UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34096

DIME COMMUNITY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

N/A

(Former name or former address, if changed since last report)


New York		11-2934195
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

898 Veterans Memorial Highway, Suite 560, Hauppauge, NY		11788
(Address of principal executive offices)		(Zip Code)

(631) 537-1000

(Registrant’s telephone number, including area code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	DCOM	The NASDAQ Stock Market
Preferred Stock, Series A, $0.01 Par Value	DCOMP	The NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all the reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 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 ☒ No ☐

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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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 ☒	Accelerated Filer ☐
Non-Accelerated Filer ☐	Smaller Reporting Company ☐
	Emerging Growth Company ☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Classes of Common Stock		Number of shares outstanding at ~~April 30,~~July 31, 2023
$0.01 Par Value		~~38,809,466~~38,826,921

Table of Contents


PART I – FINANCIAL INFORMATION		Page
Item 1.	Unaudited Condensed Consolidated Financial Statements
	Consolidated Statements of Financial Condition at ~~March 31,~~June 30, 2023 and December 31, 2022	4
	Consolidated Statements of Income for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022	5
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022	6
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022	7
	Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2023 and ~~202~~20222	89
	Notes to Unaudited Condensed Consolidated Financial Statements	910
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3637
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4953
Item 4.	Controls and Procedures	5155

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	5155
Item 1A.	Risk Factors	5156
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5256
Item 3.	Defaults Upon Senior Securities	5256
Item 4.	Mine Safety Disclosures	5356
Item 5.	Other Information	5356
Item 6.	Exhibits	5459
	Signatures	5560

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 “annualized,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “seek,” “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 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:

●

increases in competitive pressure among financial institutions or from non-financial institutions;

●

inflation and fluctuation in market interest rates, which may affect demand for our products, interest margins and the fair value of financial instruments;

●

changes in deposit flows, loan demand or real estate values;

●

changes in the quality and composition of our loan or investment portfolios or unanticipated or significant increases in loan losses;

●

changes in accounting principles, policies or guidelines;

●

changes in corporate and/or individual income tax laws or policies;

●

general socio-economic conditions, including conditions caused by COVID-19 pandemic, other public health emergencies, 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;

●

legislative, regulatory or policy changes;

●

technological changes;

●

breaches or failures of the Company’s information technology security systems;

●

difficulties or unanticipated expenses incurred in the consummation of new business initiatives or the integration of any acquired entities;

●

litigation or matters before regulatory agencies; and

●

the risks referred to in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.

Table of Contents

Item 1. Condensed Consolidated Financial Statements

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

(Dollars in thousands except share amounts)

March 31,

December 31,


2023

2022

Assets:



Cash and due from banks

$
663,132

$
169,297

Securities available-for-sale, at fair value

926,812

950,587

Securities held-to-maturity

605,642

585,798

Loans held for sale

2,171

—

Loans held for investment, net of fees and costs

10,731,845

10,566,831

Allowance for credit losses

(78,335)

(83,507)

Total loans held for investment, net

10,653,510

10,483,324

Premises and fixed assets, net

45,863

46,749

Restricted stock

105,258

88,745

Bank Owned Life Insurance ("BOLI")

335,455

333,292

Goodwill

155,797

155,797

Other intangible assets

6,107

6,484

Operating lease assets

57,204

57,857

Derivative assets

130,294

154,485

Accrued interest receivable

49,926

48,561

Other assets

104,553

108,945

Total assets

$
13,841,724

$
13,189,921

Liabilities:





Interest-bearing deposits

$
7,447,990

$
6,735,189

Non-interest-bearing deposits

3,122,245

3,519,218

Total deposits

10,570,235

10,254,407

Federal Home Loan Bank of New York ("FHLBNY") advances

1,498,000

1,131,000

Other short-term borrowings

2,068

1,360

Subordinated debt, net

200,261

200,283

Derivative cash collateral

120,680

153,040

Operating lease liabilities

59,757

60,340

Derivative liabilities

115,568

137,335

Other liabilities

83,902

82,573

Total liabilities

12,650,471

12,020,338





Commitments and contingencies

—

—

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 March 31, 2023 and December 31, 2022)

116,569

116,569

Common stock ($0.01 par, 80,000,000 shares authorized, 41,621,772 shares issued at March 31, 2023 and December 31, 2022, and 38,804,361 shares and 38,573,000 shares outstanding at March 31, 2023 and December 31, 2022, respectively)

416

416

Additional paid-in capital

493,801

495,410

Retained earnings

789,010

762,762

Accumulated other comprehensive loss, net of deferred taxes

(98,638)

(94,379)

Unearned equity awards

(13,468)

(8,078)

Treasury stock, at cost (2,817,411 shares and 3,048,772 shares at March 31, 2023 and December 31, 2022, respectively)

(96,437)

(103,117)

Total stockholders' equity

1,191,253

1,169,583

Total liabilities and stockholders' equity

$
13,841,724

$
13,189,921


	June 30,		December 31,
	2023		2022
Assets:
Cash and due from banks	$	452,504	$	169,297
Securities available-for-sale, at fair value		894,856		950,587
Securities held-to-maturity		603,960		585,798
Loans held for sale		371		—
Loans held for investment, net of fees and costs		10,876,415		10,566,831
Allowance for credit losses		(75,646)		(83,507)
Total loans held for investment, net		10,800,769		10,483,324
Premises and fixed assets, net		45,890		46,749
Restricted stock		104,724		88,745
Bank Owned Life Insurance ("BOLI")		337,083		333,292
Goodwill		155,797		155,797
Other intangible assets		5,758		6,484
Operating lease assets		54,931		57,857
Derivative assets		147,740		154,485
Accrued interest receivable		51,787		48,561
Other assets		146,692		108,945
Total assets	$	13,802,862	$	13,189,921

Liabilities:
Interest-bearing deposits	$	7,567,874	$	6,734,997
Non-interest-bearing deposits		2,884,184		3,449,763
Deposits (excluding mortgage escrow deposits)		10,452,058		10,184,760
Non-interest-bearing mortgage escrow deposits		70,431		69,455
Interest-bearing mortgage escrow deposits		203		192
Total mortgage escrow deposits		70,634		69,647
Federal Home Loan Bank of New York ("FHLBNY") advances		1,448,000		1,131,000
Other short-term borrowings		—		1,360
Subordinated debt, net		200,240		200,283
Derivative cash collateral		140,160		153,040
Operating lease liabilities		57,547		60,340
Derivative liabilities		131,130		137,335
Other liabilities		100,590		82,573
Total liabilities		12,600,359		12,020,338

Commitments and contingencies		—		—

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 June 30, 2023 and December 31, 2022)		116,569		116,569
Common stock ($0.01 par, 80,000,000 shares authorized, 41,632,327 and 41,621,772 shares shares issued at June 30, 2023 and December 31, 2022, and 38,803,119 shares and 38,573,000 shares outstanding at June 30, 2023 and December 31, 2022, respectively)		416		416
Additional paid-in capital		493,955		495,410
Retained earnings		804,532		762,762
Accumulated other comprehensive loss, net of deferred taxes		(104,385)		(94,379)
Unearned equity awards		(11,746)		(8,078)
Treasury stock, at cost (2,829,208 shares and 3,048,772 shares at June 30, 2023 and December 31, 2022, respectively)		(96,838)		(103,117)
Total stockholders' equity		1,202,503		1,169,583
Total liabilities and stockholders' equity	$	13,802,862	$	13,189,921

See notes to unaudited condensed consolidated financial statements.

Table of Contents

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands except per share amounts)

Three Months Ended

March 31,

2023

2022
Interest income:




Loans

$
128,439

$
86,420
Securities

8,431

7,131
Other short-term investments

3,802

368
Total interest income

140,672

93,919
Interest expense:




Deposits and escrow

37,272

2,531
Borrowed funds

16,171

2,278
Derivative cash collateral

1,477

1
Total interest expense

54,920

4,810
Net interest income

85,752

89,109
Recovery for credit losses

(3,648)

(1,592)
Net interest income after recovery for credit losses

89,400

90,701

Non-interest income:




Service charges and other fees

3,814

4,058
Title fees

292

421
Loan level derivative income

3,133

6
BOLI income

2,163

1,839
Gain on sale of Small Business Administration ("SBA") loans

516

242
Gain on sale of residential loans

48

148
Net loss on sale of securities and other assets

(1,447)

—
Other

482

489
Total non-interest income

9,001

7,203
Non-interest expense:




Salaries and employee benefits

26,634

30,834
Occupancy and equipment

7,373

7,584
Data processing costs

4,238

3,805
Marketing

1,449

1,295
Professional services

1,923

2,094
Federal deposit insurance premiums

1,873

1,150
Amortization of other intangible assets

377

586
Other

3,608

2,540
Total non-interest expense

47,475

49,888
Income before income taxes

50,926

48,016
Income tax expense

13,623

13,485
Net income

37,303

34,531
Preferred stock dividends

1,821

1,821
Net income available to common stockholders

$
35,482

$
32,710
Earnings per common share:




Basic

$
0.92

$
0.82
Diluted

$
0.92

$
0.82


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Interest income:
Loans	$	138,310	$	93,102	$	266,749	$	179,522
Securities		7,914		7,067		16,345		14,198
Other short-term investments		5,867		741		9,669		1,109
Total interest income		152,091		100,910		292,763		194,829
Interest expense:
Deposits and escrow		52,616		3,731		89,888		6,262
Borrowed funds		17,759		3,573		33,930		5,851
Derivative cash collateral		1,497		94		2,974		95
Total interest expense		71,872		7,398		126,792		12,208
Net interest income		80,219		93,512		165,971		182,621
Provision (recovery) for credit losses		892		44		(2,756)		(1,548)
Net interest income after provision (recovery) for credit losses		79,327		93,468		168,727		184,169

Non-interest income:
Service charges and other fees		4,856		4,337		8,670		8,395
Title fees		246		683		538		1,104
Loan level derivative income		2,437		1,685		5,570		1,691
BOLI income		2,852		4,143		5,015		5,982
Gain on sale of Small Business Administration ("SBA") loans		210		723		726		965
Gain on sale of residential loans		34		191		82		339
Loss on equity securities		(780)		—		(780)		—
Net loss on sale of securities and other assets		—		—		(1,447)		—
Other		550		362		1,032		851
Total non-interest income		10,405		12,124		19,406		19,327
Non-interest expense:
Salaries and employee benefits		29,900		28,454		56,534		59,288
Severance		481		2,193		506		2,193
Occupancy and equipment		7,144		7,396		14,517		14,980
Data processing costs		4,197		3,913		8,435		7,718
Marketing		1,488		1,515		2,937		2,810
Professional services		1,676		2,028		3,599		4,122
Federal deposit insurance premiums		1,874		1,150		3,747		2,300
Loss from extinguishment of debt		—		740		—		740
Amortization of other intangible assets		349		430		726		1,016
Other		5,077		4,019		8,660		6,559
Total non-interest expense		52,186		51,838		99,661		101,726
Income before income taxes		37,546		53,754		88,472		101,770
Income tax expense		10,048		15,269		23,671		28,754
Net income		27,498		38,485		64,801		73,016
Preferred stock dividends		1,822		1,822		3,643		3,643
Net income available to common stockholders	$	25,676	$	36,663	$	61,158	$	69,373
Earnings per common share:
Basic	$	0.66	$	0.94	$	1.58	$	1.76
Diluted	$	0.66	$	0.94	$	1.58	$	1.76

See notes to unaudited condensed consolidated financial statements.

Table of Contents

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands except per share amounts)

Three Months Ended

March 31,

2023

2022
Net income

$
37,303

$
34,531
Other comprehensive income (loss):




Change in unrealized gain (loss) on securities:

Change in net unrealized loss during the period

(2,302)

(70,131)
Reclassification adjustment for net losses included in net loss on sale of securities and other assets

1,447

—
Accretion of net unrealized loss on securities transferred to held-to-maturity

757

170
Change in pension and other postretirement obligations:

Reclassification adjustment for expense included in other expense

(370)

(934)
Change in the net actuarial gain

221

997
Change in unrealized gain (loss) on derivatives:

Change in net unrealized (loss) gain during the period

(2,111)

6,852
Reclassification adjustment for expense included in interest expense

(313)

31
Other comprehensive loss before income taxes

(2,671)

(63,015)
Deferred tax expense (benefit)

1,588

(19,816)
Total other comprehensive loss, net of tax

(4,259)

(43,199)
Total comprehensive income (loss)

$
33,044

$
(8,668)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income	$	27,498	$	38,485	$	64,801	$	73,016
Other comprehensive income (loss):
Change in unrealized gain (loss) on securities:
Change in net unrealized loss during the period		(11,291)		(33,157)		(13,593)		(103,288)
Reclassification adjustment for net losses included in net loss on sale of securities and other assets		—		—		1,447		—
Accretion of net unrealized loss on securities transferred to held-to-maturity		796		829		1,553		999
Change in pension and other postretirement obligations:
Reclassification adjustment for expense included in other expense		(370)		(936)		(740)		(1,870)
Change in the net actuarial gain		814		998		1,035		1,995
Change in unrealized gain (loss) on derivatives:
Change in net unrealized gain (loss) during the period		1,586		2,309		(525)		9,161
Reclassification adjustment for expense included in interest expense		299		(54)		(14)		(23)
Other comprehensive loss before income taxes		(8,166)		(30,011)		(10,837)		(93,026)
Deferred tax expense		(2,419)		(9,441)		(831)		(29,257)
Total other comprehensive loss, net of tax		(5,747)		(20,570)		(10,006)		(63,769)
Total comprehensive income	$	21,751	$	17,915	$	54,795	$	9,247

See notes to unaudited condensed consolidated financial statements.

Table of Contents

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands)

Three Months Ended March 31, 2023

Accumulated

Other

Comprehensive

Number of

Additional

Loss,

Unearned

Treasury

Total

Shares of

Preferred

Common

Paid-in

Retained

Net of Deferred

Equity

Stock,

Stockholders’


Common Stock

Stock

Stock

Capital

Earnings

Taxes

Awards

at cost

Equity
Beginning balance as of January 1, 2023

38,573,000

$
116,569

$
416

$
495,410

$
762,762

$
(94,379)

$
(8,078)

$
(103,117)

$
1,169,583
Net income

—

—

—

—

37,303

—

—

—

37,303
Other comprehensive loss, net of tax

—

—

—

—

—

(4,259)

—

—

(4,259)
Release of shares, net of forfeitures

293,106

—

—

(1,608)

—

—

(6,692)

8,507

207
Stock-based compensation

—

—

—

—

—

—

1,302

—

1,302
Shares received related to tax withholding

(36,932)

—

—

(1)

—

—

—

(1,112)

(1,113)
Cash dividends declared to preferred stockholders

—

—

—

—

(1,821)

—

—

—

(1,821)
Cash dividends declared to common stockholders

—

—

—

—

(9,234)

—

—

—

(9,234)
Purchase of treasury stock

(24,813)

—

—

—

—

—

—

(715)

(715)
Ending balance as of March 31, 2023

38,804,361

116,569

416

493,801

789,010

(98,638)

(13,468)

(96,437)

1,191,253

Six Months Ended June 30, 2023

Accumulated

Other

Comprehensive

Number of

Additional

Loss,

Unearned

Treasury

Total

Shares of

Preferred

Common

Paid-in

Retained

Net of Deferred

Equity

Stock,

Stockholders’

Common Stock

Stock

Capital

Earnings

Taxes

Awards

at cost

Equity

Beginning balance as of January 1, 2023

38,573,000

116,569

416

495,410

762,762

(94,379)

(8,078)

(103,117)

1,169,583

Net income

—

37,303

—

37,303

Other comprehensive loss, net of tax

—

(4,259)

—

(4,259)

Release of shares, net of forfeitures

293,106

—

(1,608)

—

(6,692)

8,507

207

Stock-based compensation

—

1,302

—

1,302

Shares received related to tax withholding

(36,932)

—

(1)

—

(1,112)

(1,113)

Cash dividends declared to preferred stockholders

—

(1,821)

—

(1,821)

Cash dividends declared to common stockholders

—

(9,234)

—

(9,234)

Purchase of treasury stock

(24,813)

—

(715)

Ending balance as of March 31, 2023

38,804,361

116,569

416

493,801

789,010

(98,638)

(13,468)

(96,437)

1,191,253

Net income

—

27,498

—

27,498

Other comprehensive loss, net of tax

—

(5,747)

—

(5,747)

Release of shares, net of forfeitures

13,262

—

154

—

364

(123)

395

Stock-based compensation

—

1,358

—

1,358

Shares received related to tax withholding

(2,504)

—

(46)

Cash dividends declared to preferred stockholders

—

(1,822)

—

(1,822)

Cash dividends declared to common stockholders

—

(10,154)

—

(10,154)

Purchase of treasury stock

(12,000)

—

(232)

Ending balance as of June 30, 2023

38,803,119

116,569

416

493,955

804,532

(104,385)

(11,746)

(96,838)

1,202,503

Table of Contents

Three Months Ended March 31, 2022

Accumulated

Other

Comprehensive

Number of

Additional

(Loss) Income,

Unearned

Treasury

Total

Shares of

Preferred

Common

Paid-in

Retained

Net of Deferred

Equity

Stock,

Stockholders’


Common Stock

Stock

Stock

Capital

Earnings

Taxes

Awards

at cost

Equity
Beginning balance as of January 1, 2022

39,877,833

$
116,569

$
416

$
494,125

$
654,726

$
(6,181)

$
(7,842)

$
(59,193)

$
1,192,620
Net income

—

—

—

—

34,531

—

—

—

34,531
Other comprehensive income, net of tax

—

—

—

—

—

(43,199)

—

—

(43,199)
Release of shares, net of forfeitures

127,812

—

—

844

(146)

—

(3,939)

3,284

43
Stock-based compensation

—

—

—

—

—

—

1,219

—

1,219
Shares received related to tax withholding

(40,731)

—

—

—

—

—

—

(1,414)

(1,414)
Cash dividends declared to preferred stockholders

—

—

—

—

(1,821)

—

—

—

(1,821)
Cash dividends declared to common stockholders

—

—

—

—

(9,300)

—

—

—

(9,300)
Purchase of treasury stock

(505,005)

—

—

—

—

—

—

(17,392)

(17,392)
Ending balance as of March 31, 2022

39,459,909

116,569

416

494,969

677,990

(49,380)

(10,562)

(74,715)

1,155,287


	Six Months Ended June 30, 2022
										Accumulated
										Other
										Comprehensive
	Number of					Additional				Loss,		Unearned		Treasury		Total
	Shares of	Preferred		Common		Paid-in		Retained		Net of Deferred		Equity		Stock,		Stockholders’
	Common Stock	Stock		Stock		Capital		Earnings		Taxes		Awards		at cost		Equity
Beginning balance as of January 1, 2022	39,877,833	$	116,569	$	416	$	494,125	$	654,726	$	(6,181)	$	(7,842)	$	(59,193)	$	1,192,620
Net income	—		—		—		—		34,531		—		—		—		34,531
Other comprehensive income, net of tax	—		—		—		—		—		(43,199)		—		—		(43,199)
Release of shares, net of forfeitures	127,812		—		—		844		—		—		(3,939)		3,284		189
Stock-based compensation	—		—		—		—		—		—		1,219		—		1,219
Shares received related to tax withholding	(40,731)		—		—		—		—		—		—		(1,414)		(1,414)
Cash dividends declared to preferred stockholders	—		—		—		—		(1,821)		—		—		—		(1,821)
Cash dividends declared to common stockholders	—		—		—		—		(9,446)		—		—		—		(9,446)
Purchase of treasury stock	(505,005)		—		—		—		—		—		—		(17,392)		(17,392)
Ending balance as of March 31, 2022	39,459,909		116,569		416		494,969		677,990		(49,380)		(10,562)		(74,715)		1,155,287

Net income	—		—		—		—		38,485		—		—		—		38,485
Other comprehensive income, net of tax	—		—		—		—		—		(20,570)		—		—		(20,570)
Release of shares, net of forfeitures	27,125		—		—		297		—		—		(644)		726		379
Stock-based compensation	—		—		—		—		—		—		946		—		946
Shares received related to tax withholding	(37)		—		—		—		—		—		—		(1)		(1)
Cash dividends declared to preferred stockholders	—		—		—		—		(1,822)		—		—		—		(1,822)
Cash dividends declared to common stockholders, net	—		—		—		—		(9,282)		—		—		—		(9,282)
Purchase of treasury stock	(717,644)		—		—		—		—		—		—		(22,900)		(22,900)
Ending balance as of June 30, 2022	38,769,353	$	116,569	$	416	$	495,266	$	705,371	$	(69,950)	$	(10,260)	$	(96,890)	$	1,140,522

See notes to unaudited condensed consolidated financial statements.

Table of Contents

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

Three Months Ended March 31,


2023

2022

CASH FLOWS FROM OPERATING ACTIVITIES:





Net income

$
37,303

$
34,531

Adjustments to reconcile net income to net cash provided by operating activities:





Net loss on sales of securities available-for-sale and other assets

1,447

—

Net gain on sale of loans held for sale

(564)

(390)

Net depreciation, amortization and accretion

1,602

2,768

Amortization of other intangible assets

377

586

Stock-based compensation

1,302

1,219

Recovery for credit losses

(3,648)

(1,592)

Originations of loans held for sale

(2,220)

(6,179)

Proceeds from sale of loans originated for sale

8,940

9,158

Increase in cash surrender value of BOLI

(2,163)

(1,839)

Decrease in other assets

2,837

8,967

(Decrease) increase in other liabilities

(31,796)

32,394

Net cash provided by operating activities

13,417

79,623

CASH FLOWS FROM INVESTING ACTIVITIES:





Proceeds from sales of securities available-for-sale

77,804

—

Purchases of securities available-for-sale

(78,157)

(3,000)

Purchases of securities held-to-maturity

(23,739)

(31,944)

Proceeds from calls and principal repayments of securities available-for-sale

21,000

49,853

Proceeds from calls and principal repayments of securities held-to-maturity

4,714

2,733

Proceeds from the sale of portfolio loans transferred to held for sale

—

1,069

Net increase in loans

(175,002)

(23,179)

Purchases of fixed assets, net

(787)

(1,842)

Purchases of restricted stock, net

(16,513)

(1,166)

Net cash used in investing activities

(190,680)

(7,476)

CASH FLOWS FROM FINANCING ACTIVITIES:





Increase (decrease) in deposits

315,884

(28,872)

Proceeds from FHLBNY advances, short-term, net

205,000

25,000

Proceeds from FHLBNY advances, long-term

162,000

—

Proceeds of other short-term borrowings, net

708

991

Release of stock for benefit plan awards

207

43

Payments related to tax withholding for equity awards

(1,113)

(1,414)

Purchase of treasury stock

(715)

(17,392)

Cash dividends paid to preferred stockholders

(1,821)

(1,821)

Cash dividends paid to common stockholders

(9,052)

(9,410)

Net cash provided by (used in) financing activities

671,098

(32,875)

Increase in cash and cash equivalents

493,835

39,272

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

169,297

393,722

CASH AND CASH EQUIVALENTS, END OF PERIOD

$
663,132

$
432,994





SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:





Cash paid for income taxes

$
1,970

$
1,601

Cash paid for interest

47,401

4,933

Securities available-for-sale transferred to held-to-maturity

—

175,260

Loans transferred to held for sale

8,232

15,172

Operating lease assets in exchange for operating lease liabilities

2,173

1,002


	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	64,801	$	73,016
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss on sales of securities available-for-sale and other assets		1,447		—
Loss on equity securities		780		—
Net gain on sale of loans held for sale		(808)		(1,304)
Net depreciation, amortization and accretion		3,056		4,370
Amortization of other intangible assets		726		1,016
Loss on extinguishment of debt		—		740
Stock-based compensation		2,660		2,165
Recovery for credit losses		(2,756)		(1,548)
Originations of loans held for sale		(4,570)		(14,790)
Proceeds from sale of loans originated for sale		14,510		28,069
Increase in cash surrender value of BOLI		(4,370)		(3,826)
Gain from death benefits from BOLI		(645)		(2,156)
Increase in other assets		(31,711)		(32,856)
Increase in other liabilities		1,492		94,513
Net cash provided by operating activities		44,612		147,409
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available-for-sale		77,804		—
Purchases of securities available-for-sale		(78,667)		(6,210)
Purchases of securities held-to-maturity		(27,136)		(41,631)
Proceeds from calls and principal repayments of securities available-for-sale		38,389		112,270
Proceeds from calls and principal repayments of securities held-to-maturity		10,680		14,102
Purchase of BOLI		—		(30,000)
Proceeds received from cash surrender value of BOLI		—		2,843
Proceeds from the sale of portfolio loans transferred to held for sale		1,701		13,201
Net increase in loans		(326,105)		(439,736)
Purchases of fixed assets, net		(2,435)		(1,753)
Purchases of restricted stock, net		(15,979)		(4,378)
Net cash used in investing activities		(321,748)		(381,292)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits		268,386		107,245
Proceeds from FHLBNY advances, short-term, net		155,000		75,000
Proceeds from FHLBNY advances, long-term		162,000		—
(Repayments) proceeds of other short-term borrowings, net		(1,360)		300
Proceeds from subordinated debentures issuance, net		—		157,559
Redemption of subordinated debentures		—		(155,000)
Release of stock for benefit plan awards		602		568
Payments related to tax withholding for equity awards		(1,159)		(1,415)
Purchase of treasury stock		(947)		(40,292)
Cash dividends paid to preferred stockholders		(3,643)		(3,643)
Cash dividends paid to common stockholders		(18,536)		(18,674)
Net cash provided by financing activities		560,343		121,648
Increase (decrease) in cash and cash equivalents		283,207		(112,235)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		169,297		393,722
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	452,504	$	281,487

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	29,470	$	22,057
Cash paid for interest		114,017		10,895
Securities available-for-sale transferred to held-to-maturity		—		372,153
Loans transferred to held for sale		11,049		24,178
Premises transferred to (from) held for sale		—		4,078
Operating lease assets in exchange for operating lease liabilities		2,749		1,004

See notes to unaudited condensed consolidated financial statements.

Table of Contents

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.BASIS OF PRESENTATION

Dime Community Bancshares, Inc. (the “ Holding Company”) is 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 Holding 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 their shareholders. As of ~~March 31,~~June 30, 2023, we operated 5960 branch locations throughout Long Island and the New York City boroughs of Brooklyn, Queens, Manhattan, Bronx and ~~the Bronx.~~Staten Island.

The unaudited consolidated financial statements presented in this Quarterly Report on Form 10-Q 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 accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited consolidated financial statements included herein reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported periods. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. Actual future results could differ significantly from those estimates. The annualized results of operations for the three and six months ended ~~March 31,~~June 30, 2023 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). 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. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which remain significantly unchanged and have been followed similarly as in prior periods.

~~Risks and Uncertainties~~

The COVID-19 pandemic caused significant economic dislocation in the United States. Certain industries were particularly hard-hit, including the travel and hospitality industry, the restaurant industry and the retail industry. Additionally, the spread of COVID-19 temporarily caused us to modify our business practices, including placing restrictions on employee travel and implementing remote work practices. As a result of the COVID-19 pandemic or any other public health emergency, and related governmental responses to any outbreak, we may be subject to the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, or results of operations: demand for our products and services may decline; if consumer and business activities are restricted, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could increase loan losses; our allowance for credit losses may have to be increased if borrowers experience financial difficulties; a material decrease in net income or a net loss over several quarters could affect our ability to pay cash dividends; cyber security risks may be increased as the result of an increase in the number of

~~Table of Contents~~

employees working remotely; critical services provided by third-party vendors may become unavailable; and the Company may experience unanticipated unavailability or loss of key employees, harming our ability to execute our business strategy.

2.SUMMARY OF ACCOUNTING POLICIES

Summary of Significant Accounting Policies

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for a fair presentation of the Company’s financial condition as of ~~March 31,~~June 30, 2023 and December 31, 2022, the results of operations and statements of comprehensive income for the three and six months ended ~~March 31,~~June 30, 2023 and 2022, the changes in stockholders’ equity for the three and six months ended ~~March 31,~~June 30, 2023 and 2022, and cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022.

Please see "Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies" for a discussion of areas in the accompanying unaudited condensed consolidated financial statements utilizing significant estimates.

Table of Contents

Adoption of Recent Accounting Standards

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 is 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. The Company adopted this ASU on January 1, 2023, on a prospective basis; therefore, there was no impact to the consolidated financial statements.

ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures

ASU 2022-02 eliminates troubled debt restructuring (“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 is 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.

~~Standards That Have Not Yet Been Adopted~~

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

~~Table of Contents~~

must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic within the Codification. ~~We are evaluating the impact of~~The Company adopted this ASU ~~2020-04 and expect the~~on July 1, 2023. The LIBOR transition ~~will~~is not anticipated to 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 2021-01 is effective upon issuance and generally can be applied through December 31, 2022. The ~~adoption of~~Company adopted this ASU ~~2021-01~~on July 1, 2023. The LIBOR transition is not ~~expected~~anticipated to have a material effect on the Company's consolidated financial statements.

Table of Contents

3.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in accumulated other comprehensive (loss) income, net of tax, was as follows:


							Total								Total
							Accumulated								Accumulated
			Defined				Other				Defined				Other
			Benefit				Comprehensive				Benefit				Comprehensive
(In thousands)	Securities		Plans		Derivatives		Income (Loss)		Securities		Plans		Derivatives		Income (Loss)
Balance as of January 1, 2023	$	(100,870)	$	(5,266)	$	11,757	$	(94,379)	$	(100,870)	$	(5,266)	$	11,757	$	(94,379)
Other comprehensive (loss) income before reclassifications		(4,313)		155		(1,172)		(5,330)		(12,259)		729		(56)		(11,586)
Amounts reclassified from accumulated other comprehensive loss		1,551		(260)		(220)		1,071		2,111		(521)		(10)		1,580
Net other comprehensive (loss) income during the period		(2,762)		(105)		(1,392)		(4,259)		(10,148)		208		(66)		(10,006)
Balance as of March 31, 2023	$	(103,632)	$	(5,371)	$	10,365	$	(98,638)
Balance as of June 30, 2023									$	(111,018)	$	(5,058)	$	11,691	$	(104,385)

Balance as of January 1, 2022	$	(7,864)	$	(1,306)	$	2,989	$	(6,181)	$	(7,864)	$	(1,306)	$	2,989	$	(6,181)
Other comprehensive (loss) income before reclassifications		(48,075)		683		4,697		(42,695)		(70,803)		1,368		6,279		(63,156)
Amounts reclassified from accumulated other comprehensive loss		116		(641)		21		(504)		685		(1,282)		(16)		(613)
Net other comprehensive (loss) income during the period		(47,959)		42		4,718		(43,199)		(70,118)		86		6,263		(63,769)
Balance as of March 31, 2022	$	(55,823)	$	(1,264)	$	7,707	$	(49,380)
Balance as of June 30, 2022									$	(77,982)	$	(1,220)	$	9,252	$	(69,950)

The before and after tax amounts allocated to each component of other comprehensive (loss) income are presented in the table below for the periods indicated.


	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
(In thousands)	2023		2022		2023		2022		2023		2022
Change in unrealized gain (loss) on securities:
Change in net unrealized loss during the period	$	(2,302)	$	(70,131)	$	(11,291)	$	(33,157)	$	(13,593)	$	(103,288)
Reclassification adjustment for net losses included in net loss on sale of securities and other assets		1,447		—		—		—		1,447		—
Accretion of net unrealized loss on securities transferred to held-to-maturity		757		170		796		829		1,553		999
Net change		(98)		(69,961)		(10,495)		(32,328)		(10,593)		(102,289)
Tax benefit (expense)		2,664		(22,002)
Tax benefit						(3,109)		(10,169)		(445)		(32,171)
Net change in unrealized loss on securities, net of reclassification adjustments and tax		(2,762)		(47,959)		(7,386)		(22,159)		(10,148)		(70,118)
Change in pension and other postretirement obligations:
Reclassification adjustment for expense included in other expense		(370)		(934)		(370)		(936)		(740)		(1,870)
Change in the net actuarial gain		221		997		814		998		1,035		1,995
Net change		(149)		63		444		62		295		125
Tax (expense) benefit		(44)		21
Tax expense						131		18		87		39
Net change in pension and other postretirement obligations		(105)		42		313		44		208		86
Change in unrealized gain (loss) on derivatives:
Change in net unrealized (loss) gain during the period		(2,111)		6,852
Change in net unrealized gain (loss) during the period						1,586		2,309		(525)		9,161
Reclassification adjustment for expense included in interest expense		(313)		31		299		(54)		(14)		(23)
Net change		(2,424)		6,883		1,885		2,255		(539)		9,138
Tax (expense) benefit		(1,032)		2,165
Tax expense (benefit)						559		710		(473)		2,875
Net change in unrealized (loss) gain on derivatives, net of reclassification adjustments and tax		(1,392)		4,718		1,326		1,545		(66)		6,263
Other comprehensive loss, net of tax	$	(4,259)	$	(43,199)	$	(5,747)	$	(20,570)	$	(10,006)	$	(63,769)

Table of Contents

4.EARNINGS PER COMMON 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. 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 performance-based share awards (“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:


	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
(In thousands except share and per share amounts)	2023		2022		2023		2022		2023		2022

Net income available to common stockholders	$	35,482	$	32,710	$	25,676	$	36,663	$	61,158	$	69,373
Less: Dividends paid and earnings allocated to participating securities		(389)		(374)		(417)		(432)		(806)		(806)
Income attributable to common stock	$	35,093	$	32,336	$	25,259	$	36,231	$	60,352	$	68,567
Weighted-average common shares outstanding, including participating securities		38,568,640		39,680,652		38,805,966		39,092,205		38,687,941		39,384,803
Less: weighted-average participating securities		(417,175)		(429,404)		(629,973)		(460,522)		(523,582)		(445,050)
Weighted-average common shares outstanding		38,151,465		39,251,248		38,175,993		38,631,683		38,164,359		38,939,753
Basic EPS	$	0.92	$	0.82	$	0.66	$	0.94	$	1.58	$	1.76

Income attributable to common stock	$	35,093	$	32,336	$	25,259	$	36,231	$	60,352	$	68,567
Weighted-average common shares outstanding		38,151,465		39,251,248		38,175,993		38,631,683		38,164,359		38,939,753
Weighted-average common equivalent shares outstanding		—		—		—		—		—		—
Weighted-average common and equivalent shares outstanding		38,151,465		39,251,248		38,175,993		38,631,683		38,164,359		38,939,753
Diluted EPS	$	0.92	$	0.82	$	0.66	$	0.94	$	1.58	$	1.76

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 92,137 weighted-average stock options outstanding for the three and six months ended June 30, 2023, which were not considered in the calculation of diluted EPS since their exercise prices exceeded the average market price during the period. There were 121,253 weighted-average stock options outstanding for the three and six months ended ~~March 31, 2023 and~~June 30, 2022, which were not considered in the calculation of diluted EPS since their exercise prices exceeded the average market price during the period.

5.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 its 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.

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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~~

~~Table of Contents~~

~~Stock~~preferred stock is perpetual and has no stated maturity. The Company may redeem the ~~Preferred Stock~~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.

6.SECURITIES

The following tables summarize the major categories of securities as of the dates indicated:

March 31, 2023

June 30, 2023

Gross

Amortized

Unrealized

Fair

Amortized

Unrealized

Fair

(In thousands)

Cost

Gains

Losses

Value

Cost

Gains

Losses

Value

Securities available-for-sale:

Agency notes

10,000

—

(709)

9,291

10,000

—

(855)

9,145

Treasury securities

246,646

—

(16,215)

230,431

246,392

—

(17,785)

228,607

Corporate securities

172,626

—

(28,744)

143,882

169,589

—

(30,036)

139,553

Pass-through mortgage-backed securities ("MBS") issued by government sponsored entities ("GSEs")

263,194

—

(28,120)

235,074

253,191

—

(30,607)

222,584

Agency collateralized mortgage obligations ("CMOs")

324,394

(46,002)

278,394

317,307

(51,636)

265,673

State and municipal obligations

32,078

—

(2,338)

29,740

31,794

—

(2,500)

29,294

Total securities available-for-sale

1,048,938

(122,128)

926,812

1,028,273

(133,419)

894,856

March 31, 2023

June 30, 2023

Gross

Amortized

Unrecognized

Fair

Amortized

Unrecognized

Fair

(In thousands)

Cost

Gains

Losses

Value

Cost

Gains

Losses

Value

Securities held-to-maturity:

Agency notes

89,258

—

(11,619)

77,639

89,359

—

(13,284)

76,075

Corporate securities

9,000

—

(2,063)

6,937

9,000

—

(1,340)

7,660

Pass-through MBS issued by GSEs

290,698

123

(37,137)

253,684

286,918

—

(40,848)

246,070

Agency CMOs

216,686

(22,390)

194,312

218,683

—

(28,419)

190,264

Total securities held-to-maturity

605,642

139

(73,209)

532,572

603,960

—

(83,891)

520,069


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Treasury securities	$	246,899	$	—	$	(19,643)	$	227,256
Corporate securities		183,791		57		(17,075)		166,773
Pass-through mortgage-backed securities ("MBS") issued by government sponsored entities ("GSEs")		272,774		—		(31,534)		241,240
Agency collateralized mortgage obligations ("CMOs")		331,394		2		(50,057)		281,339
State and municipal obligations		37,000		—		(3,021)		33,979
Total securities available-for-sale	$	1,071,858	$	59	$	(121,330)	$	950,587

	December 31, 2022
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities held-to-maturity:
Agency notes	$	89,157	$	—	$	(14,095)	$	75,062
Corporate securities		9,000		—		(553)		8,447
Pass-through MBS issued by GSEs		278,281		—		(40,960)		237,321
Agency CMOs		209,360		—		(24,431)		184,929
Total securities held-to-maturity	$	585,798	$	—	$	(80,039)	$	505,759

There were no transfers to or from securities held-to-maturity during the three or six months ended ~~March 31,~~June 30, 2023. ~~The~~During the six months ended June 30, 2022, the Company ~~transfeed~~transferred securities with a book value of ~~$182.1~~$400.0 million from ~~available-for-sale to held-to-maturity during the three months ended March 31, 2022.~~

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available-for-sale to held-to-maturity. The transfers occurred at fair value totaling $372.2 million. The related unrealized losses of $27.8 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 of securities held-to-maturity to securities available-for-sale during the six months ended June 30, 2022.

The carrying amount of securities pledged at ~~March 31,~~June 30, 2023 and December 31, 2022 was ~~$667.9~~$573.9 million and $631.4 million, respectively.

At ~~March 31,~~June 30, 2023 and December 31, 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.


	March 31, 2023				June 30, 2023
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Available-for-sale
Within one year	$	11,050	$	10,679	$	43,224	$	41,505
One to five years		269,229		251,440		237,304		218,555
Five to ten years		175,926		146,950		177,248		146,540
Beyond ten years		5,145		4,275		—		—
Pass-through MBS issued by GSEs and agency CMO		587,588		513,468		570,497		488,256
Total	$	1,048,938	$	926,812	$	1,028,273	$	894,856

Held-to-maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		10,000		9,407		10,000		9,279
Five to ten years		88,258		75,169		88,359		74,456
Beyond ten years		—		—		—		—
Pass-through MBS issued by GSEs and agency CMO		507,384		447,996		505,601		436,334
Total	$	605,642	$	532,572	$	603,960	$	520,069

The following table presents the information related to sales of securities available-for-sale as of the periods indicated:


	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
(In thousands)	2023		2022		2023		2022		2023		2022
Securities available-for-sale
Proceeds	$	77,804	$	—	$	—	$	—	$	77,804	$	—
Gross gains		130		—		—		—		130		—
Tax expense on gains		39		—		—		—		39		—
Gross losses		1,577		—		—		—		1,577		—
Tax benefit on losses		467		—		—		—		467		—

There were no sales of securities held-to-maturity during the three or six months ended ~~March 31,~~June 30, 2023 and 2022.

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The following table summarizes the gross unrealized losses and fair value of securities available-for-sale aggregated by investment category and the length of time the securities were in a continuous unrealized loss position as of the dates indicated:

March 31, 2023

June 30, 2023

Less than 12

12 Consecutive

Less than 12

12 Consecutive

Consecutive Months

Months or Longer

Total

Consecutive Months

Months or Longer

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

(In thousands)

Value

Losses

Value

Losses

Value

Losses

Value

Losses

Value

Losses

Value

Losses

Securities available-for-sale:

Agency notes

—

9,291

709

9,291

709

—

9,145

855

9,145

855

Treasury securities

—

230,431

16,215

230,431

16,215

—

228,607

17,785

228,607

17,785

Corporate securities

81,866

13,507

62,016

15,237

143,882

28,744

68,385

11,962

71,168

18,074

139,553

30,036

Pass-through MBS issued by GSEs

27,912

867

207,162

27,253

235,074

28,120

24,222

1,154

198,362

29,453

222,584

30,607

Agency CMOs

3,778

269,614

45,970

273,392

46,002

990

259,681

51,609

260,671

51,636

State and municipal obligations

2,021

27,719

2,309

29,740

2,338

1,970

26,824

2,421

28,794

2,500


	December 31, 2022
	Less than 12				12 Consecutive
	Consecutive Months				Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Losses		Value		Losses		Value		Losses
Securities available-for-sale:
Treasury securities	$	—	$	—	$	227,256	$	19,643	$	227,256	$	19,643
Corporate securities		110,707		8,494		50,116		8,581		160,823		17,075
Pass-through MBS issued by GSEs		50,813		2,010		190,427		29,524		241,240		31,534
Agency CMOs		55,924		3,454		220,413		46,603		276,337		50,057
State and municipal obligations		10,848		174		22,681		2,847		33,529		3,021

As of ~~March 31,~~June 30, 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 totaling ~~$4.7~~$5.3 million and $5.4 million at ~~March 31,~~June 30, 2023 and December 31, 2022, respectively, was included in other assets in the consolidated balance sheet and 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 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 ~~March 31,~~June 30, 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.~~quality of the issuer. 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~~

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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.

7.LOANS HELD FOR INVESTMENT, NET

The following table presents the loan categories for the period ended as indicated:

(In thousands)

March 31, 2023

December 31, 2022
One-to-four family residential and cooperative/condominium apartment

$
799,321

$
773,321
Multifamily residential and residential mixed-use

4,118,439

4,026,826
Commercial real estate ("CRE")

4,510,968

4,457,630
Acquisition, development, and construction

221,015

229,663
Total real estate loans

9,649,743

9,487,440
Commercial and industrial ("C&I")

1,074,930

1,071,712
Other loans

7,172

7,679
Total

10,731,845

10,566,831
Allowance for credit losses

(78,335)

(83,507)
Loans held for investment, net

$
10,653,510

$
10,483,324


(In thousands)	June 30, 2023		December 31, 2022
Business loans⁽¹⁾	$	2,250,108	$	2,211,857
One-to-four family residential and cooperative/condominium apartment		855,980		773,321
Multifamily residential and residential mixed-use		4,132,358		4,026,826
Non-owner-occupied commercial real estate		3,406,232		3,317,485
Acquisition, development, and construction ("ADC")		225,580		229,663
Other loans		6,157		7,679
Total		10,876,415		10,566,831
Allowance for credit losses		(75,646)		(83,507)
Loans held for investment, net	$	10,800,769	$	10,483,324

~~Included in C&I~~⁽¹⁾ Business loans ~~were Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”)~~include commercial and industrial loans, ~~totaling $2.1 million~~owner-occupied commercial real estate loans and ~~$5.8 million at March 31, 2023 and December 31, 2022, respectively. SBA~~ PPP ~~loans carry a 100% guarantee from the SBA.~~ loans.

The following tables present data regarding the allowance for credit losses activity for the periods indicated:

At or for the Three Months Ended March 31, 2023

Real Estate Loans

At or for the Three Months Ended June 30, 2023

One-to-Four

Family

Multifamily

Family

Multifamily

Residential and

Residential

Residential and

Residential

Cooperative/

and

Cooperative/

and

Non-Owner-Occupied

Condominium

Residential

Total Real

Other

Condominium

Residential

Commercial

Other

(In thousands)

Apartment

Mixed-Use

CRE

ADC

Estate

C&I

Loans

Total

Business Loans

Apartment

Mixed-Use

Real Estate

ADC

Loans

Total

Allowance for credit losses:

Beginning balance

5,969

8,360

27,329

1,723

43,381

39,853

273

83,507

43,879

6,012

7,613

18,076

2,515

240

78,335

Provision (recovery) for credit losses

(747)

(2,851)

792

(2,763)

(834)

(34)

(3,631)

(Credit) provision for credit losses

(542)

421

577

364

127

990

Charge-offs

—

(2,029)

(1)

(2,030)

(3,745)

(14)

—

(33)

(3,792)

Recoveries

—

487

489

108

—

113

Ending balance

6,012

7,613

24,478

2,515

40,618

37,477

240

78,335

39,700

6,419

8,190

18,440

2,558

339

75,646


	At or for the Three Months Ended March 31, 2022
	Real Estate Loans																At or for the Three Months Ended June 30, 2022
	One-to-Four																		One-to-Four
	Family		Multifamily																Family		Multifamily
	Residential and		Residential																Residential and		Residential
	Cooperative/		and																Cooperative/		and		Non-Owner-Occupied
	Condominium		Residential						Total Real				Other						Condominium		Residential		Commercial				Other
(In thousands)	Apartment		Mixed-Use		CRE		ADC		Estate		C&I		Loans		Total		Business Loans		Apartment		Mixed-Use		Real Estate		ADC		Loans		Total
Allowance for credit losses:
Beginning balance	$	5,932	$	7,816	$	29,166	$	4,857	$	47,771	$	35,331	$	751	$	83,853	$	43,728	$	4,528	$	7,061	$	19,180	$	4,758	$	360	$	79,615
(Recovery) provision for credit losses		(1,404)		(757)		(521)		(99)		(2,781)		1,516		(389)		(1,654)
(Credit) provision for credit losses																		2,009		(14)		(58)		(527)		(970)		(74)		366
Charge-offs		—		—		—		—		—		(2,635)		(3)		(2,638)		(645)		—		—		—		—		—		(645)
Recoveries		—		2		—		—		2		51		1		54		36		—		—		54		—		—		90
Ending balance	$	4,528	$	7,061	$	28,645	$	4,758	$	44,992	$	34,263	$	360	$	79,615	$	45,128	$	4,514	$	7,003	$	18,707	$	3,788	$	286	$	79,426

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At or for the Six Months Ended June 30, 2023

One-to-Four

Family

Multifamily

Residential and

Residential

Cooperative/

and

Non-Owner-Occupied

Condominium

Residential

Commercial

Other

(In thousands)

Business Loans

Apartment

Mixed-Use

Real Estate

ADC

Loans

Total

Allowance for credit losses:

Beginning balance

47,029

5,969

8,360

20,153

1,723

273

83,507

Provision (recovery) for credit losses

(2,150)

464

(170)

(1,713)

835

(2,641)

Charge-offs

(5,774)

(14)

—

(34)

(5,822)

Recoveries

595

—

602

Ending balance

39,700

6,419

8,190

18,440

2,558

339

75,646


	At or for the Six Months Ended June 30, 2022
			One-to-Four
			Family		Multifamily
			Residential and		Residential
			Cooperative/		and		Non-Owner-Occupied
			Condominium		Residential		Commercial				Other
(In thousands)	Business Loans		Apartment		Mixed-Use		Real Estate		ADC		Loans		Total
Allowance for credit losses:
Beginning balance	$	62,366	$	5,932	$	7,816	$	2,131	$	4,857	$	751	$	83,853
(Recovery) provision for credit losses		(14,045)		(1,418)		(815)		16,522		(1,069)		(463)		(1,288)
Charge-offs		(3,280)		—		—		—		—		(3)		(3,283)
Recoveries		87		—		2		54		—		1		144
Ending balance	$	45,128	$	4,514	$	7,003	$	18,707	$	3,788	$	286	$	79,426

The following tables present the amortized cost basis of loans on non-accrual status as of the periods indicated:

March 31, 2023

June 30, 2023

Non-accrual with

(In thousands)

No Allowance

Allowance

Reserve

No Allowance

Allowance

Reserve

Business loans

5,636

17,834

16,131

One-to-four family residential and cooperative/condominium apartment

2,808

138

—

3,305

149

CRE

4,659

3,409

1,010

Multifamily residential and residential mixed-use

—

Non-owner-occupied commercial real estate

—

Acquisition, development, and construction

657

305

—

657

305

C&I

978

18,934

18,169

Other

Other loans

—

220

Total

5,637

25,907

19,721

5,636

22,031

16,820


		December 31, 2022						December 31, 2022
		Non-accrual with		Non-accrual with				Non-accrual with		Non-accrual with
(In thousands)		No Allowance	Allowance			Reserve		No Allowance	Allowance			Reserve
Business loans							$	5,403	$	22,384	$	20,812
One-to-four family residential and cooperative/condominium apartment	$	-	$	3,203	$	181		—		3,203		181
CRE		4,915		3,417		1,424
Multifamily residential and residential mixed-use								—		—		—
Non-owner-occupied commercial real estate								15		2,476		1,297
Acquisition, development, and construction		657		-		-		657		—		—
C&I		503		21,443		20,685
Other		-		99		99
Other loans								—		99		99
Total	$	6,075	$	28,162	$	22,389	$	6,075	$	28,162	$	22,389

The Company did not recognize interest income on non-accrual loans held for investment during the three or six months ended ~~March 31,~~June 30, 2023 and 2022.

~~The following tables summarize the past due status of the Company’s investment in loans as of the dates indicated:~~

March 31, 2023

Loans 90

Days or

Total

30 to 59

60 to 89

More Past Due

Past Due

Days

Days

and Still

and

Total
(In thousands)

Past Due

Past Due

Accruing Interest

Non-accrual

Non-accrual

Current

Loans
Real estate:














One-to-four family residential, including condominium and cooperative apartment

$
6,617

$
419

$
—

$
2,808

$
9,844

$
789,477

$
799,321
Multifamily residential and residential mixed-use

3,841

—

—

—

3,841

4,114,598

4,118,439
CRE

4,603

716

—

8,068

13,387

4,497,581

4,510,968
Acquisition, development, and construction

—

—

—

657

657

220,358

221,015
Total real estate

15,061

1,135

—

11,533

27,729

9,622,014

9,649,743
C&I

3,403

233

—

19,912

23,548

1,051,382

1,074,930
Other

229

3

—

99

331

6,841

7,172
Total

$
18,693

$
1,371

$
—

$
31,544

$
51,608

$
10,680,237

$
10,731,845

Table of Contents

December 31, 2022

Loans 90

Days or

Total

30 to 59

60 to 89

More Past Due

Past Due

Days

Days

and Still

and

Total
(In thousands)

Past Due

Past Due

Accruing Interest

Non-accrual

Non-accrual

Current

Loans
Real estate:














One-to-four family residential, including condominium and cooperative apartment

$
686

$
—

$
—

$
3,203

$
3,889

$
769,432

$
773,321
Multifamily residential and residential mixed-use

4,817

—

—

—

4,817

4,022,009

4,026,826
CRE

14,189

—

—

8,332

22,521

4,435,109

4,457,630
Acquisition, development, and construction

—

—

—

657

657

229,006

229,663
Total real estate

19,692

—

—

12,192

31,884

9,455,556

9,487,440
C&I

3,561

741

—

21,946

26,248

1,045,464

1,071,712
Other

264

1

—

99

364

7,315

7,679
Total

$
23,517

$
742

$
—

$
34,237

$
58,496

$
10,508,335

$
10,566,831

The following tables summarize the past due status of the Company’s investment in loans as of the dates indicated:

June 30, 2023

Loans 90

Days or

Total

30 to 59

60 to 89

More Past Due

Past Due

Days

and Still

and

Total

(In thousands)

Past Due

Accruing Interest

Non-accrual

Current

Loans

Business loans

4,616

6,963

—

23,470

35,049

2,215,059

2,250,108

One-to-four family residential, including condominium and cooperative apartment

1,409

1,178

—

3,305

5,892

850,088

855,980

Multifamily residential and residential mixed-use

6,465

—

6,465

4,125,893

4,132,358

Non-owner-occupied commercial real estate

3,834

—

3,849

3,402,383

3,406,232

Acquisition, development, and construction

—

657

224,923

225,580

Other

—

220

286

5,871

6,157

Total

16,389

8,142

—

27,667

52,198

10,824,217

10,876,415


	December 31, 2022
					Loans 90
					Days or				Total
	30 to 59		60 to 89		More Past Due				Past Due
	Days		Days		and Still				and				Total
(In thousands)	Past Due		Past Due		Accruing Interest		Non-accrual		Non-accrual		Current		Loans
Business loans	$	5,861	$	741	$	—	$	27,787	$	34,389	$	2,177,468	$	2,211,857
One-to-four family residential, including condominium and cooperative apartment		686		—		—		3,203		3,889		769,432		773,321
Multifamily residential and residential mixed-use		4,817		—		—		—		4,817		4,022,009		4,026,826
Non-owner-occupied commercial real estate		11,889		—		—		2,491		14,380		3,303,105		3,317,485
Acquisition, development, and construction		—		—		—		657		657		229,006		229,663
Other		264		1		—		99		364		7,315		7,679
Total	$	23,517	$	742	$	—	$	34,237	$	58,496	$	10,508,335	$	10,566,831

Accruing Loans 90 Days or More Past Due:

The Company did not have accruing loans 90 days or more past due as of ~~March 31,~~June 30, 2023 or December 31, 2022.

Collateral Dependent Loans:

The Company had collateral dependent loans which were individually evaluated to determine expected credit losses as of the dates indicated:


	March 31, 2023				December 31, 2022				June 30, 2023				December 31, 2022
	Real Estate		Associated Allowance		Real Estate		Associated Allowance		Real Estate		Associated Allowance		Real Estate		Associated Allowance
(In thousands)	Collateral Dependent		for Credit Losses		Collateral Dependent		for Credit Losses		Collateral Dependent		for Credit Losses		Collateral Dependent		for Credit Losses
CRE	$	7,112	$	860	$	7,391	$	1,297
Business loans									$	5,597	$	—	$	5,849	$	—
One-to-four family residential, including condominium and cooperative apartment										—		—		—		—
Multifamily residential and residential mixed-use										—		—		—		—
Non-owner-occupied commercial real estate										—		—		2,491		1,297
Acquisition, development, and construction		657		305		657		-		657		305		657		—
C&I		945		-		949		-
Other										—		—		—		—
Total	$	8,714	$	1,165	$	8,997	$	1,297	$	6,254	$	305	$	8,997	$	1,297

Table of Contents

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 form of restructuring results 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.

The following tables shows the amortized cost basis as of June 30, 2023 of the loans modified to borrowers experiencing financial difficulty, disaggregated by loan category and type of concession granted:


	For the Three Months Ended June 30, 2023

			Significant		Term Extension		Significant Payment Delay				% of Total Class
	Term		Payment		and Significant		and Interest				of Financing
(Dollars in thousands)	Extension		Delay		Payment Delay		Rate Reduction		Total		Receivable
Business loans	$	132	$	—	$	472	$	276	$	880	0.0
One-to-four family residential, including condominium and cooperative apartment		—		—		—		—		—	0.0
Multifamily residential and residential mixed-use		—		—		—		—		—	0.0
Non-owner-occupied commercial real estate		—		—		—		—		—	0.0
Acquisition, development, and construction		—		—		—		—		—	0.0
Other		—		—		—		—		—	0.0
Total	$	132	$	—	$	472	$	276	$	880	0.0	%

	For the Six Months Ended June 30, 2023

			Significant		Term Extension		Significant Payment Delay				% of Total Class
	Term		Payment		and Significant		and Interest				of Financing
(Dollars in thousands)	Extension		Delay		Payment Delay		Rate Reduction		Total		Receivable
Business loans	$	132	$	—	$	472	$	276	$	880	0.0	%
One-to-four family residential, including condominium and cooperative apartment		—		2,852		—		—		2,852	0.3
Multifamily residential and residential mixed-use		—		—		—		—		—	0.0
Non-owner-occupied commercial real estate		—		—		—		—		—	0.0
Acquisition, development, and construction		—		—		—		—		—	0.0
Other		—		—		—		—		—	0.0
Total	$	132	$	2,852	$	472	$	276	$	3,732	0.0	%

The following tables describes the financial effect of the modifications made to borrowers experiencing financial difficulty:


	For the Three Months Ended June 30, 2023
					Weighted Average
	Weighted Average		Weighted Average		Payment Delay
	Interest Rate		Months of		or Principal
(Dollars in thousands)	Reductions		Term Extensions		Forgiveness
Business loans	4.25	%	$	16	$	11
One-to-four family residential, including condominium and cooperative apartment	—			—		—
Multifamily residential and residential mixed-use	—			—		—
Non-owner-occupied commercial real estate	—			—		—
Acquisition, development, and construction	—			—		—
Other loans	—			—		—
Total	4.25	%	$	16	$	11

1920

Table of Contents

The following table shows the amortized cost basis as of March 31, 2023 of the loans modified to borrowers experiencing financial difficulty, disaggregated by loan category and type of concession granted):

March 31, 2023

Term Extension

% of Total Class

Significant

and Significant

of Financing
(Dollars in thousands)

Payment Delay

Payment Delay

Total

Receivable
Real estate:







One-to-four family residential, including condominium and cooperative apartment

$
2,850

$
—

$
2,850

0.4
%
Multifamily residential and residential mixed-use

—

—

—

0.0

CRE

—

—

—

0.0

Acquisition, development, and construction

—

—

—

0.0

C&I

—

475

475

0.0

Other loans

—

—

—

0.0

Total

$
2,850

$
475

$
3,325

0.0
%

During the three months ended March 31, 2023, there was one one-to-four family residential modification which resulted in a significant payment delay. Twelve months of principal payments were deferred until maturity. Also during the three months ended March 31, 2023 there was one C&I loan modification which resulted in a term extension and a significant payment delay. The term was extended for 6 months and payments were reduced from the original contractual payment amount during the extension period.


	For the Six Months Ended June 30, 2023
					Weighted Average
	Weighted Average		Weighted Average		Payment Delay
	Interest Rate		Months of		or Principal
(Dollars in thousands)	Reductions		Term Extensions		Forgiveness
Business loans	4.25	%	$	21	$	17
One-to-four family residential, including condominium and cooperative apartment	—			—		72
Multifamily residential and residential mixed-use	—			—		—
Non-owner-occupied commercial real estate	—			—		—
Acquisition, development, and construction	—			—		—
Other loans	—			—		—
Total	4.25	%	$	21	$	89

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 ~~quarter~~six months ended ~~March 31,~~June 30, 2023.

March 31, 2023

June 30, 2023

30-59 Days

60-89 Days

90+ Days

30-59

60-89

90+

(Dollars in thousands)

Current

Past Due

Total

Current

Days Past Due

Non-Accrual

Total

Real estate:

Business loans

—

880

One-to-four family residential, including condominium and cooperative apartment

2,850

—

2,850

2,852

—

2,852

Multifamily residential and residential mixed-use

—

CRE

—

Non-owner-occupied commercial real estate

—

Acquisition, development, and construction

—

C&I

475

—

475

Other loans

—

Total

3,325

—

3,325

2,852

—

880

3,732

~~As of March 31, 2023, the Bank had no commitments to lend any additional funds on restructured loans. In addition, the Bank had~~There were no loans ~~that defaulted during the quarter and were modified in the 12 months before default~~made to borrowers experiencing financial ~~difficulty.~~difficulty that were modified during the three months ended June 30, 2023, and 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 has allocated $9.1 million of allowance for those loans at December 31, 2022, with no commitments to lend additional amounts.

~~Table of Contents~~

The following table presents the loans by category modified as TDRs that occurred during the year ended December 31, 2022.



	Modifications During the Year Ended December 31, 2022					Modifications During the Year Ended December 31, 2022
			Pre-		Post-			Pre-		Post-
			Modification		Modification			Modification		Modification
			Outstanding		Outstanding	Number		Outstanding		Outstanding
	Number of		Recorded		Recorded	of		Recorded		Recorded
(Dollars in thousands)	Loans		Investment		Investment	Loans		Investment		Investment
One-to-four family residential and cooperative/condominium apartment	2	$	762	$	762
CRE	1		991		991
Business loans						7	$	21,934	$	21,938
One-to-four family residential, including condominium and cooperative apartment						2		762		762
Multifamily residential and residential mixed-use						—		—		—
Non-owner-occupied commercial real estate						1		991		991
Acquisition, development, and construction	1		13,500		13,500	1		13,500		13,500
C&I	7		21,934		21,938
Other	1		276		276	1		276		276
Total	12	$	37,463	$	37,467	12	$	37,463	$	37,467

Table of Contents

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 based on 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.

2122

Table of Contents

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:


	March 31, 2023																		June 30, 2023
(In thousands)	2023		2022		2021		2020		2019		2018 and Prior		Revolving		Revolving-Term		Total		2023		2022		2021		2020		2019		2018 and Prior		Revolving		Revolving-Term		Total
Business loans
Pass																			$	149,897	$	443,880	$	216,423	$	175,305	$	160,702	$	325,188	$	626,364	$	42,465	$	2,140,224
Special mention																				528		3,284		1,316		1,430		1,317		13,447		10,849		8,946		41,117
Substandard																				52		898		396		8,339		3,593		30,410		8,637		7,303		59,628
Doubtful																				—		—		—		—		8,332		807		—		—		9,139
Total business loans																				150,477		448,062		218,135		185,074		173,944		369,852		645,850		58,714		2,250,108
YTD Gross Charge-Offs																				—		—		—		38		—		1,991		434		3,311		5,774

One-to-four family residential, and condominium/cooperative apartment:
Pass	$	43,242	$	223,185	$	105,682	$	71,817	$	64,559	$	223,911	$	36,080	$	14,027	$	782,503		112,062		221,019		104,481		71,297		64,080		219,848		33,626		13,387		839,800
Special mention		—		—		—		—		—		765		159		1,140		2,064		—		—		—		—		—		761		159		715		1,635
Substandard		—		—		947		1,021		1,226		10,612		—		949		14,754		—		—		—		1,015		1,219		11,518		—		793		14,545
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total one-to-four family residential, and condominium/cooperative apartment		43,242		223,185		106,629		72,838		65,785		235,288		36,239		16,116		799,321		112,062		221,019		104,481		72,312		65,299		232,127		33,785		14,895		855,980
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		14		14

Multifamily residential and residential mixed-use:
Pass		137,533		1,378,920		596,720		295,172		396,885		1,182,588		11,981		4,364		4,004,163		209,997		1,372,631		593,917		292,798		395,000		1,128,010		12,229		4,465		4,009,047
Special mention		—		—		4,269		18,190		14,149		19,272		—		—		55,880		—		—		4,246		18,194		14,088		30,723		—		—		67,251
Substandard		—		—		—		10,766		—		47,630		—		—		58,396		—		—		—		10,711		—		45,349		—		—		56,060
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total multifamily residential and residential mixed-use		137,533		1,378,920		600,989		324,128		411,034		1,249,490		11,981		4,364		4,118,439		209,997		1,372,631		598,163		321,703		409,088		1,204,082		12,229		4,465		4,132,358
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—

CRE:
Non-owner-occupied commercial real estate
Pass		168,749		1,015,122		848,614		684,193		496,165		1,136,286		29,949		23,247		4,402,325		193,516		730,726		665,019		480,519		361,052		824,040		11,632		8,040		3,274,544
Special mention		—		2,812		—		47,905		4,630		27,888		—		—		83,235		—		—		—		78,319		4,608		9,676		—		—		92,603
Substandard		—		—		151		4,536		7,496		13,225		—		—		25,408		—		—		15		25,756		6,343		6,971		—		—		39,085
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total CRE		168,749		1,017,934		848,765		736,634		508,291		1,177,399		29,949		23,247		4,510,968
Total non-owner-occupied commercial real estate																				193,516		730,726		665,034		584,594		372,003		840,687		11,632		8,040		3,406,232
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—

Acquisition, development, and construction:
Acquisition, development, and construction
Pass		—		42,427		136,430		7,647		15,744		609		17,233		268		220,358		—		46,952		134,396		7,647		15,718		552		19,408		250		224,923
Special mention		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Substandard		—		—		657		—		—		—		—		—		657		—		—		657		—		—		—		—		—		657
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total acquisition, development, and construction:		—		42,427		137,087		7,647		15,744		609		17,233		268		221,015
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—

C&I:
Pass		20,080		178,348		34,507		36,036		32,375		50,334		618,596		18,915		989,191
Special mention		—		3,432		624		1,467		1,371		2,031		15,142		6,286		30,353
Substandard		98		5,454		1,133		4,858		2,718		10,536		12,382		9,066		46,245
Doubtful		—		—		—		—		8,332		809		—		—		9,141
Total C&I		20,178		187,234		36,264		42,361		44,796		63,710		646,120		34,267		1,074,930
Total acquisition, development, and construction																				—		46,952		135,053		7,647		15,718		552		19,408		250		225,580
YTD Gross Charge-Offs		—		—		—		38		—		1,991		—		—		2,029		—		—		—		—		—		—		—		—		—

Total:
Pass		369,604		2,838,002		1,721,953		1,094,865		1,005,728		2,593,728		713,839		60,821		10,398,540		665,472		2,815,208		1,714,236		1,027,566		996,552		2,497,638		703,259		68,607		10,488,538
Special mention		—		6,244		4,893		67,562		20,150		49,956		15,301		7,426		171,532		528		3,284		5,562		97,943		20,013		54,607		11,008		9,661		202,606
Substandard		98		5,454		2,888		21,181		11,440		82,003		12,382		10,015		145,460		52		898		1,068		45,821		11,155		94,248		8,637		8,096		169,975
Doubtful		—		—		—		—		8,332		809		—		—		9,141		—		—		—		—		8,332		807		—		—		9,139
Total Loans	$	369,702	$	2,849,700	$	1,729,734	$	1,183,608	$	1,045,650	$	2,726,496	$	741,522	$	78,262	$	10,724,673	$	666,052	$	2,819,390	$	1,720,866	$	1,171,330	$	1,036,052	$	2,647,300	$	722,904	$	86,364	$	10,870,258
YTD Gross Charge-Offs		—		—		—		38		—		1,991		—		—		2,029	$	—	$	—	$	—	$	38	$	—	$	1,991	$	434	$	3,325	$	5,788

2223

Table of Contents

December 31, 2022
(In thousands)

2022

2021

2020

2019

2018

2017 and Prior

Revolving

Revolving-Term

Total
One-to-four family residential, and condominium/cooperative apartment:

Pass

$
225,031

$
108,185

$
72,732

$
65,515

$
66,038

$
164,338

$
41,172

$
12,563

$
755,574
Special mention

—

—

—

—

735

1,175

579

726

3,215
Substandard

—

—

1,026

1,227

407

10,779

—

1,093

14,532
Doubtful

—

—

—

—

—

—

—

—

—
Total one-to-four family residential, and condominium/cooperative apartment

225,031

108,185

73,758

66,742

67,180

176,292

41,751

14,382

773,321
YTD Gross Charge-Offs

—

—

—

—

—

—

—

—

—

Multifamily residential and residential mixed-use:

Pass

1,386,549

582,393

316,424

395,933

127,074

1,107,281

12,584

—

3,928,238
Special mention

—

—

—

11,183

—

14,168

—

—

25,351
Substandard

—

—

12,294

7,001

20,311

33,631

—

—

73,237
Doubtful

—

—

—

—

—

—

—

—

—
Total multifamily residential and residential mixed-use

1,386,549

582,393

328,718

414,117

147,385

1,155,080

12,584

—

4,026,826
YTD Gross Charge-Offs

—

—

—

—

—

—

—

—

—

CRE:

Pass

1,021,622

854,240

753,552

510,332

308,265

868,099

34,362

24,767

4,375,239
Special mention

2,864

—

19,655

4,653

14,372

15,478

—

—

57,022
Substandard

—

151

4,550

7,947

1,131

11,590

—

—

25,369
Doubtful

—

—

—

—

—

—

—

—

—
Total CRE

1,024,486

854,391

777,757

522,932

323,768

895,167

34,362

24,767

4,457,630
YTD Gross Charge-Offs

—

—

—

—

—

—

—

—

—

Acquisition, development, and construction:

Pass

36,877

152,543

11,242

15,943

—

2,087

10,033

281

229,006
Special mention

—

—

—

—

—

—

—

—

—
Substandard

—

657

—

—

—

—

—

—

657
Doubtful

—

—

—

—

—

—

—

—

—
Total acquisition, development, and construction:

36,877

153,200

11,242

15,943

—

2,087

10,033

281

229,663
YTD Gross Charge-Offs

—

—

—

—

—

—

—

—

—

C&I:

Pass

175,347

36,511

42,103

37,030

20,628

33,343

628,560

22,239

995,761
Special mention

3,770

—

894

1,529

1,521

843

9,062

478

18,097
Substandard

5,242

1,244

5,364

2,968

970

10,232

11,290

9,412

46,722
Doubtful

—

—

—

8,332

752

2,048

—

—

11,132
Total C&I

184,359

37,755

48,361

49,859

23,871

46,466

648,912

32,129

1,071,712
YTD Gross Charge-Offs

—

477

4,720

2,088

—

2,414

1,460

242

11,401

Total:

Pass

2,845,426

1,733,872

1,196,053

1,024,753

522,005

2,175,148

726,711

59,850

10,283,818
Special mention

6,634

—

20,549

17,365

16,628

31,664

9,641

1,204

103,685
Substandard

5,242

2,052

23,234

19,143

22,819

66,232

11,290

10,505

160,517
Doubtful

—

—

—

8,332

752

2,048

—

—

11,132
Total Loans

$
2,857,302

$
1,735,924

$
1,239,836

$
1,069,593

$
562,204

$
2,275,092

$
747,642

$
71,559

$
10,559,152
YTD Gross Charge-Offs

—

477

4,720

2,088

—

2,414

1,460

242

11,401


	December 31, 2022
(In thousands)	2022		2021		2020		2019		2018		2017 and Prior		Revolving		Revolving-Term		Total
Business loans
Pass	$	449,699	$	228,143	$	187,522	$	173,527	$	130,576	$	240,131	$	650,960	$	43,552	$	2,104,110
Special mention		6,634		-		894		1,529		15,893		4,213		9,062		478		38,703
Substandard		5,242		1,380		8,843		4,706		2,101		14,938		11,290		9,412		57,912
Doubtful		—		—		—		8,332		752		2,048		—		—		11,132
Total business loans		461,575		229,523		197,259		188,094		149,322		261,330		671,312		53,442		2,211,857
YTD Gross Charge-Offs		—		477		4,720		2,088		—		2,414		1,460		242		11,401

One-to-four family residential, and condominium/cooperative apartment:
Pass		225,031		108,185		72,732		65,515		66,038		164,338		41,172		12,563		755,574
Special mention		—		—		—		—		735		1,175		579		726		3,215
Substandard		—		—		1,026		1,227		407		10,779		—		1,093		14,532
Doubtful		—		—		—		—		—		—		—		—		—
Total one-to-four family residential, and condominium/cooperative apartment		225,031		108,185		73,758		66,742		67,180		176,292		41,751		14,382		773,321
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—

Multifamily residential and residential mixed-use:
Pass		1,386,549		582,393		316,424		395,933		127,074		1,107,281		12,584		—		3,928,238
Special mention		—		—		—		11,183		—		14,168		—		—		25,351
Substandard		—		—		12,294		7,001		20,311		33,631		—		—		73,237
Doubtful		—		—		—		—		—		—		—		—		—
Total multifamily residential and residential mixed-use		1,386,549		582,393		328,718		414,117		147,385		1,155,080		12,584		—		4,026,826
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—

Non-owner-occupied commercial real estate
Pass		747,272		662,608		608,133		373,835		198,317		661,311		11,963		3,453		3,266,892
Special mention		—		—		19,655		4,652		—		12,108		—		—		36,415
Substandard		—		15		1,070		6,209		—		6,884		—		—		14,178
Doubtful		—		—		—		—		—		—		—		—		—
Total non-owner-occupied commercial real estate		747,272		662,623		628,858		384,696		198,317		680,303		11,963		3,453		3,317,485
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—

Acquisition, development, and construction
Pass		36,877		152,543		11,242		15,943		—		2,087		10,033		281		229,006
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		657		—		—		—		—		—		—		657
Doubtful		—		—		—		—		—		—		—		—		—
Total acquisition, development, and construction		36,877		153,200		11,242		15,943		—		2,087		10,033		281		229,663
YTD Gross Charge-Offs		—		—		—		—		—		—		—		—		—

Total:
Pass		2,845,428		1,733,872		1,196,053		1,024,753		522,005		2,175,148		726,712		59,849		10,283,820
Special mention		6,634		—		20,549		17,364		16,628		31,664		9,641		1,204		103,684
Substandard		5,242		2,052		23,233		19,143		22,819		66,232		11,290		10,505		160,516
Doubtful		—		—		—		8,332		752		2,048		—		—		11,132
Total Loans	$	2,857,304	$	1,735,924	$	1,239,835	$	1,069,592	$	562,204	$	2,275,092	$	747,643	$	71,558	$	10,559,152
YTD Gross Charge-Offs	$	—	$	477	$	4,720	$	2,088	$	—	$	2,414	$	1,460	$	242	$	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)

March 31, 2023

December 31, 2022
Performing

$
7,073

$
7,580
Non-accrual

99

99
Total

$
7,172

$
7,679


(In thousands)	June 30, 2023		December 31, 2022
Performing	$	5,937	$	7,580
Non-accrual		220		99
Total	$	6,157	$	7,679

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8.LEASES

Maturities of the Company’s operating lease liabilities at ~~March 31,~~June 30, 2023 are as follows:


	Rent to be		Rent to be
(In thousands)	Capitalized		Capitalized
2023	$	9,122	$	6,105
2024		12,115		12,238
2025		11,912		12,039
2026		11,225		11,356
2027		9,240		9,375
Thereafter		9,991		10,047
Total undiscounted lease payments		63,605		61,160
Less amounts representing interest		(3,848)		(3,613)
Operating lease liabilities	$	59,757	$	57,547

Other information related to the Company’s operating leases was as follows:

Three Months Ended

Six Months Ended

March 31,

June 30,

(In thousands)

2023

2022

2023

2022

2023

2022

Operating lease cost

3,141

3,262

3,152

3,271

6,293

6,533

Cash paid for amounts included in the measurement of operating lease liabilities

3,071

2,924

3,088

3,055

6,159

5,979

March 31,

December 31,

June 30,

December 31,

2023

2022

2023

2022

Weighted average remaining lease term

5.7

years

5.9

years

5.4

years

5.9

years

Weighted average discount rate

2.12

2.03

2.15

2.03

9.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 both cash flow hedges and freestanding derivatives.

Cash Flow Hedges

Cash flow hedges 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. The Company uses these types of derivatives to hedge the variable cash flows associated with existing or forecasted issuances of short-term borrowings.

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~~

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same periods during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income 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 ~~$6.1~~$7.1 million will be reclassified as a decrease to interest expense.

During the three and six months ended ~~March 31,~~June 30, 2023, the Company did not terminate any derivatives. During the three and six months ended ~~March 31,~~June 30, 2022, the Company did not terminate any derivatives.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated statements of financial condition as of the dates indicated.

March 31, 2023

December 31, 2022

June 30, 2023

December 31, 2022

Notional

Fair Value

Notional

Fair Value

Notional

Fair Value

Notional

Fair Value

(Dollars in thousands)

Count

Amount

Assets

Liabilities

Count

Amount

Assets

Liabilities

Count

Amount

Assets

Liabilities

Count

Amount

Assets

Liabilities

Included in derivative assets/(liabilities):

Interest rate swaps related to FHLBNY advances

150,000

14,726

—

150,000

17,150

—

150,000

16,611

—

150,000

17,150

—

The table below presents the effect of the cash flow hedge accounting on accumulated other comprehensive income (loss) for the periods indicated:

Three Months Ended

Six Months Ended

March 31,

June 30,

(In thousands)

2023

2022

2023

2022

2023

2022

(Loss) gain recognized in other comprehensive income (loss)

(2,111)

6,852

Gain (loss) recognized on termination of derivatives

—

Gain (loss) reclassified from other comprehensive income into interest expense

313

(31)

Gain (loss) recognized in other comprehensive income (loss)

1,586

2,309

(525)

9,161

(Loss) gain reclassified from other comprehensive income into interest expense

(299)

All cash flow hedges are recorded gross on the balance sheet.

The cash flow hedges involve derivative agreements with third-party counterparties that contain provisions requiring the Company to post cash collateral if the derivative exposure exceeds a threshold amount and receive collateral for agreements in a net asset position. As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company did not post collateral to the third-party counterparties. As of ~~March 31,~~June 30, 2023, the Company received ~~$16.0~~$17.5 million in collateral from its third-party counterparties under the agreements in a net asset position. As of December 31, 2022, the Company received $17.8 million in collateral from its third-party counterparties.

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 ASU 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

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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:

March 31, 2023

June 30, 2023

Notional

Fair Value

Notional

Fair Value

(In thousands)

Count

Amount

Assets

Liabilities

Count

Amount

Assets

Liabilities

Included in derivative assets/(liabilities):

Loan level interest rate swaps with borrower

256,325

10,049

—

275,552

4,874

—

Loan level interest rate swaps with borrower

181

1,161,586

—

99,582

194

1,268,977

—

122,618

Loan level interest rate floors with borrower

294,537

—

5,937

226,257

—

3,637

Loan level interest rate swaps with third-party counterparties

256,325

—

10,049

275,552

—

4,874

Loan level interest rate swaps with third-party counterparties

181

1,161,586

99,582

—

194

1,268,977

122,618

—

Loan level interest rate floors with third-party counterparties

294,537

5,937

—

226,257

3,637

—


	December 31, 2022
		Notional		Fair Value		Fair Value
(In thousands)	Count	Amount		Assets		Liabilities
Included in derivative assets/(liabilities):
Loan level interest rate swaps with borrower	3	$	53,311	$	1,524	$	—
Loan level interest rate swaps with borrower	185		1,214,736		—		126,751
Loan level interest rate floors with borrower	40		326,309		—		9,060
Loan level interest rate swaps with third-party counterparties	3		53,311		—		1,524
Loan level interest rate swaps with third-party counterparties	185		1,214,736		126,751		—
Loan level interest rate floors with third-party counterparties	40		326,309		9,060		—

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:

Three Months Ended

Six Months Ended

March 31,

June 30,

(In thousands)

2023

2022

2023

2022

2023

2022

Loan level derivative income

3,133

2,437

1,685

5,570

1,691

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 ~~March 31,~~June 30, 2023 and December 31, 2022, the Company did not post collateral to its third-party counterparties. As of ~~March 31,~~June 30, 2023, the Company received ~~$104.7~~$122.7 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.

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 ~~March 31,~~June 30, 2023 and December 31, 2022, the notional amounts of risk participation agreements for derivative liabilities were ~~$94.3~~$94.1 million and $71.1 million, respectively. The related fair values of the Company’s risk participation agreements were immaterial as of ~~March 31,~~June 30, 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.

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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 ~~March 31,~~June 30, 2023, there were no derivatives in a net liability position, and therefore the termination value was zero. There were no provisions breached for the three or six months ended ~~March 31,~~June 30, 2023.

10.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).

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 ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 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.

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Table of Contents

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 March 31, 2023 Using

at June 30, 2023 Using

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

(In thousands)

Total

Inputs

Total

Inputs

Financial Assets:

Securities available-for-sale:

Agency notes

9,291

—

9,291

—

9,145

—

9,145

—

Treasury securities

230,431

—

230,431

—

228,607

—

228,607

—

Corporate securities

143,882

—

143,882

—

139,553

—

139,553

—

Pass-through MBS issued by GSEs

235,074

—

235,074

—

222,584

—

222,584

—

Agency CMOs

278,394

—

278,394

—

265,673

—

265,673

—

State and municipal obligations

29,740

—

29,740

—

29,294

—

29,294

—

Derivative – cash flow hedges

14,726

—

14,726

—

16,611

—

16,611

—

Derivative – freestanding derivatives, net

115,568

—

115,568

—

131,130

—

131,130

—

Financial Liabilities:

Derivative – freestanding derivatives, net

115,568

—

115,568

—

131,130

—

131,130

—


			Fair Value Measurements
			at December 31, 2022 Using
			Level 1		Level 2		Level 3
(In thousands)	Total		Inputs		Inputs		Inputs
Financial Assets:
Securities available-for-sale:
Treasury securities	$	227,256	$	—	$	227,256	$	—
Corporate securities		166,773		—		166,773		—
Pass-through MBS issued by GSEs		241,240		—		241,240		—
Agency CMOs		281,339		—		281,339		—
State and municipal obligations		33,979		—		33,979		—
Derivative – cash flow hedges		17,150		—		17,150		—
Derivative – freestanding derivatives, net		137,335		—		137,335		—
Financial Liabilities:
Derivative – freestanding derivatives, net		137,335		—		137,335		—

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

Certain financial assets and financial liabilities are measured at fair value on a non-recurring 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 (or impaired loans prior to the adoption of ASC 326) reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.


	June 30, 2023
				Fair Value Measurements Using:
			Quoted Prices
			In Active			Significant
			Markets for			Other	Significant
			Identical			Observable	Unobservable
	Carrying		Assets			Inputs	Inputs
(In thousands)	Value		(Level 1)			(Level 2)	(Level 3)
Individually evaluated loans	$	352	$	—	$	—	$	352

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March 31, 2023

Fair Value Measurements Using:



Quoted Prices



In Active

Significant

Markets for

Other

Significant

Identical

Observable

Unobservable

Carrying

Assets

Inputs

Inputs
(In thousands)

Value

(Level 1)

(Level 2)

(Level 3)
Individually evaluated loans

$
1,945

$
—
$
—

$
1,945


	December 31, 2022
				Fair Value Measurements Using:
				Quoted Prices
				In Active		Significant
				Markets for		Other	Significant
				Identical		Observable	Unobservable
	Carrying			Assets		Inputs	Inputs
(In thousands)	Value			(Level 1)		(Level 2)	(Level 3)
Individually evaluated loans	$	1,179	$	—	$	—	$	1,179

Individually evaluated loans with an allowance for credit losses at ~~March 31,~~June 30, 2023 had a carrying amount of ~~$1.9 million,~~$352 thousand, which is made up of the outstanding balance of ~~$3.1 million,~~$657 thousand, net of a valuation allowance of ~~$1.2 million.~~$305 thousand. Collateral dependent individually analyzed loans ~~as of March 31, 2023~~ resulted in a credit loss recovery of ~~$132~~$860 thousand for the three months ended June 30, 2023 and a credit loss recovery of $555 thousand for the six months ended June 30, 2023, which is included in the amounts reported in the consolidated statements of ~~income for the three months ended March 31, 2023.~~income.

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.

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 March 31, 2023 Using

at June 30, 2023 Using

Carrying

Level 1

Level 2

Level 3

Carrying

Level 1

Level 2

Level 3

(In thousands)

Amount

Inputs

Total

Amount

Inputs

Total

Financial Assets:

Cash and due from banks

663,132

—

663,132

452,504

—

452,504

Securities held-to-maturity

605,642

—

532,572

—

532,572

603,960

—

520,069

—

520,069

Loans held for investment, net

10,651,565

—

10,123,743

10,800,417

—

10,245,728

Accrued interest receivable

49,926

—

5,505

44,421

49,926

51,787

—

6,205

45,582

51,787

Financial Liabilities:

Savings, money market and checking accounts(1)

9,050,968

—

9,050,968

8,991,943

—

8,991,943

Certificates of Deposits ("CDs")

1,519,267

—

1,503,948

—

1,503,948

1,530,749

—

1,522,515

—

1,522,515

FHLBNY advances

1,498,000

—

1,502,366

—

1,502,366

1,448,000

—

1,444,184

—

1,444,184

Subordinated debt, net

200,261

—

164,461

—

164,461

200,240

—

158,240

—

158,240

Other short-term borrowings

2,068

—

2,068

Accrued interest payable

12,842

—

12,842

—

12,842

18,098

—

18,098

—

18,098

⁽¹⁾ Includes mortgage escrow deposits.

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			Fair Value Measurements										Fair Value Measurements
			at December 31, 2022 Using										at December 31, 2022 Using
	Carrying		Level 1		Level 2		Level 3				Carrying		Level 1		Level 2		Level 3
(In thousands)	Amount		Inputs		Inputs		Inputs		Total		Amount		Inputs		Inputs		Inputs		Total
Financial Assets:
Cash and due from banks	$	169,297	$	169,297	$	—	$	—	$	169,297	$	169,297	$	169,297	$	—	$	—	$	169,297
Securities held-to-maturity		585,798		—		505,759		—		505,759		585,798		—		505,759		—		505,759
Loans held for investment, net		10,482,145		—		—		10,005,121		10,005,121		10,482,145		—		—		10,005,121		10,005,121
Accrued interest receivable		48,561		—		6,105		42,456		48,561		48,561		—		6,105		42,456		48,561
Financial Liabilities:
Savings, money market and checking accounts(1)		9,139,043		9,139,043		—		—		9,139,043		9,139,043		9,139,043		—		—		9,139,043
CDs		1,115,364		—		1,096,808		—		1,096,808
Certificates of Deposits ("CDs")												1,115,364		—		1,096,808		—		1,096,808
FHLBNY advances		1,131,000		—		1,131,217		—		1,131,217		1,131,000		—		1,131,217		—		1,131,217
Subordinated debt, net		200,283		—		180,583		—		180,583		200,283		—		180,583		—		180,583
Other short-term borrowings		1,360		1,360		—		—		1,360		1,360		1,360		—		—		1,360
Accrued interest payable		5,323		—		5,323		—		5,323		5,323		—		5,323		—		5,323

⁽¹⁾ Includes mortgage escrow deposits.

11.OTHER INTANGIBLE ASSETS

The following table presents the carrying amount and accumulated amortization of intangible assets that are amortizable.


	March 31, 2023						December 31, 2022						June 30, 2023						December 31, 2022
		Core Deposit		Non-compete				Core Deposit		Non-compete				Core Deposit		Non-compete				Core Deposit		Non-compete
(In thousands)		Intangibles		Agreement		Total		Intangibles		Agreement		Total		Intangibles		Agreement		Total		Intangibles		Agreement		Total
Gross carrying value	$	10,204	$	780	$	10,984	$	10,204	$	780	$	10,984	$	10,204	$	780	$	10,984	$	10,204	$	780	$	10,984
Accumulated amortization		(4,097)		(780)		(4,877)		(3,720)		(780)		(4,500)		(4,446)		(780)		(5,226)		(3,720)		(780)		(4,500)
Net carrying amount	$	6,107	$	-	$	6,107	$	6,484	$	-	$	6,484	$	5,758	$	—	$	5,758	$	6,484	$	—	$	6,484

Amortization expense recognized on intangible assets was ~~$377~~$349 thousand and ~~$586~~$726 thousand for the three and six months ended ~~March 31, 2023~~June 30, 2023. Amortization expense recognized on intangible assets was $430 thousand and ~~2022, respectively.~~$1.0 million for the three and six months ended June 30, 2022.

Estimated amortization expense for the remainder of 2023 through 2027 and thereafter is as follows:


(In thousands)		Total		Total
2023		1,048	$	699
2024		1,163		1,163
2025		958		958
2026		795		795
2027		664		664
Thereafter		1,479		1,479
Total	$	6,107	$	5,758

12.FHLBNY ADVANCES

The Bank had borrowings from the FHLBNY (“Advances”) totaling ~~$1.50~~$1.45 billion and $1.13 billion at ~~March 31,~~June 30, 2023 and December 31, 2022, respectively, all of which were fixed rate. The average interest rate on outstanding FHLBNY Advances was ~~5.04%~~5.14% and 4.55% at ~~March 31,~~June 30, 2023 and December 31, 2022, respectively. In accordance with its Advances, Collateral Pledge and Security Agreement with the FHLBNY, the Bank was eligible to borrow ~~up to $4.45~~an additional $4.14 billion as of ~~March 31,~~June 30, 2023 and $4.13 billion as of December 31, 2022, and maintained sufficient qualifying collateral, as defined by the FHLBNY. At ~~March 31,~~June 30, 2023 there were no callable Advances.

The Company did not have extinguishment of debt during the three or six months ended ~~March 31,~~June 30, 2023 or 2022.

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The following tables present the contractual maturities and weighted average interest rates of FHLBNY advances for each of the next five years. There were $175.0 million FHLBNY advances with an overnight contractual maturity at June 30, 2023, and no FHLBNY advances with an overnight contractual maturity at ~~March 31, 2023 or~~ December 31, 2022. As of ~~March 31,~~June 30, 2023 there were ~~$800.0~~$575.0 million of FHLBNY advances with contractual maturities during 2023 and $698.0 million of FHLBNY advances with contractual maturities after 2023. As of December 31, 2022, there were $1.10 billion of FHLBNY advances with contractual maturities during 2023 and $36.0 million of FHLBNY advances with contractual maturities after 2022:

March 31, 2023

June 30, 2023

(Dollars in thousands)

Weighted

Contractual Maturity

Amount

Average Rate

Amount

Average Rate

2023, fixed rate at rates from 4.82% to 5.31%

800,000

5.13

Overnight, fixed rate at 5.31%

175,000

5.31

2023, fixed rate at rates from 5.18% to 5.64%

575,000

5.32

2024, fixed rate at rates from 4.85% to 5.16%

650,000

5.00

650,000

5.00

2027, fixed rate at 4.25%

36,000

4.25

36,000

4.25

2028, fixed rate at 4.04%

12,000

4.04

12,000

4.04

Total FHLBNY advances

1,498,000

5.04

1,448,000

5.14


	December 31, 2022
(Dollars in thousands)			Weighted
Contractual Maturity	Amount		Average Rate
2023, fixed rate at rates from 3.85% to 4.75%	$	1,095,000	4.56	%
2027, fixed rate at 4.25%		36,000	4.25
Total FHLBNY advances	$	1,131,000	4.55	%

13.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~~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 subordinated debentures totaled ~~$200.3~~$200.2 million at ~~March 31,~~June 30, 2023 and $200.3 million at December 31, 2022. Interest expense related to the subordinated debentures was $2.6 million and ~~$2.2~~$3.3 million during the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively. Interest expense related to the subordinated debentures was $5.1 million and $5.5 million during the six months ended June 30, 2023 and 2022, respectively. The subordinated debentures are included in tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

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14.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.

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.

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BNB Bank Pension Plan

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.

The following table represents the components of net periodic benefit (credit) cost included in other non-interest expense, except for service cost which is reported in salaries and employee benefits expense, in the consolidated statements of income. Net expenses associated with these plans were comprised of the following components:

Three Months Ended March 31,

2023

2022

BNB Bank

Employee

BNB Bank

Employee
(In thousands)

Pension Plan

Retirement Plan

Pension Plan

Retirement Plan
Service cost

$
175

$
—

$
268

$
—
Interest cost

330

223

195

155
Expected return on assets

(687)

(383)

(858)

(490)
Amortization of unrealized loss

—

148

—

62
Net periodic credit

$
(182)

$
(12)

$
(395)

$
(273)


	Three Months Ended June 30,
		2023			2022

	BNB Bank		Employee		BNB Bank		Employee
(In thousands)	Pension Plan		Retirement Plan		Pension Plan		Retirement Plan
Service cost	$	175	$	—	$	267	$	—
Interest cost		330		222		195		155
Expected return on assets		(688)		(382)		(857)		(490)
Amortization of unrealized loss		—		147		—		63
Net periodic credit	$	(183)	$	(13)	$	(395)	$	(272)


	Six Months Ended June 30,
	2023				2022

	BNB Bank		Employee		BNB Bank		Employee
(In thousands)	Pension Plan		Retirement Plan		Pension Plan		Retirement Plan
Service cost	$	350	$	—	$	535	$	—
Interest cost		660		445		390		310
Expected return on assets		(1,375)		(765)		(1,715)		(980)
Amortization of unrealized loss		—		295		—		125
Net periodic credit	$	(365)	$	(25)	$	(790)	$	(545)

There were no contributions to the BNB Bank Pension Plan or the Employee Retirement Plan for the three or six months ended ~~March 31,~~June 30, 2023.

401(k) Plan

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 60^th day of employment, unless they elect not to participate. Participants may contribute a portion of their pre-tax base salary, generally not to exceed ~~$20,500~~$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

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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. The 401(k) Plan held Company common stock within the accounts of participants totaling ~~$5.6~~$4.3 million at ~~March 31,~~June 30, 2023. During the three and six months ended ~~March 31,~~June 30, 2023, total expense recognized as a component of salaries and employee benefits expense for the 401(k) Plan was $582 thousand and $1.5 million, respectively. During the three and six months ended June 30, 2022, total expense recognized as a component of salaries and employee benefits expense for the 401(k) Plan was ~~$936~~$530 thousand and ~~$800 thousand,~~$1.3 million, respectively.

15.STOCK-BASED COMPENSATION

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 ~~March 31,~~June 30, 2023, there were ~~673,756~~681,061 shares reserved for issuance under the 2021 Equity Incentive Plan.

Stock Option Awards

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	Aggregate
		Weighted-		Remaining	Intrinsic
	Number of	Average Exercise		Contractual	Value
	Options	Price		Years	(In thousands)
Options outstanding at January 1, 2023	92,137	$	35.39	6.2		—
Options exercised	—		—
Options forfeited	—		—
Options outstanding at June 30, 2023	92,137	$	35.39	5.7	$	—
Options vested and exercisable at June 30, 2023	92,137	$	35.39	5.7	$	—

Information related to stock options during each period is as follows:

Three Months Ended

Six Months Ended

June 30,

(In thousands)

2023

2022

2023

2022

Cash received for option exercise cost

—

Income tax (expense) benefit recognized on stock option exercises

—

Intrinsic value of options exercised

—

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~~Stock Option Awards~~

~~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

Aggregate

Weighted-

Remaining

Intrinsic

Number of

Average Exercise

Contractual

Value


Options

Price

Years

(In thousands)
Options outstanding at January 1, 2023

92,137

$
35.39

6.2

—
Options exercised

—

—

Options forfeited

—

—

Options outstanding at March 31, 2023

92,137

$
35.39

6.0

$
—
Options vested and exercisable at March 31, 2023

92,137

$
35.39

6.0

$
—

~~Information related to stock options during each period is as follows:~~

Three Months Ended

March 31,
(In thousands)

2023

2022
Cash received for option exercise cost

$
—

$
—
Income tax (expense) benefit recognized on stock option exercises

—

—
Intrinsic value of options exercised

—

—

The range of exercise prices and weighted-average remaining contractual lives of both outstanding and vested options (by option exercise cost) as of ~~March 31,~~June 30, 2023 were as follows:


	Outstanding Options		Vested Options		Outstanding Options		Vested Options
		Weighted		Weighted		Weighted		Weighted
		Average		Average		Average		Average
		Contractual		Contractual		Contractual		Contractual
		Years		Years		Years		Years
	Amount	Remaining	Amount	Remaining	Amount	Remaining	Amount	Remaining
Exercise Prices:
$34.87	35,671	6.9	35,671	6.9	35,671	6.6	35,671	6.6
$35.35	32,079	5.9	32,079	5.9	32,079	5.6	32,079	5.6
$36.19	24,387	4.9	24,387	4.9	24,387	4.6	24,387	4.6
Total	92,137	6.0	92,137	6.0	92,137	5.7	92,137	5.7

Restricted Stock Awards

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.

~~Table of Contents~~

The following table presents a summary of activity related to the RSAs granted, and changes during the period then ended:


		Weighted-			Weighted-
		Average			Average
	Number of	Grant-Date		Number of	Grant-Date
	Shares	Fair Value		Shares	Fair Value
Unvested allocated shares outstanding at January 1, 2023	350,758	$	28.63	350,758	$	28.63
Shares granted	195,437		26.40	201,590		26.16
Shares vested	(92,897)		27.46	(120,353)		28.91
Shares forfeited	(1,284)		27.29	(2,127)		27.31
Unvested allocated shares outstanding at March 31, 2023	452,014	$	27.91
Unvested allocated shares outstanding at June 30, 2023				429,868	$	27.40

Information related to RSAs during each period is as follows:

Three Months Ended

Six Months Ended

March 31,

June 30,

(Dollars in thousands)

2023

2022

2023

2022

2023

2022

Compensation expense recognized

1,058

1,024

1,262

764

2,320

1,788

Income tax (expense) benefit recognized on vesting of RSAs

(13)

329

(99)

(112)

188

As of ~~March 31,~~June 30, 2023, there was ~~$10.2~~$9.0 million of total unrecognized compensation cost related to unvested RSAs to be recognized over a weighted-average period of ~~2.2~~2.0 years.

Performance-Based Share Awards

The Company maintains a long-term incentive award program (“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.

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The following table presents a summary of activity related to the PSAs granted, and changes during the period then ended:


		Weighted-			Weighted-
		Average			Average
	Number of	Grant-Date		Number of	Grant-Date
	Shares	Fair Value		Shares	Fair Value
Maximum aggregate share payout at January 1, 2023	95,831	$	30.35	95,831	$	30.35
Shares granted	92,187		16.97	92,566		16.97
Maximum aggregate share payout at March 31, 2023	188,018	$	23.79
Shares forfeited				(13,632)		33.67
Maximum aggregate share payout at June 30, 2023				174,765	$	23.00
Minimum aggregate share payout	—		—	—		—
Expected aggregate share payout	157,468	$	22.58	148,663	$	21.98

Information related to PSAs during each period is as follows:


	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
(In thousands)	2023		2022		2023		2022		2023		2022
Compensation expense recognized	$	245	$	195	$	95	$	182	$	340	$	377
Income tax expense recognized on vesting of PSAs		(15)		—		—		—		(15)		—

~~Table of Contents~~

As of ~~March 31,~~June 30, 2023, there was ~~$2.4~~$2.0 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 ~~2.2~~2.0 years.

16.INCOME TAXES

During the three months ended ~~March 31,~~June 30, 2023 and 2022, the Company’s consolidated effective tax rates were 26.8% and ~~28.1%~~28.4%, respectively. During the six months ended June 30, 2023 and 2022, the Company’s consolidated effective tax rates were 26.8% and 28.3%, respectively There were no significant unusual income tax items during the three or six months ended ~~March 31, 2022.~~

June 30, 2023 and 2022, respectively.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

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.

~~COVID-19 Pandemic Response~~

Following the March 2020 passage of the Paycheck Protection Program (“PPP”), administered by the SBA, the Company participated in assisting its customers with applications for resources through the program. Since the inception of the program, the consolidated PPP originations for the Company through December 31, 2021, including originations by both Legacy Dime and Bridge, exceeded $1.90 billion. Following the completion of the PPP, the Company sold its 2021 PPP loan originations in order to re-deploy funds into ongoing loan portfolio growth. The Company believes that the remainder of its SBA PPP loans will ultimately be forgiven by the SBA in accordance with the terms of the program. As of March 31, 2023, the Company had SBA PPP loans totaling $2.1 million, net of deferred fees. It is the Company’s expectation that loans funded through the PPP are fully guaranteed by the U.S. government.

~~We continue to monitor unfunded commitments, including commercial and home equity lines of credit, for evidence of increased credit exposure as borrowers utilize these lines for liquidity purposes.~~

It is possible that there will be continued material, adverse impacts to significant estimates, asset valuations, and business operations, including intangible assets, investments, loans, deferred tax assets, and derivative counter party risk, changes in consumer behavior, and supply chain interruptions as a result of the COVID-19 pandemic. Future government actions in response to the COVID-19 pandemic, including vaccination mandates, may also affect our workforce, human capital resources, and infrastructure.

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Selected Financial Highlights and Other Data

(Dollars in Thousands Except Per Share Amounts)

At or For the


Three Months Ended


March 31,


2023

2022

Per Share Data:





Reported EPS (Diluted)

$
0.92

$
0.82

Cash dividends paid per common share

0.24

0.24

Book value per common share

27.70

26.32

Dividend payout ratio

26.09
%

29.27
%
Performance and Other Selected Ratios:

Return on average assets

1.11
%

1.13
%
Return on average equity

12.50

11.53

Net interest spread

1.92

3.07

Net interest margin

2.74

3.19

Average interest-earning assets to average interest-bearing liabilities

146.80

165.88

Non-interest expense to average assets

1.41

1.64

Efficiency ratio

50.1

51.8

Loan-to-deposit ratio at end of period

101.5

88.7

Effective tax rate

26.75

28.08

Asset Quality Summary:





Non-performing loans ⁽¹⁾

$
31,544

$
35,962

Non-performing assets

31,544

35,962

Net charge-offs

1,541

2,584

Non-performing assets/Total assets

0.23
%

0.30
%
Non-performing loans/Total loans

0.29

0.39

Allowance for credit losses/Total loans

0.73

0.86

Allowance for credit losses/Non-performing loans

248.34

221.39


	At or For the						At or For the
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Per Share Data:
Reported EPS (Diluted)	$	0.66		$	0.94		$	1.58		$	1.76
Cash dividends paid per common share		0.25			0.24			0.49			0.48
Book value per common share		27.99			26.41			27.99			26.41
Dividend payout ratio		37.88	%		25.53	%		31.01	%		27.27	%
Performance and Other Selected Ratios:
Return on average assets		0.81	%		1.27	%		0.96	%		1.20	%
Return on average equity		9.03			13.44			10.75			12.47
Net interest spread		1.58			3.12			1.74			3.09
Net interest margin		2.50			3.29			2.62			3.24
Average interest-earning assets to average interest-bearing liabilities		141.00			166.61			143.80			166.19
Non-interest expense to average assets		1.53			1.71			1.47			1.67
Efficiency ratio		57.6			49.1			53.8			50.4
Loan-to-deposit ratio at end of period		103.4			91.4			103.4			91.4
Effective tax rate		26.76			28.41			26.76			28.25
Asset Quality Summary:
Non-performing loans ⁽¹⁾	$	27,667		$	36,301		$	27,667		$	36,301
Non-performing assets		27,667			36,301			27,667			36,301
Net charge-offs		3,679			555			5,220			3,139
Non-performing assets/Total assets		0.20	%		0.29	%		0.20	%		0.29	%
Non-performing loans/Total loans		0.25			0.38			0.25			0.38
Allowance for credit losses/Total loans		0.70			0.82			0.70			0.82
Allowance for credit losses/Non-performing loans		273.42			218.80			273.42			218.80

(1)	Non-performing loans are defined as all loans on non-accrual status.

Critical Accounting Estimates

Note 1. Summary of Significant Accounting Policies, to the Company’s Audited Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2022 contains a summary of significant accounting policies. These accounting policies may require various levels of subjectivity, estimates or judgment by management. Policies with

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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.

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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.

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. 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.

The Company evaluates loans that do not share risk characteristics 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.

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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.

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

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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 which 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. Discount rates, expected future cash flows, market conditions and other future events are subjective and may differ from estimates.

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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.

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

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forecast of cash flow data for the upcoming 12 months is presented to the Board of Directors on an annual basis. Given recent banking industry events, management is also monitoring the level of uninsured deposits on a daily 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 and MBS 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 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 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 ~~March 31,~~June 30, 2023 ~~and~~the Bank did not have any repurchase agreements. As of December 31, 2022, the Bank’s repurchase agreements totaling ~~$2.1~~$1.4 million and ~~$1.4 million, respectively,~~ were included in other short-term borrowings on the consolidated balance sheets.

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 escrow) increased ~~$315.8~~$268.3 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023 compared to ~~a decrease~~an increase of ~~$28.9~~$107.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2022. Within deposits, core deposits (i.e., non-CDs) decreased ~~$88.1~~$147.1 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and increased ~~$42.6~~$957 thousands during the six months ended June 30, 2022. CDs increased $415.4 million during the ~~three~~six months ended ~~March 31, 2022. CDs increased $403.9~~June 30, 2023 compared to an increase of $106.1 million during the ~~three~~six months ended ~~March 31, 2023 compared to a decrease of $71.5 million during the three months ended March 31,~~June 30, 2022. The decrease in core deposits and increase in CDs was primarily due to customer migration to higher-rate CDs as a result of the increasing interest rate environment. In the event that the Bank should require funds beyond its ability or desire to generate them internally, an additional source of funds is available through its borrowing line at the FHLBNY or borrowing capacity through AFX and lines of credit with unaffiliated

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correspondent banks. At ~~March 31,~~June 30, 2023, the Bank had an additional unused borrowing capacity of ~~$1.53~~$1.21 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements (i.e., 4.5% of the Bank’s outstanding FHLBNY borrowings).

The Bank increased its outstanding FHLBNY advances by ~~$367.0~~$317.0 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023, compared to a ~~$25.0~~$75.0 million increase during the ~~three~~six months ended ~~March 31,~~June 30, 2022. See Note 12. “FHLBNY Advances” for further information.

Subordinated debentures totaled $200.2 million at June 30, 2023 and $200.3 million at ~~March 31, 2023 and $197.1 million at March~~December 31, 2022. See Note 13. “Subordinated Debentures” to our consolidated financial statements for further information.

During the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, real estate loan originations totaled ~~$346.7~~$638.5 million and ~~$454.3~~$1.34 billion million, respectively. During the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, C&I loan originations totaled ~~$5.2~~$14.1 million and ~~$26.1~~$49.9 million, respectively.

Sale of securities available-for-sale totaled $79.3 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023. The Bank did not have any sale of securities available-for-sale during the ~~three~~six months ended ~~March 31,~~June 30, 2022. Purchases of ~~available-~~

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~~for-sale~~available-for-sale securities totaled ~~$78.2~~$78.7 million and ~~$3.0~~$6.2 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, respectively. Proceeds from pay downs and calls and maturities of available-for-sale securities were ~~$16.2~~$38.4 million and ~~$49.9~~$112.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, respectively.

The Bank did not have proceeds from sales of held-to-maturity securities during the ~~three~~six months ended ~~March 31,~~June 30, 2023 or 2022, respectively. Purchases of held-to-maturity securities totaled ~~$23.7~~$27.1 million and ~~$31.9~~$41.6 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, respectively. Proceeds from pay downs and calls and maturities of held-to-maturity securities were ~~$4.7~~$10.7 million and ~~$2.7~~$14.1 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, respectively.

The Company and the Bank are subject to minimum regulatory capital requirements imposed by ~~its~~their primary federal ~~regulator.~~regulators. As a general matter, these capital requirements are based on the amount and composition of an institution’s assets. At ~~March 31,~~June 30, 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 following table summarizes Company and Bank capital ratios calculated under the Basel III Capital Rules framework as of the period indicated:

Actual Ratios at March 31, 2023

Basel III

Consolidated

Minimum

To Be Categorized as

Bank

Company

Requirement

“Well Capitalized” ⁽¹⁾

Tier 1 common equity ratio

12.1
%

9.3
%

4.5
%

6.5
%
Tier 1 risk-based capital ratio

12.1

10.4

6.0

8.0

Total risk-based capital ratio

12.9

13.0

8.0

10.0

Tier 1 leverage ratio

9.8

8.4

4.0

5.0


	Actual Ratios at June 30, 2023
							Basel III
				Consolidated			Minimum			To Be Categorized as
	Bank			Company			Requirement			“Well Capitalized” ⁽¹⁾
Tier 1 common equity ratio		12.2	%		9.4	%		4.5	%	6.5	%
Tier 1 risk-based capital ratio		12.2			10.5			6.0		8.0
Total risk-based capital ratio		13.0			13.1			8.0		10.0
Tier 1 leverage ratio		9.8			8.4			4.0		5.0

(1)	Only the Bank is subject to these requirements.

During the ~~three~~six months ended ~~March 31,~~June 30, 2023, the Holding Company repurchased ~~24,813~~36,813 shares of its common stock at an aggregate cost of ~~$715~~$947 thousand. The Holding Company repurchased ~~505,005~~1,222,649 shares of its common stock at an aggregate cost of ~~$17.4~~$40.3 million during the ~~three~~six months ended ~~March 31,~~June 30, 2022. As of ~~March 31,~~June 30, 2023, ~~1,578,947~~1,566,947 shares remained available for purchase under the authorized share repurchase programs. See "Part II - Item 2. Other Information - Unregistered Sales of Equity Securities and Use of Proceeds" for additional information about repurchases of common stock.

The Holding Company paid ~~$1.8~~$3.6 million in cash dividends on its preferred stock during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, respectively.

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The Holding Company paid ~~$9.2~~$18.5 million and ~~$9.4~~$18.7 million in cash dividends on its common stock during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, respectively.

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 ~~March 31,~~June 30, 2023, the

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Bank had ~~$105.3~~$122.0 million of firm loan commitments that were accepted by the borrowers. All of these commitments are expected to close during the remainder of the year ended December 31, 2023.

Additionally, in connection with a loan securitization completed in December 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 available-for-sale pass-through MBS issued by GSEs as collateral.

Asset Quality

General

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 6 to our unaudited condensed 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 at each regularly scheduled Board 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, commercial real estate loans, and C&I loans, or fifteen days late in connection with one-to-four family or consumer loans. Thereafter, periodic letters are mailed and phone calls 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 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

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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 conditions for a period of generally at least six months.

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

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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 ~~$31.5~~$27.7 million at ~~March 31,~~June 30, 2023 and $34.2 million at December 31, 2022.

The following is a reconciliation of non-accrual loans as of the dates indicated:


	March 31,			December 31,			March 31,			June 30,			December 31,			June 30,
	2023			2022			2022			2023			2022			2022

	(Dollars in thousands)									(Dollars in thousands)
Non-accrual loans:
Business loans										$	23,470		$	27,787		$	29,866
One-to-four family residential, including condominium and cooperative apartment	$	2,808		$	3,203		$	5,241			3,305			3,203			3,128
Multifamily residential and residential mixed-use real estate		—			—			—
CRE		8,068			8,332			4,972
Multifamily residential and residential mixed-use											—			—			—
Non-owner-occupied commercial real estate											15			2,491			2,519
Acquisition, development, and construction		657			657			665			657			657			657
C&I		19,912			21,946			25,000
Other		99			99			84			220			99			131
Total non-accrual loans	$	31,544		$	34,237		$	35,962		$	27,667		$	34,237		$	36,301
Ratios:
Total non-accrual loans to total loans		0.29	%		0.32	%		0.39	%		0.25	%		0.32	%		0.38	%
Total non-performing assets to total assets		0.23			0.26			0.30			0.20			0.26			0.29

Troubled Debt Restructuring Disclosures Prior to Our Adoption of ASU No. 2022-02

Prior to our adoption of ASU No. 2022-02, we accounted for a Troubled Debt Restructuring (“TDRs”) as a loan that we, for economic or legal reasons related to a borrower’s financial difficulties, granted a concession to the borrower that we would not otherwise grant. Those concessions included a reduction of interest rate for the remaining term of the loan, the maturity date of the loan was extended with a stated interest rate lower than the current market rate for new debt with similar risk, and the outstanding principal amount and/or accrued interest have been reduced. In instances in which the interest rate had 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.

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On January 1, 2023, we adopted ASU 2022-02, which eliminated TDR accounting prospectively for all restructurings occurring on or after January 1, 2023. The accrual status of each restructured loan is determined separately in accordance with our policies for determining accrual or non-accrual status. At the time the modification agreement is entered into between the Bank and the borrower 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 restructured loan on accrual status and well as restructured loans 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. Restructured loans on non-accrual status excluding one-to-four family and consumer loans are individually evaluated to determine expected credit losses. For restructured loans that are collateral-dependent where we

~~Table of Contents~~

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.

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 reassess 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 balance sheets at ~~March 31,~~June 30, 2023 or December 31, 2022. We did not recognize any provisions for losses on OREO properties during the ~~three~~six months ended ~~March 31,~~June 30, 2023 or 2022.

Past Due Loans

Loans Delinquent 30 to 59 Days

At ~~March 31,~~June 30, 2023, we had loans totaling ~~$18.7~~$16.4 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 ~~March 31,~~June 30, 2023, we had loans totaling ~~$1.4~~$8.1 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 ~~March 31,~~June 30, 2023 or at December 31, 2022.

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Allowance for Off-Balance Sheet Exposures

We maintain an allowance, recorded in other liabilities, associated with unfunded loan commitments accepted by the borrower. The amount of our allowance was ~~$2.8~~$2.7 million at ~~March 31,~~June 30, 2023 and $2.8 million at December 31, 2022, respectively. This allowance is determined based upon the outstanding volume of loan commitments at each period end. Any increases or reductions in this allowance are recognized in provision for credit losses.

Allowance for Credit Losses

We recognized a credit loss recovery of ~~$3.6~~$2.7 million and $1.5 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023 ~~compared to a credit loss recovery of $1.6 million for the three months ended March 31, 2022.~~and 2022, respectively. The ~~$3.6~~$2.7 million credit loss recovery for the ~~three~~six months ended ~~March 31,~~June 30, 2023 was primarily associated with a reduction in reserves on pooled Purchased Credit

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Deteriorated ("PCD”) loans that were acquired as part of the Company’s 2021 merger of equals transaction. The ~~$1.6~~$1.5 million credit loss recovery for the ~~first quarter of~~six months ended June 30, 2022 was primarily ~~associated with the improvement in forecasted macroeconomic conditions, as well as a reduction in~~due to releases of reserves ~~for individually evaluated~~on PCD loans.

For a further discussion of the allowance for credit losses and related activity during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, please see Note 7 to the condensed consolidated financial statements.

The following table presents our allowance for credit losses allocated by loan type and the percent of loans in each category to total loans as of the dates indicated.

March 31, 2023

December 31, 2022

June 30, 2023

December 31, 2022

Percent

of Loans

in Each

Category

Allocated

to Total

Allocated

to Total

Allocated

to Total

Allocated

to Total

Amount

Loans

Amount

Loans

Amount

Loans

Amount

Loans

(Dollars in thousands)

Business loans

39,700

20.69

47,029

20.93

One-to-four family residential and cooperative/condominium apartment

6,012

7.45

5,969

7.32

6,419

7.87

5,969

7.32

Multifamily residential and residential mixed-use

7,613

38.38

8,360

38.11

8,190

37.99

8,360

38.11

CRE

24,478

42.02

27,329

42.19

Non-owner-occupied commercial real estate

18,440

31.32

20,153

31.40

Acquisition, development, and construction

2,515

2.06

1,723

2.17

2,558

2.07

1,723

2.17

C&I

37,477

10.02

39,853

10.14

Other loans

240

0.07

273

0.07

339

0.06

273

0.07

Total

78,335

100.00

83,507

100.00

75,646

100.00

83,507

100.00

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The following table sets forth information about our allowance for credit losses at or for the dates indicated:

At or for the Three Months Ended March 31,


2023

2022


(Dollars in thousands)
Total loans outstanding at end of period ⁽¹⁾

$
10,731,845

$
9,249,849

Average total loans outstanding during the period⁽²⁾

10,613,353

9,228,480

Allowance for credit losses balance at end of period

78,335

79,615

Allowance for credit losses to total loans at end of period

0.73
%

0.86
%
Non-performing loans to total loans at end of period

0.29

0.39

Allowance for credit losses to total non-performing loans at end of period

248.34

221.39

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

—

—

Acquisition, development, and construction

—

—

C&I

0.59

1.13

Other loans

(0.05)

0.04

Total

0.06

0.11


	At or for the Six Months Ended June 30,
	2023			2022

	(Dollars in thousands)
Total loans outstanding at end of period ⁽¹⁾	$	10,876,415		$	9,660,907
Average total loans outstanding during the period⁽²⁾		10,696,249			9,355,117
Allowance for credit losses balance at end of period		75,646			79,426
Allowance for credit losses to total loans at end of period		0.70	%		0.82	%
Non-performing loans to total loans at end of period		0.25			0.38
Allowance for credit losses to total non-performing loans at end of period		273.42			218.80

Ratio of net charge-offs to average loans outstanding during the period:
Business loans		0.46	%		0.32	%
One-to-four family residential and cooperative/condominium apartment		—			—
Multifamily residential and residential mixed-use		—			—
Non-owner-occupied commercial real estate		—			—
Acquisition, development, and construction		—			—
Other loans		0.78			0.03
Total		0.10			0.07

(1)	Total loans represent gross loans (excluding loans held for sale), inclusive of deferred fees/costs and premiums/discounts.

(2)	Total average loans represent gross loans (including loans held for sale), inclusive of deferred loan fees/costs and premiums/discounts.

Comparison of Financial Condition at ~~March 31,~~June 30, 2023 and December 31, 2022

Assets~~Assets.~~. Assets totaled ~~$13.84~~$13.80 billion at ~~March 31,~~June 30, 2023, ~~$651.8~~$612.9 million above their level at December 31, 2022, primarily due to increases of ~~$493.8~~$317.4 million in our loan portfolio, $283.2 million in cash and due from banks ~~$170.2~~and $37.7 million in ~~our loan portfolio and $16.5 million in restricted stock,~~other assets, partially offset by a decrease of ~~$24.2 million in derivative assets and a decrease of $3.9~~$37.6 million in total investment securities.

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Total loans, net of allowance increased ~~$170.2~~$317.4 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023, to ~~$10.65~~$10.80 billion at ~~period end.~~June 30, 2023. During the ~~period,~~six months ended June 30, 2023, we had loan originations of ~~$351.9~~$652.6 million.

Total investment securities decreased ~~$3.9~~$37.6 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023, to ~~$1.53~~$1.50 billion at ~~period end,~~June 30, 2023, primarily due to proceeds from principal payments, calls, maturities, and sales of ~~$105.0~~$128.3 million and an increase in unrealized losses of $12.1 million, offset in part by purchases of ~~$101.9~~$105.8 million. There were no transfers to or from securities held-to-maturity during the ~~three~~six months ended ~~March 31,~~June 30, 2023.

Liabilities~~Liabilities.~~. Total liabilities increased ~~$630.1~~$580.0 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023, to ~~$12.65~~$12.60 billion at ~~period end,~~June 30, 2023, primarily due to an increase of ~~$367.0~~$317.0 million in FHLBNY advances and an increase of ~~$315.8~~$268.3 million in deposits ~~partially offset by a decrease of $32.4 million in derivative cash collateral and a decrease of $21.8 million in derivative liabilities.~~(including mortgage escrow accounts).

Stockholders’ ~~Equity.~~Equity. Stockholders’ equity increased ~~$21.7~~$32.9 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023 to ~~$1.19~~$1.20 billion at ~~period end,~~June 30, 2023, primarily due to net income ~~for the period~~ of ~~$37.3~~$64.8 million, partially offset by common stock dividends of ~~$9.2~~$18.5 million, other comprehensive loss of ~~$4.3~~$10.0 million, preferred stock dividends of ~~$1.8~~$3.6 million and repurchases of shares of common stock of ~~$715~~$947 thousand.

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Comparison of Operating Results for the Three Months Ended ~~March 31,~~June 30, 2023 and 2022

General. Net income was ~~$37.3~~$27.5 million during the three months ended ~~March 31,~~June 30, 2023, compared to net income of ~~$34.5~~$38.5 million for the three months ended ~~March 31,~~June 30, 2022. During the three months ended ~~March 31,~~June 30, 2023, non-interest expense ~~decreased~~increased by ~~$2.4 million,~~$348 thousand, the credit loss provision increased by $848 thousand, non-interest income decreased by ~~$2.1 million, non-interest income increased by $1.8~~$1.7 million, net interest income decreased by ~~$3.3~~$13.3 million, and income tax expense ~~increased~~decreased by ~~$138 thousand,~~$5.2 million, compared to the three months ended ~~March 31,~~June 30, 2022.

The discussion of net interest income for the three months ended ~~March 31,~~June 30, 2023 and 2022 should be read in conjunction with the following tables, which set forth certain information related to the consolidated statements of income 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 ~~$292~~$363 thousand and ~~$834~~$455 thousand during the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively. The decrease in loan fees was primarily due to a decline in loan prepayment fees in 2023. There are no out-of-period adjustments included in the rate/volume analysis in the following table.

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Analysis of Net Interest Income

Three Months Ended March 31,

2023

2022






Average





Average


Average

Yield/

Average

Yield/


Balance

Interest

Cost


Balance

Interest

Cost

Assets:

(Dollars in thousands)

Interest-earning assets:













Real estate loans ⁽¹⁾

$
9,560,755

$
109,589

4.65
%

$
8,296,732

$
76,437

3.74
%
Commercial and industrial loans ⁽¹⁾

1,045,048

18,735

7.27

916,090

9,786

4.33

Other loans ⁽¹⁾

7,550

115

6.18

15,658

197

5.10

Securities

1,699,846

8,431

2.01

1,726,189

7,131

1.68

Other short-term investments

372,036

3,802

4.14

379,136

368

0.39

Total interest-earning assets

12,685,235

140,672

4.50
%

11,333,805

93,919

3.36
%
Non-interest earning assets

764,511

865,916

Total assets

$
13,449,746

$
12,199,721

Liabilities and Stockholders' Equity:













Interest-bearing liabilities:













Interest-bearing checking

$
843,108

$
1,523

0.73
%

$
870,889

$
367

0.17
%
Money market

2,699,640

13,849

2.08

3,632,438

973

0.11

Savings

2,327,126

14,599

2.54

1,256,701

207

0.07

Certificates of deposit

1,167,736

7,301

2.54

824,883

984

0.48

Total interest-bearing deposits

7,037,610

37,272
��

2.15

6,584,911

2,531

0.16

FHLBNY advances

1,255,700

13,500

4.36

33,889

77

0.92

Subordinated debt, net

200,276

2,553

5.17

197,080

2,201

4.53

Other short-term borrowings

11,827

118

4.05

2,459

—

—

Total borrowings

1,467,803

16,171

4.47

233,428

2,278

3.96

Derivative cash collateral

135,641

1,477

4.42

14,335

1

—

Total interest-bearing liabilities

8,641,054

54,920

2.58
%

6,832,674

4,810

0.29
%
Non-interest-bearing checking

3,341,707

3,979,741

Other non-interest-bearing liabilities

273,281

189,843

Total liabilities

12,256,042

11,002,258

Stockholders' equity

1,193,704

1,197,463

Total liabilities and stockholders' equity

$
13,449,746

$
12,199,721

Net interest income

$
85,752

$
89,109

Net interest spread ⁽²⁾

1.92
%

3.07
%
Net interest-earning assets

$
4,044,181

$
4,501,131

Net interest margin ⁽³⁾

2.74
%

3.19
%
Ratio of interest-earning assets to interest-bearing liabilities

146.80
%

165.88
%
Deposits (including non-interest-bearing checking accounts)

$
10,379,317

$
37,272

1.46
%

$
10,564,652

$
2,531

0.10
%

Three Months Ended June 30,

2023

2022






Average





Average


Average

Yield/

Average

Yield/


Balance

Interest

Cost


Balance

Interest

Cost

Assets:

(Dollars in thousands)

Interest-earning assets:













Business loans⁽¹⁾⁽³⁾

$
2,259,769

$
35,558

6.31
%

$
1,982,020

$
21,787

4.41
%
One-to-four family residential, including condo and coop⁽³⁾

828,324

9,818

4.75

683,615

6,771

3.97

Multifamily residential and residential mixed-use⁽³⁾

4,125,119

45,123

4.39

3,510,377

32,024

3.66

Non-owner-occupied commercial real estate⁽³⁾

3,337,689

42,559

5.11

2,990,246

28,466

3.82

Acquisition, development, and construction⁽³⁾

220,795

5,149

9.35

302,534

3,909

5.18

Other loans ⁽³⁾

6,536

103

6.32

11,571

145

5.03

Securities

1,642,057

7,914

1.93

1,695,702

7,067

1.67

Other short-term investments

468,233

5,867

5.03

236,285

741

1.26

Total interest-earning assets

12,888,522

152,091

4.73
%

11,412,350

100,910

3.55
%
Non-interest earning assets

769,546

709,599

Total assets

$
13,658,068

$
12,121,949

Liabilities and Stockholders' Equity:













Interest-bearing liabilities:













Interest-bearing checking⁽²⁾

$
952,424

$
3,081

1.30
%

$
858,402

$
604

0.28
%
Money market

2,713,816

18,284

2.70

3,148,472

1,240

0.16

Savings⁽²⁾

2,279,670

17,376

3.06

1,509,776

859

0.23

Certificates of deposit

1,546,257

13,875

3.60

827,286

1,028

0.50

Total interest-bearing deposits

7,492,167

52,616

2.82

6,343,936

3,731

0.24

FHLBNY advances

1,327,121

15,206

4.60

79,176

172

0.87

Subordinated debt, net

200,254

2,553

5.11

273,470

3,309

4.85

Other short-term borrowings

814

—

—

54,229

92

0.68

Total borrowings

1,528,189

17,759

4.66

406,875

3,573

3.52

Derivative cash collateral

120,542

1,497

4.98

98,995

94

0.38

Total interest-bearing liabilities

9,140,898

71,872

3.15
%

6,849,806

7,398

0.43
%
Non-interest-bearing checking⁽²⁾

3,043,899

3,935,765

Other non-interest-bearing liabilities

254,826

191,066

Total liabilities

12,439,623

10,976,637

Stockholders' equity

1,218,445

1,145,312

Total liabilities and stockholders' equity

$
13,658,068

$
12,121,949

Net interest income

$
80,219

$
93,512

Net interest spread ⁽⁴⁾

1.58
%

3.12
%
Net interest-earning assets

$
3,747,624

$
4,562,544

Net interest margin ⁽⁵⁾

2.50
%

3.29
%
Ratio of interest-earning assets to interest-bearing liabilities

141.00
%

166.61
%
Deposits (including non-interest-bearing checking accounts)⁽²⁾

$
10,536,066

$
52,616

2.00
%

$
10,279,701

$
3,731

0.15
%
⁽¹⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
⁽²⁾ Includes mortgage escrow deposits.
⁽³⁾ Amounts are net of deferred origination costs/(fees) and allowance for credit losses, and include loans held for sale.
~~(2)~~⁽⁴⁾ Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
~~(3)~~⁽⁵⁾ Net interest margin represents net interest income divided by average-interest earning assets.

4748

Table of Contents

Rate/Volume Analysis

Three Months Ended March 31, 2023

Compared to Three Months Ended March 31, 2022

Increase / (Decrease) Due to:


Volume

Rate

Total

(Dollars in thousands)
Interest-earning assets:

Real estate loans ⁽¹⁾

$
13,096

$
20,056

$
33,152
Commercial and industrial ⁽¹⁾

1,843

7,106

8,949
Other loans ⁽¹⁾

(114)

32

(82)
Securities

(107)

1,407

1,300
Other short-term investments

(40)

3,474

3,434
Total interest-earning assets

$
14,678

$
32,075

$
46,753
Interest-bearing liabilities:





Interest-bearing checking

$
(30)

$
1,186

$
1,156
Money market

(2,511)

15,387

12,876
Savings

3,462

10,930

14,392
Certificates of deposit

1,267

5,050

6,317
FHLBNY advances

7,954

5,469

13,423
Subordinated debt, net

39

313

352
Other short-term borrowings

47

71

118
Derivative cash collateral

660

816

1,476
Total interest-bearing liabilities

$
10,888

$
39,222

$
50,110
Net change in net interest income

$
3,790

$
(7,147)

$
(3,357)


Three Months Ended June 30, 2023

Compared to Three Months Ended June 30, 2022

Increase / (Decrease) Due to:


Volume

Rate

Total

(Dollars in thousands)
Interest-earning assets:

Business loans ⁽¹⁾⁽²⁾

$
3,675

$
10,094

$
13,769
One-to-four family residential, including condo and coop ⁽²⁾

1,564

1,483

3,047
Multifamily residential and residential mixed-use⁽²⁾

6,225

6,876

13,101
Non-owner-occupied commercial real estate ⁽²⁾

3,905

10,188

14,093
Acquisition, development, and construction⁽²⁾

(1,487)

2,727

1,240
Other loans ⁽²⁾

(70)

28

(42)
Securities

(258)

1,105

847
Other short-term investments

1,545

3,581

5,126
Total interest-earning assets

$
15,099

$
36,082

$
51,181
Interest-bearing liabilities:





Interest-bearing checking

$
150

$
2,327

$
2,477
Money market

(1,740)

18,784

17,044
Savings

3,298

13,219

16,517
Certificates of deposit

3,533

9,314

12,847
FHLBNY advances

8,495

6,539

15,034
Subordinated debt, net

(898)

142

(756)
Other short-term borrowings

(291)

199

(92)
Derivative cash collateral

194

1,209

1,403
Total interest-bearing liabilities

$
12,741

$
51,733

$
64,474
Net change in net interest income

$
2,358

$
(15,651)

$
(13,293)
⁽¹⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
⁽²⁾ 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 ~~$85.8~~$80.2 million during the three months ended ~~March 31,~~June 30, 2023, a decrease of ~~$3.3~~$13.3 million from the three months ended ~~March 31,~~June 30, 2022. Average interest-earning assets were ~~$12.69~~$12.89 billion for the three months ended ~~March 31,~~June 30, 2023, an increase of ~~$1.36~~$1.48 billion from ~~$11.33~~$11.41 billion for the three months ended ~~March 31,~~June 30, 2022. Net interest margin (“NIM”) was ~~2.74%~~2.50% during the three months ended ~~March 31,~~June 30, 2023, down from ~~3.19%~~3.29% during the three months ended ~~March 31,~~June 30, 2022.
Interest Income. Interest income was ~~$140.7~~$152.1 million during the three months ended ~~March 31,~~June 30, 2023, compared to ~~$93.9~~$100.9 million during the three months ended ~~March 31,~~June 30, 2022. During the ~~first quarter of~~three months ended June 30, 2023, interest income increased ~~$46.8~~$51.2 million from the ~~first quarter of~~three months ended June 30, 2022, primarily reflecting increases in interest income of ~~$33.1~~$14.1 million on ~~real estate loans, $8.9~~non-owner occupied loan income, $13.8 million on ~~C&I loans, $3.4~~business loan income, $13.1 million on multifamily loan income, $5.1 million on other short-term investments, $3.0 million on one-to-four family loan income, $1.2 million on acquisition, development and ~~$1.3 million~~construction loan income and $847 thousand on securities, partially offset by decrease in interest income of ~~$82~~$42 thousand on other loans.
The increased interest income on ~~real estate loans~~non-owner occupied loan income was related to ~~an increase of~~ a ~~91-basis~~129-basis point increase in the average yield and an increase of ~~$1.26 billion~~$347.4 million in the average balance of such loans in the 2023 period. The increased interest income on ~~C&I~~business loans was related to a ~~294-basis~~190-basis point increase in the average yield and an increase of ~~$129.0~~$277.7 million in the average balance of such loans in the period. The increased interest income on multifamily loans was related to a 73-basis point increase in the average yield and an increase of $614.7 million in the average balance of such loans in the period. The increased interest income on short-term investments was due to ~~an increase of~~ a ~~375-basis~~377-basis point increase in the average yield ~~offset by a $7.1~~and an increase of $231.9 million ~~decrease~~ in the average balance of such short-term investments during the period. The increased interest income on ~~securities~~one-to-four family loans was ~~due~~related to ana $144.7 million increase in the average balance and a 78-basis point increase in the average yield of such loans in the period. The increased interest income on acquisition, development,

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and construction loans was related to a ~~33-basis~~417-basis point increase in the average yield, offset by a ~~$26.3~~decrease of $81.7 million in the average balance of such loans in the period. The increased interest income on securities was due to a 26-basis point increase in the average yield offset by a $53.7 million decrease in the average balance of such securities during the period. ~~The decreased interest income on other loans was due to a 108-basis point increase in the average yield offset by a $8.1 million decrease in the average balance of other loans during the period.~~

Interest Expense. Interest expense was ~~$54.9~~$71.9 million during the three months ended ~~March 31,~~June 30, 2023, compared to ~~$4.8~~$7.4 million during the three months ended ~~March 31,~~June 30, 2022, primarily reflecting increases in interest expense of ~~$34.7~~$48.9 million on deposits, ~~$13.9~~$14.2 million on total borrowings and ~~$1.5~~$1.4 million on derivative cash collateral. The increased interest expense

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on deposits primarily reflects a ~~247-basis~~283-basis point increase in rates paid on savings accounts and an increase of ~~$1.07 billion~~$769.9 million in average balance of such deposits, a ~~197 basis-point~~254-basis point increase in rates paid on money market accounts offset by ~~$932.8~~a $434.7 million decrease in average balances of such deposits and a ~~206 basis-point~~310-basis point increase in rates paid on CDs and an increase of ~~$342.9~~$719.0 million in average balance of such deposits. The increases in interest expenses on money market accounts, saving accounts and CDs were primarily due to intense price competition among banks and other financial ~~institutions.~~institutions and the rising interest rate environment. The increased interest expense on total borrowings primarily reflects a ~~$1.22~~$1.25 billion increase in the average balance of FHLBNY advances and a ~~344-basis~~373-basis point increase in rates paid on such advances.

Provision for Credit Losses. We recognized a credit loss ~~recovery~~provision of ~~$3.6 million~~$892 thousand during the three months ended ~~March 31,~~June 30, 2023, compared to a credit loss ~~recovery~~provision of ~~$1.6 million~~$44 thousand for the three months ended ~~March 31,~~June 30, 2022. The ~~$3.6 million~~$892 thousand credit loss ~~recovery~~provision for the ~~first quarter of~~three months ended June 30, 2023 was ~~primarily~~ associated with growth in the loan portfolio and deterioration in forecasted macroeconomic conditions offset by a reduction in ~~reserves~~the reserve on ~~pooled~~ Purchased Credit Deteriorated (“("PCD”) loans that were acquired as part of the Company’s ~~2021~~ merger of equals ~~transaction.~~transaction in 2021. The ~~$1.6 million~~$44 thousand credit loss ~~recovery~~provision for the ~~first quarter of~~three months ended June 30, 2022 was primarily associated with ~~an improvement in forecasted macroeconomic conditions, as well as~~ a ~~reduction~~$366 thousand credit loss provision on the loan portfolio primarily due to growth, partially offset by a $323 thousand credit loss recovery in reserves for ~~individually evaluated loans.~~unfunded loan commitments primarily due to lower balances.

Non-Interest Income. Non-interest income was ~~$9.0~~$10.4 million during the three months ended ~~March 31,~~June 30, 2023, compared to ~~$7.2~~$12.1 million during the three months ended ~~March 31,~~June 30, 2022. During the ~~first quarter of~~three months ended June 30, 2023, non-interest income ~~increased $1.8~~decreased $1.7 million from the ~~first quarter of~~three months ended June 30, 2022, reflecting ~~an increase~~a decrease of ~~$3.1~~$1.3 million in ~~loan level derivative~~BOLI income, an increase of ~~$324~~$780 thousand ~~in BOLI income and~~related to a ~~$274~~loss on equity securities, a decrease of $513 thousand ~~increase in~~from gain on sale of SBA loans and a decrease of $437 thousand on title fees, partially offset by a ~~$1.4 million loss on sale~~increase of ~~securities~~$752 thousand of loan level derivative income and a ~~$244~~$519 thousand ~~decrease~~increase on service charges and other fees during the 2023 period.
Non-Interest Expense. Non-interest expense was ~~$47.5~~$52.2 million during the three months ended ~~March 31,~~June 30, 2023, compared to ~~$49.9~~$51.8 million during the three months ended ~~March 31,~~June 30, 2022. During the ~~first quarter of~~three months ended June 30, 2023, non-interest expense ~~decreased $2.4 million~~increased $348 thousand from the ~~first quarter of~~three months ended June 30, 2022, primarily due to a ~~$4.2~~$1.4 million ~~decrease~~increase in salaries and employee benefits, ~~offset by increases of $723~~and a $724 thousand in federal deposit insurance premiums, ~~$433~~offset by decreases of $1.7 million in severance, $740 thousand in ~~data processing costs and $631~~loss on extinguishment of debt, $352 thousand in ~~all other non-interest expenses.~~professional services and $252 thousand in occupancy and equipment. The increase in federal deposit insurance premiums relates to an increase in deposit insurance rates due to a special assessment by the FDIC.
Non-interest expense was ~~1.41%~~1.53% and ~~1.64%~~1.71% of average assets during the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively.
Income Tax Expense. Income tax expense was ~~$13.6~~$10.0 million during the three months ended ~~March 31,~~June 30, 2023, compared to income tax expense of ~~$13.5~~$15.3 million during the three months ended ~~March 31,~~June 30, 2022. The reported effective tax rate for the ~~first quarter ending March 31,~~three months ended June 30, 2023 was 26.8%, and ~~28.1%~~28.4% for the ~~first quarter ending March 31,~~three months ended June 30, 2022.
Comparison of Operating Results for the Six Months Ended June 30, 2023 and 2022

General. Net income was $64.8 million during the six months ended June 30, 2023, compared to net income of $73.0 million for the six months ended June 30, 2022. During the six months ended June 30, 2023, net interest income decreased by $16.7 million, income tax expense decreased by $5.1 million, non-interest expense decreased by $2.1 million and the credit loss recovery increased by $1.2 million, non-interest income increased by $79 thousand, compared to the six months ended June 30, 2022.

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The discussion of net interest income for the six months ended June 30, 2023 and 2022 should be read in conjunction with the following tables, which set forth certain information related to the consolidated statements of income 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 $655 thousand and $1.3 million during the six months ended June 30, 2023 and 2022, respectively. The decrease in loan fees was primarily due to a decline in loan prepayment fees in 2023. There are no out-of-period adjustments included in the rate/volume analysis in the following table.

Six Months Ended June 30,

2023

2022






Average





Average


Average

Yield/

Average

Yield/


Balance

Interest

Cost


Balance

Interest

Cost

Assets:

(Dollars in thousands)

Interest-earning assets:













Business loans ⁽¹⁾⁽³⁾

$
2,230,319

$
68,008

6.15
%

$
1,969,811

$
40,660

4.16
%
One-to-four family residential, including condo and coop ⁽³⁾

808,424

18,675

4.66

677,191

13,615

4.05

Multifamily residential and residential mixed-use⁽³⁾

4,099,706

87,472

4.30

3,432,108

62,481

3.67

Non-owner-occupied commercial real estate ⁽³⁾

3,327,427

82,254

4.98

2,950,099

54,722

3.74

Acquisition, development, and construction⁽³⁾

223,333

10,122

9.14

312,305

7,702

4.97

Other loans ⁽³⁾

7,040

218

6.24

13,603

342

5.07

Securities

1,670,792

16,345

1.97

1,710,862

14,198

1.67

Other short-term investments

420,400

9,669

4.64

307,315

1,109

0.73

Total interest-earning assets

12,787,441

292,763

4.62
%

11,373,294

194,829

3.45
%
Non-interest earning assets

767,042

787,326

Total assets

$
13,554,483

$
12,160,620

Liabilities and Stockholders' Equity:









Interest-bearing liabilities:









Interest-bearing checking ⁽²⁾

$
898,068

$
4,603

1.03
%

$
864,611

$
970

0.23
%
Money market

2,706,767

32,134

2.39

3,389,118

2,214

0.13

Savings ⁽²⁾

2,303,267

31,975

2.80

1,383,938

1,066

0.16

Certificates of deposit

1,358,043

21,176

3.14

826,091

2,012

0.49

Total interest-bearing deposits

7,266,145

89,888

2.49

6,463,758

6,262

0.20

FHLBNY advances

1,291,608

28,706

4.48

56,657

249

0.89

Subordinated debt, net

200,265

5,106

5.14

235,486

5,510

4.72

Other short-term borrowings

6,290

118

3.78

28,487

92

0.65

Total borrowings

1,498,163

33,930

4.57

320,630

5,851

3.68

Derivative cash collateral

128,050

2,974

4.68

59,218

95

0.32

Total interest-bearing liabilities

8,892,358

126,792

2.88
%

6,843,606

12,208

0.36
%
Non-interest-bearing checking⁽²⁾

3,191,980

3,957,631

Other non-interest-bearing liabilities

264,002

188,140

Total liabilities

12,348,340

10,989,376

Stockholders' equity

1,206,143

1,171,243

Total liabilities and stockholders' equity

$
13,554,483

$
12,160,620

Net interest income

$
165,971

$
182,621

Net interest spread ⁽⁴⁾

1.74
%

3.09
%
Net interest-earning assets

$
3,895,083

$
4,529,688

Net interest margin ⁽⁵⁾

2.62
%

3.24
%
Ratio of interest-earning assets to interest-bearing liabilities

143.80
%

166.19
%
Deposits (including non-interest-bearing checking accounts)⁽²⁾

$
10,458,125

$
89,888

1.73
%

$
10,421,389

$
6,262

0.12
%
⁽¹⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
⁽²⁾ Includes mortgage escrow deposits.
⁽³⁾ Amounts are net of deferred origination costs/(fees) and allowance for credit losses, and include loans held for sale.
⁽⁴⁾ Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
⁽⁵⁾ Net interest margin represents net interest income divided by average-interest earning assets.

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Six Months Ended June 30, 2023

Compared to Six Months Ended June 30, 2022

Increase / (Decrease) Due to:


Volume

Rate

Total

(Dollars in thousands)

Interest-earning assets:

Business loans ⁽¹⁾⁽²⁾

$
6,641

$
20,707

$
27,348

One-to-four family residential, including condo and coop ⁽²⁾

2,824

2,236

5,060

Multifamily residential and residential mixed-use⁽²⁾

13,209

11,782

24,991

Non-owner-occupied commercial real estate ⁽²⁾

8,195

19,337

27,532

Acquisition, development, and construction⁽²⁾

(3,116)

5,536

2,420

Other loans ⁽²⁾

(184)

60

(124)

Securities

(365)

2,512

2,147

Other short-term investments

1,505

7,055

8,560

Total interest-earning assets

$
28,709

$
69,225

$
97,934

Interest-bearing liabilities:







Interest-bearing checking

$
120

$
3,513

$
3,633

Money market

(4,251)

34,171

29,920

Savings

6,760

24,149

30,909

Certificates of deposit

4,800

14,364

19,164

FHLBNY advances

16,449

12,008

28,457

Subordinated debt, net

(859)

455

(404)

Other short-term borrowings

(244)

270

26

Derivative cash collateral

854

2,025

2,879

Total interest-bearing liabilities

$
23,629

$
90,955

$
114,584

Net change in net interest income

$
5,080

$
(21,730)

$
(16,650)

⁽¹⁾ Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
⁽²⁾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 $166.0 million during the six months ended June 30, 2023, a decrease of $16.6 million from the six months ended June 30, 2022. Average interest-earning assets were $12.79 billion for the six months ended June 30, 2023, an increase of $1.42 billion from $11.37 billion for the six months ended June 30, 2022. Net interest margin (“NIM”) was 2.62% during the six months ended June 30, 2023, down from 3.24% during the six months ended June 30, 2022.
Interest Income. Interest income was $292.8 million during the six months ended June 30, 2023, compared to $194.8 million during the six months ended June 30, 2022. During the six months ended June 30, 2023, interest income increased $97.9 million from the six months ended June 30, 2022, primarily reflecting increases in interest income of $27.5 million on non-owner occupied loan income, $27.3 million on business loan income, $25.0 million on multifamily loan income, $8.6 million on other short-term investments, $5.1 million on one-to-four family loan income, $2.4 million on acquisition, development and construction loan income and $2.1 million on securities, partially offset by a decrease in interest income of $124 thousand on other loans.
The increased interest income on non-owner occupied loan income was related to a 124-basis point increase in the average yield and an increase of $377.3 million in the average balance of such loans in the 2023 period. The increased interest income on business loans was related to a 199-basis point increase in the average yield and an increase of $260.5 million in the average balance of such loans in the period. The increased interest income on multifamily loans was related to an increase of $667.6 million in the average balance and a 63-basis point increase in the average yield of such loans in the period. The increased interest income on one-to-four family loans was related to an increase of $131.2 million in the average balance and a 61-basis point increase in the average yield of such loans in the period. The increased interest income on acquisition, development, and construction loans was related to a 417-basis point increase in the average yield and a decrease of $89.0 million in the average balance of such loans in the period. The decreased interest income on other loans was due to a 117-basis point increase in the average yield offset by a $6.6 million decrease in the average balance of other loans during the period. The increased interest income on securities was due to an increase of a 30-basis point increase in the average yield, offset by a $40.1 million decrease in the average balance of such securities during the period. The increased interest income on short-term investments was due to a 391-basis point increase in the average yield and an increase of $113.1 million in the average balance of such short-term investments during the period.

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Interest Expense. Interest expense was $126.8 million during the six months ended June 30, 2023, compared to $12.2 million during the six months ended June 30, 2022, primarily reflecting increases in interest expense of $83.6 million on deposits, $28.5 million on FHLBNY advances, $28.1 million on total borrowings and $2.9 million on derivative cash collateral. The increased interest expense on deposits primarily reflects a 264-basis point increase in rates paid on savings accounts and an increase of $919.3 million in average balance of such deposits, a 226-basis point increase in rates paid on money market accounts offset by a decrease of $682.3 million in average balances of such deposits and a 265-basis point increase in rates paid on CDs and an increase of $532.0 million in average balance of such deposits. The increases in interest expenses on money market accounts, saving accounts and CDs were primarily due to intense price competition among banks and other financial institutions and the rising interest rate environment. The increased interest expense on total borrowings primarily reflects a a 359-basis point increase in rates paid and a $1.23 billion increase in the average balance of FHLBNY advances.

Provision for Credit Losses. We recognized a credit loss recovery of $2.8 million during the six months ended June 30, 2023, compared to a credit loss recovery of $1.5 million for the six months ended June 30, 2022. The $2.8 million credit loss recovery for the six months ended June 30, 2023 was primarily associated with a reduction in reserves on pooled PCD loans that were acquired as part of the Company’s 2021 merger of equals transaction. The $1.5 million credit loss recovery for the six months ended June 30, 2022 was primarily associated with releases of reserves on PCD loans.

Non-Interest Income. Non-interest income was $19.4 million during the six months ended June 30, 2023, compared to $19.3 million during the six months ended June 30, 2022. During the six months ended June 30, 2023, non-interest income increased $79 thousand from the six months ended June 30, 2022, reflecting an increase of $3.9 million of loan level derivative income and a $275 thousand increase on service charges and other fees, partially offset by a $1.4 million loss on sale of securities, a $967 thousand decrease in BOLI income, an increase of $780 thousand loss on equity securities, a $566 thousand decrease in title fee income, a $257 thousand decrease in gain on sale of residential loans and a $239 thousand decrease from gain on sale of SBA loans during the 2023 period.

Non-Interest Expense. Non-interest expense was $99.7 million during the six months ended June 30, 2023, compared to $101.7 million during the six months ended June 30, 2022. During the six months ended June 30, 2023, non-interest expense decreased $2.1 million from the six months ended June 30, 2022, primarily due to a $2.8 million decrease in salaries and employee benefits, a $1.7 million decrease in severance, a $740 thousand decrease in loss on extinguishment of debt, a $523 thousand decrease in professional services and $463 thousand decrease in occupancy and equipment, partially offset by increases of $2.1 million in other non-interest expenses, a $1.4 million increase in federal deposit insurance premiums, and a $717 thousand increase in data processing costs. The increase in federal deposit insurance premiums relates to an increase in deposit insurance rates due to a special assessment by the FDIC.

Non-interest expense was 1.47% and 1.67% of average assets during the six months ended June 30, 2023 and 2022, respectively.

Income Tax Expense. Income tax expense was $23.7 million during the six months ended June 30, 2023, compared to income tax expense of $28.8 million during the six months ended June 30, 2022. The reported effective tax rate for the six months ended June 30, 2023 was 26.8%, and 28.3% for the six months ended June 30, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Quantitative and qualitative disclosures about market risk were presented at December 31, 2022 in Item 7A of the Holding Company’s Annual Report on Form 10-K, filed with the SEC on February 28, 2023. The following is an update of the discussion provided therein.
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 three and six months ended ~~March 31,~~June 30, 2023, we conducted zero transactions involving derivative instruments requiring bifurcation in order to hedge interest rate or market risk.

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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.

~~Table of Contents~~

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.

The analysis that follows presents, as of ~~March 31,~~June 30, 2023 and December 31, 2022, the estimated EVE at both the Pre-Shock Scenario and the -100 Basis Point, +100 Basis Point Rate and +200 Basis Point Rate Shock Scenarios.


	March 31, 2023					December 31, 2022					June 30, 2023					December 31, 2022
			Dollar		Percentage			Dollar		Percentage			Dollar		Percentage			Dollar		Percentage
(Dollars in thousands)	EVE		Change		Change	EVE		Change		Change	EVE		Change		Change	EVE		Change		Change

Rate Shock Scenarios
+ 200 Basis Points	$	1,661,278	$	118,558	7.7%	$	1,717,562	$	78,373	4.8%	$	1,386,078	$	73,576	5.6%	$	1,717,562	$	78,373	4.8%
+ 100 Basis Points		1,621,565		78,845	5.1%		1,703,131		63,942	3.9%		1,362,237		49,735	3.8%		1,703,131		63,942	3.9%
Pre-Shock Scenario		1,542,720		—	—		1,639,189		—	—		1,312,502		—	—		1,639,189		—	—
- 100 Basis Points		1,449,208		(93,512)	(6.1)%		1,515,010		(124,179)	(7.6)%		1,242,486		(70,016)	(5.3)%		1,515,010		(124,179)	(7.6)%

The Company’s Pre-Shock Scenario EVE decreased from $1.64 billion at December 31, 2022 to ~~$1.54~~$1.31 billion at ~~March 31,~~June 30, 2023. InThe primary factors contributing to the ~~first quarter of 2023,~~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, led to~~deposits. Further influencing the change in EVE was a decline in the relative value of the Bank’s ~~EVE at March 31, 2023 relative to year-end. However, despite~~loan portfolio as market interest rates have increased more than the ~~quarter-over-quarter changes in the EVE valuation, the Bank continued to maintain a low-cost funding base relative to peers in the metro New York area.~~overall portfolio yield.

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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 ~~$1.62~~$1.36 billion and ~~$1.66~~$1.39 billion, respectively, at ~~March 31,~~June 30, 2023. In the -100 Basis Point Rate Shock Scenario the Company’s EVE decreased from $1.52 billion at December 31, 2022, to ~~$1.45~~$1.24 billion at ~~March 31,~~June 30, 2023.

~~Table of Contents~~

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 ~~March 31,~~June 30, 2023, for the given rate scenarios:


	Percentage Change in Net Interest Income		Percentage Change in Net Interest Income
Gradual Change in Interest rates of:	Year-One	Year-Two	Year-One	Year-Two
+ 200 Basis Points	0.6%	1.5%	(3.1)%	(3.4)%
+ 100 Basis Points	0.2%	0.6%	(1.7)%	(1.9)%
- 100 Basis Points	(0.4)%	(1.6)%	1.3%	0.5%

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.


	Percentage Change in Net Interest Income		Percentage Change in Net Interest Income
Instantaneous Rate Shock Scenarios	Year-One	Year-Two	Year-One	Year-Two
+ 200 Basis Points	3.2%	3.9%	(2.9)%	(0.9)%
+ 100 Basis Points	1.6%	1.9%	(1.5)%	(0.5)%
- 100 Basis Points	(2.2)%	(3.2)%	0.4%	(1.1)%

iIte

Item 4.Controls and Procedures
Management of the Company, with the participation of its Principal Executive Officer and Principal Financial Officer, conducted an evaluation of the effectiveness, as of ~~March 31,~~June 30, 2023, of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act. Based upon this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2023 in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management of the Company as appropriate to allow timely decisions regarding required disclosures.
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 ~~March 31,~~June 30, 2023, that has materially affected, or is reasonably likely to materially affect, such controls.
PART II – OTHER INFORMATION
Item 1.Legal Proceedings
In the ordinary course of business, the Company is 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. In the opinion of management, the Company was not involved in any actions or proceedings that were likely to have a material adverse impact on its financial condition and results of operations as of ~~March 31,~~June 30, 2023.

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Item 1A.Risk Factors
For information regarding the Company’s risk factors, see Part 1, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2022, and Part II, Item 1A “Risk Factors” in our subsequent Annual Reports on Form 10-Q, each as filed with the Securities and Exchange Commission. ~~The following risk factors represent a material update and addition to those disclosed in the Annual Report on Form 10-K for~~

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the fiscal year ended December 31, 2022. The risk factors set forth below also identify important factors that could cause our actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of us.

The Company’s business and stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions. If the Company is unable to adequately manage liquidity, deposits, capital levels and interest rate risk, which have come under greater scrutiny in light of recent bank failures, it may have a material adverse effect on the Company’s financial condition and results of operations.

On March 8, 2023, Silvergate Capital Corporation, La Jolla, California, the holding company for Silvergate Bank, announced its decision to voluntarily liquidate the Bank and wind down operations. On March 10, 2023, Silicon Valley Bank, Santa Clara, California, and on May 1, 2023, First Republic Bank, San Francisco, California, were closed by the California Department of Financial Protection and Innovation. On March 12, 2023, Signature Bank, New York, New York, was closed by the New York State Department of Financial Services. These banks also had elevated levels of uninsured deposits, which may be less likely to remain at the bank over time and less stable as a source of funding than insured deposits. These failures led to volatility and declines in the market for bank stocks and questions about depositor confidence in regional depository institutions.

As a result, customers may choose to maintain deposits with larger financial institutions or invest in higher yielding short-term fixed income securities, all of which could materially adversely impact the Company’s liquidity, loan funding capacity, net interest margin, capital and results of operations. While the Department of the Treasury, the Federal Reserve, and the FDIC have made statements ensuring that depositors of these recently failed banks would have access to their deposits, including previously uninsured deposit accounts, there is no guarantee that such actions will be successful in restoring customer confidence in regional banks and the banking system more broadly.

These events have led to a greater focus by institutions, investors and regulators on the on-balance sheet liquidity of and funding sources for financial institutions, the composition of deposit portfolios, including the amount of uninsured deposits, the amount of accumulated other comprehensive loss, capital levels and interest rate risk management. If the Company is unable to adequately manage liquidity, deposits, capital levels and interest rate risk, it may have a material adverse effect on its financial condition and results of operations.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
(a) Not applicable.
(b) Not applicable.
(c)

Total

Total Number of

Maximum Number

Total

Total Number of

Maximum Number

Number

Average

Shares Purchased

of Shares that May

Number

Average

Shares Purchased

of Shares that May

of Shares

Price Paid

as Part of Publicly

Yet be Purchased

of Shares

Price Paid

as Part of Publicly

Yet be Purchased
Period

Purchased

Per Share

Announced Programs

Under the Programs ⁽¹⁾

Purchased

Per Share

Announced Programs

Under the Programs ⁽¹⁾
January 2023

9,200

$
30.50

9,200

1,594,560
February 2023

8,818

30.67

8,818

1,585,742
March 2023

6,795

26.01

6,795

1,578,947
April 2023

5,700

$
20.97

5,700

1,573,247
May 2023

6,300

17.35

6,300

1,566,947
June 2023

—

—

—

1,566,947

(1) 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 ~~March 31,~~June 30, 2023, there were ~~1,578,947~~1,566,947 shares remaining to be purchased in the program.
Item 3.Defaults Upon Senior Securities
None.

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Item 4.Mine Safety Disclosures
Not Applicable.
Item 5.Other Information
~~None.~~During the three months ended June 30, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as that term is used in SEC regulations.
The information below is reported in lieu of information that would be reported pursuant to a Current Report on Form 8-K filed with the Commission during the period under Items 5.02 and 5.03.

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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Executive Officer

Departure of Kevin M. O’Connor as Chief Executive Officer. As previously disclosed by Dime Community Bancshares, Inc., a New York corporation (the “Company”), in the Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 28, 2023, the Company issued a press release announcing that Kevin M. O’Connor will step down from the position of Chief Executive Officer of the Company effective as of August 31, 2023 (the “Effective Date”). The Company also announced that Mr. O’Connor will continue to serve on the Board of Directors until December 31, 2023. Mr. O’Connor’s departure from his positions with the Company is not the result, in whole or in part, of any disagreement with the Company’s management.

In connection with Mr. O’Connor’s departure, on July 27, 2023, the Company, Dime Community Bank and Mr. O’Connor entered into an Agreement and General Release (the “O’Connor Agreement”). Upon execution and non-revocation of the O’Connor Agreement, that certain Employment Agreement, dated October 16, 2020, and effective February 1, 2021 (“Employment Agreement”), that certain Amendment to Employment Agreement, dated June 28, 2021 (the “Amendment”), and that certain Retention Agreement, dated October 16, 2020, will terminate in all respects except with respect to certain restrictive covenants as set forth in the Employment Agreement, which such restrictive covenants shall extend until the later of December 31, 2024 or one year after the date on which Mr. O’Connor steps down from all officer and director positions. Until the Effective Date, Mr. O’Connor will continue to be employed by the Company as the Chief Executive Officer and will continue to earn and receive his current base salary and benefits in full through the Effective Date.

Pursuant to the O’Connor Agreement, Mr. O’Connor will receive the following payments as contemplated by the Employment Agreement and the Amendment, in a lump sum, less required tax withholding: (i) a pro-rated bonus of $782,546.54, which shall be in lieu of any bonus, incentive or additional payment for 2023 as provided in the Employment Agreement; (ii) $6,226,290, which amounts to three years of Mr. O’Connor’s base salary and 2022 bonus; (iii) $1,205,850, which amount is intended to account for and be in lieu of any payments that Mr. O’Connor would have received for the three-year period following the Effective Date related to contributions by the Company to the defined contribution plan; (iv) an amount equal to 36 months of 150% of Mr. O’Connor’s COBRA health care premiums and monthly life insurance premiums; and (v) an amount equal to one week of accrued paid time off, which equals one week of base salary at Mr. O’Connor’s current base salary rate. Also, Mr. O’Connor will be reimbursed for certain expenses not to exceed $135,000. Mr. O’Connor’s unvested equity awards will be forfeited as of the Effective Date.
This summary of the O’Connor Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the text of the O’Connor Agreement, included as Exhibit 10.1 to this filing. Exhibit 10.1 is incorporated by reference herein.
Appointment of Stuart H. Lubow as President and Chief Executive Officer. In connection with Mr. O’Connor’s departure, on July 27, 2023, the Board of Directors appointed Stuart H. Lubow as the Company’s President and Chief Executive Officer to be effective on the Effective Date. Mr. Lubow will serve in such capacity until his successor has been duly elected and qualified or until death, resignation or removal.
Mr. Lubow, age 66, currently serves as the President and Chief Operating Officer of the Company. From 2020, Mr. Lubow served as President of Dime Community Bancshares, Inc., a Delaware corporation (“Legacy Dime”) which as of February 1, 2023, merged with and into the Company pervious known as “Bridge Bancorp, Inc.,” and from 2017, Mr. Lubow served

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as Senior Executive Vice President and Chief Banking Officer of Legacy Dime. Prior to joining Legacy Dime, Mr. Lubow served as Chairman, President and Chief Executive Officer of Community National Bank from 2005 to 2015.

There are no family relationships between Mr. Lubow and any director or executive officer of the Company, and the Company has not entered into any transactions with Mr. Lubow that are reportable pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Board of Directors

Departure of Kevin M. O’Connor from the Board of Directors. Pursuant to the O’Connor Agreement, Mr. O’Connor will step down from the Board of Directors effective as of December 31, 2023.

Election of Stuart H. Lubow to the Board of Directors. As further described in Item 5.03 of this Current Report on Form 8-K, on July 27, 2023, the Board of Directors approved an amendment and restatement of the Dime Community Bancshares, Inc. Bylaws (the “Bylaws” and, as amended and restated, the “Amended and Restated Bylaws”) to delete Article VIII, Section 8.03(a) which required that the Board of Directors consist of 12 directors. On July 27, 2023, pursuant to Article II, Section 2.04 of the Amended and Restated Bylaws, effective as of the Effective Date, the Board of Directors determined that the number of directors comprising the Board of Directors will be increased from 12 to 13, until December 31, 2023 or Mr. O’Connor’s earlier death, resignation or removal from the Board of Directors, when the number of directors comprising the Board of Directors will be reduced from 13 to 12. The increase in the number of directors from 12 to 13 creates a vacancy on the Board of Directors as of the Effective Date.

On July 27, 2023, the Board of Directors elected Mr. Lubow as a director, effective as of the Effective Date, to fill the vacancy created by the increase in the size of the Board of Directors. Mr. Lubow will serve as a director from the Effective Date until the next election of directors at the Company’s annual meeting of shareholders to be held in 2024 or Mr. Lubow’s earlier death, resignation or removal. The Board of Directors did not designate Mr. Lubow as a member of any committees of the Board of Directors.

Other than described above, there are no arrangements or understandings between Mr. Lubow and any other person pursuant to which he will be elected as a director. There are no transactions with Mr. Lubow that are reportable pursuant to Item 404(a) of Regulation S-K promulgated under the Exchange Act.

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

On July 27, 2023, the Board of Directors approved and adopted the Amended and Restated Bylaws, effective upon the Effective Date. The changes made in the Amended and Restated Bylaws include (1) the deletion of Article VIII, Section 8.03(a) of the Bylaws, which provided that the Board of Directors was to be comprised of 12 directors, of which six must be Legacy Bridge Bancorp Directors (as defined in the Bylaws) and six must be Legacy DCB Directors (as defined in the Bylaws) during the Specified Period (as defined in the Bylaws), and (2) corresponding changes to the section numbers and cross references in Article VIII, Section 8.03 and 8.04 of the Amended and Restated Bylaws.

This summary of the Amended and Restated Bylaws does not purport to be complete and is subject to and qualified in its entirety by reference to the text of the Amended and Restated Bylaws, included as Exhibit 3.2 to this filing. Exhibit 3.2 is incorporated by reference herein.

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Item 6.Exhibits

3.1

Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed February 2, 2021 (File No. 001-34096))
3.2

Amended and Restated Bylaws of ~~the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed February 1, 2021 (File No. 001-34096))~~Dime Community Bancshares, Inc.
4.1

Indenture, dated May 6, 2022, between Dime Community Bancshares, Inc. and Wilmington Trust National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed May 6, 2022 (File No. 001-34096))
4.2

First Supplemental Indenture, May 6, 2022, between Dime Community Bancshares, Inc. and Wilmington Trust National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed May 6, 2022 (File No. 001-34096))
4.3

Form of 5.000% Fixed-to-Floating Rate Subordinated Notes due 2032 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed May 6, 2022 (File No. 001-34096))
10.1
Agreement and General Release, dated July 27, 2023, by and among Dime Community Bancshares, Inc., Dime Community Bank and Kevin M. O’Connor
31.1

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)
31.2

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)
32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350
101

The following financial statements from Dime Community Bancshares, Inc.'s Quarterly Report on Form 10-Q for the Quarter Ended ~~March 31,~~June 30, 2023, filed on ~~May 5,~~August 2, 2023, formatted in XBRL: (i) Consolidated Balance Sheets as of ~~March 31,~~June 30, 2023 and December 31, 2022, (ii) Consolidated Statements of Income for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022, (iii) Consolidated Statements of Comprehensive Income for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022, (iv) Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022, (v) Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2023 and 2022, and (vi) the Condensed Notes to Consolidated Financial Statements.
101.INS

XBRL Instance Document
101.SCH

XBRL Taxonomy Extension Schema Document
101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB

XBRL Taxonomy Extension Labels Linkbase Document
101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF

XBRL Taxonomy Extension Definitions Linkbase Document
104
Cover page to this Quarterly Report on Form 10-Q, formatted in Inline XBRL

5459

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SIGNATURES
Pursuant to the requirements 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.
Dime Community Bancshares, Inc.

Dated: ~~May 5,~~August 2, 2023
By:
/s/ KEVIN M. O’CONNOR

Kevin M. O’Connor

Chief Executive Officer

Dated: ~~May 5,~~August 2, 2023
By:
/s/ AVINASH REDDY

Avinash Reddy

Senior Executive Vice President and Chief Financial Officer

5560


	Three Months Ended March 31, 2022
										Accumulated
										Other
										Comprehensive
	Number of					Additional				(Loss) Income,		Unearned		Treasury		Total
	Shares of	Preferred		Common		Paid-in		Retained		Net of Deferred		Equity		Stock,		Stockholders’
	Common Stock	Stock		Stock		Capital		Earnings		Taxes		Awards		at cost		Equity
Beginning balance as of January 1, 2022	39,877,833	$	116,569	$	416	$	494,125	$	654,726	$	(6,181)	$	(7,842)	$	(59,193)	$	1,192,620
Net income	—		—		—		—		34,531		—		—		—		34,531
Other comprehensive income, net of tax	—		—		—		—		—		(43,199)		—		—		(43,199)
Release of shares, net of forfeitures	127,812		—		—		844		(146)		—		(3,939)		3,284		43
Stock-based compensation	—		—		—		—		—		—		1,219		—		1,219
Shares received related to tax withholding	(40,731)		—		—		—		—		—		—		(1,414)		(1,414)
Cash dividends declared to preferred stockholders	—		—		—		—		(1,821)		—		—		—		(1,821)
Cash dividends declared to common stockholders	—		—		—		—		(9,300)		—		—		—		(9,300)
Purchase of treasury stock	(505,005)		—		—		—		—		—		—		(17,392)		(17,392)
Ending balance as of March 31, 2022	39,459,909		116,569		416		494,969		677,990		(49,380)		(10,562)		(74,715)		1,155,287


	Three Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	37,303	$	34,531
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss on sales of securities available-for-sale and other assets		1,447		—
Net gain on sale of loans held for sale		(564)		(390)
Net depreciation, amortization and accretion		1,602		2,768
Amortization of other intangible assets		377		586
Stock-based compensation		1,302		1,219
Recovery for credit losses		(3,648)		(1,592)
Originations of loans held for sale		(2,220)		(6,179)
Proceeds from sale of loans originated for sale		8,940		9,158
Increase in cash surrender value of BOLI		(2,163)		(1,839)
Decrease in other assets		2,837		8,967
(Decrease) increase in other liabilities		(31,796)		32,394
Net cash provided by operating activities		13,417		79,623
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available-for-sale		77,804		—
Purchases of securities available-for-sale		(78,157)		(3,000)
Purchases of securities held-to-maturity		(23,739)		(31,944)
Proceeds from calls and principal repayments of securities available-for-sale		21,000		49,853
Proceeds from calls and principal repayments of securities held-to-maturity		4,714		2,733
Proceeds from the sale of portfolio loans transferred to held for sale		—		1,069
Net increase in loans		(175,002)		(23,179)
Purchases of fixed assets, net		(787)		(1,842)
Purchases of restricted stock, net		(16,513)		(1,166)
Net cash used in investing activities		(190,680)		(7,476)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits		315,884		(28,872)
Proceeds from FHLBNY advances, short-term, net		205,000		25,000
Proceeds from FHLBNY advances, long-term		162,000		—
Proceeds of other short-term borrowings, net		708		991
Release of stock for benefit plan awards		207		43
Payments related to tax withholding for equity awards		(1,113)		(1,414)
Purchase of treasury stock		(715)		(17,392)
Cash dividends paid to preferred stockholders		(1,821)		(1,821)
Cash dividends paid to common stockholders		(9,052)		(9,410)
Net cash provided by (used in) financing activities		671,098		(32,875)
Increase in cash and cash equivalents		493,835		39,272
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		169,297		393,722
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	663,132	$	432,994

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	1,970	$	1,601
Cash paid for interest		47,401		4,933
Securities available-for-sale transferred to held-to-maturity		—		175,260
Loans transferred to held for sale		8,232		15,172
Operating lease assets in exchange for operating lease liabilities		2,173		1,002


	Actual Ratios at March 31, 2023
							Basel III
				Consolidated			Minimum			To Be Categorized as
	Bank			Company			Requirement			“Well Capitalized” ⁽¹⁾
Tier 1 common equity ratio		12.1	%		9.3	%		4.5	%	6.5	%
Tier 1 risk-based capital ratio		12.1			10.4			6.0		8.0
Total risk-based capital ratio		12.9			13.0			8.0		10.0
Tier 1 leverage ratio		9.8			8.4			4.0		5.0


	Three Months Ended March 31, 2023
	Compared to Three Months Ended March 31, 2022
	Increase / (Decrease) Due to:
	Volume		Rate		Total

	(Dollars in thousands)
Interest-earning assets:
Real estate loans ⁽¹⁾	$	13,096	$	20,056	$	33,152
Commercial and industrial ⁽¹⁾		1,843		7,106		8,949
Other loans ⁽¹⁾		(114)		32		(82)
Securities		(107)		1,407		1,300
Other short-term investments		(40)		3,474		3,434
Total interest-earning assets	$	14,678	$	32,075	$	46,753
Interest-bearing liabilities:
Interest-bearing checking	$	(30)	$	1,186	$	1,156
Money market		(2,511)		15,387		12,876
Savings		3,462		10,930		14,392
Certificates of deposit		1,267		5,050		6,317
FHLBNY advances		7,954		5,469		13,423
Subordinated debt, net		39		313		352
Other short-term borrowings		47		71		118
Derivative cash collateral		660		816		1,476
Total interest-bearing liabilities	$	10,888	$	39,222	$	50,110
Net change in net interest income	$	3,790	$	(7,147)	$	(3,357)


	Three Months Ended June 30, 2023
	Compared to Three Months Ended June 30, 2022
	Increase / (Decrease) Due to:
	Volume		Rate		Total

	(Dollars in thousands)
Interest-earning assets:
Business loans ⁽¹⁾⁽²⁾	$	3,675	$	10,094	$	13,769
One-to-four family residential, including condo and coop ⁽²⁾		1,564		1,483		3,047
Multifamily residential and residential mixed-use⁽²⁾		6,225		6,876		13,101
Non-owner-occupied commercial real estate ⁽²⁾		3,905		10,188		14,093
Acquisition, development, and construction⁽²⁾		(1,487)		2,727		1,240
Other loans ⁽²⁾		(70)		28		(42)
Securities		(258)		1,105		847
Other short-term investments		1,545		3,581		5,126
Total interest-earning assets	$	15,099	$	36,082	$	51,181
Interest-bearing liabilities:
Interest-bearing checking	$	150	$	2,327	$	2,477
Money market		(1,740)		18,784		17,044
Savings		3,298		13,219		16,517
Certificates of deposit		3,533		9,314		12,847
FHLBNY advances		8,495		6,539		15,034
Subordinated debt, net		(898)		142		(756)
Other short-term borrowings		(291)		199		(92)
Derivative cash collateral		194		1,209		1,403
Total interest-bearing liabilities	$	12,741	$	51,733	$	64,474
Net change in net interest income	$	2,358	$	(15,651)	$	(13,293)


	Six Months Ended June 30, 2023
	Compared to Six Months Ended June 30, 2022
	Increase / (Decrease) Due to:
	Volume		Rate		Total

	(Dollars in thousands)
Interest-earning assets:
Business loans ⁽¹⁾⁽²⁾	$	6,641	$	20,707	$	27,348
One-to-four family residential, including condo and coop ⁽²⁾		2,824		2,236		5,060
Multifamily residential and residential mixed-use⁽²⁾		13,209		11,782		24,991
Non-owner-occupied commercial real estate ⁽²⁾		8,195		19,337		27,532
Acquisition, development, and construction⁽²⁾		(3,116)		5,536		2,420
Other loans ⁽²⁾		(184)		60		(124)
Securities		(365)		2,512		2,147
Other short-term investments		1,505		7,055		8,560
Total interest-earning assets	$	28,709	$	69,225	$	97,934
Interest-bearing liabilities:
Interest-bearing checking	$	120	$	3,513	$	3,633
Money market		(4,251)		34,171		29,920
Savings		6,760		24,149		30,909
Certificates of deposit		4,800		14,364		19,164
FHLBNY advances		16,449		12,008		28,457
Subordinated debt, net		(859)		455		(404)
Other short-term borrowings		(244)		270		26
Derivative cash collateral		854		2,025		2,879
Total interest-bearing liabilities	$	23,629	$	90,955	$	114,584
Net change in net interest income	$	5,080	$	(21,730)	$	(16,650)


	Total			Total Number of	Maximum Number	Total			Total Number of	Maximum Number
	Number	Average		Shares Purchased	of Shares that May	Number	Average		Shares Purchased	of Shares that May
	of Shares	Price Paid		as Part of Publicly	Yet be Purchased	of Shares	Price Paid		as Part of Publicly	Yet be Purchased
Period	Purchased	Per Share		Announced Programs	Under the Programs ⁽¹⁾	Purchased	Per Share		Announced Programs	Under the Programs ⁽¹⁾
January 2023	9,200	$	30.50	9,200	1,594,560
February 2023	8,818		30.67	8,818	1,585,742
March 2023	6,795		26.01	6,795	1,578,947
April 2023						5,700	$	20.97	5,700	1,573,247
May 2023						6,300		17.35	6,300	1,566,947
June 2023						—		—	—	1,566,947


3.1		Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed February 2, 2021 (File No. 001-34096))
3.2		Amended and Restated Bylaws of ~~the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed February 1, 2021 (File No. 001-34096))~~Dime Community Bancshares, Inc.
4.1		Indenture, dated May 6, 2022, between Dime Community Bancshares, Inc. and Wilmington Trust National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed May 6, 2022 (File No. 001-34096))
4.2		First Supplemental Indenture, May 6, 2022, between Dime Community Bancshares, Inc. and Wilmington Trust National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed May 6, 2022 (File No. 001-34096))
4.3		Form of 5.000% Fixed-to-Floating Rate Subordinated Notes due 2032 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed May 6, 2022 (File No. 001-34096))
10.1		Agreement and General Release, dated July 27, 2023, by and among Dime Community Bancshares, Inc., Dime Community Bank and Kevin M. O’Connor
31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14(a)
31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a)
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350
101		The following financial statements from Dime Community Bancshares, Inc.'s Quarterly Report on Form 10-Q for the Quarter Ended ~~March 31,~~June 30, 2023, filed on ~~May 5,~~August 2, 2023, formatted in XBRL: (i) Consolidated Balance Sheets as of ~~March 31,~~June 30, 2023 and December 31, 2022, (ii) Consolidated Statements of Income for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022, (iii) Consolidated Statements of Comprehensive Income for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022, (iv) Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022, (v) Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2023 and 2022, and (vi) the Condensed Notes to Consolidated Financial Statements.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definitions Linkbase Document
104		Cover page to this Quarterly Report on Form 10-Q, formatted in Inline XBRL


Dated: ~~May 5,~~August 2, 2023	By:	/s/ KEVIN M. O’CONNOR
		Kevin M. O’Connor
		Chief Executive Officer


Dated: ~~May 5,~~August 2, 2023	By:	/s/ AVINASH REDDY
		Avinash Reddy
		Senior Executive Vice President and Chief Financial Officer