured
depository institutions are required to meet the following in order to qualify as “well capitalized”: (1) a common equity
tier 1 risk-based capital ratio of 6.5% (new standard); (2) a tier 1 risk-based capital ratio of 8.0% (increased from 6.0%);
(3) a total risk-based capital ratio of 10.0% (unchanged); and (4) a tier 1 leverage ratio of 5.0% (unchanged).
Dividends
Under federal law and applicable regulations, a New York state member bank may generally declare a dividend, without
prior regulatory approval, in an amount equal to its year-to-date retained net income plus the prior two years’ retained net
income that is still available for dividend. Dividends exceeding those amounts require application to and approval by the
NYSDFS and FRB. In addition, a member bank may be limited in paying cash dividends if it does not maintain the capital
conservation buffer described previously under “—Capitalization.”
Liquidity
Pursuant to federal regulations, the Bank is required to maintain sufficient liquidity to ensure its safe and sound operation.
Branching
Subject to certain limitations, with approval of the FRB, New York state-chartered banks and trust companies can open
their initial branches in other states by establishing a de novo branch at any location at which a bank chartered by that state
could also establish a branch. Federal law also permits an interstate merger transaction involving the acquisition of a
branch without the acquisition of the bank only if the law of the state in which the branch is located permits out-of-state
banks to acquire a branch of a bank in such state without acquiring the bank.
Acquisitions
Under the Federal Bank Merger Act, prior approval of the FRB is required for the Bank to merge with or purchase the
assets or assume the deposits of another insured depository institution. In reviewing applications seeking approval of
merger and acquisition transactions, the FRB will consider, among other factors, the competitive effect and public benefits
of the transactions, the capital position of the combined organization, the risks to the stability of the U.S. banking or
financial system, the applicant’s performance record under the CRA (see “Community Reinvestment”) and its compliance
with fair housing and other consumer protection laws and the effectiveness of the subject organizations in combating
money laundering activities.
9
Privacy and Security Protection
The federal banking agencies have adopted regulations for consumer privacy protection that require financial institutions
to adopt procedures to protect customers and their “non-public personal information.” The regulations require the Bank to
disclose its privacy policy, including identifying with whom it shares “non-public personal information,” to customers at
the time of establishing the customer relationship, and annually thereafter if there are changes to its policy. In addition,
the Bank is required to provide its customers the ability to “opt-out” of: (1) the sharing of their personal information with
unaffiliated third parties if the sharing of such information does not satisfy any of the permitted exceptions; and (2) the
receipt of marketing solicitations from Bank affiliates.
The Bank is additionally subject to regulatory guidelines establishing standards for safeguarding customer information.
The guidelines describe the federal banking agencies’ expectations for the creation, implementation and maintenance of
an information security program, including administrative, technical and physical safeguards appropriate for the size and
complexity of the institution and the nature and scope of its activities. The standards set forth in the guidelines are intended
to ensure the security and confidentiality of customer records and information, and protect against anticipated threats or
hazards to the security or integrity of such records and unauthorized access to or use of such records or information that
could result in substantial customer harm or inconvenience.
Federal law additionally permits each state to enact legislation that is more protective of consumers’ personal information.
There are periodically privacy bills considered by the New York legislature. Management of the Company cannot predict
the impact, if any, of these bills if enacted.
Cybersecurity more broadly has become a focus of federal and state banking agencies, including during the regulators’
examinations. In March 2017, the NYSDFS issued regulations requiring financial institutions regulated by the NYSDFS,
including the Bank, to, among other things, (i) establish and maintain a cyber security program designed to ensure the
confidentiality, integrity and availability of their information systems; (ii) implement and maintain a written cyber security
policy setting forth policies and procedures for the protection of their information systems and nonpublic information; and
(iii) designate a Chief Information Security Officer. In November 2023, NYSDFS amended these regulations to include
heightened governance requirements and an expansion of the breadth and depth of required policies and procedures, among
other things.
Transactions with Affiliates and Insiders
Sections 23A and 23B of the Federal Reserve Act govern transactions between a member bank and its affiliates, which
includes the Company. The FRB has adopted Regulation W, which comprehensively implements and interprets Sections
23A and 23B, and codifies prior FRB interpretations under those sections.
An affiliate of a bank includes, among other things, any company or entity that controls, is controlled by or is under
common control with the bank. A subsidiary of a bank that is not also a depository institution or a “financial subsidiary”
under federal law is generally not treated as an affiliate of the bank for the purposes of Sections 23A and 23B and
Regulation W; however, the FRB has the discretion to treat subsidiaries of a bank as affiliates on a case-by-case basis.
Section 23A and Regulation W limit the extent to which a bank or its subsidiaries may engage in “covered transactions”
with any one affiliate to an amount equal to 10% of such bank’s capital stock and surplus, and limit all such transactions
with all affiliates to an amount equal to 20% of such capital stock and surplus. Section 23A and Regulation W also require
that all “covered transactions” be on terms that are consistent with safe and sound banking practices. The term “covered
transaction” includes the making of loans, purchase of assets, issuance of guarantees and other similar types of transactions.
Further, most loans by a bank to any of its affiliates must be secured by collateral in amounts ranging from 100 to
130 percent of the loan amounts. In addition, under Section 23B and Regulation W, bank transactions with affiliates,
including “covered transactions,” sales of assets, and the furnishing of services, must be on terms that are substantially
the same, or at least as favorable, to the bank as those prevailing at the time for comparable transactions with or involving
a non-affiliate.
A bank’s loans to its affiliates executive officers, directors, any owner of more than 10% of its stock (each, an insider) and
entities controlled by such person (an insider’s related interest) are subject to the conditions and limitations imposed by
Section 22(h) of the Federal Reserve Act and the FRB’s Regulation O implemented thereunder. Under these restrictions,
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the aggregate amount of the loans to any insider and the insider’s related interests may not exceed the loans-to-one-
borrower limit applicable to national banks. All loans by a bank to all insiders and insiders’ related interests in the aggregate
may not exceed the bank’s unimpaired capital and unimpaired surplus. With certain exceptions, loans to an executive
officer, other than loans for the education of the officer’s children and certain loans secured by the officer’s residence,
may not exceed the greater of $25,000 or 2.5% of the bank’s unimpaired capital and unimpaired surplus, and in no event
can be more than $100,000. Regulation O also requires that any proposed loan to an insider or a related interest of that
insider be approved in advance by a majority of the board of directors of the bank, with any interested director not
participating in the voting, if such loan, when aggregated with any existing loans to that insider and the insider’s related
interests, would exceed either $500,000 or the greater of $25,000 or 5% of the bank’s unimpaired capital and surplus.
Generally, such loans must be made on substantially the same terms as, and follow credit underwriting procedures that are
no less stringent than, those that are prevailing at the time for comparable transactions with other persons and must not
present more than a normal risk of repayment or present other unfavorable features. An exception is made for extensions
of credit made pursuant to a benefit or compensation plan of a bank that is widely available to employees of the bank and
that does not give any preference to insiders of the bank over other employees of the bank.
Examinations and Assessments
The Bank is required to file periodic reports with and is subject to periodic examination by the NYSDFS and the FRB.
Applicable laws and regulations generally require periodic on-site examinations and annual audits by independent public
accountants for all insured institutions. The Bank is required to pay an annual assessment to the NYSDFS to fund its
supervision.
Federal law provides that institutions with more than $10 billion in total assets, such as the Bank, are examined by the
Consumer Financial Protection Bureau (“CFPB”) as to compliance with certain federal consumer protection and fair
lending laws and regulations.
Community Reinvestment Act
Under the federal Community Reinvestment Act (“CRA”), the Bank has a continuing and affirmative obligation consistent
with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate-income
neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does
it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular
community, consistent with the CRA. The CRA requires the FRB, in connection with its examination of the Bank, to
assess its record of meeting the credit needs of its community and to take that record into account in its evaluation of
certain applications by the Bank. For example, the regulations specify that a bank’s CRA performance will be considered
in its expansion (e.g., branching or mergers) proposals and may be the basis for approving, denying or conditioning the
approval of an application. On October 24, 2023, the FDIC, the Federal Reserve Board, and the Office of the Comptroller
of the Currency issued a final rule to strengthen and modernize the CRA regulations. Under the final rule, banks with
assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies
will evaluate large banks under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the
Community Development Financing Test, and the Community Development Services Test. The applicability date for the
majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on
January 1, 2027. As of the date of its most recent CRA examination, which was conducted by the Federal Reserve Bank
of New York and the NYSDFS, the Bank’s CRA performance was rated “Outstanding”.
New York law imposes a similar obligation on the Bank to serve the credit needs of its community. New York law contains
its own community invested-related provisions, which are substantially similar to federal law.
The Bank Secrecy Act and USA PATRIOT Act
The Bank Secrecy Act (“BSA”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) require the Bank to implement a compliance
program to detect and prevent money laundering, terrorist financing, and crime. Together, the BSA and USA PATRIOT
Act require the Bank to implement internal controls, conduct customer due diligence, maintain records, and file reports.
The USA PATRIOT Act also required the federal banking agencies to take into consideration the effectiveness of controls
11
designed to combat money laundering activities in determining whether to approve a merger or other acquisition
application. Accordingly, if the Bank engages in a merger or other acquisition, its controls designed to combat money
laundering would be considered as part of the application process. The Bank has established policies, procedures and
systems designed to comply with the BSA, USA PATRIOT Act, and regulations implemented thereunder.
Dime Community Bancshares, Inc.
The Company, as a bank holding company controlling the Bank, is subject to the Bank Holding Company Act of 1956, as
amended (“BHCA”), and the rules and regulations of the FRB under the BHCA applicable to bank holding companies.
We are required to file reports with, and otherwise comply with the rules and regulations of the FRB.
The FRB previously adopted consolidated capital adequacy guidelines for bank holding companies structured similarly,
but not identically, to those applicable to the Bank. The Dodd-Frank Act directed the FRB to issue consolidated capital
requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of
components of capital, than those applicable to institutions themselves. The FRB subsequently issued regulations
amending its regulatory capital requirements to implement the Dodd-Frank Act as to bank holding company capital
standards. Consolidated regulatory capital requirements identical to those applicable to the subsidiary banks applied to
bank holding companies as of January 1, 2015. As is the case with institutions themselves, the capital conservation buffer
was phased-in between 2016 and 2019. The Company met all capital adequacy requirements under the FRB’s capital
rules on December 31, 2023.
The policy of the FRB is that a bank holding company must serve as a source of strength to its subsidiary banks by
providing capital and other support in times of distress. The Dodd-Frank Act codified the source of strength policy.
Under the prompt corrective action provisions of federal law, a bank holding company parent of an undercapitalized
subsidiary bank is required to guarantee, within specified limits, the capital restoration plan that is required of an
undercapitalized bank. If an undercapitalized bank fails to file an acceptable capital restoration plan or fails to implement
an accepted plan, the FRB may prohibit the bank holding company parent of the undercapitalized bank from paying
dividends or making any other capital distribution.
As a bank holding company, we are required to obtain the prior approval of the FRB to acquire more than 5% of a class
of voting securities of any additional bank or bank holding company or to acquire all, or substantially all, the assets of any
additional bank or bank holding company. In addition, bank holding companies may generally only engage in activities
that are closely related to banking as determined by the FRB. Bank holding companies that meet certain criteria may opt
to become a financial holding company and thereby engage in a broader array of financial activities. The Company has
elected not to become a financial holding company.
FRB policy is that a bank holding company should pay cash dividends only to the extent that the company’s net income
is sufficient to fund the dividends and the prospective rate of earnings retention is consistent with the company’s capital
needs, asset quality and overall financial condition. In addition, FRB guidance sets forth the supervisory expectation that
bank holding companies will inform and consult with FRB staff in advance of issuing a dividend that exceeds earnings for
the quarter and should inform the FRB and should eliminate, defer or significantly reduce dividends if (i) net income
available to stockholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to
fully fund the dividends, (ii) prospective rate of earnings retention is not consistent with the bank holding company’s
capital needs and overall current and prospective financial condition, or (iii) the bank holding company will not meet, or
is in danger of not meeting, its minimum regulatory capital adequacy ratios. Moreover, the guidance indicates that a bank
holding company should notify the FRB in advance of declaring or paying a dividend that exceeds earnings for the period
(e.g., quarter) for which the dividend is being paid or that could result in a material adverse change to the organization’s
capital structure. FRB guidance also provides for consultation and nonobjection for material increases in the amount of a
bank holding company’s common stock dividend.
Current FRB regulations provide that a bank holding company that is not well capitalized or well managed, as such terms
are defined in the regulations, or that is subject to any unresolved supervisory issues, is required to give the FRB prior
written notice of any repurchase or redemption of its outstanding equity securities if the gross consideration for repurchase
or redemption, when combined with the net consideration paid for all such repurchases or redemptions during the
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preceding 12 months, will be equal to 10% or more of the company’s consolidated net worth. The FRB may disapprove
such a repurchase or redemption if it determines that the proposal would constitute an unsafe and unsound practice or
violate a law or regulation. FRB guidance generally provides for bank holding company consultation with FRB staff prior
to engaging in a repurchase or redemption of a bank holding company’s stock, even if a formal written notice is not
required. The guidance provides that the purpose of such consultation is to allow the FRB to review the proposed
repurchases or redemption from a supervisory perspective and possibly object.
The NYSDFS and FRB have extensive enforcement authority over the institutions and holding companies that they
regulate to prohibit or correct activities that violate law, regulation or written agreements with the agencies or which are
deemed to be unsafe or unsound banking practices. Enforcement actions may include: the appointment of a conservator or
receiver for an institution; the issuance of a cease and desist order; the termination of deposit insurance; the imposition of
civil money penalties on the institution, its directors, officers, employees and institution-affiliated parties; the issuance of
directives to increase capital; the issuance of formal and informal agreements; the removal of or restrictions on directors,
officers, employees and institution-affiliated parties; and the enforcement of any such mechanisms through restraining
orders or other court actions. Any change in applicable New York or federal laws and regulations could have a material
adverse impact on us and our operations and stockholders.
We file certain reports with the Securities and Exchange Commission (“SEC”) under the federal securities laws. Our
operations are also subject to extensive regulation by other federal, state and local governmental authorities and the
Company is subject to various laws and judicial and administrative decisions imposing requirements and restrictions on
part or all of its operations. We believe that we are in substantial compliance, in all material respects, with applicable
federal, state and local laws, rules and regulations. Because our business is highly regulated, the laws, rules and regulations
applicable to it are subject to regular modification and change. There can be no assurance that laws, rules and regulations
currently proposed, or any other laws, rules or regulations, will not be adopted in the future, which could make compliance
more difficult or expensive or otherwise adversely affect our business, financial condition or prospects.
Other Information
Through a link on the Investor Relations section of our website of www.dime.com, copies of our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports filed or
furnished pursuant to Section 13(a) for 15(d) of the Exchange Act, are made available, free of charge, as soon as reasonably
practicable after electronically filing such material with, or furnishing it to, the SEC. Copies of such reports and other
information also are available at no charge to any person who requests them or at www.sec.gov. Such requests may be
directed to Dime Community Bancshares, Inc., Investor Relations, 898 Veterans Memorial Highway, Suite 560,
Hauppauge, NY 11788, (631) 537-1000. Information on our website is not incorporated by reference and is not a part of
this annual report on Form 10-K.
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Item 1A. Risk Factors
Risks Related to our Loan Portfolio
The concentration of our loan portfolio in loans secured by commercial, multi-family and residential real estate
properties located in Greater Long Island and Manhattan could materially adversely affect our financial condition
and results of operations if general economic conditions or real estate values in this area decline.
Unlike larger banks that are more geographically diversified, our loan portfolio consists primarily of real estate loans
secured by commercial, multi-family and residential real estate properties located in Greater Long Island and Manhattan.
The local economic conditions in Greater Long Island and Manhattan have a significant impact on the volume of loan
originations and the quality of loans, the ability of borrowers to repay these loans, and the value of collateral securing these
loans. A considerable decline in the general economic conditions caused by inflation, recession, unemployment or other
factors beyond our control would impact these local economic conditions and could negatively affect our financial
condition and results of operations. Additionally, decreases in tenant occupancy may also have a negative effect on the
ability of borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings.
If our regulators impose limitations on our commercial real estate lending activities, earnings could be adversely
affected.
In 2006, the federal bank regulatory agencies (collectively, the “Agencies”) issued joint guidance entitled “Concentrations
in Commercial Real Estate Lending, Sound Risk Management Practices” (the “CRE Guidance”). Although the CRE
Guidance did not establish specific lending limits, it provides that a bank’s commercial real estate lending exposure may
receive increased supervisory scrutiny where total non-owner occupied CRE loans, including loans secured by apartment
buildings, investor CRE and construction and land loans, represent 300% or more of an institution’s total risk-based capital
and the outstanding balance of the CRE loan portfolio has increased by 50% or more during the preceding 36 months. The
Consolidated Company’s non-owner occupied CRE level equaled 538% of total risk-based capital at December 31, 2023.
If our regulators were to impose restrictions on the amount of CRE loans we can hold in our portfolio, or require higher
capital ratios as a result of the level of CRE loans held, our earnings would be adversely affected.
The performance of our multi-family real estate loans could be adversely impacted by regulation.
Multi-family real estate loans generally involve a greater risk than residential real estate loans because of legislation and
government regulations involving rent control and rent stabilization, which are outside the control of the borrower or the
Bank, and could impair the value of the security for the loan or the future cash flow of such properties. For example, on
June 14, 2019, the State of New York enacted legislation increasing the restrictions on rent increases in a rent-regulated
apartment building, including, among other provisions, (i) repealing the vacancy bonus and longevity bonus, which
allowed a property owner to raise rents as much as 20% each time a rental unit became vacant, (ii) eliminating high rent
vacancy deregulation and high-income deregulation, which allowed a rental unit to be removed from rent stabilization
once it crossed a statutory high-rent threshold and became vacant, or the tenant’s income exceeded the statutory amount
in the preceding two years, and (iii) eliminating an exception that allowed a property owner who offered preferential rents
to tenants to raise the rent to the full legal rent upon renewal. The legislation still permits a property owner to charge up
to the full legal rent once the tenant vacates. As a result of this legislation as well as previously existing laws and
regulations, it is possible that rental income might not rise sufficiently over time to satisfy increases in the loan rate at
repricing or increases in overhead expenses (e.g., utilities, taxes, maintenance, etc.). For example, the New York City Rent
Guidelines Board established the maximum rent increase on certain apartments at 3.0% for a one-year lease beginning on
or after October 1, 2023 and on or after September 30, 2024, while the overall inflation rate increased at a greater rate. In
addition, overhead (including maintenance) expenses often increase significantly during inflationary periods. Finally, if
the cash flow from a collateral property is reduced (e.g., if leases are not obtained or renewed), the borrower’s ability to
repay the loan and the value of the security for the loan may be impaired.
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If we experience greater credit losses than anticipated, earnings may be adversely impacted.
As a lender, we are exposed to the risk that customers may not repay their loans according to the original terms, and the
collateral securing the payment of those loans may be insufficient to pay any remaining loan balance. Additionally, at
December 31, 2023, our portfolio of commercial and industrial loans, and owner-occupied commercial real estate loans,
totaled $2.31 billion, or 21.4% of our total loan portfolio. We plan to continue to emphasize the origination of these types
of loans, which generally expose us to a greater risk of nonpayment and loss than residential real estate loans because
repayment of such loans often depends on the successful operations and income stream of the borrowers. Additionally,
such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to consumer
loans or residential real estate loans. Hence, we may experience significant credit losses, which could have a material
adverse effect on our operating results.
Since the first quarter of 2021, we have been required to determine periodic estimates of lifetime expected credit losses on
loans and recognize the expected credit losses as allowances for credit losses. This method of loan loss accounting
represents a change from the previous method of providing allowances for loan losses that are probable, and greatly
increased the types of data we need to collect and review to determine the appropriate level of the allowance for credit
losses. We make various assumptions and judgments about the collectability of our loan portfolio, including the
creditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of
loans. In determining the amount of the allowance for credit losses, we rely on loan quality reviews, our past loss
experience and that of our peer group, and an evaluation of economic conditions, among other factors. If our assumptions
prove to be incorrect, the allowance for credit losses may not be sufficient to cover expected losses in the loan portfolio,
resulting in additions to the allowance for credit losses. Material additions to the allowance for credit losses through
charges to earnings would materially decrease our net income.
Additionally, bank regulators periodically review our allowance for credit losses and may require us to increase our
provision for credit losses or loan charge-offs. Any increase in our allowance for credit losses or loan charge-offs as
required by these regulatory authorities could have a material adverse effect on our results of operations and/or financial
condition.
We are subject to the CRA and fair lending laws, and failure to comply with these laws could lead to material
penalties.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose
nondiscriminatory lending requirements on financial institutions. With respect to the Bank, the NYSDFS, FRB, CFPB,
the United States Department of Justice and other federal and state agencies are responsible for enforcing these laws and
regulations. A successful regulatory challenge to an institution’s performance under the CRA or fair lending laws and
regulations could result in a wide variety of sanctions, including the required payment of damages and civil money
penalties, injunctive relief, imposition of restrictions on mergers and acquisitions activity and restrictions on expansion.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class
action litigation. Such actions could have a material adverse effect on our business, financial condition and results of
operations.
The Company is subject to environmental liability risk associated with lending activities.
A significant portion of the Company’s loan portfolio is secured by real property. During the ordinary course of business,
the Company may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous
or toxic substances could be found on these properties. If hazardous or toxic substances are found, the Company may be
liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require the
Company to incur substantial expenses and may materially reduce the affected property’s value or limit the Company’s
ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies
with respect to existing laws may increase the Company’s exposure to environmental liability. Environmental reviews of
real property before initiating foreclosure may not be sufficient to detect all potential environmental hazards. The
remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse
effect on the Company’s business, financial condition and results of operations.
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Risks Related to Interest Rates
Changes in interest rates could affect our profitability.
Our ability to earn a profit, like most financial institutions, depends primarily on net interest income, which is the difference
between the interest income that we earn on our interest-earning assets, such as loans and investments, and the interest
expense that we pay on our interest-bearing liabilities, such as deposits and borrowings. Our profitability depends on our
ability to manage our assets and liabilities during periods of changing market interest rates.
During 2022 and 2023, in response to accelerated inflation, the Federal Reserve implemented monetary tightening policies,
resulting in significantly increased interest rates. In a period of rising interest rates, the interest income earned on our assets
may not increase as rapidly as the interest paid on our liabilities, demand for loan products may decline, and borrower
defaults on loan payments may increase.
A sustained decrease in market interest rates could also adversely affect our earnings. When interest rates decline,
borrowers tend to refinance higher-rate, fixed-rate loans at lower rates. Under those circumstances, we may not be able to
reinvest those prepayments in assets earning interest rates as high as the rates on those prepaid loans or in investment
securities.
Changes in interest rates also affect the fair value of the securities portfolio. Generally, the fair value of securities moves
inversely with changes in interest rates. As of December 31, 2023, the carrying value of the securities portfolio totaled
$1.48 billion.
Management is unable to predict fluctuations of market interest rates, which are affected by many factors, including
inflation, recession, unemployment, monetary policy, domestic and international disorder and instability in domestic and
foreign financial markets, and investor and consumer demand.
Risks Related to Regulation
We operate in a highly regulated environment, Federal and state regulators periodically examine our business, and
we may be required to remediate adverse examination findings.
The FRB and the NYSDFS periodically examine our business, including our compliance with laws and regulations. If, as
a result of an examination, a federal banking agency were to determine that our financial condition, capital resources, asset
quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or
that we were in violation of any law or regulation, we may take a number of different remedial actions as we deem
appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to
correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially
enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against our officers
or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an
imminent risk of loss to depositors, to terminate our deposit insurance and place it into receivership or conservatorship. If
we become subject to any regulatory actions, it could have a material adverse effect on our business, results of operations,
financial condition and growth prospects.
Additionally, the CFPB has the authority to issue consumer finance regulations and is authorized, individually or jointly
with bank regulatory agencies, to conduct investigations to determine whether any person is, or has, engaged in conduct
that violates new and existing consumer financial laws or regulations. Banks with assets in excess of $10 billion are
subject to requirements imposed by the Dodd-Frank Act and its implemented regulations, including the examination
authority of the CFPB to assess our compliance with federal consumer financial laws, imposition of higher FDIC
premiums, reduced debit card interchange fees, and enhanced risk management frameworks, all of which increase
operating costs and reduce earnings. In addition, in accordance with a memorandum of understanding entered into between
the CFPB and U.S. Department of Justice, the two agencies have agreed to coordinate efforts related to enforcing the fair
16
lending laws, which includes information sharing and conducting joint investigations, and have done so on a number of
occasions.
We face a risk of noncompliance and enforcement action with the federal Bank Secrecy Act (the “BSA”) and other
anti-money laundering and counter terrorist financing statutes and regulations.
The BSA, the USA PATRIOT Act and other laws and regulations require financial institutions, among others, to institute
and maintain an effective anti-money laundering compliance program and to file reports such as suspicious activity reports
and currency transaction reports. Our products and services, including our debit card issuing business, are subject to an
increasingly strict set of legal and regulatory requirements intended to protect consumers and to help detect and prevent
money laundering, terrorist financing and other illicit activities. We are required to comply with these and other anti-
money laundering requirements. The federal banking agencies and the U.S. Treasury Department’s Financial Crimes
Enforcement Network are authorized to impose significant civil money penalties for violations of those requirements and
have recently engaged in coordinated enforcement efforts against banks and other financial services providers with the
U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service. We are also subject to
increased scrutiny of compliance with the regulations administered and enforced by the U.S. Treasury Department’s Office
of Foreign Assets Control. If we violate these laws and regulations, or our policies, procedures and systems are deemed
deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on our
ability to pay dividends and the ability to obtain regulatory approvals to proceed with certain aspects of our business plan,
including acquisitions.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have
serious reputational consequences for us. Any of these results could have a material adverse effect on our business,
financial condition, results of operations and growth prospects.
Risks Related to our Debt Securities
The subordinated debentures that we issued have rights that are senior to those of our common shareholders.
In 2015, the Company issued $40.0 million of 5.75% Fixed-to-Floating Rate Subordinated Debentures due 2030. In 2022,
the Company issued $160.0 million of 5.00% Fixed-to-Floating Rate Subordinated Debentures due 2032. Because these
subordinated debentures rank senior to our common stock, if we fail to make timely principal and interest payments on
the subordinated debentures, we may not pay any dividends on our common stock. Further, if we declare bankruptcy,
dissolve or liquidate, we must satisfy all of our subordinated debenture obligations before we may pay any distributions
on our common stock.
Strategic Risks
Expansion of our branch network may adversely affect our financial results.
The Bank has in the past and may in the future establish new branch offices. We cannot be certain that the opening of new
branches will be accretive to earnings or that it will be accretive to earnings within a reasonable period of time. Numerous
factors contribute to the performance of a new branch, such as suitable location, qualified personnel, and an effective
marketing strategy. Additionally, it takes time for a new branch to gather sufficient loans and deposits to generate income
sufficient to cover its operating expenses. Difficulties we experience in opening new branches may have a material adverse
effect on our financial condition and results of operations.
Mergers and acquisitions involve numerous risks and uncertainties.
The Company has in the past and may in the future pursue mergers and acquisitions opportunities. Mergers and acquisitions
involve a number of risks and challenges, including the expenses involved; potential diversion of management’s attention
from other strategic matters; integration of branches and operations acquired; outflow of customers from the acquired
branches; retention of personnel from acquired companies or branches; competing effectively in geographic areas not
previously served; managing growth resulting from the transaction; and dilution in the acquirer's book and tangible book
value per share.
17
Our growth or future losses may require us to raise additional capital in the future, but that capital may not be
available when it is needed or the cost of that capital may be very high.
We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations.
While we anticipate that our capital resources will satisfy our capital requirements for the foreseeable future, we may at
some point need to raise additional capital to support our operations or continued growth, both internally and through
acquisitions. Any capital we obtain may result in the dilution of the interests of existing holders of our common stock, or
otherwise adversely affect your investment.
Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are
outside our control, and on our financial condition and performance. Accordingly, we cannot make assurances of our
ability to raise additional capital if needed, or if the terms will be acceptable to us. If we cannot raise additional capital
when needed, our ability to further expand our operations through internal growth and acquisitions could be materially
impaired and our financial condition and liquidity could be materially and adversely affected.
Operational Risk Factors
A lack of liquidity could adversely affect the Company’s financial condition and results of operations.
Liquidity is essential to our business. The Company relies on its ability to generate deposits and effectively manage the
repayment of its liabilities to ensure that there is adequate liquidity to fund operations. An inability to raise funds through
deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative
effect on liquidity. The Company’s most important source of funds is its deposits. Deposit balances can decrease when
customers perceive alternative investments as providing a better risk adjusted return, which are strongly influenced by
such external factors as the direction of interest rates, local and national economic conditions and the availability and
attractiveness of alternative investments. Further, the demand for deposits may be reduced due to a variety of factors such
as negative trends in the banking sector, the level of and/or composition of our uninsured deposits, demographic patterns,
changes in customer preferences, reductions in consumers’ disposable income, the monetary policy of the Federal Reserve
or regulatory actions that decrease customer access to particular products. If customers move money out of bank deposits
and into other investments such as money market funds, the Company would lose a relatively low-cost source of funds,
which would increase its funding costs and reduce net interest income. Any changes made to the rates offered on deposits
to remain competitive with other financial institutions may also adversely affect profitability and liquidity. Other primary
sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered
deposits, borrowings from the FHLB and/or FRB discount window, and unsecured borrowings. The Company also may
borrow funds from third-party lenders, such as other financial institutions. The Company’s access to funding sources in
amounts adequate to finance or capitalize its activities, or on terms that are acceptable, could be impaired by factors that
affect the Company directly or the financial services industry or economy in general, such as disruptions in the financial
markets or negative views and expectations about the prospects for the financial services industry, a decrease in the level
of the Company’s business activity as a result of a downturn in markets or by one or more adverse regulatory actions
against the Company or the financial sector in general. Any decline in available funding could adversely impact the
Company’s ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as meeting deposit
withdrawal demands, any of which could have a material adverse impact on its liquidity, business, financial condition and
results of operations.
Our business may be adversely affected by conditions in the financial markets and economic conditions generally.
A favorable business environment is generally characterized by, among other factors, economic growth, efficient capital
markets, low inflation, high business and investor confidence, and strong business earnings. Unfavorable or uncertain
economic and market conditions can be caused by declines in economic growth, declines in housing and real estate
valuations, business activity or investor or business confidence; limitations on the availability or increases in the cost of
credit and capital; increases in inflation; changes in market interest rates; geopolitical conflicts; natural disasters; or a
combination of these or other factors.
The Company's performance could be negatively affected to the extent there is deterioration in business and economic
conditions, including persistent inflation, an inverted yield curve, rising prices, and supply chain issues or labor shortages,
18
which have direct or indirect material adverse impacts on us, our customers, and our counterparties. Recessionary
conditions may significantly affect the markets in which we do business, the financial condition of our borrowers, the
value of our loans and investments, and our ongoing operations, costs and profitability. Declines in real estate values and
sales volumes and increased unemployment levels may result in higher than expected loan delinquencies, increases in our
levels of nonperforming and classified assets and a decline in demand for our products and services. Such events may
cause us to incur losses and may adversely affect our capital, liquidity, and financial condition.
Strong competition within our market area may limit our growth and profitability.
Our primary market area is located in Greater Long Island and Manhattan. Competition in the banking and financial
services industry remains intense. Our profitability depends on the continued ability to successfully compete. We compete
with commercial banks, savings banks, credit unions, insurance companies, and brokerage and investment banking firms.
Many of our competitors have substantially greater resources and lending limits than us and may offer certain services that
we do not provide. In addition, competitors may offer deposits at higher rates and loans with lower fixed rates, more
attractive terms and less stringent credit structures than we have been willing to offer.
Our future success depends on the success and growth of Dime Community Bank.
Our primary business activity for the foreseeable future will be to act as the holding company of the Bank. Therefore, our
future profitability will depend on the success and growth of this subsidiary. The continued and successful implementation
of our growth strategy will require, among other things that we increase our market share by attracting new customers that
currently bank at other financial institutions in our market area. In addition, our ability to successfully grow will depend
on several factors, including favorable market conditions, the competitive responses from other financial institutions in
our market area, and our ability to maintain good asset quality. While we believe we have the management resources,
market opportunities and internal systems in place to obtain and successfully manage future growth, growth opportunities
may not be available, and we may not be successful in continuing our growth strategy. In addition, continued growth
requires that we incur additional expenses, including salaries, data processing and occupancy expense related to new
branches and related support staff. Many of these increased expenses are considered fixed expenses. Unless we can
successfully continue our growth, our results of operations could be negatively affected by these increased costs.
The loss of key personnel could impair our future success.
Our future success depends in part on the continued service of our executive officers, other key management, and staff, as
well as our ability to continue to attract, motivate, and retain additional highly qualified employees. The loss of services
of one or more of our key personnel or our inability to timely recruit replacements for such personnel, or to otherwise
attract, motivate, or retain qualified personnel could have an adverse effect on our business, operating results and financial
condition.
Our business may be adversely affected by fraud and other financial crimes.
Our loans to businesses and individuals and our deposit relationships and related transactions are subject to exposure to
the risk of loss due to fraud and other financial crimes. While we have policies and procedures designed to prevent such
losses, losses may still occur. In the past, we have experienced losses due to fraud.
Risks associated with system failures, interruptions, or breaches of security could negatively affect our operations
and earnings.
Information technology systems are critical to our business. We collect, process and store sensitive customer data by
utilizing computer systems and telecommunications networks operated by us and third-party service providers. We have
established policies and procedures to prevent or limit the impact of system failures, interruptions, and security breaches,
but such events may still occur or may not be adequately addressed if they do occur. Although we take numerous protective
measures and otherwise endeavor to protect and maintain the privacy and security of confidential data, these systems may
be vulnerable to unauthorized access, computer viruses, other malicious code, cyberattacks, including distributed denial
of service attacks, hacking, social engineering and phishing attacks, cyber-theft and other events that could have a security
impact. Cyber threats are rapidly evolving, and we may not be able to anticipate or prevent all such attacks. If one or more
19
of such events were to occur, this potentially could jeopardize confidential and other information processed and stored in,
and transmitted through, our systems or otherwise cause interruptions or malfunctions in our operations or our customers'
operations.
In addition, we maintain interfaces with certain third-party service providers. If these third-party service providers
encounter difficulties, or if we have difficulty communicating with them, our ability to adequately process and account for
transactions could be affected, and our business operations could be adversely affected. Threats to information security
also exist in the processing of customer information through various other vendors and their personnel.
The occurrence of any system failures, interruption, or breach of security could damage our reputation and result in a loss
of customers and business subject us to additional regulatory scrutiny, and expose us to litigation and possible financial
liability. We may be required to expend significant additional resources to modify our protective measures or to investigate
and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are not fully
covered by our insurance. Any of these events could have a material adverse effect on our financial condition and results
of operations.
Severe weather, acts of terrorism and other external events could impact our ability to conduct business.
Weather-related events have adversely impacted our market area in recent years, especially areas located near coastal
waters and flood prone areas. Such events that may cause significant flooding and other storm-related damage may become
more common events in the future. Financial institutions have been, and continue to be, targets of terrorist threats aimed
at compromising operating and communication systems and the metropolitan New York area remains a central target for
potential acts of terrorism. Such events could cause significant damage, impact the stability of our facilities and result in
additional expenses, impair the ability of borrowers to repay their loans, reduce the value of collateral securing repayment
of loans, and result in the loss of revenue. While we have established and regularly test disaster recovery procedures, the
occurrence of any such event could have a material adverse effect on our business, operations and financial condition.
Additionally, global markets may be adversely affected by natural disasters, the emergence of widespread health
emergencies or pandemics like COVID-19, cyberattacks or campaigns, military conflict, terrorism or other geopolitical
events. Global market fluctuations may affect our business liquidity. Also, any sudden or prolonged market downturn in
the U.S. or abroad, as a result of the above factors or otherwise could result in a decline in revenue and adversely affect
our results of operations and financial condition, including capital and liquidity levels.
Damage to the Company’s reputation could adversely impact our business.
The Company's reputation is important to our success. Our ability to attract and retain customers, investors, employees
and advisors may depend upon external perceptions of the Company. Damage to the Company's reputation could cause
significant harm to our business and prospects and may arise from numerous sources, including litigation or regulatory
actions, compliance failures, customer services failures, or unethical behavior or misconduct of employees, advisors and
counterparties. Adverse developments with respect to the financial services industry may also, by association, negatively
impact the Company's reputation or result in greater regulatory or legislative scrutiny of or litigation against the Company.
Furthermore, shareholders and other stakeholders have begun to consider how corporations are addressing environmental,
social and governance (“ESG”) issues. Governments, investors, customers and the general public are increasingly focused
on ESG practices and disclosures, and views about ESG are diverse and rapidly changing. These shifts in investing
priorities may result in adverse effects on the trading price of the Company’s common stock if investors determine that
the Company has not made sufficient progress on ESG matters. The Company could also face potential negative ESG-
related publicity in traditional media or social media if shareholders or other stakeholders determine that we have not
adequately considered or addressed ESG matters. If the Company, or our relationships with certain customers, vendors or
suppliers became the subject of negative publicity, our ability to attract and retain customers and employees, and our
financial condition and results of operations, could be adversely impacted.
20
Accounting-Related Risks
Changes in our accounting policies or in accounting standards could materially affect how we report our financial
results.
Our accounting policies are fundamental to understanding our financial results and condition. Some of these policies
require the use of estimates and assumptions that may affect the value of our assets or liabilities and financial results. Some
of our accounting policies are critical because they require management to make difficult, subjective and complex
judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be
reported under different conditions or using different assumptions. If such estimates or assumptions underlying our
financial statements are incorrect, we may experience material losses.
From time to time, the FASB and the SEC change the financial accounting and reporting standards or the interpretation of
those standards that govern the preparation of our external financial statements. These changes are beyond our control,
can be hard to predict and could materially impact how we report our results of operations and financial condition. We
could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial
statements in material amounts.
If we determine our goodwill or other intangible assets to be impaired, the Company’s financial condition and
results of operations would be negatively affected.
When the Company completes a business combination, a portion of the purchase price of the acquisition is allocated to
goodwill and other identifiable intangible assets. The amount of the purchase price which is allocated to goodwill and
other intangible assets is determined by the excess of the purchase price over the net identifiable assets acquired. At least
annually (or more frequently if indicators arise), the Company evaluates goodwill for impairment. If the Company
determines goodwill or other intangible assets are impaired, the Company will be required to write down these assets. Any
write-down would have a negative effect on the consolidated financial statements.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 1C. Cybersecurity
Overview
(cid:120) Dime Community Bank (“Dime”, “the Bank”) maintains comprehensive information technology and
cybersecurity programs which encompass policies, procedures, assessments, monitoring, response plans, and
testing to ensure technical, administrative, and physical controls are effective.
(cid:120) Dime’s Cybersecurity Incident Response and Business Continuity Programs are inclusive of cyber resiliency,
business continuity and disaster recovery strategies to help mitigate the impact of a cybersecurity incident across
all business lines.
Management Role and Board Oversight.
(cid:120)
The cybersecurity program is overseen by the Chief Information Security Officer (“CISO”) reporting into the
Chief Risk Officer (“CRO”), the Enterprise Risk Management Committee, which consists of the CEO, CFO, and
CTO among others, and the Enterprise Risk Committee of the Board of Directors, which consists of three
independent directors. Our Board of Directors includes members who have expertise in cybersecurity, data
privacy law, fraud and risk management. Cybersecurity risks are primarily assessed, monitored, and remediated
by the CISO, who has extensive experience in the Information Technology and cybersecurity fields and maintains
advanced cybersecurity centric certifications. The CISO’s extensive knowledge and experience in the
cybersecurity field are critical to executing our cybersecurity program. Our CISO oversees proactive initiatives,
remediation plans of known risks, compliance with regulations and standards, and Disaster Recovery, Business
Continuity, and Incident Response efforts. Additionally, the Bank’s Risk Management function is led by the
CRO, who has extensive experience in risk management and audit. The cybersecurity program includes a cross-
sectional team of internal and external Information Security professionals, all of which are provided with relevant
21
training and are required to maintain industry accredited certifications. Our Incident Response Team is chaired
by our CISO and is comprised of executive management and designated managers throughout the organization.
The purpose of the Incident Response Plan is to manage Information Security, and related incidents, efficiently
and effectively to minimize loss and destruction, mitigate weaknesses, restore services, and notify customers, as
required by state law, comply with regulatory requirements, and any third-party contractual obligations.
(cid:120)
The CISO and CRO play a pivotal role in informing the Board of all cybersecurity risks. These positions provide
comprehensive updates to the Enterprise Risk Committee of the Board, at least quarterly. The briefings combine
a range of updates, including the cybersecurity program, emerging risks, status of operational changes, status of
regulatory compliance, and risk reporting.
Managing Material Risks & Integrated Overall Risk Management
(cid:120)
The Bank maintains documented processes, procedures, and controls for assessing, identifying, and managing
material risks from cybersecurity threats. Cybersecurity threats are identified utilizing risk assessments, detection
tools, information gathering and performing internal, external, and third-party contracted security assessments.
Cybersecurity Threats
(cid:120)
To assess and manage cybersecurity threats from material risks, Dime maintains an Incident Response Team
comprised of members from the major business areas in the Bank to ensure appropriate subject matter experts are
represented. All cybersecurity events include a determination of whether the incident has materially affected or
is reasonably likely to materially affect the Bank’s business strategy, results of operations, or financial condition
by following implemented processes.
(cid:120) Dime has not identified any cybersecurity threats that have materially affected operations or financial position.
Oversee Third-Party Risk
(cid:120) Dime has processes to oversee and identify material risks from reported cybersecurity threats from any third-
party service providers or vendors. The Bank’s Third-Party Risk Management Program requires an initial due
diligence, on-going monitoring, and annual recertification of third-party cybersecurity controls.
Cybersecurity Risks
(cid:120) Dime considers Cybersecurity Risks as part of our strategic planning process. Management and the Board of
Directors acknowledge that technology systems, managed both by Dime and third-party service providers, are
critical to business operations and therefore require appropriate risk management.
Engagement With Third-Parties on Risk Management
(cid:120)
Cybersecurity is part of Dime’s overall risk management program, which is supported through the use of
consultants, auditors and other third-parties who assist with reviewing and validating the effectiveness of
cybersecurity controls. Internal Audit actively participates and engages with those managing the cybersecurity
program to validate the effectiveness of implemented safeguards. External audit results are reviewed and reported
on in our annual filing. Additionally, Dime is a regulated entity and undergoes regulatory reviews to ensure the
Bank remains in compliance with all appropriate standards.
22
Item 2. Properties
The Company’s corporate headquarters is located at 898 Veterans Memorial Highway in Hauppauge, New York. The
Bank’s main office is located at 2200 Montauk Highway in Bridgehampton, New York.
As of December 31, 2023, we operated 60 branch locations throughout Greater Long Island and Manhattan, of which 45
were leased and 15 were owned.
For additional information on our premises and equipment, see Note 7. “Premises and Fixed Assets, net and Premises Held
for Sale” in the Notes to the Consolidated Financial Statements.
Item 3. Legal Proceedings
In the ordinary course of business, the Holding Company and the Bank are routinely named as a defendant in or party to
various pending or threatened legal actions or proceedings. Certain of these matters may seek substantial monetary
damages against the Holding Company or the Bank. In the opinion of management, as of December 31, 2023, neither the
Holding Company nor the Bank were involved in any actions or proceedings that were likely to have a material adverse
impact on the Company’s consolidated financial condition and results of operations.
Item 4. Mine Safety Disclosures
Not applicable.
23
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock trades on the NASDAQ® Stock Market under the symbol “DCOM”. Prior to the Merger, our common
shares were traded under the symbol “BDGE”. At February 15, 2024, we had approximately 1,117 shareholders of record,
not including the number of persons or entities holding stock in nominee or the street name through various banks and
brokers.
DCOM Performance Graph
Pursuant to the regulations of the SEC, the graph below compares our performance with that of the total return for the
NASDAQ® Composite Index and the S&P SmallCap 600 Banks Index from December 31, 2018 through December 31,
2023. The graph assumes the reinvestment of dividends in additional shares of the same class of equity securities as those
listed below. The following performance graph reflects the performance of BDGE prior to the Merger.
Index
Dime Community Bancshares, Inc.
S&P SmallCap 600 Banks Index
NASDAQ Composite Index
Year Ended December 31,
2018
100.00
100.00
100.00
2019
135.73
122.85
136.69
2020
102.50
109.63
198.10
2021
153.01
147.16
242.03
2022
142.61
132.62
163.28
2023
126.19
132.66
236.17
24
Issuer Purchases of Equity Securities
In May 2022, we announced the adoption of a new stock repurchase program of up to 1,948,314 shares, upon the
completion of our existing authorized stock repurchase program. The stock repurchase program may be suspended,
terminated, or modified at any time for any reason, and has no termination date. As of December 31, 2023, there were
1,566,947 shares remaining to be purchased in the program. There were no repurchases of common stock during the quarter
ended December 31, 2023. During the year ended December 31, 2023, the Company repurchased 36,813 shares of common
stock, at an average cost of $25.98.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
In this Annual Report on Form 10-K, unless otherwise mentioned, the terms the “Company”, “we”, “us” and “our” refer
to Dime Community Bancshares, Inc. and our wholly-owned subsidiary, Dime Community Bank (the “Bank”). We use the
term “Holding Company” to refer solely to Dime Community Bancshares, Inc. and not to our consolidated subsidiary.
Overview
Dime Community Bancshares, Inc., a New York corporation, is a bank holding company formed in 1988. On a parent-
only basis, the Holding Company has minimal operations, other than as owner of Dime Community Bank. The Holding
Company is dependent on dividends from its wholly-owned subsidiary, Dime Community Bank, its own earnings,
additional capital raised, and borrowings as sources of funds. The information in this report reflects principally the financial
condition and results of operations of the Bank. The Bank's results of operations are primarily dependent on its net interest
income, which is the difference between interest income on loans and investments and interest expense on deposits and
borrowings. The Bank also generates non-interest income, such as fee income on deposit and loan accounts, merchant
credit and debit card processing programs, loan swap fees, investment services, income from its title insurance subsidiary,
and net gains on sales of securities and loans. The level of non-interest expenses, such as salaries and benefits, occupancy
and equipment costs, other general and administrative expenses, expenses from the Bank’s title insurance subsidiary, and
income tax expense, further affects our net income. Certain reclassifications have been made to prior year amounts and
the related discussion and analysis to conform to the current year presentation. These reclassifications did not have an
impact on net income or total stockholders' equity.
Critical Accounting Estimates
Critical accounting estimates are those estimates made in accordance with Generally Accepted Accounting Principles that
involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the
financial condition or the results of the operations of the Registrant. Note 1 Summary of Significant Accounting Policies
(page 51), to the Company’s Audited Consolidated Financial Statement for the year ended December 31, 2023 contains a
summary of significant accounting policies. These accounting policies may require various levels of subjectivity, estimates
or judgment by management. Policies with respect to the methodologies it uses to determine the allowance for credit losses
on loans held for investment and fair value of loans acquired in a business combinations are critical accounting policies
because they are important to the presentation of the Company’s consolidated financial condition and results of operations.
These critical accounting estimates involve a significant degree of complexity and require management to make difficult
and subjective judgments which often necessitate assumptions or estimates about highly uncertain matters. The use of
different judgments, assumptions or estimates could result in material variations in the Company’s consolidated results of
operations or financial condition.
Management has reviewed the following critical accounting estimates and related disclosures with its Audit Committee.
25
Allowance for Credit Losses on Loans Held for Investment
Methods and Assumptions Underlying the Estimate
On January 1, 2021, we adopted the Current Expected Credit Losses (“CECL”) Standard, which requires that loans held
for investment be accounted for under the current expected credit losses model. The allowance for credit losses is
established and maintained through a provision for credit losses based on expected losses inherent in our loan portfolio.
Management evaluates the adequacy of the allowance on a quarterly basis, and additions to the allowance are charged to
expense and realized losses, net of recoveries, are charged against the allowance.
Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of
matters that are inherently uncertain. In determining the allowance for credit losses for loans that share similar risk
characteristics, the Company utilizes a model which compares the amortized cost basis of the loan to the net present value
of expected cash flows to be collected. Expected credit losses are determined by aggregating the individual cash flows and
calculating a loss percentage by loan segment, or pool, for loans that share similar risk characteristics. For a loan that does
not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. Within the model,
assumptions are made in the determination of probability of default, loss given default, reasonable and supportable
economic forecasts, prepayment rate, curtailment rate, and recovery lag periods. Management assesses the sensitivity of
key assumptions at least annually by stressing the assumptions to understand the impact on the model. At June 30, 2023,
if the four-quarter national unemployment rate forecast had increased 100 basis points our quantitative ACL reserve would
have increased 10.5%. Changes in quantitative inputs may not occur in the same direction or magnitude across all segments
of our loan portfolio and deterioration in some quantitative inputs may offset improvement in others. This sensitivity
analysis does not represent a change to our expectations of the economic environment but provides a hypothetical result
to assess the sensitivity of the ACL to a change in a key input. This sensitivity analysis does not incorporate changes to
management’s judgment of qualitative loss factors.
Statistical regression is utilized to relate historical macro-economic variables to historical credit loss experience of a peer
group of banks that operate in and around Dime’s footprint. These models are then utilized to forecast future expected loan
losses based on expected future behavior of the same macro-economic variables. Adjustments to the quantitative results
are made using qualitative factors, which are subjective and require significant management judgment. These factors
include: (1) lending policies and procedures; (2) international, national, regional and local economic business conditions
and developments that affect the collectability of the portfolio, including the condition of various markets; (3) the nature
and volume of the loan portfolio; (4) the experience, ability, and depth of the lending management and other relevant staff;
(5) the volume and severity of past due loans; (6) the quality of our loan review system; (7) the value of underlying
collateral for collateralized loans; (8) the existence and effect of any concentrations of credit, and changes in the level of
such concentrations; and (9) the effect of external factors such as competition and legal and regulatory requirements on
the level of estimated credit losses in the existing portfolio.
For loans that do not share risk characteristics, the Company evaluates these loans on an individual basis based on various
factors. Factors that may be considered are borrower delinquency trends and non-accrual status, probability of foreclosure
or note sale, changes in the borrower’s circumstances or cash collections, borrower’s industry, or other facts and
circumstances of the loan or collateral. The expected credit loss is measured based on net realizable value, that is, the
difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and
the amortized cost basis of the loan. For collateral dependent loans, expected credit loss is measured as the difference
between the amortized cost basis of the loan and the fair value of the collateral, less estimated costs to sell.
Uncertainties Regarding the Estimate
Estimating the timing and amounts of future losses is subject to significant management judgment as these projected cash
flows rely upon the estimates discussed above and factors that are reflective of current or future expected conditions. These
estimates depend on the duration of current overall economic conditions, industry, borrower, or portfolio specific
conditions. Volatility in certain credit metrics and differences between expected and actual outcomes are to be expected.
Customers may not repay their loans according to the original terms, and the collateral securing the payment of those loans
may be insufficient to pay any remaining loan balance. Bank regulators periodically review our allowance for credit losses
and may require us to increase our provision for credit losses or loan charge-offs.
26
Impact on Financial Condition and Results of Operations
If our assumptions prove to be incorrect, the allowance for credit losses may not be sufficient to cover expected losses in
the loan portfolio, resulting in additions to the allowance. Future additions or reductions to the allowance may be necessary
based on changes in economic, market or other conditions. Changes in estimates could result in a material change in the
allowance through charges to earnings and would materially decrease our net income.
We may experience significant credit losses if borrowers experience financial difficulties, which could have a material
adverse effect on our operating results.
In addition, various regulatory agencies, as an integral part of the examination process, periodically review the allowance
for credit losses. Such agencies may require the Bank to recognize adjustments to the allowance based on their judgments
of the information available to them at the time of their examination.
Fair value of loans acquired in a business combination
Methods and Assumptions Underlying the Estimate
On February 1, 2021, the Company completed a merger of equals business combination accounted for as a reverse merger
using the acquisition method of accounting. As a part of accounting for the Merger, fair value estimates were calculated
with a combination of assumptions by management and by using a third party. The fair value often involved third-party
estimates utilizing input assumptions by management which may be complex or uncertain. The fair value of acquired loans
was based on a discounted cash flow methodology that considers factors such as type of loan and related collateral, and
requires management’s judgment on estimates about discount rates, expected future cash flows, market conditions and
other future events.
For purchased financial loans with credit deterioration (“PCD”), an estimate of expected credit losses was made for loans
with similar risk characteristics and was added to the purchase price to establish the initial amortized cost basis of the PCD
loans. Any difference between the unpaid principal balance and the amortized cost basis is considered to relate to non-
credit factors and resulted in a discount or premium. Discounts and premiums are recognized through interest income on
a level-yield method over the life of the loans. For acquired loans not deemed PCD at acquisition, the differences between
the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives
of the related loans.
Uncertainties Regarding the Estimate
Management relied on economic forecasts, internal valuations, or other relevant factors which were available at the time
of the Merger in the determination of the assumptions used to calculate the fair value of the acquired loans. The estimates
about discount rates, expected future cash flows, market conditions and other future events were subjective and may differ
from estimates.
Impact on Financial Condition and Results of Operations
The estimate of fair values on acquired loans contributed to the recorded goodwill from the Merger. In future income
statement periods, interest income on loans will include the amortization and accretion of any premiums and discounts
resulting from the fair value of acquired loans. Additionally, the provision for credit losses on acquired individually
analyzed PCD loans may be impacted due to changes in the assumptions used to calculate expected cash flows.
Comparison of Operating Results For The Years Ended December 31, 2023, 2022 and 2021
The Company’s results of operations for the year ended December 31, 2021, include income for the eleven months
following the Merger and the results of Legacy Dime for the month ended January 31, 2021. The Company’s historical
operating results as of and for periods before February 1, 2021, as presented and discussed in this Annual Report on Form
10-K, do not include the historical results of Bridge.
27
General. Net income was $96.1 million in 2023, compared to $152.6 million in 2022, and $104.0 million in 2021. During
2023, net interest income decreased by $63.3 million, non-interest expense increased by $12.4 million and non-interest
income decreased by $2.0 million, partially offset by a decrease of $18.6 million in income tax expense and a decrease of
$2.6 million in provision for credit losses. During 2022, net interest income increased by $22.3 million, provision for credit
losses decreased by $0.8 million, and non-interest expense decreased by $44.6 million, partially offset by a non-interest
income decrease of $3.9 million and an income tax expense increase of $15.2 million. During 2021, net interest income
increased by $179.9 million, provision for credit losses decreased by $20.0 million and non-interest income increased
$20.8 million, partially offset by a non-interest expense increase of $127.5 million and an income tax expense increase of
$31.5 million.
The discussion of net interest income for the years ended December 31, 2023, 2022, and 2021 should be read in conjunction
with the following tables, which set forth certain information related to the consolidated statements of operations for those
periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated. The
average yields and costs were derived by dividing income or expense by the average balance of their related assets or
liabilities during the periods represented. Average balances were derived from average daily balances. No tax-equivalent
adjustments have been made for interest income exempt from Federal, state, and local taxation. The yields include loan
fees consisting of amortization of loan origination and commitment fees and certain direct and indirect origination costs,
prepayment fees, and late charges that are considered adjustments to yields. Loan fees included in interest income were
$1.5 million in 2023, $3.1 million in 2022, and $12.5 million in 2021. The decrease in loan fees in 2023 was primarily due
to a decline in loan prepayment fees. There are no out-of-period adjustments included in the rate/volume analysis in the
following table.
28
Average Balance Sheets
2023
Year Ended December 31,
2022
2021
Average
Balance
Average
Yield/
Interest Cost
Average
Balance
Average
Yield/
Interest Cost
Average
Balance
Average
Yield/
Interest Cost
Assets:
Interest-earning assets:
Real estate loans (1) (4)
Commercial and industrial loans ("C&I") (1)
Other loans (1)
Securities
Other short-term investments
Total interest-earning assets
Non-interest earning assets
Total assets
$ 9,708,119
1,049,965
6,514
1,640,066
442,574
12,847,238
777,977
$ 13,625,215
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking
Money market
Savings
Certificates of deposit ("CDs")
Total interest-bearing deposits
FHLBNY advances
Subordinated debt, net
Other short-term borrowings
Total borrowings
Derivative cash collateral
Total interest-bearing liabilities
Non-interest-bearing checking
Other non-interest-bearing liabilities
Total liabilities
Stockholders' equity
Total liabilities and stockholders' equity
Net interest income
Net interest spread (2)
Net interest-earning assets
Net interest margin (3)
Ratio of interest-earning assets to interest-
bearing liabilities
Deposits (including non-interest-bearing
checking accounts)
$
775,904
2,882,859
2,311,275
1,444,554
7,414,592
1,251,871
200,243
3,150
1,455,264
143,735
9,013,591
3,126,575
270,033
12,410,199
1,215,016
$ 13,625,215
$ 3,833,647
$ 473,425
80,670
393
32,179
22,693
609,360
$
8,562
83,950
73,270
53,263
219,045
56,140
10,212
120
66,472
7,272
292,789
4.88 % $ 8,798,852
937,542
7.68
11,493
6.03
1,687,835
1.96
248,779
5.13
11,684,501
4.74
782,261
$ 12,466,762
$ 354,418
51,556
627
29,224
3,400
439,225
4.03 % $ 7,969,344
1,494,970
5.50
19,891
5.46
1,295,439
1.73
574,467
1.37
11,354,111
3.76
758,689
$ 12,112,800
$ 298,682
58,909
1,425
22,634
2,976
384,626
3.75 %
3.94
7.16
1.75
0.52
3.39
$
3,115
10,879
15,906
8,533
38,433
7,062
10,616
1,439
19,117
1,812
59,362
1.10 % $
2.91
3.17
3.69
2.95
4.48
5.10
3.81
4.57
5.06
3.25
851,931
2,971,312
1,815,198
926,837
6,565,278
252,838
217,753
56,030
526,621
97,225
7,189,124
3,890,642
218,194
11,297,960
1,168,802
$ 12,466,762
0.37 % $
0.37
0.88
0.92
0.59
2.79
4.88
2.57
3.63
1.86
0.83
924,122
3,491,870
1,142,111
1,247,425
6,805,528
259,203
190,128
6,282
455,613
1,982
7,263,123
3,513,354
175,075
10,951,552
1,161,248
$ 12,112,800
$
1,655
6,521
697
7,654
16,527
1,963
8,523
4
10,490
—
27,017
0.18 %
0.19
0.06
0.61
0.24
0.76
4.48
0.06
2.30
—
0.37
$ 316,571
$ 379,863
$ 357,609
$ 4,495,377
1.49 %
2.46 %
142.53 %
$ 4,090,988
2.93 %
3.25 %
162.53 %
3.02 %
3.15 %
156.33 %
$ 10,541,167
$ 219,045
2.08 % $ 10,455,920
$ 38,433
0.37 % $ 10,318,882
$ 16,527
0.16 %
(1) Amounts are net of deferred origination costs/ (fees) and allowance for credit losses, and include loans held for sale.
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of
average interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.
(4) At December 31, 2023, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount
of hedged one-to-four family residential mortgage loans, multifamily residential mortgage loans and CRE loans.
29
Rate/Volume Analysis
(In thousands)
Interest-earning assets:
Real estate loans (1)
C&I (1)
Other loans (1)
Securities
Other short-term investments
Total interest-earning assets
Interest-bearing liabilities:
Interest-bearing checking
Money market
Savings
CDs
FHLBNY advances
Subordinated debt, net
Other short-term borrowings
Derivative cash collateral
Total interest-bearing liabilities
Year Ended December 31,
2023 over 2022
2022 over 2021
Increase/(Decrease) Due to
Increase/(Decrease) Due to
Volume Rate
Total
Volume Rate
Total
$ 40,430
$ 78,577
$ 119,007
$ 32,265
$ 23,471
$ 55,736
7,429
21,685
29,114
(26,319)
18,966
(286)
(877)
6,297
52
3,832
12,996
(234)
2,955
19,293
52,993
117,142
170,135
(527)
(1,364)
10,080
11,910
36,339
(869)
(1,687)
1,607
5,974
74,435
47,284
32,820
12,739
465
368
3,853
5,447
73,071
57,364
44,730
49,078
(404)
(1,319)
5,460
(531)
6,858
(3,077)
9,196
(213)
(1,458)
3,124
(2,472)
(106)
1,285
654
888
(267)
(268)
3,501
45,403
(7,353)
(798)
6,590
424
54,599
1,673
5,816
1,460
4,358
12,085
15,209
3,351
5,205
808
781
924
879
5,099
2,093
1,435
1,812
55,489
177,938
233,427
1,702
30,643
32,345
Net change in net interest income
$ (2,496) $ (60,796) $ (63,292) $
7,494
$ 14,760
$ 22,254
(1) Amounts are net of deferred origination costs/ (fees) and allowance for credit losses, and include loans held for sale.
Net Interest Income. Net interest income was $316.6 million in 2023, $379.9 million in 2022, and $357.6 million in 2021.
Average interest-earning assets were $12.85 billion in 2023, $11.68 billion in 2022 and $11.35 billion in 2021. Net interest
margin was 2.46% in 2023, 3.25% in 2022, and 3.15% in 2021.
Interest Income. Interest income was $609.4 million in 2023, $439.2 million in 2022, and $384.6 million in 2021. During
2023, interest income increased $170.2 million from 2022, primarily reflecting increases in interest income of $119.0
million on real estate loans, $29.1 million on C&I loans and $19.3 million on short-term investments. The increased interest
income on real estate loans was primarily due to an 85-basis point increase in yield and an increase of $909.3 million in
the average balances of such loans in the period. The increased interest income on C&I loans was primarily due to a 218-
basis point increase in yield and an increase of $112.4 million in the average balances of such loans in the period. The
increased interest income from short-term investments was primarily due to a 376-basis point increase in yield and an
increase of $193.8 million in the average balances of such short-term investments in the period. Increased yields across
interest-earning assets were a result of the rising interest rate environment. During 2022, interest income increased $54.6
million from 2021, primarily reflecting increases in interest income of $55.7 million on real estate loans and $6.6 million
on securities. The increased interest income on real estate loans was primarily due to an increase of $829.5 million in the
average balance of real estate loans and a 28-basis point increase in the yield of such loans. The increased interest income
from securities was primarily due to an increase of $392.4 million in the average balance of securities, offset by a 2-basis
point decrease in the yield of such securities.
Interest Expense. Interest expense was $292.8 million in 2023, $59.4 million in 2022, and $27.0 million in 2021. During
2023, interest expense increased $233.4 million from 2022, primarily reflecting increases in interest expense of $73.1
million on money market accounts, $57.4 million on savings accounts, $49.1 million on Federal Home Loan Bank of New
York (“FHLBNY”) advances and $44.7 million on CDs. The increase in interest expense on money market accounts was
primarily due to a 254-basis point increase in rates paid on money market accounts, offset by a decrease of $88.5 million
30
in the average balances of such deposits in the period. The increase in interest expense on savings accounts was primarily
due to a 229-basis point increase in rates paid on savings accounts and an increase of $496.1 million in the average balances
of such deposits in the period. The increase in interest expense on CDs was primarily due to a 277-basis point increase in
rates paid on CDs and an increase of $517.7 million in the average balances of such deposits in the period. The increase
in interest expense on FHLBNY advances primarily reflects a $999.0 million increase in the average balance of FHLBNY
advances and a 169-basis point increase in rates paid on such advances. During 2022, interest expense increased $32.3
million from 2021, primarily reflecting increases in interest expense of $15.2 million on savings accounts, $5.1 million on
FHLBNY advances, and $4.4 million on money market accounts. The increase in interest expense on savings accounts
was primarily due to an 82-basis point increase in yield on savings account and an increase of $673.1 million in the average
balances of such deposits in the period. The increase in interest expense on FHLBNY advances was primarily due to a
203-basis point increase in rates paid on FHLBNY wholesale borrowings, partially offset by a $6.4 million decrease in the
average balance of such borrowings. The increase in interest expense on money market accounts was primarily due to an
18-basis point increase in rates paid on money market accounts, partially offset by a $520.6 million decrease in the average
balance of such accounts.
Provision for Credit Losses. The Company recognized a provision for credit losses of $2.8 million in 2023, $5.4 million
in 2022 and $6.2 million in 2021. The $2.8 million provision for credit losses recognized in 2023 was associated with
increased provisioning for individually analyzed loans. The $5.4 million provision for credit losses recognized in 2022
was associated with growth in the loan portfolio and a deterioration of forecasted macroeconomic conditions, offset by a
reduction in reserves on individually analyzed loans and unfunded commitments. The $6.2 million provision for credit
losses recognized in 2021 included a provision recorded on acquired non-PCD loans for the Day 2 accounting of acquired
loans from the Merger, offset by improvements in forecasted macroeconomic conditions, and releases of reserves on
individually analyzed loans. The provision for credit losses recognized in 2023, 2022 and 2021 was calculated in
accordance with the CECL Standard adopted by the Company on January 1, 2021.
Non-Interest Income. Non-interest income was $36.2 million in 2023, $38.2 million in 2022, and $42.1 million in 2021.
During 2023, non-interest income decreased $2.0 million from 2022, primarily due to a decrease of $2.9 million from net
gain on sale of securities and other assets, offset by a $3.4 million increase in loan level derivative income. During 2022,
non-interest income decreased $3.9 million from 2021, due primarily to a decrease in gain on the sales of SBA PPP loans,
and a decrease in gain on sale of residential loans and other non-interest income of $1.3 million each. Offsetting these
declines was an increase in BOLI income of $3.3 million and no loss on termination of derivatives in 2022 (versus a $16.5
million loss on termination of derivatives in 2021).
Non-Interest Expense. Non-interest expense was $213.1 million in 2023, $200.7 million in 2022, and $245.3 million in
2021. During 2023, non-interest expense increased $12.4 million from 2022, primarily due to a $6.9 million increase in
severance expense, a $5.0 million increase in federal deposit insurance premiums (including $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), partially offset by a $2.7 million decrease in salaries and employee benefits. During 2022, non-
interest expense decreased $44.6 million from 2021, primarily due to not recognizing any merger expenses and transaction
costs and branch restructuring costs in 2022 (versus $44.8 million in merger expenses and transaction costs and $5.1
million of branch restructuring costs in 2021). These declines were offset by an increase of $11.8 million in salaries and
employee benefits expenses.
Non-interest expense was 1.56%, 1.61%, and 2.03% of average assets during 2023, 2022, and 2021, respectively.
Income Tax Expense. Income tax expense was $40.8 million in 2023, $59.4 million in 2022, and $44.2 million in 2021.
Income tax expense decreased $18.6 million during 2023 compared to 2022, primarily as a result of $75.0 million of lower
pre-tax income during 2023. Income tax expense increased $15.2 million during 2022 compared to 2021, primarily as a
result of $63.7 million of higher pre-tax income during 2022.
The Company’s consolidated tax rate was 29.8%, 28.0% and 29.8% in 2023, 2022, and 2021, respectively.
Comparison of Financial Condition at December 31, 2023 and December 31, 2022
Assets. Assets totaled $13.64 billion at December 31, 2023, $446.1 million above their level at December 31, 2022,
primarily due to an increase in cash and due from banks of $288.3 million, an increase in the loan portfolio of $218.4
31
million, partially offset by a decrease in total securities of $55.5 million, and a decrease in derivative assets of $32.4
million.
Total net loans held for investment increased $218.4 million during the year ended December 31, 2023, to $10.70 billion
at period end. During the period, the Bank had originations of $997.8 million.
Total securities decreased $55.5 million during the year ended December 31, 2023, to $1.48 billion at period end, primarily
due to proceeds from principal payments, calls, maturities and sales of $177.8 million offset in part by purchases of $114.4
million and a decrease in unrealized losses of $11.8 million. There were no transfers to or from securities held-to-maturity
for the year ended ended December 31, 2023.
Liabilities. Total liabilities increased $389.4 million during the year ended December 31, 2023, to $12.41 billion at period
end, primarily due to an increase of $276.2 in deposits, an increase of $182.0 million in FHLBNY advances, partially
offset by a decrease of $44.9 million in derivative cash collateral and a decrease of $16.1 million in derivative liabilities.
We maintained a higher level of borrowings to support loan growth.
Stockholders’ Equity. Stockholders’ equity increased $56.6 million during the year ended December 31, 2023 to $1.23
billion at period end, primarily due to net income for the period of $96.1 million, a decrease in accumulated other
comprehensive loss of $2.8 million, offset in part by common stock dividends of $38.6 million, preferred stock dividends
of $7.3 million and repurchases of shares of common stock of $947 thousand.
Loan Portfolio Composition
The following table presents an analysis of outstanding loans by loan type, excluding loans held for sale, net of unearned
discounts and premiums and deferred origination fees and costs, at the dates presented:
(In thousands)
One-to-four family, including condominium and cooperative
apartment
Multifamily residential and residential mixed-use
CRE
Acquisition, development, and construction ("ADC")
Total real estate loans
C&I loans
Other loans
Total
Fair value hedge basis point adjustments (1)
Total loans, net of fair value hedge basis point adjustments
Allowance for credit losses
Loans held for investment, net
2023
$
887,555
4,017,176
4,620,900
168,513
9,694,144
1,066,938
5,755
10,766,837
6,591
10,773,428
(71,743)
$ 10,701,685
December 31,
2022
2021
8.2 % $
37.3
42.9
1.6
90.0
9.9
0.1
100.0 %
773,321
4,026,826
4,457,630
229,663
9,487,440
1,071,712
7,679
10,566,831
—
10,566,831
(83,507)
$ 10,483,324
7.2 %
36.3
42.7
3.5
89.7
10.1
0.2
100.0 %
7.3 % $
38.1
42.2
2.2
89.8
10.1
0.1
100.0 %
669,282
3,356,346
3,945,948
322,628
8,294,204
933,559
16,898
9,244,661
—
9,244,661
(83,853)
$ 9,160,808
(1) At December 31, 2023, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged one-
to-four family residential mortgage loans, multifamily residential mortgage loans and CRE loans.
During the year ended December 31, 2023, our real estate loans increased $206.7 million and our C&I loans decreased
$4.7 million.
Loan Purchases, Sales and Servicing
In the event that the Bank were to sell loans in the secondary market or through securitization, it generally retains servicing
rights on the loans sold. Servicing fees are typically derived based upon the difference between the actual origination rate
and contractual pass-through rate of the loans at the time of sale. At December 31, 2023 and 2022, the Bank had recorded
servicing right assets ("SRAs") of $2.9 million and $3.1 million, respectively, associated with the sale of loans to third-
party institutions in which the Bank retained the servicing of the loan. The Bank outsources the servicing of a portion of
our one-to-four family mortgage loan portfolio to an unrelated third-party under a sub-servicing agreement. Fees paid
under the sub-servicing agreement are reported as a component of other non-interest expense in the consolidated statements
of operations.
32
Loan Maturity and Repricing
As of December 31, 2023, $8.84 billion, or 82.1% of the loan portfolio was scheduled to mature or reprice within
five years.
The following table distributes our loans held for investment portfolio at December 31, 2023 by the earlier of the maturity
or next repricing date. ARMs are included in the period during which their interest rates are next scheduled to adjust. The
table does not include scheduled principal amortization.
(In thousands)
One-to-four family residential and cooperative/condominium
apartment
Multifamily residential and residential mixed-use
CRE
ADC
Total real estate loans
C&I
Other loans
Total
Less than
1 year
1 to 5 years
5 to 15 years Over 15 years
Total
$
$
99,518
930,022
1,538,046
164,698
2,732,284
857,752
2,454
3,592,490
$
$
351,192
2,440,640
2,320,776
3,160
5,115,768
126,303
937
5,243,008
$
$
356,680
646,486
757,374
—
1,760,540
82,877
191
1,843,608
$
$
80,165
28
4,704
655
85,552
6
2,173
87,731
$
887,555
4,017,176
4,620,900
168,513
9,694,144
1,066,938
5,755
$ 10,766,837
The following table presents our loans held for investment with maturity or next repricing due after December 31, 2024:
(In thousands)
One-to-four family residential and cooperative/condominium apartment
Multifamily residential and residential mixed-use
CRE
ADC
Total real estate loans
C&I
Other loans
Total
Asset Quality
General
Due after December 31, 2024
Fixed
129,544
914,032
1,514,128
655
2,558,359
188,503
3,301
2,750,163
Adjustable
658,493
2,173,122
1,568,726
3,160
4,403,501
20,683
-
4,424,184
$
$
$
$
$
$
Total
788,037
3,087,154
3,082,854
3,815
6,961,860
209,186
3,301
7,174,347
We do not originate or purchase loans, either whole loans or loans underlying mortgage-backed securities (“MBS”), which
would have been considered subprime loans at origination, i.e., real estate loans advanced to borrowers who did not qualify
for market interest rates because of problems with their income or credit history. See Note 4 to our Consolidated Financial
Statements for a discussion of evaluation for impaired securities.
Monitoring and Collection of Delinquent Loans
Our management reviews delinquent loans on a monthly basis and reports to our Board of Directors or Committees of the
Board of the Directors at each regularly scheduled Board or Committee meeting regarding the status of all non-performing
and otherwise delinquent loans in our loan portfolio.
Our loan servicing policies and procedures require that an automated late notice be sent to a delinquent borrower as soon
as possible after a payment is ten days late in the case of multifamily residential, CRE loans, and C&I loans, or fifteen days
late in connection with one-to-four family and consumer loans. Thereafter, periodic letters are mailed and phone calls are
placed to the borrower until payment is received. When contact is made with the borrower at any time prior to foreclosure,
we will attempt to obtain the full payment due or negotiate a repayment schedule with the borrower to avoid foreclosure.
Accrual of interest is generally discontinued on a loan that meets any of the following three criteria: (i) full payment of
principal or interest is not expected; (ii) principal or interest has been in default for a period of 90 days or more (unless the
loan is both deemed to be well secured and in the process of collection); or (iii) an election has otherwise been made to
maintain the loan on a cash basis due to deterioration in the financial condition of the borrower. Such non-accrual
33
determination practices are applied consistently to all loans regardless of their internal classification or designation. Upon
entering non-accrual status, we reverse all outstanding accrued interest receivable.
We generally initiate foreclosure proceedings on real estate loans when a loan enters non-accrual status based upon non-
payment, unless the borrower is paying in accordance with an agreed upon modified payment agreement. We obtain an
updated appraisal upon the commencement of legal action to calculate a potential collateral shortfall and to reserve
appropriately for the potential loss. If a foreclosure action is instituted and the loan is not brought current, paid in full, or
refinanced before the foreclosure action is completed, the property securing the loan is transferred to Other Real Estate
Owned (“OREO”) status. We generally attempt to utilize all available remedies, such as note sales in lieu of foreclosure,
in an effort to resolve non-accrual loans and OREO properties as quickly and prudently as possible in consideration of
market conditions, the physical condition of the property and any other mitigating circumstances. We have not initiated
any expected or imminent foreclosure proceedings that are likely to have a material adverse impact on our consolidated
financial statements. In the event that a non-accrual loan is subsequently brought current, it is returned to accrual status
once the doubt concerning collectability has been removed and the borrower has demonstrated performance in accordance
with the loan terms and has made at least six months of payments.
The C&I portfolio is actively managed by our lenders and underwriters. Most credit facilities typically require an annual
review of the exposure and borrowers are required to submit annual financial reporting and loans are structured with
financial covenants to indicate expected performance levels. Smaller C&I loans are monitored based on performance and
the ability to draw against a credit line is curtailed if there are any indications of credit deterioration. Guarantors are also
required to update their financial reporting. All exposures are risk rated and those entering adverse ratings due to financial
performance concerns of the borrower or material delinquency of any payments or financial reporting are subjected to
added management scrutiny. Measures taken typically include amendments to the amount of the available credit facility,
requirements for increased collateral, additional guarantor support or a material enhancement to the frequency and quality
of financial reporting. Loans determined to reach adverse risk rating standards are monitored closely by Credit
Administration to identify any potential credit losses. When warranted, loans reaching a Substandard rating could be
reassigned to the Workout Group for direct handling.
Non-accrual Loans
Within our held-for-investment loan portfolio, non-accrual loans totaled $29.1 million at December 31, 2023 and $34.2
million at December 31, 2022.
Loan Restructurings
The Company adopted ASU No. 2022-02 on January 1, 2023, which eliminates the recognition and measurement of a
TDR. Due to the removal of the TDR designation, the Company applies the loan refinancing and restructuring guidance
to determine whether a modification or other forms of restructuring result in a new loan or a continuation of an existing
loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or
amount of contractual cash flows include conditions where there is principal forgiveness, interest rate reductions, other-
than-insignificant payment delays, term extensions, and/or a combinations of these modifications. The disclosures related
to loan restructuring are only for modifications that directly affect cash flows.
Please refer to Note 5 to our condensed Consolidated Financial Statements for a further discussion loan restructurings.
34
Troubled Debt Restructurings (“TDRs”)
Prior to the adoption of ASU No.2022-02, we were required to recognize loans for which certain modifications or
concessions have been made as TDRs. A TDR has been created in the event that, for economic or legal reasons, any of
the following concessions has been granted that would not have otherwise been considered to a debtor experiencing
financial difficulties. The following criteria are considered concessions:
(cid:120) A reduction of interest rate has been made for the remaining term of the loan.
(cid:120)
(cid:120)
The maturity date of the loan has been extended with a stated interest rate lower than the current market rate for
new debt with similar risk.
The outstanding principal amount and/or accrued interest have been reduced.
In instances in which the interest rate has been reduced, management would not deem the modification a TDR in the event
that the reduction in interest rate reflected either a general decline in market interest rates or an effort to maintain a
relationship with a borrower who could readily obtain funds from other sources at the current market interest rate, and the
terms of the restructured loan are comparable to the terms offered by the Bank to non-troubled debtors.
We modified twelve loans in a manner that met the criteria for a TDR during the year ended December 31, 2022.
Accrual status for TDRs is determined separately for each TDR in accordance with our policies for determining accrual
or non-accrual status. At the time an agreement is entered into between the Bank and the borrower that results in our
determination that a TDR has been created, the loan can be on either accrual or non-accrual status. If a loan is on non-
accrual status at the time it is restructured, it continues to be classified as non-accrual until the borrower has demonstrated
compliance with the modified loan terms for a period of at least six months. Conversely, if at the time of restructuring the
loan is performing (and accruing) it will remain accruing throughout its restructured period, unless the loan subsequently
meets any of the criteria for non-accrual status under our policy and agency regulations. Within the allowance for credit
losses, losses are estimated for TDRs on accrual status as well as TDRs on non-accrual status that are one-to-four family
loans or consumer loans, on a pooled basis with loans that share similar risk characteristics. TDRs on non-accrual status
excluding one-to-four family and consumer loans are individually evaluated to determine expected credit losses. For
collateral-dependent TDRs where we have determined that foreclosure of the collateral is probable, or where the borrower
is experiencing financial difficulty and we expect repayment of the loan to be provided substantially through the operation
or sale of the collateral, the allowance for credit losses (“ACL”) is measured based on the difference between the fair value
of collateral, less the estimated costs to sell, and the amortized cost basis of the loan as of the measurement date. For non-
collateral-dependent loans, the ACL is measured based on the difference between the present value of expected cash flows
and the amortized cost basis of the loan as of the measurement date.
Please refer to Note 5 to our condensed Consolidated Financial Statements for a further discussion of TDRs.
OREO
Property acquired by the Bank, or a subsidiary, as a result of foreclosure on a mortgage loan or a deed in lieu of foreclosure
is classified as OREO. Upon entering OREO status, we obtain a current appraisal on the property and reassesses the likely
realizable value (a/k/a fair value) of the property quarterly thereafter. OREO is carried at the lower of the fair value or
book balance, with any write downs recognized through a provision recorded in non-interest expense. Only the appraised
value, or either a contractual or formal marketed value that falls below the appraised value, is used when determining the
likely realizable value of OREO at each reporting period. We typically seek to dispose of OREO properties in a timely
manner. As a result, OREO properties have generally not warranted subsequent independent appraisals.
There was no carrying value of OREO properties on our consolidated statements of financial condition at December 31,
2023 or December 31, 2022. We did not recognize any provisions for losses on OREO properties during the years ended
December 31, 2023, 2022 or 2021.
35
Past Due Loans
Loans Delinquent 30 to 59 Days
At December 31, 2023, we had loans totaling $12.0 million that were past due between 30 and 59 days. At December 31,
2022, we had loans totaling $23.5 million that were past due between 30 and 59 days. The 30 to 59-day delinquency levels
fluctuate monthly, and are generally considered a less accurate indicator of near-term credit quality trends than non-accrual
loans.
Loans Delinquent 60 to 89 Days
At December 31, 2023, we had loans totaling $1.3 million that were past due between 60 and 89 days. At December 31,
2022, we had loans totaling $0.7 million that were past due between 60 and 89 days. The 60 to 89-day delinquency levels
fluctuate monthly, and are generally considered a less accurate indicator of near-term credit quality trends than non-accrual
loans.
Accruing Loans 90 Days or More Past Due
There were no accruing loans 90 days or more past due at December 31, 2023 or 2022.
Reserve for Loan Commitments
We maintain a reserve, recorded in other liabilities, associated with unfunded loan commitments accepted by the borrower.
The amount of reserve was $2.7 million at December 31, 2023 and $2.8 million at December 31, 2022. This reserve is
determined based upon the outstanding volume of loan commitments at each period end. Any increases or reductions in
this reserve are recognized in provision for credit losses.
Allowance for Credit Losses
On January 1, 2021, the Company adopted ASU No. 2016-13 "Financial Instruments – Credit Losses (Topic 326)". ASU
2016-13 was effective for the Company as of January 1, 2020. Under Section 4014 of the CARES Act, financial
institutions required to adopt ASU 2016-13 as of January 1, 2020 were provided an option to delay the adoption of the
CECL framework. The Company elected to defer adoption of CECL until January 1, 2021. This standard requires that the
measurement of all expected credit losses for financial assets held at the reporting date be based on historical experience,
current conditions, and reasonable and supportable forecasts. This standard requires financial institutions and other
organizations to use forward-looking information to better inform their credit loss estimates.
The adoption of the CECL Standard resulted in an initial decrease of $3.9 million to the allowance for credit losses and an
increase of $1.4 million to the reserve for unfunded commitments. The after-tax cumulative-effect adjustment of $1.7
million was recorded as an increase to retained earnings as of January 1, 2021.
A provision of $2.8 million and $5.4 million were recorded during the twelve-month periods ended December 31, 2023
and 2022, respectively. The $2.8 million provision for credit losses recognized in 2023 was primarily associated with
provisioning for individually analyzed loans. The $5.4 million provision for credit losses recognized in 2022 was
associated with growth in the loan portfolio and a deterioration of forecasted economic conditions, offset by a reduction
in reserves on individually analyzed loans and unfunded commitments.
For further discussion of the allowance for credit losses and related activity during the years ended December 31, 2023,
2022 and 2021, please see Note 5 to the Consolidated Financial Statements.
36
The following table presents our allowance for credit losses allocated by loan type and the percent of each to total loans at
the dates indicated.
(Dollars in thousands)
One-to-four family residential and
cooperative/condominium apartment
Multifamily residential and residential mixed-use
CRE
ADC
C&I
Other loans
Total
2023
December 31,
2022
2021
Percent
of Loans
in Each
Category
to Total
Loans
8.24 % $
37.31
42.92
1.57
9.91
0.05
Percent
of Loans
in Each
Category
to Total
Loans
7.32 % $
38.11
42.19
2.17
10.14
0.07
Allocated
Amount
5,932
7,816
29,166
4,857
35,331
751
Allocated
Amount
5,969
8,360
27,329
1,723
39,853
273
Allocated
Amount
$
6,813
7,237
26,608
1,989
28,977
119
$
71,743
100.00 % $
83,507
100.00 % $
83,853
Percent
of Loans
in Each
Category
to Total
Loans
7.24 %
36.31
42.68
3.49
10.10
0.18
100.00 %
The following table sets forth information about our allowance for credit losses at or for the dates indicated:
(Dollars in thousands)
Total loans outstanding at end of period (1)
Average total loans outstanding during the period(2)
Allowance for credit losses balance at end of period
Allowance for credit losses to total loans at end of period
Non-performing loans to total loans at end of period
Allowance for credit losses to total non-performing loans at end of period
Ratio of net charge-offs to average loans outstanding during the period:
One-to-four family residential and cooperative/condominium apartment
Multifamily residential and residential mixed-use
CRE
ADC
C&I
Other loans
Total
At or for the Year Ended December 31,
2021
2022
2023
9,244,661
$ 10,566,831
$ 10,766,837
9,484,205
9,747,887
10,764,598
83,853
83,507
71,743
$
0.67 %
0.27
246.55
0.79 %
0.32
243.91
0.91 %
0.37
231.26
— %
—
—
—
1.37
4.34
0.14
— %
—
—
—
0.77
0.42
0.07
(0.01)%
0.01
0.09
—
0.33
3.89
0.10
(1) Total loans represent gross loans (excluding loans held for sale), fair value hedge basis point adjustments, inclusive
of deferred fees/costs and premiums/discounts.
(2) Total average loans represent gross loans (including loans held for sale and fair value hedge basis point adjustments),
inclusive of deferred loan fees/costs and premiums/discounts.
37
Investment Activities
Securities available-for-sale
The following table presents the amortized cost, fair value and weighted average yield of our securities available-for-sale
at December 31, 2023, categorized by remaining period to contractual maturity:
(Dollars in thousands)
Due within 1 year
Due after 1 year but within 5 years
Due after 5 years but within 10 years
Due after ten years
Total
Amortized
Cost
$
$
96,095
266,176
280,157
353,281
995,709
$
$
Fair
Value
93,607
250,253
247,742
294,638
886,240
Weighted
Average
Yield
0.48 %
1.44
3.42
1.50
1.93 %
The entire carrying amount of each security at December 31, 2023 is reflected in the above table in the maturity period
that includes the final security payment date and, accordingly, no effect has been given to periodic repayments or possible
prepayments. The weighted average duration of our securities available-for-sale approximated 2.9 years as of
December 31, 2023 when giving consideration to anticipated repayments or possible prepayments, which is significantly
less than their weighted average maturity.
The following table presents the weighted average contractual maturity of our securities available-for-sale:
Agency notes
Treasury securities
Corporate securities
Pass-through MBS issued by U.S. GSEs and agency collateralized mortgage obligations ("CMOs")
State and municipal obligations
Securities held-to-maturity
December 31,
2023
2.85
1.33
6.75
16.68
3.92
The following table presents the amortized cost, fair value and weighted average yield of our securities held-to-maturity
at December 31, 2023, categorized by remaining period to contractual maturity:
(Dollars in thousands)
Due within 1 year
Due after 1 year but within 5 years
Due after 5 years but within 10 years
Due after ten years
Total
Amortized
Cost
$
$
— $
32,742
167,524
394,373
594,639
$
Fair
Value
—
30,710
144,761
341,459
516,930
Weighted
Average
Yield
— %
2.48
2.48
2.70
2.63 %
The entire carrying amount of each security at December 31, 2023 is reflected in the above table in the maturity period
that includes the final security payment date and, accordingly, no effect has been given to periodic repayments or possible
prepayments. The weighted average duration of our securities held-to-maturity approximated 5.7 years as of December 31,
2023 when giving consideration to anticipated repayments or possible prepayments, which is significantly less than their
weighted average maturity.
38
The following table presents the weighted average contractual maturity of our securities held-to-maturity:
Agency notes
Corporate securities
Pass-through MBS issued by GSEs and agency CMOs
Sources of Funds
Deposits
December 31,
2023
6.26
8.59
21.21
The following table presents our deposit accounts and the related weighted average interest rates at the dates indicated
(Dollars in thousands):
December 31, 2023
December 31, 2022
December 31, 2021
Savings accounts
CDs
Money market accounts
Interest-bearing checking accounts
Non-interest-bearing checking accounts
Totals
Percent
of
Total
Amount
Deposits
$ 2,335,490
1,607,683
3,125,996
515,987
2,945,499
$ 10,530,655
22.2 %
15.3
29.6
4.9
28.0
100.00 %
Weighted
Average
Rate
Amount
3.67 % $ 2,260,101
1,115,364
4.43
2,532,270
3.46
827,454
0.77
3,519,218
—
2.56 % $ 10,254,407
Percent
Of
Total
Weighted
Average
Amount
Deposits Rate
22.0 %
10.9
24.7
8.1
34.3
100.00 %
2.24 % $ 1,158,040
853,242
2.25
3,621,552
1.50
905,717
1.01
3,920,423
—
1.19 % $ 10,458,974
Percent
Of
Total
Deposits
Weighted
Average
Rate
11.1 %
8.2
34.6
8.7
37.5
100.00 %
0.03 %
0.58
0.07
0.18
—
0.09 %
The weighted average maturity of our CDs at December 31, 2023 was 5.1 months, compared to 7.6 months at
December 31, 2022.
Non-insured deposits (excluding collateralized deposits and deposits with pass through insurance) represented 28.9% and
31.0% of total deposits as of December 31, 2023 and 2022, respectively. The Bank had $1.88 billion and $1.90 billion of
public funds collateralized by securities and Municipal Letters of Credit (“MULOC”), and $680.8 million and $615.6
million of deposits with pass through insurance as of December 31, 2023, and 2022, respectively.
The following table sets forth the amount of time deposits in uninsured accounts by maturity, all of which are CDs at
December 31, 2023:
(In thousands)
Three months or less
Over three through six months
Over six through twelve months
Over twelve months
Total
$
$
97,664
95,112
53,347
26,672
272,795
As of December 31, 2023, the portion of uninsured time deposits in excess of the $250,000 FDIC insurance limit was
$115.3 million.
Our Board of Directors authorized the Bank to accept brokered deposits up to an aggregate limit of 10.0% of total assets.
At December 31, 2023, brokered deposits totaled $898.7 million, which included purchased CDs from the CDARS
program, purchased MMAs from the ICS program and purchased CDs through a broker. At December 31, 2022, brokered
deposits totaled $538.9 million, which included purchased CDs from the CDARS program, purchased MMAs from the
ICS program and purchased CDs through a broker. At December 31, 2021, brokered deposits totaled $200.0 million, which
included purchased MMAs from the ICS program.
39
Borrowings
The Bank’s total borrowing line with FHLBNY equaled $4.09 billion at December 31, 2023. The Bank had $1.31 billion
of FHLBNY advances outstanding at December 31, 2023, and $1.13 billion at December 31, 2022. The Bank maintained
sufficient collateral, as defined by the FHLBNY (principally in the form of real estate loans), to secure such advances.
The Company had no outstanding securities sold under agreements to repurchase (“repurchase agreements”) at
December 31, 2023. The Company had $1.4 million outstanding of securities sold under agreements to repurchase at
December 31, 2022.
Liquidity and Capital Resources
The Board of Directors of the Bank has approved a liquidity policy that it reviews and updates at least annually. Senior
management is responsible for implementing the policy. The Bank’s Asset Liability Committee (“ALCO”) is responsible
for general oversight and strategic implementation of the policy and management of the appropriate departments are
designated responsibility for implementing any strategies established by ALCO. On a daily basis, appropriate senior
management receives a current cash position report and one-week forecast to ensure that all short-term obligations are
timely satisfied and that adequate liquidity exists to fund future activities. Reports detailing the Bank’s liquidity reserves
are presented to appropriate senior management on a monthly basis, and the Board of Directors at each of its meetings. In
addition, a twelve-month liquidity forecast is presented to ALCO in order to assess potential future liquidity concerns. A
forecast of cash flow data for the upcoming 12 months is presented to the Board of Directors on an annual basis.
Liquidity is primarily needed to meet customer borrowing commitments and deposit withdrawals, either on demand or on
contractual maturity, to repay borrowings as they mature, to fund current and planned expenditures and to make new loans
and investments as opportunities arise. The Bank’s primary sources of funding for its lending and investment activities
include deposits, loan payments, investment security principal and interest payments and advances from the FHLBNY.
The Bank may also sell or securitize selected multifamily residential, mixed-use or one-to-four family residential real
estate loans to private sector secondary market purchasers, and has in the past sold such loans to FNMA and Federal Home
Loan Mortgage Corporation (“FHLMC”). The Company may additionally issue debt or equity under appropriate
circumstances. Although maturities and scheduled amortization of loans and investments are predictable sources of funds,
deposit flows and prepayments on real estate loans and MBS are influenced by interest rates, economic conditions and
competition.
The Bank is a member of American Financial Exchange (“AFX”), through which it may either borrow or lend funds on
an overnight or short-term basis with other member institutions. The availability of funds changes daily.
The Bank utilizes repurchase agreements as part of its borrowing policy to add liquidity. Repurchase agreements represent
funds received from customers, generally on an overnight basis, which are collateralized by investment securities. As of
December 31, 2023 the Bank did not have any repurchase agreements. As of December 31, 2022, the Bank’s repurchase
agreements totaled $1.4 million, included in other short-term borrowings on the consolidated statements of financial
condition.
The Bank gathers deposits in direct competition with commercial banks, savings banks and brokerage firms, many among
the largest in the nation. It must additionally compete for deposit monies against the stock and bond markets, especially
during periods of strong performance in those arenas. The Bank’s deposit flows are affected primarily by the pricing and
marketing of its deposit products compared to its competitors, as well as the market performance of depositor investment
alternatives such as the U.S. bond or equity markets. To the extent that the Bank is responsive to general market increases
or declines in interest rates, its deposit flows should not be materially impacted. However, favorable performance of the
equity or bond markets could adversely impact the Bank’s deposit flows.
Total deposits (including mortgage escrow deposits) increased $276.2 million during the year ended December 31, 2023
compared to a decrease of $204.6 million during the year ended December 31, 2022. The increase in total deposits during
the 2023 period was primarily due to an increase in money market deposits. Within deposits, core deposits (i.e., non-CDs)
decreased $216.1 million during the year ended December 31, 2023 and decreased $466.7 million during the year ended
December 31, 2022. CDs increased $492.3 million during the year ended December 31, 2023 compared to an increase of
40
$262.1 million during the year ended December 31, 2022. The increase in CDs during the current period was primarily
due to a $359.9 million increase in brokered CDs.
The Bank increased its outstanding FHLBNY advances by $182.0 million during the year ended December 31, 2023,
compared to a $1.11 billion increase during the year ended December 31, 2022. See Note 13. “Federal Home Loan Bank
Advances” to our Consolidated Financial Statements for further information.
Subordinated debentures totaled $200.2 million at December 31, 2023 and $200.3 million at December 31, 2022. See Note
14. “Subordinated Debentures” to our Consolidated Financial Statements for further information.
In the event that the Bank should require funds beyond its ability or desire to generate them internally, additional sources
of liquidity are available through its collateralized borrowing lines at the FHLBNY and the FRB, as well as unsecured
borrowing capacity through the AFX and lines of credit with unaffiliated correspondent banks. At December 31, 2023, the
Bank had remaining borrowing capacity of $1.19 billion through the FHLBNY, subject to customary minimum FHLBNY
common stock ownership requirements (i.e., 4.5% of the Bank’s drawn FHLBNY borrowings). The Bank also had access
to the FRB Discount Window and the FRB Bank Term Funding Program. At December 31, 2023, an available line of
credit totaling $848.4 million was in place at the FRB backed by investment securities with no advances
drawn. Additionally, at December 31, 2023, a line of credit totaling $2.01 billion was in place at the FRB secured by
certain qualifying 1-4 family residential mortgage loans, construction loans and CRE loans with no amounts drawn.
During the year ended December 31, 2023 and 2022, real estate loan originations totaled $885.5 million and $2.67 billion,
respectively. During the year ended December 31, 2023 and 2022, C&I loan originations totaled $112.3 million and $160.1
million, respectively.
Sales of securities available-for-sale totaled $77.8 million during the year ended December 31, 2023. There were no sales
of securities available-for-sale during the year ended December 31, 2022. Purchases of available-for-sale securities totaled
$86.1 million and $39.2 million during the years ended December 31, 2023 and 2022, respectively. Proceeds from pay
downs and calls and maturities of available-for-sale securities were $79.9 million and $165.1 million for the years ended
December 31, 2023 and 2022, respectively.
The Bank did not have proceeds from sales of held-to-maturity securities during the years ended December 31, 2023 or
2022. Purchases of held-to-maturity securities totaled $28.3 million and $63.2 million during the year ended December
31, 2023 and 2022, respectively. Proceeds from pay downs and calls and maturities of held-to-maturity securities were
$23.0 million and $31.7 million for the year ended December 31, 2023 and 2022, respectively.
The Company and the Bank are subject to minimum regulatory capital requirements imposed by its primary federal
regulator. As a general matter, these capital requirements are based on the amount and composition of an institution’s
assets. At December 31, 2023, each of the Company and the Bank were in compliance with all applicable regulatory capital
requirements and the Bank was considered "well capitalized" for all regulatory purposes.
The Holding Company repurchased 36,813 shares of its common stock during the year ended December 31, 2023. The
Holding Company repurchased 1,431,241 shares of its common stock during the year ended December 31, 2022. As of
December 31, 2023, up to 1,566,947 shares remained available for purchase under the authorized share repurchase
programs. See "Part II - Item 5. Issuer Purchases of Equity Securities" for additional information about repurchases of
common stock.
The Holding Company paid $7.3 million in cash dividends on its preferred stock during the years ended December 31,
2023 and 2022, respectively.
The Holding Company paid $37.3 million and $36.8 million in cash dividends on its common stock during the years ended
December 31, 2023 and 2022, respectively.
41
Contractual Obligations
The Bank generally has outstanding at any time borrowings in the form of FHLBNY advances, short-term or overnight
borrowings, subordinated debt, as well as customer CDs with fixed contractual interest rates. In addition, the Bank is
obligated to make rental payments under leases on certain of its branches and equipment.
Off-Balance Sheet Arrangements
As part of its loan origination business, the Bank generally has outstanding commitments to extend credit to borrowers,
which are originated pursuant to its regular underwriting standards. Available lines of credit may not be drawn on or may
expire prior to funding, in whole or in part, and amounts are not estimates of future cash flows. As of December 31, 2023,
the Bank had $97.0 million of firm loan commitments that were accepted by the borrowers.
Additionally, in connection with a loan securitization transaction that was completed in 2017, the Bank executed a
reimbursement agreement with FHLMC that obligates the Company to reimburse FHLMC for any contractual principal
and interest payments on defaulted loans, not to exceed 10% of the original principal amount of the loans comprising the
aggregate balance of the loan pool at securitization. The maximum exposure under this reimbursement obligation is $28.0
million. The Bank has pledged $28.0 million of pass-through MBS issued by GSEs as collateral.
Recently Issued Accounting Standards
For a discussion of the impact of recently issued accounting standards, please see Note 1 to the Company’s Consolidated
Financial Statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
General
The Company’s largest component of market risk remains interest rate risk. The Company is not subject to foreign currency
exchange or commodity price risk. During the year ended December 31, 2023, we conducted zero transactions involving
derivative instruments requiring bifurcation in order to hedge interest rate or market risk.
Asset/Liability Management
Management considers interest rate risk to be the most significant market risk for the Company. Market risk is the risk of
losses from adverse changes in market prices and rates. Interest rate risk is the exposure to adverse changes in net income
as a result of changes in interest rates.
The Company’s primary earnings source is net interest income, which is affected by changes in the level of interest rates,
the relationship between rates, the impact of interest rate fluctuations on asset prepayments, the level and composition of
deposits and liabilities, and the credit quality of earning assets. Our asset and liability management objectives are to
maintain a strong, stable net interest margin, to utilize its capital effectively without taking undue risks, to maintain
adequate liquidity, and to reduce vulnerability of our operations to changes in interest rates.
Our Asset and Liability Committee evaluates periodically, but no less than four times annually, the impact of changes in
market interest rates on assets and liabilities, net interest margin, capital and liquidity. Risk assessments are governed by
policies and limits established by senior management, which are reviewed and approved by the Board of Directors at least
annually. The economic environment continually presents uncertainties as to future interest rate trends. The Asset and
Liability Committee regularly utilizes a model that projects net interest income based on increasing or decreasing interest
rates, in order to be better able to respond to changes in interest rates.
At December 31, 2023, $1.26 billion, or 85.2%, of our available-for-sale and held-to-maturity securities had fixed interest
rates. At December 31, 2023, $7.85 billion, or 73.0%, of the loan portfolio had contractual terms with adjustable or floating
interest rates. Changes in interest rates affect the value of interest-earning assets and, in particular, the securities portfolio.
Generally, the value of securities fluctuates inversely with changes in interest rates. Increases in interest rates could result
42
in decreases in the market value of interest-earning assets, which could adversely affect stockholders’ equity and the results
of operations if sold. The Company is also subject to reinvestment risk associated with changes in interest rates. Changes
in market interest rates also could affect the type (fixed-rate or adjustable-rate) and amount of loans originated and the
average life of loans and securities, which can impact the yields earned on loans and securities. In periods of decreasing
interest rates, the average life of loans and securities held may be shortened to the extent increased prepayment activity
occurs during such periods which, in turn, may result in the investment of funds from such prepayments in lower yielding
assets. Under these circumstances, the Company is subject to reinvestment risk to the extent that management is unable to
reinvest the cash received from such prepayments at rates that are comparable to the rates on existing loans and securities.
Additionally, increases in interest rates may result in decreasing loan prepayments with respect to fixed rate loans (and,
therefore, an increase in the average life of such loans), may result in a decrease in loan demand, and may make it more
difficult for borrowers to repay adjustable rate loans. In addition, increases in interest rates may result in the extensions of
the average life of securities which may result in lower cash flows to the Bank.
Interest Rate Risk Exposure Analysis
Economic Value of Equity ("EVE") Analysis. In accordance with agency regulatory guidelines, the Company simulates the
impact of interest rate volatility upon EVE using several interest rate scenarios. EVE is the difference between the present
value of the expected future cash flows of the Company’s assets and liabilities and the value of any off-balance sheet
items, such as derivatives, if applicable.
Traditionally, the fair value of fixed-rate instruments fluctuates inversely with changes in interest rates. Increases in
interest rates thus result in decreases in the fair value of interest-earning assets, which could adversely affect the
Company’s consolidated results of operations in the event they were to be sold, or, in the case of interest-earning assets
classified as available-for-sale, reduce the Company’s consolidated stockholders’ equity, if retained. The changes in the
value of assets and liabilities due to fluctuations in interest rates measure the interest rate sensitivity of those assets and
liabilities.
In order to measure the Company’s sensitivity to changes in interest rates, EVE is calculated under market interest rates
prevailing at a given quarter-end ("Pre-Shock Scenario"), and under various other interest rate scenarios ("Rate Shock
Scenarios") representing immediate, permanent, parallel shifts in the term structure of interest rates from the actual term
structure observed in the Pre-Shock Scenario. An increase in the EVE is considered favorable, while a decline is considered
unfavorable. The changes in EVE between the Pre-Shock Scenario and various Rate Shock Scenarios due to fluctuations
in interest rates reflect the interest rate sensitivity of the Company’s assets, liabilities, and off-balance sheet items that are
included in the EVE. Management reports the EVE results to the Board of Directors on a quarterly basis. The report
compares the Company’s estimated Pre-Shock Scenario EVE to the estimated EVE calculated under the various Rate
Shock Scenarios.
The Company’s valuation model makes various estimates regarding cash flows from principal repayments on loans and
deposit decay rates at each level of interest rate change. The Company’s estimates for loan repayment levels are influenced
by the recent history of prepayment activity in its loan portfolio, as well as the interest rate composition of the existing
portfolio, especially in relation to the existing interest rate environment. In addition, the Company considers the amount
of fee protection inherent in the loan portfolio when estimating future repayment cash flows. Regarding deposit decay
rates, the Company tracks and analyzes the decay rate of its deposits over time, with the assistance of a reputable third-
party, and over various interest rate scenarios. Such results are utilized in determining estimates of deposit decay rates in
the valuation model. The Company also generates a series of spot discount rates that are integral to the valuation of the
projected monthly cash flows of its assets and liabilities. The valuation model employs discount rates that it considers
representative of prevailing market rates of interest with appropriate adjustments it believes are suited to the heterogeneous
characteristics of the Company’s various asset and liability portfolios. No matter the care and precision with which the
estimates are derived, actual cash flows could differ significantly from the Company’s estimates resulting in significantly
different EVE calculations.
43
The analysis that follows presents, as of December 31, 2023 and 2022, the estimated EVE at both the Pre-Shock Scenario
and the -100 Basis Point Rate, +100 Basis Point Rate and +200 Basis Point Rate Shock Scenarios.
(Dollars in thousands)
Rate Shock Scenarios
+ 200 Basis Points
+ 100 Basis Points
Pre-Shock Scenario
- 100 Basis Points
December 31, 2023
December 31, 2022
EVE
Dollar
Change
Percentage
Change
EVE
Dollar
Change
Percentage
Change
$ 1,414,548
1,375,777
1,334,803
1,247,956
$
79,745
40,974
—
(86,847)
6.0% $ 1,717,562
1,703,131
3.1%
1,639,189
—
(6.5)% 1,515,010
$
78,373
63,942
—
(124,179)
4.8%
3.9%
—
(7.6)%
The Company’s Pre-Shock Scenario EVE decreased from $1.64 billion at December 31, 2022, to $1.33 billion at December
31, 2023. The primary factors contributing to the decline in EVE include a shift in the deposit mix, coupled with an increase
in the cost of the Bank’s interest-bearing non-maturity deposits during the year.
The Company’s EVE in the +100 Basis Point Rate and +200 Basis Point Rate Shock Scenarios decreased from $1.70
billion and $1.72 billion, respectively, at December 31, 2022, to $1.38 billion and $1.41 billion, respectively, at December
31, 2023. In the -100 Basis Point Rate Shock Scenario the Company’s EVE decreased from $1.52 billion at December 31,
2022, to $1.25 billion at December 31, 2023.
Income Simulation Analysis. As of the end of each quarterly period, the Company also monitors the impact of interest rate
changes through a net interest income simulation model. This model estimates the impact of interest rate changes on the
Company’s net interest income over forward-looking periods typically not exceeding 36 months (a considerably shorter
period than measured through the EVE analysis). Management reports the net interest income simulation results to the
Company’s Board of Directors on a quarterly basis. The following table discloses the estimated changes to the Company’s
net interest income in various time periods assuming gradual changes in interest rates over a 12-month period beginning
December 31, 2023, for the given rate scenarios:
Gradual Change in Interest rates of:
+ 200 Basis Points
+ 100 Basis Points
- 100 Basis Points
Percentage Change in Net Interest Income
Year-One
Year-Two
(0.7)%
(0.3)%
1.7%
2.9%
1.5%
0.8%
Management also examines the potential impact to net interest income by simulating the impact of instantaneous changes
to interest rates. The following table discloses the estimated changes to the Company’s net interest income in various time
periods associated with the given interest rate shock scenarios:
Instantaneous Rate Shock Scenarios
+ 200 Basis Points
+ 100 Basis Points
- 100 Basis Points
Percentage Change in Net Interest Income
Year-One
Year-Two
0.4%
0.3%
0.9%
5.2%
2.8%
(0.6)%
44
Item 8. Financial Statements and Supplementary Data
For the Company’s Consolidated Financial Statements with the notes thereto, see pages hereafter.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share amounts)
Assets:
Cash and due from banks
Securities available-for-sale, at fair value
Securities held-to-maturity
Loans held for sale
Loans held for investment, net of fees and costs
Allowance for credit losses
Total loans held for investment, net
Premises and fixed assets, net
Premises held for sale
Restricted stock
BOLI
Goodwill
Other intangible assets
Operating lease assets
Derivative assets
Accrued interest receivable
Other assets
Total assets
Liabilities:
Interest-bearing deposits
Non-interest-bearing deposits
Deposits (excluding mortgage escrow deposits)
Non-interest-bearing mortgage escrow deposits
Interest-bearing mortgage escrow deposits
Total mortgage escrow deposits
FHLBNY advances
Other short-term borrowings
Subordinated debt, net
Derivative cash collateral
Operating lease liabilities
Derivative liabilities
Other liabilities
Total liabilities
Commitments and contingencies
December 31,
2023
2022
$
$
$
457,547
886,240
594,639
10,159
10,773,428
(71,743)
10,701,685
44,868
905
98,750
349,816
155,797
5,059
52,729
122,132
55,666
100,013
13,636,005
7,585,020
2,884,378
10,469,398
61,121
136
61,257
1,313,000
—
200,196
108,100
55,454
121,265
81,110
12,409,780
$
$
$
169,297
950,587
585,798
—
10,566,831
(83,507)
10,483,324
46,749
—
88,745
333,292
155,797
6,484
57,857
154,485
48,561
108,945
13,189,921
6,734,997
3,449,763
10,184,760
69,455
192
69,647
1,131,000
1,360
200,283
153,040
60,340
137,335
82,573
12,020,338
Stockholders' equity:
Preferred stock, Series A ($0.01 par, $25.00 liquidation value, 10,000,000 shares authorized and 5,299,200
shares issued and outstanding at December 31, 2023 and December 31, 2022)
Common stock ($0.01 par, 80,000,000 shares authorized, 41,637,256 and 41,621,772 shares issued at
December 31, 2023 and December 31, 2022, and 38,822,654 shares and 38,573,000 shares outstanding at
December 31, 2023 and December 31, 2022, respectively)
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss, net of deferred taxes
Unearned equity awards
Treasury stock, at cost (2,814,602 shares and 3,048,772 shares at December 31, 2023 and December 31, 2022,
respectively)
Total stockholders' equity
Total liabilities and stockholders' equity
116,569
116,569
416
494,454
813,007
(91,579)
(8,622)
416
495,410
762,762
(94,379)
(8,078)
(98,020)
1,226,225
13,636,005
(103,117)
1,169,583
13,189,921
$
$
See Notes to Consolidated Financial Statements.
45
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
Year Ended December 31,
2022
2023
2021
Interest income:
Loans
Securities
Other short-term investments
Total interest income
Interest expense:
Deposits and escrow
Borrowed funds
Derivative cash collateral
Total interest expense
Net interest income
Provision for credit losses
Net interest income after provision for credit losses
Non-interest income:
Service charges and other fees
Title fees
Loan level derivative income
BOLI income
Gain on sale of SBA loans
Gain on sale of residential loans
Net (loss) gain on equity securities
Net (loss) gain on sale of securities and other assets
Loss on termination of derivatives
Other
Total non-interest income
Non-interest expense:
Salaries and employee benefits
Severance
Occupancy and equipment
Data processing costs
Marketing
Professional services
Federal deposit insurance premiums
Loss from extinguishment of debt for FHLBNY advances and subordinated debt
Curtailment loss
Merger expenses and transaction costs
Branch restructuring costs
Amortization of other intangible assets
Other
Total non-interest expense
Income before income taxes
Income tax expense
Net income
Preferred stock dividends
Net income available to common stockholders
Earnings per common share:
Basic
Diluted
See Notes to Consolidated Financial Statements.
$
$
$
$
46
$
$ 406,601
29,224
3,400
439,225
554,488
32,179
22,693
609,360
219,045
66,472
7,272
292,789
316,571
2,770
313,801
16,437
1,295
7,081
9,748
1,592
115
(758)
(1,469)
—
2,165
36,206
117,437
9,093
29,055
16,474
6,781
6,155
8,853
—
—
—
—
1,425
17,855
213,128
136,879
40,785
96,094
7,286
88,808
38,433
19,117
1,812
59,362
379,863
5,374
374,489
16,206
2,031
3,637
10,346
1,797
448
—
1,397
—
2,294
38,156
120,108
2,198
30,220
15,175
5,900
8,069
3,900
740
—
—
—
1,878
12,542
200,730
211,915
59,359
152,556
7,286
$ 145,270
2.29
2.29
$
$
3.73
3.73
$
$
$
359,016
22,634
2,976
384,626
16,527
10,490
—
27,017
357,609
6,212
351,397
15,998
2,338
2,909
7,071
23,033
1,758
131
1,705
(16,505)
3,630
42,068
108,331
1,875
30,697
16,638
4,661
9,284
4,077
1,751
1,543
44,824
5,059
2,622
13,937
245,299
148,166
44,170
103,996
7,286
96,710
2.45
2.45
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands except per share amounts)
Year Ended December 31,
2022
152,556
$
$
2023
96,094
2021
103,996
10,355
(138,630)
(28,865)
1,447
3,142
(1,547)
—
(190)
(11,782)
—
2,092
3,517
717
2,800
98,894
—
2,953
(3,715)
—
(2,062)
14,412
—
(1,621)
(128,663)
(40,465)
(88,198)
64,358
$
$
(1,207)
—
(1,092)
1,543
6,563
5,277
16,505
940
(336)
(79)
(257)
103,739
Net income
Other comprehensive income (loss):
Change in unrealized gain (loss) on securities:
Change in net unrealized gain (loss) during the period
Reclassification adjustment for net losses (gains) included in net (loss) gain on sale of securities
and other assets
Accretion of net unrealized loss on securities transferred to held-to-maturity
Change in pension and other postretirement obligations:
Reclassification adjustment for expense included in other expense
Reclassification adjustment for curtailment loss
Change in the net actuarial (loss) gain
Change in unrealized gain (loss) on derivatives:
Change in net unrealized (loss) gain during the period
Reclassification adjustment for loss included in loss on termination of derivatives
Reclassification adjustment for expense included in interest expense
Other comprehensive income (loss) before income taxes
Deferred tax expense (benefit)
Total other comprehensive income (loss), net of tax
Total comprehensive income
See Notes to Consolidated Financial Statements.
$
$
47
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S
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended December 31,
2023
2022
2021
$
96,094
$
152,556
$
103,996
1,469
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(1,707)
—
6,025
561
1,425
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4,638
2,770
(8,219)
32,433
(9,103)
(645)
10,332
(45,957)
90,874
77,804
—
(86,084)
(28,328)
76,858
22,986
(8,000)
1,224
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5,000
(259,805)
(5,721)
25
(10,005)
—
(214,046)
276,411
20,000
162,000
(1,360)
—
—
—
—
1,164
(1,258)
—
(947)
—
(7,286)
(37,302)
411,422
288,250
169,297
457,547
$
(1,397)
—
(2,245)
—
8,314
—
1,878
740
4,278
5,374
(20,709)
46,474
(8,190)
(2,156)
(35,170)
145,425
295,172
—
—
(39,232)
(63,210)
165,097
31,736
(30,000)
2,843
—
13,201
(1,359,782)
(3,745)
1,914
(51,013)
—
(1,332,191)
(204,233)
1,070,000
—
36,000
(502)
157,559
(155,000)
—
1,167
(1,558)
—
(46,762)
—
(7,286)
(36,791)
812,594
(224,425)
393,722
169,297
(1,705)
(131)
(24,791)
16,505
7,805
—
2,622
1,751
5,407
6,212
(48,610)
77,184
(6,721)
(350)
125,486
(118,333)
146,327
138,077
6,101
(1,095,028)
(40,249)
411,031
1,360
(40,000)
1,464
(9,855)
684,898
282,683
14
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715,988
1,102,821
518,682
(1,228,865)
(190,150)
25,000
(118,138)
—
—
431
1,153
(111)
(993)
(59,280)
(121)
(7,286)
(39,351)
(1,099,029)
150,119
243,603
393,722
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss (gain) on sales of securities available-for-sale and other assets
Net loss (gain) on equity securities
Net gain on sale of loans held for sale
Loss on termination of derivatives
Net depreciation, amortization and accretion
Amortization of fair value hedge basis point adjustments
Amortization of other intangible assets
Loss on extinguishment of debt
Stock-based compensation
Provision for credit losses
Originations of loans held for sale
Proceeds from sale of loans originated for sale
Increase in cash surrender value of BOLI
Gain from death benefits from BOLI
Decrease (increase) in other assets
(Decrease) increase in other liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available-for-sale
Proceeds from sales of marketable equity securities
Purchases of securities available-for-sale
Purchases of securities held-to-maturity
Proceeds from calls and principal repayments of securities available-for-sale
Proceeds from calls and principal repayments of securities held-to-maturity
Purchase of BOLI
Proceeds received from cash surrender value of BOLI
Loans purchased
Proceeds from the sale of portfolio loans transferred to held for sale
(Increase) decrease in loans
(Purchases) sales of fixed assets, net
Proceeds from the sale of fixed assets and premises held for sale
Purchases of restricted stock, net
Net cash received in business combination
Net cash used in (provided by) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits
Proceeds (repayments) from FHLBNY advances, short-term, net
Proceeds (repayments) of FHLBNY advances, long-term
(Repayments) proceeds from FHLBNY advances, long-term
Repayments of other short-term borrowings, net
Proceeds from subordinated debentures issuance, net
Redemption of subordinated debentures
Proceeds from exercise of stock options
Release of stock for benefit plan awards
Payments related to tax withholding for equity awards
BMP Employee Stock Ownership Plan shares received to satisfy distribution of
retirement benefits
Purchase of treasury stock
Redemption of REIT preferred stock
Cash dividends paid to preferred stockholders
Cash dividends paid to common stockholders
Net cash provided by (used in) financing activities
Increase (decrease) in cash and cash equivalents
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD
See Notes to Consolidated Financial Statements.
49
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in thousands)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes
Cash paid for interest
Securities available-for-sale transferred to held-to-maturity
Loans transferred to held for sale
Loans transferred to held for investment
Premises transferred to held for sale
Operating lease assets in exchange for operating lease liabilities
Cumulative change due to CECL Standard adoption
Net non-cash liabilities assumed in Merger (See Note 2)
See Notes to Consolidated Financial Statements.
Year Ended December 31,
2023
2022
2021
$
37,910
280,815
—
37,346
—
905
6,333
—
—
43,518
54,910
372,154
34,997
4,051
—
5,098
—
—
34,771
28,460
140,399
692,751
—
2,799
9,769
1,686
324,937
50
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except for share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations and Principles of Consolidation
On February 1, 2021, Dime Community Bancshares, Inc., a Delaware corporation (“Legacy Dime”) merged with and into
Bridge Bancorp, Inc., a New York corporation (“Bridge”) (the “Merger”), with Bridge as the surviving corporation under
the name “Dime Community Bancshares, Inc.” (the “Holding Company”). At the effective time of the Merger (the
“Effective Time”), each outstanding share of Legacy Dime common stock, par value $0.01 per share, was converted into
the right to receive 0.6480 shares of the Holding Company’s common stock, par value $0.01 per share.
At the Effective Time, each outstanding share of Legacy Dime’s Series A preferred stock, par value $0.01 (the “Dime
Preferred Stock”), was converted into the right to receive one share of a newly created series of the Holding Company’s
preferred stock having the same powers, preferences and rights as the Dime Preferred Stock.
Immediately following the Merger, Dime Community Bank, a New York-chartered commercial bank and a wholly-owned
subsidiary of Legacy Dime, merged with and into BNB Bank, a New York-chartered trust company and a wholly-owned
subsidiary of Bridge, with BNB Bank as the surviving bank, under the name “Dime Community Bank” (the “Bank”).
The audited consolidated financial statements presented in this Annual Report on Form 10-K include the collective results
of the Holding Company and its wholly-owned subsidiary, the Bank, which are collectively herein referred to as “we”,
“us”, “our” and the “Company.”
The Merger was accounted for as a reverse merger using the acquisition method of accounting, which means that for
accounting and financial reporting purposes, Legacy Dime was deemed to have acquired Bridge in the Merger, even though
Bridge was the legal acquirer. Accordingly, Legacy Dime’s historical financial statements are the historical financial
statements of the combined company for all periods before February 1, 2021 (the “Merger Date”).
The Company’s results of operations for 2021 include the results of operations of Bridge on and after the Merger Date.
Results for periods before the Merger Date reflect only those of Legacy Dime and do not include the results of operations
of Bridge. The number of shares issued and outstanding, earnings per share, additional paid-in capital, dividends paid and
all references to share quantities of the Company have been retrospectively adjusted to reflect the equivalent number of
shares issued to holders of Legacy Dime common stock in the Merger. The assets and liabilities of Bridge as of the Merger
Date were recorded at their estimated fair values and added to those of Legacy Dime. See Note 2. Merger for further
information.
As of December 31, 2023, we operated 60 branch locations throughout Long Island and New York City boroughs of
Brooklyn, Queens, Manhattan, Staten Island, and the Bronx.
The Company is a bank holding company engaged in commercial banking and financial services through its wholly-owned
subsidiary, Dime Community Bank. The Bank was established in 1910 and is headquartered in Hauppauge, New York.
The Holding Company was incorporated under the laws of the State of New York in 1988 to serve as the holding company
for the Bank. The Company functions primarily as the holder of all of the Bank’s common stock. Our bank operations
include Dime Community Inc., a real estate investment trust subsidiary which was formerly known as Bridgehampton
Community, Inc., as an operating subsidiary. Our bank operations also include Dime Abstract LLC (“Dime Abstract”), a
wholly-owned subsidiary of the Bank, which is a broker of title insurance services. In September 2021, the Company
dissolved two REITs, DSBW Preferred Funding Corporation and DSBW Residential Preferred Funding Corporation,
which were wholly-owned subsidiaries of the Bank, and the preferred shares outstanding were redeemed by its
shareholders.
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”) and general practices within the financial institution industry. The accompanying
consolidated financial statements include the accounts of the Holding Company and the Bank and its subsidiaries. Inter-
company accounts and transactions have been eliminated in consolidation.
51
The following is a description of the significant accounting policies that the Company follows in preparing its consolidated
financial statements.
Use of Estimates
To prepare consolidated financial statements in conformity with GAAP, management makes judgments, estimates and
assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial
statements and the disclosures provided, and actual results could differ.
Summary of Significant Accounting Policies
Cash and Cash Equivalents - Cash and cash equivalents include cash and deposits with other financial institutions with
original maturities fewer than 90 days. Net cash flows are reported for customer loan and deposit transactions, and interest
bearing deposits in other financial institutions.
Securities - Debt securities are classified as held-to-maturity and carried at amortized cost when management has the
positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be
sold before maturity. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses
reported in other comprehensive income, net of tax. Equity securities are carried at fair value, with changes in fair value
reported in net income. Equity securities without readily determinable fair values are carried at cost, minus impairment, if
any, plus or minus changes resulting in observable price changes in orderly transactions for the identical or a similar
investment.
Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are
amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where
prepayments are anticipated. The Company has made a policy election to exclude accrued interest from the amortized cost
basis of debt securities and report accrued interest separately in accrued interest receivable in the consolidated statements
of financial condition. A debt security is placed on non-accrual status at the time any principal or interest payments become
more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security
placed on non-accrual is reversed against interest income. There were no non-accrual debt securities at December 31, 2023
and 2022, and there was no accrued interest related to debt securities reversed against interest income for the year ended
December 31, 2023 and 2022. Gains and losses on sales are recorded on the trade date and determined using the specific
identification method.
Restricted Stock – Restricted stock represents FHLBNY capital stock, FRB capital stock, and Atlantic Community Bankers
Bank (“ACBB”) capital stock, which are reported at cost. The Bank is a member of the FHLB system. Members are
required to own a particular amount of stock based on the level of borrowings and other factors and may invest in additional
amounts. FHLB stock is periodically evaluated for impairment based on ultimate recovery of par value. The Bank is a
member of the FRB. Membership requires the purchase of shares of FRB capital stock. The Bank has a relationship with
ACBB. The relationship requires the purchase of shares of ACBB capital stock. Both cash and stock dividends are reported
as income.
Loans Held for Sale - Loans originated and intended for sale in the secondary market, as well as identified problem loans
which are subject to an executed note sale agreement, are carried at the lower of aggregate cost or net realizable proceeds.
Loans originated and intended for sale are generally sold with servicing rights retained. Certain loans in which the borrower
does not adhere to all of the terms and conditions of the legal contract were best resolved through the sale of the loan rather
than through litigation through our workout department.
Loans - Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are
reported at the principal amount outstanding, net of partial charge-offs, deferred origination costs and fees and purchase
premiums and discounts. Loan origination, commitment fees and certain direct and indirect costs incurred in connection
with loan originations are deferred and amortized to income over the life of the related loans as adjustments to yield. When
a loan prepays, the remaining unamortized net deferred origination fees or costs are recognized in the current year. Interest
on loans is credited to income based on the principal outstanding during the period. The Company has made a policy
election to exclude accrued interest from the amortized cost basis of loans and report accrued interest separately from the
related loan balance in accrued interest receivable on the consolidated statements of financial condition. Past due status is
based on the contractual terms of the loan. Loans that are 90 days past due are automatically placed on non-accrual and
previously accrued interest is reversed and charged against interest income. However, if the loan is in the process of
52
collection and the Bank has reasonable assurance that the loan will be fully collectable based upon an individual loan
evaluation assessing such factors as collateral and collectability, accrued interest will be recognized as earned. If a payment
is received when a loan is non-accrual, the payment is applied to the principal balance. Loans are returned to accrual status
when all the principal and interest amounts contractually due are brought current and future payments are reasonably
assured. Non-accrual loans that are modified to borrowers experiencing financial difficulty remain on non-accrual status
until the borrower has demonstrated performance under the modified terms.
Unless otherwise noted, the above policy is applied consistently to all loan segments.
Allowance for Credit Losses - On January 1, 2021, the Company adopted the CECL Standard, which requires that the
measurement of all expected credit losses for financial assets at amortized cost, such as loans receivable, securities, and
off-balance sheet credit exposures, held as of the reporting date be based on historical experience, current conditions, and
reasonable and supportable forecasts to cover lifetime expected credit losses. Accrued interest receivable is excluded from
amortized cost basis. The allowance for credit losses is established and maintained through a provision for credit losses
based on expected losses inherent within the financial asset holdings. Management evaluates the adequacy of the allowance
on a quarterly basis, and additions to the allowance are charged to expense and realized losses, net of recoveries, are
charged against the allowance.
Allowance for credit losses on held-to-maturity securities - Management classifies its held-to-maturity portfolio
into the following major security types: Pass-through MBS issued by GSEs, Agency Collateralized Mortgage Obligations,
Agency Notes and Corporate Securities. The majority of the securities in the held-to-maturity portfolio are issued by U.S.
government-sponsored entities or agencies. These securities are either explicitly or implicitly guaranteed by the U.S.
government, are highly rated by major rating agencies, and have a long history of no credit losses. To the extent that debt
securities in the held-to-maturity portfolio share common risk characteristics, expected credit losses are calculated by pools
of such debt securities. The historical lifetime probability of default and severity of loss in the event of default is derived
or obtained from external sources and adjusted for the expected effects of reasonable and supportable forecasts over the
expected lifetime of the securities.
For a debt security in the held-to-maturity portfolio that does not share common risk characteristics with any of the pools
of debt securities, expected credit loss on each security is individually measured based on net realizable value, or the
difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and
the recorded amortized cost basis of the security.
With respect to certain classes of debt securities, primarily U.S. Treasuries and securities issued by Government Sponsored
Entities or agencies, the Company considers the history of credit losses, current conditions and reasonable and supportable
forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero,
even if the U.S. government were to technically default. Therefore, for those securities, the Company does not record
expected credit losses.
Allowance for credit losses on available-for-sale securities - Management evaluates available-for-sale debt
securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market
conditions warrant such evaluation. For securities in an unrealized loss position, management considers the extent of the
unrealized loss, and the near-term prospects of the issuer. Impairment may result from credit deterioration of the issuer or
collateral underlying the security. In performing an assessment of whether any decline in fair value is due to a credit loss,
all relevant information is considered at the individual security level. For asset-backed securities performance indicators
considered related to the underlying assets include default rates, delinquency rates, percentage of non-performing assets,
debt-to-collateral ratios, third party guarantees, current levels of subordination, vintage, geographic concentration, analyst
reports and forecasts, credit ratings and other market data. In assessing whether a credit loss exists, we compare the present
value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present
value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and
an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. Declines
in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market
interest rates, are excluded from earnings and reported, net of tax, in other comprehensive income (“OCI”). Management
also assesses whether it intends to sell or is more likely than not that it will be required to sell a security in an unrealized
loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is
met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.
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Allowance for credit losses on loans held for investment - The Company utilizes a model which compares the
amortized cost basis of the loan to the net present value of expected cash flows to be collected. Expected credit losses are
determined by aggregating the individual cash flows and calculating a loss percentage by loan segment, or pool, for loans
that share similar risk characteristics. For a loan that does not share risk characteristics with other loans, the Company will
evaluate the loan on an individual basis. The methodology for determining the allowance for credit losses on loans held
for investment is considered a critical accounting policy by management given the judgment required for determining
assumptions used, uncertainty of economic forecasts, and subjectivity of any qualitative factors considered.
The Company evaluates its loan pooling methodology at least annually. The Company has identified the following loan
pools used to measure the allowance for credit losses as follows:
One-to-four family residential, including condominium and cooperative apartment loans - Loans in this
classification consist of residential real estate and one-to-four family real estate properties, and may have a mixed-
use commercial aspect. Included in one-to-four family loans are also certain SBA loans in which the loan is
secured by underlying real estate as collateral. The Bank may sell a portion of the loan, guaranteed by the SBA,
to a third-party investor. Owner-occupied properties are generally underwritten based upon an appraisal
performed by an independent, state licensed appraiser and the credit quality of the individual borrower.
Investment properties require: (1) a maximum loan-to-value ratio of 75% based upon an appraisal performed by
an independent, state licensed appraiser, and (2) sufficient rental income from the underlying property to
adequately service the debt, represented by a minimum debt service ratio of 1.25x. The credit quality of this
portfolio is largely dependent on economic factors, such as unemployment rates and housing prices.
Multifamily residential and residential mixed-use loans - Loans in this classification consist of
multifamily residential real estate with a minimum of five residential units, and may have a mixed-use commercial
aspect of less than 50% of the property’s rental income. The Bank’s underwriting standards for multifamily
residential loans generally require: (1) a maximum loan-to-value ratio of 75% based upon an appraisal performed
by an independent, state licensed appraiser, and (2) sufficient rental income from the underlying property to
adequately service the debt, represented by a minimum debt service ratio of 1.20x. Repayment of multifamily
residential loans is dependent, in significant part, on cash flow from the collateral property sufficient to satisfy
operating expenses and debt service. Future increases in interest rates, increases in vacancy rates on multifamily
residential or commercial buildings, and other economic events, such as unemployment rates, which are outside
the control of the borrower or the Bank could negatively impact the future net operating income of such properties.
Similarly, government regulations, such as the existing New York City Rent Regulation and Rent Stabilization
laws, could limit future increases in the revenue from these buildings.
Commercial real estate and commercial mixed-use loans - Loans in this classification consist of CRE,
both owner-occupied and non-owner occupied, and may have a residential aspect of less than 50% of the
property’s rental income. The Bank’s underwriting standards for CRE loans generally require: (1) a maximum
loan-to-value ratio of 75% based upon an appraisal performed by an independent, state licensed appraiser, and
(2) sufficient rental income from the underlying property to adequately service the debt, represented by a
minimum debt service ratio of 1.25x. Included in CRE loans are also certain SBA loans in which the loan is
secured by underlying real estate as collateral. The Bank may sell a portion of the loan, guaranteed by the SBA,
to a third-party investor. Repayment of CRE loans is often dependent upon successful operation or management
of the collateral properties, as well as the success of the business and retail tenants occupying the properties.
Repayment of such loans is generally more vulnerable to weak economic conditions, such as unemployment rates
and CRE prices.
Acquisition, development, and construction loans - Loans in this classification consist of loans to
purchase land intended for further development, including single-family homes, multi-family housing, and
commercial income properties. In general, the maximum loan-to-value ratio for a land acquisition loan is 50% of
the appraised value of the property. The credit quality of this portfolio is largely dependent on economic factors,
such as unemployment rates and CRE prices.
Commercial, industrial and agricultural loans - Loans in this classification consist of lines of credit,
revolving lines of credit, and term loans, generally to businesses or high net worth individuals. The owners of
these businesses typically provide recourse such that they guarantee the debt. The lines of credit are generally
secured by the assets of the business, though they may at times be issued on an unsecured basis. Generally
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speaking, they are subject to renewal on an annual basis based upon review of the borrower’s financial statements.
Term loans are generally secured by either specific or general asset liens of the borrower’s business. These loans
are granted based upon the strength of the cash generation ability of the borrower. Included in C&I loans are also
certain SBA loans in which the loan is secured by underlying assets of the business (excludes SBA Paycheck
Protection Program (“PPP”) loans from allowance for credit losses as these loans carry a 100% guarantee from
the SBA). The Bank may sell a portion of the loan, guaranteed by the SBA, to a third-party investor. The credit
quality of this portfolio is largely dependent on economic factors, such as unemployment rates.
Other loans - Loans in this classification consist of installment and consumer loans. Repayment is
dependent on the credit quality of the individual borrower. The credit quality of this portfolio is largely dependent
on economic factors, such as unemployment rates.
Loan restructurings - The Company adopted ASU No. 2022-02 on January 1, 2023, which eliminates
the recognition and measurement of a TDR. Due to the removal of the TDR designation, the Company applies
the loan refinancing and restructuring guidance to determine whether a modification or other forms of
restructuring result in a new loan or a continuation of an existing loan. Loan modifications to borrowers
experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows
include conditions where there is principal forgiveness, interest rate reductions, other-than-insignificant payment
delays, term extensions, and/or a combinations of these modifications. The disclosures related to loan
restructuring are only for modifications that directly affect cash flows.
Troubled debt restructurings - As allowed by ASC 326, the Company elected to maintain pools of loans
accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether
modifications to individual acquired financial assets accounted for in pools were TDRs as of the date of adoption.
A loan for which the terms have been modified resulting in a concession, and for which the borrower is
experiencing financial difficulties, is considered to be a TDR. The allowance for credit loss on a TDR is measured
using the same method as all other loans held for investment, except when the value of a concession cannot be
measured using a method other than the discounted cash flow method. When the value of a concession is
measured using the discounted cash flow method, the allowance for credit loss is determined by discounting the
expected future cash flows at the original interest rate of the loan. The allowance for credit losses on a TDR is
measured using the same method as all other loans held for investment, except that the original interest rate is
used to discount the expected cash flows, not the rate specified within the restructuring.
Management estimates the allowance for credit losses on each loan pool using relevant available information, from internal
and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historically
observed credit loss experience of peer banks within our geography provide the basis for the estimation of expected credit
losses on similar loan pools. Within the model, assumptions are made in the determination of probability of default, loss
given default, reasonable and supportable economic forecasts, prepayment rate, curtailment rate, and recovery lag periods.
Statistical regression is utilized to relate historical macro-economic variables to historical credit loss experience of the peer
group. These models are then utilized to forecast future expected loan losses based on expected future behavior of the
same macro-economic variables. Adjustments to the quantitative results are adjusted using qualitative factors. These
factors include: (1) lending policies and procedures; (2) international, national, regional and local economic business
conditions and developments that affect the collectability of the portfolio, including the condition of various markets; (3)
the nature and volume of the loan portfolio; (4) the experience, ability, and depth of the lending management and other
relevant staff; (5) the volume and severity of past due loans; (6) the quality of our loan review system; (7) the value of
underlying collateral for collateralized loans; (8) the existence and effect of any concentrations of credit, and changes in
the level of such concentrations; and (9) the effect of external factors such as competition and legal and regulatory
requirements on the level of estimated credit losses in the existing portfolio. Collectively evaluated loans totaled $10.73
billion and $10.52 billion at December 31, 2023 and 2022, respectively. The associated allowance for credit losses on the
collectively evaluated loans totaled $55.4 million and $57.1 million at December 31, 2023 and 2022, respectively.
Individually evaluated loans - Loans that do not share risk characteristics are evaluated on an individual basis
based on various factors and are not included in the collective pool evaluation. Factors that may be considered are borrower
delinquency trends and non-accrual status, probability of foreclosure or note sale, changes in the borrower’s circumstances
or cash collections, borrower’s industry, or other facts and circumstances of the loan or collateral. For a loan that does not
share risk characteristics with other loans, expected credit loss is measured based on net realizable value, that is, the
difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and
the amortized cost basis of the loan. For these loans, the Company recognizes expected credit loss equal to the amount by
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which the net realizable value of the loan is less than the amortized cost basis of the loan (which is net of previous charge-
offs), except when the loan is collateral dependent, that is, when the borrower is experiencing financial difficulty and
repayment is expected to be provided substantially through the operation or sale of the collateral. In these cases, expected
credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral.
The fair value of the collateral is adjusted for the estimated costs to sell the collateral if repayment or satisfaction of a loan
is dependent on the sale (rather than only on the operation) of the collateral. Individually evaluated loans totaled $35.4
million and $47.6 million at December 31, 2023 and 2022, respectively. The associated allowance for credit losses on the
individually evaluated loans totaled $16.3 million and $26.4 million at December 31, 2023 and 2022, respectively.
The fair value of real estate collateral is determined based on recent appraised values. Appraisals are performed by certified
general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose
qualifications and licenses have been reviewed and verified by the Company. Appraisals undergo a second review process
to ensure that the methodology employed, and the values derived are reasonable. Generally, collateral values for real estate
loans for which measurement of expected losses is dependent on collateral values are updated every twelve months. Non-
real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging
reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time
of the valuation and management’s expertise and knowledge of the borrower and its business. Once the expected credit
loss amount is determined, an allowance is provided for equal to the calculated expected credit loss and included in the
allowance for credit losses. Pursuant to the Company’s policy, credit losses must be charged-off in the period the loans,
or portions thereof, are deemed uncollectable.
Allowance for credit losses on off-balance sheet credit exposures - The Company estimates expected credit losses
over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit,
unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet
credit exposures, which is included in other liabilities on the consolidated statements of financial condition, is adjusted as
a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an
estimate of expected credit losses on commitments expected to be funded over its estimated life, which is the same as the
expected loss factor as determined based on the corresponding portfolio segment.
For further discussion of our loan accounting and acquisitions, see Note 2 - Merger and Note 5 - Loans.
Derivatives - The Company may engage in three types of derivatives depending on the Company’s intentions and belief
as to the likely effectiveness as a hedge. These three types are (1) a hedge of the variability of cash flows to be received or
paid related to a recognized asset or liability (“cash flow hedge”), (2) a hedge with the exposure to changes in fair value
of an asset, liability, or firm commitment attributable to particular risk, such as interest risk (“fair value hedge”) or (3) an
instrument with no hedging designation (“freestanding derivatives”). For a cash flow hedge, the gain or loss on the
derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which
the hedged transaction affects earnings. Changes in fair value of the fair value derivative and the hedged item related to
the hedged risk are recoginized in earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting
are reported currently in earnings as non-interest income.
Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense,
based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported
in non-interest income. Cash flows on hedges are classified in the cash flow statement same as the cash flows of the items
being hedged.
The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management
objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This
documentation includes linking cash flow hedges to specific liabilities on the consolidated statements of financial
condition. The Company also formally assesses, both at the hedge’s inception and on an on-going basis, whether the
derivative instruments that are used are highly effective in offsetting changes in cash flows of the hedged items. The
Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes
in cash flows of the hedged item, or treatment of the derivative as a hedge is no longer appropriate or intended.
When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest
income. When a cash flow hedge is discontinued but the hedged cash flows are still expected to occur, gains or losses that
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were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged
transaction will affect earnings.
The Company is exposed to losses if a counterparty fails to make its payments under a contract in which the Company is
in the net receiving position. The Company anticipates that the counterparties will be able to fully satisfy their obligations
under the agreements. All the contracts to which the Company is a party settle monthly. In addition, the Company obtains
collateral above certain thresholds of the fair value of its hedges from each counterparty based upon their credit standing
and the Company has netting agreements with the dealers with which it does business.
Other Real Estate Owned (“OREO”) - Properties acquired as a result of foreclosure on a real estate loan or a deed in lieu
of foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical
possession of residential real estate collateralizing a one-to-four family residential loan occurs when legal title is obtained
upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through
execution of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted
for at the lower of cost or fair value less estimated costs to sell. Declines in the recorded balance subsequent to acquisition
by the Company are recorded through expense. Operating costs after acquisition are expensed.
Premises and Fixed Assets, Net - Land is carried at cost. Premises and equipment are stated at cost less accumulated
depreciation. Buildings and related components are depreciated using the straight-line method with useful lives generally
ranging from forty to fifty years. Furniture, fixtures and equipment are depreciated using the straight-line method with
useful lives generally ranging from three to ten years.
Leases - On January 1, 2019, the Company adopted ASC 2016-02 "Leases (ASC Topic 842)" and subsequent amendments
thereto, which requires the Company to recognize most leases on the consolidated statements of financial condition. The
Company adopted the standard under a modified retrospective approach as of the date of adoption and elected to apply
several of the available practical expedients, including:
Carryover of historical lease determination and lease classification conclusions.
Carryover of historical initial direct cost balances for existing leases.
(cid:120)
(cid:120)
(cid:120) Accounting for lease and non-lease components in contracts in which the Company is a lessee as a single lease
component.
Adoption of the leasing standard resulted in the recognition of operating right-of-use assets, and operating lease liabilities.
These amounts were determined based on the present value of remaining minimum lease payments, discounted using the
Company’s incremental borrowing rate as of the date of adoption. There was no material impact to the timing of expense
or income recognition in the Company’s consolidated statements of operations. Disclosures about the Company’s leasing
activities are presented in Note 8.
The Company made a policy election to exclude the recognition requirements of ASC 2016-02 on short-term leases with
original terms of 12 months or less. Short-term lease payments are recognized in the income statement on a straight-line
basis over the lease term. Certain leases may include one or more options to renew. The exercise of lease renewal options
is typically at the Company’s discretion, and are included in the operating lease liability if it is reasonably certain that the
renewal option will be exercised. Certain real estate leases may contain lease and non-lease components, such as common
area maintenance charges, real estate taxes, and insurance, which are generally accounted for separately and are not
included in the measurement of the lease liability since they are generally able to be segregated. The Company does not
sublease any of its leased properties. The Company does not lease properties from any related parties.
Goodwill and Other Intangible Assets - Goodwill resulting from business combinations is generally determined as the
excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed
as of the acquisition date. Goodwill and indefinite-lived intangible assets are not amortized, but tested for impairment at
least annually, or more frequently if events and circumstances exist that indicate the carrying amount of the asset may be
impaired. The Company performs its annual goodwill impairment test in the fourth quarter of every year, or more
frequently if events or changes in circumstance indicate the asset might be impaired.
Other intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual
values. Core deposit intangible assets are amortized on an accelerated method over their estimated useful lives of ten
years.
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Servicing Right Assets - When real estate or C&I loans are sold with servicing retained, servicing rights are initially
recorded at fair value with the income statement effect recorded in gains on sales of loans. SRAs are carried at the lower
of cost or fair value and are amortized in proportion to, and over the period of, anticipated net servicing income. All
separately recognized SRAs are required to be initially measured at fair value, if practicable. The estimated fair value of
loan servicing assets is determined by calculating the present value of estimated future net servicing cash flows, using
assumptions of prepayments, defaults, servicing costs and discount rates derived based upon actual historical results for
the Bank, or, in the absence of such data, from historical results for the Bank’s peers. Capitalized loan servicing assets are
stratified based on predominant risk characteristics of the underlying loans (i.e., collateral, interest rate, servicing spread
and maturity) for the purpose of evaluating impairment. A valuation allowance is then established in the event the recorded
value of an individual stratum exceeds its fair value. The fair values of servicing rights are subject to significant fluctuations
as a result of changes in estimated and actual prepayment speeds, default rates, and losses.
Transfers of Financial Assets - Transfers of financial assets are accounted for as sales, when control over the assets has
been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been legally isolated
from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right)
to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred
assets through an agreement to repurchase them before their maturity.
Bank Owned Life Insurance - BOLI is carried at the amount that can be realized under the insurance contract at the balance
sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement.
Increases in the contract value are recorded as non-interest income in the consolidated statements of operations and
insurance proceeds received are recorded as a reduction of the contract value.
Income Taxes - Income tax expense is the total of the current year income tax due or refundable and the change in deferred
tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary
differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation
allowance, if needed, reduces deferred tax assets to the amount deemed more likely than not to be realized.
A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a
tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax
benefit that is greater than 50% likely of being realized on examination. For tax positions not satisfying the "more likely
than not" test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to tax matters in income
tax expense. The Company had no unrecognized tax positions at December 31, 2023 or 2022.
Employee Benefits - The Bank maintains two noncontributory pension plans that existed before the Merger: (i) the
Retirement Plan of Dime Community Bank (“Employee Retirement Plan”) and (ii) the BNB Bank Pension Plan, covering
all eligible employees. As the sponsor of a single employer defined benefit plan, the Company must do the following for
the Employee Retirement Plan and BNB Bank Pension Plan: (1) recognize the funded status of the benefit plans in its
statements of financial condition, measured as the difference between plan assets at fair value (with limited exceptions)
and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit obligation; for any other
postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement
benefit obligation; (2) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior
service costs or credits that arise during the period but are not recognized as components of net periodic benefit or cost.
Amounts recognized in accumulated other comprehensive income, including the gains or losses, prior service costs or
credits, and the transition asset or obligation are adjusted as they are subsequently recognized as components of net periodic
benefit cost; (3) measure defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end
statements of financial condition (with limited exceptions); and (4) disclose in the notes to financial statements additional
information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of
the gains or losses, prior service costs or credits, and transition asset or obligation. The Dime Community Bank KSOP
Plan (“Dime KSOP Plan”) and Outside Director Retirement Plan, were terminated by resolution of the Legacy Dime Board
of Directors. The effective date of the Dime terminations was February 1, 2021, the Merger Date.
The Company provides a 401(k) plan, which covers substantially all current employees. Newly hired employees are
automatically enrolled in the plan on the 60th day of employment, unless they elect not to participate.
The Holding Company and Bank maintain the Dime Community Bancshares, Inc. 2021 Equity Incentive Plan (the “2021
Equity Incentive Plan”), the Dime Community Bancshares, Inc. 2019 Equity Incentive Plan, (the “2019 Equity Incentive
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Plan”), and the 2012 Stock-Based Compensation Plan (the “2012 Equity Incentive Plan”), (collectively the “Stock Plans”);
which are discussed more fully in Note 20 Stock-Based Compensation. Under the Stock Plans, compensation cost is
recognized for stock options and restricted stock awards issued to employees based on the fair value of the awards at the
date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the
Holding Company’s common stock (“Common Stock”) at the date of grant is used for restricted stock awards.
Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with
graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire
award.
Basic and Diluted EPS - Basic earnings per share (“EPS”) is computed by dividing net income available to common
stockholders by the weighted average common shares outstanding during the reporting period. Diluted EPS is computed
using the same method as basic EPS, but reflects the potential dilution that would occur if "in the money" stock options
were exercised and converted into common stock, and prior to 2021, if all likely aggregate Long Term Incentive Plan
("LTIP") performance-based share awards (“PSA”) were issued. In determining the weighted average shares outstanding
for basic and diluted EPS, treasury shares are excluded. Vested restricted stock award ("RSA") shares are included in the
calculation of the weighted average shares outstanding for basic and diluted EPS. Unvested RSA and PSA shares are
recognized as a special class of participating securities under ASC 260, and are included in the calculation of the weighted
average shares outstanding for basic and diluted EPS.
Comprehensive Income - Comprehensive income consists of net income and other comprehensive income (loss). Other
comprehensive income includes unrealized gains and losses on available-for-sale securities, unrealized gains and losses
on cash flow hedges, and changes in the funded status of the pension plan, which are also recognized as separate
components of equity. Comprehensive and accumulated comprehensive income are summarized in Note 3.
Disclosures about Segments of an Enterprise and Related Information - The Company has one reportable segment,
"Community Banking." All of the Company’s activities are interrelated, and each activity is dependent and assessed based
on the manner in which it supports the other activities of the Company. For example, lending is dependent upon the ability
of the Bank to fund itself with retail deposits and other borrowings and to manage interest rate and credit risk. Accordingly,
all significant operating decisions are based upon analysis of the Company as one operating segment or unit.
For the years ended December 31, 2023, 2022 and 2021, there was no customer that accounted for more than 10% of the
Company's consolidated revenue.
Reclassifications – There have been no material reclassifications to prior year amounts to conform to their current
presentation.
Adoption of New Accounting Standards
Standards Adopted in 2021
ASU 2016-13, Financial Instruments – Credit Losses (Topic 326)
The Company adopted ASU No. 2016-13 on January 1, 2021 using the modified retrospective method for all financial
assets measured at amortized cost and off-balance sheet credit exposures. ASU 2016-13 was effective for the Company
as of January 1, 2020. Under Section 4014 of the CARES Act, financial institutions required to adopt ASU 2016-13 as of
January 1, 2020 were provided an option to delay the adoption of the CECL Standard framework. The Company elected
to defer adoption of the CECL Standard until January 1, 2021. The CECL Standard requires that the measurement of all
expected credit losses for financial assets held at the reporting date be based on historical experience, current conditions,
and reasonable and supportable forecasts. This standard requires financial institutions and other organizations to use
forward-looking information to better inform their credit loss estimates. Results for reporting periods beginning after
January 1, 2021 are presented under the CECL Standard while prior period amounts will continue to be reported in
accordance with previously applicable GAAP.
The adoption of the CECL Standard resulted in an initial decrease of $3.9 million to the allowance for credit losses and an
increase of $1.4 million to the reserve for unfunded commitments in other liabilities, for the year ended December 31,
2021. The after-tax cumulative-effect adjustment of $1.7 million was recorded in retained earnings as of January 1, 2021.
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There were no held-to-maturity securities as of January 1, 2021 and, therefore, no impact from the adoption of the CECL
Standard.
Standards Adopted in 2023
ASU 2020-04, Reference Rate Reform (Topic 848)
ASU 2020-04 provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative
contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate
benchmarks. ASU 2020-04 also provides numerous optional expedients for derivative accounting. ASU 2020-04 is
effective March 12, 2020 through December 31, 2022. Once optional expedients are elected, the amendments in this ASU
must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic within the
Codification. As of July 1, 2023, the Company has transitioned LIBOR based transactions to other indexes. The LIBOR
transition did not have a material effect on the Company's consolidated financial statements.
ASU 2021-01, Reference Rate Reform (Topic 848): Scope
ASU 2021-01 clarifies that all derivative instruments affected by changes to the interest rates used for discounting,
margining, or contract price alignment due to reference rate reform are in the scope of ASC 848. Entities may apply certain
optional expedients in ASC 848 to derivative instruments that do not reference LIBOR or another rate expected to be
discontinued as a result of reference rate reform if there is a change to the interest rate used for discounting, margining or
contract price alignment. ASU 2020-01 is effective upon issuance and generally can be applied through December 31,
2022. As of July 1, 2023, the Company has transitioned LIBOR based derivatives to other indexes such as fallback rate
SOFR. The LIBOR transition did not have a material effect on the Company's consolidated financial statements.
ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method
On March 28, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-01,
Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. The purpose of this updated guidance
is to further align risk management objectives with hedge accounting results on the application of the last-of-layer method,
which was first introduced in ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting
for Hedging Activities. ASU 2022-01 became effective for public business entities for fiscal years beginning after
December 15, 2022, with early adoption in the interim period, permitted. For entities who have already adopted ASU
2017-12, immediate adoption is allowed. This ASU became effective for the Company on January 1, 2023, on a
prospective basis. This standard did not have a material impact on the consolidated financial statements.
ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures
ASU 2022-02 eliminates TDR recognition and measurement guidance and, instead, requires that an entity evaluate whether
the modification represents a new loan or a continuation of an existing loan. ASU 2022-02 enhances existing disclosure
requirements and introduces new requirements related to certain modifications of receivables made to borrowers
experiencing financial difficulty. For entities that have adopted the amendments of ASU 2016-13, the amendments in ASU
2022-02 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal
years. This ASU became effective for the Company on January 1, 2023. The Company adopted ASU 2022-02 on its
effective date using the modified retrospective method. The adoption of ASU 2022-02 did not have a material impact on
the Company's consolidated financial statements.
2. MERGER
As described in Note 1. Summary of Significant Accounting Policies, on February 1, 2021, we completed our Merger with
Legacy Dime.
Pursuant to the merger agreement, Legacy Dime merged with and into Bridge with Bridge as the surviving corporation
under the name “Dime Community Bancshares, Inc.” At the effective time of the Merger, each outstanding share of Legacy
Dime common stock, par value $0.01 per share, was converted into 0.6480 shares of the Company’s common stock, par
value $0.01 per share.
60
At the Effective Time, each outstanding share of Legacy Dime’s Series A preferred stock, par value $0.01 was converted
into one share of a newly created series of the Company’s preferred stock having the same powers, preferences and rights
as the Dime Preferred Stock.
In connection with the Merger, the Company assumed $115.0 million in aggregate principal amount of the 4.50% Fixed-
to-Floating Rate Subordinated Debentures due 2027 of Legacy Dime.
The Merger constituted a business combination and was accounted for as a reverse merger using the acquisition method
of accounting. As a result, Legacy Dime was the accounting acquirer and Bridge was the legal acquirer and the accounting
acquiree. Accordingly, the historical financial statements of Legacy Dime became the historical financial statements of
the combined company. In addition, the assets and liabilities of Bridge have been recorded at their estimated fair values
and added to those of Legacy Dime as of the Merger Date. The determination of fair value required management to make
estimates about discount rates, expected future cash flows, market conditions and other future events that are subjective
and subject to change.
The Company issued 21.2 million shares of its common stock to Legacy Dime stockholders in connection with the Merger,
which represented 51.5% of the voting interests in the Company upon completion of the Merger. In accordance with FASB
ASC 805-40-30-2, the purchase price in a reverse acquisition is determined based on the number of equity interests the
legal acquiree would have had to issue to give the owners of the legal acquirer the same percentage equity interest in the
combined entity that results from the reverse acquisition.
The table below summarizes the ownership of the combined company following the Merger, for each shareholder group,
as well as the market capitalization of the combined company using shares of Bridge and Legacy Dime common stock
outstanding at January 31, 2021 and Bridge’s closing price on January 31, 2021.
(Dollars and shares in thousands)
Bridge shareholders
Legacy Dime shareholders
Total
Dime Community Bancshares, Inc. Ownership and Market Value
Number of
Bridge
Outstanding Shares
19,993
21,233
41,226
Percentage
Ownership
48.5%
51.5%
100.0%
$
$
Market Value at
$24.43 Bridge
Share Price
488,420
518,720
1,007,140
The table below summarizes the hypothetical number of shares as of January 31, 2021 that Legacy Dime would have to
issue to give Bridge owners the same percentage ownership in the combined company.
(Shares in thousands)
Bridge shareholders
Legacy Dime shareholders
Total
Hypothetical Legacy Dime Ownership
Number of
Legacy Dime
Outstanding Shares
30,853
32,767
63,620
Percentage
Ownership
48.5%
51.5%
100.0%
The purchase price is calculated based on the number of hypothetical shares of Legacy Dime common stock issued to
Bridge shareholders multiplied by the share price as demonstrated in the table below.
(Dollars and shares in thousands)
Number of hypothetical Legacy Dime shares issued to Bridge shareholders
Legacy Dime market price per share as of February 1, 2021
Purchase price determination of hypothetical Legacy Dime shares issued to Bridge shareholders
Value of Bridge stock options hypothetically converted to options to acquire shares of Legacy Dime
common stock
Cash in lieu of fractional shares
Purchase price consideration
$
$
$
30,853
15.90
490,560
643
7
491,210
61
The following table provides the purchase price allocation as of the Merger Date and the Bridge assets acquired and
liabilities assumed at their estimated fair value as of the Merger Date as recorded by Dime Community Bancshares. We
recorded the estimate of fair value based on initial valuations available at the Merger Date. We finalized all valuations and
recorded final adjustments during the fourth quarter of 2021. In the fourth quarter of 2021, we obtained additional
information and evidence that resulted in a subsequent adjustment to decrease the estimated fair value of our acquired
BNB Bank Pension Plan assets, which resulted in an increase to goodwill resulting from the Merger of $458 thousand, net
of tax. The subsequent adjustment to assets acquired was recorded in other assets in the consolidated statements of financial
condition.
(In thousands)
Purchase price consideration
Fair value of assets acquired:
Cash and due from banks
Securities available-for-sale
Loans held for sale
Loans held for investment
Premises and fixed assets
Restricted stock
BOLI
Other intangible assets
Operating lease assets
Other assets
Total assets acquired
Fair value of liabilities assumed:
Deposits
Other short-term borrowings
Subordinated debt
Operating lease liabilities
Other liabilities
Total liabilities assumed
Fair value of net identifiable assets
Goodwill resulting from Merger
$
491,210
715,988
651,997
10,000
4,531,640
37,881
23,362
94,085
10,984
45,603
117,016
6,238,556
5,405,575
216,298
83,200
45,285
97,147
5,847,505
391,051
100,159
$
As a result of the Merger, we recorded $100.2 million of goodwill. The goodwill recorded is not deductible for income tax
purposes.
62
The Company is required to record PCD assets, defined as a more-than-insignificant deterioration in credit quality since
origination or issuance, at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under
this method, there is no credit loss expense affecting net income on acquisition of PCD assets. Changes in estimates of
expected losses after acquisition are recognized as credit loss expense (or reversal of credit loss expense) in subsequent
periods as they arise. Any non-credit discount or premium resulting from acquiring a pool of purchased financial assets
with credit deterioration shall be allocated to each individual asset. At the acquisition date, the initial allowance for credit
losses determined on a collective basis shall be allocated to individual assets to appropriately allocate any non-credit
discount or premium. The non-credit discount or premium, after the adjustment for the allowance for credit losses, shall
be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment
for credit losses at the adoption date. Information regarding loans acquired at the Merger Date are as follows:
(In thousands)
PCD loans:
Unpaid principal balance
Non-credit discount at acquisition
Unpaid principal balance, net
Allowance for credit losses at acquisition
Fair value at acquisition
Non-PCD loans:
Unpaid principal balance
Premium at acquisition
Fair value at acquisition
Total fair value at acquisition
$
295,306
(9,050)
286,256
(52,284)
233,972
4,289,236
8,432
4,297,668
$
4,531,640
Supplemental disclosures of cash flow information related to investing and financing activities regarding the Merger are
as follows for the year ended December 31, 2021:
(In thousands)
Business combination:
Fair value of tangible assets acquired
Goodwill, core deposit intangible and other intangible assets acquired
Liabilities assumed
Purchase price consideration
$
6,227,572
111,143
5,847,505
491,210
Other intangible assets consisted of core deposit intangibles and a non-compete agreement with estimated fair values at
the Merger Date of $10.2 million and $780 thousand, respectively. Core deposit intangibles are being amortized over a
life of 10 years on an accelerated basis. The non-compete agreement was amortized over a life of 13 months.
63
3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Activity in accumulated other comprehensive income (loss), net of tax, was as follows:
(In thousands)
Balance as of January 1, 2022
Other comprehensive (loss) income before reclassifications
Amounts reclassified from accumulated other comprehensive income
(loss)
Net other comprehensive (loss) income during the period
Balance as of December 31, 2022
Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other comprehensive income
(loss)
Net other comprehensive income (loss) during the period
Balance as of December 31, 2023
Securities
Available-
Defined
Benefit
for-Sale Plans
$
(7,864) $ (1,306) $
(95,030)
(1,413)
Derivatives
$
2,989
9,879
2,024
(93,006)
(2,547)
(3,960)
$ (100,870) $ (5,266) $
7,498
(109)
3,130
10,628
(1,055)
(1,164)
$ (90,242) $ (6,430) $
(1,111)
8,768
11,757
(8,091)
1,427
(6,664)
5,093
$
$
Total
Accumulated
Other
Comprehensive
Loss
(6,181)
(86,564)
(1,634)
(88,198)
(94,379)
(702)
3,502
2,800
(91,579)
The before and after tax amounts allocated to each component of other comprehensive income (loss) are presented in the
table below for the periods indicated.
(In thousands)
Change in unrealized gain (loss) on securities:
Change in net unrealized gain (loss) during the period
Reclassification adjustment for net losses (gains) included in net (loss) gain on sale
of securities and other assets
Accretion of net unrealized loss on securities transferred to held-to-maturity
Net change
Tax expense (benefit)
Net change in unrealized gain (loss) on securities, net of reclassification
adjustments and tax
Year Ended December 31,
2022
2023
2021
$
10,355
$
(138,630) $
(28,865)
1,447
3,142
14,944
4,316
—
2,953
(135,677)
(42,671)
(1,207)
—
(30,072)
(9,514)
10,628
(93,006)
(20,558)
Change in pension and other postretirement obligations:
Reclassification adjustment for expense included in other expense
Reclassification adjustment for curtailment loss
Change in the net actuarial (loss) gain
Net change
Tax (benefit) expense
Net change in pension and other postretirement obligations
Change in unrealized gain (loss) on derivatives:
Change in net unrealized (loss) gain during the period
Reclassification adjustment for loss included in loss on termination of derivatives
Reclassification adjustment for expense included in interest expense
Net change
Tax expense (benefit)
Net change in unrealized gain (loss) on derivatives, net of reclassification
adjustments and tax
Other comprehensive income (loss), net of tax
(1,547)
—
(190)
(1,737)
(573)
(1,164)
(11,782)
—
2,092
(9,690)
(3,026)
(6,664)
2,800
$
(3,715)
—
(2,062)
(5,777)
(1,817)
(3,960)
14,412
—
(1,621)
12,791
4,023
8,768
$
(88,198) $
(1,092)
1,543
6,563
7,014
2,234
4,780
5,277
16,505
940
22,722
7,201
15,521
(257)
64
4. SECURITIES
The following tables summarize the major categories of securities as of the dates indicated:
(In thousands)
Securities available-for-sale:
Agency notes
Treasury securities
Corporate securities
Pass-through mortgage-backed securities ("MBS") issued by government
sponsored entities ("GSEs")
Agency CMOs
State and municipal obligations
Total securities available-for-sale
(In thousands)
Securities held-to-maturity:
Agency notes
Corporate securities
Pass-through MBS issued by GSEs
Agency CMOs
Total securities held-to-maturity
(In thousands)
Securities available-for-sale:
Treasury securities
Corporate securities
Pass-through MBS issued by GSEs
Agency CMOs
State and municipal obligations
Total securities available-for-sale
(In thousands)
Securities held-to-maturity:
Agency notes
Corporate securities
Pass-through MBS issued by GSEs
Agency CMOs
Total securities held-to-maturity
Amortized
Cost
December 31, 2023
Gross
Unrealized
Gains
Gross
Unrealized
Losses
10,000
245,877
174,978
230,253
305,860
28,741
995,709
$
$
— $
—
—
10
46
—
56
$
(629)
(11,687)
(23,808)
(24,978)
(46,491)
(1,932)
(109,525)
December 31, 2023
Gross
Unrecognized
Gains
Gross
Unrecognized
Losses
$
$
$
$
— $
—
—
16
16
$
(11,300)
(1,825)
(37,579)
(27,021)
(77,725)
December 31, 2022
Gross
Unrealized
Gains
Gross
Unrealized
Losses
— $
57
—
2
—
59
$
(19,643)
(17,075)
(31,534)
(50,057)
(3,021)
(121,330)
December 31, 2022
Gross
Unrecognized
Gains
Gross
Unrecognized
Losses
Amortized
Cost
89,563
9,000
279,853
216,223
594,639
Amortized
Cost
246,899
183,791
272,774
331,394
37,000
1,071,858
Amortized
Cost
89,157
9,000
278,281
209,360
585,798
$
$
— $
—
—
—
— $
(14,095)
(553)
(40,960)
(24,431)
(80,039)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Fair
Value
9,371
234,190
151,170
205,285
259,415
26,809
886,240
Fair
Value
78,263
7,175
242,274
189,218
516,930
Fair
Value
227,256
166,773
241,240
281,339
33,979
950,587
Fair
Value
75,062
8,447
237,321
184,929
505,759
During the year ended December 31, 2023, there were no transfers of securities from available-for-sale to securities held-
to-maturity. There were no transfers of securities from held-to-maturity to available-for-sale during the year ended
December 31, 2023. The Company reassessed classification of certain investments and transferred securities with a book
value of $372.2 million from available-for-sale to securities held-to-maturity during the year ended December 31, 2022.
The related unrealized losses of $27.7 million were converted to a discount that is being accreted through interest income
on a level-yield method over the term of the securities, while the unrealized losses recorded in other comprehensive income
are amortized out of other comprehensive income through interest income on a level-yield method over the remaining term
of securities, with no net change to interest income. No gain or loss was recorded at the time of transfer. There were no
transfers from securities held-to-maturity during the year ended December 31, 2022. There were $140.4 million transferred
from securities available-for-sale to securities held-to-maturity during the year ended December 31, 2021. There were no
transfers from securities held-to-maturity during the year ended December 31, 2021.
65
The carrying amount of securities pledged at December 31, 2023 and 2022 was $457.7 million and $631.4 million,
respectively. The pledged securities are mainly used as collateral for a portion of the Company’s municipal deposit
portfolio.
At December 31, 2023 and 2022, there were no holdings of securities of any one issuer, other than the U.S. Government
and its agencies, in an amount greater than 10% of stockholders’ equity.
The amortized cost and fair value of securities are shown by contractual maturity. Expected maturities may differ from
contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
Securities not due at a single maturity date are shown separately.
(In thousands)
Available-for-sale
Within one year
One to five years
Five to ten years
Beyond ten years
Pass-through MBS issued by GSEs and agency CMO
Total
Held-to-maturity
Within one year
One to five years
Five to ten years
Beyond ten years
Pass-through MBS issued by GSEs and agency CMO
Total
December 31, 2023
Amortized
Cost
Fair
Value
$
$
$
$
88,498
198,552
172,546
—
536,113
995,709
$
$
— $
19,783
78,780
—
496,076
594,639
$
86,233
186,041
149,266
—
464,700
886,240
—
18,397
67,041
—
431,492
516,930
The following table presents the information related to sales of securities available-for-sale for the periods indicated:
(In thousands)
Proceeds
Gross gains
Tax expense on gains
Gross losses
Tax benefit on losses
2023
Year Ended December 31,
2022
2021
$
$
77,804
130
39
1,577
467
— $
—
—
—
—
138,077
1,327
421
120
38
Equity securities included in other assets in the consolidated statements of financial condition had a fair value of $2.2
million as of December 31, 2023. Net loss on equity securities of $758 thousand was recognized for the year ended
December 31, 2023.
Marketable equity securities were fully liquidated in connection with the termination of the BMP. Prior to termination,
the Company held marketable equity securities as the underlying mutual fund investments of the BMP, held in a rabbi
trust.
A summary of the sales of marketable equity securities is listed below for the periods indicated:
(In thousands)
Proceeds:
Marketable equity securities
2023
Year Ended December 31,
2022
2021
$
— $
— $
6,101
The related gain or loss on marketable equity securities shown in the consolidated statements of operations was due to
market valuation changes. Net gain on marketable equity securities of $131 thousand were recognized for the year ended
December 31, 2021.
There were no sales of securities held-to-maturity during the years ended December 31, 2023, 2022, or 2021.
66
The following table summarizes the gross unrealized losses and fair value of securities aggregated by investment category
and the length of time the securities were in a continuous unrealized loss position for the periods indicated:
(In thousands)
Securities available-for-sale:
Agency notes
Treasury securities
Corporate securities
Pass-through MBS issued by GSEs
Agency CMOs
State and municipal obligations
(In thousands)
Securities available-for-sale:
Treasury securities
Corporate securities
Pass-through MBS issued by GSEs
Agency CMOs
State and municipal obligations
Less than 12
Consecutive Months
Fair
Value
Unrealized
Losses
December 31, 2023
12 Consecutive
Months or Longer
Fair
Value
Losses
Unrealized
Total
Fair
Value
Unrealized
Losses
$
— $
—
20,935
—
—
1,796
— $
—
917
—
—
54
9,371
234,190
130,235
203,469
251,900
21,513
$
629
11,687
22,891
24,978
46,491
1,878
$
9,371
234,190
151,170
203,469
251,900
23,309
$
629
11,687
23,808
24,978
46,491
1,932
Less than 12
Consecutive Months
Fair
Value
Unrealized
Losses
December 31, 2022
12 Consecutive
Months or Longer
Fair
Value
Losses
Unrealized
Total
Fair
Value
Unrealized
Losses
$
— $
110,707
50,813
55,924
10,848
— $ 227,256
50,116
190,427
220,413
22,681
8,494
2,010
3,454
174
$
19,643
8,581
29,524
46,603
2,847
$ 227,256
160,823
241,240
276,337
33,529
$
19,643
17,075
31,534
50,057
3,021
As of December 31, 2023, none of the Company’s available-for-sale debt securities were in an unrealized loss position
due to credit and therefore no allowance for credit losses on available-for-sale debt securities was required. Additionally,
given the high-quality composition of the Company’s held-to-maturity portfolio, the Company did not record an allowance
for credit losses on the held-to-maturity portfolio. With respect to certain classes of debt securities, primarily U.S.
Treasuries and securities issued by Government Sponsored Entities, the Company considers the history of credit losses,
current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of
the amortized cost basis is or continues to be zero, even if the U.S. government were to technically default. Accrued interest
receivable on securities totaled $5.3 million and $5.4 million at December 31, 2023 and 2022 respectively, and was
excluded from the amortized cost and estimated fair value totals in the table above.
Management evaluates available-for-sale debt securities in unrealized loss positions to determine whether the impairment
is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value
is less than amortized cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability
of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery
in fair value.
At December 31, 2023, substantially all of the securities in an unrealized loss position had a fixed interest rate and the
cause of the temporary impairment was directly related to changes in interest rates. The Company generally views changes
in fair value caused by changes in interest rates as temporary, which is consistent with its experience. The following major
security types held by the Company are all issued by U.S. government entities and agencies and therefore either explicitly
or implicitly guaranteed by the U.S. government: Agency Notes, Treasury Securities, Pass-through MBS issued by GSEs,
Agency Collateralized Mortgage Obligations. Substantially all of the corporate bonds within the portfolio have maintained
an investment grade rating by either Kroll, Egan-Jones, Fitch, Moody’s or Standard and Poor’s. None of the unrealized
losses are related to credit losses. Substantially all of the state and municipal obligations within the portfolio have all
maintained an investment grade rating by either Moody’s or Standard and Poor’s. The Company does not have the intent
to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated
recovery. The issuers continue to make timely principal and interest payments on the debt. The fair value is expected to
recover as the securities approach maturity.
67
5. LOANS HELD FOR INVESTMENT, NET
The following table presents the loan categories for the period ended as indicated:
(In thousands)
One-to-four family residential and cooperative/condominium apartment
Multifamily residential and residential mixed-use
CRE
ADC
Total real estate loans
C&I
Other loans
Total
Fair value hedge basis point adjustments (1)
Total loans, net of fair value hedge basis point adjustments
Allowance for credit losses
Loans held for investment, net
December 31,
2023
887,555
4,017,176
4,620,900
168,513
9,694,144
1,066,938
5,755
10,766,837
6,591
10,773,428
(71,743)
10,701,685
$
$
2022
773,321
4,026,826
4,457,630
229,663
9,487,440
1,071,712
7,679
10,566,831
—
10,566,831
(83,507)
10,483,324
$
$
(1) At December 31, 2023, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged one-
to-four family residential mortgage loans, multifamily residential mortgage loans and CRE loans.
C&I loans included SBA PPP loans totaling $1.1 million and $5.8 million at December 31, 2023 and 2022, respectively.
In June 2021, the Company sold $596.2 million of SBA PPP loans and recorded a gain of $20.7 million in gain on sale of
SBA loans in the consolidated statements of operations.
The following tables present data regarding the allowance for credit losses activity for the periods indicated:
Real Estate Loans
One-to-Four
Family
Multifamily
Residential and Residential
Cooperative/
Condominium Residential
and
Total Real
Apartment
Mixed-Use CRE ADC Estate
C&I
Other
Loans
Total
$
644
$
17,016
$
9,059
$ 1,993
$ 28,712
$ 12,737 $
12
$ 41,461
1,048
(8,254)
4,849
381
(1,976)
(1,935)
(8)
(3,919)
1,692
2,220
1,975
(20)
65
8,762
3,292
(3,921)
(391)
74
13,908
23,124
(4,497)
(3,406)
37
2,374
117
2,366
—
—
26,736
28,753
(4,077)
(3,817)
176
10,802
23,374
6,016
(4,984)
123
4
157
1,364
(777)
3
37,542
52,284
3,303
(9,578)
302
5,932
$
7,816
$ 29,166
$ 4,857
$ 47,771
$ 35,331 $
751
$ 83,853
37
—
—
542
—
2
(1,891)
—
54
(3,134)
—
—
(4,446)
—
56
11,786
(11,401)
4,137
(430)
(53)
5
6,910
(11,454)
4,198
5,969
$
8,360
$ 27,329
$ 1,723
$ 43,381
$ 39,853 $
273
$ 83,507
858
(14)
—
(1,121)
(2)
—
(721)
—
—
266
—
—
(718)
(16)
—
3,464
(15,364)
1,024
129
(300)
17
2,875
(15,680)
1,041
6,813
$
7,237
$ 26,608
$ 1,989
$ 42,647
$ 28,977 $
119
$ 71,743
$
$
$
(In thousands)
Ending balance as of
December 31, 2020
Impact of adopting CECL as of
January 1, 2021
Beginning balance as of January 1,
2021
Day 1 acquired PCD loans
Provision for credit losses
Charge-offs
Recoveries
Ending balance as of
December 31, 2021
Provision (credit) for credit losses
Charge-offs
Recoveries
Ending balance as of
December 31, 2022
Provision (credit) for credit losses
Charge-offs
Recoveries
Ending balance as of
December 31, 2023
68
The following tables present the amortized cost basis of loans on non-accrual status as of the periods indicated:
(In thousands)
One-to-four family residential and cooperative/condominium apartment
CRE
ADC
C&I
Total
(In thousands)
One-to-four family residential and cooperative/condominium apartment
CRE
ADC
C&I
Other
Total
December 31, 2023
Non-accrual with
No Allowance
Non-accrual with
Allowance
Reserve
December 31, 2022
Non-accrual with
No Allowance
Non-accrual with
Allowance
Reserve
— $
2,298
—
1,482
3,780
— $
4,915
657
503
—
6,075
$
3,248
8,229
657
13,185
$
25,319
$
$
3,203
3,417
—
21,443
99
$
28,162
$
133
832
305
12,932
14,202
181
1,424
—
20,685
99
22,389
$
$
$
$
The Company did not recognize interest income on non-accrual loans held for investment during the years ended December
31, 2023 or 2022.
The following tables summarize the past due status of the Company’s investment in loans as of the dates indicated:
(In thousands)
Real estate:
One-to-four family residential, including
condominium and cooperative apartment
Multifamily residential and residential
mixed-use
CRE
ADC
Total real estate
C&I
Other
Total
December 31, 2023
30 to 59
Days
60 to 89
Days
Loans 90
Days or
More Past Due
and Still
Total
Past Due
and
Past Due Past Due Accruing Interest Non-accrual Non-accrual Current
Total
Loans
$ 4,071
$
73
$
— $
3,248
$
7,392
$
880,163
$
887,555
—
3,160
430
7,661
4,316
—
$ 11,977
—
208
—
281
1,009
—
$ 1,290
$
—
—
—
—
—
—
— $
—
10,527
657
14,432
14,667
—
29,099
$
—
13,895
1,087
22,374
19,992
—
42,366
4,017,176
4,607,005
167,426
9,671,770
1,046,946
5,755
$ 10,724,471
4,017,176
4,620,900
168,513
9,694,144
1,066,938
5,755
$ 10,766,837
69
(In thousands)
Real estate:
One-to-four family residential, including
condominium and cooperative apartment
Multifamily residential and residential
mixed-use
CRE
ADC
Total real estate
C&I
Other
Total
December 31, 2022
30 to 59
Days
60 to 89
Days
Loans 90
Days or
More Past Due
and Still
Total
Past Due
and
Past Due Past Due Accruing Interest Non-accrual Non-accrual Current
Total
Loans
$
686
$ — $
— $
3,203
$
3,889
$
769,432
$
773,321
4,817
14,189
—
19,692
3,561
264
$ 23,517
$
—
—
—
—
741
1
742
$
—
—
—
—
—
—
— $
—
8,332
657
12,192
21,946
99
34,237
$
4,817
22,521
657
31,884
26,248
364
58,496
4,022,009
4,435,109
229,006
9,455,556
1,045,464
7,315
$ 10,508,335
4,026,826
4,457,630
229,663
9,487,440
1,071,712
7,679
$ 10,566,831
Accruing Loans 90 Days or More Past Due:
At December 31, 2023 and 2022, there were no accruing loans 90 days or more past due.
Collateral Dependent Loans:
The Company had collateral dependent loans which were individually evaluated to determine expected credit losses as
follows:
Year Ended December 31,
2023
2022
(In thousands)
CRE
ADC
C&I
Total
Related Party Loans
Real Estate
Collateral Dependent
8,903
$
657
1,444
11,004
$
$
$
Associated
Allowance
Real Estate
for Credit Losses Collateral Dependent
7,391
$
657
949
8,997
621
305
—
926
$
Associated
Allowance
for Credit Losses
1,297
$
—
—
1,297
$
Certain directors, executive officers, and their related parties, including their immediate families and companies in which
they are principal owners, were loan customers of the Bank during 2023.
The following table sets forth selected information about related party loans:
Year Ended
(In thousands)
Beginning balance
New loans
Repayments
Balance at end of period
Loan Restructurings
$
December 31, 2023
4,956
531
(565)
4,922
$
The Company adopted ASU No. 2022-02 on January 1, 2023, which eliminates the recognition and measurement of a
TDR. Due to the removal of the TDR designation, the Company applies the loan refinancing and restructuring guidance
to determine whether a modification or other forms of restructuring result in a new loan or a continuation of an existing
loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or
amount of contractual cash flows include conditions where there is principal forgiveness, interest rate reductions, other-
than-insignificant payment delays, term extensions, and/or a combinations of these modifications. The disclosures related
to loan restructuring are only for modifications that directly affect cash flows.
70
The following table shows the amortized cost basis as of December 31, 2023 of the loans modified to borrowers
experiencing financial difficulty, disaggregated by loan category and type of concession granted:
For the Year Ended December 31, 2023
Term
Significant Extension and
Payment
Significant
Term
Significant
Payment Delay
and Interest
Extension Delay
Payment Delay Rate Reduction
Total
% of
Total Class
of Financing
Receivable
(Dollars in thousands)
One-to-four family residential and
cooperative/condominium apartment
$
— $
2,856
$
92
$
— $
2,948
Multifamily residential and residential mixed-use
CRE
ADC
C&I
Other
Total
—
—
—
1,789
—
1,789
—
24,706
—
12,020
—
39,582
$
$
$
—
—
—
520
—
612
$
—
—
—
298
—
298
—
24,706
—
14,627
—
42,281
$
0.3 %
0.0
0.5
0.0
1.4
0.0
0.4 %
The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:
(Dollars in thousands)
One-to-four family residential and cooperative/condominium apartment
Multifamily residential and residential mixed-use
CRE
ADC
C&I
Other
Total
For the Year Ended December 31, 2023
Weighted Average Weighted Average
Interest Rate
Reductions
Months of
Term Extensions
Weighted Average
Payment Delay
or Principal
Forgiveness
— %
—
—
—
4.27
—
4.27 %
189
—
—
—
13
—
202
$
$
76
—
988
—
2,406
—
3,470
The Bank monitors the performance of loans modified to borrowers experiencing financial difficulty to understand the
effectiveness of its modification efforts. The following table describes the performance of loans that have been modified
during the year ended December 31, 2023.
(Dollars in thousands)
One-to-four family residential and
cooperative/condominium apartment
Multifamily residential and residential mixed-
use
CRE
ADC
C&I
Other
Total
30-59
Days Past
Due
December 31, 2023
90+
Days Past
Due
60-89
Days Past
Due
Non-Accrual
Total
— $
—
—
—
—
—
— $
— $
—
—
—
—
—
— $
— $
—
—
—
—
—
— $
92
$
2,948
—
—
2,131
—
2,223
$
—
24,706
—
14,627
—
42,281
Current
$
2,856
$
—
24,706
—
12,496
—
40,058
$
$
There were no loans made to borrowers experiencing financial difficulty that were modified during the year ended
December 31, 2023, that subsequently defaulted. For the purposes of this disclosure, a payment default is defined as 90 or
more days past due and still accruing. Non-accrual loans that are modified to borrowers experiencing financial difficulty
remain on non-accrual status until the borrower has demonstrated performance under the modified terms.
Prior to our adoption of ASU 2022-02, as of December 31, 2022, the Company had TDRs totaling $22.1 million. The
Company had allocated $9.1 million of allowance for those loans at December 31, 2022, with no commitments to lend
additional amounts. As of December 31, 2021, the Company had TDRs totaling $942 thousand. The Company had
allocated $483 thousand of allowance for those loans at December 31, 2021, with no commitments to lend additional
amounts.
During the year ended December 31, 2022, TDR modifications included reduction of outstanding principal, extensions of
maturity dates, or favorable interest rates and loan terms than the prevailing market interest rates and loan terms.
71
During the year ended December 31, 2022, the Company modified one CRE loan as a TDR, and one Acquisition,
Development, and Construction loan, which subsequently paid off during the year. During the year ended December 31,
2021, the Company modified one CRE loan as a TDR, which subsequently paid off during the year.
The following table presents the loans by category modified as TDRs that occurred during the year ended December 31,
2022:
(Dollars in thousands)
One-to-four family residential and
cooperative/condominium apartment
CRE
ADC
C&I
Other
Total
Modifications During the Year Ended December 31,
2022
Pre-
Post-
Modification Modification
Outstanding Outstanding
2021
Pre-
Post-
Modification Modification
Outstanding Outstanding
Number
of Loans
Recorded
Investment
Recorded
Investment
Number
of Loans
Recorded
Investment
Recorded
Investment
2
1
1
7
1
12
$
$
762
991
13,500
21,934
276
37,463
$
$
762
991
13,500
21,938
276
37,467
2
1
—
1
—
4
$
$
467
10,000
—
456
—
10,923
$
$
467
10,000
—
488
—
10,955
There were no TDR charge-offs during the years ended December 31, 2022 and 2021.
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service
their debt such as: current financial information, historical payment experience, credit structure, loan documentation,
public information, and current economic trends, among other factors. The Company analyzes loans individually by
classifying them as to credit risk. The Company uses the following definitions for risk ratings:
Special Mention. Loans classified as special mention have a potential weakness that deserves management’s
close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects
for the loan or of the Bank’s credit position at some future date.
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying
capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or
weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank
will sustain some loss if the deficiencies are not corrected.
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with
the added characteristic that the weaknesses make collection or liquidation in full, on the basis of then existing facts,
conditions, and values, highly questionable and improbable.
72
The following is a summary of the credit risk profile of loans by internally assigned grade as of the periods indicated, the
years represent the year of origination for non-revolving loans:
2023
2022
2021
2020
2019
2018 and
Prior
Revolving-
Revolving
Term
Total
December 31, 2023
(In thousands)
One-to-four family residential, and
condominium/cooperative apartment:
Pass
Special mention
Substandard
Doubtful
Total one-to-four family residential, and
condominium/cooperative apartment
YTD Gross Charge-Offs
Multifamily residential and residential mixed-
use:
Pass
Special mention
Substandard
Doubtful
Total multifamily residential and residential
mixed-use
YTD Gross Charge-Offs
CRE:
Pass
Special mention
Substandard
Doubtful
Total CRE
YTD Gross Charge-Offs
ADC:
Pass
Special mention
Substandard
Doubtful
Total ADC
YTD Gross Charge-Offs
C&I:
Pass
Special mention
Substandard
Doubtful
Total C&I
YTD Gross Charge-Offs
Total:
Pass
Special mention
Substandard
Doubtful
Total Loans
YTD Gross Charge-Offs
12,493
776
1,061
—
14,330
14
4,325
—
—
—
4,325
—
11,538
17,862
—
—
29,400
—
225
—
657
—
882
—
31,467
7,444
18,449
—
57,360
3,390
$
875,473
968
11,114
—
887,555
14
3,834,927
81,373
100,876
—
4,017,176
2
4,338,786
170,782
111,332
—
4,620,900
—
129,142
38,714
657
—
168,513
—
963,579
45,412
57,199
748
1,066,938
15,364
10,141,907
337,249
281,178
748
$ 10,761,082
15,380
$
$ 170,601 $
—
—
—
213,479 $
—
—
—
102,684 $
—
—
—
69,524 $
—
1,005
—
62,356 $
—
337
—
213,131 $ 31,205 $
33
8,711
—
159
—
—
170,601
—
213,479
—
102,684
—
70,529
—
62,693
—
221,875
—
31,364
—
256,822
—
—
—
1,340,197
—
—
—
256,822
—
1,340,197
—
417,973
—
—
—
417,973
—
990,748
28,770
—
—
1,019,518
—
16,735
—
—
—
16,735
—
60,771
481
—
—
61,252
—
17,534
11,500
—
—
29,034
—
138,145
12,912
1,857
—
152,914
—
578,352
9,334
—
—
587,686
—
817,171
19,872
151
—
837,194
—
59,202
14,961
—
—
74,163
—
24,865
1,199
2,045
—
28,109
77
283,633
3,880
28,799
—
316,312
—
566,427
88,040
61,424
—
715,891
—
9,900
—
—
—
9,900
—
25,371
905
5,577
—
31,853
38
4,841
—
—
—
4,841
—
24,839
—
—
—
24,839
—
22,444
—
—
—
22,444
—
384,937
3,886
5,089
—
981,820
64,273
66,988
—
393,912
—
1,113,081
2
484,930
10,484
7,289
—
502,703
—
1,025,160
5,754
42,468
—
1,073,382
—
2,665
12,253
—
—
14,918
—
25,142
1,204
1,768
—
28,114
4,166
437
—
—
—
437
—
37,019
159
11,936
748
49,862
2,229
620,799
21,108
15,567
—
657,474
5,464
922,902
481
—
—
2,700,103
53,182
1,857
—
60,048
26,082
20,167
—
$ 923,383 $ 2,755,142 $ 1,629,836 $ 1,144,485 $ 1,002,340 $ 2,458,637 $ 740,962 $ 106,297
3,404
38 $
$
1,582,274
45,366
2,196
—
2,257,567
70,219
130,103
748
954,855
92,825
96,805
—
960,030
27,827
14,483
—
704,128
21,267
15,567
—
5,464 $
2,231 $
4,166 $
77 $
— $
— $
73
(In thousands)
One-to-four family residential, and
condominium/cooperative apartment:
Pass
Special mention
Substandard
Doubtful
Total one-to-four family residential, and
condominium/cooperative apartment
YTD Gross Charge-Offs
Multifamily residential and residential mixed-use:
Pass
Special mention
Substandard
Doubtful
Total multifamily residential and residential
mixed-use
YTD Gross Charge-Offs
CRE:
Pass
Special mention
Substandard
Doubtful
Total CRE
YTD Gross Charge-Offs
ADC:
Pass
Special mention
Substandard
Doubtful
Total ADC
YTD Gross Charge-Offs
C&I:
Pass
Special mention
Substandard
Doubtful
Total C&I
YTD Gross Charge-Offs
Total:
Pass
Special mention
Substandard
Doubtful
Total Loans
YTD Gross Charge-Offs
2022
2021
2020
2019
2018
2017 and
Prior
Revolving-
Revolving
Term
Total
December 31, 2022
$
225,031 $
—
—
—
108,185 $
—
—
—
72,732 $
—
1,026
—
65,515 $ 66,038 $
164,338 $ 41,172 $
—
1,227
—
735
407
—
1,175
10,779
—
579
—
—
225,031
—
108,185
—
73,758
—
66,742
—
67,180
—
176,292
—
41,751
—
1,386,549
—
—
—
1,386,549
—
1,021,622
2,864
—
—
1,024,486
—
36,877
—
—
—
36,877
—
175,347
3,770
5,242
—
184,359
—
582,393
—
—
—
582,393
—
854,240
—
151
—
854,391
—
152,543
—
657
—
153,200
—
36,511
—
1,244
—
37,755
477
316,424
—
12,294
—
328,718
—
753,552
19,655
4,550
—
777,757
—
11,242
—
—
—
11,242
—
42,103
894
5,364
—
48,361
4,720
395,933
11,183
7,001
—
127,074
—
20,311
—
1,107,281
14,168
33,631
—
414,117
—
147,385
—
1,155,080
—
510,332
4,653
7,947
—
522,932
—
308,265
14,372
1,131
—
323,768
—
868,099
15,478
11,590
—
895,167
—
15,943
—
—
—
15,943
—
37,030
1,529
2,968
8,332
49,859
2,088
—
—
—
—
—
—
20,628
1,521
970
752
23,871
—
2,087
—
—
—
2,087
—
33,343
843
10,232
2,048
46,466
2,414
12,584
—
—
—
12,584
—
34,362
—
—
—
34,362
—
10,033
—
—
—
10,033
—
628,560
9,062
11,290
—
648,912
1,460
2,845,426
6,634
5,242
—
1,733,872
—
2,052
—
1,196,053
20,549
23,234
—
1,024,753
17,365
19,143
8,332
522,005
16,628
22,819
752
2,175,148
31,664
66,232
2,048
726,711
9,641
11,290
—
$ 2,857,302 $ 1,735,924 $ 1,239,836 $ 1,069,593 $ 562,204 $ 2,275,092 $ 747,642 $
1,460 $
$
2,088 $
4,720 $
2,414 $
477 $
— $
— $
$
12,563
726
1,093
—
14,382
—
755,574
3,215
14,532
—
773,321
—
—
—
—
—
—
—
24,767
—
—
—
24,767
—
281
—
—
—
281
—
22,239
478
9,412
—
32,129
242
59,850
1,204
10,505
—
71,559
242
3,928,238
25,351
73,237
—
4,026,826
—
4,375,239
57,022
25,369
—
4,457,630
—
229,006
—
657
—
229,663
—
995,761
18,097
46,722
11,132
1,071,712
11,401
10,283,818
103,685
160,517
11,132
$ 10,559,152
11,401
$
For other loans, the Company evaluates credit quality based on payment activity. Other loans that are 90 days or more past
due are placed on non-accrual status, while all remaining other loans are classified and evaluated as performing. The
following is a summary of the credit risk profile of other loans by internally assigned grade:
(In thousands)
Performing
Non-accrual
Total
6. LOAN SERVICING ACTIVITIES
Year Ended December 31,
2022
2023
$
$
5,755
—
5,755
$
$
7,580
99
7,679
The Bank services real estate and C&I loans for others having principal balances outstanding of approximately $346.1
million and $347.9 million at December 31, 2023 and 2022, respectively. Loans serviced for others are not reported as
assets. Servicing loans for others generally consists of collecting loan payments, maintaining escrow accounts, disbursing
payments to investors, paying taxes and insurance and processing foreclosures. In connection with loans serviced for
others, the Bank held borrowers’ escrow balances of $1.3 million at December 31, 2023 and 2022.
74
There are no restrictions on the Company’s consolidated assets or liabilities related to loans sold with servicing rights
retained. Upon sale of these loans, the Company recorded an SRA in other assets, and has elected to account for the SRA
under the "amortization method" prescribed under GAAP. The activity for SRAs for the periods indicated are as follows:
(In thousands)
Servicing right assets:
Beginning of year
Acquired in the Merger
Additions
Amortized to expense
Sold
End of year
Valuation allowance:
Beginning of year
Additions expensed
End of year
Servicing right assets, net
Year Ended December 31,
2022
2023
2021
$
$
3,349
—
458
(639)
—
3,168
(201)
(36)
(237)
2,931
$
$
3,856
—
659
(907)
(259)
3,349
(80)
(121)
(201)
3,148
$
$
1,710
2,070
885
(809)
—
3,856
—
(80)
(80)
3,776
The fair value of SRAs was $3.4 million and $3.5 million, at December 31, 2023 and 2022, respectively. The fair value at
December 31, 2023 was determined using discount rates ranging from 10.0% to 14.5%, prepayment speeds ranging from
6.5% to 12.2%, depending on the stratification of the specific servicing right, and a weighted average default rate of 0.67%.
The fair value at December 31, 2022 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds
ranging from 6.7% to 16%, depending on the stratification of the specific servicing right, and a weighted average default
rate of 0.67%.
7. PREMISES AND FIXED ASSETS, NET AND PREMISES HELD FOR SALE
Premises and Fixed Assets, Net
The following is a summary of premises and fixed assets, net:
(In thousands)
Land
Buildings
Leasehold improvements
Furniture, fixtures and equipment
Premises and fixed assets, gross
Less: accumulated depreciation and amortization
Premises and fixed assets, net
December 31,
2023
2022
$
$
$
10,824
21,173
28,307
25,909
86,213
(41,345)
44,868
$
$
$
10,824
21,688
26,862
25,750
85,124
(38,375)
46,749
Depreciation and amortization expense amounted to $6.7 million, $7.4 million and $6.5 million during the years ended
December 31, 2023, 2022 and 2021, respectively.
Premises Held for Sale
During the year ended December 31, 2023, the Company transferred one real estate property utilized as a retail branch to
premises held for sale totaling $905 thousand. There were no premises held for sale as of December 31, 2022.
During the year ended December 31, 2022, the Company sold one real estate property utilized as a retail branch for $1.9
million and recorded an associated gain of $1.4 million in Gain on sale of securities and other assets in the consolidated
statements of operations.
75
8. LEASES
The following table presents the Company’s remaining maturities of undiscounted lease payments, as well as a
reconciliation to the discounted operating lease liabilities in the Consolidated Statements of Financial Condition at
December 31, 2023:
(In thousands)
2024
2025
2026
2027
2028
Thereafter
Total undiscounted lease payments
Less amounts representing interest
Operating lease liabilities
$
$
13,009
12,833
12,173
10,322
4,297
6,260
58,894
(3,440)
55,454
Other information related to our operating leases was as follows:
(In thousands)
Operating lease cost
Cash paid for amounts included in the measurement of operating lease
liabilities
Year Ended December 31,
2022
2023
2021
$
12,801
$
11,428
$
14,341
12,560
10,574
13,975
Weighted average remaining lease term
Weighted average discount rate
9. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Year Ended December 31,
2022
2023
5.0 years
2.34 %
5.9 years
2.03 %
At December 31, 2023 and 2022, the carrying amount of the Company’s goodwill was $155.8 million.
The Company performs its annual goodwill impairment test in the fourth quarter of every year, or more frequently if events
or changes in circumstance indicate the asset might be impaired. It was determined during the annual impairment testing
that no impairment was needed for the years ended December 31, 2023, 2022 and 2021.
The following table presents the change in Goodwill for the years ended December 31, 2023, 2022 and 2021:
(In thousands)
Beginning of year
Acquired goodwill (1)
End of year
Year Ended December 31,
2023
2022
155,797
-
155,797
$
$
155,797
-
155,797
$
$
$
$
2021
55,638
100,159
155,797
(1)
See Note 2. Merger for additional information regarding the acquired goodwill
76
Other Intangible Assets
The following table presents the carrying amount and accumulated amortization of intangible assets that are amortizable,
all of which are core deposit intangibles:
(In thousands)
Gross carrying value
Accumulated amortization
Net carrying amount
Year Ended December 31,
2023
2022
$
$
10,204
(5,145)
5,059
$
$
10,204
(3,720)
6,484
Amortization expense recognized on intangible assets was $1.4 million and $1.9 million for the years ended December 31,
2023 and 2022, respectively.
Estimated amortization expense for 2024 through 2028 and thereafter is as follows:
(In thousands)
2024
2025
2026
2027
2028
Thereafter
Total
10. RESTRICTED STOCK
The following is a summary of restricted stock:
(In thousands)
FHLBNY capital stock
FRB capital stock
ACBB capital stock
Restricted stock
FHLBNY Capital Stock
$
$
1,164
958
795
664
560
918
5,059
Year Ended December 31,
2023
2022
$
$
$
73,475
25,110
165
98,750
$
63,627
24,953
165
88,745
The Bank is a member of the FHLBNY. Membership requires the purchase of shares of FHLBNY capital stock at $100
per share. Members are required to own a particular amount of stock based on the level of borrowings and other factors.
The Bank increased its outstanding FHLBNY advances by $182.0 million during the year ended December 31, 2023,
resulting in an increase of required FHLBNY stock. The Bank owned 734,751 shares and 636,274 shares at December 31,
2023 and 2022, respectively. The Bank recorded dividend income on the FHLBNY capital stock of $5.4 million, $853
thousand and $1.9 million during the years ended December 31, 2023, 2022 and 2021, respectively.
FRB Capital Stock
The Bank is a member of the FRB. Membership requires the purchase of shares of FRB capital stock at $50 per share. The
Bank owned 502,197 shares at December 31, 2023 and 499,052 shares at December 31, 2022. The Bank recorded dividend
income on the FRB capital stock of $1.0 million, $828 thousand, and $442 thousand during the years ended December 31,
2023, 2022, and 2021, respectively.
ACBB Capital Stock
The Bank has a relationship with ACBB. The relationship requires the purchase of shares of ACBB capital stock between
$2,500 and $3,250 per share. The Bank owned 60 shares at December 31, 2023 and 2022. The Bank recorded dividend
77
income on the ACBB capital stock of $2 thousand during the year ended December 31, 2023 and $1 thousand during
the years ended December 31, 2022, and 2021, respectively.
11. DEPOSITS
Deposits are summarized as follows:
(Dollars in thousands)
Savings (1)
CDs
Money market
Interest-bearing checking
Non-interest-bearing checking (1)
Total
(1)
Includes mortgage escrow deposits.
Year Ended December 31,
2023
2022
Weighted
Average
Weighted
Average
Rate
Liability Rate
Liability
3.67 % $ 2,335,490
1,607,683
4.43
3,125,996
3.46
515,987
0.77
2,945,499
—
2.56 % $ 10,530,655
2.24 % $ 2,260,101
1,115,364
2.25
2,532,270
1.50
827,454
1.01
3,519,218
—
1.19 % $ 10,254,407
The following table presents a summary of scheduled maturities of CDs outstanding at December 31, 2023:
(Dollars in thousands)
2024
2025
2026
2027
2028
2029 and beyond
Total
Maturing
Balance
Weighted Average
Interest Rate
$
$
1,489,735
81,297
25,742
7,527
3,382
—
1,607,683
4.60 %
2.52
2.26
0.18
0.05
—
4.43 %
CDs that met or exceeded the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250 thousand were
$115.3 million and $129.6 million at December 31, 2023 and 2022, respectively.
12. DERIVATIVES AND HEDGING ACTIVITIES
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company
principally manages its exposures to a wide variety of business and operational risks through management of its core
business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by
managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments.
Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business
activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are
determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the
amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments
principally related to the Company’s loan portfolio.
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its
exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part
of its interest rate risk management strategy. The Company engages in far value hedges, cash flow hedges and freestanding
derivatives.
78
Fair Values of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Financial Condition
The tables below present the fair value of the Company’s derivative assets and liabilities as well as their classification on
the consolidated statements of financial condition as of December 31, 2023 and December 31, 2022.
(Dollars in thousands)
Derivatives designated as hedging instruments
Cash flow hedges - interest rate products
Derivatives not designated as hedging instruments
Interest rate products
(Dollars in thousands)
Derivatives designated as hedging instruments
Fair value hedges - interest rate products
Cash flow hedges - interest rate products
Derivatives not designated as hedging instruments
Interest rate products
Other contracts
December 31, 2023
December 31, 2022
Notional
Amount
Fair Value
Assets
Notional
Amount
Fair Value
Assets
$
150,000
$
12,492
$
150,000
$
17,874
1,682,961
114,671
1,594,356
137,335
December 31, 2023
December 31, 2022
Notional
Amount
Fair Value
Notional
Liabilities Amount
Fair Value
Liabilities
$
500,000
200,000
$
6,594
5,031
$
— $
—
—
—
1,682,961
93,891
114,671
24
1,594,356
71,103
137,335
33
Effect of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Operations
The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of
operations as of December 31, 2023 and December 31, 2022.
Effects of fair value or cash flow hedges are recorded
$
561
$
2,275
$
— $
—
December 31, 2023
December 31, 2022
Interest
Income
Interest
Expense
Interest
Income
Interest
Expense
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships
Interest contracts
Hedged items
Derivatives designated as hedging instruments
Gain or (loss) on cash flow hedging relationships
Interest contracts
Gain (loss) reclassified from AOCI into income
Fair Value Hedges
6,591
(6,030)
—
—
—
2,275
—
—
—
—
—
1,134
The Company uses fair value hedges to protect against changes in fair value of certain interest rate sensitive assets. Interest
rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for
the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying
notional amount.
For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting
loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.
In October 2023, the Company entered into interest rate swaps with a notional amount totaling $500.0 million which was
designated as a fair value hedge on a closed pool of certain fixed rate loans that are settled daily to market. As of December
31, 2023, the Company posted $6.5 million to the Chicago Mercantile Exchange ("CME") clearing house related to the
79
fair value derivatives settled daily to market. The Company pays an average fixed rate of 4.82% and receives a floating
rate based on the US federal funds effective rate for the life of the agreement without an exchange of the underlying
notional amount. For derivatives that are designated as fair value hedges, the gain or loss on the derivatives as well as the
loss or gain on the hedged item attributable to the hedged risk are recognized in earnings.
The amortized cost basis of the closed portfolio of the fixed rate mortgage loans on December 31, 2023 totaled $729.5
million. The amount identified as the last-of-layer in the open hedge relationship was $500.0 million, which is the amount
of loans in the closed portfolio anticipated to be outstanding for the designated hedge period. The basis adjustment
associated with the hedge was a $6.6 million asset as of December 31, 2023, which would be allocated across the entire
remaining closed pool upon termination or maturity of the hedged relationship.
During the year ended December 31, 2023, the Company recorded a $561 thousand credit from the swap transaction as a
component of interest income in the consolidated statements of operations.
As of December 31, 2023, the following amounts were recorded on the consolidated statements of financial condition
related to cumulative basis adjustment for fair value hedges:
Year Ended December 31,
2023
Cumulative Amount of
Fair Value Hedging
Adjustment Included in
the Carrying Amount of
the Hedged Assets
2022
Cumulative Amount of
Fair Value Hedging
Adjustment Included in
the Carrying Amount of
the Hedged Assets
Carrying
Amount of the
Hedged Assets
$
6,591
$
— $
—
Carrying
Amount of the
Hedged Assets
506,591
$
(Dollars in thousands)
Fixed Rate Loans
Cash Flow Hedges
The Company uses cash flow hedges to protect against variability in cash flows associated with existing or forecasted
issuances of short-term borrowing. Cash flow hedges on liabilities involve the receipt of variable amounts from a
counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange
of the underlying notional amount.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is
recorded in Accumulated Other Comprehensive Income (Loss) and subsequently reclassified into interest expense in the
same periods during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive
income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s
debt. During the next twelve months, the Company estimates that an additional $6.4 million will be reclassified as a
decrease to interest expense.
During the years ended December 31, 2023 and 2022, the Company did not terminate any derivatives. During the year
ended December 31, 2021, the Company terminated 34 derivatives with notional values totaling $785.0 million, resulting
in a termination value of $16.5 million which was recognized in loss on termination of derivatives in non-interest income.
The table below presents the effect of the cash flow hedge accounting on accumulated other comprehensive loss as of
December 31, 2023, 2022 and 2021.
(In thousands)
(Loss) gain recognized in other comprehensive income (loss)
Gain recognized on termination of derivatives
(Loss) gain reclassified from other comprehensive income into interest expense
$
All cash flow hedges are recorded gross on the statement of financial condition.
Year Ended December 31,
2022
2021
$
$
14,412
—
1,621
5,277
16,505
(940)
2023
(11,782)
—
(2,092)
Certain cash flow hedges involve derivative agreements with third-party counterparties that contain provisions requiring
the Bank to post cash collateral if the derivative exposure exceeds a threshold amount. As of December 31, 2023 and 2022,
the Company received $13.5 million and $17.8 million, respectively, in collateral from its third-party counterparties under
80
the agreements in a net asset position. Additionally, the Bank entered certain cash flow hedges that are CME exchanged
and settled daily to market. As of December 31, 2023, the Company posted $4.9 million to the CME clearing house that
are accounted for as settlements of the derivative liabilities.
Freestanding Derivatives
The Company maintains an interest-rate risk protection program for its loan portfolio in order to offer loan level derivatives
with certain borrowers and to generate loan level derivative income. The Company enters into interest rate swap or interest
rate floor agreements with borrowers. These interest rate derivatives are designed such that the borrower synthetically
attains a fixed-rate loan, while the Company receives floating rate loan payments. The Company offsets the loan level
interest rate swap exposure by entering into an offsetting interest rate swap or interest rate floor with an unaffiliated and
reputable bank counterparty. These interest rate derivatives do not qualify as designated hedges, under ASC 815; therefore,
each interest rate derivative is accounted for as a freestanding derivative. The notional amounts of the interest rate
derivatives do not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the
notional amount and the other terms of the individual interest rate derivative agreements. The following tables reflect
freestanding derivatives included in the consolidated statements of financial condition as of the dates indicated:
(In thousands)
Included in derivative assets/(liabilities):
Loan level interest rate swaps with borrower
Loan level interest rate swaps with borrower
Loan level interest rate floors with borrower
Loan level interest rate floors with borrower
Loan level interest rate swaps with third-party counterparties
Loan level interest rate swaps with third-party counterparties
Loan level interest rate floors with third-party counterparties
Loan level interest rate floors with third-party counterparties
(In thousands)
Included in derivative assets/(liabilities):
Loan level interest rate swaps with borrower
Loan level interest rate swaps with borrower
Loan level interest rate floors with borrower
Loan level interest rate swaps with third-party counterparties
Loan level interest rate swaps with third-party counterparties
Loan level interest rate floors with third-party counterparties
December 31, 2023
Notional
Count Amount
Fair Value Fair Value
Liabilities
Assets
49
178
2
7
49
178
2
7
$
491,394
1,121,085
29,721
40,761
491,394
1,121,085
29,721
40,761
$ 10,985
—
—
—
—
103,570
—
116
$
—
103,570
—
116
10,985
—
—
—
December 31, 2022
Notional
Count Amount
Fair Value Fair Value
Liabilities
Assets
3
185
40
3
185
40
$
53,311
1,214,736
326,309
53,311
1,214,736
326,309
$
1,524
—
—
—
126,751
9,060
$
—
126,751
9,060
1,524
—
—
Loan level derivative income is recognized on the mark-to-market of the interest rate swap as a fair value adjustment at
the time the transaction is closed. Total loan level derivative income is included in non-interest income as follows:
(In thousands)
Loan level derivative income
Year Ended December 31,
2022
2021
2023
$
7,081
$
3,637
$
2,909
The interest rate swap product with the borrower is cross collateralized with the underlying loan and, therefore, there is no
posted collateral. Certain interest rate swap agreements with third-party counterparties contain provisions that require the
Company to post collateral if the derivative exposure exceeds a threshold amount and receive collateral for agreements in
a net asset position. As of December 31, 2023 and December 31, 2022, the Company did not post collateral to its third-
party counterparties. As of December 31, 2021, posted collateral was $14.0 million. As of December 31, 2023, the
Company received $94.7 million in collateral from its third-party counterparties under the agreements in a net asset
position. As of December 31, 2022, the Company received $135.3 million in collateral from its third-party counterparties
under the agreements in a net asset position.
81
Risk Participation Agreements
The Company enters into risk participation agreements to manage economic risks but does not designate the instruments
in hedge relationships. As of December 31, 2023 and December 31, 2022, the notional amounts of risk participation
agreements for derivative liabilities were $93.9 million and $71.1 million, respectively. The related fair values of the
Company’s risk participation agreements were immaterial as of December 31, 2023 and December 31, 2022
Credit Risk Related Contingent Features
The Company’s agreements with each of its derivative counterparties state that if the Company defaults on any of its
indebtedness, it could also be declared in default on its derivative obligations and could be required to terminate its
derivative positions with the counterparty.
The Company’s agreements with certain of its derivative counterparties state that if the Bank fails to maintain its status as
a well-capitalized institution, the Bank could be required to terminate its derivative positions with the counterparty.
For derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance
risk, any breach of the above provisions by the Company may require settlement of its obligations under the agreements
at the termination value with the respective counterparty. As of December 31, 2023, there were no derivatives in a net
liability position, and therefore the termination value was zero. There were no provisions breached for the year ended
December 31, 2023.
13. FHLBNY ADVANCES
The Bank had borrowings from the FHLBNY (“Advances”) totaling $1.31 billion and $1.13 billion at December 31, 2023
and 2022, respectively, all of which were fixed rate. In accordance with its Advances, Collateral Pledge and Security
Agreement with the FHLBNY, the Bank was eligible to borrow or secure municipal letters of credit up to $4.09 billion as
of December 31, 2023 and $4.13 billion as of December 31, 2022, and maintained sufficient qualifying collateral, as
defined by the FHLBNY. We pledge real estate loans including Residential, Multifamily and CRE. At December 31, 2023
there were no callable Advances and the Bank had $1.19 billion of remaining borrowing capacity through the FHLBNY.
During the years ended December 31, 2023 and 2022, the Company did not have any prepayment penalty expense
recognized as a loss on extinguishment of debt. During the year ended December 31, 2021, the Company’s prepayment
penalty expense was recognized as a loss on extinguishment of debt.
The following table is a summary of FHLBNY extinguishments for the periods presented:
(Dollars in thousands)
FHLBNY advances extinguished
Weighted average rate
Loss on extinguishment of debt
Year Ended December 31,
2023
2022
-
- %
-
$
$
-
- %
-
$
$
$
$
2021
209,010
1.31 %
1,751
The following table presents the contractual maturities of FHLBNY advances for each of the next five years. There were
no FHLBNY advances with an overnight contractual maturity at December 31, 2023 or 2022.
(Dollars in thousands)
2023, fixed rate at rates from 3.85% to 5.65%
2024, fixed rate at rates from 4.85% to 5.67%
2027, fixed rate at 4.25%
2028, fixed rate at 4.04%
Total FHLBNY advances
December 31,
2023
2022
—
1,265,000
36,000
12,000
1,313,000
$
1,095,000
—
36,000
—
1,131,000
$
Total FHLBNY advances had a weighted average interest rate of 5.23% and 4.55% at December 31, 2023 and December
31, 2022, respectively.
82
14. SUBORDINATED DEBENTURES
On May 6, 2022, the Company issued $160.0 million aggregate principal amount of fixed-to-floating rate subordinated
notes due 2032 (“the Notes”). The Notes are callable at par after five years, have a stated maturity of May 15, 2032 and
bear interest at a fixed annual rate of 5.00% per year, payable semi-annually in arrears on May 15 and November 15 of
each year, commencing on November 15, 2022. The last interest payment for the fixed rate period will be May 15, 2027.
From and including May 15, 2027 to, but excluding the maturity date or early redemption date, the interest rate will reset
quarterly to an annual interest rate equal to the benchmark rate (which is expected to be Three-Month Term SOFR) plus
218 basis points, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year,
commencing on August 15, 2027.
The Company used the net proceeds of the offering for the repayment of $115.0 million of the Company’s 4.50% fixed-
to-floating rate subordinated notes due 2027 on June 15, 2022, and $40.0 million of the Company’s 5.25% fixed-to-floating
rate subordinated debentures due 2025 on June 30, 2022. The repayment of the subordinated notes due 2027 resulted in a
pre-tax write-off of debt issuance costs of $740 thousand, which was recognized in loss on extinguishment of debt in non-
interest expense.
The remaining $40.0 million of fixed-to-floating rate subordinated debentures were issued by the Company in September
2015, are callable at par after ten years, have a stated maturity of September 30, 2030, and bear interest at a fixed annual
rate of 5.75% per year, for the first five years. From and including September 30, 2025 to the maturity date or early
redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month CME
Term SOFR plus 372 basis points.
The subordinated debentures totaled $200.2 million at December 31, 2023 and $200.3 million at December 31, 2022.
Interest expense related to the subordinated debt was $10.2 million, $10.6 million and $8.5 million during the years ended
December 31, 2023, 2022 and 2021, respectively. The subordinated debentures are included in tier 2 capital (with certain
limitations applicable) under current regulatory guidelines and interpretations.
15. OTHER SHORT-TERM BORROWINGS
The following is a summary of other short-term borrowings:
(In thousands)
Repurchase agreements
Other short-term borrowings
Repurchase Agreements
December 31,
2023
2022
$
$
— $
— $
1,360
1,360
The Bank utilizes securities sold under agreements to repurchase (“repurchase agreements”) as part of its borrowing policy
to add liquidity. Repurchase agreements represent funds received from customers, generally on an overnight basis, which
are collateralized by investment securities, of which 100% were pass-through MBS issued by GSEs. There were no
repurchase agreements at December 31, 2023.
Repurchase agreements are financing arrangements that at maturity, the securities underlying the agreements are returned
to the Bank. The primary risk associated with these secured borrowings is the requirement to pledge a market value-based
balance of collateral in excess of the borrowed amount. The excess collateral pledged represents an unsecured exposure to
the lending counterparty. As the market value of the collateral changes, both through changes in discount rates and spreads
as well as related cash flows, additional collateral may need to be pledged. In accordance with the Bank’s policies, eligible
counterparties are defined and monitored to minimize exposure.
There was no interest expense on repurchase agreements for the year ended December 31, 2023. Interest expense on
repurchase agreements for the years ended December 31, 2022 and 2021 was $1 thousand, respectively.
83
AFX
The Bank is a member of AFX, through which it may either borrow or lend funds on an overnight or short-term basis with
other member institutions. The availability of funds changes daily. Interest expense on AFX borrowings for the years
ended December 31, 2023, 2022 and 2021 was $101 thousand, $1.4 million, and $1 thousand, respectively.
16. INCOME TAXES
The Company’s consolidated Federal, State and City income tax provisions were comprised of the following:
(In thousands)
Current expense
Federal
State and city
Total current expense
Deferred expense
Federal
State and city
Total deferred expense
Total
2023
Year Ended December 31,
2022
2021
$
$
24,469
15,681
40,150
1,393
(758)
635
40,785
$
$
39,492
17,205
56,697
840
1,822
2,662
59,359
$
$
23,759
11,815
35,574
5,490
3,106
8,596
44,170
The preceding table excludes tax effects recorded directly to stockholders’ equity in connection with unrealized gains and
losses on securities available-for-sale (including losses on such securities upon their transfer to held-to-maturity), interest
rate derivatives, and adjustments to other comprehensive income relating to the minimum pension liability, unrecognized
gains of pension and other postretirement obligations and changes in the non-credit component of OTTI. These tax effects
are disclosed as part of the presentation of the consolidated statements of changes in stockholders’ equity and
comprehensive income.
The provision for income taxes differed from that computed at the Federal statutory rate as follows:
(Dollars in thousands)
Tax at federal statutory rate
State and local taxes, net of federal income tax benefit
Benefit plan differences
Investment in BOLI
Equity based compensation
Salaries deduction limitation
Transaction costs
Other, net
Total
Effective tax rate
$
$
$
$
Year Ended December 31,
2022
44,502
13,699
(127)
(2,173)
(141)
2,054
—
1,545
59,359
$
28.01 %
2023
28,745
12,237
(127)
(2,047)
79
2,381
—
(483)
40,785
29.80 %
2021
31,115
11,601
(107)
(1,485)
(301)
3,419
181
(253)
44,170
29.81 %
$
The increase in effective tax rate in 2023 was primarily the result of an increase in the Section 162M limitation due to
executive severance. Deferred tax assets and liabilities are recorded for temporary differences between the book and tax
bases of assets and liabilities. The components of Federal, State and City deferred income tax assets and liabilities were as
follows:
84
(In thousands)
Deferred tax assets:
Allowance for credit losses and other contingent liabilities
Tax effect of other components of income on securities available-for-sale
Tax effect of other components of income on securities held-to-maturity
Operating lease liability
Other
Total deferred tax assets
Deferred tax liabilities:
Tax effect of other components of income on derivatives
Employee benefit plans
Tax effect of purchase accounting fair value adjustments
Difference in book and tax carrying value of fixed assets
Difference in book and tax basis of unearned loan fees
Operating lease asset
States taxes
Other
Total deferred tax liabilities
Net deferred tax asset (recorded in other assets)
December 31,
2023
2022
26,926
34,745
7,216
19,229
2,603
90,719
2,368
1,707
1,329
2,230
3,239
18,266
2,166
241
31,546
59,173
$
$
28,175
38,140
8,138
19,256
2,074
95,783
5,394
976
2,352
4,261
2,431
18,414
2,801
1,002
37,631
58,152
$
$
The Company and its subsidiary are subject to U.S. federal income tax as well as income tax of the State of New York,
City of New York and the State of New Jersey.
Under generally accepted accounting principles, the Company uses the asset and liability method of accounting for income
taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled.
No valuation allowances were recognized on deferred tax assets during the years ended December 31, 2023 or 2022, since,
at each period end, it was deemed more likely than not that the deferred tax assets would be fully realized.
In connection with the Merger, the Company acquired a federal net operating loss (“NOL”) carryforward subject to Internal
Revenue Code Section 382. The Company recorded a deferred tax asset that it expects to realize within the carryforward
period. At December 31, 2023, the remaining federal NOL carryforward was $2.2 million. At December 31, 2023, the
Company had a New York State NOL carryforward of $543 thousand, and recorded a deferred tax asset that it expects to
recover within the carryforward period. At December 31, 2023, the Company had a New York City NOL carryforward
balance of zero. The New York State NOLs at December 31, 2023 included NOLs acquired in connection with the Merger.
At December 31, 2023 and 2022, the Bank had accumulated bad debt reserves totaling $15.1 million for which no provision
for income tax was required to be recorded. These bad debt reserves could be subject to recapture into taxable income
under certain circumstances, including a distribution of the bad debt benefits to the Holding Company or the failure of the
Bank to qualify as a bank for federal income tax purposes. Should the reserves as of December 31, 2023 be fully recaptured,
the Bank would recognize $4.8 million in additional income tax expense. The Company expects to take no action in the
foreseeable future that would require the establishment of a tax liability associated with these bad debt reserves.
The Company is subject to regular examination by various tax authorities in jurisdictions in which it conducts significant
business operations. The Company regularly assesses the likelihood of additional examinations in each of the tax
jurisdictions resulting from ongoing assessments.
Under current accounting rules, all tax positions adopted are subjected to two levels of evaluation. Initially, a determination
is made, based on the technical merits of the position, as to whether it is more likely than not that a tax position will be
sustained upon examination, including resolution of any related appeals or litigation processes. In conducting this
evaluation, management is required to presume that the position will be examined by the appropriate taxing authority
possessing full knowledge of all relevant information. The second level of evaluation is the measurement of a tax position
that satisfies the more-likely-than-not recognition threshold. This measurement is performed in order to determine the
amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit
that is greater than 50% likely to be realized upon ultimate settlement. The Company had no unrecognized tax benefits as
85
of December 31, 2023 or 2022. The Company does not anticipate any material change to unrecognized tax benefits during
the year ended December 31, 2024.
As of December 31, 2023, the tax years ended December 31, 2023, 2022, 2021, and 2020, remained subject to examination
by all of the Company's relevant tax jurisdictions. The Company is currently not under audit in any taxing jurisdictions.
17. MERGER RELATED EXPENSES
Merger-related expenses were recorded in the consolidated statements of operations as a component of non-interest
expense and include costs relating to the Merger, as described in Note 2. Merger. These charges represent one-time costs
associated with merger activities and do not represent ongoing costs of the fully integrated combined organization.
Accounting guidance requires that merger-related transactional and restructuring costs incurred by the Company be
charged to expense as incurred. There were no costs associated with merger expenses and transaction costs for the year
ended December 31, 2023 and December 31, 2022. Costs associated with employee severance and other merger-related
compensation expense incurred in connection with the Merger totaled $15.9 million for the year ended December 31, 2021
and were recorded in merger expenses and transaction costs expense in the consolidated statements of operations.
Transaction costs (inclusive of costs to terminate leases) in connection with the Merger totaled $28.9 million, for the year
ended December 31, 2021, and were recorded in merger expenses and transaction costs in the consolidated statements of
operations.
18. BRANCH RESTRUCTURING COSTS
On June 29, 2021, the Company issued a press release announcing that the Bank planned to combine five branch locations
into other existing branches. The combinations took place in October 2021. Costs associated with early lease terminations
and accelerated depreciation of fixed assets totaled $5.1 million for the year ended December 31, 2021 and were recorded
in branch restructuring costs in the consolidated statements of operations. There were no branch restructuring costs for the
years ended December 31, 2023 or 2022.
19. RETIREMENT AND POSTRETIREMENT PLANS
The Bank maintains two noncontributory pension plans that existed before the Merger: (i) the Retirement Plan of Dime
Community Bank (“Employee Retirement Plan”) and (ii) the BNB Bank Pension Plan, covering all eligible employees.
Bank of America, N.A. (“BANA”) was the Trustee for the Employee Retirement Plan and BNB Bank Pension Plan assets
as of December 31, 2023. Pentegra Retirement Trust was the trustee for the Employee Retirement Plan prior to the transfer
to BANA during the year ended December 31, 2021. The assets of both plans are overseen by the Retirement Committee
(“Committee”), comprised of management, who meet quarterly and set investment policy guidelines. Merrill Lynch,
Pierce, Fenner & Smith, Inc. (“MLPF&S”) and Blackrock are the investment managers of the assets of both plans. The
Committee meets with representatives of MLPF&S and reviews the performance of the plan assets. Pension plan assets
include cash and cash equivalents, equities and fixed income securities.
Employee Retirement Plan
The Bank sponsors the Employee Retirement Plan, a tax-qualified, noncontributory, defined-benefit retirement plan. Prior
to April 1, 2000, substantially all full-time employees of at least 21 years of age were eligible for participation after
one year of service. Effective April 1, 2000, the Bank froze all participant benefits under the Employee Retirement Plan.
On December 21, 2023, the Company’s Board of Directors adopted a resolution to terminate the Employee Retirement
Plan effective December 31, 2023. Retirement benefits of the plan were vested as they were earned. For the years ended
December 31, 2023 and 2022, the Bank used December 31 as its measurement date for the Employee Retirement Plan.
86
The funded status of the Employee Retirement Plan was as follows:
(In thousands)
Reconciliation of projected benefit obligation:
Projected benefit obligation at beginning of year
Interest cost
Actuarial (gain) loss
Benefit payments
Projected benefit obligation at end of year
Plan assets at fair value (investments in trust funds managed by trustee)
Balance at beginning of year
Return on plan assets
Benefit payments
Balance at end of year
Funded status at end of year
Year Ended December 31,
2023
2022
$
$
19,021
900
384
(1,584)
18,721
22,593
294
(1,584)
21,303
2,582
$
$
24,961
622
(5,004)
(1,558)
19,021
28,693
(4,542)
(1,558)
22,593
3,572
The net periodic cost for the Employee Retirement Plan included the following components:
(In thousands)
Interest cost
Expected return on plan assets
Amortization of unrealized loss
Net periodic benefit (credit) cost
Year Ended December 31,
2022
2023
2021
$
$
900
(1,521)
572
(49)
$
$
622
(1,949)
261
(1,066)
$
$
562
(1,846)
824
(460)
The change in accumulated other comprehensive loss that resulted from the Employee Retirement Plan is summarized as
follows:
(In thousands)
Balance at beginning of period
Amortization of unrealized loss
Loss recognized during the year
Balance at the end of the period
Period end component of accumulated other comprehensive loss, net of tax
Year Ended December 31,
2023
2022
$
$
$
(5,323)
572
(1,612)
(6,363)
4,343
$
$
$
(4,097)
261
(1,487)
(5,323)
3,649
Major assumptions utilized to determine the net periodic cost of the Employee Retirement Plan benefit obligations were
as follows:
At or for the Year Ended December 31,
2022
2023
2021
Discount rate used for net periodic benefit cost
Discount rate used to determine benefit obligation at period end
Expected long-term return on plan assets used for net periodic benefit cost
Expected long-term return on plan assets used to determine benefit obligation at
period end
4.90 %
4.70
7.00
2.55 %
4.90
7.00
2.15 %
2.55
7.00
7.00
7.00
7.00
Plan Assets
At December 31, 2023, the Employee Retirement Plan’s assets included included debt securities. Debt securities include
corporate bonds, government issues, mortgage-backed securities, high yield securities and mutual funds.
The weighted average expected long-term rate of return is estimated based on current trends in Employee Retirement Plan
assets, as well as projected future rates of return on those assets and reasonable actuarial assumptions based on the guidance
provided by Actuarial Standard of Practice No. 27 for the real and nominal rate of investment return for a specific mix of
asset classes. The long-term rate of return considers historical returns for the S&P 500 index and corporate bonds
representing cumulative returns of approximately 9.0% and 5.0%, respectively. These returns were considered along with
87
the target allocations of asset categories. When these overall return expectations were applied to the Employee Retirement
Plan’s target allocation, the expected annual rate of return was determined to be 7.00% at both December 31, 2023 and
2022.
The Bank did not make any contributions to the Employee Retirement Plan during the year ended December 31, 2023.
The Bank does not expect to make contributions to the Employee Retirement Plan during the year ending December 31,
2024.
The weighted-average allocation by asset category of the assets of the Employee Retirement Plan was summarized as
follows:
Asset category:
Equity securities
Debt securities
Cash equivalents
Total
December 31,
2023
2022
— %
100
—
100 %
51 %
47
2
100 %
The allocation percentages in the above table were consistent with future planned allocation percentages as of
December 31, 2023 and 2022, respectively.
The following tables present a summary of the Employee Retirement Plan’s investments measured at fair value on a
recurring basis by level within the fair value hierarchy, as of the dates indicated. (See Note 24 for a discussion of the fair
value hierarchy).
(In thousands)
Description:
Cash and cash equivalents
Fixed income securities:
Government
Total Plan Assets
(In thousands)
Description:
Cash and cash equivalents
Equities:
U.S. large cap
U.S. mid cap/small cap
International
Equities blend
Fixed income securities:
Corporate
Government
Mortgage-backed
High yield bonds and bond funds
Total Plan Assets
December 31, 2023
Fair Value Measurements Using:
Quoted
Prices in
Active Markets for
Identical
Significant
Other
Observable
Significant
Unobservable
Assets (Level 1)
Inputs (Level 2) Inputs (Level 3) Total
$
$
— $
21,245
21,245
$
58
—
58
$
$
— $
58
—
21,245
— $ 21,303
December 31, 2022
Fair Value Measurements Using:
Quoted
Prices in
Active Markets for
Identical
Significant
Other
Observable
Significant
Unobservable
Assets (Level 1)
Inputs (Level 2) Inputs (Level 3) Total
— $
541
$
— $
541
8,398
2,348
2,718
192
—
2,527
—
—
16,183
$
—
—
—
—
1,305
—
586
3,978
6,410
$
—
—
—
—
8,398
2,348
2,718
192
—
1,305
—
2,527
—
586
3,978
—
— $ 22,593
$
$
88
Benefit payments for the fiscal year ending December 31st are anticipated to be made as follows:
(In thousands)
2024
2025
2026
2027
2028
2029 to 2033
BNB Bank Pension Plan
$
1,526
1,518
1,475
1,447
1,401
6,621
During 2012, Bridge amended the BNB Bank Pension Plan by revising the formula for determining benefits effective
January 1, 2013, except for certain grandfathered Bridge employees. Additionally, new Bridge employees hired on or after
October 1, 2012 were not eligible for the BNB Bank Pension Plan. For the year ended December 31, 2023, the Bank used
December 31 as its measurement date for the BNB Bank Pension Plan. Effective December 31, 2023, the Bank froze all
participant benefits under the BNB Pension Plan, the impact of which is reflected in the recorded curtailment as of
December 31, 2023. On December 21, 2023, the Company’s Board of Directors adopted a resolution to terminate the BNB
Bank Pension Plan effective December 31, 2023. Retirement benefits of the plan were vested as they were earned.
The funded status of the BNB Bank Pension Plan was as follows:
(In thousands)
Reconciliation of projected benefit obligation:
Projected benefit obligation at beginning of year
Service cost
Interest cost
Actuarial gain
Curtailment
Benefit payments
Projected benefit obligation at end of year
Plan assets at fair value (investments in trust funds managed by trustee)
Balance at beginning of year
Return on plan assets
Benefit payments
Balance at end of year
Funded status at end of year
The net periodic cost for the BNB Bank Pension Plan included the following components:
(In thousands)
Service cost
Interest cost
Expected return on plan assets
Net periodic benefit credit
Year Ended December 31,
2023
2022
$
$
27,920
564
1,263
(883)
(446)
(1,136)
27,282
38,572
734
(1,136)
38,170
10,888
$
$
34,495
807
793
(7,111)
—
(1,064)
27,920
47,857
(8,221)
(1,064)
38,572
10,652
Year Ended December 31,
2023
2022
$
$
$
564
1,263
(2,760)
(933) $
807
793
(3,441)
(1,841)
89
The change in accumulated other comprehensive income that resulted from the BNB Bank Pension Plan is summarized as
follows:
(In thousands)
Balance at beginning of period
Loss recognized during the year
Balance at the end of the period
Period end component of accumulated other comprehensive income, net of tax
Year Ended December 31,
2023
2022
$
$
$
(2,358) $
(698)
(3,056) $
$
2,087
2,193
(4,551)
(2,358)
1,617
Major assumptions utilized to determine the net periodic cost of the BNB Bank Pension Plan benefit obligations were as
follows:
Discount rate used for net periodic benefit cost
Discount rate used to determine benefit obligation at period end
Expected long-term return on plan assets used for net periodic benefit cost
Expected long-term return on plan assets used to determine benefit obligation at
period end
Plan Assets
At or for the Year Ended December 31,
2023
2022
4.98 %
4.79
7.25
7.25
2.69 %
4.98
7.25
7.25
At December 31, 2023, the BNB Bank Pension Plan’s assets included cash equivalents and debt securities.
The weighted average expected long-term rate of return is estimated based on current trends in BNB Bank Pension Plan
assets, as well as projected future rates of return on those assets and reasonable actuarial assumptions based on the guidance
provided by Actuarial Standard of Practice No. 27 for the real and nominal rate of investment return for a specific mix of
asset classes. The long-term rate of return considers historical returns for the S&P 500 index and corporate bonds
representing cumulative returns of approximately 9.0% and 5.0%, respectively. These returns were considered along with
the target allocations of asset categories. When these overall return expectations were applied to the BNB Bank Pension
Plan’s target allocation, the expected annual rate of return was determined to be 7.25% at December 31, 2023 and 2022.
The Bank did not make any contributions to the BNB Bank Pension Plan during the year ended December 31, 2023. The
Bank does not expect to make contributions to the BNB Bank Pension Plan during the year ending December 31, 2024.
The weighted-average allocation by asset category of the assets of the BNB Bank Pension Plan was summarized as follows:
Asset category:
Equity securities
Debt securities
Cash equivalents
Total
December 31,
2023
2022
- %
99
1
100 %
51 %
46
3
100 %
90
The following tables present a summary of the BNB Bank Pension Plan’s investments measured at fair value on a recurring
basis by level within the fair value hierarchy, as of the dates indicated. (See Note 24 for a discussion of the fair value
hierarchy).
(In thousands)
Description:
Cash and cash equivalents
Fixed income securities:
Government
Total Plan Assets
(In thousands)
Description:
Cash and cash equivalents
Equities:
U.S. large cap
U.S. mid cap/small cap
International
Equities blend
Fixed income securities:
Corporate
Government
Mortgage-backed
High yield bonds and bond funds
Total Plan Assets
Fair Value Measurements
at December 31, 2023
Quoted
Prices in
Active Markets for
Identical
Significant
Other
Observable
Significant
Unobservable
Assets (Level 1)
Inputs (Level 2) Inputs (Level 3) Total
$
$
— $
37,853
37,853
$
317
—
317
$
$
— $
317
—
37,853
— $ 38,170
Fair Value Measurements
at December 31, 2022
Quoted
Prices in
Active Markets for
Identical
Significant
Other
Observable
Significant
Unobservable
Assets (Level 1)
Inputs (Level 2) Inputs (Level 3) Total
$
$
— $
1,001
$
— $ 1,001
14,310
4,094
4,658
308
—
4,275
—
—
27,645
—
—
—
—
2,203
—
979
6,744
10,927
$
$
—
—
—
—
14,310
4,094
4,658
308
2,203
—
4,275
—
979
—
—
6,744
— $ 38,572
Benefit payments for the fiscal year ending December 31st are anticipated to be made as follows:
(In thousands)
2024
2025
2026
2027
2028
2029 to 2033
401(k) Plan
$
1,298
1,379
1,501
1,477
1,529
9,075
The Company maintains a 401(k) Plan (the “401(k) Plan”) that existed before the Merger. The 401(k) Plan covers
substantially all current employees. Newly hired employees are automatically enrolled in the plan on the first day of the
month following the 60th day of employment, unless they elect not to participate. Participants may contribute a portion of
their pre-tax base salary, generally not to exceed $22,500 for the calendar year ended December 31, 2023. Under the
provisions of the 401(k) plan, employee contributions are partially matched by the Bank as follows: 100% of each
employee’s contributions up to 1% of each employee’s compensation plus 50% of each employee’s contributions over 1%
but not in excess of 6% of each employee’s compensation for a maximum contribution of 3.5% of a participating
employee’s compensation. Participants can invest their account balances into several investment alternatives. The
401(k) plan does not allow for investment in the Company’s common stock. Legacy Dime employees were allowed to
rollover Company common stock shares in-kind held in the former Dime Community Bank KSOP Plan (“Dime KSOP
Plan”) and hold in the 401(k) Plan. The 401(k) held Company common stock within the accounts of participants totaling
$6.3 million and $7.8 million at December 31, 2023 and 2022, respectively. Total expense recognized as a component of
91
salaries and employee benefits expense for the 401(k) Plan was $2.5 million during the year ended December 31, 2023
and $2.3 million during the years December 31, 2022, and December 31, 2021, respectively.
Dime KSOP Plan
The Dime Community Bank KSOP Plan (“Dime KSOP Plan”) was terminated by resolution of the Legacy Dime Board
of Directors. The effective date of the Dime KSOP Plan termination was February 1, 2021, the date of the Merger. As
such, all participants were required to transfer their assets out of the Dime KSOP Plan. The KSOP held Legacy Dime
common stock within the accounts of participants totaling $40 thousand at December 31, 2021. During the year ended
December 31, 2021, total expense recognized as a component of salaries and employee benefits expense for the Dime
KSOP Plan was $338 thousand.
BMP and Outside Director Retirement Plan
The Holding Company and Bank maintained the BMP, which existed in order to compensate executive officers for any
curtailments in benefits due to statutory limitations on benefit plans. Benefit accruals under the defined benefit portion of
the BMP were suspended on April 1, 2000, when they were suspended under the Employee Retirement Plan.
Effective July 1, 1996, the Company established the Outside Director Retirement Plan to provide benefits to each eligible
outside director commencing upon the earlier of termination of Board service or at age 75. The Outside Director Retirement
Plan was frozen on March 31, 2005, and only outside directors serving prior to that date are eligible for benefits.
As of December 31, 2021, the Bank used December 31st as its measurement date for both the BMP and Outside Director
Retirement Plan.
In connection with the Merger, the Outside Director Retirement Plan and the BMP were terminated, resulting in lump sum
payments to the participants in the amounts of $2.8 million for the Outside Director Retirement Plan and $6.2 million for
the BMP. The total expense recognized as a curtailment loss during the year ended December 31, 2021 was $1.5 million.
The combined funded status of the defined benefit portions of the BMP and the Director Retirement Plan was as follows:
(In thousands)
Reconciliation of projected benefit obligation:
Projected benefit obligation at beginning of year
Interest cost
Benefit payments
Actuarial (gain) loss
Projected benefit obligation at end of year
Plan assets at fair value:
Balance at beginning of year
Contributions
Benefit payments
Balance at end of period
Funded status at end of year
Year Ended
December 31, 2021
$
$
9,328
12
(9,063)
(277)
—
—
9,063
(9,063)
—
—
The combined net periodic cost for the defined benefit portions of the BMP and the Director Retirement Plan included the
following components:
Year Ended
(In thousands)
Interest cost
Curtailment loss
Amortization of unrealized loss
Net periodic benefit cost
92
$
December 31, 2021
12
1,543
—
1,555
$
The combined change in accumulated other comprehensive loss that resulted from the BMP and Director Retirement Plan
is summarized as follows:
Year Ended
(In thousands)
Balance at beginning of year
Amortization of unrealized loss
Gain (loss) recognized during the year
Curtailment credit
Balance at the end of year
Period end component of accumulated other comprehensive loss, net of tax
Postretirement Benefit Plan
$
December 31, 2021
(1,820)
—
277
1,543
—
—
$
$
The Bank offered the Postretirement Benefit Plan to its retired employees who provided at least five consecutive years of
credited service and were active employees prior to April 1, 1991. Postretirement Benefit Plan benefits were available only
to full-time employees who commence or commenced collecting retirement benefits from the Retirement Plan immediately
upon termination of service from the Bank. The Postretirement Benefit Plan was amended effective March 31, 2015 to
eliminate plan participation for post-amendment retirees. The plan was terminated during the year ended December 31,
2020.
The funded status of the Postretirement Benefit Plan was as follows:
(In thousands)
Reconciliation of projected benefit obligation:
Projected benefit obligation at beginning of year
Interest cost
Actuarial loss
Curtailment gain
Benefit payments
Projected benefit obligation at end of year
Plan assets at fair value:
Balance at beginning of year
Contributions
Benefit payments
Balance at end of period
Funded status at end of year
20. STOCK-BASED COMPENSATION
Year Ended
December 31, 2021
$
$
13
—
—
—
(13)
—
—
13
(13)
—
—
Before the Merger, Bridge and Legacy Dime granted share-based awards under their respective stock-based compensation
plans, (collectively, the “Legacy Stock Plans”), which are both subject to the accounting requirements of ASC 718.
In May 2021, the Company’s shareholders approved the Dime Community Bancshares, Inc. 2021 Equity Incentive Plan
(the “2021 Equity Incentive Plan”) to provide the Company with sufficient equity compensation to meet the objectives of
appropriately incentivizing its officers, other employees, and directors to execute our strategic plan to build shareholder
value, while providing appropriate shareholder protections. The Company no longer makes grants under the Legacy Stock
Plans. Awards outstanding under the Legacy Stock Plans will continue to remain outstanding and subject to the terms and
conditions of the Legacy Stock Plans. At December 31, 2023, there were 638,799 shares reserved for issuance under the
2021 Equity Incentive Plan.
In connection with the Merger, all outstanding stock options granted under Legacy Dime’s equity plans, were legally
assumed by the combined company and adjusted so that its holder is entitled to receive a number of shares of Dime’s
common stock equal to the product of (a) the number of shares of Legacy Dime common stock subject to such award
multiplied by (b) the Exchange Ratio and (c) rounded, as applicable, to the nearest whole share, and otherwise subject to
the same terms and conditions (including, without limitation, with respect to vesting conditions (taking into account any
vesting that occurred at the Merger Date).
93
In connection with the Merger, all outstanding stock options and time-vesting restricted stock units of Bridge, which we
refer to as the Bridge equity awards, which were outstanding immediately before the Merger Date continue to be awards
in respect of Dime common stock following the Merger, subject to the same terms and conditions that were applicable to
such awards before the Merger Date.
Stock Option Activity
The following table presents a summary of activity related to stock options granted under the Legacy Stock Plans, and
changes during the period then ended:
Weighted-
Average
Remaining
Weighted-
Number of Average Exercise Contractual
Price
Years
Aggregate
Intrinsic
Value
(Dollars in thousands except share and per share amounts)
Options outstanding at January 1, 2023
Options exercised
Options forfeited
Options outstanding at December 31, 2023
Options vested and exercisable at December 31, 2023
Options
$
92,137
—
(65,142)
26,995
26,995
$
$
35.39
—
35.38
35.39
35.39
6.2
5.2
5.2
$
$
—
—
—
Information related to stock options during each period is as follows:
(In thousands)
Cash received for option exercise cost
Income tax (expense) benefit recognized on stock option exercises
Intrinsic value of options exercised
Year Ended December 31,
2022
2023
2021
$
— $
—
—
— $
—
—
431
(15)
171
The range of exercise prices and weighted-average remaining contractual lives of both outstanding and vested options (by
option exercise cost) as of December 31, 2023 were as follows:
Exercise Prices:
$34.87
$35.35
$36.19
Total
Restricted Stock Awards
Outstanding Options
Vested Options
Weighted
Average
Contractual
Years
Weighted
Average
Contractual
Years
Amount Remaining Amount Remaining
10,061
9,802
7,132
26,995
6.1
5.1
4.1
5.2
10,061
9,802
7,132
26,995
6.1
5.1
4.1
5.2
The Company has made RSA grants to outside Directors and certain officers under the Legacy Stock Plans and the 2021
Equity Incentive Plan. Typically, awards to outside Directors fully vest on the first anniversary of the grant date, while
awards to officers vest over a pre-determined requisite period. All awards were made at the fair value of the Company’s
common stock on the grant date. Compensation expense on all RSAs is based upon the fair value of the shares on the
respective dates of the grant.
94
The following table presents a summary of activity related to the RSAs granted, and changes during the period then ended:
Unvested allocated shares outstanding at January 1, 2023
Shares granted
Shares vested
Shares forfeited
Unvested allocated shares outstanding at December 31, 2023
Information related to RSAs during each period is as follows:
Weighted-
Average
Grant-Date
Fair Value
Number of
Shares
350,758
220,750
(134,648)
(80,065)
356,795
$
$
28.63
25.47
29.37
26.45
26.88
(In thousands)
Compensation expense recognized
Income tax (expense) benefit recognized on vesting of RSAs
Year Ended December 31,
2022
2023
$
4,003
(188)
$
3,516
(10)
$
2021
5,253
27
As of December 31, 2023, there was $5.6 million of total unrecognized compensation cost related to unvested RSAs to be
recognized over a weighted-average period of 1.7 years.
Performance-Based Share Awards
The Company maintains a LTIP for certain officers, which meets the criteria for equity-based accounting. For each award,
threshold (50% of target), target (100% of target) and stretch (150% of target) opportunities are eligible to be earned over
a three-year performance period based on the Company’s relative performance on certain goals that were established at
the onset of the performance period and cannot be altered subsequently. Shares of common stock are issued on the grant
date and held as unvested stock awards until the end of the performance period. Shares are issued at the stretch opportunity
in order to ensure that an adequate number of shares are allocated for shares expected to vest at the end of the performance
period. Compensation expense on PSAs is based upon the fair value of the shares on the date of the grant for the expected
aggregate share payout as of the period end.
As of December 31, 2023 and 2022, 195,066 shares and 60,755 shares have been granted, respectively.
The following table presents a summary of activity related to the PSAs granted, and changes during the period then ended:
Maximum aggregate share payout at January 1, 2023
Shares granted
Shares forfeited
Maximum aggregate share payout at December 31, 2023
Minimum aggregate share payout
Expected aggregate share payout
Information related to PSAs during each period is as follows:
(In thousands)
Compensation (benefit) expense recognized
Income tax expense recognized on vesting of PSAs
Weighted-
Average
Grant-Date
Fair Value
Number of
Shares
95,831
195,066
(60,987)
229,910
—
210,820
$
$
$
30.35
17.69
25.21
20.97
—
20.21
Year Ended December 31,
2022
2023
2021
$
$
635
—
$
760
193
154
—
As of December 31, 2023, there was $2.7 million of total unrecognized compensation cost related to unvested PSAs based
on the expected aggregate share payout to be recognized over a weighted-average period of 2.3 years.
95
21. EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-
average common shares outstanding during the reporting period. Diluted EPS is computed using the same method as basic
EPS, but reflects the potential dilution that would occur if "in the money" stock options were exercised and converted into
common stock, and prior to 2021, if all likely aggregate PSAs were issued. In determining the weighted average shares
outstanding for basic and diluted EPS, treasury shares are excluded. Vested RSA shares are included in the calculation of
the weighted average shares outstanding for basic and diluted EPS. Unvested RSA and PSA shares not yet awarded are
recognized as a special class of participating securities under ASC 260, and are included in the calculation of the weighted
average shares outstanding for basic and diluted EPS.
The following is a reconciliation of the numerators and denominators of basic and diluted EPS for the periods presented:
(In thousands except share and per share amounts)
Net income available to common stockholders
Less: Dividends paid and earnings allocated to participating securities
Income attributable to common stock
Weighted-average common shares outstanding, including participating securities
Less: weighted-average participating securities
Weighted-average common shares outstanding
Basic EPS
Income attributable to common stock
Weighted-average common shares outstanding
Weighted-average common equivalent shares outstanding
Weighted-average common and equivalent shares outstanding
Diluted EPS
$
$
$
$
$
2021
$
$
2023
Year Ended December 31,
2022
145,270
(1,688)
143,582
38,985,314
(446,480)
38,538,834
3.73
88,808
(1,240)
87,568
38,754,346
(566,869)
38,187,477
2.29
$
$
$
$
96,710
(1,215)
95,495
39,327,959
(425,533)
38,902,426
2.45
87,568
38,187,477
—
38,187,477
2.29
$
$
143,582
38,538,834
—
38,538,834
3.73
$
$
95,495
38,902,426
611
38,903,037
2.45
Common and equivalent shares resulting from the dilutive effect of "in-the-money" outstanding stock options are
calculated based upon the excess of the average market value of the common stock over the exercise price of outstanding
in-the-money stock options during the period.
There were 69,479, 134,447 and 167,053 weighted-average stock options outstanding for the years ended December 31,
2023, 2022 and 2021, respectively, which were not considered in the calculation of diluted EPS since their exercise
prices exceeded the average market price during the period.
22. PREFERRED STOCK
On February 5, 2020, Legacy Dime completed an underwritten public offering of 2,999,200 shares, or $75.0 million in
aggregate liquidation preference, of its 5.50% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series A, par value
$0.01 per share, with a liquidation preference of $25.00 per share (the “Legacy Dime Preferred Stock”). The net proceeds
received from the issuance of preferred stock at the time of closing were $72.2 million. On June 10, 2020, Legacy Dime
completed an underwritten public offering, a reopening of the February 5, 2020 original issuance, of 2,300,000 shares, or
$57.5 million in aggregate liquidation preference, of the Legacy Dime Preferred Stock. The net proceeds received from
the issuance of preferred stock at the time of closing were $44.3 million.
At the Effective Time of the Merger, each outstanding share of the Legacy Dime Preferred Stock was converted into the
right to receive one share of a newly created series of the Company’s preferred stock having the same powers, preferences
and rights as the Legacy Dime Preferred Stock.
The Company expects to pay dividends when, as, and if declared by its board of directors, at a fixed rate of 5.50% per
annum, payable quarterly, in arrears, on February 15, May 15, August 15 and November 15 of each year. The Preferred
Stock is perpetual and has no stated maturity. The Company may redeem the Preferred Stock at its option at a redemption
price equal to $25.00 per share, plus any declared and unpaid dividends (without regard to any undeclared dividends),
subject to regulatory approval, on or after June 15, 2025 or within 90 days following a regulatory capital treatment event,
as described in the prospectus supplement and accompanying prospectus relating to the offering.
96
23. COMMITMENTS AND CONTINGENCIES
Loan Commitments and Lines of Credit
The contractual amounts of financial instruments with off-balance sheet risk were as follows:
Year Ended December 31,
2023
2022
(In thousands)
Available lines of credit
Other loan commitments
Stand-by letters of credit
Fixed Rate Variable Rate Fixed Rate Variable Rate
996,029
120,899
355
$ 114,880
7,190
38,095
1,072,471
89,855
—
73,929
150,663
27,020
$
$
$
At December 31, 2023 and 2022, the Bank had outstanding firm loan commitments that were accepted by borrowers that
aggregated to $97.0 million and $271.6 million, respectively. Substantially all of the Bank’s commitments expire within
three months of their acceptance by the prospective borrowers. The credit risk associated with these commitments is based
on the loan type which is comprised of multifamily residential, residential mixed-use, CRE, commercial mixed-use, C&I,
and one-to-four family residential loans.
At December 31, 2023, the Bank had an available line of credit with the FHLBNY equal to its excess borrowing capacity.
At December 31, 2023, this amount approximated $1.19 billion.
During the year ended December 31, 2017, the Bank completed a securitization of $280.2 million of its multifamily loans
through a FHLMC sponsored “Q-deal” securitization completed in December 2017. With respect to the securitization
transaction, the Company also has continuing involvement through a reimbursement agreement executed with Freddie
Mac. To the extent the ultimate resolution of defaulted loans results in contractual principal and interest payments that are
deficient, the Company is obligated to reimburse FHLMC for such amounts, not to exceed 10% of the original principal
amount of the loans comprising the securitization pool at the closing date.
Litigation
The Company is subject to certain pending and threatened legal actions which arise out of the normal course of business.
Litigation is inherently unpredictable, particularly in proceedings where claimants seek substantial or indeterminate
damages, or which are in their early stages. The Company cannot predict with certainty the actual loss or range of loss
related to such legal proceedings, the manner in which they will be resolved, the timing of final resolution or the ultimate
settlement. Consequently, the Company cannot estimate losses or ranges of losses related to such legal matters, even in
instances where it is reasonably possible that a loss will be incurred. In the opinion of management, after consultation with
counsel, the resolution of all ongoing legal proceedings will not have a material adverse effect on the consolidated financial
condition or results of operations of the Company. The Company accounts for potential losses related to litigation in
accordance with GAAP.
24. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the
measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1 Inputs – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the reporting entity
has the ability to access at the measurement date.
Level 2 Inputs – Significant other observable inputs such as any of the following: (1) quoted prices for similar assets
or liabilities in active markets, (2) quoted prices for identical or similar assets or liabilities in markets that are not active,
(3) inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves
observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates),
or (4) inputs that are derived principally from or corroborated by observable market data by correlation or other means
(market-corroborated inputs).
97
Level 3 Inputs – Significant unobservable inputs for the asset or liability. Significant unobservable inputs reflect the
reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability
(including assumptions about risk). Significant unobservable inputs shall be used to measure fair value to the extent that
observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the
asset or liability at the measurement date.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Securities
The Company’s available-for-sale securities are reported at fair value, which were determined utilizing prices obtained
from independent parties. The valuations obtained are based upon market data, and often utilize evaluated pricing models
that vary by asset and incorporate available trade, bid and other market information. For securities that do not trade on a
daily basis, pricing applications apply available information such as benchmarking and matrix pricing. The market inputs
normally sought in the evaluation of securities include benchmark yields, reported trades, broker/dealer quotes (obtained
only from market makers or broker/dealers recognized as market participants), issuer spreads, two-sided markets,
benchmark securities, bids, offers and reference data. For certain securities, additional inputs may be used or some market
inputs may not be applicable. Prioritization of inputs may vary on any given day based on market conditions.
All MBS, CMOs, treasury securities, and agency notes are guaranteed either implicitly or explicitly by GSEs as of
December 31, 2023 and December 31, 2022. In accordance with the Company’s investment policy, corporate securities
are rated "investment grade" at the time of purchase and the financials of the issuers are reviewed quarterly. Obtaining
market values as of December 31, 2023 and December 31, 2022 for these securities utilizing significant observable inputs
was not difficult due to their liquid nature.
Derivatives
Derivatives represent interest rate swaps and estimated fair values are based on valuation models using observable market
data as of the measurement date.
The following tables present financial assets and liabilities measured at fair value on a recurring basis as of the dates
indicated, segmented by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety
based on the lowest level of input that is significant to the fair value measurement.
Fair Value Measurements
at December 31, 2023 Using
Level 2
Inputs
Level 3
Inputs
Level 1
Inputs
$
— $
—
—
—
—
—
—
—
—
—
9,371
234,190
151,170
205,285
259,415
26,809
7,461
114,671
6,594
114,671
—
—
—
—
—
—
—
—
—
—
(In thousands)
Financial Assets:
Securities available-for-sale:
Agency notes
Treasury securities
Corporate securities
Pass-through MBS issued by GSEs
Agency CMOs
State and municipal obligations
Derivative – cash flow hedges
Derivative – freestanding derivatives, net
Financial Liabilities:
Derivative – fair value hedges
Derivative – freestanding derivatives, net
Total
$
$
9,371
234,190
151,170
205,285
259,415
26,809
7,461
114,671
6,594
114,671
98
(In thousands)
Financial Assets:
Securities available-for-sale:
Treasury securities
Corporate securities
Pass-through MBS issued by GSEs
Agency CMOs
State and municipal obligations
Derivative – cash flow hedges
Derivative – freestanding derivatives, net
Financial Liabilities:
Derivative – freestanding derivatives, net
Fair Value Measurements
at December 31, 2022 Using
Level 2
Inputs
Level 3
Inputs
Level 1
Inputs
Total
$
$ 227,256
166,773
241,240
281,339
33,979
17,150
137,335
$
— $ 227,256
166,773
—
241,240
—
281,339
—
33,979
—
17,150
—
137,335
—
137,335
—
137,335
—
—
—
—
—
—
—
—
Assets Measured at Fair Value on a Non-recurring Basis
Certain financial assets are measured at fair value on a nonrecurring basis. That is, they are subject to fair value adjustments
in certain circumstances. Financial assets measured at fair value on a non-recurring basis include certain individually
evaluated loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.
(In thousands)
Individually evaluated loans
(In thousands)
Individually evaluated loans
December 31, 2023
Fair Value Measurements Using:
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Carrying
Value
$
6,336
$
— $
— $
6,336
December 31, 2022
Fair Value Measurements Using:
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Carrying
Value
$
1,179 $
— $
— $
1,179
Individually evaluated loans with an allowance for credit losses at December 31, 2023 had a carrying amount of $6.3
million, which is made up of the outstanding balance of $7.3 million, net of a valuation allowance of $1.0 million.
Collateral dependent individually analyzed loans as of December 31, 2023 resulted in a credit loss recovery of $371
thousand, which is included in the amounts reported in the consolidated statements of operations for the year ended
December 31, 2023.
Individually evaluated loans with an allowance for credit losses at December 31, 2022 had a carrying amount of $1.2
million, which is made up of the outstanding balance of $2.5 million, net of a valuation allowance of $1.3 million.
Collateral dependent individually analyzed loans as of December 31, 2022 resulted in a credit loss provision of $0.7
million, which is included in the amounts reported in the consolidated statements of operations for the year ended
December 31, 2022.
99
Financial Instruments Not Measured at Fair Value
The following tables present the carrying amounts and estimated fair values of financial instruments other than those
measured at fair value on either a recurring or nonrecurring basis for the dates indicated, segmented by level within the
fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is
significant to the fair value measurement.
Fair Value Measurements
at December 31, 2023 Using
Carrying
Amount
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
Total
$
457,547
594,639
10,695,349
55,666
$
457,547
—
—
—
8,922,972
1,607,683
1,313,000
200,196
17,298
8,922,972
—
—
—
—
$
— $
516,930
—
6,593
—
1,602,087
1,312,940
160,696
17,298
— $
—
10,305,026
49,073
457,547
516,930
10,305,026
55,666
—
—
—
—
—
8,922,972
1,602,087
1,312,940
160,696
17,298
Fair Value Measurements
at December 31, 2022 Using
Carrying
Amount
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
Total
$
169,297
585,798
10,482,145
48,561
$
169,297
—
—
—
9,139,043
1,115,364
1,131,000
200,283
1,360
5,323
9,139,043
—
—
—
1,360
—
$
— $
505,759
—
6,105
—
1,096,808
1,131,217
180,583
—
5,323
— $
—
10,005,121
42,456
169,297
505,759
10,005,121
48,561
—
—
—
—
—
—
9,139,043
1,096,808
1,131,217
180,583
1,360
5,323
(In thousands)
Financial Assets:
Cash and due from banks
Securities held-to-maturity
Loans held for investment, net
Accrued interest receivable
Financial Liabilities:
Savings, money market and checking accounts (1)
CDs
FHLBNY advances
Subordinated debt, net
Accrued interest payable
(1)
Includes mortgage escrow deposits.
(In thousands)
Financial Assets:
Cash and due from banks
Securities held-to-maturity
Loans held for investment, net
Accrued interest receivable
Financial Liabilities:
Savings, money market and checking accounts (1)
CDs
FHLBNY advances
Subordinated debt, net
Other short-term borrowings
Accrued interest payable
(1)
Includes mortgage escrow deposits.
25. REGULATORY CAPITAL MATTERS
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking
agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s
financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the
Company and the Bank must meet specific capital requirements that involve quantitative measures of the Company’s and
Bank’s assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The
Company’s and Bank’s capital amounts and classifications also are subject to qualitative judgments by the regulators about
components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain
minimum amounts and ratios of total, tier 1, and common equity tier 1 capital to risk-weighted assets and of tier 1 capital
to average assets. Tier 1 capital, risk-weighted assets and average assets are as defined by regulation. The required
minimums for the Company and Bank are set forth in the tables that follow. The Company and the Bank met all capital
adequacy requirements at December 31, 2023 and 2022.
100
Under the Basel III Capital Rules the Company and the Bank are subject to the following minimum capital to risk-weighted
assets ratios: a) 4.5% based on common equity tier 1 capital ("CET1"); b) 6.0% based on tier 1 capital; and c) 8.0% based
on total regulatory capital. A minimum leverage ratio (tier 1 capital as a percentage of total average assets) of 4.0% is also
required under the Basel III Capital Rules. The Basel III Capital Rules additionally require institutions to retain a capital
conservation buffer, composed of CET1, of 2.5% above these required minimum capital ratio levels. Including the capital
conservation buffer, the Company and the Bank effectively have the following minimum capital to risk-weighted assets
ratios: a) 7.0% based on CET1; b) 8.5% based on tier 1 capital; and c) 10.5% based on total regulatory capital.
The Company and the Bank made the one-time, permanent election to continue to exclude the effects of accumulated other
comprehensive income or loss items included in stockholders’ equity for the purposes of determining the regulatory capital
ratios.
As of December 31, 2023, the most recent notification from the Federal Deposit Insurance Corporation categorized the
Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well
capitalized,” the Bank must maintain minimum total risk-based, tier 1 risk-based, common equity tier 1 risk-based, and
tier 1 leverage ratios as set forth in the tables below. Since that notification, there are no conditions or events that
management believes have changed the institution’s category.
The following tables present actual capital levels and minimum required levels for the Company and the Bank under Basel
III rules at December 31, 2023 and 2022:
(Dollars in thousands)
Tier 1 capital / % of average total assets
Bank
Consolidated Company
Common equity Tier 1 capital / % of risk-weighted assets
Bank
Consolidated Company
Tier 1 capital / % of risk-weighted assets
Bank
Consolidated Company
Total capital / % of risk-weighted assets
Bank
Consolidated Company
(1)
In accordance with the Basel III rules.
(Dollars in thousands)
Tier 1 capital / % of average total assets
Bank
Consolidated Company
Common equity Tier 1 capital / % of risk-weighted assets
Bank
Consolidated Company
Tier 1 capital / % of risk-weighted assets
Bank
Consolidated Company
Total capital / % of risk-weighted assets
Bank
Consolidated Company
(1)
In accordance with the Basel III rules.
Actual
At December 31, 2023
For Capital
Adequacy Purposes(1)
Minimum
To Be Categorized
as “Well Capitalized”(1)
Minimum
Amount
Ratio Amount Ratio Amount
Ratio
$ 1,331,676
1,158,455
9.8 % $ 544,254
544,529
8.5
4.0 % $ 680,318
N/A
4.0
5.0 %
N/A
1,331,676
1,041,886
1,331,676
1,158,455
1,406,581
1,433,361
12.6
9.8
12.6
10.9
13.3
13.5
476,168
476,341
634,890
635,122
846,520
846,829
4.5
4.5
6.0
6.0
8.0
8.0
687,798
N/A
846,520
N/A
1,058,151
N/A
6.5
N/A
8.0
N/A
10.0
N/A
Actual
At December 31, 2022
For Capital
Adequacy Purposes(1)
Minimum
To Be Categorized
as “Well Capitalized”(1)
Minimum
Amount
Ratio Amount Ratio Amount
Ratio
$ 1,286,656
1,103,498
10.0 % $ 517,606
517,914
8.5
4.0 % $ 647,008
N/A
4.0
5.0 %
N/A
1,286,656
986,928
1,286,656
1,103,498
1,373,431
1,390,272
11.9
9.2
11.9
10.2
12.7
12.9
485,062
485,243
646,749
646,990
862,332
862,654
4.5
4.5
6.0
6.0
8.0
8.0
700,645
N/A
862,332
N/A
1,077,915
N/A
6.5
N/A
8.0
N/A
10.0
N/A
101
26. CONDENSED HOLDING COMPANY ONLY FINANCIAL STATEMENTS
The following statements of financial condition as of December 31, 2023 and 2022, and the related statements of
operations and cash flows for the years ended December 31, 2023, 2022 and 2021, reflect the Holding Company’s
investment in its wholly-owned subsidiary, the Bank, using, as deemed appropriate, the equity method of accounting:
DIME COMMUNITY BANCSHARES, INC.
CONDENSED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
ASSETS:
Cash and due from banks
Securities available-for-sale, at fair value
Investment in subsidiaries
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Subordinated debt, net
Other liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity
December 31,
2023
2022
$
35,114
2,693
1,395,526
4,401
$ 1,437,734
$
25,009
2,489
1,348,962
4,389
$ 1,380,849
$
200,196
11,313
1,226,225
$ 1,437,734
$
200,283
10,983
1,169,583
$ 1,380,849
DIME COMMUNITY BANCSHARES, INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (1)
(In thousands)
Net interest loss
Dividends received from Bank
Non-interest income
Non-interest expense
Income before income taxes and equity in undistributed earnings of direct subsidiaries
Income tax credit
Income before equity in undistributed earnings of direct subsidiaries
Equity in undistributed earnings of subsidiaries
Net income
$
$
2023
$
$
2021
Year Ended December 31,
2022
(10,394)
95,000
—
(1,720)
82,886
4,001
86,887
65,669
$ 152,556
(9,942)
60,000
—
(1,066)
48,992
7,822
56,814
39,280
96,094
(8,427)
20,000
136
(4,361)
7,348
4,051
11,399
92,597
$ 103,996
(1) Comprehensive income for the Holding Company approximated comprehensive income for the consolidated
Company during the years ended December 31, 2023, 2022 and 2021.
102
DIME COMMUNITY BANCSHARES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of direct subsidiaries
Net gain on marketable equity securities
Net accretion
Loss on extinguishment of debt
(Increase) decrease in other assets
(Decrease) increase in other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Proceeds sales of marketable equity securities
Purchases of securities available-for-sale
Net cash received in business combination
Net cash provided by investing activities
Cash flows from financing activities:
Proceeds from subordinated debentures issuance, net
Redemption of subordinated debentures
Proceeds from exercise of stock options
Release of stock for benefit plan awards
Payments related to tax withholding for equity awards
BMP ESOP shares received to satisfy distribution of retirement benefits
Treasury shares repurchased
Cash dividends paid to preferred stockholders
Cash dividends paid to common stockholders
Net cash used in financing activities
Year Ended December 31,
2022
2023
2021
$
96,094
$ 152,556
$ 103,996
(39,280)
—
(87)
—
(62)
(931)
55,734
—
—
—
—
—
—
—
1,164
(1,258)
—
(947)
(7,286)
(37,302)
(45,629)
(65,669)
—
(111)
740
(104)
(1,096)
86,316
—
—
—
—
157,559
(155,000)
—
1,167
(1,558)
—
(46,762)
(7,286)
(36,791)
(88,671)
(92,597)
(131)
(157)
—
761
269
12,141
6,101
(3,000)
11,545
14,646
—
—
431
1,153
(111)
(993)
(59,280)
(7,286)
(39,351)
(105,437)
Net increase (decrease) in cash and due from banks
Cash and due from banks, beginning of period
Cash and due from banks, end of period
10,105
25,009
35,114
$
(2,355)
27,364
25,009
(78,650)
106,014
27,364
$
$
103
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of the Company’s management, including
the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and
Exchange Act of 1934, as amended) as of December 31, 2023. Based on that evaluation, the Company’s Principal
Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were
effective as of the end of the period covered by the annual report.
Report by Management on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining an effective system of internal control over financial
reporting. The Company’s system of internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. There are inherent limitations in the effectiveness of any system
of internal control over financial reporting, including the possibility of human error and circumvention or overriding of
controls. Accordingly, even an effective system of internal control over financial reporting can provide only reasonable
assurance with respect to financial statement preparation. Projections of any evaluation of effectiveness to future periods
are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of
compliance with the policies or procedures may deteriorate.
Management assessed the Company’s internal control over financial reporting as of December 31, 2023. This assessment
was based on criteria for effective internal control over financial reporting described in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this
assessment, management believes that, as of December 31, 2023, the Company maintained effective internal control over
financial reporting based on those criteria.
The Company’s independent registered public accounting firm that audited the financial statements that are included in
this annual report on Form 10-K, has issued an attestation report on the Company’s internal control over financial
reporting. The attestation report of Crowe LLP appears on page 104.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the quarter ended December
31, 2023, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
104
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information regarding Directors, Executive Officers and Corporate Governance will be set forth in the Registrant’s
Proxy Statement for the Annual Meeting of Shareholders to be held on May 23, 2024 and is incorporated herein by
reference thereto.
Item 11. Executive Compensation
The information regarding Executive Compensation will be set forth in the Registrant’s Proxy Statement for the Annual
Meeting of Shareholders to be held on May 23, 2024 and is incorporated herein by reference thereto.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information regarding Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters will be set forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 23,
2024 and is incorporated herein by reference thereto.
Set forth below is certain information as of December 31, 2023, regarding the Company’s equity compensation plans that
have been approved by stockholders. The Company does not have any equity compensation plans that have not been
approved by stockholders.
Equity compensation
plan approved by
stockholders
2012 Equity Incentive Plan
2019 Equity Incentive Plan
2021 Equity Incentive Plan
Employee Stock Purchase Plan
Total
Number of securities to
be issued upon exercise
of outstanding options
and awards
Weighted average
exercise price with
respect to outstanding
stock options
16,934
10,061
—
—
26,995
$ 35.70
34.87
—
—
$ 35.39
Number of securities
remaining available for
issuance under the plan
—
—
638,799
941,669
1,580,468
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information regarding Certain Relationships and Related Transactions and Director Independence will be set forth in
the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 23, 2024 and is incorporated
herein by reference thereto.
Item 14. Principal Accounting Fees and Services
The information regarding the Company’s independent registered public accounting firm’s fees and services will be set
forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 23, 2024 and is
incorporated herein by reference thereto.
105
Item 15. Exhibits and Financial Statement Schedules
PART IV
(a) The following consolidated financial statements, including notes thereto, and financial schedules of the Company,
required in response to this item are included in Part II, Item 8, “Financial Statements and Supplementary Data.”
1.
Financial Statements
Consolidated Statements of Financial Condition
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 173)
2.
Financial Statement Schedules
Page No.
45
46
47
48
49
51
107
Financial Statement Schedules have been omitted because they are not applicable or the required information is shown in
the Consolidated Financial Statements or Notes thereto in Part II, Item 8, “Financial Statements and Supplementary Data.”
3.
Exhibits
See Exhibit Index on page 110
106
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stockholders and the Board of Directors
of Dime Community Bancshares, Inc. and Subsidiaries
Hauppauge, New York
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial condition of Dime Community Bancshares, Inc.
and Subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations,
comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period
ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). We also have
audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years
in the three-year period ended December 31, 2023 in conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework:
(2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Report by Management on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that
our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
107
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for Credit Losses for Loans – Qualitative Factors
As described in Notes 1 and 5 to the financial statements, the Company estimates expected credit losses for its financial
assets carried at amortized cost utilizing the current expected credit loss (“CECL”) methodology. In determining the
allowance for credit losses (“ACL”) related to loans that are collectively evaluated, expected credit losses are determined
by calculating a loss percentage by loan segment, or pool. Management estimates the allowance for credit losses on each
loan pool using relevant available information, from internal and external sources, relating to past events, current
conditions, and reasonable and supportable forecasts. Historically observed credit loss experience of peer banks within
the Company’s geography, adjusted for prepayment and curtailment assumptions as well as reasonable and supportable
forecasts, provide the basis for the estimation of quantitatively modeled expected credit losses on similar loan pools.
The quantitative results of the modeling are then adjusted using qualitative factors. These factors include: (1) lending
policies and procedures; (2) international, national, regional and local economic business conditions and developments
that affect the collectability of the portfolio, including the condition of various markets; (3) the nature and volume of the
loan portfolio; (4) the experience, ability, and depth of the lending management and other relevant staff; (5) the volume
and severity of past due loans; (6) the quality of the loan review system; (7) the value of underlying collateral for
collateralized loans; (8) the existence and effect of any concentrations of credit, and changes in the level of such
concentrations; and (9) the effect of external factors such as competition and legal and regulatory requirements on the level
of estimated credit losses in the existing portfolio. A significant amount of management judgment is required to assess the
reasonableness of the qualitative factors.
The qualitative factors contribute to the determination of the ACL related to loans that share similar risk characteristics.
We identified the assessment of qualitative factors as a critical audit matter because auditing management’s estimate
required especially subjective auditor judgment.
108
The primary procedures we performed to address this critical audit matter were comprised of testing management’s process
and controls related to the determination of qualitative factor adjustments, which included (i) testing the design and
operating effectiveness of controls over the review and approval of qualitative factors, including significant assumptions
and judgments made in those determinations, (ii) testing the relevance and reliability of data used as the basis for qualitative
factors, and (iii) evaluating the reasonableness of management’s judgments and significant assumptions used in the
assessment of qualitative factors, including determining that they are calculated to conform with management’s policies.
Crowe LLP
We have served as the Company’s auditor since 2009.
New York, New York
February 22, 2024
109
Exhibit Number
Description of Exhibit
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
Restated Certificate of Incorporation of the Registrant (incorporated by reference to
Exhibit 3.1 to the Registrant’s Form 8-K, filed February 2, 2021 (SEC File No. 001-
34096))
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2
to the Registrant’s Form 8-K, filed December 21, 2023 (SEC File No. 001-34096))
Description of the Registrant’s Securities
Indenture, dated as of September 21, 2015, by and between the Registrant, as Issuer, and
Wilmington Trust, National Association, as Trustee (incorporated by reference to Exhibit
4.1 to Registrant’s Form 8-K, filed on September 21, 2015 (SEC File No. 001-34096))
First Supplemental Indenture, dated as of September 21, 2015, by and between the
Registrant and Wilmington Trust, National Association, as Trustee, including the form of
the 5.25% fixed-to-floating rate subordinated debentures due 2025 attached as Exhibit A
thereto (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K, filed
September 21, 2015 (SEC File No. 001-34096))
Second Supplemental Indenture, dated as of September 21, 2015, by and between the
Registrant and Wilmington Trust, National Association, as Trustee, including the form of
the 5.75% fixed-to-floating rate subordinated debentures due 2030 attached as Exhibit A
thereto (incorporated by reference to Exhibit 4.3 to the Registrant’s Form 8-K, filed
September 21, 2015 (SEC File No. 001-34096))
Indenture, dated as of June 13, 2017, by and between Dime Community Bancshares, Inc.,
as Issuer, and Wilmington Trust, National Association, as Trustee (incorporated by
reference to Exhibit 4.1 to Dime Community Bancshares, Inc.’s Form 8-K, filed on June
13, 2017 (SEC File No. 000-27782))
First Supplemental Indenture, dated as of June 13, 2017, by and between Dime
Community Bancshares, Inc., as Issuer, and Wilmington Trust, National Association, as
Trustee, including the form of the 4.50% fixed-to-floating rate subordinated debentures
due 2027 attached as Exhibit A thereto (incorporated by reference to Exhibit 4.2 to Dime
Community Bancshares, Inc.’s Form 8-K, filed on June 13, 2017 (SEC File No. 000-
27782))
Second Supplemental Indenture, dated as of February 1, 2021, by and between the
Registrant and Wilmington Trust, National Association, as Trustee (incorporated by
reference to Exhibit 4.3 to the Registrant’s Form 8-K, filed February 1, 2021 (SEC File
No. 000-27782))
Indenture, dated May 6, 2022, between the Registrant and Wilmington Trust National
Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Form
8-K, filed May 6, 2022 (SEC File No. 001-34096))
First Supplemental Indenture, May 6, 2022, between the Registrant and Wilmington Trust
National Association, as Trustee, including the form of 5.000% Fixed-to-Floating Rate
Subordinated Notes due 2032 (incorporated by reference to Exhibit 4.2 to the Registrant’s
Form 8-K, filed May 6, 2022 (SEC File No. 001-34096))
110
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10
10.9
10.10
10.11
10.12
10.13
21.1
23.1
Form of Employment Agreement entered into with Stuart H. Lubow, Avinash Reddy and
Conrad J. Gunther (incorporated by reference to Exhibit 10.4 to Pre-Effective Amendment
No. 1 to the Registrant’s Registration Statement on Form S-4, filed October 15, 2020 (File
No. 333-248787))
Form of Amendment to Employment Agreement entered into with Stuart H. Lubow,
Avinash Reddy and Conrad J. Gunther (incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, filed June 28, 2021 (File No. 001-34096))
Second Amendment to Employment Agreement entered into with Stuart H. Lubow
(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-
K, filed December 23, 2021 (File No. 001-34096))
Change in Control Employment Agreement between Dime Community Bancshares, Inc.
and Patricia M. Schaubeck (incorporated by reference to Exhibit 10.4 to Registrant’s
Annual Report on Form 10-K, filed February 28, 2023 (File No. 001-34096))
Amendments One and Two to the Change in Control Employment Agreement between
Dime Community Bancshares, Inc. and Patricia M. Schaubeck (incorporated by reference
10.5 to Registrant’s Annual Report on Form 10-K, filed February 28, 2023 (File No. 001-
34096))
Form of Retention and Award Agreement entered into with Stuart H. Lubow, Avinash
Reddy and Conrad J. Gunther (incorporated by reference to Exhibit 10.5 to Pre-Effective
Amendment No. 1 to the Registrant’s Registration Statement on Form S-4, filed October
15, 2020 (File No. 333-248787))
Form of Defense of Tax Position Agreement entered into with Kenneth J. Mahon, Stuart
H. Lubow, Avinash Reddy and Conrad J. Gunther (incorporated by reference to Exhibit
10.6 to Pre-Effective Amendment No. 1 to the Registrant’s Registration Statement on
Form S-4, filed October 15, 2020 (File No. 333-248787))
Executive Chairman and Separation Agreement entered into with Kenneth J. Mahon
(incorporated by reference to Exhibit 10.7 to Pre-Effective Amendment No. 1 to the
Registrant’s Registration Statement on Form S-4, filed October 15, 2020 (File No. 333-
248787))
Dime Community Bank Supplemental Executive Retirement Plan (incorporated by
reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed November
2, 2021 (File No. 001-34096))
Amendment One to the Dime Community Bancshares, Inc. 2021 Equity Incentive Plan
(incorporated by reference to Exhibit 10.10 to Registrant’s Annual Report on Form 10-K,
filed February 28, 2023 (File No. 001-34096))
Dime Community Bancshares, Inc. 2021 Equity Incentive Plan (incorporated by reference
to the Registrant’s Definitive Proxy Statement, File No. 001-34096, filed April 16, 2021)
Dime Community Bancshares, Inc. 2019 Equity Incentive Plan (incorporated by reference
to the Registrant’s Definitive Proxy Statement, File No. 001-34096, filed April 1, 2019)
Employee Stock Purchase Plan (incorporated by reference to the Registrant’s Definitive
Proxy Statement, filed April 2, 2018 (SEC File No. 001-34096))
Subsidiaries of Registrant
Consent of Independent Registered Public Accounting Firm
111
31.1
31.2
32.1
97
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule
13a-14(b) and 18 U.S.C. Section 1350
Dime Community Bancshares, Inc. Clawback Policy
101.INS
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101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document
104
Cover page to this Annual Report on Form 10-K, formatted in Inline XBRL
Item 16. Form 10-K Summary
Not applicable.
112
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
February 22, 2024
February 22, 2024
DIME COMMUNITY BANCSHARES, INC.
Registrant
/s/ Stuart H. Lubow
Stuart H. Lubow
President and Chief Executive Officer
/s/ Avinash Reddy
Avinash Reddy
Senior Executive Vice President, Chief Financial Officer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated.
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
February 22, 2024
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
/s/ Kenneth J. Mahon
Kenneth J. Mahon
/s/ Paul M. Aguggia
Paul M. Aguggia
/s/ Rosemarie Chen
Rosemarie Chen
/s/ Michael P. Devine
Michael P. Devine
/s/ Judith H. Germano
Judith H. Germano
/s/ Matthew A. Lindenbaum
Matthew A. Lindenbaum
/s/ Stuart H. Lubow
Stuart H. Lubow
/s/ Albert E. McCoy, Jr.
Albert E. McCoy, Jr.
/s/ Raymond A. Nielsen
Raymond A. Nielsen
/s/ Joseph J. Perry
Joseph J. Perry
/s/ Kevin Stein
Kevin Stein
/s/ Dennis A. Suskind
Dennis A. Suskind
113
[(cid:100)(cid:346)(cid:349)(cid:400)(cid:3)(cid:393)(cid:258)(cid:336)(cid:286)(cid:3)(cid:349)(cid:374)(cid:410)(cid:286)(cid:374)(cid:415)(cid:381)(cid:374)(cid:258)(cid:367)(cid:367)(cid:455)(cid:3)(cid:367)(cid:286)(cid:332)(cid:3)(cid:271)(cid:367)(cid:258)(cid:374)(cid:364)]
Fellow Shareholders:
Our vision at Dime Community Bank is to become the premier
community commercial bank from Montauk to Manhattan, by
partnering and building trusted relationships with our
colleagues and customers and providing solutions for their
financial success. Our customers value our local decisioning,
and our single point of contact approach, matched with best-in-
class technology.
They also value Dime’s long history of financial strength. Since
opening our doors in 1864, Dime has endured the great
depression, two world wars, the financial crisis of 2008, and a
global pandemic. At each point, Dime has leaned into the
communities we serve to support their needs and provided a
safe harbor during these times.
2023 in Review
2023 was marked by the failure of several regional banks. While
these events shook the confidence of banking customers
nationwide, Dime stood firm. As a result of our strong balance
sheet, which is supported by over $1.0 Billion in Tier 1 capital,
we grew both loans and deposits in 2023.
We took our Private and Commercial Bank operations to the
next level and seized the opportunity to hire several productive
banking teams. Importantly, we made numerous enhancements
to our systems and processes and created a best-in-class
customer experience. I would like to thank all our employees
for this bank-wide initiative, which will serve us well in the years
ahead.
The initial results of the expansion of the Private and Commercial
Bank are well documented. Dime’s Private and Commercial
Bank booked over $500 Million of low-cost deposits in less than
twelve months. As we continue to execute on our growth plan,
we expect to remain active on the recruitment front.
Customer Focused and Community Driven in 2024
As we continue our journey of recruitment and growth, we
have also focused on diversifying our balance sheet with the
addition of a new Healthcare lending vertical. We believe we
have state-of-the-art and customer centric technology: some
examples include Dime Escrow Express for Law Firms & Title
Companies, Positive Pay for Fraud Prevention, and Smart Safe
Remote Deposit with next-day credit for specialized industries.
Our commitment to the communities we serve remains just as
strong as our commitment to growth. Our 60 branch locations,
now including Staten Island, remain as foundational pillars of
strength and stability in our communities; our branch network
is a valuable source of low-cost, granular deposits. We have not
slowed down after receiving an “Outstanding” rating for our
efforts pertaining to the Community Reinvestment Act of 1977.
In fact, in classic Dime fashion, we have leaned in to work
harder. We now have over 200 employee volunteers for
community efforts. This is a testament to our dedicated
employees.
In closing, we are steadfast in our commitment to become the
premier community commercial bank, from Montauk to
Manhattan and delivering value
for our shareholders,
customers, and communities alike.
Sincerely,
$11.3
$11.9
$12.1
$13.2
$13.6
$9
Stuart H. Lubow
President & Chief Executive Officer
2019
2020
2021
2022
2023
5-Year Total Asset Trend
$ in Billions1
$11.3
$11.9
$12.1
$13.2
$13.6
5-Year Deposit & Loan Trend
$10.5
$10.5 $10.5
$10.3
$10.7
$10.0
$9.0
$9.1
$9.2
$8.2
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
1Totals represent combined historical data for the merged entities as of year-end.
Deposits
Loans
$15
$12
$6
$3
$0
$12
$10
$8
$15
$12
$9
$6
$3
$0
$12
$10
$8
$10.5
$10.5 $10.5
$10.3
$10.7
$10.0
$9.0
$9.1
$9.2
$8.2
2019
2020
2021
2022
2023
15
12
9
6
3
0
60
50
40
30
20
10
0
15
12
9
6
3
0
60
50
40
30
20
10
0
D I M E C O M M U N I T Y B A N C S H A R E S , I N C .
CORPORATE INFORMATION
Mario Caracappa
Executive Vice President,
Director of Treasury Management
Sales & Service
Geraldine L. Harden
Executive Vice President,
Head of Commercial Loan Service
Robert Maichin
Executive Vice President,
Head of Middle Market
James J. Manseau
Executive Vice President,
Chief Banking Officer
Steven Miley
Executive Vice President,
Chief Marketing Officer
William Newham
Executive Vice President,
Head of Real Estate Lending
Christopher Porzelt
Executive Vice President,
Chief Risk Officer
John Romano
Executive Vice President,
Director of Private Banking
Patricia M. Schaubeck
Executive Vice President,
General Counsel
Austin Stonitsch
Executive Vice President,
Chief Human Resources Officer
Brian Teplitz
Executive Vice President,
Chief Credit Officer
Nancy Tomich
Executive Vice President,
Senior Group Leader
BOARD OF DIRECTORS
Kenneth J. Mahon
Chairman of The Board
Paul M. Aguggia
Rosemarie Chen
Michael P. Devine
Judith H. Germano
Matthew A. Lindenbaum
Stuart H. Lubow
Albert E. McCoy, Jr.
Raymond A. Nielsen
Joseph J. Perry
Kevin Stein
Dennis A. Suskind
EXECUTIVE MANAGEMENT
Stuart H. Lubow
President & Chief Executive Officer
Michael J. Fegan
Sr. Executive Vice President,
Chief Technology & Operations Officer
Conrad J. Gunther
Sr. Executive Vice President,
Chief Lending Officer
Avinash Reddy
Sr. Executive Vice President,
Chief Financial Officer
Jeffrey Barber
Executive Vice President,
Senior Group Leader
Branch Locations
INVESTOR RELATIONS
Exchange: NASDAQ®
Symbol: DCOM
Avinash Reddy
Sr. Executive Vice President,
Chief Financial Officer
898 Veterans Memorial Highway
Suite 560
Hauppauge, NY 11788
avinash.reddy@dime.com
Shareholders seeking information about
the Company may access presentations,
press releases and government filings
through the Bank’s investor website:
investors.dime.com.
STOCK TRANSFER AGENT
AND REGISTRAR
Computershare Investor Services
PO Box 505000
Louisville, KY 40233-5000
800.368.5948
computershare.com
Shareholders who would like to make
changes to the name, address or
ownership of their stock, consolidate
accounts, eliminate duplicate mailings,
or replace lost certificates or dividend
checks should contact Computershare.
GENERAL COUNSEL
Patricia M. Schaubeck
Executive Vice President
898 Veterans Memorial Highway
Suite 560
Hauppauge, NY 11788
D
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2023 Annual Report
DIME COMMUNITY BANCSHARES, INC.
898 Veterans Memorial Highway, Suite 560, Hauppauge, NY 11788
dime.com
2023