Dime Community Bancshares Inc NY
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
DCOM$42.21-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0000846617-24-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0000846617-24-000053
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 129 current paragraphs.
65 unchanged; 42 reworded; 15 added; 8 removed; 7 previous and 7 current paragraphs rearranged.
Tables are not compared: 11 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Loan Restructurings
Current report
Premises and fixed assets decreased $8.8 million during the six months ended June 30, 2024, to $36.1 million at period end, primarily due to the sale of two Bank owned buildings.
Current report
Subordinated debt increased $62.6 million during the six months ended June 30, 2024, to $262.8 million at period end, due to the Company raising $65.0 million of gross proceeds from a registered public offering of its 9.000% fixed-to-floating rate subordinated notes due 2034 (the “Notes”). Subsequently, on July 9, 2024, the Company issued and sold an additional $9.8 million of Notes, pursuant to an overallotment option granted to the underwriters of the offering. Including the overallotment option, the total gross proceeds from the offering were $74.8 million, before discounts and estimated offering expenses.
Current report
*Interest Expense.*Interest expense was $83.9 million during the three months ended June 30, 2024, compared to $71.9 million during the three months ended June 30, 2023. During the three months ended June 30, 2024, interest expense increased $12.0 million, primarily reflecting an increase in interest expense of $20.3 million on deposits. The increased interest expense on deposits primarily reflects a $782.2 million increase in average balances of money market accounts and a 112-basis point increase in rates paid on such deposits, a $56.5 million increase in average balances of savings accounts and a 92-basis point increase in rates paid on such deposits, and a 75-basis point increase in rates paid on CDs, partially offset by a decrease of $152.6 million in average balances of such deposits. The increases in interest expenses on money market accounts, saving accounts and CDs were primarily due to price competition among banks and other financial institutions and the rising interest rate environment.
Current report
Provision for Credit Losses. We recorded a credit loss provision of $5.6 million during the three months ended June 30, 2024, compared to a credit loss provision of $892 thousand for the three months ended June 30, 2023. The $5.6 million credit loss provision for the three months ended June 30, 2024, was primarily associated with increased provisioning for our pooled multifamily loan portfolio. The $892 thousand credit loss provision for the 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 the reserve on Purchased Credit Deteriorated (“PCD”) loans that were acquired as part of the Merger in 2021.
Current report
*General.*Net income was $36.2 million during the six months ended June 30, 2024, compared to net income of $64.8 million for the six months ended June 30, 2023. During the six months ended June 30, 2024, net interest income decreased by $18.9 million, credit loss provision increased by $13.6 million, non-interest expense increased by $8.5 million, non-interest income increased by $2.9 million, and income tax expense decreased by $9.5 million, compared to the six months ended June 30, 2023.
Current report
Analysis of Net Interest Income
Current report
(2)Includes mortgage escrow deposits.
Current report
(3)Amounts are net of deferred origination costs/(fees) and allowance for credit losses, and include loans held for sale.
Current report
Rate/Volume Analysis
Current report
Net interest income. Net interest income was $147.0 million during the six months ended June 30, 2024, a decrease of $18.9 million from the six months ended June 30, 2023. Average interest-earning assets were $12.82 billion for the six months ended June 30, 2024, an increase of $32.7 million from $12.79 billion for the six months ended June 30, 2023. Net interest margin was 2.31% during the six months ended June 30, 2024, down from 2.62% during the six months ended June 30, 2023.
Current report
*Interest Income.*Interest income was $320.4 million during the six months ended June 30, 2024, compared to $292.8 million during the six months ended June 30, 2023. During the six months ended June 30, 2024, interest income increased $27.6 million from the six months ended June 30, 2023, primarily reflecting increases in interest income of $11.8 million on business loan income, $7.3 million on non-owner-occupied loan income, $4.3 million on multifamily loan income, $3.5 million on one-to-four family loan income and $4.3 million on other short-term investments.
Current report
*Non-Interest Income.*Non-interest income was $22.3 million during the six months ended June 30, 2024, compared to $19.4 million during the six months ended June 30, 2023. During the six months ended June 30, 2024, non-interest income increased $2.9 million from the six months ended June 30, 2023, primarily reflecting an increase of $6.7 million from gain on sale of Bank’s premises, partially offset by a decrease of $4.1 million related to loan level derivative income.
Current report
*Non-Interest Expense.*Non-interest expense was $108.2 million during the six months ended June 30, 2024, compared to $99.7 million during the six months ended June 30, 2023. During the six months ended June 30, 2024, non-interest expense increased $8.5 million from the six months ended June 30, 2023, primarily due to a $7.7 million increase in salaries and employee benefits.
Current report
Non-interest expense was 1.59% and 1.47% of average assets during the six months ended June 30, 2024 and 2023, respectively.
Removed paragraphs (8)
Previous report
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.
Previous report
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.
Previous report
Uncertainties Regarding the Estimate
Previous report
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.
Previous report
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.
Previous report
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, 2024 and December 31, 2023 the Bank did not have any repurchase agreements.
Previous report
TDR Disclosures Prior to Our Adoption of ASU No. 2022-02
Previous report
Prior to our adoption of ASU No. 2022-02, we accounted for 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.
Reworded paragraphs (42)
Previous wording
of loans acquired in a business combination 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.
Current wording
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, 2023 contains a summary of significant accounting policies. These accounting policies may require various levels of subjectivity, estimates or judgment by management. Policies with respect to the methodologies it uses to determine the allowance for credit losses on loans held for investment and fair value of loans acquired in a business combination 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.
Previous wording
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.
Current wording
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 and the experience, ability, and depth of the lending management and other relevant staff; (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 volume and severity of past due loans; (5) the quality of our loan review system; (6) the value of underlying collateral for collateralized loans; (7) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (8) the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.
Previous wording
Total deposits (including escrow) increased $368.2 million during the three months ended March 31, 2024, compared to an increase of $315.8 million for the three months ended March 31, 2023. Within deposits, core deposits (i.e., non-CDs) increased $420.7 million during the three months ended March 31, 2024 compared to a decrease of $88.1 million during the three months ended March 31, 2023. The increase in core deposits was primarily due to growth in business deposits. 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 correspondent banks. At March 31, 2024, the Bank had remaining borrowing capacity of $1.76 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements (i.e., 4.5% of the Bank’s outstanding FHLBNY borrowings).
Current wording
Total deposits (including escrow) increased $497.8 million during the six months ended June 30, 2024, compared to an increase of $268.3 million for the six months ended June 30, 2023. Within deposits, core deposits (i.e., non-CDs) increased $723.2 million during the six months ended June 30, 2024 compared to a decrease of $147.1 million during the six months ended June 30, 2023. The increase in core deposits was primarily due to growth in business deposits. 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 correspondent banks. At June 30, 2024, the Bank had remaining borrowing capacity of $1.88 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements (i.e., 4.5% of the Bank’s outstanding FHLBNY borrowings).
Previous wording
The Bank reduced its outstanding FHLBNY advances by $540.0 million during the three months ended March 31, 2024, compared to a $367.0 million increase during the three months ended March 31, 2023. See Note 12. “FHLBNY Advances” for further information.
Current wording
The Bank reduced its outstanding FHLBNY advances by $680.0 million during the six months ended June 30, 2024, compared to a $317.0 million increase during the six months ended June 30, 2023. See Note 12. “FHLBNY Advances” for further information.
Previous wording
Subordinated debentures totaled $200.2 million at March 31, 2024 and at December 31, 2023, respectively. See Note 13. “Subordinated Debentures” to our Consolidated Financial Statements for further information.
Current wording
Subordinated debentures totaled $262.8 million and $200.2 million at June 30, 2024 and at December 31, 2023, respectively. Subsequently, on July 9, 2024, the Company issued and sold an additional $9.8 million of Notes, pursuant to an overallotment option granted to the underwriters of the offering. Including the overallotment option, the total gross proceeds from the offering were $74.8 million, before discounts and estimated offering expenses. See Note 13. “Subordinated Debentures” to our Consolidated Financial Statements for further information.
Previous wording
During the three months ended March 31, 2024 and 2023, real estate loan originations totaled $98.3 million and $346.7 million, respectively. During the three months ended March 31, 2024 and 2023, C&I loan originations totaled $21.1 million and $5.2 million, respectively.
Current wording
During the six months ended June 30, 2024 and 2023, business loan originations totaled $171.6 million and $143.6 million, respectively. During the six months ended June 30, 2024 and 2023, real estate loan originations (excluding owner-occupied commercial real estate) totaled $88.2 million and $508.9 million, respectively.
Previous wording
The Bank did not have any sales or purchases of securities available-for-sale during the three months ended March 31, 2024. The Bank had sales and purchases of securities available-for-sale of $79.3 million and $78.2 million, respectively during the three months ended March 31, 2023. Proceeds from pay downs and calls and maturities of available-for-sale securities were $29.7 million and $16.2 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
The Bank did not have any sales of securities available-for-sale during the six months ended June 30, 2024. The Bank had sales of securities available for sale of $78.7 million during the six months ended June 30, 2023. Purchases of available-for-sale securities totaled $4.0 million and $79.3 million during the six months ended June 30, 2024 and 2023, respectively. Proceeds from pay downs and calls and maturities of available-for-sale securities were $76.8 million and $38.4 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
The Bank did not have any sales of held-to-maturity securities during the three months ended March 31, 2024 or 2023, respectively. The Bank did not have any purchases of securities held-to-maturity during the three months ended March 31, 2024. Purchases of held-to-maturity securities totaled $23.7 million during the three months ended March 31, 2023. Proceeds from pay downs and calls and maturities of held-to-maturity securities were $6.1 million and $4.7 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
The Bank did not have any sales of held-to-maturity securities during the six months ended June 30, 2024 or 2023, respectively. The Bank had purchases of securities held-to-maturity of $7.4 million and $27.1 million during the six months ended June 30, 2024 and 2023, respectively. Proceeds from pay downs and calls and maturities of held-to-maturity securities were $15.8 million and $10.7 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
During the three months ended March 31, 2024, the Holding Company did not repurchase any shares of its common stock. The Holding Company repurchased 24,813 shares of its common stock at an aggregate cost of $715 thousand during the three months ended March 31, 2023. As of March 31, 2024, 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, Use of Proceeds and Issuer Purchases of Equity Securities" for additional information about repurchases of common stock.
Current wording
During the six months ended June 30, 2024, the Holding Company did not repurchase any shares of its common stock. The Holding Company repurchased 36,813 shares of its common stock at an aggregate cost of $947 thousand during the six months ended June 30, 2023. As of June 30, 2024, 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, Use of Proceeds and Issuer Purchases of Equity Securities" for additional information about repurchases of common stock.
Previous wording
The Holding Company paid $1.8 million in cash dividends on its preferred stock during the three months ended March 31, 2024 and 2023, respectively.
Current wording
The Holding Company paid $3.6 million in cash dividends on its preferred stock during the six months ended June 30, 2024 and 2023, respectively.
Previous wording
The Holding Company paid $9.7 million and $9.2 million in cash dividends on its common stock during the three months ended March 31, 2024 and 2023, respectively.
Current wording
The Holding Company paid $19.0 million and $18.5 million in cash dividends on its common stock during the six months ended June 30, 2024 and 2023, respectively.
Previous wording
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, 2024, the Bank had $142.0 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 ending December 31, 2024.
Current wording
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 June 30, 2024, the Bank had $189.0 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 ending December 31, 2024.
Previous wording
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.
Current wording
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 commercial and industrial (“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.
Previous wording
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 to calculate a potential collateral shortfall and to reserve appropriately for the potential loss. If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure action is completed, the property securing the loan is transferred to Other Real Estate Owned (“OREO”) status. We generally attempt to utilize all available remedies, such as note sales in lieu of foreclosure, in an effort to resolve non-accrual loans
Current wording
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 to calculate a potential collateral shortfall and to reserve appropriately for the potential loss. If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure action is completed, the property securing the loan is transferred to Other Real Estate Owned (“OREO”) status. We generally attempt to utilize all available remedies, such as note sales in lieu of foreclosure, in an effort to resolve non-accrual loans and OREO properties as quickly and prudently as possible in consideration of market conditions, the physical condition of the property and any other mitigating circumstances. We have not initiated any expected or imminent foreclosure proceedings that are likely to have a material adverse impact on our Consolidated Financial Statements. In the event that a non-accrual loan is subsequently brought current, it is returned to accrual status once the doubt concerning collectability has been removed and the borrower has demonstrated performance in accordance with the loan terms and conditions for a period of generally at least six months.
Previous wording
Within our held-for-investment loan portfolio, non-accrual loans totaled $34.8 million at March 31, 2024 and $29.1 million at December 31, 2023.
Current wording
Within our held-for-investment loan portfolio, non-accrual loans totaled $24.8 million at June 30, 2024 and $29.1 million at December 31, 2023.
Previous wording
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.
Current wording
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.
Previous wording
There was no carrying value of OREO properties on our Consolidated Statement of Financial Condition at March 31, 2024 or December 31, 2023. We did not recognize any provisions for losses on OREO properties during the three months ended March 31, 2024 or 2023.
Current wording
There was no carrying value of OREO properties on our Consolidated Statement of Financial Condition at June 30, 2024 or December 31, 2023. We did not recognize any provisions for losses on OREO properties during the six months ended June 30, 2024 or 2023.
Previous wording
At March 31, 2024, we had loans totaling $26.2 million that were past due between 30 and 59 days. At December 31, 2023, we had loans totaling $12.0 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.
Current wording
At June 30, 2024, we had loans totaling $20.9 million that were past due between 30 and 59 days. At December 31, 2023, we had loans totaling $12.0 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.
Previous wording
At March 31, 2024, we had loans totaling $25.2 million that were past due between 60 and 89 days. At December 31, 2023, we had loans totaling $1.3 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.
Current wording
At June 30, 2024, we had loans totaling $32.4 million that were past due between 60 and 89 days. At December 31, 2023, we had loans totaling $1.3 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.
Previous wording
We maintain an allowance, recorded in other liabilities, associated with unfunded loan commitments accepted by the borrower. The amount of our allowance was $2.9 million and $2.7 million at March 31, 2024 and December 31, 2023, 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.
Current wording
We maintain an allowance, recorded in other liabilities, associated with unfunded loan commitments accepted by the borrower. The amount of our allowance was $3.1 million and $2.7 million at June 30, 2024 and December 31, 2023, 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.
Previous wording
We recorded a credit loss provision of $5.2 million during the three months ended March 31, 2024, compared to a credit loss recovery of $3.6 million for the three months ended March 31, 2023. The $5.2 million credit loss provision for the three months ended March 31, 2024, was primarily associated with provisioning for the Bank’s pooled multifamily loan portfolio. The $3.6 million credit loss recovery for the three months ended March 31, 2023, was primarily associated with a reduction in reserves on pooled Purchased Credit Deteriorated (“PCD”) loans that were acquired as part of the Company’s 2021 merger of equals transaction.
Current wording
We recorded a credit loss provision of $10.8 million during the six months ended June 30, 2024, compared to a credit loss recovery of $2.8 million for the six months ended June 30, 2023. The $10.8 million credit loss provision for the six months ended June 30, 2024, was primarily associated with provisioning for the Bank’s pooled multifamily loan portfolio. 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 Purchased Credit Deteriorated (“PCD”) loans that were acquired as part of the Company’s 2021 Merger.
Previous wording
For a further discussion of the allowance for credit losses and related activity during the three months ended March 31, 2024 and 2023, please see Note 7 to the condensed Consolidated Financial Statements.
Current wording
For a further discussion of the allowance for credit losses and related activity during the six months ended June 30, 2024 and 2023, please see Note 7 to the condensed Consolidated Financial Statements.
Previous wording
Assets*.*Assets totaled $13.50 billion at March 31, 2024, $134.9 million below their level at December 31, 2023, primarily due to decreases of $86.7 million in cash and due from banks, $32.3 million in total investment securities, $24.4 million in restricted stock and $13.2 million in the loan portfolio, partially offset by an increase of $13.0 million in derivative assets.
Current wording
Assets*.*Assets totaled $13.55 billion at June 30, 2024, $87.2 million below their level at December 31, 2023, primarily due to decreases of $73.7 million in total investment securities, $43.6 million in cash and due from banks, $30.3 million in restricted stock and $8.8 million in premises and fixed assets, partially offset by increases of $45.4 million in the loan portfolio, $12.4 million in derivative assets and $4.9 million in BOLI.
Previous wording
Total loans, net of allowance decreased $13.2 million during the three months ended March 31, 2024, to $10.69 billion at period end. During the three months ended March 31, 2024, we had loan originations of $98.3 million.
Current wording
Total loans, net of allowance increased $45.4 million during the six months ended June 30, 2024, to $10.75 billion at period end. During the six months ended June 30, 2024, we had loan originations of $259.9 million.
Previous wording
Total investment securities decreased $32.3 million during the three months ended March 31, 2024, to $1.45 billion at period end, primarily due to proceeds from principal payments, calls and maturities of $35.6 million, offset by a decrease in unrealized losses of $3.3 million. There were no transfers to or from securities held-to-maturity during the three months ended March 31, 2024.
Current wording
Total investment securities decreased $73.7 million during the six months ended June 30, 2024, to $1.41 billion at period end, primarily due to proceeds from principal payments, calls and maturities of $92.2 million, offset by purchases of $11.4 million and a decrease in unrealized losses of $7.1 million. There were no transfers to or from securities held-to-maturity during the six months ended June 30, 2024.
Previous wording
Total restricted stock decreased $24.4 million during the three months ended March 31, 2024, to $74.3 million at period end, primarily due to FHLB advance terminations.
Current wording
Total restricted stock decreased $30.3 million during the six months ended June 30, 2024, to $68.4 million at period end, primarily due to a reduction in FHLB advances.
Previous wording
Derivative assets increased $13.1 million during the three months ended March 31, 2024, to $135.2 million at period end, primarily due to an increase in cash flows hedges.
Current wording
Derivative assets increased $12.4 million during the six months ended June 30, 2024, to $134.5 million at period end, primarily due to an increase in cash flows hedges.
Previous wording
Liabilities*.*Total liabilities decreased $148.1 million during the three months ended March 31, 2024, to $12.26 billion at period end, primarily due to a decrease of $540.0 million in FHLB advances, partially offset by increases of $368.2 million in deposits (including mortgage escrow accounts), and $24.8 million in derivative cash collateral.
Current wording
Liabilities*.*Total liabilities decreased $111.6 million during the six months ended June 30, 2024, to $12.30 billion at period end, primarily due to a decrease of $680.0 million in FHLB advances and a decrease of $14.4 million in other liabilities, partially offset by increases of $497.8 million in deposits (including mortgage escrow accounts), $62.6 million in subordinated debt and $22.0 million in derivative cash collateral.
Previous wording
Stockholders’ Equity*.*Stockholders’ equity increased $13.1 million during the three months ended March 31, 2024, to $1.24 billion at period end, primarily due to net income of $17.7 million and other comprehensive income of $6.1 million, partially offset by common stock dividends of $9.7 million, and preferred stock dividends of $1.8 million.
Current wording
Stockholders’ Equity*.*Stockholders’ equity increased $24.4 million during the six months ended June 30, 2024, to $1.25 billion at period end, primarily due to net income of $36.2 million and other comprehensive income of $8.8 million, partially offset by common stock dividends of $19.5 million, and preferred stock dividends of $3.6 million.
Previous wording
*General.*Net income was $17.7 million during the three months ended March 31, 2024, compared to net income of $37.3 million for the three months ended March 31, 2023. During the three months ended March 31, 2024, net interest income decreased by $14.2 million, non-interest income increased by $1.5 million, non-interest expense increased by $5.0 million, the credit loss provision increased by $8.9 million, and income tax expense decreased by $7.0 million, compared to the three months ended March 31, 2023.
Current wording
*General.*Net income was $18.5 million during the three months ended June 30, 2024, compared to net income of $27.5 million for the three months ended June 30, 2023. During the three months ended June 30, 2024, net interest income decreased by $4.7 million, the credit loss provision increased by $4.7 million, non-interest expense increased by $3.5 million, non-interest income increased by $1.4 million, and income tax expense decreased by $2.5 million, compared to the three months ended June 30, 2023.
Previous wording
The discussion of net interest income for the three months ended March 31, 2024 and 2023 should be read in conjunction with the following tables, which set forth certain information related to the Consolidated Statements of Operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated. The average yields and costs were derived by dividing income or expense by the average balance of their related assets or liabilities during the periods represented. Average balances were derived from average daily balances. No tax-equivalent adjustments have been made for interest income exempt from federal, state, and local taxation. The yields include loan fees consisting of amortization of loan origination and commitment fees and certain direct and indirect origination costs, prepayment fees, and late charges that are considered adjustments to yields. Net loan costs included in interest income were $297 thousand during the three months ended March 31, 2024. Net loan fees included in interest income were $292 thousand during the three months ended March 31, 2023. The decrease in net loan fees was primarily due to the decline in loan prepayment fees in 2024.
Current wording
The discussion of net interest income for the three months ended June 30, 2024 and 2023 should be read in conjunction with the following tables, which set forth certain information related to the Consolidated Statements of Operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated. The average yields and costs were derived by dividing income or expense by the average balance of their related assets or liabilities during the periods represented. Average balances were derived from average daily balances. No tax-equivalent adjustments have been made for interest income exempt from federal, state, and local taxation. The yields include loan fees consisting of amortization of loan origination and commitment fees and certain direct and indirect origination costs, prepayment fees, and late charges that are considered adjustments to yields. Net loan costs included in interest income were $7 thousand during the three months ended June 30, 2024. Net loan fees included in interest income were $363 thousand during the three months ended June 30, 2023. The decrease in net loan fees was primarily due to the decline in deferred fees and the decline in loan prepayment fees in 2024.
Previous wording
Net interest income. Net interest income was $71.5 million during the three months ended March 31, 2024, a decrease of $14.2 million from the three months ended March 31, 2023. Average interest-earning assets were $13.02 billion for the three months ended March 31, 2024, an increase of $330.5 million from $12.69 billion for the three months ended March 31, 2023. Net interest margin was 2.21% during the three months ended March 31, 2024, down from 2.74% during the three months ended March 31, 2023.
Current wording
Net interest income. Net interest income was $75.5 million during the three months ended June 30, 2024, a decrease of $4.7 million from the three months ended June 30, 2023. Average interest-earning assets were $12.62 billion for the three months ended June 30, 2024, a decrease of $264.0 million from $12.89 billion for the three months ended June 30, 2023. Net interest margin was 2.41% during the three months ended June 30, 2024, down from 2.50% during the three months ended June 30, 2023.
Previous wording
*Interest Income.*Interest income was $161.0 million during the three months ended March 31, 2024, compared to $140.7 million during the three months ended March 31, 2023. During the three months ended March 31, 2024, interest income increased $20.3 million from the three months ended March 31, 2023, primarily reflecting increases in interest income of $5.8 million on other short-term investments, $5.5 million on business loan income, $5.1 million on non-owner-occupied loan income, $3.7 million on multifamily loan income and $2.2 million on one-to-four family loan income.
Current wording
*Interest Income.*Interest income was $159.4 million during the three months ended June 30, 2024, compared to $152.1 million during the three months ended June 30, 2023. During the three months ended June 30, 2024, interest income increased $7.3 million from the three months ended June 30, 2023, primarily reflecting increases in interest income of $6.2 million on business loan income, $2.2 million on non-owner-occupied loan income, $1.3 million on one-to-four family loan income and $652 thousand on multifamily loan income.
Previous wording
*Non-Interest Income.*Non-interest income was $10.5 million during the three months ended March 31, 2024, compared to $9.0 million during the three months ended March 31, 2023. During the three months ended March 31, 2024, non-interest income increased $1.5 million from the three months ended March 31, 2023, reflecting an increase of $3.0 million from gain on sale of Bank’s premises, partially offset by a decrease of $2.7 million related to loan level derivative income.
Current wording
*Non-Interest Income.*Non-interest income was $11.8 million during the three months ended June 30, 2024, compared to $10.4 million during the three months ended June 30, 2023. During the three months ended June 30, 2024, non-interest income increased $1.4 million from the three months ended June 30, 2023, reflecting an increase of $3.7 million from gain on sale of Bank’s premises, partially offset by a decrease of $1.4 million related to loan level derivative income.
Previous wording
*Non-Interest Expense.*Non-interest expense was $52.5 million during the three months ended March 31, 2024, compared to $47.5 million during the three months ended March 31, 2023. During the three months ended March 31, 2024, non-interest expense increased $5.0 million from the three months ended March 31, 2023, primarily due to a $5.4 million increase in salaries and employee benefits.
Current wording
*Non-Interest Expense.*Non-interest expense was $55.7 million during the three months ended June 30, 2024, compared to $52.2 million during the three months ended June 30, 2023. During the three months ended June 30, 2024, non-interest expense increased $3.5 million from the three months ended June 30, 2023, primarily due to a $2.3 million increase in salaries and employee benefits and a $1.1 million increase in professional services.
Previous wording
Non-interest expense was 1.52% and 1.41% of average assets during the three months ended March 31, 2024 and 2023, respectively.
Current wording
Non-interest expense was 1.66% and 1.53% of average assets during the three months ended June 30, 2024 and 2023, respectively.
Previous wording
Income Tax Expense. Income tax expense was $6.6 million during the three months ended March 31, 2024, compared to income tax expense of $13.6 million during the three months ended March 31, 2023. The reported effective tax rate for the three months ended March 31, 2024 was 27.1%, and 26.8% for the three months ended March 31, 2023.
Current wording
Income Tax Expense. Income tax expense was $7.6 million during the three months ended June 30, 2024, compared to income tax expense of $10.0 million during the three months ended June 30, 2023. The reported effective tax rate for the three months ended June 30, 2024 was 29.0%, and 26.8% for the three months ended June 30, 2023.
Previous wording
(1) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.
Current wording
(1)Business loans include commercial and industrial loans and owner-occupied commercial real estate loans.
Previous wording
The increased interest income on short-term investments was due to a $323.3 million increase in the average balances and a 139-basis point increase in the yield of such short-term investments in the period. The increased interest income on business loans was due to a 62-basis point increase in the yield and an increase of $107.8 million in the average balances of such loans in the period. The increased interest income on non-owner-occupied loan income was related to a 49-basis point increase in the yield and an increase of $54.4 million in the average balances of such loans in the period. The increased interest income on multifamily loans was related to a 41-basis point increase in the yield, partially offset by a decrease of $73.5 million in the average balances of such loans in the period. The increased interest income on one-to-four family loans was related to a 51-basis point increase in the yield and a $98.3 million increase in the average balances of such loans in the period. Increased yields across interest-earning assets were a result of the rising interest rate environment.
Current wording
The increased interest income on business loans was due to a 65-basis point increase in the yield and an increase of $124.0 million in the average balances of such loans in the period. During the six months ended June 30, 2024, there was a recovery of interest income from a loan that was previously on non-accrual status in the amount of $1.3 million. The increased interest income on non-owner-occupied loan income was related to a 37-basis point increase in the yield and an increase of $37.8 million in the average balances of such loans in the period. The increased interest income on multifamily loans was related to a 34-basis point increase in the yield, partially offset by a decrease of $120.1 million in the average balances of such loans in the period. The increased interest income on one-to-four family loans was related to a 42-basis point increase in the yield and a $77.9 million increase in the average balances of such loans in the period. The increased interest income on short-term investments was to a 93-basis point increase in the yield and a $84.2 million increase in the average balances of such short-term investments in the period. Increased yields across these interest-earning assets were a result of the rising interest rate environment.
Previous wording
*Interest Expense.*Interest expense was $89.5 million during the three months ended March 31, 2024, compared to $54.9 million during the three months ended March 31, 2023. During the three months ended March 31, 2024, interest expense increased $34.6 million, primarily reflecting an increase in interest expense of $35.8 million on deposits. The increased interest expense on deposits primarily reflects a 159-basis point increase in rates paid on money market accounts and a
Current wording
*Interest Expense.*Interest expense was $173.4 million during the six months ended June 30, 2024, compared to $126.8 million during the six months ended June 30, 2023. During the six months ended June 30, 2024, interest expense increased $46.6 million, primarily reflecting an increase in interest expense of $56.1 million on deposits. The increased interest expense on deposits primarily reflects a 135-basis point increase in rates paid on money market accounts and a $721.2
Showing the first 40 of 42 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
The increased interest income on business loans was due to a $140.5 million increase in the average balances and a 67-basis point increase in the yield of such loans in the period. During the three months ended June 30, 2024, there was a recovery of interest income from a loan that was previously on non-accrual status in the amount of $1.3 million. The increased interest income on non-owner-occupied loan income was related to an increase of $21.3 million in the average balances and a 25-basis point increase in the yield of such loans in the period. The increased interest income on one-to-four family loans was related to a 33-basis point increase in the yield and a $57.7 million increase in the average balances of such loans in the period. The increased interest income on multifamily loans was related to a 26-basis point increase in the yield, partially offset by a decrease of $166.5 million in the average balances of such loans in the period. Increased yields across interest-earning assets were a result of the rising interest rate environment.
Current report — wording carried from elsewhere
Comparison of Operating Results for the Six Months Ended June 30, 2024 and 2023
Current report — wording carried from elsewhere
The discussion of net interest income for the six months ended June 30, 2024 and 2023 should be read in conjunction with the following tables, which set forth certain information related to the Consolidated Statements of Operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated. The average yields and costs were derived by dividing income or expense by the average balance of their related assets or liabilities during the periods represented. Average balances were derived from average daily balances. No tax-equivalent adjustments have been made for interest income exempt from federal, state, and local taxation. The yields include loan fees consisting of amortization of loan origination and commitment fees and certain direct and indirect origination costs, prepayment fees, and late charges that are considered adjustments to yields. Net loan costs included in interest income were $304 thousand during the six months ended June 30, 2024. Net loan fees included in interest income were $655 thousand during the six months ended June 30, 2023. The decrease in net loan fees was primarily due to the decline in loan deferred fees and the decline in loan prepayment fees in 2024.
Current report — wording carried from elsewhere
(4)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
Current report — wording carried from elsewhere
(5)Net interest margin represents net interest income divided by average-interest earning assets.
Current report — wording carried from elsewhere
(2) Amounts are net of deferred origination costs/ (fees) and allowance for credit losses, and include loans held for sale.
Current report — wording carried from elsewhere
Income Tax Expense. Income tax expense was $14.1 million during the six months ended June 30, 2024, compared to income tax expense of $23.7 million during the six months ended June 30, 2023. The reported effective tax rate for the six months ended June 30, 2024, was 28.1%, and 26.8% for the six months ended June 30, 2023.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
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, 2023 contains a summary of significant accounting policies. These accounting policies may require various levels of subjectivity, estimates or judgment by management. Policies with respect to the methodologies it uses to determine the allowance for credit losses on loans held for investment and fair value
Previous report — wording carried elsewhere
Fair value of loans acquired in a business combination* *
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Methods and Assumptions Underlying the Estimate
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Impact on Financial Condition and Results of Operations
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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.
Previous report — wording carried elsewhere
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
Previous report — wording carried elsewhere
(1) Business loans include commercial and industrial loans, owner-occupied commercial real estate loans and PPP loans.