Preferred Stock Offering in Second Quarter of 2020 Fortifies Capital Base and Increases Tier 1 Risk-Based Capital Ratio to 13.1% and Total Risk-Based Capital Ratio to 16.3%

BROOKLYN, N.Y., July 28, 2020 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime” or “its”), the parent company of Dime Community Bank (the “Bank”), today reported net income to common stockholders of $11.8 million for the quarter ended June 30, 2020, or $0.35 per diluted common share, compared with net income to common stockholders of $8.4 million for the quarter ended March 31, 2020, or $0.24 per diluted common share, and net income to common stockholders of $13.0 million for the quarter ended June 30, 2019, or $0.36 per diluted common share.

Excluding the pre-tax impact of $3.9 million of severance expenses related to an organizational restructuring, $1.1 million of merger related expenses, and $3.1 million of income from gain on sale of securities, earnings per share (“EPS”) for the quarter ended June 30, 2020 would have been $0.39 per diluted share.

Mr. Kenneth J. Mahon, Chief Executive Officer (“CEO”) of the Company, stated, “Our extremely strong second quarter results were underpinned by linked quarter net interest margin (“NIM”) expansion of 14 basis points and year-over-year non-interest income growth (excluding gain on sale of securities) of 83%. In the month of June we fortified already very strong capital ratios through the issuance of perpetual preferred stock. During this challenging period in the midst of the pandemic and economic downturn, Dime’s earnings profile and robust capital base helps position us well to serve our customers and communities, our employees and investors. Earlier this month, we announced our intention to merge with Bridge Bancorp, Inc. and create a premier community-based business bank with over $11 billion in assets. I am proud of the hard work and collaboration from our respective integration teams and am extremely excited that we are on our way to create a foundational franchise that has the opportunity to dominate the New York community banking landscape in the years ahead.”

Highlights for the Second Quarter of 2020 Included:

• The Company raised net proceeds of $44 million from its perpetual preferred stock offering in the second quarter of 2020. The Company had previously raised net proceeds of $72 million from its perpetual preferred stock offering in the first quarter of 2020.  Outlined below are the Company’s consolidated capital ratios.

	Q2 2020		Q1 2020		Q2 2019
Total Equity to Total Assets	10.54%		10.17%		9.37%
Tangible Equity to Tangible Assets (1)	9.76%		9.38%		8.58%
Tier 1 Risk-Based Capital Ratio	13.07%		12.15%		10.94%
Total Risk-Based Capital Ratio	16.29%		15.21%		13.58%
(1)  See "Non-GAAP Reconciliation" tables for reconciliation of tangible equity and tangible assets.

• Linked quarter NIM expansion of 14 basis points primarily driven by a 27 basis point linked quarter decrease in the cost of deposits;
• Strong growth in checking account balances. Compared to the second quarter of 2019, the sum of average non-interest-bearing checking account balances and average interest-bearing checking account balances for the second quarter of 2020 increased by 53.7% to $840.8 million;
• Loans to small businesses under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) totaled $310.5 million at June 30, 2020. Total potential unrecognized income from processing these loans is approximately $8.9 million;
• Loan-to-deposit ratio declined to 122.7% at June 30, 2020, versus 124.7% at June 30, 2019. Excluding the $310.5 million of PPP loans, the loan-to-deposit ratio would have been 115.7% at June 30, 2020;  
• Our Municipal Banking division, which began operations in the fourth quarter of 2019, grew its deposit portfolio to approximately $351 million at June 30, 2020; 
• Total non-interest income grew to $8.4 million in the second quarter of 2020, driven by $2.5 million of customer-related loan level swap income, $0.9 million of BOLI income (the Company purchased $20.0 million of additional BOLI in the month of June) and $3.1 million of gain on sale of securities, versus $2.8 million of non-interest income for the second quarter of 2019; and
• The Company repurchased 975,064 shares of its common stock, which represented 2.9% of beginning period shares outstanding, in the second quarter of 2020, at a weighted average price of $14.62.

Loans with Payment Deferrals

We are focused on supporting our clients who may be experiencing financial hardships due to COVID-19, including making deferrals on payments as needed. Our deferral program began in April 2020. Total loans with payment deferrals as of June 30, 2020, declined to $916.3 million versus $1.09 billion as of May 31, 2020. Of the tranche of $489.1 million of loans that were provided payment deferrals in the month of April, $120.1 million are now paying full interest and escrow (i.e., only principal is being deferred on these loans) and $194.9 million are no longer requiring any form of payment relief.

We continue to closely monitor segments of our loan portfolio that may be disproportionately impacted by the pandemic. As of June 30, 2020, the Company had 15 loans aggregating $27.0 million to restaurants and 13 loans aggregating $176.3 million to hotels. As of June 30, 2020, loans with payment deferrals to restaurants totaled $12.4 million and loans with payment deferrals to hotels totaled $43.1 million. The Company does not have any exposure to the energy industry, airline industry, leveraged lending, shared national credits, credits card loans, or auto loans.

Mr. Mahon concluded, “Our capital strength, earnings profile and the nature of our asset classes provides me confidence that we will be able to navigate through the pandemic. The largest segment within our loan portfolio remains multifamily loans, which constituted 55% of our loan portfolio at June 30, 2020. New York City multifamily loans were one of the best performing asset classes during the financial crisis of 2008. Year after year, Dime had one of the lowest loss rates in the nation. Given the low loan-to-value (“LTV”) nature of our multifamily portfolio (weighted average of approximately 50% at June 30, 2020), we anticipate our track record will continue.”

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income in the second quarter of 2020 was $43.6 million, an increase of $3.0 million (7.5%) from the first quarter of 2020 and an increase of $7.1 million (19.3%) from the second quarter of 2019. The table below provides a reconciliation of the reported NIM and the NIM excluding the impact of loan prepayment fees.

($ in millions)	Q2 2020			Q1 2020			Q2 2019
NIM	2.86%			2.72%			2.38%
Net Interest Income	$43,556			$40,524			$36,504
Income from Loan Prepayment Activity	$1,737			$1,975			$1,581
Net Interest Income Excluding Prepayment Fee Income	$41,819			$38,549			$34,923
NIM, Excluding Prepayment Fee	2.75%			2.59%			2.28%

Mr. Mahon commented, “Our NIM (excluding the impact of prepayment fees) has now increased for seven consecutive quarters. As anticipated, our business model transformation is producing the desired trends on NIM.”

Average interest-earning assets were $6.10 billion for the second quarter of 2020, a 9.6% (annualized) increase from $5.95 billion for the first quarter of 2020, and a 0.7% decrease from $6.13 billion for the second quarter of 2019. For the second quarter of 2020, the average yield on interest-earning assets was 3.85%, a decrease of 11 basis points compared with the first quarter of 2020, and a decrease of 6 basis points compared to the second quarter of 2019.  The decline in the yield on earning assets reflected the full quarter impact of the 150 basis point reduction in the federal funds rate by the Federal Reserve in March 2020 and the related decline in market interest rates.

The ending weighted average rate (“WAR”) on the total loan portfolio was 3.77% at June 30, 2020, which represents a 23 basis point decrease versus the ending WAR on the total loan portfolio at March 31, 2020, and a 22 basis point decrease versus the ending WAR on the total loan portfolio at June 30, 2019. The WAR on the total loan portfolio as of June 30, 2020 was negatively impacted by PPP loans ($310.5 million of loans at June 30, 2020 with a WAR of 1.00%). Excluding the impact of PPP loans, the WAR on the loan portfolio was 3.94% at June 30, 2020, which represents a 6 basis point decrease versus the ending WAR on the total loan portfolio at March 31, 2020, and a 5 basis point decrease versus the ending WAR on the total loan portfolio at June 30, 2019.

The average cost of borrowed funds (which primarily consist of Federal Home Loan Bank advances) was 2.00% for the second quarter of 2020, a decrease of 15 basis points versus the first quarter of 2020, and a decrease of 44 basis points versus the second quarter of 2019.

Loans

The real estate loan portfolio decreased by $63.1 million (5.2% annualized) during the second quarter of 2020, primarily due to managed run-off in the Bank’s lower-yielding legacy multifamily business. Total real estate loan originations were $208.8 million during the second quarter of 2020, at a weighted average interest rate of 2.91%. Real estate loan amortization and satisfactions totaled $278.6 million, or 23.1% (annualized) of the portfolio balance, at an average rate of 3.65%. The annualized real estate loan payoff rate of 23.1% for the second quarter of 2020 was comparable to the first quarter of 2020 (23.5% annualized) and higher than the second quarter of 2019 (20.6% annualized).

Average real estate loans were $4.87 billion in the second quarter of 2020, a decrease of $86.4 million (-7.0% annualized) from the first quarter of 2020, and a decrease of $333.4 million (-6.4%) from the second quarter of 2019.

Average C&I loans were $519.0 million in the second quarter of 2020 (including average SBA PPP loans of $192.8 million), an increase of $191.3 million (233.6% annualized) from the first quarter of 2020, and an increase of $229.2 million (79.1%) from the second quarter of 2019.

Outlined below are the loan originations for the current quarter, linked quarter and prior year quarter.

($s in millions)	Originations/ Weighted Average Rate
	Q2 2020	Q1 2020	Q2 2019
Real Estate Originations	$208.8/2.91%	$166.8/4.05%	$249.6/4.94%
C&I Originations	$15.0/4.19%	$51.9/4.95%	$89.9/5.97%
SBA PPP Originations	$319.4/1.00%	n/a	n/a

Deposits and Borrowed Funds

The Company continues to focus on growing relationship-based business deposits. Mr. Mahon commented, “Importantly, we continue to improve the quality of our deposit base, as evidenced by the non-interest- bearing deposits to total deposits ratio increasing to approximately 15.0% at June 30, 2020, compared to 9.6% at June 30, 2019.”

Total deposits increased by $198.6 million on a linked quarter basis to $4.44 billion at June 30, 2020. Mr. Mahon commented, “The increase in total deposits was driven by strength in our municipal deposit business and an inflow of PPP-related deposits. PPP-related deposits were approximately $104 million at June 30, 2020.”

The cost of total deposits decreased 27 basis points on a linked quarter basis. As of June 30, 2020, the Company had $875.6 million of certificates of deposits (19.7% of total deposits), with a weighted average rate of 1.52%, that were set to mature in the second half of 2020. Mr. Mahon commented, “Given the significant repricing opportunity for certificates of deposits in the second half of the year, we expect our deposit costs to continue trending downwards.”

Given the increase in deposit funding, total borrowings (excluding subordinated debt securities) were reduced to $1.02 billion at June 30, 2020, compared to $1.12 billion at the first quarter of 2020, and $1.17 billion at the second quarter of 2019.

Non-Interest Income

Non-interest income was $8.4 million during the second quarter of 2020, $4.2 million during the first quarter of 2020, and $2.8 million during the second quarter of 2019. Excluding gains and losses on equity securities and from sales of securities and other assets, non-interest income was $4.8 million during the second quarter of 2020 compared to $4.7 million during the first quarter of 2020 and $2.7 million during the second quarter of 2019.

Mr. Mahon commented, “Our commercial bank operation has produced the desired results on fee income growth, especially as it relates to gaining significant traction with our commercial customers on interest rate swap products. Fees associated with customer level swaps were $2.5 million for the second quarter of 2020 versus $1.2 million for the first quarter of 2020 and $0.3 million for the second quarter of 2019.”

Non-Interest Expense (Excluding Non-recurring Items) Down Slightly

Total non-interest expense was $29.3 million during the second quarter of 2020, $26.0 million during the first quarter of 2020, and $22.3 million during the second quarter of 2019. Excluding the impact of severance and merger-related expenses, non-interest expense was $24.3 million during the second quarter of 2020, $25.4 million during the first quarter of 2020, and $22.3 million during the second quarter of 2019.

The ratio of non-interest expense to average assets was 1.84% during the second quarter of 2020, compared to 1.68% during the linked quarter and 1.40% for the second quarter of 2019. Excluding the impact of severance and merger-related expenses, the ratio of non-interest expense to average assets was 1.52% during the second quarter of 2020, compared to 1.64% during the linked quarter and 1.40% for the second quarter of 2019.

The efficiency ratio was 60.7% during the second quarter of 2020, compared to 57.6% during the linked quarter and 56.8% during the second quarter of 2019. Excluding the impact of severance and merger-related expenses and gain on sale of securities, the efficiency ratio was 50.3% during the second quarter of 2020, compared to 56.1% during the linked quarter and 56.8% during the second quarter of 2019.

Income Tax Expense

The reported effective tax rate for the second quarter of 2020 was 21.6%, compared to 21.6% for the first quarter of 2020, and 25.4% for the second quarter of 2019.

Credit Quality

Non-performing loans at June 30, 2020 were $15.4 million, or 0.3% of total loans, compared to $18.2 million, or 0.4% of total loans, at March 31, 2020.

Under Section 4014 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act), financial institutions had the option to delay the adoption of the Current Expected Credit Loss (“CECL”) framework until the earlier of December 31, 2020 or when the national emergency is lifted. The Bank elected to defer adoption of CECL and is utilizing its existing incurred loss framework.

A loan loss provision of $6.1 million was recorded during the second quarter of 2020, compared to a loan loss provision of $8.0 million during the first quarter of 2020, and a loan loss credit of $0.4 million during the second quarter of 2019. The $6.1 million provision for the second quarter of 2020 was primarily associated with an increase in the general loan loss reserve due to the adjustment of qualitative factors tied to the Bank’s existing incurred loss framework, to account for the effects of the COVID-19 pandemic and related economic disruption.

The allowance for loan losses was 0.78% of total loans at June 30, 2020 as compared to 0.70% of total loans at March 31, 2020. Excluding $310.5 million of PPP loans, the ratio of allowance for losses to total loans at June 30, 2020 would have been 0.83%.

At June 30, 2020, non-performing assets represented 2.9% of the sum of tangible equity plus the allowance for loan losses and reserve for contingent liabilities (see “Problem Assets as a Percentage of Tangible Equity and Reserves” table and “Non-GAAP Reconciliation” table at the end of this news release). 

Capital Management

The Company’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements. At June 30, 2020, the Consolidated Tier 1 capital to average assets (“leverage ratio”) was 10.11%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 13.07% and 16.29%, respectively.

The Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.  At June 30, 2020, the Bank’s leverage ratio was 9.98%, while the Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 12.97% and 13.85%, respectively.

Mr. Mahon commented, “Over the course of 2020, we have raised approximately $117 million from the issuance of perpetual preferred stock. As a result, our capital position is very strong as demonstrated by a tangible equity to tangible assets ratio of 9.76% at June 30, 2020. Excluding the impact of the PPP loans, our tangible equity to tangible assets ratio would have been 10.26% at June 30, 2020; this is well above the previously communicated 9.25% minimum target for this ratio that we disclosed during our first quarter earnings call.”

Diluted earnings per common share of $0.35 exceeded the quarterly $0.14 cash dividend per share by 150.0% during the second quarter of 2020, equating to a 40.0% dividend payout ratio.

Book value per common share increased to $17.07 and tangible common book value per share (common equity less goodwill divided by number of shares outstanding) (see “Non-GAAP Reconciliation” tables at the end of this news release) increased to $15.39 at June 30, 2020.

Earnings Call Information

The Company will conduct a conference call at 8:00 a.m. (ET) on July 29, 2020, during which Chief Executive Officer, Kenneth J. Mahon, will discuss the Company’s second quarter performance, with a Q&A session to follow. Dial-in information for the live call is 1-888-348-2672. Upon dialing in, request to be joined into Dime Community Bancshares, Inc. call with the conference operator.

The conference call will be simultaneously webcast (listen only), and archived for a period of one year, at https://services.choruscall.com/links/dcom200729.html. Dial-in information for the replay is 1-877-344-7529 using access code #10146095. Replay will be available July 29, 2020 (9:30 a.m. (ET)) through August 5, 2020 (11:59 p.m. (ET)).

ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company had $6.47 billion in consolidated assets as of June 30, 2020. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has 28 retail branches located throughout Brooklyn, Queens, the Bronx, Nassau and Suffolk Counties, New York. More information on the Company and the Bank can be found on Dime's website at www.dime.com. 

This news release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," “continue,” "could," "estimate," "expect," "intend," “likely,” "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.

Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These include statements regarding the proposed merger of the Company with Bridge Bancorp, Inc. (the “Merger”).  These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on such statements. Factors that could affect our results include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company and/or the Bank; unanticipated or significant increases in loan losses may negatively affect the Company’s financial condition or results of operations; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; there may be failures or breaches of information technology security systems; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates;  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; we may incur unexpected expenses and delays related to the Merger; or we may be unable to obtain regulatory approvals or satisfy other closing conditions required to complete the Merger. Further, given its ongoing and dynamic nature, it is difficult to predict what effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch closures, work stoppages and unavailability of personnel; and increased cybersecurity risks, as employees increasingly work remotely.

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

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share amounts)
	June 30,				March 31,				December 31,
		2020				2020				2019
ASSETS:
Cash and due from banks	$	117,013			$	246,153			$	155,488
Mortgage-backed securities available-for-sale, at fair value		464,279				500,758				502,464
Investment securities available-for-sale, at fair value		77,728				57,067				48,531
Marketable equity securities, at fair value		5,707				5,398				5,894
Real Estate Loans:
One-to-four family and cooperative/condominium apartment		182,264				176,755				148,429
Multifamily residential and residential mixed-use (1)(2)		2,988,509				3,160,248				3,385,375
Commercial real estate and commercial mixed-use		1,504,020				1,403,985				1,350,185
Acquisition, development, and construction ("ADC")		136,606				133,514				118,365
Total real estate loans		4,811,399				4,874,502				5,002,354
Commercial and industrial ("C&I")		321,009				331,816				336,412
Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans		310,509				-				-
Other loans		1,463				956				1,772
Allowance for credit losses		(42,492	)			(36,463	)			(28,441	)
Total loans, net		5,401,890				5,170,811				5,312,097
Premises and fixed assets, net		21,423				21,631				21,692
Premises held for sale		-				514				514
Loans held for sale		1,794				1,430				500
Federal Home Loan Bank of New York ("FHLBNY") capital stock		52,305				57,146				56,019
Bank Owned Life Insurance ("BOLI")		154,036				133,128				114,257
Goodwill		55,638				55,638				55,638
Operating lease assets		36,813				36,582				37,858
Other assets		78,895				61,569				43,508
TOTAL ASSETS	$	6,467,521			$	6,347,825			$	6,354,460
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Non-interest-bearing checking	$	664,323			$	479,376			$	478,549
Interest-bearing checking		231,201				162,198				151,491
Savings		406,771				390,994				374,265
Money Market		1,742,563				1,565,761				1,705,451
Sub-total		3,044,858				2,598,329				2,709,756
Certificates of deposit		1,393,554				1,641,497				1,572,869
Total Due to Depositors		4,438,412				4,239,826				4,282,625
Escrow and other deposits		87,646				116,097				76,481
FHLBNY advances		1,017,300				1,117,300				1,092,250
Subordinated notes payable, net		113,979				113,942				113,906
Other borrowings		5,000				-				110,000
Operating lease liabilities		42,733				42,614				44,098
Other liabilities		80,908				72,398				38,342
TOTAL LIABILITIES		5,785,978				5,702,177				5,757,702
STOCKHOLDERS' EQUITY:
Preferred stock, Series A ($0.01 par, $25.00 liquidiation value, 9,000,000 shares authorized, 5,299,200 shares and 2,999,200
shares issued and outstanding at June 30, 2020 and March 31, 2020, respectively, and none issued or outstanding at December 31, 2019)		116,569				72,224				-
Common stock ($0.01 par, 125,000,000 shares authorized, 53,724,233 shares, 53,721,189 shares and 53,721,189 shares issued at
June 30, 2020, March 31, 2020 and December 31, 2019, respectively, and 33,089,585 shares, 33,875,386 shares and 35,154,642
shares outstanding at June 30, 2020, March 31, 2020 and Decmeber 31, 2019, respectively)		537				537				537
Additional paid-in capital		278,581				279,327				279,322
Retained earnings		592,497				585,294				581,817
Accumulated other comprehensive loss, net of deferred taxes		(14,403	)			(12,632	)			(5,940	)
Unearned equity awards		(7,549	)			(6,067	)			(6,731	)
Common Stock held by the Benefit Maintenance Plan		(1,496	)			(1,496	)			(1,496	)
Treasury stock, at cost (20,634,648 shares, 19,845,803 shares and 18,566,547 shares at June 30, 2020, March 31, 2020 and
December 31, 2019, respectively)		(283,193	)			(271,539	)			(250,751	)
TOTAL STOCKHOLDERS' EQUITY		681,543				645,648				596,758
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,467,521			$	6,347,825			$	6,354,460
(1) Includes loans underlying cooperatives.
(2) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except share and per share amounts)
	For the Three Months Ended											For the Six Months Ended
	June 30,			March 31,				June 30,				June 30,				June 30,
		2020			2020				2019				2020				2019
Interest income:
Loans secured by real estate	$	49,058		$	50,117			$	50,811			$	99,175			$	99,988
Commercial and industrial ("C&I") loans		5,071			4,045				4,134				9,116				7,570
Other loans		13			15				18				28				36
Mortgage-backed securities		3,064			3,305				2,961				6,369				6,158
Investment securities		582			421				570				1,003				990
Other short-term investments		846			1,002				1,457				1,848				2,904
Total interest income		58,634			58,905				59,951				117,539				117,646
Interest expense:
Deposits and escrow		9,700			11,926				16,271				21,626				31,288
Borrowed funds		5,378			6,455				7,176				11,833				14,530
Total interest expense		15,078			18,381				23,447				33,459				45,818
Net interest income		43,556			40,524				36,504				84,080				71,828
Provision for loan losses		6,060			8,012				(449	)			14,072				(128	)
Net interest income after provision for loan losses		37,496			32,512				36,953				70,008				71,956
Non-interest income:
Service charges and other fees		1,083			1,203				1,264				2,286				2,363
Mortgage banking income, net		52			66				61				118				129
Gain (loss) on equity securities		436			(472	)			148				(36	)			416
Gain (loss) on sale of securities and other assets		3,134			8				(57	)			3,142				(133	)
Gain on sale of loans		206			315				339				521				594
Income from BOLI		911			1,887				707				2,798				1,401
Loan level derivative income		2,494			1,163				291				3,657				291
Other		70			66				67				136				119
Total non-interest income		8,386			4,236				2,820				12,622				5,180
Non-interest expense:
Salaries and employee benefits		14,719			14,846				12,061				29,565				23,945
Severance pay		3,930			70				-				4,000				-
Stock benefit plan compensation expense		478			671				491				1,149				775
Occupancy and equipment		3,959			4,056				3,827				8,015				7,696
Data processing costs		2,007			2,024				1,908				4,031				3,974
Marketing		136			397				465				533				931
Federal deposit insurance premiums		529			477				586				1,006				1,040
Merger expenses		1,072			586				-				1,658				-
Other		2,516			2,913				2,958				5,429				5,987
Total non-interest expense		29,346			26,040				22,296				55,386				44,348
Income before taxes		16,536			10,708				17,477				27,244				32,788
Income tax expense		3,570			2,316				4,442				5,886				8,252
Net income		12,966			8,392				13,035				21,358			$	24,536
Preferred stock dividends		1,140			-				-				1,140				-
Net income available to common stockholders	$	11,826		$	8,392			$	13,035			$	20,218			$	24,536
Earnings per Common Share ("EPS"):
Basic	$	0.36		$	0.24			$	0.36			$	0.60			$	0.68
Diluted	$	0.35		$	0.24			$	0.36			$	0.59			$	0.68
Average common shares outstanding for Diluted EPS		33,243,700			34,631,965				35,864,389				33,994,124				35,944,361

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share amounts)
	At or For the Three Months Ended												At or For the Six Months Ended
	June 30,				March 31,				June 30,				June 30,				June 30,
		2020				2020				2019				2020				2019
Per Share Data:
Reported EPS (Diluted)	$	0.35			$	0.24			$	0.36			$	0.59			$	0.68
Cash dividends paid per common share		0.14				0.14				0.14				0.28				0.28
Book value per common share		17.07				16.93				16.96				17.07				16.96
Tangible common book value per share (1)		15.39				15.29				15.41				15.39				15.41
Dividend payout ratio		40.00	%			58.33	%			38.89	%			47.46	%			41.18	%
Performance Ratios (Based upon Reported Net Income):
Return on average assets		0.81	%			0.54	%			0.82	%			0.68	%			0.77	%
Return on average equity		7.96				5.35				8.59				6.68				8.10
Return on average tangible equity (1)		8.71				5.87				9.45				7.32				8.92
Return on average tangible common equity (1)		9.23				6.27				9.45				7.72				8.92
Net interest spread		2.61				2.46				2.08				2.53				2.05
Net interest margin		2.86				2.72				2.38				2.79				2.35
Average interest-earning assets to average interest-bearing liabilities		124.97				120.93				119.47				122.94				118.80
Non-interest expense to average assets		1.84				1.68				1.40				1.76				1.39
Efficiency ratio		60.67				57.58				56.83				59.18				58.25
Loan-to-deposit ratio at end of period		122.67				122.82				124.71				122.67				124.71
CRE consolidated concentration ratio (2)		544.90				588.64				697.30				544.90				697.30
Effective tax rate		21.59				21.63				25.42				21.60				25.17
Average Balance Data:
Average assets	$	6,389,768			$	6,207,949			$	6,391,476			$	6,298,859			$	6,377,787
Average interest-earning assets		6,091,545				5,949,363				6,134,510				6,020,454				6,122,902
Average loans		5,387,839				5,286,487				5,492,455				5,335,663				5,468,878
Average deposits		4,413,182				4,177,592				4,378,999				4,295,387				4,360,022
Average equity		651,319				627,344				607,152				639,332				605,613
Average tangible equity (1)		595,681				571,706				551,515				583,694				549,976
Average tangible common equity (1)		512,371				535,594				551,515				523,983				549,976
Asset Quality Summary:
Non-performing loans (excluding loans held for sale)	$	15,383			$	18,157			$	2,538			$	15,383			$	2,538
Non-performing assets		15,383				18,157				2,538				15,383				2,538
Loans delinquent 30 to 89 days at period end		6,278				13				105				6,278				105
Net (recoveries) charge-offs		31				(10	)			358				21				520
Non-performing assets/ Total assets		0.24	%			0.29	%			0.04	%			0.24	%			0.04	%
Non-performing loans/ Total loans		0.28				0.35				0.05				0.28				0.05
Allowance for loan loss/ Total loans		0.78				0.70				0.38				0.78				0.38
Allowance for loan loss/ Non-performing loans		276.23				200.82				832.70				276.23				832.70
Capital Ratios - Consolidated:
Tangible common equity to tangible assets (1)		7.94	%			8.23	%			8.58	%			7.94	%			8.58	%
Tangible equity to tangible assets (1)		9.76				9.38				8.58				9.76				8.58
Tier 1 common equity ratio		10.69				10.69				10.94				10.69				10.94
Tier 1 risk-based capital ratio		13.07				12.15				10.94				13.07				10.94
Total risk-based capital ratio		16.29				15.21				13.58				16.29				13.58
Tier 1 leverage ratio		10.11				9.80				8.83				10.11				8.83
Capital Ratios - Bank Only:
Tier 1 common equity ratio		12.97	%			12.72	%			12.14	%			12.97	%			12.14	%
Tier 1 risk-based capital ratio		12.97				12.72				12.14				12.97				12.14
Total risk-based capital ratio		13.85				13.47				12.56				13.85				12.56
Tier 1 leverage ratio		9.98				9.93				9.77				9.98				9.77
(1) See "Non-GAAP Reconciliation" table for reconciliation of tangible equity, tangible common equity, and tangible assets. Average balances are calculated using the ending balance for months during the period indicated.
(2) The CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner occupied commercial real estate, multifamily, and ADC, divided by consolidated capital.

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)
	For the Three Months Ended
	June 30, 2020								March 31, 2020								June 30, 2019
						Average								Average								Average
	Average					Yield/			Average					Yield/			Average					Yield/
	Balance		Interest			Cost			Balance		Interest			Cost			Balance		Interest			Cost
Assets:
Interest-earning assets:
Real estate loans	$	4,867,970	$	49,058		4.03	%		$	4,954,391	$	50,117		4.05	%		$	5,201,395	$	50,811		3.91	%
Commercial and industrial loans		518,999		5,071		3.91				327,653		4,045		4.94				289,843		4,134		5.71
Other loans		870		13		5.98				1,443		15		4.16				1,217		18		5.92
Mortgage-backed securities		468,705		3,064		2.61				486,722		3,305		2.72				423,387		2,961		2.80
Investment securities		65,155		582		3.57				47,060		421		3.58				64,488		570		3.54
Other short-term investments		169,846		846		1.99				132,094		1,002		3.03				154,180		1,457		3.78
Total interest-earning assets		6,091,545		58,634		3.85	%			5,949,363		58,905		3.96	%			6,134,510		59,951		3.91	%
Non-interest-earning assets		298,223								258,586								256,966
Total assets	$	6,389,768							$	6,207,949							$	6,391,476
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking accounts	$	222,694	$	212		0.38	%		$	159,027	$	87		0.22	%		$	125,041	$	91		0.29	%
Money market accounts		1,656,394		2,495		0.61				1,580,779		3,586		0.91				1,908,737		7,397		1.55
Savings accounts		404,389		305		0.30				383,769		367		0.38				327,312		46		0.06
Certificates of deposit		1,511,598		6,688		1.78				1,586,549		7,886		2.00				1,595,849		8,737		2.20
Total interest-bearing deposits		3,795,075		9,700		1.03				3,710,124		11,926		1.29				3,956,939		16,271		1.65
FHLBNY advances		962,657		4,047		1.69				1,085,553		5,085		1.88				1,050,824		5,756		2.20
Subordinated notes payable, net		113,955		1,330		4.69				113,918		1,330		4.70				113,808		1,330		4.69
Other borrowings		2,747		1		0.15				9,890		40		1.63				13,308		90		2.71
Borrowed Funds		1,079,359		5,378		2.00				1,209,361		6,455		2.15				1,177,940		7,176		2.44
Total interest-bearing liabilities		4,874,434		15,078		1.24	%			4,919,485		18,381		1.50	%			5,134,879		23,447		1.83	%
Non-interest-bearing checking accounts		618,107								467,468								422,060
Other non-interest-bearing liabilities		245,908								193,652								227,385
Total liabilities		5,738,449								5,580,605								5,784,324
Stockholders' equity		651,319								627,344								607,152
Total liabilities and stockholders' equity	$	6,389,768							$	6,207,949							$	6,391,476
Net interest income			$	43,556							$	40,524							$	36,504
Net interest spread						2.61	%							2.46	%							2.08	%
Net interest-earning assets	$	1,217,111							$	1,029,878							$	999,631
Net interest margin						2.86	%							2.72	%							2.38	%
Ratio of interest-earning assets to interest-bearing liabilities				124.97	%							120.93	%							119.47	%
Deposits (including non-interest-bearing checking accounts)	$	4,413,182	$	9,700		0.88	%		$	4,177,592	$	11,926		1.15	%		$	4,378,999	$	16,271		1.49	%

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF LOAN COMPOSITION AND WEIGHTED AVERAGE RATES ("WAR") (1)
(Dollars in thousands)
	At June 30, 2020					At March 31, 2020					At June 30, 2019
	Balance		WAR			Balance		WAR			Balance		WAR
Loan balances at period end:
One-to-four family residential, including condominium and cooperative apartment	$	182,264	3.98	%		$	176,755	3.89	%		$	120,523	4.60	%
Multifamily residential and residential mixed-use (2)(3)		2,988,509	3.77				3,160,248	3.78				3,736,500	3.69
Commercial real estate and commercial mixed-use		1,504,020	4.06				1,403,985	4.28				1,279,188	4.26
Acquisition, development, and construction ("ADC")		136,606	5.08				133,514	5.11				77,479	6.57
Total real estate loans		4,811,399	3.91				4,874,502	3.96				5,213,690	3.88
Commercial and industrial ("C&I")		321,009	4.39				331,816	4.49				316,061	5.78
Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans		310,509	1.00				-	-				-	-
Total	$	5,442,917	3.77	%		$	5,206,318	4.00	%		$	5,529,751	3.99	%
(1) Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, divided by the total amount of loans in the category.
(2) Includes loans underlying cooperatives.
(3) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS ("TDRs")
(Dollars in thousands)
	At June 30,				At March 31,				At June 30,
		2020				2020				2019
Non-Performing Loans
One-to-four family residential, including condominium and cooperative apartment	$	819			$	6,685			$	832
Multifamily residential and residential mixed-use (1)(2)		1,377				1,332				428
Commercial real estate and commercial mixed-use real estate (2)		3,003				56				1,274
C&I		10,176				10,082				-
Other		8				2				4
Total Non-Performing Loans (3)	$	15,383			$	18,157			$	2,538
Total Non-Performing Assets	$	15,383			$	18,157			$	2,538
Performing TDR Loans
One-to-four family and cooperative/condominium apartment	$	-			$	-			$	11
Multifamily residential and mixed-use residential real estate (1)(2)		-				-				252
Commercial real estate and commercial mixed-use real estate (2)		-				-				4,037
Total Performing TDRs	$	-			$	-			$	4,300
(1) Includes loans underlying cooperatives.
(2) While the loans within this category are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately
from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant component of the total loan portfolio.
(3) There were no non-accruing TDRs for the periods indicated.
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE EQUITY AND RESERVES
(Dollars in thousands)
	At June 30,				At March 31,				At June 30,
		2020				2020				2019
Total Non-Performing Assets	$	15,383			$	18,157			$	2,538
Loans 90 days or more past due on accrual status (4)		3,691				1,033				1,531
TOTAL PROBLEM ASSETS	$	19,074			$	19,190			$	4,069
Tangible equity (5)	$	625,905			$	590,010			$	553,063
Allowance for loan losses and reserves for contingent liabilities		42,517				36,488				21,159
TANGIBLE EQUITY PLUS RESERVES	$	668,422			$	626,498			$	574,222
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE EQUITY AND RESERVES		2.9	%			3.1	%			0.7	%
(4) These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed in the near future, and were not expected
to result in any loss of contractual principal or interest. These loans are not included in non-performing loans.
(5) See "Non-GAAP Reconciliation" table for reconciliation of tangible common equity and tangible assets.

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(Dollars in thousands except per share amounts)
	For the Three Months Ended												For the Six Months Ended
	June 30,				March 31,				June 30,				June 30,				June 30,
		2020				2020				2019				2020				2019
Reconciliation of Reported and Adjusted ("non-GAAP") Net Income:
Reported net income	$	12,966			$	8,392			$	13,035			$	21,358			$	24,536
Adjustments to net income, net of tax (1):
Add: Merger expenses		733				400				-				1,133				-
Add: Severance		2,686				48				-				2,734				-
Less: Loss (Gain) on sale of securities		(2,142	)			(5	)			39				(2,147	)			91
Adjusted ("non-GAAP") net income	$	14,243			$	8,835			$	13,074			$	23,078			$	24,627
Adjusted Ratios (Based upon "non-GAAP Net Income" as calculated above):
Adjusted EPS (Diluted)	$	0.39			$	0.26			$	0.36			$	0.64			$	0.68
Adjusted return on average assets		0.89	%			0.57	%			0.82	%			0.73	%			0.77	%
Adjusted return on average equity		8.75				5.63				8.61				7.22				8.13
Adjusted return on average tangible equity		9.56				6.18				9.48				7.91				8.96
Adjusted return on average tangible common equity		10.23				6.60				9.48				8.37				8.96
Adjusted non-interest expense to average assets		1.52				1.64				1.40				1.58				1.39
Adjusted efficiency ratio		50.33				56.13				56.83				53.13				57.80
	June 30,				March 31,				June 30,
		2020				2020				2019
Reconciliation of Tangible Assets:
Total assets	$	6,467,521			$	6,347,825			$	6,498,362
Less:
Goodwill		55,638				55,638				55,638
Tangible assets	$	6,411,883			$	6,292,187			$	6,442,724
Reconciliation of Tangible Common Equity - Consolidated:
Total stockholders' equity	$	681,543			$	645,648			$	608,701
Less:
Goodwill		55,638				55,638				55,638
Tangible equity		625,905				590,010				553,063
Less:
Preferred Stock, net		116,569				72,224				-
Tangible common equity	$	509,336			$	517,786			$	553,063
(1) Adjustments to net income are taxed at the Company's statutory tax rate of approximately 32% unless otherwise noted.