Dime Community Bancshares (DCOM) 10-Q 2021 Q3 Quarterly report

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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 September 30, 2021

OR

☐  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 October 31, 2021
$0.01 Par Value	40,454,438

PART I – FINANCIAL INFORMATION		Page
Item 1.	Unaudited Condensed Consolidated Financial Statements
	Consolidated Statements of Financial Condition at September 30, 2021 and December 31, 2020	4
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2021 and 2020	5
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2021 and 2020	6
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020	7
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 4.	Controls and Procedures	64
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	66
Item 6.	Exhibits	67
	Signatures	68

2

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;

● fluctuation in market interest rates;

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

● changes in the quality and composition of our loan or investment portfolios;

● changes in accounting principles, policies or guidelines;

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

● general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry;

● legislative, regulatory or policy changes;

● the success or consummation of new business initiatives or the integration of any acquired entities may be more difficult or expensive than the Company anticipates; 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, 2020 as updated by our Quarterly Reports on Form 10-Q.

Further, the COVID-19 pandemic has caused local and national economic disruption and has had an impact on the Company’s operations and financial results. Given its ongoing and dynamic nature, it is difficult to predict what further effects the pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch closures, work stoppages and unavailability of personnel; and increased cybersecurity risks, as employees continue to increasingly work remotely.

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

3

Item 1.   Condensed Consolidated Financial Statements

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

(Dollars in thousands except share amounts)

	September 30,		December 31,
	2021		2020
Assets
Cash and due from banks	$	629,011	$	243,603
Mortgage-backed securities available-for-sale, at fair value		1,212,383		426,979
Investment securities available-for-sale, at fair value		496,680		111,882
Investment securities held-to-maturity		40,303		—
Marketable equity securities, at fair value		—		5,970
Loans held for sale		14,720		5,903
Loans held for investment, net:
Real estate		8,251,743		4,978,195
Commercial and industrial ("C&I") loans		1,012,415		641,533
Other loans		20,713		2,316
Allowance for credit losses		(81,255)		(41,461)
Total loans held for investment, net		9,203,616		5,580,583
Premises and fixed assets, net		49,615		19,053
Premises held for sale		2,799		—
Restricted stock		37,719		60,707
Bank Owned Life Insurance ("BOLI")		293,898		156,096
Goodwill		155,339		55,638
Other intangible assets		9,077		—
Operating lease assets		56,836		33,898
Derivative assets		41,700		18,932
Accrued interest receivable		43,284		34,815
Other assets		77,401		27,551
Total assets	$	12,364,381	$	6,781,610
Liabilities
Interest-bearing deposits	$	6,852,205	$	3,744,371
Non-interest-bearing deposits		3,821,832		780,751
Total deposits		10,674,037		4,525,122
Federal Home Loan Bank of New York ("FHLBNY") advances		25,000		1,204,010
Other short-term borrowings		2,629		120,000
Subordinated debt, net		197,142		114,052
Operating lease liabilities		62,870		39,874
Derivative liabilities		38,889		37,374
Other liabilities		162,697		40,082
Total liabilities		11,163,264		6,080,514
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 September 30, 2021 and December 31, 2020)		116,569		116,569
Common stock ($0.01 par 80,000,000 shares authorized, 41,599,973 shares and 34,813,302 shares issued at September 30, 2021 and December 31, 2020, respectively, and 40,714,828 shares and 21,232,984 shares outstanding at September 30, 2021 and December 31, 2020, respectively)		416		348
Additional paid-in capital		493,775		278,295
Retained earnings		630,744		600,641
Accumulated other comprehensive loss, net of deferred taxes		(1,042)		(5,924)
Unearned equity awards		(9,417)		—
Common stock held by the Benefit Maintenance Plan ("BMP")		—		(1,496)
Treasury stock, at cost (885,145 shares and 13,580,318 shares at September 30, 2021 and December 31, 2020, respectively)		(29,928)		(287,337)
Total stockholders' equity		1,201,117		701,096
Total liabilities and stockholders' equity	$	12,364,381	$	6,781,610

See notes to unaudited condensed consolidated financial statements.

4

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands except per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Interest income:
Loans	$	94,045	$	53,245	$	269,715	$	161,564
Securities		6,030		3,422		15,536		10,794
Other short-term investments		583		729		2,563		2,577
Total interest income		100,658		57,396		287,814		174,935
Interest expense:
Deposits and escrow		3,565		6,672		13,666		28,298
Borrowed funds		2,265		5,780		8,225		17,613
Total interest expense		5,830		12,452		21,891		45,911
Net interest income		94,828		44,944		265,923		129,024
(Credit) provision for credit losses		(5,187)		5,931		6,344		20,003
Net interest income after (credit) provision for credit losses		100,015		39,013		259,579		109,021
Non-interest income:
Service charges and other fees		4,581		1,632		11,377		3,918
Title fees		482		—		1,603		—
Loan level derivative income		445		1,544		2,796		5,201
BOLI income		2,249		1,033		5,181		3,831
Gain on sale of SBA loans		348		808		22,182		972
Gain on sale of residential loans		304		617		1,533		974
Net gain on equity securities		—		175		131		139
Net gain on sale of securities and other assets		—		215		730		3,357
Loss on termination of derivatives		—		—		(16,505)		—
Other		1,319		125		2,861		379
Total non-interest income		9,728		6,149		31,889		18,771
Non-interest expense:
Salaries and employee benefits		28,276		14,316		80,693		45,030
Severance		—		—		1,875		4,000
Occupancy and equipment		7,814		4,046		22,913		12,061
Data processing costs		3,573		2,146		12,132		6,177
Marketing		1,054		345		2,702		1,140
Professional services		2,751		935		7,154		2,713
Federal deposit insurance premiums		1,173		761		3,046		1,767
Loss from extinguishment of debt		—		—		1,751		—
Curtailment loss		—		—		1,543		—
Merger expenses and transaction costs		2,472		769		42,250		2,427
Branch restructuring costs		4,518		—		6,177		—
Amortization of other intangible assets		715		—		1,907		—
Other		4,437		1,535		10,327		4,924
Total non-interest expense		56,783		24,853		194,470		80,239
Income before income taxes		52,960		20,309		96,998		47,553
Income tax expense		14,565		4,441		28,359		10,327
Net income		38,395		15,868		68,639		37,226
Preferred stock dividends		1,822		1,822		5,465		2,962
Net income available to common stockholders	$	36,573	$	14,046	$	63,174	$	34,264
Earnings per common share:
Basic	$	0.89	$	0.66	$	1.62	$	1.57
Diluted	$	0.89	$	0.65	$	1.62	$	1.56

See notes to unaudited condensed consolidated financial statements.

5

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands except per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income	$	38,395	$	15,868	$	68,639	$	37,226
Other comprehensive income (loss):
Change in unrealized holding gain or loss on securities available-for-sale:
Change in net unrealized gain or loss during the period		(8,654)		1,716		(15,222)		15,769
Reclassification adjustment for net gains included in net gain on securities and other assets		—		(215)		(1,207)		(3,357)
Change in pension and other postretirement obligations:
Reclassification adjustment for expense included in other expense		(735)		4		(1,595)		194
Reclassification adjustment for curtailment loss		—		—		1,543		—
Change in the net actuarial gain or loss		941		267		2,470		619
Change in unrealized gain or loss on derivatives:
Change in net unrealized gain or loss during the period		225		100		3,767		(25,098)
Reclassification adjustment for loss included in loss on termination of derivatives		—		—		16,505		—
Reclassification adjustment for expense included in interest expense		38		2,319		902		3,679
Other comprehensive (loss) income before income taxes		(8,185)		4,191		7,163		(8,194)
Deferred tax (benefit) expense		(2,567)		1,327		2,281		(2,595)
Total other comprehensive (loss) income, net of tax		(5,618)		2,864		4,882		(5,599)
Total comprehensive income	$	32,777	$	18,732	$	73,521	$	31,627

See notes to unaudited condensed consolidated financial statements.

6

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands)

	Nine Month Period Ended September 30, 2021
										Accumulated
										Other
										Comprehensive				Common
	Number of					Additional				Loss,		Unearned		Stock		Treasury		Total
	Shares of	Preferred		Common		Paid-in		Retained		Net of Deferred		Equity		Held by		Stock,		Stockholders’
	Common Stock	Stock		Stock		Capital		Earnings		Taxes		Awards		BMP		at cost		Equity
Beginning balance as of January 1, 2021	21,232,984	$	116,569	$	348	$	278,295	$	600,641	$	(5,924)	$	—	$	(1,496)	$	(287,337)	$	701,096
Cumulative change in accounting principle (Note 3)	—		—		—		—		1,686		—		—		—		—		1,686
Adjusted beginning balance on January 1, 2021	21,232,984		116,569		348		278,295		602,327		(5,924)		—		(1,496)		(287,337)		702,782
Net loss	—		—		—		—		(21,034)		—		—		—		—		(21,034)
Other comprehensive income, net of tax	—		—		—		—		—		6,455		—		—		—		6,455
Reverse merger with Bridge Bancorp Inc.	19,992,284		—		65		206,641		—		—		(2,603)		—		287,107		491,210
Exercise of stock options	15,928		—		—		292		—		—		—		—		80		372
Release of shares, net of forfeitures	335,959		—		3		8,562		—		—		(8,340)		—		(33)		192
Stock-based compensation	—		—		—		—		—		—		836		—		—		836
Shares received to satisfy distribution of retirement benefits	(41,101)		—		—		(1,359)		—		—		—		1,496		(1,130)		(993)
Cash dividends declared to preferred stockholders	—		—		—		—		(1,821)		—		—		—		—		(1,821)
Cash dividends declared to common stockholders	—		—		—		—		(5,175)		—		—		—		—		(5,175)
Ending balance as of March 31, 2021	41,536,054		116,569		416		492,431		574,297		531		(10,107)		—		(1,313)		1,172,824
Net income	—		—		—		—		51,278		—		—		—		—		51,278
Other comprehensive income, net of tax	—		—		—		—		—		4,045		—		—		—		4,045
Exercise of stock options	1,174		—		—		(7)		—		—		—		—		31		24
Release of shares, net of forfeitures	3,098		—		—		424		—		—		64		—		(141)		347
Stock-based compensation	—		—		—		—		—		—		1,514		—		—		1,514
Shares received related to tax withholding	(3,342)		—		—		—		—		—		—		—		(147)		(147)
Cash dividends declared to preferred stockholders	—		—		—		—		(1,822)		—		—		—		—		(1,822)
Cash dividends declared to common stockholders	—		—		—		—		(9,962)		—		—		—		—		(9,962)
Repurchase of shares of common stock	(424,121)		—		—		—		—		—		—		—		(13,825)		(13,825)
Ending balance as of June 30, 2021	41,112,863	$	116,569	$	416	$	492,848	$	613,791	$	4,576	$	(8,529)	$	—	$	(15,395)	$	1,204,276
Net income	—		—		—		—		38,395		—		—		—		—		38,395
Other comprehensive loss, net of tax	—		—		—		—		—		(5,618)		—		—		—		(5,618)
Release of shares, net of forfeitures	82,004		—		—		1,048		—		—		(2,423)		—		1,615		240
Stock-based compensation	—		—		—		—		—		—		1,535		—		—		1,535
Cash dividends declared to preferred stockholders	—		—		—		—		(1,822)		—		—		—		—		(1,822)
Cash dividends declared to common stockholders	—		—		—		—		(19,620)		—		—		—		—		(19,620)
Redemption of real estate investment trust ("REIT") preferred stock	—		—		—		(121)		—		—		—		—		—		(121)
Repurchase of shares of common stock	(480,039)		—		—		—		—		—		—		—		(16,148)		(16,148)
Ending balance as of September 30, 2021	40,714,828	$	116,569	$	416	$	493,775	$	630,744	$	(1,042)	$	(9,417)	$	—	$	(29,928)	$	1,201,117

7

	Nine Month Period Ended September 30, 2020
										Accumulated
										Other
										Comprehensive				Common
	Number of					Additional				Loss,		Unearned		Stock		Treasury		Total
	Shares of	Preferred		Common		Paid-in		Retained		Net of Deferred		Equity		Held by		Stock,		Stockholders’
	Common Stock	Stock		Stock		Capital		Earnings		Taxes		Awards		BMP		at cost		Equity
Beginning balance as of January 1, 2020	22,780,208	$	—	$	348	$	279,511	$	581,817	$	(5,940)	$	(6,731)	$	(1,496)	$	(250,751)	$	596,758
Net income	—		—		—		—		8,392		—		—		—		—		8,392
Other comprehensive loss, net of tax	—		—		—		—		—		(6,692)		—		—		—		(6,692)
Release of shares, net of forfeitures	59		—		—		5		—		—		(7)		—		2		—
Stock-based compensation	—		—		—		—		—		—		671		—		—		671
Proceeds from Preferred Stock issuance, net	—		72,224		—		—		—		—		—		—		—		72,224
Shares received related to tax withholding	(3,025)		—		—		—		—		—		—		—		(79)		(79)
Cash dividends declared to common stockholders, net	—		—		—		—		(4,915)		—		—		—		—		(4,915)
Repurchase of shares of common stock	(825,992)		—		—		—		—		—		—		—		(20,711)		(20,711)
Ending balance as of March 31, 2020	21,951,250		72,224		348		279,516		585,294		(12,632)		(6,067)		(1,496)		(271,539)		645,648
Net income	—		—		—		—		12,966		—		—		—		—		12,966
Other comprehensive loss, net of tax	—		—		—		—		—		(1,771)		—		—		—		(1,771)
Exercise of stock options, net	1,973		—		—		38		—		—		—		—		—		38
Release of shares, net of forfeitures	127,582		—		—		(784)		—		—		(1,960)		—		2,772		28
Stock-based compensation	—		—		—		—		—		—		478		—		—		478
Proceeds from Preferred Stock issuance, net	—		44,345		—		—		—		—		—		—		—		44,345
Shares received related to tax withholding	(6,912)		—		—		—		—		—		—		—		(169)		(169)
Cash dividends declared to preferred stockholders	—		—		—		—		(1,140)		—		—		—		—		(1,140)
Cash dividends declared to common stockholders	—		—		—		—		(4,623)		—		—		—		—		(4,623)
Repurchase of shares of common stock	(631,842)		—		—		—		—		—		—		—		(14,257)		(14,257)
Ending balance as of June 30, 2020	21,442,051	$	116,569	$	348	$	278,770	$	592,497	$	(14,403)	$	(7,549)	$	(1,496)	$	(283,193)	$	681,543
Net income	—		—		—		—		15,868		—		—		—		—		15,868
Other comprehensive income, net of tax	—		—		—		—		—		2,864		—		—		—		2,864
Release of shares, net of forfeitures	(2,368)		—		—		(1)		—		—		50		—		(49)		—
Stock-based compensation	—		—		—		—		—		—		804		—		—		804
Shares received related to tax withholding	(4,203)		—		—		—		—		—		—		—		(81)		(81)
Cash dividends declared to preferred stockholders	—		—		—		—		(1,822)		—		—		—		—		(1,822)
Cash dividends declared to common stockholders	—		—		—		—		(4,630)		—		—		—		—		(4,630)
Repurchase of shares of common stock	(19,196)		—		—		—		—		—		—		—		(388)		(388)
Ending balance as of September 30, 2020	21,416,284	$	116,569	$	348	$	278,769	$	601,913	$	(11,539)	$	(6,695)	$	(1,496)	$	(283,711)	$	694,158

See notes to unaudited condensed consolidated financial statements.

8

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

	Nine Months Ended September 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	68,639	$	37,226
Adjustments to reconcile net income to net cash provided by operating activities:
Net gain on sales of securities available-for-sale and other assets		(730)		(3,357)
Net gain on equity securities		(131)		(139)
Net gain on sale of loans held for sale		(23,715)		(1,946)
Loss on termination of derivatives		16,505		—
Net depreciation, amortization and accretion		4,907		3,786
Amortization of other intangible assets		1,907		—
Stock-based compensation		3,885		1,953
Provision for credit losses		6,344		20,003
Originations of loans held for sale		(38,709)		(26,007)
Proceeds from sale of loans originated for sale		57,558		38,789
Increase in cash surrender value of BOLI		(4,831)		(2,697)
Gain from death benefits from BOLI		(350)		(1,134)
Deferred income tax benefit		(12,704)		(6,841)
Decrease (increase) in other assets		126,377		(17,810)
(Decrease) increase in other liabilities		(45,669)		6,148
Net cash provided by operating activities		159,283		47,974
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available-for-sale		138,077		68,784
Proceeds from sales of marketable equity securities		6,101		410
Purchases of securities available-for-sale		(1,025,697)		(149,353)
Purchases of securities held-to-maturity		(40,303)		—
Acquisition of marketable equity securities		0		(136)
Proceeds from calls and principal repayments of securities available-for-sale		350,598		121,169
Purchase of BOLI		(40,000)		(40,000)
Proceeds received from cash surrender value of BOLI		1,464		3,020
Loans purchased		(9,855)		(18,892)
Proceeds from the sale of portfolio loans transferred to held for sale		681,956		35,025
Net decrease (increase) in loans		244,995		(266,490)
Purchases of fixed assets, net		(781)		(1,442)
Redemptions (purchases) of restricted stock, net		46,350		(1,286)
Net cash received in business combination		715,988		0
Net cash provided by (used in) investing activities		1,068,893		(249,191)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits		733,744		133,042
Repayments of FHLBNY advances, long-term		(190,150)		(188,800)
Repayments of FHLBNY advances, short-term, net		(2,663,865)		—
Proceeds from FHLBNY advances, short-term		1,435,000		127,500
Proceeds from FHLBNY advances, long-term		25,000		97,450
Repayments of other short-term borrowings, net		(117,371)		(40,000)
Proceeds from preferred stock issuance, net		0		116,569
Proceeds from exercise of stock options		396		38
Release of stock for benefit plan awards		779		28
Payments related to tax withholding for equity awards		(147)		(329)
BMP ESOP shares received to satisfy distribution of retirement benefits		(993)		—
Treasury shares repurchased		(29,973)		(35,356)
Redemption of REIT preferred stock		(121)		—
Cash dividends paid to preferred stockholders		(5,465)		(2,962)
Cash dividends paid to common stockholders		(29,602)		(14,168)
Net cash (used in) provided by financing activities		(842,768)		193,012
Increase (decrease) in cash and cash equivalents		385,408		(8,205)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		243,603		155,488
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	629,011	$	147,283
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	17,930	$	13,755
Cash paid for interest		21,995		46,972
Loans transferred to held for sale		685,747		47,938
Loans transferred to held for investment		10,000		—
Premises held for investment transferred to held for sale		2,799		—
Premises held for sale transferred to premises and fixed assets, net		0		(514)
Operating lease assets in exchange for operating lease liabilities		4,048		1,524
Cumulative change due to CECL adoption		1,686		—
Net non-cash liabilities assumed in Merger (See Note 2)		324,479		—

See notes to unaudited condensed consolidated financial statements.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.BASIS OF PRESENTATION

On February 1, 2021, Dime Community Bancshares, Inc., a Delaware corporation (“Legacy Dime”) merged with and into Bridge Bancorp, Inc., a New York corporation (“Bridge”) (the “Merger”), with Bridge as the surviving corporation under the name “Dime Community Bancshares, Inc.” (the “Holding Company”). At the effective time of the Merger (the “Effective Time”), each outstanding share of Legacy Dime common stock, par value $0.01 per share, was converted into the right to receive 0.6480 shares of the Holding Company’s common stock, par value $0.01 per share.

At the Effective Time, each outstanding share of Legacy Dime’s Series A preferred stock, par value $0.01 (the “Dime Preferred Stock”), was converted into the right to receive one share of a newly created series of the Holding Company’s preferred stock having the same powers, preferences and rights as the Dime Preferred Stock.

Immediately following the Merger, Dime Community Bank, a New York-chartered commercial bank and a wholly-owned subsidiary of Legacy Dime, merged with and into BNB Bank, a New York-chartered trust company and a wholly-owned subsidiary of Bridge, with BNB Bank as the surviving bank, under the name “Dime Community Bank” (the “Bank”).

The 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 Merger was accounted for as a reverse merger using the acquisition method of accounting, which means that for accounting and financial reporting purposes, Legacy Dime was deemed to have acquired Bridge in the Merger, even though Bridge was the legal acquirer. Accordingly, Legacy Dime’s historical financial statements are the historical financial statements of the combined company for all periods before February 1, 2021 (the “Merger Date”).

The Company’s results of operations for 2021 include the results of operations of Bridge on and after the Merger Date. Results for periods before the Merger Date reflect only those of Legacy Dime and do not include the results of operations of Bridge. The number of shares issued and outstanding, earnings per share, additional paid-in capital, dividends paid and all references to share quantities of the Company have been retrospectively adjusted to reflect the equivalent number of shares issued to holders of Legacy Dime common stock in the Merger. The assets and liabilities of Bridge as of the Merger Date have been recorded at their estimated fair value and added to those of Legacy Dime. See Note 2. Merger for further information.

As of September 30, 2021, we operated 65 branch locations throughout Long Island and the New York City boroughs of Brooklyn, Queens, Manhattan, and the Bronx.  

The Company is a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, Dime Community Bank, which was known as BNB Bank prior to the Merger. The Bank was established in 1910 and is headquartered in Hauppauge, New York. The Holding Company was incorporated under the laws of the State of New York in 1988 to serve as the holding company for the Bank. The Company functions primarily as the holder of all of the Bank’s common stock. Our bank operations include Dime Community Inc., a real estate investment trust subsidiary which was formerly known as Bridgehampton Community, Inc., as an operating subsidiary. Our bank operations also include Bridge Abstract LLC (“Bridge Abstract”), a wholly-owned subsidiary of the Bank, which is a broker of title insurance services. In connection with the Merger, on February 1, 2021, the Holding Company acquired Dime Community Bank and its wholly-owned subsidiaries. In September 2021, the Company dissolved 2 REITs, DSBW Preferred Funding Corporation and DSBW Residential Preferred Funding Corporation, which were wholly-owned subsidiaries of the Bank. The preferred shares issued by the REITs were redeemed in connection with the dissolutions.  

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

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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 nine months ended September 30, 2021 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 Legacy Dime’s Annual Report on Form 10-K for the year ended December 31, 2019, which remain significantly unchanged and have been followed similarly as in prior periods except for the allowance for credit losses policy, resulting from the adoption of Accounting Standard Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326)” and certain policies added as a result of the Merger.

Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which has spread to most countries, including the United States. The pandemic has adversely affected economic activity globally, nationally and locally.

In March 2020, the United States declared a National Public Health Emergency in response to the COVID-19 pandemic. In an effort to mitigate the spread of COVID-19, local state governments, including New York (in which the Bank has retail banking offices), have taken preventative or protective actions such as travel restrictions, advising or requiring individuals to limit or forego their time outside of their homes, and other forced closures for certain types of non-essential businesses. The impact of these actions is expected to continue to have an adverse impact on the economies and financial markets in the United States.

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020. The CARES Act is intended to provide relief and lessen a severe economic downturn. The stimulus package includes direct financial aid to American families and economic stimulus to significantly impacted industry sectors. The package also includes extensive emergency funding for hospitals and healthcare providers.

In December 2020, the 2021 Consolidated Appropriations Act was signed into law to provide additional relief.  

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.

2.MERGER

As described in Note 1. Basis of Presentation, on February 1, 2021, we completed our Merger with Legacy Dime.

Pursuant to the merger agreement, Legacy Dime merged with and into Bridge with Bridge as the surviving corporation under the name “Dime Community Bancshares, Inc.” At the effective time of the Merger, each outstanding share of Legacy Dime common stock, par value $0.01 per share, was converted into 0.6480 shares of the Company’s common stock, par value $0.01 per share.

At the Effective Time, each outstanding share of Legacy Dime’s Series A preferred stock, par value $0.01 was converted into 1 share of a newly created series of the Company’s preferred stock having the same powers, preferences and rights as the Dime Preferred Stock.

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In connection with the Merger, the Company assumed $115.0 million in aggregate principal amount of the 4.50% Fixed-to-Floating Rate Subordinated Debentures due 2027 of Legacy Dime.

The Merger constituted a business combination and was accounted for as a reverse merger using the acquisition method of accounting. As a result, Legacy Dime was the accounting acquirer and Bridge was the legal acquirer and the accounting acquiree. Accordingly, the historical financial statements of Legacy Dime became the historical financial statements of the combined company. In addition, the assets and liabilities of Bridge have been recorded at their estimated fair values and added to those of Legacy Dime as of the Merger Date. The determination of fair value required management to make estimates about discount rates, expected future cash flows, market conditions and other future events that are subjective and subject to change.

The Company issued 21.2 million shares of its common stock to Legacy Dime stockholders in connection with the Merger, which represented 51.5% of the voting interests in the Company upon completion of the Merger. In accordance with FASB ASC 805-40-30-2, the purchase price in a reverse acquisition is determined based on the number of equity interests the legal acquiree would have had to issue to give the owners of the legal acquirer the same percentage equity interest in the combined entity that results from the reverse acquisition.

The table below summarizes the ownership of the combined company following the Merger, for each shareholder group, as well as the market capitalization of the combined company using shares of Bridge and Legacy Dime common stock outstanding at January 31, 2021 and Bridge’s closing price on January 31, 2021.

	Dime Community Bancshares, Inc. Ownership and Market Value
	Number of				Market Value at
	Bridge		Percentage		$24.43 Bridge
(Dollars and shares in thousands)	Outstanding Shares		Ownership		Share Price
Bridge shareholders		19,993		48.5%	$	488,420
Legacy Dime shareholders		21,233		51.5%		518,720
Total		41,226		100.0%	$	1,007,140

The table below summarizes the hypothetical number of shares as of January 31, 2021 that Legacy Dime would have to issue to give Bridge owners the same percentage ownership in the combined company.

	Hypothetical Legacy Dime Ownership
	Number of
	Legacy Dime		Percentage
(Shares in thousands)	Outstanding Shares		Ownership
Bridge shareholders		30,853		48.5%
Legacy Dime shareholders		32,767		51.5%
Total		63,620		100.0%

The purchase price is calculated based on the number of hypothetical shares of Legacy Dime common stock issued to Bridge shareholders multiplied by the share price as demonstrated in the table below.

(Dollars and shares in thousands)
Number of hypothetical Legacy Dime shares issued to Bridge shareholders		30,853
Legacy Dime market price per share as of February 1, 2021	$	15.90
Purchase price determination of hypothetical Legacy Dime shares issued to Bridge shareholders	$	490,560
Value of Bridge stock options hypothetically converted to options to acquire shares of Legacy Dime common stock		643
Cash in lieu of fractional shares		7
Purchase price consideration	$	491,210

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The following table provides the purchase price allocation as of the Merger Date and the Bridge assets acquired and liabilities assumed at their estimated fair value as of the Merger Date as recorded by Dime Community Bancshares. We recorded the estimate of fair value based on initial valuations available at the Merger Date and these estimates are considered preliminary and subject to adjustment for up to one year after the Merger Date. While we believe that the information available on the Merger Date provided a reasonable basis for estimating fair value, we are currently within the measurement period and our estimates of fair value are provisional. During the third quarter of 2021, no material fair value adjustments to acquired assets and assumed liabilities were identified. We expect that we may obtain additional information and evidence during the measurement period that would result in changes to the estimated fair value amounts. The measurement period ends on the earlier of one year after the Merger Date or the date we are able to determine that we have obtained all necessary information about the facts and circumstances that existed as of Merger Date. We expect to finalize all valuations and record final adjustments during the fourth quarter of 2021. Subsequent adjustments to fair value, if necessary, will be reflected in our future filings.

(In thousands)
Purchase price consideration	$	491,210
Fair value of assets acquired:
Cash and due from banks		715,988
Securities available-for-sale		651,997
Loans held for sale		10,000
Loans held for investment		4,531,640
Premises and fixed assets		37,881
Restricted stock		23,362
BOLI		94,085
Other intangible assets		10,984
Operating lease assets		45,603
Other assets		117,474
Total assets acquired		6,239,014
Fair value of liabilities assumed:
Deposits		5,405,575
Other short-term borrowings		216,298
Subordinated debt		83,200
Operating lease liabilities		45,285
Other liabilities		97,147
Total liabilities assumed		5,847,505
Fair value of net identifiable assets		391,509
Goodwill resulting from Merger	$	99,701

As a result of the Merger, we recorded $99.7 million of goodwill. The goodwill recorded is not deductible for income tax purposes.

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As described in detail in Note 3. Summary of Accounting Policies, the Company is required to record purchased financial assets with credit deterioration (PCD assets), defined as a more-than-insignificant deterioration in credit quality since origination or issuance, at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no credit loss expense affecting net income on acquisition of PCD assets.  Changes in estimates of expected losses after acquisition are recognized as credit loss expense (or reversal of credit loss expense) in subsequent periods as they arise. Any non-credit discount or premium resulting from acquiring a pool of purchased financial assets with credit deterioration shall be allocated to each individual asset.  At the acquisition date, the initial allowance for credit losses determined on a collective basis shall be allocated to individual assets to appropriately allocate any non-credit discount or premium.  The non-credit discount or premium, after the adjustment for the allowance for credit losses, shall be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment for credit losses at the adoption date. Information regarding loans acquired at the Merger Date are as follows:

(In thousands)
PCD loans:
Unpaid principal balance	$	295,306
Non-credit discount at acquisition		(9,050)
Unpaid principal balance, net		286,256
Allowance for credit losses at acquisition		(52,284)
Fair value at acquisition		233,972
Non-PCD loans:
Unpaid principal balance		4,289,236
Premium at acquisition		8,432
Fair value at acquisition		4,297,668
Total fair value at acquisition	$	4,531,640

Supplemental disclosures of cash flow information related to investing and financing activities regarding the Merger are as follows for the nine months ended September 30, 2021:

(In thousands)
Business combination:
Fair value of tangible assets acquired	$	6,228,030
Goodwill, core deposit intangible and other intangible assets acquired		110,685
Liabilities assumed		5,847,505
Purchase price consideration		491,210

Other intangible assets consisted of core deposit intangibles and a non-compete agreement with estimated fair values at the Merger Date of $10.2 million and $780 thousand, respectively. Core deposit intangibles are being amortized over a life of 10 years on an accelerated basis. The non-compete agreement is being amortized over a life of 13 months.

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Pro Forma Combined Results of Operations

The following pro forma financial information presents the consolidated results of operations of Legacy Dime and Bridge as if the Merger occurred as of January 1, 2020 with pro forma adjustments. The pro forma adjustments give effect to any change in interest income due to the accretion of discounts (premiums) associated with the fair value adjustments of acquired loans, any change in interest expense due to estimated premium amortization/discount accretion associated with the fair value adjustments to acquired time deposits and other debt, and the amortization of the core deposit intangible that would have resulted had the deposits been acquired as of January 1, 2020. Merger related expenses incurred by the Company during the three and nine months ended September 30, 2021 are not reflected in the pro forma amounts. The pro forma information does not necessarily reflect the results of operations that would have occurred had Legacy Dime merged with Bridge at the beginning of 2020.  

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands except per share amounts)	2021		2020		2021		2020
Net interest income	$	93,316	$	86,818	$	274,499	$	252,455
Non-interest income		9,728		12,939		33,240		33,030
Net income		39,978		29,971		92,782		72,015
Net income available to common shareholders		37,700		27,791		86,390		68,169
Earnings per share:
Basic		0.93		0.68		2.11		1.66
Diluted		0.93		0.68		2.11		1.66

3.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 September 30, 2021 and December 31, 2020, the results of operations and statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020, the changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020.

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.

Recent Accounting Pronouncements

Allowance for Credit Losses – The Company adopted ASU No. 2016-13 on January 1, 2021 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures.  ASU 2016-13 was effective for the Company as of January 1, 2020. Under Section 4014 of the CARES Act, financial institutions required to adopt ASU 2016-13 as of January 1, 2020 were provided an option to delay the adoption of the Current Expected Credit Loss (“CECL” or the “CECL Standard”) framework. The Company elected to defer adoption of the CECL Standard until January 1, 2021. The CECL Standard requires that the measurement of all expected credit losses for financial assets held at the reporting date be based on historical experience, current conditions, and reasonable and supportable forecasts. This standard requires financial institutions and other organizations to use forward-looking information to better inform their credit loss estimates. Results for reporting periods beginning after January 1, 2021 are presented under the CECL Standard while prior period amounts will continue to be reported in accordance with previously applicable GAAP.

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The adoption of the CECL Standard resulted in an initial decrease of $3.9 million to the allowance for credit losses and an increase of $1.4 million to the reserve for unfunded commitments in other liabilities. The after-tax cumulative-effect adjustment of $1.7 million was recorded in retained earnings as of January 1, 2021. There were no held-to-maturity securities as of January 1, 2021 and, therefore, no impact from the adoption of the CECL Standard.

The allowance for credit losses is a valuation allowance that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loan losses are charged against the allowance when management believes it has confirmed the loan balance is uncollectible. Subsequent recoveries, if any, are credited to the allowance.

The CECL Standard requires that debt securities held-to-maturity be accounted for under the current expected credit losses model, including historical loss experience and impact of current conditions and reasonable and supportable forecasts, with an associated allowance for credit losses. In addition, while credit losses on debt securities available-for-sale should be measured in accordance with the other-than-temporary impairment (“OTTI”) framework under current GAAP, the amendments in the CECL Standard require that these credit losses be presented as an allowance for credit losses.  For AFS debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis.

Management estimates the allowance for credit losses for the Company’s loan portfolio required using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historically observed credit loss experience of peer banks within our geography provide the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or terms as well as changes in environmental conditions, such as changes in unemployment rates, gross domestic product, and real estate pricing. Management evaluates the adequacy of the allowance on a quarterly basis.

Accrued interest receivable is excluded from the estimate of credit losses.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

One-to-four family residential, including condominium and cooperative apartment loans - Loans in this classification consist of residential real estate and one-to-four family real estate properties, and may have a mixed-use commercial aspect. Included in one-to-four family loans are also certain Small Business Administration ("SBA") loans in which the loan is secured by underlying real estate as collateral. The Bank may sell a portion of the loan, guaranteed by the SBA, to a third-party investor. Owner-occupied properties are generally underwritten based upon an appraisal performed by an independent, state licensed appraiser and the credit quality of the individual borrower. Investment properties require: (1) a maximum loan-to-value ratio of 75% based upon an appraisal performed by an independent, state licensed appraiser, and (2) sufficient rental income from the underlying property to adequately service the debt, represented by a minimum debt service ratio of 1.25x. The credit quality of this portfolio is largely dependent on economic factors, such as unemployment rates and housing prices.  

Multifamily residential and residential mixed-use loans - Loans in this classification consist of multifamily residential real estate with a minimum of five residential units, and may have a mixed-use commercial aspect of less than 50% of the property’s rental income. The Bank’s underwriting standards for multifamily residential loans generally require: (1) a maximum loan-to-value ratio of 75% based upon an appraisal performed by an independent, state licensed appraiser, and (2) sufficient rental income from the underlying property to adequately service the debt, represented by a minimum debt service ratio of 1.20x. Repayment of multifamily residential loans is dependent, in significant part, on cash flow from the collateral property sufficient to satisfy operating expenses and debt service. Future increases in interest rates, increases in vacancy rates on multifamily residential or commercial buildings, and other economic events, such as unemployment rates, which are outside the control of the borrower or the Bank could negatively impact the future net operating income of such properties. Similarly, government regulations, such as the existing New York City Rent Regulation and Rent Stabilization laws, could limit future increases in the revenue from these buildings.

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Commercial real estate and commercial mixed-use loans - Loans in this classification consist of commercial real estate, both owner-occupied and non-owner occupied, and may have a residential aspect of less than 50% of the property’s rental income. The Bank’s underwriting standards for commercial real estate loans generally require: (1) a maximum loan-to-value ratio of 75% based upon an appraisal performed by an independent, state licensed appraiser, and (2) sufficient rental income from the underlying property to adequately service the debt, represented by a minimum debt service ratio of 1.25x. Included in commercial real estate loans are also certain SBA loans in which the loan is secured by underlying real estate as collateral. The Bank may sell a portion of the loan, guaranteed by the SBA, to a third-party investor. Repayment of commercial real estate loans is often dependent upon successful operation or management of the collateral properties, as well as the success of the business and retail tenants occupying the properties. Repayment of such loans is generally more vulnerable to weak economic conditions, such as unemployment rates and commercial real estate prices.

Acquisition, development, and construction loans - Loans in this classification consist of loans to purchase land intended for further development, including single-family homes, multi-family housing, and commercial income properties. In general, the maximum loan-to-value ratio for a land acquisition loan is 50% of the appraised value of the property. The credit quality of this portfolio is largely dependent on economic factors, such as unemployment rates and commercial real estate prices.

Commercial, Industrial and Agricultural Loans - Loans in this classification consist of lines of credit, revolving lines of credit, and term loans, generally to businesses or high net worth individuals. The owners of these businesses typically provide recourse such that they guarantee the debt. The lines of credit are generally secured by the assets of the business, though they may at times be issued on an unsecured basis. Generally speaking, they are subject to renewal on an annual basis based upon review of the borrower’s financial statements. Term loans are generally secured by either specific or general asset liens of the borrower’s business. These loans are granted based upon the strength of the cash generation ability of the borrower. Included in C&I loans are also certain SBA loans in which the loan is secured by underlying assets of the business (excludes SBA Paycheck Protection Program (“PPP”) loans from allowance for credit losses as these loans carry a 100% guarantee from the SBA). The Bank may sell a portion of the loan, guaranteed by the SBA, to a third-party investor. The credit quality of this portfolio is largely dependent on economic factors, such as unemployment rates.

Other Loans – Loans in this classification consist of installment and consumer loans. Repayment is dependent on the credit quality of the individual borrower. The credit quality of this portfolio is largely dependent on economic factors, such as unemployment rates and housing prices.

As allowed by ASC 326, the Entity elected to maintain pools of loans accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether modifications to individual acquired financial assets accounted for in pools were troubled debt restructurings (“TDRs”) as of the date of adoption.

TDRs – A loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, is considered to be a TDR. The allowance for credit loss on a TDR is measured using the same method as all other loans held for investment, except when the value of a concession cannot be measured using a method other than the discounted cash flow method. When the value of a concession is measured using the discounted cash flow method, the allowance for credit loss is determined by discounting the expected future cash flows at the original interest rate of the loan.  The allowance for credit losses on a TDR is measured using the same method as all other loans held for investment, except that the original interest rate is used to discount the expected cash flows, not the rate specified within the restructuring.

Loans that do not share risk characteristics are evaluated on an individual basis based on various factors. Loans evaluated individually are not included in the collective evaluation. Factors that may be considered are borrower delinquency trends and non-accrual status, probability of foreclosure or note sale, changes in the borrower’s circumstances or cash collections, borrower’s industry, or other facts and circumstances of the loan or collateral.

Individually Evaluated Loans with an ACL and Other Real Estate Owned: For collateral-dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral, less the estimated costs to sell, and the amortized cost basis of the loan as of the measurement date.  The fair value of real estate collateral is

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determined based on recent appraised values. The fair value of other real estate owned is also determined based on recent appraised values less the estimated cost to sell. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Adjustments may relate to location, square footage, condition, amenities, market rate of leases as well as timing of comparable sales. All appraisals undergo a second review process to ensure that the methodology employed and the values derived are reasonable. The fair value of non-real estate collateral, which includes inventory, may be determined based on an appraisal, net book value per the borrower’s financial statements, aging reports, or by reference to  market activity, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the borrower and its business. For non-collateral-dependent loans, 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.

Appraisals for collateral-dependent loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Appraisal and Credit Departments review the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Management also considers the appraisal values for commercial properties associated with current loan origination activity. Collectively, this information is reviewed to help assess current trends in commercial property values. For each collateral dependent loan, management considers information that relates to the type of property to determine if such properties may have appreciated or depreciated in value since the date of the most recent appraisal. Adjustments to fair value are made only when the analysis indicates a probable decline in collateral values. Adjustments made in the appraisal process are not deemed material to the overall consolidated financial statements given the level of collateral dependent loans measured at fair value on a non-recurring basis.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures – The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures, which is included in other liabilities on the consolidated statements of financial condition, is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which is the same as the expected loss factor as determined based on the corresponding portfolio segment.

Loans acquired in a business combination – The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, on January 1, 2021 which now requires the Company to record purchased financial assets with credit deterioration (PCD assets), defined as a more-than-insignificant deterioration in credit quality since origination or issuance, at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no credit loss expense affecting net income on acquisition of PCD assets.  Changes in estimates of expected losses after acquisition are recognized as credit loss expense (or reversal of credit loss expense) in subsequent periods as they arise. Any non-credit discount or premium resulting from acquiring a pool of purchased financial assets with credit deterioration shall be allocated to each individual asset.  At the acquisition date, the initial allowance for credit losses determined on a collective basis shall be allocated to individual assets to appropriately allocate any non-credit discount or premium.  The non-credit discount or premium, after the adjustment for the allowance for credit losses, shall be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment for credit losses at the adoption date.

A purchased financial asset that does not qualify as a PCD asset is accounted for similar to an originated financial asset.  Generally, this means that an entity recognizes the allowance for credit losses for non-PCD assets through net income at the time of acquisition.  In addition, both the credit discount and non-credit discount or premium resulting from acquiring a pool of purchased financial assets that do not qualify as PCD assets shall be allocated to each individual asset.  This combined discount or premium shall be accreted to interest income using the effective yield method.

For further discussion of our loan accounting and acquisitions, see Note 2 – Merger and Note 8 – Loans.

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Held-to-maturity debt securities and the allowance for credit losses

To the extent that debt securities in the held-to-maturity portfolio share common risk characteristics, estimated expected credit losses are calculated in a manner like that used for loans held for investment.  That is, for pools of such debt securities with common risk characteristics, the historical lifetime probability of default and severity of loss in the event of default is derived or obtained from external sources and adjusted for the expected effects of reasonable and supportable forecasts over the expected lives of the securities.

Expected credit loss on each debt security in the held-to-maturity portfolio that do not share common risk characteristics with any of the pools of debt securities is individually measured based on net realizable value, or the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the recorded amortized cost basis of the security.

With respect to certain classes of debt securities, primarily U.S. Treasuries and securities issued by Government Sponsored Entities (“GSEs”), the Company considers the history of credit losses, current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero, even if the U.S. government were to technically default. Therefore, the Company did not record an allowance for expected credit losses on its securities issued by GSEs at September 30, 2021.

Accrued interest receivable is excluded from the estimate of credit losses.

Available-for-sale debt securities and the allowance for credit losses

For available-for-sale debt securities in an unrealized loss position, management first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes in the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.  If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are excluded from earnings and reported, net of tax, in other comprehensive income (“OCI”).

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.  Losses are charged against the allowance when management believes the collectability of an available-for-sale security is confirmed or when the criteria regarding intent or requirement to sell is met.

Accrued interest receivable is excluded from the estimate of credit losses.  

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4.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

							Total
							Accumulated
	Securities		Defined				Other
	Available-		Benefit				Comprehensive
(In thousands)	for-Sale		Plans		Derivatives		Income (Loss)
Balance as of January 1, 2021	$	12,694	$	(6,086)	$	(12,532)	$	(5,924)
Other comprehensive (loss) income before reclassifications		(10,378)		2,706		13,850		6,178
Amounts reclassified from accumulated other comprehensive loss		(826)		(1,082)		612		(1,296)
Net other comprehensive (loss) income during the period		(11,204)		1,624		14,462		4,882
Balance as of September 30, 2021	$	1,490	$	(4,462)	$	1,930	$	(1,042)
Balance as of January 1, 2020	$	4,621	$	(6,024)	$	(4,537)	$	(5,940)
Other comprehensive income (loss) before reclassifications		10,783		423		(17,150)		(5,944)
Amounts reclassified from accumulated other comprehensive loss		(2,302)		133		2,514		345
Net other comprehensive income (loss) during the period		8,481		556		(14,636)		(5,599)
Balance as of September 30, 2020	$	13,102	$	(5,468)	$	(19,173)	$	(11,539)

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2021		2020		2021		2020
Change in unrealized holding gain or loss on securities available-for-sale:
Change in net unrealized gain or loss during the period	$	(8,654)	$	1,716	$	(15,222)	$	15,769
Reclassification adjustment for net gains included in net gain on securities and other assets		—		(215)		(1,207)		(3,357)
Net change		(8,654)		1,501		(16,429)		12,412
Tax (benefit) expense		(2,714)		475		(5,226)		3,931
Net change in unrealized holding gain or loss on securities available-for-sale, net of reclassification adjustments and tax		(5,940)		1,026		(11,203)		8,481
Change in pension and other postretirement obligations:
Reclassification adjustment for expense included in other expense		(735)		4		(1,595)		194
Reclassification adjustment for curtailment loss		—		—		1,543		—
Change in the net actuarial gain or loss		941		267		2,470		619
Net change		206		271		2,418		813
Tax expense		65		86		795		257
Net change in pension and other postretirement obligations		141		185		1,623		556
Change in unrealized gain or loss on derivatives:
Change in net unrealized gain or loss during the period		225		100		3,767		(25,098)
Reclassification adjustment for loss included in loss on termination of derivatives		—		—		16,505		—
Reclassification adjustment for expense included in interest expense		38		2,319		902	��	3,679
Net change		263		2,419		21,174		(21,419)
Tax expense (benefit)		82		766		6,712		(6,783)
Net change in unrealized gain or loss on derivatives, net of reclassification adjustments and tax		181		1,653		14,462		(14,636)
Other comprehensive (loss) income, net of tax	$	(5,618)	$	2,864	$	4,882	$	(5,599)

5.EARNINGS PER COMMON SHARE ("EPS")

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average common shares outstanding during the reporting period. Diluted EPS is computed using the same method as basic EPS, but reflects the potential dilution that would occur if "in the money" stock options were exercised and converted into common stock, and prior to 2021, if all likely aggregate performance-based share awards ("PSA”) were issued. In determining the weighted average shares outstanding for basic and diluted EPS, treasury shares are excluded. Vested restricted stock award ("RSA") shares are included in the calculation of the weighted average shares outstanding for basic and diluted EPS. Unvested RSA

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and PSA shares not yet awarded are recognized as a special class of participating securities under ASC 260, and are included in the calculation of the weighted average shares outstanding for basic and diluted EPS.

The following is a reconciliation of the numerators and denominators of basic and diluted EPS for the periods presented:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands except share and per share amounts)	2021		2020		2021		2020
Net income available to common stockholders	$	36,573	$	14,046	$	63,174	$	34,264
Less: Dividends paid and earnings allocated to participating securities		(437)		(83)		(811)		(195)
Income attributable to common stock	$	36,136	$	13,963	$	62,363	$	34,069
Weighted average common shares outstanding, including participating securities		40,915,012		21,378,332		38,979,259		21,848,184
Less: weighted average participating securities		(489,274)		(187,781)		(405,102)		(191,438)
Weighted average common shares outstanding		40,425,738		21,190,551		38,574,157		21,656,746
Basic EPS	$	0.89	$	0.66	$	1.62	$	1.57
Income attributable to common stock	$	36,136	$	13,963	$	62,363	$	34,069
Weighted average common shares outstanding		40,425,738		21,190,551		38,574,157		21,656,746
Weighted average common equivalent shares outstanding		423		133,636		700		134,334
Weighted average common and equivalent shares outstanding		40,426,161		21,324,187		38,574,857		21,791,080
Diluted EPS	$	0.89	$	0.65	$	1.62	$	1.56

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 174,584 and 177,953 weighted-average stock options outstanding for the three and nine-month periods ended September 30, 2021, respectively, which were not considered in the calculation of diluted EPS since their exercise prices exceeded the average market price during the period. There were 0 "out-of-the-money" stock options during the three-month or the nine-month period ended September 30, 2020.

6.PREFERRED STOCK

On February 5, 2020, Legacy Dime completed an underwritten public offering of 2,999,200 shares, or $75.0 million in aggregate liquidation preference, of its 5.50% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share, with a liquidation preference of $25.00 per share (the “Legacy Dime Preferred Stock”). The net proceeds received from the issuance of preferred stock at the time of closing were $72.2 million. On June 10, 2020, Legacy Dime completed an underwritten public offering, a reopening of the February 5, 2020 original issuance, of 2,300,000 shares, or $57.5 million in aggregate liquidation preference, of the Legacy Dime Preferred Stock. The net proceeds received from the issuance of preferred stock at the time of closing were $44.3 million.

At the Effective Time of the Merger, each outstanding share of the Legacy Dime Preferred Stock was converted into the right to receive one share of a newly created series of the Company’s preferred stock having the same powers, preferences and rights as the Legacy Dime Preferred Stock.

The Company expects to pay dividends when, as, and if declared by its board of directors, at a fixed rate of 5.50% per annum, payable quarterly, in arrears, on February 15, May 15, August 15 and November 15 of each year. The Preferred Stock is perpetual and has no stated maturity. The Company may redeem the Preferred Stock at its option at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends (without regard to any undeclared dividends), subject to regulatory approval, on or after June 15, 2025 or within 90 days following a regulatory capital treatment event, as described in the prospectus supplement and accompanying prospectus relating to the offering.

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7.INVESTMENT AND MORTGAGE-BACKED SECURITIES

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

	September 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Agency notes	$	82,475	$	—	$	(1,457)	$	81,018
Treasury securities		248,173		5		(482)		247,696
Corporate securities		122,476		4,758		(401)		126,833
Pass-through MBS issued by GSEs		622,225		6,005		(6,273)		621,957
Agency Collateralized Mortgage Obligations ("CMOs")		590,385		5,159		(5,118)		590,426
State and municipal obligations		41,158		153		(178)		41,133
Total securities available-for-sale	$	1,706,892	$	16,080	$	(13,909)	$	1,709,063
	September 30, 2021
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities held-to-maturity:
Pass-through MBS issued by GSEs	$	25,325	$	—	$	—	$	25,325
Agency Collateralized Mortgage Obligations ("CMOs")		14,978		—		—		14,978
Total securities held-to-maturity	$	40,303	$	—	$	—	$	40,303

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Agency notes	$	47,500	$	12	$	(91)	$	47,421
Corporate securities		62,021		2,440		—		64,461
Pass-through MBS issued by GSEs		135,842		7,672		(31)		143,483
Agency CMOs		274,898		8,674		(76)		283,496
Total securities available-for-sale	$	520,261	$	18,798	$	(198)	$	538,861

As a result of the Merger, the Company acquired $652.0 million of securities available-for-sale on the Merger Date.

As of December 31, 2020, there were 0 securities held-to-maturity.

The carrying amount of securities pledged as collateral was $684.0 million and $99.4 million at September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021 and December 31, 2020, there were 0 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 debt 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.  

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	September 30, 2021
	Amortized		Fair
(In thousands)	Cost		Value
Available-for-sale
Within one year	$	1,346	$	1,351
One to five years		270,069		269,665
Five to ten years		209,938		212,881
Beyond ten years		12,929		12,783
Pass-through MBS issued by GSEs and agency CMO		1,212,610		1,212,383
Total	$	1,706,892	$	1,709,063
Held-to-maturity
Pass-through MBS issued by GSEs and agency CMO	$	40,303	$	40,303
Total	$	40,303	$	40,303

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2021		2020		2021		2020
Agency Notes:
Proceeds	$	—	$	—	$	—	$	273
Gross gains		—		—		—		—
Tax expense on gain		—		—		—		—
Gross losses		—		—		—		—
Tax benefit on loss		—		—		—		—
Corporate Securities:
Proceeds		—		—		50,273		25,403
Gross gains		—		—		729		1,344
Tax expense on gain		—		—		232		423
Gross losses		—		—		41		—
Tax benefit on loss		—		—		13		—
Pass through MBS issued by GSEs:
Proceeds		—		5,987		26,823		39,182
Gross gains		—		215		187		2,005
Tax expense on gain		—		67		59		630
Gross losses		—		—		35		—
Tax benefit on loss		—		—		11		—
Agency CMOs:
Proceeds		—		—		41,324		4,199
Gross gains		—		—		268		8
Tax expense on gain		—		—		85		3
Gross losses		—		—		44		—
Tax benefit on loss		—		—		14		—
State and municipal obligations:
Proceeds		—		—		19,657		—
Gross gains		—		—		143		—
Tax expense on gain		—		—		45		—
Gross losses		—		—		—		—
Tax benefit on loss		—		—		—		—

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2021		2020		2021		2020
Proceeds:
Marketable equity securities	$	—	$	137	$	—	$	410

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There were 0 gains on marketable equity securities for the three months ended September 30, 2021. Net gain of $175 thousand was recognized on marketable equity securities for the three months ended September 30, 2020. Net gains of $131 thousand and $139 thousand were recognized on marketable equity securities for the nine months ended September 30, 2021 and 2020, respectively. Marketable equity securities were fully liquidated in connection with the termination of the BMP.

There were 0 sales of securities held-to-maturity during the three months ended September 30, 2021 and 2020.  There were 0 sales of securities held-to-maturity during the nine months ended September 30, 2021 and 2020.

There were 0 transfers to or from securities held-to-maturity during the three months ended September 30, 2021 and 2020.  There were 0 transfers to or from securities held-to-maturity during the nine months ended September 30, 2021 and 2020.

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

	September 30, 2021
	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:
Agency notes	$	81,018	$	1,457	$	0	$	0	$	81,018	$	1,457
Treasury securities		231,984		482		0		0		231,984		482
Corporate securities		17,863		401		0		0		17,863		401
Pass-through MBS issued by GSEs		446,864		6,273		0		0		446,864		6,273
Agency CMOs		347,726		5,118		0		0		347,726		5,118
State and municipal obligations		16,412		178		0		0		16,412		178

	December 31, 2020
	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:
Agency notes	$	22,409	$	91	$	0	$	0	$	22,409	$	91
Pass-through MBS issued by GSEs		5,007		31		0		0		5,007		31
Agency CMOs		6,563		30		4,954		46		11,517		76

The issuers of securities available-for-sale are primarily U.S. government-sponsored entities or agencies. The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality. In accordance with the Company’s investment policy, corporate notes are rated "investment grade" at the time of purchase and the financials of the issuers are reviewed quarterly. It is likely that the Company will not be required to sell the securities before their anticipated recovery, and as such, the Company does not consider these securities to be other-than-temporarily-impaired at September 30, 2021.

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8.LOANS HELD FOR INVESTMENT, NET

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

(In thousands)	September 30, 2021		December 31, 2020
One-to-four family residential and cooperative/condominium apartment	$	683,665	$	184,989
Multifamily residential and residential mixed-use		3,468,262		2,758,743
Commercial real estate ("CRE")		3,814,437		1,878,167
Acquisition, development, and construction ("ADC")		285,379		156,296
Total real estate loans		8,251,743		4,978,195
Commercial and industrial ("C&I")		1,012,415		641,533
Other loans		20,713		2,316
Total		9,284,871		5,622,044
Allowance for credit losses		(81,255)		(41,461)
Loans held for investment, net	$	9,203,616	$	5,580,583

As a result of the Merger, the Company recorded $4.53 billion of loans held for investment on the Merger Date.

As of September 30, 2021, included in C&I loans was $134.1 million of SBA PPP loans. There was $313.4 million of SBA PPP loans at December 31, 2020.  These loans carry a 100% guarantee from the SBA and have 0 allowance for credit losses allocated to them based on the nature of the guarantee. In June 2021, the Company sold $596.2 million of SBA PPP loans and recorded a gain of $20.7 million in Gain on sale of SBA loans in the consolidated statements of income.

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

	At or for the Three Months Ended September 30, 2021
	Real Estate Loans
	One-to-Four
	Family		Multifamily
	Residential and		Residential
	Cooperative/		and
	Condominium		Residential						Total Real				Other
(In thousands)	Apartment		Mixed-Use		CRE		ADC		Estate		C&I		Loans		Total
Allowance for credit losses:
Beginning balance	$	5,522	$	10,285	$	41,201	$	5,158	$	62,166	$	30,095	$	499	$	92,760
Provision (credit) for credit losses		583		(1,998)		(8,649)		(139)		(10,203)		1,943		946		(7,314)
Charge-offs		(1)		(58)		(2,952)		—		(3,011)		(497)		(768)		(4,276)
Recoveries		—		78		3		—		81		4		—		85
Ending balance	$	6,104	$	8,307	$	29,603	$	5,019	$	49,033	$	31,545	$	677	$	81,255

	At or for the Three Months Ended September 30, 2020
	Real Estate Loans
	One-to-Four
	Family		Multifamily
	Residential and		Residential
	Cooperative/		and
	Condominium		Residential						Total Real				Other
(In thousands)	Apartment		Mixed-Use		CRE		ADC		Estate		C&I		Loans		Total
Allowance for credit losses:
Beginning balance	$	671	$	16,666	$	9,859	$	1,777	$	28,973	$	13,502	$	17	$	42,492
Provision (credit) for credit losses		134		3,468		2,162		274		6,038		(107)		—		5,931
Charge-offs		(6)		(13)		0		0		(19)		0		(1)		(20)
Recoveries		0		89		0		0		89		0		0		89
Ending balance	$	799	$	20,210	$	12,021	$	2,051	$	35,081	$	13,395	$	16	$	48,492

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	At or for the Nine Months Ended September 30, 2021
	Real Estate Loans
	One-to-Four
	Family		Multifamily
	Residential and		Residential
	Cooperative/		and
	Condominium		Residential						Total Real				Other
	Apartment		Mixed-Use		CRE		ADC		Estate		C&I		Loans		Total
Allowance for credit losses:
Beginning balance, prior to the adoption of CECL	$	644	$	17,016	$	9,059	$	1,993	$	28,712	$	12,737	$	12	$	41,461
Impact of adopting CECL		1,048		(8,254)		4,849		381		(1,976)		(1,935)		(8)		(3,919)
Adjusted beginning balance as of January 1, 2021		1,692		8,762		13,908		2,374		26,736		10,802		4		37,542
PCD Day 1		2,220		3,292		23,124		117		28,753		23,374		157		52,284
Provision (credit) for credit losses		2,212		(3,361)		(4,068)		2,528		(2,689)		2,215		1,286		812
Charge-offs		(20)		(467)		(3,365)		—		(3,852)		(4,959)		(773)		(9,584)
Recoveries		—		81		4		—		85		113		3		201
Ending balance	$	6,104	$	8,307	$	29,603	$	5,019	$	49,033	$	31,545	$	677	$	81,255

	At or for the Nine Months Ended September 30, 2020
	Real Estate Loans
	One-to-Four
	Family		Multifamily
	Residential and		Residential
	Cooperative/		and
	Condominium		Residential						Total Real				Other
	Apartment		Mixed-Use		CRE		ADC		Estate		C&I		Loans		Total
Allowance for credit losses:
Beginning balance	$	269	$	10,142	$	3,900	$	1,244	$	15,555	$	12,870	$	16	$	28,441
Provision for credit losses		540		10,010		8,127		807		19,484		518		1		20,003
Charge-offs		(10)		(45)		(6)		—		(61)		—		(1)		(62)
Recoveries		—		103		—		—		103		7		—		110
Ending balance	$	799	$	20,210	$	12,021	$	2,051	$	35,081	$	13,395	$	16	$	48,492

The following table presents the amortized cost basis of loans on non-accrual status as of the period indicated:

		September 30, 2021
		Non-accrual with		Non-accrual with
(In thousands)		No Allowance	Allowance			Reserve
One-to-four family residential and cooperative/condominium apartment	$	-	$	4,938	$	781
Multifamily residential and residential mixed-use		859		-		-
CRE		1,240		2,882		812
C&I		-		23,727		11,191
Other		-		374		371
Total	$	2,099	$	31,921	$	13,155

The Company did not recognize interest income on non-accrual loans during the three and nine-months ended September 30, 2021.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method, prior to the adoption of ASC 326, as of the dates indicated:

26

	December 31, 2020
	Real Estate Loans
	One-to-Four
	Family		Multifamily
	Residential and		Residential
	Cooperative/		and
	Condominium		Residential						Total Real				Other
(In thousands)	Apartment		Mixed-Use		CRE		ADC		Estate		C&I		Loans		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	6,474	$	—	$	6,474
Collectively evaluated for impairment		644		17,016		9,059		1,993		28,712		6,263		12		34,987
Total ending allowance balance	$	644	$	17,016	$	9,059	$	1,993	$	28,712	$	12,737	$	12	$	41,461
Loans:
Individually evaluated for impairment	$	—	$	1,863	$	2,704	$	—	$	4,567	$	12,502	$	—	$	17,069
Collectively evaluated for impairment		184,989		2,756,880		1,875,463		156,296		4,973,628		629,031		2,316		5,604,975
Total ending loans balance	$	184,989	$	2,758,743	$	1,878,167	$	156,296	$	4,978,195	$	641,533	$	2,316	$	5,622,044

Impaired Loans (prior to the adoption of ASC 326)

A loan is considered impaired when, based on then current information and events, it is probable that all contractual amounts due will not be collected in accordance with the terms of the loan. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays or shortfalls generally are not classified as impaired. Management determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

The Bank considers TDRs and all non-accrual loans, except non-accrual one-to-four family loans in less than the Federal National Mortgage Association (“FNMA”) Limits, to be impaired. Non-accrual one-to-four family loans equal to or less than the FNMA Limits, as well as all consumer loans, are considered homogeneous loan pools and are not required to be evaluated individually for impairment unless considered a TDR.

Impairment is typically measured using the difference between the outstanding loan principal balance and either: 1) the likely realizable value of a note sale; 2) the fair value of the underlying collateral, net of likely disposal costs, if repayment is expected to come from liquidation of the collateral; or 3) the present value of estimated future cash flows (using the loan’s pre-modification rate for certain performing TDRs). If a TDR is substantially performing in accordance with its restructured terms, management will look to either the potential net liquidation proceeds of the underlying collateral or the present value of the expected cash flows from the debt service in measuring impairment (whichever is deemed most appropriate under the circumstances). If a TDR has re-defaulted, generally the likely realizable net proceeds from either a note sale or the liquidation of the collateral is considered when measuring impairment. Measured impairment is either charged off immediately or, in limited instances, recognized as an allocated reserve within the allowance for loan losses.

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The following tables summarize impaired loans with no related allowance recorded and with related allowance recorded as of the periods indicated (by collateral type within the real estate loan segment):

	December 31, 2020
	Unpaid
	Principal		Recorded		Related
(In thousands)	Balance		Investment(1)		Allowance
With no related allowance recorded:
Multifamily residential and residential mixed-use	$	1,863	$	1,863	$	0
CRE		2,704		2,704		0
Total with no related allowance recorded		4,567		4,567		0
With an allowance recorded:
C&I		12,502		12,502		6,474
Total with an allowance recorded		12,502		12,502		6,474
Total	$	17,069	$	17,069	$	6,474

(1) The recorded investment excludes net deferred costs due to immateriality.

The following table presents information for impaired loans for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30, 2020				September 30, 2020
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment(1)		Recognized(2)		Investment(1)		Recognized(2)
With no related allowance recorded:
One-to-four family residential, including condominium and cooperative apartment	$	—	$	—	$	10	$	4
Multifamily residential and residential mixed-use		1,295		—		416		7
Commercial real estate and commercial mixed-use		1,525		—		2,688		54
Total with no related allowance recorded		2,820		—		3,114		65
With an allowance recorded:
C&I		10,232		—		7,500		153
Total	$	13,052	$	—	$	10,614	$	218

(1) The recorded investment excludes net deferred costs due to immateriality.

(2) Cash basis interest and interest income recognized on accrual basis approximate each other.

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

	September 30, 2021
					Loans 90
					Days or
	30 to 59		60 to 89		More Past Due
	Days		Days		and Still				Total				Total
(In thousands)	Past Due		Past Due		Accruing Interest		Non-accrual		Past Due		Current		Loans
Real estate:
One-to-four family residential, including condominium and cooperative apartment	$	3,135	$	1,245	$	5,021	$	4,938	$	14,339	$	669,326	$	683,665
Multifamily residential and residential mixed-use		10,251		2,738		—		859		13,848		3,454,414		3,468,262
CRE		8,360		1,069		1,004		4,122		14,555		3,799,882		3,814,437
ADC		17,700		0		0		0		17,700		267,679		285,379
Total real estate		39,446		5,052		6,025		9,919		60,442		8,191,301		8,251,743
C&I		10,962		2,455		257		23,727		37,401		975,014		1,012,415
Other		730		2		0		374		1,106		19,607		20,713
Total	$	51,138	$	7,509	$	6,282	$	34,020	$	98,949	$	9,185,922	$	9,284,871

December 31, 2020
	Loans 90
	Days or