Dime Commercial Bancshares, Inc. /NY/ 10-K

Item 8. Financial Statements and Supplementary Data CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2020 2019 ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 107,729 ​ $ 77,693 Interest-bearing deposits with banks ​ ​ 769,099 ​ ​ 39,501 Total cash and cash equivalents ​ ​ 876,828 ​ ​ 117,194 ​ ​ ​ ​ ​ ​ ​ Securities available for sale, at fair value ​ ​ 450,360 ​ ​ 638,291 Securities held to maturity (fair value of $ 89,325 and $ 135,027 , respectively) ​ ​ 85,700 ​ ​ 133,638 Total securities ​ ​ 536,060 ​ ​ 771,929 ​ ​ ​ ​ ​ ​ ​ Securities, restricted ​ ​ 23,362 ​ ​ 32,879 ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ ​ 52,785 ​ ​ 12,643 ​ ​ ​ ​ ​ ​ ​ Loans held for investment ​ ​ 4,597,403 ​ ​ 3,680,285 Allowance for credit losses ​ ​ ( 44,200 ) ​ ​ ( 32,786 ) Loans, net ​ ​ 4,553,203 ​ ​ 3,647,499 ​ ​ ​ ​ ​ ​ ​ Premises and equipment, net ​ ​ 34,872 ​ ​ 34,062 Operating lease right-of-use assets ​ ​ 44,007 ​ ​ 43,450 Accrued interest receivable ​ ​ 16,566 ​ ​ 10,908 Goodwill ​ ​ 105,950 ​ ​ 105,950 Other intangible assets ​ ​ 3,378 ​ ​ 3,677 Prepaid pension ​ ​ 10,313 ​ ​ 10,988 Bank owned life insurance ​ ​ 93,900 ​ ​ 91,942 Other assets ​ ​ 83,072 ​ ​ 38,399 Total assets ​ $ 6,434,296 ​ $ 4,921,520 ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ Demand deposits ​ $ 2,472,727 ​ $ 1,518,958 Savings, NOW and money market deposits ​ ​ 2,728,081 ​ ​ 1,987,712 Certificates of deposit of $100,000 or more ​ ​ 216,017 ​ ​ 214,093 Other time deposits ​ ​ 72,428 ​ ​ 93,884 Total deposits ​ ​ 5,489,253 ​ ​ 3,814,647 ​ ​ ​ ​ ​ ​ ​ Repurchase agreements ​ ​ 1,223 ​ ​ 999 Federal Home Loan Bank ("FHLB") advances ​ ​ 215,000 ​ ​ 435,000 Subordinated debentures, net ​ ​ 79,059 ​ ​ 78,920 Operating lease liabilities ​ ​ 46,713 ​ ​ 45,977 Other liabilities and accrued expenses ​ ​ 85,217 ​ ​ 48,823 Total liabilities ​ ​ 5,916,465 ​ ​ 4,424,366 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ ​ ​ ​ ​ Preferred stock, par value $ .01 per share ( 2,000,000 shares authorized; none issued) ​ ​ — ​ ​ — Common stock, par value $ .01 per share ( 40,000,000 shares authorized; 19,951,955 and 19,898,022 shares issued, respectively; and 19,743,710 and 19,836,797 shares outstanding, respectively) ​ ​ 199 ​ ​ 199 Surplus ​ ​ 360,741 ​ ​ 356,436 Retained earnings ​ ​ 172,075 ​ ​ 150,703 Treasury stock at cost, 208,245 and 61,225 shares, respectively ​ ​ ( 5,056 ) ​ ​ ( 1,843 ) ​ ​ ​ 527,959 ​ ​ 505,495 Accumulated other comprehensive loss, net of income taxes ​ ​ ( 10,128 ) ​ ​ ( 8,341 ) Total stockholders’ equity ​ ​ 517,831 ​ ​ 497,154 Total liabilities and stockholders’ equity ​ $ 6,434,296 ​ $ 4,921,520 See accompanying Notes to the Consolidated Financial Statements. Page -46- CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans (including fee income) ​ $ 169,411 ​ $ 158,228 ​ $ 144,380 Mortgage-backed securities, CMOs and other asset-backed securities ​ ​ 9,329 ​ ​ 16,182 ​ ​ 16,591 U.S. GSE securities ​ ​ 365 ​ ​ 465 ​ ​ 837 State and municipal obligations ​ ​ 1,843 ​ ​ 2,234 ​ ​ 2,812 Corporate bonds ​ ​ 1,070 ​ ​ 1,200 ​ ​ 1,422 Deposits with banks ​ ​ 673 ​ ​ 1,697 ​ ​ 1,076 Other interest and dividend income ​ ​ 1,541 ​ ​ 1,535 ​ ​ 1,866 Total interest income ​ ​ 184,232 ​ ​ 181,541 ​ ​ 168,984 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Savings, NOW and money market deposits ​ ​ 10,435 ​ ​ 23,687 ​ ​ 15,928 Certificates of deposit of $100,000 or more ​ ​ 3,346 ​ ​ 4,270 ​ ​ 3,007 Other time deposits ​ ​ 1,198 ​ ​ 1,502 ​ ​ 1,801 Federal funds purchased and repurchase agreements ​ ​ 79 ​ ​ 767 ​ ​ 1,200 FHLB advances ​ ​ 3,992 ​ ​ 4,573 ​ ​ 5,729 Subordinated debentures ​ ​ 4,401 ​ ​ 4,539 ​ ​ 4,539 Total interest expense ​ ​ 23,451 ​ ​ 39,338 ​ ​ 32,204 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ 160,781 ​ ​ 142,203 ​ ​ 136,780 Provision for credit losses ​ ​ 11,500 ​ ​ 5,700 ​ ​ 1,800 Net interest income after provision for credit losses ​ ​ 149,281 ​ ​ 136,503 ​ ​ 134,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Service charges and other fees ​ ​ 8,955 ​ ​ 10,059 ​ ​ 9,853 Net securities gains (losses) ​ ​ 3,525 ​ ​ 201 ​ ​ ( 7,921 ) Loss on termination of swaps ​ ​ ( 3,403 ) ​ ​ — ​ ​ — Change in fair value of loans held for sale ​ ​ ( 2,877 ) ​ ​ — ​ ​ — Title fees ​ ​ 2,337 ​ ​ 1,720 ​ ​ 1,797 Gain on sale of Small Business Administration ("SBA") loans ​ ​ 3,940 ​ ​ 1,984 ​ ​ 2,078 Bank owned life insurance ​ ​ 2,186 ​ ​ 2,230 ​ ​ 2,219 Loan swap fees ​ ​ 3,742 ​ ​ 7,460 ​ ​ 716 Other ​ ​ 1,298 ​ ​ 1,733 ​ ​ 2,826 Total non-interest income ​ ​ 19,703 ​ ​ 25,387 ​ ​ 11,568 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 67,159 ​ ​ 56,244 ​ ​ 50,458 Occupancy and equipment ​ ​ 14,287 ​ ​ 14,372 ​ ​ 13,245 Technology and communications ​ ​ 9,712 ​ ​ 7,905 ​ ​ 6,465 Marketing and advertising ​ ​ 3,287 ​ ​ 4,740 ​ ​ 4,597 Professional services ​ ​ 4,988 ​ ​ 3,797 ​ ​ 4,004 FDIC assessments ​ ​ 1,950 ​ ​ 608 ​ ​ 1,665 Merger expenses ​ ​ 4,452 ​ ​ — ​ ​ — Net fraud loss ​ ​ — ​ ​ — ​ ​ 8,900 Office relocation costs ​ ​ — ​ ​ — ​ ​ 750 Amortization of other intangible assets ​ ​ 656 ​ ​ 787 ​ ​ 917 Other ​ ​ 6,766 ​ ​ 7,686 ​ ​ 7,179 Total non-interest expense ​ ​ 113,257 ​ ​ 96,139 ​ ​ 98,180 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ ​ 55,727 ​ ​ 65,751 ​ ​ 48,368 Income tax expense ​ ​ 13,685 ​ ​ 14,060 ​ ​ 9,141 Net income ​ $ 42,042 ​ $ 51,691 ​ $ 39,227 Basic earnings per share ​ $ 2.11 ​ $ 2.59 ​ $ 1.97 Diluted earnings per share ​ $ 2.11 ​ $ 2.59 ​ $ 1.97 ​ See accompanying Notes to the Consolidated Financial Statements . ​ Page -47- CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( In thousands ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 Net income ​ $ 42,042 ​ $ 51,691 ​ $ 39,227 Other comprehensive (loss) income: ​ ​ Change in unrealized net gains (losses) on securities available for sale, net of reclassifications and deferred income taxes ​ 3,916 ​ 10,856 ​ ( 348 ) Adjustment to pension liability, net of reclassifications and deferred income taxes ​ ( 1,865 ) ​ ( 410 ) ​ ( 832 ) Unrealized (losses) gains on cash flow hedges, net of reclassifications and deferred income taxes ​ ( 3,838 ) ​ ( 3,675 ) 1,007 Total other comprehensive (loss) income ​ ( 1,787 ) ​ 6,771 ​ ( 173 ) Comprehensive income ​ $ 40,255 ​ $ 58,462 $ 39,054 ​ See accompanying Notes to the Consolidated Financial Statements . ​ Page -48- CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ( In thousands, except share and per share amounts ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ Common ​ ​ ​ ​ Retained ​ Treasury ​ Comprehensive ​ ​ ​ ​ Stock ​ Surplus ​ Earnings ​ Stock ​ Loss ​ Total Balance at January 1, 2018 ​ $ 197 ​ $ 347,691 ​ $ 96,547 ​ $ ( 296 ) ​ $ ( 14,939 ) ​ $ 429,200 Net income ​ ​ ​ ​ 39,227 ​ ​ ​ ​ 39,227 Shares issued under the dividend reinvestment plan (“DRP”) ( 25,154 shares) ​ ​ ​ 954 ​ ​ ​ ​ ​ ​ 954 Shares issued under the Employee Stock Purchase Plan ("ESPP"), net of offering costs ( 3,758 shares) ​ ​ ​ 63 ​ ​ ​ ​ ​ ​ 63 Stock awards granted and distributed ( 84,910 shares) ​ 1 ​ ( 539 ) ​ ​ ​ 538 ​ ​ ​ — Stock awards forfeited ( 15,225 shares) ​ ​ ​ 437 ​ ​ ​ ( 437 ) ​ ​ ​ — Repurchase of surrendered stock from vesting of stock plans ( 17,073 shares) ​ ​ ​ ​ ​ ​ ( 586 ) ​ ​ ​ ( 586 ) Share based compensation expense ​ ​ ​ 3,487 ​ ​ ​ ​ ​ ​ 3,487 Cash dividend declared, $ 0.92 per share ​ ​ ​ ​ ( 18,342 ) ​ ​ ​ ​ ( 18,342 ) Other comprehensive loss, net of deferred income taxes ​ ​ ​ ​ ​ ​ ​ ( 173 ) ​ ( 173 ) Balance at December 31, 2018 ​ $ 198 ​ $ 352,093 ​ $ 117,432 ​ $ ( 781 ) ​ $ ( 15,112 ) ​ $ 453,830 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ ​ ​ 51,691 ​ ​ ​ ​ 51,691 Shares issued under the DRP ( 24,529 shares) ​ ​ ​ 867 ​ ​ ​ ​ ​ ​ 867 Shares issued under the ESPP ( 7,888 shares) ​ ​ ​ ​ ​ 235 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 235 Purchase of treasury stock ( 22,600 shares) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ( 625 ) ​ ​ ​ ​ ​ ( 625 ) Stock awards granted and distributed ( 82,210 shares) ​ 1 ​ ( 988 ) ​ ​ ​ 987 ​ ​ ​ — Stock awards forfeited ( 19,531 shares) ​ ​ ​ 555 ​ ​ ​ ( 555 ) ​ ​ ​ — Repurchase of surrendered stock from vesting of stock plans ( 26,583 shares) ​ ​ ​ ( 18 ) ​ ​ ​ ( 869 ) ​ ​ ​ ( 887 ) Share based compensation expense ​ ​ ​ 3,692 ​ ​ ​ ​ ​ ​ 3,692 Cash dividend declared, $ 0.92 per share ​ ​ ​ ​ ( 18,420 ) ​ ​ ​ ​ ( 18,420 ) Other comprehensive income, net of deferred income taxes ​ ​ ​ ​ ​ ​ ​ 6,771 ​ 6,771 Balance at December 31, 2019 ​ $ 199 ​ $ 356,436 ​ $ 150,703 ​ $ ( 1,843 ) ​ $ ( 8,341 ) ​ $ 497,154 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cumulative change in accounting principle (Note 1) ​ ​ ​ ​ ​ ​ ​ ​ ( 1,473 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 1,473 ) Balance at January 1, 2020 (as adjusted for change in accounting principle) ​ ​ 199 ​ ​ 356,436 ​ ​ 149,230 ​ ​ ( 1,843 ) ​ ​ ( 8,341 ) ​ ​ 495,681 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ ​ ​ 42,042 ​ ​ ​ ​ 42,042 Shares issued under the DRP ( 39,600 shares) ​ ​ ​ 1,012 ​ ​ ​ ​ ​ ​ 1,012 Shares issued under the ESPP ( 11,413 shares) ​ ​ ​ ​ ​ 255 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 255 Purchase of treasury stock ( 179,620 shares) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 4,633 ) ​ ​ ​ ​ ​ ( 4,633 ) Stock awards granted and distributed ( 136,662 shares) ​ ​ ​ ( 4,167 ) ​ ​ ​ 4,167 ​ ​ ​ — Stock awards forfeited ( 6,593 shares) ​ ​ ​ 222 ​ ​ ​ ( 222 ) ​ ​ ​ — Repurchase of surrendered stock from vesting of stock plans ( 95,892 shares) ​ ​ ​ ( 656 ) ​ ​ ​ ( 2,525 ) ​ ​ ​ ( 3,181 ) Share based compensation expense ​ ​ ​ 7,639 ​ ​ ​ ​ ​ ​ 7,639 Cash dividend declared, $ 0.96 per share ​ ​ ​ ​ ( 19,197 ) ​ ​ ​ ​ ( 19,197 ) Other comprehensive loss, net of deferred income taxes ​ ​ ​ ​ ​ ​ ​ ( 1,787 ) ​ ( 1,787 ) Balance at December 31, 2020 ​ $ 199 ​ $ 360,741 ​ $ 172,075 ​ $ ( 5,056 ) ​ $ ( 10,128 ) ​ $ 517,831 ​ See accompanying Notes to the Consolidated Financial Statements . ​ Page -49- CONSOLIDATED STATEMENTS OF CASH FLOWS ( In thousands ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net income ​ $ 42,042 ​ $ 51,691 ​ $ 39,227 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Provision for credit losses ​ 11,500 ​ 5,700 ​ 1,800 Depreciation and amortization of premises and equipment ​ 4,319 ​ 4,253 ​ 3,822 Net (accretion) and other amortization ​ ​ ( 940 ) ​ ​ ( 1,375 ) ​ ​ ( 2,093 ) Net amortization on securities ​ 3,585 ​ 4,365 ​ 4,009 Increase in cash surrender value of bank owned life insurance ​ ( 2,186 ) ​ ( 2,230 ) ​ ( 2,219 ) Amortization of other intangible assets ​ 656 ​ 787 ​ 917 Share based compensation expense ​ 7,639 ​ 3,692 ​ 3,487 Net securities (gains) losses ​ ( 3,525 ) ​ ( 201 ) ​ 7,921 Loss on termination of swaps ​ ​ 3,403 ​ ​ — ​ ​ — Change in fair value of loans held for sale ​ ​ 2,877 ​ ​ — ​ ​ — (Increase) decrease in accrued interest receivable ​ ( 5,658 ) ​ 328 ​ 416 SBA loans originated for sale ​ ( 47,741 ) ​ ( 27,419 ) ​ ( 28,340 ) Proceeds from sale of the guaranteed portion of SBA loans ​ 52,643 ​ 29,922 ​ 30,898 Gain on sale of the guaranteed portion of SBA loans ​ ( 3,940 ) ​ ( 1,984 ) ​ ( 2,078 ) Gain on sale of loans ​ — ​ — ​ ( 441 ) (Increase) decrease in other assets ​ ( 11,916 ) ​ 3,942 ​ ( 2,373 ) (Decrease) increase in accrued expenses and other liabilities ​ ( 5,371 ) ​ ( 1,509 ) ​ 3,430 Net cash provided by operating activities ​ 47,387 ​ 69,962 ​ 58,383 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ Purchases of securities available for sale ​ ( 363,224 ) ​ ( 141,297 ) ​ ( 255,746 ) Purchases of securities, restricted ​ ( 52,988 ) ​ ( 97,206 ) ​ ( 505,272 ) Purchases of securities held to maturity ​ — ​ — ​ ( 1,000 ) Proceeds from sales of securities available for sale ​ 152,980 ​ 46,478 ​ 230,372 Redemption of securities, restricted ​ 62,505 ​ 88,355 ​ 516,593 Maturities, calls and principal payments of securities available for sale ​ 404,093 ​ 149,456 ​ 92,818 Maturities, calls and principal payments of securities held to maturity ​ 47,505 ​ 25,642 ​ 20,851 Net increase in loans ​ ( 962,582 ) ​ ( 421,024 ) ​ ( 213,973 ) Proceeds from loan sale ​ — ​ — ​ 40,133 Proceeds from sales of other real estate owned ("OREO"), net ​ ​ — ​ ​ 297 ​ ​ — Purchase of premises and equipment ​ ( 5,129 ) ​ ( 3,307 ) ​ ( 5,325 ) Net cash used in investing activities ​ ( 716,840 ) ​ ( 352,606 ) ​ ( 80,549 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ Net increase (decrease) in deposits ​ 1,674,607 ​ ( 71,728 ) ​ 551,891 Net decrease in federal funds purchased ​ — ​ — ​ ( 50,000 ) Net (decrease) increase in FHLB advances ​ ( 220,000 ) ​ 194,568 ​ ( 260,855 ) Net increase (decrease) in repurchase agreements ​ 224 ​ 460 ​ ( 338 ) Net proceeds from issuance of common stock ​ 1,267 ​ 1,102 ​ 1,017 Purchase of treasury stock ​ ​ ( 4,633 ) ​ ​ ( 625 ) ​ ​ — Repurchase of surrendered stock from vesting of stock plans ​ ( 3,181 ) ​ ( 887 ) ​ ( 586 ) Cash dividends paid ​ ( 19,197 ) ​ ( 18,420 ) ​ ( 18,342 ) Net cash provided by financing activities ​ 1,429,087 ​ 104,470 ​ 222,787 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ​ 759,634 ​ ( 178,174 ) ​ 200,621 Cash and cash equivalents at beginning of period ​ 117,194 ​ 295,368 ​ 94,747 Cash and cash equivalents at end of period ​ $ 876,828 ​ $ 117,194 ​ $ 295,368 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ Cash paid for: ​ ​ ​ ​ ​ Interest ​ $ 24,037 ​ $ 39,395 ​ $ 32,254 Income taxes ​ $ 12,457 ​ $ 9,158 ​ $ 2,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash investing and financing activities: ​ ​ ​ ​ Transfers from portfolio loans to loans held for sale ​ $ 43,019 ​ $ 12,643 ​ $ — Transfers from portfolio loans to other real estate owned ​ $ — ​ $ — ​ $ 175 ​ See accompanying Notes to the Consolidated Financial Statements . ​ ​ Page -50- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020, 2019 and 2018 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Principles of Consolidation On February 1, 2021, Dime Community Bancshares, Inc., (“Legacy Dime”) merged with and into Bridge Bancorp, Inc., (“Legacy Bridge”) (the “Merger”), with Legacy Bridge as the surviving corporation under the name “Dime Community Bancshares, Inc.” (the “Holding Company”). The consolidated financial statements include the Holding Company, which was known as “Bridge Bancorp, Inc.” prior to the Merger, a bank holding company incorporated under the laws of the State of New York, engaged in commercial banking and financial services through its wholly-owned subsidiary, Dime Community Bank, (the “Bank”), which was known as “BNB Bank” prior to the Merger, together referred to as the “Company.” The Bank’s operations include its real estate investment trust subsidiary, Bridgehampton Community, Inc.; a financial title insurance subsidiary, Bridge Abstract LLC (“Bridge Abstract”); and an investment services subsidiary, Bridge Financial Services, Inc. (“Bridge Financial Services”). Intercompany transactions and balances are eliminated in consolidation. The Company’s consolidated financial statements, including notes thereto, and accounting policies and practices are as of December 31, 2020, and do not include the operations of Legacy Dime. The Company provides financial services through its branches in its primary market areas of Suffolk and Nassau Counties on Long Island and the New York City boroughs. The Bank’s primary deposit products are time, savings and demand deposits from the consumers, businesses and local municipalities in its market area. Its primary lending products are commercial real estate, multi-family, commercial and industrial, and residential mortgage loans. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the area. The audited consolidated financial statements presented in this Annual Report on Form 10-K include the collective results of the Holding Company and its wholly-owned subsidiary, the Bank, which are collectively herein referred to as “we”, “us”, “our” and the “Company.” The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and general practices within the financial institution industry. The following is a description of the significant accounting policies that the Company follows in preparing its consolidated financial statements. Use of Estimates The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the consolidated financial statements and the disclosures provided, and actual future results could differ. COVID-19 Risks In December 2019, a novel coronavirus (“COVID-19”) was reported in China, and, in March 2020, the World Health Organization declared COVID-19 a pandemic. On March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation in the United States as many state and local governments, including New York, ordered non-essential businesses to close and residents to shelter in place at home. This has resulted in an unprecedented slow-down in economic activity and a related increase in unemployment. The Company’s audited consolidated financial statements reflect the impact of COVID-19 on the assumptions and estimates used. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 outbreak on the Company’s business. The extent of such impact will depend on future developments, which are highly uncertain, including when COVID-19 can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, Page -51- the Company is subject to the following risks, any of which could have a material, adverse effect on its business, financial condition, liquidity, and results of operations: ● demand for the Company’s products and services may decline, making it difficult to grow assets and income; ● if the economy is unable to substantially reopen or remain open, and high levels of unemployment continue, for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; ● collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; ● the Company’s allowance for credit losses (“ACL”) may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect the Company’s net income; ● the Company may recognize impairment of its goodwill; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to the Company; ● as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on the Company’s assets may decline to a greater extent than the decline in its cost of interest-bearing liabilities, reducing net interest margin and spread and reducing net income; ● a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of the Company’s quarterly cash dividend; ● the Company’s cyber security risks are increased as the result of an increase in the number of employees working remotely; and ● the Company relies on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on the Company. ​ Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest- earning deposits with banks, and federal funds sold, which mature overnight. Net cash flows are reported for customer loan and deposit transactions, federal funds purchased, FHLB advances, and repurchase agreements. Securities Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Equity securities are carried at fair value, with changes in fair value reported in net income. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting in observable price changes in orderly transactions for the identical or a similar investment. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. The Company has made a policy election to exclude accrued interest from the amortized cost basis of debt securities and report accrued interest separately in accrued interest receivable in the consolidated balance sheet. A debt security is placed on non-accrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on non-accrual is reversed against interest income. There were no non-accrual debt securities at December 31, 2020 and there was no accrued interest related to debt securities reversed against interest income for the year ended December 31, 2020. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. On January 1, 2020, the Company adopted the CECL Standard, which 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 Page -52- 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. 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, the Company considers the history of credit losses, current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero, even if the U.S. government were to technically default. Therefore, for those securities, the Company does not record expected credit losses. Accrued interest receivable is excluded from the estimate of credit losses. Available for sale debt securities and the allowance for credit losses Management evaluates available for sale debt securities for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the near-term prospects of the issuer. Impairment may result from credit deterioration of the issuer or collateral underlying the security. In performing an assessment of whether any decline in fair value is due to a credit loss, all relevant information is considered at the individual security level. For asset-backed securities performance indicators considered related to the underlying assets include default rates, delinquency rates, percentage of non-performing assets, debt-to-collateral ratios, third party guarantees, current levels of subordination, vintage, geographic concentration, analyst reports and forecasts, credit ratings and other market data. In assessing whether a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are excluded from earnings and reported, net of tax, in other comprehensive income (“OCI”). Management also assesses whether it intends to sell or is more likely than not that it will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. Accrued interest receivable is excluded from the estimate of credit losses. Securities, Restricted Securities, restricted represents FHLB, Federal Reserve Bank (“FRB”) and bankers’ banks stock, which are reported at cost. The Bank is a member of the FHLB system. Members are required to own a particular amount of stock based on the Page -53- level of borrowings and other factors, and may invest in additional amounts. FHLB stock is periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Loans Held for Sale Loans held for sale are carried at the lower of aggregate cost or estimated fair value. Any subsequent declines in fair value below the initial carrying value are recorded as a valuation allowance, which is established through a charge to earnings. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amount outstanding, net of partial charge-offs, deferred origination costs and fees and purchase premiums and discounts. Loan origination and commitment fees and certain direct and indirect costs incurred in connection with loan originations are deferred and amortized to income over the life of the related loans as an adjustment to yield. When a loan prepays, the remaining unamortized net deferred origination fees or costs are recognized in the current year. Interest on loans is credited to income based on the principal outstanding during the period. The Company has made a policy election to exclude accrued interest from the amortized cost basis of loans and report accrued interest separately from the related loan balance in accrued interest receivable on consolidated balance sheets. Past due status is based on the contractual terms of the loan. Loans that are 90 days past due are automatically placed on non-accrual and previously accrued interest is reversed and charged against interest income. However, if the loan is in the process of collection and the Bank has reasonable assurance that the loan will be fully collectable based upon an individual loan evaluation assessing such factors as collateral and collectability, accrued interest will be recognized as earned. If a payment is received when a loan is non-accrual or a troubled debt restructuring (“TDR”) loan is non-accrual, the payment is applied to the principal balance. A TDR loan performing in accordance with its modified terms is maintained on accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans that were acquired through the acquisition of Community National Bank on June 19, 2015 and First National Bank of New York on February 14, 2014 were initially recorded at fair value with no carryover of the related allowance for loan losses. After acquisition, losses are recognized through the allowance for loan losses. Determining fair value of the loans involves estimating the amount and timing of expected principal and interest cash flows to be collected on the loans and discounting those cash flows at a market interest rate. Some of the loans at the time of acquisition showed evidence of credit deterioration since origination. These loans were considered purchased credit impaired (“PCI”) loans. As of December 31, 2019, the remaining balance of PCI loans was immaterial to the Company’s financial condition and results of operations. Unless otherwise noted, the above policy is applied consistently to all loan segments. Allowance for Credit Losses On January 1, 2020, we adopted the CECL Standard, which requires that loans held for investment be accounted for under the current expected credit losses model. Although the CARES Act provided the option to delay the adoption of the current expected credit loss model until the earlier of December 31, 2020 or the termination of the current national emergency declaration related to the COVID-19 outbreak, we implemented the CECL Standard in the first quarter of 2020 as previously planned. The allowance for credit losses is established and maintained through a provision for credit losses based on expected losses inherent in our loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis. Management monitors its entire loan portfolio regularly, with consideration given to detailed analysis of classified loans, repayment patterns, past loss experience, various types of concentrations of credit, current economic conditions, and reasonable and supportable forecasts. Additions to the allowance are charged to expense and realized losses, net of recoveries, are charged against the allowance. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of our loan portfolio segments. These segments are further disaggregated into loan risk ratings, the level at which credit risk is monitored. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on expected loss history, delinquency status and other credit trends and risk characteristics, including current Page -54- conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and provision for credit losses in those future periods. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in our process for estimation of expected credit losses. The allowance level is influenced by loan volumes, loan risk rating migration, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: (1) an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and (2) a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics. Loans that do not share similar credit risk characteristics For a loan that does not share risk characteristics with other loans, expected credit loss is measured based on net realizable value, that is, the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the amortized cost basis of the loan. For these loans, the Company recognizes expected credit loss equal to the amount by which the net realizable value of the loan is less than the amortized cost basis of the loan (which is net of previous charge-offs), except when the loan is collateral dependent, that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In these cases, expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of the collateral is adjusted for the estimated costs to sell the loan if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral. The fair value of real estate collateral is determined based on recent appraised values. Appraisals are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. All appraisals undergo a second review process to ensure that the methodology employed and the values derived are reasonable. Generally, collateral values for real estate loans for which measurement of expected losses is dependent on collateral values are updated every twelve months. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the borrower and its business. Once the expected credit loss amount is determined, an allowance is provided for equal to the calculated expected credit loss and included in the allowance for credit losses. Pursuant to the Company’s policy, credit losses must be charged-off in the period the loans, or portions thereof, are deemed uncollectable. Loans that share similar credit risk characteristics In estimating the component of the allowance for credit losses for loans that share similar risk characteristics with other loans, such loans are segmented into loan types. Loans are designated into loan pools with similar risk characteristics based on product type in conjunction with other homogeneous characteristics. Loan types include commercial real estate mortgages, owner and non-owner occupied; multi-family mortgage loans; residential real estate mortgages and home equity loans; commercial, industrial and agricultural loans, real estate construction and land loans; and consumer loans. In determining the allowance for credit losses, the Company derives an estimated credit loss assumption from a model that categorizes loan pools based on loan type and further segmented by risk rating. This model is known as Probability of Default/Loss Given Default, utilizing a Transition Matrix approach. This model calculates an expected loss percentage for each loan pool by considering the probability of default, based upon the historical transition or migration of loans from performing (various pass ratings) to criticized, and classified risk ratings to default by risk rating buckets using life-of-loan analysis runout periods for all loan segments, and the historical severity of loss, based on the aggregate net lifetime losses (loss given default) per loan pool. The default trigger, which is defined as the earlier of ninety days past-due or non-accrual status, and severity factors used to calculate the allowance for credit losses for loans in pools that share similar risk characteristics with other loans, are adjusted for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio. These factors Page -55- 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 including the terms of the loans; (4) the experience, ability, and depth of the lending management and other relevant staff; (5) the volume and severity of past due and adversely classified or graded loans and the volume of non-accrual 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. Such factors are used to adjust the historical probabilities of default and severity of loss for current conditions that are not reflective of the model results. In addition, the economic factor includes management’s expectation of future conditions based on a reasonable and supportable forecast of the economy. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made (currently two years ), the Bank reverts immediately back to the historical rates of default and severity of loss. Management believes that this transition approach to the Probability of Default/Loss Given Default is a relevant calculation of expected credit losses as there is sufficient volume as well as movement in the risk ratings due to the initial grading system as well as timely updates to risk ratings when necessary. Credit risk ratings are based on management’s evaluation of a credit’s cash flow, collateral, guarantor support, financial disclosures, industry trends and strength of borrowers’ management. Future additions or reductions to the allowance may be necessary based on changes in economic, market or other conditions. Changes in estimates could result in a material change in the allowance. In addition, various regulatory agencies, as an integral part of the examination process, periodically review the allowance for credit losses. Such agencies may require the Bank to recognize adjustments to the allowance based on their judgments of the information available to them at the time of their examination. A loan is considered a potential charge-off when it is in default of either principal or interest for a period of 90, 120 or 180 days, depending upon the loan type, as of the end of the prior month. In addition to delinquency criteria, other triggering events may include, but are not limited to, notice of bankruptcy by the borrower or guarantor, death of the borrower, and deficiency balance from the sale of collateral. Unless otherwise noted, the above policy is applied consistently to all loan portfolio segments. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as unused lines of credit, commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded on the balance sheet when they are funded. In accordance with the CECL Standard, the Company maintains a separate reserve for off-balance sheet credit instruments, which is included in other liabilities on the consolidated statements of financial condition. Management estimates the amount of expected losses by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors, current conditions and forecasting adjustments used in the allowance for credit loss methodology to the results of the usage calculation to estimate the liability for credit losses related to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance sheet credit exposures that are unconditionally cancellable by the Company. At December 31, 2020, the reserve for off-balance sheet credit exposures was immaterial to the Company’s consolidated statements of financial condition and results of operations. Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation. Buildings and related components are depreciated using the straight-line method with a useful life of fifty years for buildings and a range of two to ten years for equipment, computer hardware and software, and furniture and fixtures. Leasehold improvements are amortized over the lives of the respective leases or the service lives of the improvements, whichever is shorter. Land is carried at cost. Improvements and major repairs are capitalized, while the cost of ordinary maintenance, repairs and minor improvements are charged to expense. Page -56- Bank-Owned Life Insurance The Bank is the owner and beneficiary of life insurance policies on certain employees. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Other Real Estate Owned Real estate properties acquired through, or in lieu of, foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at the lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. Goodwill and Other Intangible Assets Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and indefinite-lived intangible assets are not amortized, but tested for impairment at least annually, or more frequently if events and circumstances exist that indicate the carrying amount of the asset may be impaired. The Company has selected November 30 as the date to perform the annual impairment test. Goodwill and the BNB Bank trademark are intangible assets with indefinite lives on the Company’s balance sheet. Other intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible assets are amortized on an accelerated method over their estimated useful lives of ten years . Other intangible assets also include servicing rights, which result from the sale of SBA loans with servicing rights retained. Servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable servicing contracts, when available or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Servicing assets are subsequently measured using the amortization method, which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Derivatives The Company records cash flow hedges at the inception of the derivative contract based on the Company’s intentions and belief as to likely effectiveness as a hedge. Cash flow hedges represent a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (“OCI”) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. The changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or Page -57- terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods in which the hedged transactions will affect earnings. Income Taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. It is management’s position, as currently supported by the facts and circumstances, that no valuation allowance is necessary against any of the Company’s deferred tax assets at December 31, 2020. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. There are no such tax positions in the Company’s financial statements at December 31, 2020 and 2019. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company did not have any amounts accrued for interest and penalties at December 31, 2020 and 2019. Treasury Stock Repurchases of common stock are recorded as treasury stock at cost. Treasury stock is reissued using the first in, first out method. Earnings Per Share (“EPS”) Basic EPS is net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the period. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Diluted EPS includes the dilutive effect of additional potential common shares issuable under stock options. Dividend Restriction Cash available for distribution of dividends to stockholders of the Company is primarily derived from cash and cash equivalents of the Company and dividends paid by the Bank to the Company. Prior regulatory approval is required if the total of all dividends declared by the Bank in any calendar year exceeds the total of the Bank’s net income of that year combined with its retained net income of the preceding two years . Dividends from the Bank to the Company at January 1, 2021 are limited to $ 49.8 million, which represents the Bank’s net retained earnings from the previous two years. During 2020, the Bank paid $ 26.5 million in cash dividends to the Company. Segment Reporting While management monitors the revenue streams of the various products and services, the identifiable segments are not material and operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. Page -58- Stock-Based Compensation Compensation cost is recognized for stock options, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”) issued to employees and independent directors, based on the fair value of these awards at the date of the grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used to estimate the fair value for RSAs and RSUs. Compensation cost is recognized as expense over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur. Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on available for sale securities, unrealized gains and losses on cash flow hedges, and changes in the funded status of the pension plan, which are also recognized as separate components of equity. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. ​ Standards Effective in 2020 ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) Effective for periods after December 31, 2019, the Company adopted Accounting Standards Update (“ASU”) No 2016-13, Financial Instruments – Credit Losses (Topic 326), which replaced the long-standing incurred loss model used in calculating the allowance for loan and lease losses with a more forward-looking, current expected credit loss model (“CECL” or the “CECL Standard”). Furthermore, the CECL Standard requires financial institutions to measure all expected credit losses for in-scope financial assets held at amortized cost at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, including estimates of prepayments. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. Accordingly, financial institutions will now leverage forward-looking information to better inform their credit loss estimates. For the Company, this standard applies to loans held for investment, unfunded commitments, and securities held to maturity. In addition, the CECL Standard made changes to the accounting for available for sale debt securities. Credit losses on available for sale debt securities under the CECL Standard should be measured in a manner similar to legacy GAAP. However, the amendments in the CECL Standard require that credit losses be presented as an allowance for credit losses rather than as a write-down. The CECL Standard approach is an improvement because an entity is able to record reversals of credit losses (in situations in which the estimate of credit losses declines) in current period net income, which in turn should align the income statement recognition of credit losses with the reporting period in which changes occur. Although the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act) provided the option to delay the adoption of the CECL Standard until the earlier of December 31, 2020 or the termination of the current national emergency declaration related to the COVID-19 outbreak, the Company adopted the CECL Standard in the first quarter of 2020 as previously planned using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. The adoption of the CECL Standard resulted in an initial increase of $ 1.6 million to the allowance for credit losses and $ 0.5 million to the reserve for unfunded commitments. The after-tax cumulative-effect adjustment of $ 1.5 million was recorded in retained earnings as of January 1, 2020. Based on the credit quality of the Company's securities portfolio, there was no initial adjustment to retained earnings for credit losses associated with debt securities held to maturity. Results for reporting periods beginning after January 1, 2020 are presented under the CECL Standard while prior period amounts will continue to be reported in accordance with previously applicable GAAP. ​ Page -59- ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB amended existing guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments require an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirement for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendments are effective for public business entities that are an SEC filer, like the Company, for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The amendments should be applied prospectively. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition in the first annual period when the entity initially adopts the amendments. The adoption of ASU 2017-04 did not have an effect on the Company's consolidated financial statements. ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU 2018-15 to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments in this ASU are effective for public business entities, like the Company, for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this ASU is permitted, including adoption in any interim period. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 did not have a material effect on the Company's consolidated financial statements. ​ 2. SECURITIES The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at December 31, 2020 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ Gross ​ Gross ​ Estimated ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair (In thousands) Cost Gains Losses Value Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ State and municipal obligations ​ $ 40,448 $ 1,650 ​ $ ( 10 ) $ 42,088 U.S. GSE residential mortgage-backed securities ​ 111,398 ​ 1,843 ​ ( 6 ) ​ 113,235 U.S. GSE residential collateralized mortgage obligations ​ 127,369 ​ 1,661 ​ ( 226 ) ​ 128,804 U.S. GSE commercial mortgage-backed securities ​ 24,920 ​ 140 ​ ( 253 ) ​ 24,807 U.S. GSE commercial collateralized mortgage obligations ​ 61,102 ​ 1,286 ​ ( 52 ) ​ 62,336 Other asset backed securities ​ 24,250 ​ — ​ ( 300 ) ​ 23,950 Corporate bonds ​ 56,500 ​ 195 ​ ( 1,555 ) ​ 55,140 Total available for sale ​ 445,987 ​ 6,775 ​ ( 2,402 ) ​ 450,360 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ Gross ​ Estimated ​ ​ Amortized ​ Unrecognized ​ Unrecognized ​ Fair (In thousands) Cost Gains Losses Value Held to maturity: ​ ​ ​ ​ ​ ​ State and municipal obligations ​ 23,715 ​ 1,406 ​ — ​ 25,121 U.S. GSE residential mortgage-backed securities ​ 6,272 ​ 227 ​ — ​ 6,499 U.S. GSE residential collateralized mortgage obligations ​ 18,511 ​ 489 ​ ( 9 ) ​ 18,991 U.S. GSE commercial mortgage-backed securities ​ 13,069 ​ 625 ​ — ​ 13,694 U.S. GSE commercial collateralized mortgage obligations ​ 24,133 ​ 887 ​ — ​ 25,020 Total held to maturity ​ 85,700 ​ 3,634 ​ ( 9 ) ​ 89,325 Total securities ​ $ 531,687 ​ $ 10,409 ​ $ ( 2,411 ) ​ $ 539,685 Page -60- ​ As of December 31, 2020, none of the Company’s available for sale debt securities were in an unrealized loss position due to credit and therefore no allowance for credit losses on available for sale debt securities was required. Additionally, the calculated allowance for credit losses on held to maturity securities was inconsequential given the high quality composition of the Company’s held to maturity portfolio and therefore no allowance for credit losses was recorded. Accrued interest receivable on securities totaling $ 1.4 million at December 31, 2020 was included in accrued interest receivable in the consolidated balance sheet and excluded from the amortized cost and estimated fair value totals in the table above. ​ The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at December 31, 2019 and the corresponding amounts of gross unrealized gains and losses therein: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ Gross Gross Estimated ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair (In thousands) Cost ​ Gains ​ Losses ​ Value Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 50,833 ​ $ — ​ $ ( 11 ) ​ $ 50,822 U.S. GSE securities ​ ​ 5,000 ​ ​ — ​ ​ ( 5 ) ​ ​ 4,995 State and municipal obligations ​ 34,303 ​ 704 ​ ( 43 ) ​ 34,964 U.S. GSE residential mortgage-backed securities ​ 84,550 ​ 609 ​ ( 468 ) ​ 84,691 U.S. GSE residential collateralized mortgage obligations ​ 278,149 ​ 1,166 ​ ( 1,464 ) ​ 277,851 U.S. GSE commercial mortgage-backed securities ​ 13,656 ​ 23 ​ ( 70 ) ​ 13,609 U.S. GSE commercial collateralized mortgage obligations ​ 102,722 ​ 1,723 ​ ( 289 ) ​ 104,156 Other asset-backed securities ​ 24,250 ​ — ​ ( 849 ) ​ 23,401 Corporate bonds ​ 46,000 ​ — ​ ( 2,198 ) ​ 43,802 Total available for sale ​ 639,463 ​ 4,225 ​ ( 5,397 ) ​ 638,291 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to maturity: ​ ​ ​ ​ ​ ​ State and municipal obligations ​ 41,008 ​ 809 ​ — ​ 41,817 U.S. GSE residential mortgage-backed securities ​ 8,142 ​ 5 ​ ( 54 ) ​ 8,093 U.S. GSE residential collateralized mortgage obligations ​ 39,936 ​ 624 ​ ( 62 ) ​ 40,498 U.S. GSE commercial mortgage-backed securities ​ 17,215 ​ 102 ​ ( 82 ) ​ 17,235 U.S. GSE commercial collateralized mortgage obligations ​ 27,337 ​ 191 ​ ( 144 ) ​ 27,384 Total held to maturity ​ 133,638 ​ 1,731 ​ ( 342 ) ​ 135,027 Total securities ​ $ 773,101 ​ $ 5,956 ​ $ ( 5,739 ) ​ $ 773,318 ​ The following table summarizes available for sale debt securities with gross unrealized losses for which an allowance for credit losses has not been recorded at December 31, 2020, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ Less than 12 months ​ Greater than 12 months ​ ​ Estimated ​ Gross ​ Estimated ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized (In thousands) Value Losses Value Losses Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ State and municipal obligations ​ $ 5,310 $ ( 10 ) ​ $ — $ — U.S. GSE residential mortgage-backed securities ​ — ​ — ​ 152 ​ ( 6 ) U.S. GSE residential collateralized mortgage obligations ​ 55,832 ​ ( 226 ) ​ — ​ — U.S. GSE commercial mortgage-backed securities ​ 14,994 ​ ( 253 ) ​ — ​ — U.S. GSE commercial collateralized mortgage obligations ​ 11,755 ​ ( 52 ) ​ — ​ — Other asset backed securities ​ — ​ — ​ 3,450 ​ ( 300 ) Corporate bonds ​ 7,927 ​ ( 73 ) ​ 29,518 ​ ( 1,482 ) Total available for sale ​ $ 95,818 $ ( 614 ) ​ $ 33,120 $ ( 1,788 ) Page -61- The following table summarizes securities with gross unrealized losses at December 31, 2019, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ Less than 12 months ​ Greater than 12 months ​ ​ Estimated ​ Gross ​ Estimated ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized (In thousands) Value Losses Value Losses Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 50,822 ​ $ ( 11 ) ​ $ — ​ $ — U.S. GSE securities ​ ​ — ​ ​ — ​ ​ 4,995 ​ ​ ( 5 ) State and municipal obligations ​ 4,982 ​ ( 42 ) ​ 76 ​ ( 1 ) U.S. GSE residential mortgage-backed securities ​ 2,935 ​ ( 30 ) ​ 39,617 ​ ( 438 ) U.S. GSE residential collateralized mortgage obligations ​ 81,377 ​ ( 480 ) ​ 93,403 ​ ( 984 ) U.S. GSE commercial mortgage-backed securities ​ 6,648 ​ ( 70 ) ​ — ​ — U.S. GSE commercial collateralized mortgage obligations ​ 28,710 ​ ( 145 ) ​ 9,614 ​ ( 144 ) Other asset-backed securities ​ — ​ — ​ 23,401 ​ ( 849 ) Corporate bonds ​ — ​ — ​ 43,802 ​ ( 2,198 ) Total available for sale ​ $ 175,474 $ ( 778 ) ​ $ 214,908 $ ( 4,619 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to maturity: ​ ​ ​ ​ ​ ​ U.S. GSE residential mortgage-backed securities ​ — ​ — ​ 7,268 ​ ( 54 ) U.S. GSE residential collateralized mortgage obligations ​ 6,750 ​ ( 17 ) ​ 6,105 ​ ( 45 ) U.S. GSE commercial mortgage-backed securities ​ — ​ — ​ 5,034 ​ ( 82 ) U.S. GSE commercial collateralized mortgage obligations ​ 13,038 ​ ( 57 ) ​ 4,300 ​ ( 87 ) Total held to maturity ​ $ 19,788 ​ $ ( 74 ) ​ $ 22,707 ​ $ ( 268 ) ​ Other-Than-Temporary Impairment Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. ​ At December 31, 2020, substantially all of the securities in an unrealized loss position had a variable interest rate and the cause of the temporary impairment was directly related to changes in interest rates. The Company generally views changes in fair value caused by changes in interest rates as temporary, which is consistent with its experience. Other asset backed securities are comprised of student loan backed bonds, which are guaranteed by the U.S. Department of Education for 97% to 100% of principal . Additionally, the bonds have credit support of 3% to 5% and have maintained their Aa3 Moody’s rating during the time the Bank has owned them. The corporate bonds within the portfolio have all maintained an investment grade rating by either Moody’s or Standard and Poor’s. None of the unrealized losses is related to credit losses. The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. The issuers continue to make timely principal and interest payments on the debt. The fair value is expected to recover as the securities approach maturity. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2020. Sales and Calls of Securities There were $ 153.0 million of proceeds on sales of available for sale securities with gross gains of approximately $ 4.3 million and gross losses of approximately $ 0.8 million realized in 2020. There were $ 46.5 million of proceeds on sales of available for sale securities with gross gains of approximately $ 0.2 million realized in 2019. There were $ 230.4 million of proceeds on sales of available for sale securities with gross losses of approximately $ 7.9 million realized in 2018. There were $ 14.9 million, $ 20.3 million and $ 3.3 million of proceeds from calls of securities in 2020, 2019 and 2018, respectively. Page -62- Pledged Securities Securities having a fair value of $ 402.8 million and $ 402.2 million at December 31, 2020 and 2019, respectively, were pledged to secure public deposits and FHLB and FRB overnight borrowings. Trading Securities The Company did not hold any trading securities during the years ended December 31, 2020 and 2019. Restricted Securities The Bank is a member of the FHLB of New York. Members are required to own a particular amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. The Bank is a member of the Atlantic Central Banker’s Bank (“ACBB”) and is required to own ACBB stock. The Bank is also a member of the FRB system and required to own FRB stock. FHLB, ACBB and FRB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank owned $ 23.4 million and $ 32.9 million in FHLB, ACBB and FRB stock at December 31, 2020 and 2019, respectively. These amounts were reported as restricted securities in the consolidated balance sheets. As of December 31, 2020 and 2019, there was no issuer, other than the U.S. Government and its sponsored entities, where the Bank had invested holdings that exceeded 10 % of consolidated stockholders’ equity. ​ The following table summarizes the amortized cost and estimated fair value by contractual maturity of the available for sale and held to maturity investment securities portfolio at December 31, 2020. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ Amortized ​ Estimated (In thousands) Cost Fair Value Maturity ​ ​ ​ ​ ​ ​ Available for sale: ​ ​ ​ ​ ​ ​ Within one year $ 4,131 $ 4,116 One to five years ​ ​ 58,608 ​ ​ 58,861 Five to ten years ​ ​ 38,415 ​ ​ 38,597 Beyond ten years ​ ​ 344,833 ​ ​ 348,786 Total $ 445,987 $ 450,360 ​ ​ ​ ​ ​ ​ ​ Held to maturity: ​ ​ ​ ​ ​ ​ Within one year $ 1,885 $ 1,902 One to five years ​ ​ 23,140 ​ ​ 24,452 Five to ten years ​ ​ 11,535 ​ ​ 12,144 Beyond ten years ​ ​ 49,140 ​ ​ 50,827 Total $ 85,700 $ 89,325 ​ ​ ​ 3. FAIR VALUE The Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , during the first quarter of 2018. FASB ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy, which requires an entity Page -63- to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following tables summarize assets and liabilities measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ Assets ​ Inputs ​ Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Financial assets: ​ ​ ​ ​ ​ ​ ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ State and municipal obligations ​ $ 42,088 ​ ​ $ 42,088 ​ U.S. GSE residential mortgage-backed securities ​ 113,235 ​ ​ 113,235 ​ U.S. GSE residential collateralized mortgage obligations ​ 128,804 ​ ​ 128,804 ​ U.S. GSE commercial mortgage-backed securities ​ 24,807 ​ ​ 24,807 ​ U.S. GSE commercial collateralized mortgage obligations ​ 62,336 ​ ​ 62,336 ​ Other asset-backed securities ​ 23,950 ​ ​ 23,950 ​ Corporate bonds ​ 55,140 ​ ​ 55,140 ​ Total available for sale securities ​ $ 450,360 ​ ​ ​ $ 450,360 ​ Derivatives ​ $ 49,662 ​ ​ ​ $ 49,662 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ Derivatives ​ $ 56,417 ​ ​ ​ $ 56,417 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ Assets ​ Inputs ​ Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 50,822 ​ ​ ​ $ 50,822 ​ ​ U.S. GSE securities ​ ​ 4,995 ​ ​ ​ ​ 4,995 ​ State and municipal obligations ​ 34,964 ​ ​ 34,964 ​ U.S. GSE residential mortgage-backed securities ​ 84,691 ​ ​ 84,691 ​ U.S. GSE residential collateralized mortgage obligations ​ 277,851 ​ ​ 277,851 ​ U.S. GSE commercial mortgage-backed securities ​ 13,609 ​ ​ 13,609 ​ U.S. GSE commercial collateralized mortgage obligations ​ 104,156 ​ ​ 104,156 ​ Other asset-backed securities ​ 23,401 ​ ​ 23,401 ​ Corporate bonds ​ 43,802 ​ ​ 43,802 ​ Total available for sale securities ​ $ 638,291 ​ ​ ​ $ 638,291 ​ Derivatives ​ $ 15,437 ​ ​ ​ $ 15,437 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ Derivatives ​ $ 16,645 ​ ​ ​ $ 16,645 ​ ​ Page -64- The following tables summarize assets measured at fair value on a non-recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ Assets ​ Inputs ​ Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Loans held for sale ​ $ 52,785 $ 42,785 ​ ​ $ 10,000 Individually evaluated loans ​ $ 2,940 ​ ​ ​ $ 2,940 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ ​ Assets ​ Inputs ​ Inputs (In thousands) Value ​ (Level 1) (Level 2) (Level 3) Loans held for sale ​ $ 12,643 ​ ​ ​ ​ $ 12,643 Impaired loans ​ $ 6,981 ​ ​ $ 6,981 ​ Loans held for sale at December 31, 2020 had a carrying amount of $ 52.8 million which is net of a $ 2.9 million valuation allowance. Loans held for sale at December 31, 2019 had a carrying amount of $ 12.6 million with no valuation allowance recorded. Individually evaluated commercial and industrial loans with an allowance for credit losses at December 31, 2020 had a carrying amount of $ 2.9 million, which is made up of the outstanding balance of $ 9.6 million, net of a valuation allowance of $ 6.7 million. This resulted in an additional provision for credit losses of $ 2.6 million that is included in the amount reported on the consolidated statements of income for the year ended December 31, 2020. Impaired loans (prior to the adoption of the CECL standard) with an allocated allowance for loan losses at December 31, 2019 had a carrying amount of $ 7.0 million, which is made up of the outstanding balance of $ 11.7 million, net of a valuation allowance of $ 4.7 million. There was no other real estate owned at December 31, 2020 and 2019. Accordingly, there was no additional provision for credit losses included in the amount reported on the consolidated statements of income. The Company used the following methods and assumptions in estimating the fair value of its financial instruments: Securities Available for Sale and Held to Maturity: If available, the estimated fair values are based on independent dealer quotations on nationally recognized securities exchanges and are classified as Level 1. For securities where quoted prices are not available, fair value is based on matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities resulting in a Level 2 classification. Derivatives: Represents interest rate swaps for which the estimated fair values are based on valuation models using observable market data as of the measurement date resulting in a Level 2 classification. Loans Held for Sale: Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is initially determined using the price we expect to receive for the loans based on commitments received from third-party investors. Thereafter, loans held for sale are re-evaluated quarterly to determine if a valuation allowance is required to adjust for a decline in fair value below the carrying amount. Subsequent fair value determinations are based on commitments received from third party investors and/or through appraisals using a single valuation approach or a combination of approaches including comparable sales and the income approach. Appraisals may be discounted for changes in market conditions. These valuation methods result in a Level 3 classification. Page -65- At December 31, 2020 the leveraged lending portfolio was reclassified to held for sale and sold in January 2021.The estimated fair values at December 31, 2020 were based on the observable market prices for the loans, resulting in a Level 1 classification. Individually Evaluated Loans with an ACL (Impaired Loans with an ACL prior to the adoption of the CECL Standard) 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 and the amortized cost basis of the loan as of the measurement date. The fair value of real estate collateral is 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. Non-real estate collateral, which includes inventory and taxi medallions, may be valued using 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. These valuation methods result in a Level 3 classification. 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. Page -66- The following tables summarize the estimated fair values and recorded carrying amounts of the Company’s financial instruments at December 31, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ Quoted Prices In Other Significant ​ ​ ​ Active Markets for Observable Unobservable ​ ​ ​ ​ Carrying Identical Assets Inputs Inputs ​ Total (In thousands) Amount (Level 1) (Level 2) (Level 3) Fair Value Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and due from banks $ 107,729 $ 107,729 $ — $ — $ 107,729 Interest-bearing deposits with banks ​ 769,099 ​ 769,099 ​ — ​ — ​ 769,099 Securities available for sale ​ 450,360 ​ — ​ 450,360 ​ — ​ 450,360 Securities restricted ​ 23,362 ​ n/a ​ n/a ​ n/a ​ n/a Securities held to maturity ​ 85,700 ​ — ​ 89,325 ​ — ​ 89,325 Loans held for sale ​ ​ 52,785 ​ ​ 42,785 ​ ​ — ​ ​ 10,000 ​ ​ 52,785 Loans, net ​ 4,553,203 ​ — ​ — ​ 4,554,333 ​ 4,554,333 Derivatives ​ 49,662 ​ — ​ 49,662 ​ — ​ 49,662 Accrued interest receivable ​ 16,566 ​ — ​ 1,421 ​ 15,145 ​ 16,566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ 288,445 ​ — ​ 290,971 ​ — ​ 290,971 Demand and other deposits ​ 5,200,808 ​ 5,200,808 ​ — ​ — ​ 5,200,808 FHLB advances ​ 215,000 ​ — ​ 221,665 ​ — ​ 221,665 Repurchase agreements ​ 1,223 ​ — ​ 1,223 ​ — ​ 1,223 Subordinated debentures ​ 79,059 ​ — ​ 86,704 ​ — ​ 86,704 Derivatives ​ 56,417 ​ — ​ 56,417 ​ — ​ 56,417 Accrued interest payable ​ 881 ​ — ​ 881 ​ — ​ 881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ Quoted Prices In Other Significant ​ ​ ​ ​ Active Markets for Observable Unobservable ​ ​ ​ ​ Carrying Identical Assets Inputs Inputs ​ Total (In thousands) Amount (Level 1) (Level 2) (Level 3) Fair Value Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and due from banks $ 77,693 $ 77,693 $ — $ — $ 77,693 Interest-bearing deposits with banks ​ 39,501 ​ 39,501 ​ — ​ — ​ 39,501 Securities available for sale ​ 638,291 ​ — ​ 638,291 ​ — ​ 638,291 Securities restricted ​ 32,879 ​ n/a ​ n/a ​ n/a ​ n/a Securities held to maturity ​ 133,638 ​ — ​ 135,027 ​ — ​ 135,027 Loans held for sale ​ ​ 12,643 ​ ​ — ​ ​ — ​ ​ 12,643 ​ ​ 12,643 Loans, net ​ 3,647,499 ​ — ​ — ​ 3,685,770 ​ 3,685,770 Derivatives ​ 15,437 ​ — ​ 15,437 ​ — ​ 15,437 Accrued interest receivable ​ 10,908 ​ — ​ 2,181 ​ 8,727 ​ 10,908 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ 307,977 ​ — ​ 308,660 ​ — ​ 308,660 Demand and other deposits ​ 3,506,670 ​ 3,506,670 ​ — ​ — ​ 3,506,670 FHLB advances ​ 435,000 ​ 195,000 ​ 239,622 ​ — ​ 434,622 Repurchase agreements ​ 999 ​ — ​ 999 ​ — ​ 999 Subordinated debentures ​ 78,920 ​ — ​ 81,010 ​ — ​ 81,010 Derivatives ​ 16,645 ​ — ​ 16,645 ​ — ​ 16,645 Accrued interest payable ​ 1,467 ​ — ​ 1,467 ​ — ​ 1,467 ​ ​ Page -67- 4. LOANS The following table sets forth the major classifications of loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) December 31, 2020 December 31, 2019 Commercial real estate mortgage loans: ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 557,076 ​ $ 531,088 Non-owner occupied ​ ​ 1,081,443 ​ ​ 1,034,599 Multi-family mortgage loans ​ ​ 899,730 ​ 812,174 Residential real estate mortgage loans ​ 434,689 ​ 493,144 Commercial, industrial and agricultural loans ​ 1,527,147 ​ 679,444 Real estate construction and land loans ​ 82,479 ​ 97,311 Installment/consumer loans ​ 23,019 ​ 24,836 Total loans ​ 4,605,583 ​ 3,672,596 Net deferred loan (fees) costs ​ ( 8,180 ) ​ 7,689 Total loans held for investment ​ 4,597,403 ​ 3,680,285 Allowance for credit losses ​ ( 44,200 ) ​ ( 32,786 ) Loans, net ​ $ 4,553,203 ​ $ 3,647,499 ​ Included in commercial, industrial and agricultural loans at December 31, 2020 was $ 844.7 million of Paycheck Protection Program (“PPP”) loans. These loans are expected to be fully guaranteed by the SBA and have a nominal allowance for credit losses allocated to them based on the nature of the guarantee. The shift from net deferred loan costs at December 31, 2019 to net deferred loan fees at December 31, 2020 was the result of the net deferred loan fees associated with the PPP loans. Accrued interest receivable on loans totaling $ 15.1 million at December 31, 2020 and $ 8.7 million at December 31, 2019 was included in accrued interest receivable in the consolidated balance sheet and excluded from the table above. The increase in accrued interest receivable from December 31, 2019 relates primarily to accrued interest on PPP loans. Loans held for sale, which are not included in the table above, totaled $ 52.8 million at December 31, 2020 and $ 12.6 million at December 31, 2019. In December 2020, the Company made a decision to dispose of its $ 43.0 million leveraged lending portfolio which was previously included in commercial, industrial and agricultural loans. As of December 31, 2020, the leveraged lending portfolio was reclassified from loans held for investment to loans held for sale and written down by $ 234 thousand to the estimated fair value of the loans in this portfolio of $ 42.8 million through a valuation allowance which was charged against non-interest income in the consolidated statements of income. As of December 31, 2020 and 2019, one commercial real estate (“CRE”) mortgage loan totaling $ 10.0 million and $ 12.6 million, respectively, was classified as held for sale. The loan was reclassified from loans held for investment to loans held for sale and written down from $ 16.3 million to the loan’s estimated fair value of $ 12.6 million as of June 30, 2019, through a $ 3.7 million charge-off during the 2019 second quarter. During the 2020 second quarter, an additional write-down was recognized for the decrease in the estimated fair value of the loan by $ 2.6 million to $ 10.0 million through a valuation allowance which was charged against non-interest income in the consolidated statements of income. Lending Risk The principal business of the Bank is lending in CRE mortgage loans, multi-family mortgage loans, residential real estate mortgage loans, construction loans, home equity loans, commercial, industrial and agricultural loans, land loans and consumer loans. The Bank considers its primary lending area to be Nassau and Suffolk Counties located on Long Island and the New York City boroughs. A substantial portion of the Bank’s loans is secured by real estate in these areas. Accordingly, the ultimate collectability of the loan portfolio is susceptible to changes in market and economic conditions in this region. Commercial Real Estate Mortgages Loans in this classification include income producing investment properties and owner-occupied real estate used for business purposes. The underlying properties are located largely in the Bank’s primary market area. The cash flows of the income producing investment properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on credit quality. Generally, management seeks to obtain annual financial Page -68- information for borrowers with loans in excess of $ 1.0 million in this category. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending will have an adverse effect on credit quality. Multi-Family Mortgages Loans in this classification include income producing residential investment properties of five or more families. Loans are made to established owners with a proven and demonstrable record of strong performance. Loans are secured by a first mortgage lien on the subject property with a loan to value ratio generally not exceeding 75 %. Repayment is derived generally from the rental income generated from the property and may be supplemented by the owners’ personal cash flow. Credit risk arises with an increase in vacancy rates, property mismanagement and the predominance of non-recourse loans that are customary in the industry. Residential Real Estate Mortgages and Home Equity Loans Loans in these classifications are generally secured by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this loan class. The Bank generally does not originate loans with a loan-to-value ratio greater than 80 % and does not grant subprime loans. Commercial, Industrial and Agricultural Loans Loans in this classification are made to businesses and include term loans, lines of credit, senior secured loans to corporations, equipment financing and taxi medallion loans. Generally, these loans are secured by assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending, will have an effect on the credit quality in this loan class. Real Estate Construction and Land Loans Loans in this classification primarily include land loans to local individuals, contractors and developers for developing the land for sale or for the purpose of making improvements thereon. Repayment is derived primarily from sale of the lots/units including any pre-sold units. Credit risk is affected by market conditions, time to sell at an adequate price and cost overruns. To a lesser extent, this class includes commercial development projects that the Company finances, which in most cases require interest only during construction, and then convert to permanent financing. Construction delays, cost overruns, market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by the Bank, all affect the credit risk in this loan class. Installment and Consumer Loans Loans in this classification may be either secured or unsecured. Repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan, such as automobiles. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan class. Credit Quality Indicators The Company categorizes loans into risk categories of pass, watch, special mention, substandard and doubtful based on relevant information about the ability of borrowers to service their debt including repayment patterns, past loss experience, current economic conditions, and various types of concentrations of credit. Assigned risk rating grades are continuously updated as new information is obtained. Loans risk rated special mention, substandard and doubtful are reviewed on a quarterly basis. The Company uses the following definitions for risk rating grades: Pass: Loans classified as pass include current loans performing in accordance with contractual terms, pools of homogenous residential real estate and installment/consumer loans that are not individually risk rated and loans which do not exhibit certain risk factors that require greater than usual monitoring by management. Page -69- Watch: Loans classified as watch are considered pass rated loans. These loans carry additional risk factors above those of pass loans but do not have all the risk characteristics of loans classified as special mention. Such risk factors require monitoring and if left uncorrected, could lead these loans to be downgraded. Special mention: Loans classified as special mention, while generally not delinquent, have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank’s credit position at some future date. Substandard: Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in a substandard loan, may also be in delinquency status and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly questionable and improbable. ​ Page -70- The following tables represent loans categorized by internally assigned risk grades as of December 31, 2020 and December 31, 2019. In the December 31, 2020 table, the years noted represent the year of origination for non-revolving loans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 (In thousands) ​ 2020 ​ 2019 ​ 2018 ​ 2017 ​ 2016 ​ 2015 and Prior ​ Revolving ​ Revolving-Term ​ Total Commercial real estate owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 92,053 ​ $ 96,679 ​ $ 47,224 ​ $ 66,320 ​ $ 25,852 ​ $ 153,766 ​ $ — ​ $ — ​ $ 481,894 Watch ​ ​ 727 ​ ​ 1,373 ​ ​ 8,038 ​ ​ 10,737 ​ ​ 3,425 ​ ​ 23,919 ​ ​ — ​ ​ — ​ ​ 48,219 Special mention ​ ​ 1,843 ​ ​ — ​ ​ 3,875 ​ ​ 10,857 ​ ​ 823 ​ ​ 4,600 ​ ​ — ​ ​ — ​ ​ 21,998 Substandard ​ ​ 469 ​ ​ 553 ​ ​ — ​ ​ — ​ ​ 2,426 ​ ​ 1,517 ​ ​ — ​ ​ — ​ ​ 4,965 Total commercial real estate owner occupied ​ ​ 95,092 ​ ​ 98,605 ​ ​ 59,137 ​ ​ 87,914 ​ ​ 32,526 ​ ​ 183,802 ​ ​ — ​ ​ — ​ ​ 557,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate non-owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 181,811 ​ ​ 249,782 ​ ​ 108,086 ​ ​ 180,235 ​ ​ 54,252 ​ ​ 214,620 ​ ​ — ​ ​ — ​ ​ 988,786 Watch ​ ​ 7,314 ​ ​ 7,700 ​ ​ 12,845 ​ ​ 12,117 ​ ​ 12,209 ​ ​ 24,089 ​ ​ — ​ ​ — ​ ​ 76,274 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 290 ​ ​ — ​ ​ — ​ ​ 290 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 9,006 ​ ​ 6,038 ​ ​ 1,049 ​ ​ — ​ ​ — ​ ​ 16,093 Total commercial real estate non-owner occupied ​ ​ 189,125 ​ ​ 257,482 ​ ​ 120,931 ​ ​ 201,358 ​ ​ 72,499 ​ ​ 240,048 ​ ​ — ​ ​ — ​ ​ 1,081,443 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 159,301 ​ ​ 293,752 ​ ​ 40,840 ​ ​ 86,169 ​ ​ 118,846 ​ ​ 106,044 ​ ​ — ​ ​ — ​ ​ 804,952 Watch ​ ​ 15,436 ​ ​ 2,724 ​ ​ — ​ ​ 19,331 ​ ​ 35,976 ​ ​ 12,825 ​ ​ — ​ ​ — ​ ​ 86,292 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 8,098 ​ ​ — ​ ​ 388 ​ ​ — ​ ​ — ​ ​ 8,486 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total multi-family ​ ​ 174,737 ​ ​ 296,476 ​ ​ 40,840 ​ ​ 113,598 ​ ​ 154,822 ​ ​ 119,257 ​ ​ — ​ ​ — ​ ​ 899,730 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 20,033 ​ ​ 32,564 ​ ​ 71,903 ​ ​ 95,712 ​ ​ 23,589 ​ ​ 106,518 ​ ​ 53,217 ​ ​ 7,012 ​ ​ 410,548 Watch ​ ​ — ​ ​ — ​ ​ 406 ​ ​ 321 ​ ​ 541 ​ ​ 1,740 ​ ​ — ​ ​ 1,145 ​ ​ 4,153 Special mention ​ ​ — ​ ​ 1,103 ​ ​ 758 ​ ​ — ​ ​ — ​ ​ 6,879 ​ ​ 818 ​ ​ 633 ​ ​ 10,191 Substandard ​ ​ — ​ ​ 466 ​ ​ 569 ​ ​ 937 ​ ​ — ​ ​ 6,967 ​ ​ — ​ ​ 858 ​ ​ 9,797 Total residential real estate ​ ​ 20,033 ​ ​ 34,133 ​ ​ 73,636 ​ ​ 96,970 ​ ​ 24,130 ​ ​ 122,104 ​ ​ 54,035 ​ ​ 9,648 ​ ​ 434,689 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 949,257 ​ ​ 62,410 ​ ​ 30,736 ​ ​ 17,646 ​ ​ 12,685 ​ ​ 26,606 ​ ​ 304,781 ​ ​ 5,086 ​ ​ 1,409,207 Watch ​ ​ 8,062 ​ ​ 6,140 ​ ​ 8,265 ​ ​ 1,574 ​ ​ 1,188 ​ ​ 3,048 ​ ​ 40,448 ​ ​ 1,527 ​ ​ 70,252 Special mention ​ ​ 2,914 ​ ​ 838 ​ ​ 572 ​ ​ 1,507 ​ ​ 545 ​ ​ 1,323 ​ ​ 18,984 ​ ​ 2,073 ​ ​ 28,756 Substandard ​ ​ — ​ ​ 905 ​ ​ 1,233 ​ ​ 3,514 ​ ​ 470 ​ ​ 9,660 ​ ​ 200 ​ ​ 2,950 ​ ​ 18,932 Total commercial, industrial and agricultural ​ ​ 960,233 ​ ​ 70,293 ​ ​ 40,806 ​ ​ 24,241 ​ ​ 14,888 ​ ​ 40,637 ​ ​ 364,413 ​ ​ 11,636 ​ ​ 1,527,147 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate construction and land loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 37,684 ​ ​ 20,948 ​ ​ 8,229 ​ ​ 11,308 ​ ​ — ​ ​ 1,701 ​ ​ — ​ ​ — ​ ​ 79,870 Watch ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,150 ​ ​ — ​ ​ 270 ​ ​ — ​ ​ — ​ ​ 1,420 Special mention ​ ​ — ​ ​ — ​ ​ 1,078 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,078 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 111 ​ ​ — ​ ​ — ​ ​ 111 Total real estate construction and land loans ​ ​ 37,684 ​ ​ 20,948 ​ ​ 9,307 ​ ​ 12,458 ​ ​ — ​ ​ 2,082 ​ ​ — ​ ​ — ​ ​ 82,479 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Installment/consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ ​ 1,656 ​ ​ 215 ​ ​ 166 ​ ​ 93 ​ ​ — ​ ​ 710 ​ ​ 17,382 ​ ​ 1,257 ​ ​ 21,479 Watch ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 496 ​ ​ 40 ​ ​ 536 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 46 ​ ​ 46 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 50 ​ ​ 908 ​ ​ 958 Total installment/consumer loans ​ ​ 1,656 ​ ​ 215 ​ ​ 166 ​ ​ 93 ​ ​ — ​ ​ 710 ​ ​ 17,928 ​ ​ 2,251 ​ ​ 23,019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Loans ​ $ 1,478,560 ​ $ 778,152 ​ $ 344,823 ​ $ 536,632 ​ $ 298,865 ​ $ 708,640 ​ $ 436,376 ​ $ 23,535 ​ $ 4,605,583 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 (In thousands) Pass Special Mention Substandard Doubtful Total Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 511,444 ​ $ 18,426 ​ $ 1,218 ​ $ — ​ $ 531,088 Non-owner occupied ​ 1,022,208 ​ — ​ 12,391 ​ ​ — ​ ​ 1,034,599 Multi-family ​ 811,770 ​ 404 ​ — ​ ​ — ​ ​ 812,174 Residential real estate ​ 475,949 ​ 12,400 ​ 4,795 ​ ​ — ​ ​ 493,144 Commercial, industrial and agricultural ​ 643,413 ​ 15,670 ​ 20,361 ​ ​ — ​ ​ 679,444 Real estate construction and land loans ​ 95,530 ​ — ​ 1,781 ​ ​ — ​ ​ 97,311 Installment/consumer loans ​ 23,976 ​ 103 ​ 757 ​ ​ — ​ ​ 24,836 Total loans ​ $ 3,584,290 ​ $ 47,003 ​ $ 41,303 ​ $ — ​ $ 3,672,596 ​ Page -71- Past Due and Non-accrual Loans The following tables represent the aging of past due loans as of December 31, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ 90+ Days ​ Non-accrual ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-59 ​ 60-89 ​ Past Due ​ Including 90 ​ Total Past ​ ​ ​ ​ ​ ​ ​ ​ Days ​ Days ​ And ​ Days or More ​ Due and ​ ​ ​ ​ ​ ​ (In thousands) Past Due Past Due Accruing Past Due Non-accrual Current Total Loans Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ — ​ $ — ​ $ — ​ $ 636 ​ $ 636 ​ $ 556,440 ​ $ 557,076 Non-owner occupied ​ — ​ — ​ — ​ 6,771 ​ 6,771 ​ 1,074,672 ​ 1,081,443 Multi-family ​ — ​ — ​ — ​ — ​ — ​ 899,730 ​ 899,730 Residential real estate ​ 3,567 ​ 949 ​ — ​ 2,897 ​ 7,413 ​ 427,276 ​ 434,689 Commercial, industrial and agricultural ​ 2,711 ​ 4,072 ​ — ​ 1,597 ​ 8,380 ​ 1,518,767 ​ 1,527,147 Real estate construction and land loans ​ 210 ​ — ​ — ​ 111 ​ 321 ​ 82,158 ​ 82,479 Installment/consumer loans ​ 100 ​ 4 ​ — ​ 150 ​ 254 ​ 22,765 ​ 23,019 Total loans ​ $ 6,588 ​ $ 5,025 ​ $ — ​ $ 12,162 ​ $ 23,775 ​ $ 4,581,808 ​ $ 4,605,583 ​ In the absence of other intervening factors, loans granted payment deferrals related to COVID-19 are not reported as past due or placed on non-accrual status provided the borrowers have met the criteria in the CARES Act or otherwise have met the criteria included in an interagency statement issued by bank regulatory agencies. During the year ended December 31, 2020, there was $ 93 thousand in interest earned on non-accrual loans and $ 406 thousand in accrued interest on non-accrual loans was reversed through interest income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ 90+ Days ​ Non-accrual ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-59 ​ 60-89 ​ Past Due ​ Including 90 ​ Total Past ​ ​ ​ ​ ​ ​ ​ ​ Days ​ Days ​ And ​ Days or More ​ Due and ​ ​ ​ ​ ​ ​ (In thousands) Past Due Past Due Accruing Past Due Non-accrual Current Total Loans Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 917 ​ $ 433 ​ $ — ​ $ 225 ​ $ 1,575 ​ $ 529,513 ​ $ 531,088 Non-owner occupied ​ 98 ​ — ​ — ​ 512 ​ 610 ​ 1,033,989 ​ 1,034,599 Multi-family ​ — ​ — ​ — ​ — ​ — ​ 812,174 ​ 812,174 Residential real estate ​ 3,053 ​ 747 ​ 343 ​ 2,743 ​ 6,886 ​ 486,258 ​ 493,144 Commercial, industrial and agricultural ​ 273 ​ 721 ​ — ​ 736 ​ 1,730 ​ 677,714 ​ 679,444 Real estate construction and land loans ​ — ​ — ​ — ​ 123 ​ 123 ​ 97,188 ​ 97,311 Installment/consumer loans ​ 124 ​ — ​ — ​ 30 ​ 154 ​ 24,682 ​ 24,836 Total loans ​ $ 4,465 ​ $ 1,901 ​ $ 343 ​ $ 4,369 ​ $ 11,078 ​ $ 3,661,518 ​ $ 3,672,596 ​ There was no other real estate owned at December 31, 2020 and 2019. Troubled Debt Restructurings The terms of certain loans were modified and are considered TDRs. The modification of the terms of such loans generally includes one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. The modification of these loans involved loans to borrowers who were experiencing financial difficulties. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed to determine if that borrower is currently in payment default under any of its obligations or whether there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. ​ Page -72- The following table presents loans modified as troubled debt restructurings during the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Modifications During the Year Ended December 31, ​ ​ 2020 ​ 2019 ​ 2018 ​ ​ ​ ​ Pre- ​ Post- ​ ​ ​ Pre- ​ Post- ​ ​ ​ Pre- ​ Post- ​ ​ ​ ​ Modification ​ Modification ​ ​ ​ Modification ​ Modification ​ ​ ​ Modification ​ Modification ​ ​ ​ ​ Outstanding ​ Outstanding ​ ​ ​ Outstanding ​ Outstanding ​ ​ ​ Outstanding ​ Outstanding ​ ​ Number of ​ Recorded ​ Recorded ​ Number of ​ Recorded ​ Recorded ​ Number of ​ Recorded ​ Recorded (Dollars in thousands) Loans Investment Investment Loans Investment Investment Loans Investment Investment Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ — $ — $ — 3 $ 8,582 $ 8,582 — $ — $ — Non-owner occupied — — — — — — 1 926 926 Residential real estate ​ — ​ — ​ — 1 ​ 338 ​ 338 1 ​ 644 ​ 644 Commercial, industrial and agricultural 3 ​ 1,138 ​ ​ 1,138 15 ​ 12,828 ​ ​ 12,828 10 ​ 7,649 ​ ​ 7,649 Installment/consumer loans — ​ — ​ ​ — — ​ — ​ ​ — — ​ — ​ ​ — Total 3 $ 1,138 $ 1,138 19 $ 21,748 $ 21,748 12 ​ $ 9,219 ​ $ 9,219 ​ There were $ 1.7 million, $ 0.1 million and $ 0.4 million of charge-offs related to TDRs during the years ended December 31, 2020, 2019 and 2018, respectively. During the year ended December 31, 2020 there was one loan modified as a TDR for which there was a payment default within twelve months following the modification. There were two loans modified as TDRs during 2019 and one loan modified as a TDR during 2018 for which there was a payment default within twelve months following the modification. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. At December 31, 2020 and 2019, the Company had $ 346 thousand and $ 405 thousand, respectively, of non-accrual TDRs and $ 22.2 million and $ 26.3 million, respectively, of performing TDRs. The decrease in performing TDRs is primarily due to one TDR relationship which became non-accrual during the 2020 second quarter and totaled $ 2.7 million at June 30, 2020. In the 2020 third quarter, a settlement agreement was entered into resulting in $ 1.4 million in payments and a charge-off totaling $ 1.3 million. At December 31, 2020, three non-accrual TDRs totaling $ 130 thousand were unsecured and one non-accrual TDR totaling $ 216 thousand was secured and at December 31, 2019, the non-accrual TDRs were unsecured. The Bank has no commitment to lend additional funds to these debtors. The terms of certain other loans were modified during the year ended December 31, 2020 that did not meet the definition of a TDR. These loans have a total recorded investment at December 31, 2020 of $ 191.1 million. These loans were to borrowers who were not experiencing financial difficulties. In connection with the COVID-19 relief provided by the CARES Act and interagency guidance issued in March 2020, the Company is supporting its customers who may experience financial difficulty due to COVID-19 through loan moratoriums and forbearance programs. The Company began offering 90-day payment modifications on a case-by-case basis to those customers whose income was adversely impacted by COVID-19. The loan modifications in this program primarily consist of three-month deferrals of interest and principal payments. Extensions may be granted on a case by case basis. As of December 31, 2020, approximately 500 loans totaling $ 635 million were granted payment moratoriums during 2020. T hese deferrals are not considered TDRs based on the CARES Act and/or the interagency guidance. As of January 21, 2021, $ 76.1 million in moratoriums were outstanding. Collateral Dependent Loans At December 31, 2020, the Company had collateral dependent loans which were individually evaluated to determine expected credit losses. Collateral dependent commercial, industrial and agricultural loans totaled $ 9.6 million and had a related allowance for credit losses totaling $ 6.7 million. The loans were secured by taxi medallions. Collateral dependent commercial real estate loans totaled $ 10.8 million and had no related allowance for credit losses. Impaired Loans (prior to the adoption of the CECL Standard) At December 31, 2019 the Company had individually impaired loans as defined by FASB ASC 310, “Receivables” of $ 27.0 million. For a loan to be considered impaired, management determines after review whether it is probable that the Bank will not be able to collect all amounts due according to the contractual terms of the loan agreement. Management applies its normal loan review procedures in making these judgments. Impaired loans include individually classified non- Page -73- accrual loans and TDRs. At December 31, 2019 impaired loans included $ 1.1 million in other impaired performing loans related to borrowers with other performing TDRs. For impaired loans, the Bank evaluates the impairment of the loan in accordance with FASB ASC 310-10-35-22. Impairment is determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate. For loans that are collateral dependent, the fair value of the collateral is used to determine the fair value of the loan. The fair value of the collateral is determined based on recent appraised values. The fair value of the collateral or present value of expected cash flows is compared to the carrying value to determine if any write-down or specific loan loss allowance allocation is required. The following tables set forth the recorded investment, unpaid principal balance and related allowance for individually impaired loans at December 31, 2019 and 2018. The tables also set forth the average recorded investment of individually impaired loans and interest income recognized while the loans were impaired during the years ended December 31, 2019 and 2018: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ Year Ended December 31, 2019 ​ ​ ​ ​ ​ Unpaid ​ Related ​ Average ​ Interest ​ ​ Recorded ​ Principal ​ Allocated ​ Recorded ​ Income (In thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 3,379 ​ $ 3,401 ​ $ — ​ $ 1,286 ​ $ 41 Non-owner occupied ​ 2,296 ​ 2,296 ​ — ​ 2,149 ​ 99 Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ — ​ — — Home equity ​ ​ 294 ​ 300 ​ — ​ 74 — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 494 ​ 494 ​ — ​ 287 18 Unsecured ​ ​ 8,863 ​ 8,863 ​ — ​ 6,601 411 Total with no related allowance recorded ​ ​ 15,326 ​ 15,354 ​ — ​ 10,397 ​ 569 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ With an allowance recorded: ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ Owner occupied ​ ​ — ​ — ​ — ​ — ​ — Non-owner occupied ​ — — — — — Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ — ​ — ​ — Home equity ​ ​ — ​ — ​ — ​ — ​ — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 9,612 ​ 9,612 ​ 3,435 ​ 6,189 ​ 223 Unsecured ​ ​ 2,045 ​ 2,051 ​ 1,241 ​ 1,838 ​ 86 Total with an allowance recorded ​ ​ 11,657 ​ 11,663 ​ ​ 4,676 ​ 8,027 ​ 309 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ ​ 3,379 ​ 3,401 ​ — ​ 1,286 ​ 41 Non-owner occupied ​ ​ 2,296 ​ 2,296 ​ — ​ 2,149 99 Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ — ​ — — Home equity ​ ​ 294 ​ 300 ​ — ​ 74 — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 10,106 ​ 10,106 ​ 3,435 ​ 6,476 241 Unsecured ​ ​ 10,908 ​ 10,914 ​ 1,241 ​ 8,439 497 Total ​ $ 26,983 ​ $ 27,017 ​ $ 4,676 ​ $ 18,424 $ 878 Page -74- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2018 ​ Year Ended December 31, 2018 ​ ​ ​ ​ ​ Unpaid ​ Related ​ Average ​ Interest ​ ​ Recorded ​ Principal ​ Allocated ​ Recorded ​ Income (In thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 268 ​ $ 278 ​ $ — ​ $ 177 ​ $ — Non-owner occupied ​ 2,816 ​ 2,816 ​ — 1,583 ​ 88 Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ ​ — ​ — — Home equity ​ ​ — ​ — ​ ​ — ​ — — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 8,234 ​ 8,234 ​ ​ — ​ 5,644 196 Unsecured ​ ​ 5,316 ​ 5,316 ​ ​ — ​ 5,127 284 Total with no related allowance recorded ​ ​ 16,634 ​ 16,644 ​ ​ — ​ 12,531 ​ 568 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ With an allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ ​ — ​ — ​ ​ — ​ — ​ — Non-owner occupied ​ ​ — — ​ — — — Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ ​ — ​ — ​ — Home equity ​ ​ — ​ — ​ ​ — ​ — ​ — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 2,721 ​ 2,721 ​ 189 ​ 2,757 ​ 91 Unsecured ​ ​ — ​ — ​ ​ — ​ — ​ — Total with an allowance recorded ​ ​ 2,721 ​ 2,721 ​ ​ 189 ​ 2,757 91 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total: ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ ​ 268 ​ 278 ​ — ​ 177 — Non-owner occupied ​ ​ 2,816 ​ 2,816 ​ — ​ 1,583 88 Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgages ​ ​ — ​ — ​ — ​ — — Home equity ​ ​ — ​ — ​ — ​ — — Commercial, industrial and agricultural: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured ​ ​ 10,955 ​ 10,955 ​ 189 ​ 8,401 287 Unsecured ​ ​ 5,316 ​ 5,316 ​ — ​ 5,127 284 Total ​ $ 19,355 ​ $ 19,365 ​ $ 189 ​ $ 15,288 $ 659 ​ The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. For purposes of this disclosure, the unpaid principal balance is not reduced for partial charge-offs. Related Party Loans Certain directors, executive officers, and their related parties, including their immediate families and companies in which they are principal owners, were loan customers of the Bank during 2020 and 2019. The following table sets forth selected information about related party loans for the year ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands) 2020 Balance at beginning of period ​ $ 12,349 New loans ​ ​ 724 Repayments ​ ​ ( 1,575 ) Balance at end of period ​ $ 11,498 ​ ​ Page -75- The following tables represent the changes in the allowance for credit losses for the years ended December 31, 2020, 2019 and 2018: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2020 ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance, prior to adoption of CECL ​ $ 12,150 ​ $ 4,829 ​ $ 1,882 ​ $ 12,583 ​ $ 1,066 ​ $ 276 ​ $ 32,786 Impact of adopting CECL ​ ​ ( 7,712 ) ​ ​ ( 3,589 ) ​ ​ 2,182 ​ ​ 8,699 ​ ​ 1,274 ​ ​ 771 ​ ​ 1,625 Charge-offs ​ ( 1 ) ​ ​ — ​ ​ — ​ ​ ( 2,004 ) ​ ​ — ​ ​ ( 7 ) ​ ​ ( 2,012 ) Recoveries ​ — ​ — ​ 3 ​ 298 ​ — ​ — ​ 301 Provision (credit) for credit losses ​ 4,097 ​ 496 ​ ( 1,005 ) ​ 7,787 ​ ( 165 ) ​ 290 ​ 11,500 Ending balance ​ $ 8,534 ​ $ 1,736 ​ $ 3,062 ​ $ 27,363 ​ $ 2,175 ​ $ 1,330 ​ $ 44,200 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2019 ​ ​ ​ ​ ​ Residential Commercial, Real Estate ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 10,792 ​ $ 2,566 ​ $ 3,935 ​ $ 12,722 ​ $ 1,297 ​ $ 106 ​ $ 31,418 Charge-offs ​ ( 3,670 ) ​ — ​ — ​ ( 799 ) ​ — ​ ( 13 ) ​ ( 4,482 ) Recoveries ​ 1 ​ — ​ 112 ​ 25 ​ — ​ 12 ​ 150 Provision (credit) for credit losses ​ 5,027 ​ 2,263 ​ ( 2,165 ) ​ 635 ​ ( 231 ) ​ 171 ​ 5,700 Ending balance ​ $ 12,150 ​ $ 4,829 ​ $ 1,882 ​ $ 12,583 ​ $ 1,066 ​ $ 276 ​ $ 32,786 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2018 ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 11,048 ​ $ 4,521 ​ $ 2,438 ​ $ 12,838 ​ $ 740 ​ $ 122 ​ $ 31,707 Charge-offs ​ — ​ — ​ ( 24 ) ​ ( 2,806 ) ​ — ​ ( 11 ) ​ ( 2,841 ) Recoveries ​ — ​ — ​ 3 ​ 747 ​ — ​ 2 ​ 752 (Credit) provision for credit losses ​ ( 256 ) ​ ( 1,955 ) ​ 1,518 ​ 1,943 ​ 557 ​ ( 7 ) ​ 1,800 Ending balance ​ $ 10,792 ​ $ 2,566 ​ $ 3,935 ​ $ 12,722 ​ $ 1,297 ​ $ 106 ​ $ 31,418 ​ The increase in allowance for credit losses in the first half of 2020 was primarily related to the reasonable and supportable forecast component of the newly adopted CECL Standard which includes the impact of the COVID-19 pandemic. The COVID-19 pandemic continues to have a profound impact on economic activity. While there have been some signs of economic improvement during the latter half of 2020, significant uncertainty remains. Management still believes that the economic recovery will continue during 2021 and 2022, however, based on the aforementioned uncertainty and negative impact the virus has had to date, the decision was made to maintain the current risk level for the reasonable and supportable forecast component of the allowance for credit losses as of December 31, 2020. ​ The following table represents the balance in the allowance for loan losses and the recorded investment in loans, as defined under FASB ASC 310-10 (prior to adoption of the CECL Standard), and based on impairment method as of December 31, 2019: ​ Page -76- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ Commercial, ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Real Estate ​ Industrial and ​ Construction ​ Installment/ ​ ​ ​ ​ ​ Real Estate ​ Multi-family ​ Mortgage ​ Agricultural ​ and Land ​ Consumer ​ ​ (In thousands) Mortgage Loans Loans Loans Loans Loans Loans Total Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Individually evaluated for impairment ​ $ — ​ $ — ​ $ — ​ $ 4,676 ​ $ — ​ $ — ​ $ 4,676 Collectively evaluated for impairment ​ ​ 12,150 ​ ​ 4,829 ​ ​ 1,882 ​ ​ 7,907 ​ ​ 1,066 ​ ​ 276 ​ ​ 28,110 Loans acquired with deteriorated credit quality ​ — ​ ​ — ​ ​ — ​ — ​ — ​ ​ — ​ ​ — Total allowance for loan losses ​ $ 12,150 ​ $ 4,829 ​ $ 1,882 ​ $ 12,583 ​ $ 1,066 ​ $ 276 ​ $ 32,786 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans: ​ ​ ​ ​ ​ ​ ​ Individually evaluated for impairment ​ $ 5,675 ​ $ — ​ $ 294 ​ $ 21,014 ​ $ — ​ $ — ​ $ 26,983 Collectively evaluated for impairment ​ 1,560,012 ​ 812,174 ​ 492,507 ​ 658,430 ​ 97,311 ​ 24,836 ​ 3,645,270 Loans acquired with deteriorated credit quality ​ — ​ — ​ 343 ​ — ​ — ​ — ​ 343 Total loans ​ $ 1,565,687 ​ $ 812,174 ​ $ 493,144 ​ $ 679,444 ​ $ 97,311 ​ $ 24,836 ​ $ 3,672,596 ​ The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. ​ ​ 5. PREMISES AND EQUIPMENT, NET The following table details the components of premises and equipment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2020 2019 Land ​ $ 7,896 ​ $ 7,896 Building and improvements ​ 17,391 ​ 17,271 Furniture, fixtures and equipment ​ 28,682 ​ 25,288 Leasehold improvements ​ 13,355 ​ 12,356 ​ ​ 67,324 ​ 62,811 Accumulated depreciation and amortization ​ ( 32,452 ) ​ ( 28,749 ) Total premises and equipment, net ​ $ 34,872 ​ $ 34,062 ​ Depreciation and amortization amounted to $ 4.3 million, $ 4.3 million and $ 3.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. ​ Page -77- ​ 6. LEASES The Company has operating leases for certain branch locations, corporate offices and equipment. Certain leases contain rent escalation clauses, which are reflected in the Company’s operating lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants. The components of lease cost were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2020 2019 Lease cost ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 7,643 ​ $ 7,038 Sublease income ​ ​ ( 37 ) ​ ​ ( 95 ) Total lease cost ​ $ 7,606 ​ $ 6,943 ​ The Company reports lease cost in occupancy and equipment expense in the consolidated statements of income. The Company subleases a portion of its leased properties to commercial sublessees. Sublease income is included in other operating income in the consolidated statements of income. Supplemental cash flow and balance sheet information related to operating leases were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 7,363 ​ $ 7,019 Operating right-of-use assets obtained in exchange for lease liabilities ​ $ 7,843 ​ $ 48,101 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ December 31, 2019 ​ Weighted-average remaining lease term-operating leases ​ ​ 7.6 years ​ 7.8 years Weighted-average discount rate-operating leases (1) ​ 2.91 % ​ 3.20 % (1) The Company computes the present value of operating lease liabilities using its incremental borrowing rate as the discount rate. Certain leases contain renewal options which are not reflected in the tables below. The exercise of renewal options, which extend the lease term from five to ten years , is at the Company’s discretion. The maturities of operating lease liabilities were as follows: ​ ​ ​ ​ ​ (In thousands) December 31, 2020 2021 ​ $ 7,387 2022 ​ ​ 7,260 2023 ​ 6,548 2024 ​ ​ 6,297 2025 ​ 6,177 Thereafter ​ 18,649 Total operating lease payments ​ $ 52,318 Less: Interest ​ ​ ( 5,605 ) Present value of operating lease liabilities ​ $ 46,713 ​ Page -78- 7. GOODWILL AND OTHER INTANGIBLE ASSETS FASB ASC 350, Intangibles — Goodwill and Other, requires a company to perform an impairment test on goodwill annually, or more frequently if events or changes in circumstance indicate that the asset might be impaired, by comparing the fair value of such goodwill to its recorded or carrying amount. If the carrying amount of goodwill exceeds the fair value, an impairment charge must be recorded in an amount equal to the excess. The FASB issued ASU No. 2011-08, “Testing Goodwill for Impairment,” which permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Goodwill At December 31, 2020 and 2019, the carrying amount of the Company’s goodwill was $ 106.0 million. The Company tested goodwill for impairment during the fourth quarter of 2020. The Company has one reporting unit, Dime Community Bancshares, Inc., and evaluated goodwill at that reporting unit level. The Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value and no further testing was required. The results of this assessment indicated that goodwill was not impaired. Other Intangible Assets The Company’s other intangible assets consist of core deposit intangibles, a trademark, and servicing assets. At December 31, 2020 and 2019, the carrying amount of the Company’s servicing assets was $ 1.7 million and $ 1.3 million, respectively. Acquired Intangible Assets The following table reflects acquired intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2020 ​ 2019 ​ ​ Gross ​ ​ ​ Gross ​ ​ ​ ​ Carrying Accumulated Carrying Accumulated (In thousands) Amount Amortization Amount Amortization Intangible assets subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Core deposit intangibles ​ $ 7,211 ​ $ 5,769 ​ $ 7,211 ​ $ 5,113 Intangible assets not subject to amortization: ​ ​ ​ ​ Trademark ​ 259 ​ — ​ 259 ​ — Total intangible assets ​ $ 7,470 ​ $ 5,769 ​ $ 7,470 ​ $ 5,113 ​ Aggregate amortization expense for intangible assets with finite lives for the years ended December 31, 2020, 2019, and 2018 was $ 0.7 million, $ 0.8 million, and $ 0.9 million, respectively. The Company acquired a trademark related to the Bank’s name change from “Bridgehampton National Bank” to “BNB Bank” during the year ended December 31, 2017. At December 31, 2020 and 2019, the carrying amount of the Company’s trademark was $ 259 thousand. The following table reflects estimated amortization expense for each of the next five years: ​ ​ ​ ​ ​ (In thousands) Total 2021 ​ $ 530 2022 ​ 413 2023 ​ 281 2024 ​ 164 2025 ​ 54 Total ​ $ 1,442 ​ ​ Page -79- ​ 8. DEPOSITS Time Deposits The following table presents the remaining maturities of the Bank’s time deposits at December 31, 2020: ​ ​ ​ ​ ​ (In thousands) Total 2021 ​ $ 238,117 2022 ​ 26,702 2023 ​ 14,258 2024 ​ 4,897 2025 ​ 4,265 Thereafter ​ 206 Total ​ $ 288,445 ​ The deposits that met or exceeded the FDIC insurance limit of $250,000 at December 31, 2020 and 2019 were $ 121.8 million and $ 129.6 million, respectively. Deposits from principal officers, directors and their affiliates at December 31, 2020 and 2019 were approximately $ 25.0 million and $ 16.7 million, respectively. ​ 9. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE Securities sold under agreements to repurchase totaled $ 1.2 million at December 31, 2020 and $ 1.0 million at December 31, 2019. The repurchase agreements were collateralized by investment securities, of which 34 % were U.S. GSE residential collateralized mortgage obligations and 66 % were U.S. GSE residential mortgage-backed securities with a carrying amount of $ 2.2 million at December 31, 2020 and 17 % were U.S. GSE residential collateralized mortgage obligations and 83 % were U.S. GSE residential mortgage-backed securities with a carrying amount of $ 2.1 million at December 31, 2019. Securities sold under agreements to repurchase are financing arrangements with $ 1.2 million maturing during the first quarter of 2021. At maturity, the securities underlying the agreements are returned to the Company. The primary risk associated with these secured borrowings is the requirement to pledge a market value-based balance of collateral in excess of the borrowed amount. The excess collateral pledged represents an unsecured exposure to the lending counterparty. As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows, additional collateral may need to be pledged. In accordance with the Company’s policies, eligible counterparties are defined and monitored to minimize exposure. The following table summarizes information concerning securities sold under agreements to repurchase: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2020 2019 Average daily balance during the year ​ $ 1,529 ​ $ 849 ​ Average interest rate during the year ​ 0.05 % 0.05 % Maximum month-end balance during the year ​ $ 1,943 ​ $ 1,037 ​ Weighted average interest rate at year-end ​ 0.05 % 0.05 % ​ ​ 10. FEDERAL HOME LOAN BANK ADVANCES The following table summarizes information concerning FHLB advances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2020 2019 Average daily balance during the year ​ $ 284,719 ​ $ 245,283 ​ Average interest rate during the year ​ 1.40 % 1.86 % Maximum month-end balance during the year ​ $ 340,000 ​ $ 435,000 ​ Weighted average interest rate at year-end ​ 0.35 % 1.82 % ​ Page -80- The following tables present the contractual maturities and weighted average interest rates of FHLB advances for each of the next five years. There are no FHLB advances with contractual maturities after 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 (Dollars in thousands) ​ ​ ​ ​ Weighted Contractual Maturity Amount Average Rate Overnight ​ $ — ​ — % ​ ​ ​ ​ ​ ​ ​ 2021 ​ 215,000 0.35 ​ Total FHLB advances ​ $ 215,000 0.35 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 (Dollars in thousands) ​ ​ ​ ​ Weighted Contractual Maturity Amount Average Rate Overnight ​ $ 195,000 ​ 1.81 % ​ ​ ​ ​ ​ ​ ​ 2020 ​ 240,000 1.84 ​ Total FHLB advances ​ $ 435,000 1.82 % ​ Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. The advances were collateralized by $ 1.7 billion and $ 1.4 billion of residential and commercial mortgage loans under a blanket lien arrangement at December 31, 2020 and 2019, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow up to a total of $ 1.9 billion at December 31, 2020. ​ 11. SUBORDINATED DEBENTURES In September 2015, the Company issued $ 80.0 million in aggregate principal amount of fixed-to-floating rate subordinated debentures. $ 40.0 million of the subordinated debentures are callable at par after five years , have a stated maturity of September 30, 2025 and bear interest at a fixed annual rate of 5.25 % per year, from and including September 21, 2015 until but excluding September 30, 2020. From and including September 30, 2020 to the maturity date or early redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR plus 360 basis points. The remaining $ 40.0 million of the subordinated debentures are callable at par after ten years , have a stated maturity of September 30, 2030 and bear interest at a fixed annual rate of 5.75 % per year, from and including September 21, 2015 until but excluding September 30, 2025. From and including September 30, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR plus 345 basis points. The subordinated debentures totaled $ 79.1 million at December 31, 2020 and $ 78.9 million at December 31, 2019. The subordinated debentures are included in tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. ​ 12. DERIVATIVES During the first quarter of 2019 the Company adopted ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities . The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company has adopted the standard in 2019 with minimal impact to its financial position upon transition. The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Funding Rate ("SOFR") replace USD-LIBOR. ARRC has proposed that the transition to SOFR from USD-LIBOR will take place by the end of 2021. The Company has material contracts that are indexed to USD-LIBOR. Industry organizations are currently working on the transition plan. The Company is currently monitoring this activity and evaluating the risks involved. Page -81- Cash Flow Hedges of Interest Rate Risk As part of its asset liability management, the Company utilizes interest rate swap agreements to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent the amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Interest rate swaps with notional amounts totaling $ 280.0 million and $ 290.0 million as of December 31, 2020 and 2019, respectively, were designated as cash flow hedges of certain FHLB advances. The swaps were determined to be fully effective during the periods presented. The aggregate fair value of the swaps is recorded in other assets or other liabilities with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps. The following table summarizes information about the interest rate swaps designated as cash flow hedges at December 31, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (Dollars in thousands) 2020 2019 ​ Notional amounts ​ $ 280,000 ​ $ 290,000 ​ Weighted average pay rates ​ 1.33 % 1.84 % Weighted average receive rates ​ 0.23 % 1.94 % Weighted average maturity ​ 3.14 years 2.91 years ​ Four interest rate swaps, with notional amounts totaling $ 125.0 million, were terminated resulting in $ 3.4 million in loss on termination of swaps, which is reported as a component of non-interest income, for the year ended December 31, 2020. ​ Interest expense recorded on these swap transactions totaled $ 1.7 million during the year ended December 31, 2020. Interest income recorded on these swap transactions totaled $ 1.6 million and $ 1.1 million during the years ended December 31, 2019 and 2018, respectively. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company’s variable-rate assets/liabilities. During the year ended December 31, 2020, the Company had $ 1.7 million of reclassifications as a reduction to interest expense. During the year ended December 31, 2020, the Company accelerated the reclassification of $ 3.4 million loss from other comprehensive income to earnings as a result of hedged forecasted transactions becoming probable not to occur. During the next twelve months, the Company estimates that $ 2.1 million will be reclassified as an increase in interest expense. The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income relating to the cash flow derivative instruments for the years ended December 31, 2020, 2019 and 2018: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of gain (loss) ​ Amount of gain ​ ​ ​ ​ ​ ​ ​ ​ reclassified from ​ reclassified from ​ ​ Amount of (loss) gain ​ Amount of (loss) gain ​ Accumulated OCI ​ Accumulated OCI (In thousands) ​ recognized in OCI ​ recognized in OCI ​ into income ​ into income Interest rate contracts included component excluded component included component excluded component Year ended December 31, 2020 ​ $ ( 10,455 ) ​ $ — ​ $ ( 5,016 ) ​ $ — Year ended December 31, 2019 ​ ​ ( 3,601 ) ​ ​ — ​ ​ 1,588 ​ ​ — Year ended December 31, 2018 ​ ​ 2,493 ​ ​ — ​ ​ 1,068 ​ ​ — ​ Page -82- The following table reflects the cash flow hedges included in the consolidated balance sheets at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2020 ​ 2019 ​ ​ ​ ​ Fair ​ Fair ​ ​ ​ ​ Fair ​ Fair (In thousands) ​ Notional ​ Value ​ Value ​ Notional ​ Value ​ Value Included in other assets/(liabilities): Amount Asset Liability Amount Asset Liability Interest rate swaps related to FHLB advances ​ $ 215,000 ​ $ — ​ $ ( 6,651 ) ​ $ 240,000 ​ $ 1,233 ​ $ ( 978 ) Forward starting interest rate swaps related to FHLB advances ​ $ 65,000 ​ $ 11 ​ $ ( 222 ) ​ $ 50,000 ​ $ — ​ $ ( 1,427 ) ​ Non-Designated Hedges Derivatives not designated as hedges may be used to manage the Company’s exposure to interest rate movements or to provide service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. The Company executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that the Company executes with a third party in order to minimize the net risk exposure resulting from such transactions. These interest-rate swap agreements do not qualify for hedge accounting treatment, and therefore changes in fair value are reported in current period earnings. The Company’s existing credit derivatives result from participations in interest rate swaps provided by external lenders as part of loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans. ​ Interest rate swaps with notional amounts totaled $ 1.1 billion at December 31, 2020. Of the $ 1.1 billion notional amounts, $ 548.5 million were from loan customers and $ 548.5 million were from bank counterparties. Interest rate swaps with notional amounts totaled $ 823.9 million at December 31, 2019. Of the $ 823.9 million notional amounts, $ 411.9 million were from loan customers and $ 411.9 million were from bank counterparties. The following table presents summary information about the interest rate swaps at December 31, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ (Dollars in thousands) 2020 ​ 2019 Notional amounts ​ $ 1,097,100 ​ ​ $ 823,894 Weighted average pay rates ​ ​ 2.94 % ​ ​ 3.75 % Weighted average receive rates ​ ​ 2.94 % ​ ​ 3.75 % Weighted average maturity ​ ​ 10.02 years ​ ​ 10.77 years Fair value of combined interest rate swaps ​ $ — ​ ​ $ — ​ ​ Loan swap fees recorded on these swap transactions, which is reported as a component of non-interest income, totaled $ 3.7 million, $ 7.5 million, and $ 716 thousand for the years ended December 31, 2020, 2019, and 2018, respectively. ​ Credit-Risk-Related Contingent Features As of December 31, 2020, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $ 57.1 million, while there were no derivatives in a net asset position. The Company has minimum collateral posting thresholds with certain of its derivative counterparties. If the termination value of derivatives is a net liability position, the Company is required to post collateral against its obligations under the agreements. However, if the termination value of derivatives is a net asset position, the counterparty is required to post collateral to the Company. At December 31, 2020, the Company posted collateral of $ 57.9 million to its counterparties under the agreements in a net liability position and received no collateral from its counterparties under the agreements in a net asset position. If the Company had breached any of these provisions at December 31, 2020, it could have been required to settle its obligations under the agreements at the termination value. ​ Page -83- 13. INCOME TAXES The following table details the components of income tax expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2020 2019 2018 Current: ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 16,262 ​ $ 12,665 ​ $ 5,270 State ​ 1,457 ​ 639 ​ 1,023 Total current ​ 17,719 ​ 13,304 ​ 6,293 Deferred: ​ ​ ​ Federal ​ ( 3,782 ) ​ ( 419 ) ​ 3,299 State ​ ( 252 ) ​ 1,175 ​ ( 451 ) Total deferred ​ ( 4,034 ) ​ 756 ​ 2,848 Total income tax expense ​ $ 13,685 ​ $ 14,060 ​ $ 9,141 ​ The following table is a reconciliation of the expected federal income tax expense at the statutory tax rate to the actual provision: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ Percentage ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ of Pre-tax ​ ​ ​ ​ of Pre-tax ​ ​ ​ ​ of Pre-tax ​ (Dollars in thousands) Amount Earnings Amount Earnings Amount Earnings ​ Federal income tax expense computed by applying the statutory rate to income before income taxes ​ $ 11,703 ​ 21 % $ 13,808 ​ 21 % $ 10,157 ​ 21 % Tax-exempt income ​ ( 851 ) ( 1 ) ​ ( 920 ) ( 1 ) ​ ( 1,002 ) ( 2 ) ​ State taxes, net of federal income tax benefit ​ 1,214 2 ​ 1,425 2 ​ 1,999 4 ​ Other ​ 1,619 3 ​ ( 253 ) ( 1 ) ​ ( 2,013 ) ( 4 ) ​ Income tax expense ​ $ 13,685 25 % $ 14,060 21 % $ 9,141 19 % ​ The following table summarizes the composition of deferred tax assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2020 2019 Deferred tax assets: ​ ​ ​ ​ ​ ​ Allowance for credit losses and off-balance sheet credit exposure ​ $ 13,983 ​ $ 10,305 Net unrealized losses on securities ​ — ​ 343 Compensation and related benefit obligations ​ 1,674 ​ 2,368 Net deferred loan costs and fees ​ ​ 2,588 ​ ​ — Purchase accounting fair value adjustments ​ 3,574 ​ 4,735 Net change in pension and other post-retirement benefits plans ​ 3,608 ​ 2,809 Net operating loss carryforward ​ 786 ​ 3,229 Net loss on cash flow hedges ​ ​ 1,905 ​ ​ 304 Operating lease liabilities ​ ​ 13,684 ​ ​ 13,444 Other ​ 1,234 ​ 200 Total deferred tax assets ​ 43,036 ​ 37,737 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ Pension and SERP expense ​ ( 5,366 ) ​ ( 4,904 ) Net unrealized gains on securities ​ ​ ( 1,285 ) ​ ​ — Depreciation ​ ( 546 ) ​ ( 956 ) REIT undistributed net income ​ ( 3,178 ) ​ ( 2,403 ) Net deferred loan costs and fees ​ — ​ ( 2,413 ) State and local taxes ​ ( 1,345 ) ​ ( 1,227 ) Operating lease right-of-use assets ​ ( 13,172 ) ​ ( 12,934 ) Other ​ ( 970 ) ​ ( 835 ) Total deferred tax liabilities ​ ( 25,862 ) ​ ( 25,672 ) Net deferred tax asset ​ $ 17,174 ​ $ 12,065 ​ The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the State and City of New York and the State of New Jersey. The Company is no longer subject to examination by taxing authorities for years Page -84- before 2015. There are no unrecorded tax benefits, and the Company does not expect the total amount of unrecognized income tax benefits to significantly increase in the next twelve months. In connection with the acquisition of FNBNY, the Company acquired a federal net operating loss (“NOL”) carryforward subject to Internal Revenue Code Section 382. The Company recorded a deferred tax asset that it expects to realize within the carryforward period. At December 31, 2020, the remaining federal NOL carryforward was $ 2.9 million. At December 31, 2020, the Company had New York State NOL carryforward of $ 2.1 million, and recorded a deferred tax asset that it expects to recover within the carryforward period. At December 31, 2020, the Company had New York City NOL carryforward of zero . The New York State and New York City NOLs at December 31, 2020 included NOLs acquired in connection with the CNB and FNBNY acquisitions. ​ 14. PENSION AND OTHER POSTRETIREMENT PLANS Pension Plan and Supplemental Executive Retirement Plan The Bank maintains a noncontributory pension plan (the “Pension Plan”) covering all eligible employees. The Bank uses a December 31 measurement date for this plan in accordance with FASB ASC 715-30 “Compensation – Retirement Benefits – Defined Benefit Plans – Pension.” During 2012, the Company amended the Pension Plan by revising the formula for determining benefits effective January 1, 2013, except for certain grandfathered employees. Additionally, new employees hired on or after October 1, 2012 are not eligible for the Pension Plan. During 2001, the Bank adopted the Bridgehampton National Bank Supplemental Executive Retirement Plan (“SERP”). As recommended by the Compensation Committee of the Board of Directors and approved by the full Board of Directors, the SERP provides benefits to certain employees, whose benefits under the Pension Plan are limited by the applicable provisions of the Internal Revenue Code. The benefit under the SERP is equal to the additional amount the employee would be entitled to under the Pension Plan and the 401(k) Plan in the absence of such Internal Revenue Code limitations. The assets of the SERP are held in a rabbi trust to maintain the tax-deferred status of the plan and are subject to the general, unsecured creditors of the Company. As a result, the assets of the rabbi trust are reflected on the Company’s consolidated balance sheets. The following table provides information about changes in obligations and plan assets of the defined benefit Pension Plan and the defined benefit plan component of the SERP: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Benefits ​ SERP Benefits ​ ​ Year Ended December 31, ​ Year Ended December 31, (In thousands) 2020 2019 2020 2019 Change in benefit obligation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit obligation at beginning of year ​ $ 28,757 ​ $ 23,611 ​ $ 5,323 ​ $ 3,811 Service cost ​ 940 952 ​ 371 261 Interest cost ​ 794 908 ​ 149 147 Benefits paid and expected expenses ​ ( 609 ) ( 475 ) ​ ( 112 ) ( 112 ) Assumption changes and other ​ 3,865 3,761 ​ 238 1,216 Benefit obligation at end of year ​ $ 33,747 ​ $ 28,757 ​ $ 5,969 ​ $ 5,323 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at beginning of year ​ $ 39,745 ​ $ 33,874 ​ $ — ​ $ — Actual return on plan assets ​ 3,764 6,346 ​ — — Employer contribution ​ 1,160 — ​ 112 112 Benefits paid and actual expenses ​ ( 609 ) ( 475 ) ​ ( 112 ) ( 112 ) Fair value of plan assets at end of year ​ $ 44,060 ​ $ 39,745 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status at end of year ​ $ 10,313 ​ $ 10,988 ​ $ ( 5,969 ) ​ $ ( 5,323 ) ​ Page -85- The following table presents amounts recognized in accumulated other comprehensive income at December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Benefits ​ SERP Benefits ​ ​ December 31, ​ December 31, (In thousands) 2020 2019 2020 2019 Net actuarial loss ​ $ 10,572 ​ $ 7,997 ​ $ 2,083 ​ $ 2,071 Prior service cost ​ ( 408 ) ( 484 ) ​ — — Net amount recognized ​ $ 10,164 ​ $ 7,513 ​ $ 2,083 ​ $ 2,071 ​ As of December 31, 2020, the accumulated benefit obligation was $ 32.3 million for the Pension Plan and $ 6.0 million for the SERP. As of December 31, 2019, the accumulated benefit obligation was $ 27.4 million for the Pension Plan and $ 3.6 million for the SERP. The following table summarizes the components of net periodic benefit (credit) cost and other amounts recognized in other comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Benefits ​ SERP Benefits ​ ​ Year Ended December 31, ​ Year Ended December 31, (In thousands) 2020 2019 2018 2020 2019 2018 Components of net periodic benefit (credit) cost and other amounts recognized in other comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 940 ​ $ 952 ​ $ 1,106 $ 371 $ 261 $ 290 Interest cost ​ 794 908 794 ​ 149 147 127 Expected return on plan assets ​ ( 2,905 ) ( 2,445 ) ( 2,547 ) ​ — — — Amortization of net loss ​ 431 494 335 ​ 227 70 121 Amortization of prior service credit ​ ( 77 ) ( 77 ) ( 77 ) ​ — — — Amortization of transition obligation ​ — — — ​ — — 5 Net periodic benefit (credit) cost ​ $ ( 817 ) ​ $ ( 168 ) ​ $ ( 389 ) $ 747 $ 478 $ 543 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss (gain) ​ $ 3,006 ​ $ ( 140 ) ​ $ 1,980 $ 239 $ 1,216 $ ( 413 ) Amortization of net loss ​ ( 431 ) ( 494 ) ( 335 ) ​ ( 227 ) ( 70 ) ( 121 ) Amortization of prior service credit ​ 77 77 77 ​ — — — Amortization of transition obligation ​ — — — ​ — — ( 5 ) Total recognized in other comprehensive income ​ $ 2,652 ​ $ ( 557 ) ​ $ 1,722 $ 12 $ 1,146 $ ( 539 ) ​ The Company's service cost component is reported in the Company's income statement in salaries and employee benefits, which is the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. All other components of net periodic benefit (credit) cost are reported in the other operating expenses income statement line. The estimated net loss and prior service credit for the defined benefit Pension Plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $ 650 thousand and $ 77 thousand, respectively. The estimated net loss for the SERP that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $ 257 thousand. Page -86- Expected Long-Term Rate of Return The Company’s expected long-term rate of return on Pension Plan assets is a long-term rate based on anticipated Pension Plan asset returns over an extended period of time, taking into account market conditions and broad asset mix considerations. The expected rate of return is a long-term assumption and generally does not change annually. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Benefits ​ SERP Benefits ​ ​ December 31, ​ December 31, ​ 2020 2019 2018 2020 2019 2018 Weighted average assumptions used to determine benefit obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate 2.33 % 3.10 % 4.14 % 2.28 % 3.08 % 4.13 % Rate of compensation increase 3.00 3.00 3.00 — 5.00 5.00 ​ Weighted average assumptions used to determine net periodic benefit cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate 3.10 % 4.14 % 3.52 % 3.08 % 4.13 % 3.50 % Rate of compensation increase 3.00 3.00 3.00 — 5.00 5.00 ​ Expected long-term rate of return 7.25 7.25 7.25 — — — ​ ​ Pension Plan Assets The Pension Plan seeks to provide retirement benefits to the employees of the Bank who are entitled to receive benefits under the Pension Plan. The Pension Plan assets are overseen by a committee comprised of management, who meet semi-annually, and sets the investment policy guidelines. The Pension Plan’s overall investment strategy is to achieve a mix of approximately 97 % of investments for long‐term growth and 3 % for near‐term benefit payments with a wide diversification of asset types, fund strategies, and fund managers. Cash equivalents consist primarily of short-term investment funds. Equity securities primarily include investments in common stock, mutual funds, depository receipts and exchange traded funds. Fixed income securities include corporate bonds, government issues, mortgage-backed securities, high yield securities and mutual funds. The weighted average expected long-term rate of return is estimated based on current trends in Pension Plan assets, as well as projected future rates of return on those assets and reasonable actuarial assumptions based on the guidance provided by Actuarial Standard of Practice No. 27 for the real and nominal rate of investment return for a specific mix of asset classes. The long-term rate of return considers historical returns for the S&P 500 index and corporate bonds representing cumulative returns of approximately 9.5 % and 5.0 %, respectively. These returns were considered along with the target allocations of asset categories. The following table indicates the target allocations for Plan assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average- ​ ​ Target ​ Percentage of Plan Assets ​ Expected Long- ​ ​ ​ Allocation ​ At December 31, ​ term Rate of Asset Category 2021 2020 2019 Return Cash equivalents 0 - 5 % 5.6 % 3.6 % — % Equity securities 45 - 65 ​ 56.8 ​ 57.9 ​ 9.5 ​ Fixed income securities 30 - 50 ​ 37.6 ​ 38.5 ​ 5.0 ​ Total ​ ​ 100.0 ​ 100.0 ​ ​ ​ ​ Except for pooled vehicles and mutual funds, which are governed by the prospectus, and unless expressly authorized by management, the Pension Plan and its investment managers are prohibited from purchasing the following investments: letter stock, private placements, or direct payments; securities not readily marketable; Bridge Bancorp, Inc. stock; pledging or hypothecating securities, except for loans of securities that are fully collateralized; purchasing or selling derivative securities for speculation or leverage; and investments by the investment managers in their own securities, their affiliates or subsidiaries (excluding money market funds). Fair value is defined under FASB ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair Page -87- value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels are described in Note 3 “Fair Value.” In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments valued using the Net Asset Value (“NAV”) are classified as level 2 if the Pension Plan can redeem its investment with the investee at the NAV at the measurement date. If the Pension Plan can never redeem the investment with the investee at the NAV, it is considered as level 3. If the Pension Plan can redeem the investment at the NAV at a future date, the Pension Plan’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset. In accordance with FASB ASC 715-20, the following table represents the Pension Plan’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 31, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ Quoted Prices Significant ​ ​ ​ ​ ​ ​ ​ In Active ​ Other ​ ​ Significant ​ ​ ​ ​ ​ Markets for ​ Observable ​ ​ Unobservable ​ ​ Carrying ​ Identical Assets ​ Inputs ​ ​ Inputs (Dollars in thousands) Value (Level 1) (Level 2) ​ (Level 3) Cash and cash equivalents ​ $ 2,452 $ — $ 2,452 $ — Equities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. large cap ​ 15,449 ​ 15,449 ​ — ​ — U.S. mid cap/small cap ​ 3,471 ​ 3,471 ​ — ​ — International ​ 6,029 ​ 6,029 ​ — ​ — Equities blend ​ 74 ​ 74 ​ — ​ — Total equities ​ 25,023 ​ 25,023 ​ — ​ — Fixed income securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ 1,853 ​ 1,853 ​ — ​ — Government ​ 2,342 ​ — ​ 2,342 ​ — Mortgage-backed ​ 2,325 ​ — ​ 2,325 ​ — High yield bonds and bond funds ​ 10,065 ​ — ​ 10,065 ​ — Total fixed income securities ​ 16,585 ​ 1,853 ​ 14,732 ​ — Total plan assets ​ $ 44,060 ​ $ 26,876 ​ $ 17,184 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ Fair Value Measurements Using: ​ ​ ​ Quoted Prices Significant ​ ​ ​ ​ ​ ​ ​ In Active ​ Other ​ ​ Significant ​ ​ ​ ​ ​ Markets for ​ Observable ​ ​ Unobservable ​ ​ Carrying ​ Identical Assets ​ Inputs ​ ​ Inputs (Dollars in thousands) Value (Level 1) (Level 2) ​ (Level 3) Cash and cash equivalents ​ $ 1,444 $ — $ 1,444 $ — Equities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. large cap ​ ​ 12,097 ​ 12,097 ​ — ​ — U.S. mid cap/small cap ​ ​ 4,195 ​ 4,195 ​ — ​ — International ​ ​ 6,320 ​ 6,320 ​ — ​ — Equities blend ​ ​ 414 ​ 414 ​ — ​ — Total equities ​ ​ 23,026 ​ 23,026 ​ — ​ — Fixed income securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ 2,024 ​ 2,024 ​ — ​ — Government ​ ​ 2,926 ​ — ​ 2,926 ​ — Mortgage-backed ​ ​ 1,033 ​ — ​ 1,033 ​ — High yield bonds and bond funds ​ ​ 9,292 ​ — ​ 9,292 ​ — Total fixed income securities ​ ​ 15,275 ​ 2,024 ​ 13,251 ​ — Total plan assets ​ $ 39,745 ​ $ 25,050 ​ $ 14,695 ​ $ — ​ The Company has no minimum required pension contribution due to the overfunded status of the plan. Page -88- Estimated Future Payments The following table summarizes benefits expected to be paid under the Pension Plan and the SERP as of December 31, 2020, which reflect expected future service: ​ ​ ​ ​ ​ ​ ​ Pension and SERP Payments Year (in thousands) 2021 ​ $ 1,093 2022 ​ 1,180 2023 ​ 1,315 2024 ​ 1,318 2025 ​ 1,395 2026-2030 ​ 10,228 ​ 401(k) Plan The Company provides a 401(k) plan, which covers substantially all current employees. Newly hired employees are automatically enrolled in the plan on the 60 th day of employment, unless they elect not to participate. Participants may contribute a portion of their pre-tax base salary, generally not to exceed $ 19,500 for the calendar year ended December 31, 2020. Under the provisions of the 401(k) plan, employee contributions are partially matched by the Bank as follows: 100% of each employee’s contributions up to 1 % of each employee’s compensation plus 50 % of each employee’s contributions over 1% but not in excess of 6 % of each employee’s compensation for a maximum contribution of 3.5 % of a participating employee’s compensation . Participants can invest their account balances into several investment alternatives. The 401(k) plan does not allow for investment in the Company’s common stock. During the years ended December 31, 2020, 2019 and 2018 the Company made cash contributions of $ 1.4 million, $ 1.1 million, and $ 1.0 million, respectively. The 401(k) plan also includes a discretionary profit-sharing component. During the years ended December 31, 2020, 2019 and 2018, the Company made discretionary profit-sharing contributions of $ 546 thousand, $ 583 thousand, and $ 497 thousand, respectively. ​ Page -89- ​ 15. STOCK-BASED COMPENSATION PLANS In May 2019, the Company’s shareholders approved the Bridge Bancorp, Inc. 2019 Equity Incentive Plan (the “2019 Equity Incentive Plan”), which provides for the grant of stock-based and other incentive awards to officers, employees and directors of the Company. The 2019 Equity Incentive Plan superseded the Bridge Bancorp, Inc. 2012 Stock-Based Incentive Plan (the “2012 Equity Incentive Plan”). The 2012 Equity Incentive Plan superseded the 2006 Stock-Based Incentive Plan. The maximum number of shares of stock, in the aggregate, that may be granted under the 2019 Equity Incentive Plan as stock options, restricted stock, or restricted stock units is 370,000 plus the number of shares of stock which have been reserved but not issued under the 2012 Equity Incentive Plan, and any awards that are forfeited under the 2012 Equity Incentive Plan after the effective date of the 2019 Equity Incentive Plan. No further grants will be made under the 2012 Equity Incentive Plan. Currently outstanding grants under the 2012 Equity Incentive Plan will not be affected. The number of shares of the Company’s common stock available for stock-based awards under the 2019 Equity Incentive Plan is 370,000 plus 162,738 shares that were remaining under the 2012 Equity Incentive Plan. At December 31, 2020, 436,953 shares remain available for issuance, including shares that may be granted in the form of stock options, RSAs, or RSUs. The Compensation Committee of the Board of Directors determines awards under the 2019 Equity Incentive Plan. The Company accounts for the 2019 Equity Incentive Plan under FASB ASC 718. Stock Options Stock options may be either incentive stock options, which bestow certain tax benefits on the optionee, or non-qualified stock options, not qualifying for such benefits. All options have an exercise price that is not less than the market value of the Company's common stock on the date of the grant. The fair value of each option granted is estimated on the date of the grant using the Black-Scholes option-pricing model. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the Company's common stock as of the exercise or reporting date. During the years ended December 31, 2020, 2019 and 2018, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 69,360 , 63,267 and 47,393 stock options, respectively, with an exercise price set to equal a 10.0 % premium over the grant date stock price. All of the stock options granted vest ratably over three years . The estimated weighted-average grant-date fair value of all stock options granted in the years ended December 31, 2020, 2019 and 2018 was $ 4.10 , $ 5.05 and $ 6.52 per stock option, respectively, using the Black-Scholes option-pricing model with assumptions as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2020 2019 ​ 2018 Dividend yield ​ ​ ​ 3.03 % ​ 2.86 % ​ 2.80 % Expected volatility ​ ​ ​ 23.11 ​ ​ 23.80 ​ ​ 27.53 ​ Risk-free interest rate ​ ​ ​ 1.47 ​ ​ 2.52 ​ ​ 2.67 ​ Expected option life ​ ​ ​ 6.0 years ​ 6.0 years ​ 6.5 years ​ Compensation expense attributable to stock options was $ 425 thousand, $ 197 thousand and $ 91 thousand for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, there was $ 201 thousand of total unrecognized compensation cost related to unvested stock options. The cost is expected to be recognized over a weighted-average period of 0.1 years. ​ Page -90- The following table summarizes the status of the Company's stock options: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ Number ​ Average ​ Remaining ​ ​ Aggregate ​ ​ of ​ Exercise ​ Contractual ​ ​ Intrinsic (Dollars in thousands, except per share amounts) Options Price Life Value Outstanding, January 1, 2020 ​ 110,660 $ 35.71 ​ ​ ​ ​ ​ ​ ​ Granted ​ 69,360 ​ ​ 34.87 ​ ​ ​ ​ ​ ​ ​ Outstanding, December 31, 2020 ​ 180,020 ​ 35.39 ​ 8.2 years ​ $ — Vested and Exercisable, December 31, 2020 ​ 110,660 ​ 35.71 ​ 7.7 years ​ ​ — ​ ​ ​ ​ ​ Number of ​ Exercise Options Price 69,360 ​ $ 34.87 63,267 ​ ​ 35.35 47,393 ​ ​ 36.19 180,020 ​ ​ ​ ​ Restricted Stock Awards The Company's RSAs are shares of the Company's common stock that are forfeitable and are subject to restrictions on transfer prior to the vesting date. RSAs are forfeited if the award holder departs the Company before vesting. RSAs carry dividend and voting rights from the date of grant. The vesting of time-vested RSAs depends upon the award holder continuing to render services to the Company. The Company's performance-based RSAs vest subject to the achievement of the Company's corporate goals. The following table summarizes the unvested RSA activity for the year ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average Grant-Date ​ Shares Fair Value Unvested, January 1, 2020 293,717 ​ $ 30.37 Granted 91,428 ​ ​ 31.02 Vested ( 289,509 ) ​ ​ 30.34 Forfeited ( 6,593 ) ​ ​ 32.16 Unvested, December 31, 2020 89,043 ​ ​ 31.00 ​ During the year ended December 31, 2020, the Company granted a total of 91,428 RSAs. Of the 91,428 RSAs granted, 57,850 time-vested RSAs vest ratably over five years and 33,578 time-vested RSAs vest ratably over three years . During the year ended December 31, 2019, the Company granted RSAs of 78,952 shares. Of the 78,952 shares granted, 49,925 shares vest over five years and 29,027 shares vest over three years . During the year ended December 31, 2018, the Company granted RSAs of 83,782 shares. Of the 83,782 shares granted, 44,750 shares vest over five years , 13,915 shares vest over three years and 25,117 performance-based RSAs vest ratably over two years , subject to the achievement of the Company’s 2018 corporate goals. As of December 31, 2020, there were 89,043 unvested RSAs, all of which were time-vested RSAs and there were no performance-based RSAs. Compensation expense attributable to RSAs was $ 5.1 million, $ 2.2 million and $ 2.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The total fair value of shares vested during the years ended December 31, 2020, 2019 and 2018, was $ 8.8 million, $ 2.5 million and $ 1.5 million, respectively. As of December 31, 2020, there was $ 2.2 million of total unrecognized compensation costs related to non-vested RSAs. The cost is expected to be recognized over a weighted-average period of 0.1 years. Page -91- Restricted Stock Units Long Term Incentive Plan RSUs represent an obligation to deliver shares to an employee at a future date if certain vesting conditions are met. RSUs are subject to a time-based vesting schedule, or the satisfaction of performance conditions, and are settled in shares of the Company's common stock. RSUs do not provide voting rights and RSUs may provide dividend equivalent rights from the date of grant. The following table summarizes the unvested NEO RSU activity for the year ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average Grant-Date ​ Shares Fair Value Unvested, January 1, 2020 ​ 85,342 $ 29.59 Granted ​ 26,556 ​ ​ 32.13 Reinvested dividends ​ 4,491 ​ ​ 30.08 Added by performance factor ​ 605 ​ ​ 33.69 Forfeited ​ ( 6,623 ) ​ ​ 28.68 Vested ​ ( 72,096 ) ​ ​ 29.10 Unvested, December 31, 2020 ​ 38,275 ​ 32.57 ​ During the year ended December 31, 2020 in accordance with the LTI plan for NEOs, the Company granted 26,556 RSUs. Of the 26,556 RSUs granted, 17,943 time-vested RSUs vest ratably over three years and 8,613 performance-based RSUs vest subject to the achievement of the Company’s three-year corporate goal for the three-year period ending December 31, 2022. During the year ended December 31, 2019 in accordance with the LTI plan for NEOs, the Company granted 22,305 RSUs. Of the 22,305 RSUs granted, 13,255 time-vested RSUs vest ratably over five years and 9,050 performance-based RSUs vest subject to the achievement of the Company’s three-year corporate goal for the three-year period ending December 31, 2021. Compensation expense attributable to LTI plan RSUs was $ 1.6 million, $ 693 thousand and $ 462 thousand in connection with these awards for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, there was $ 0.6 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 0.1 years. Directors Plan In April 2009, the Company adopted a Directors Deferred Compensation Plan (“Directors Plan”). Under the Directors Plan, independent directors may elect to defer all or a portion of their annual retainer fee in the form of RSUs. In addition, directors receive a non-election retainer in the form of RSUs. These RSUs vest ratably over one year and have dividend rights but no voting rights. In connection with the Directors Plan, the Company recorded expense of $ 553 thousand, $ 570 thousand and $ 560 thousand for the years ended December 31, 2020, 2019 and 2018, respectively. Employee Stock Purchase Plan In May 2018, the Board of Directors adopted, and stockholders approved the Employee Stock Purchase Plan (“ESPP”). A total of 1,000,000 shares of the Company’s common stock have been initially authorized for issuance under the ESPP. Subject to any plan limitations, the ESPP allows eligible employees to contribute, normally through payroll deductions, up to $ 25 thousand for the purchase of the Company’s common stock at a discounted price per share for any calendar year. Eligible employees purchased 11,413 shares, 7,888 shares and 3,758 shares of the Company’s common stock under the ESPP during the years ended December 31, 2020, 2019 and 2018, respectively. No expense was recorded related to ESPP for the years ended December 31, 2020, 2019 and 2018. Page -92- 16. EARNINGS PER SHARE FASB ASC 260-10-45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing EPS. The RSAs and certain RSUs granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities. The two-class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities. The following table presents the computation of EPS for the years ended December 31, 2020, 2019 and 2018: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands, except per share data) 2020 2019 2018 Net income ​ $ 42,042 ​ $ 51,691 ​ $ 39,227 Dividends paid on and earnings allocated to participating securities ​ ( 872 ) ( 1,096 ) ( 853 ) Income attributable to common stock ​ $ 41,170 ​ $ 50,595 ​ $ 38,374 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding, including participating securities ​ 19,903 19,952 19,875 Weighted average participating securities ​ ( 409 ) ( 424 ) ( 434 ) Weighted average common shares outstanding ​ 19,494 19,528 ​ 19,441 Basic earnings per common share ​ $ 2.11 ​ $ 2.59 ​ $ 1.97 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to common stock ​ $ 41,170 ​ $ 50,595 ​ $ 38,374 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding ​ 19,494 19,528 ​ 19,441 Incremental shares from assumed conversions of options and restricted stock units ​ 55 31 27 Weighted average common and equivalent shares outstanding ​ 19,549 19,559 ​ 19,468 Diluted earnings per common share ​ $ 2.11 ​ $ 2.59 ​ $ 1.97 ​ There were 180,020 , 110,660 and 47,393 stock options outstanding at December 31, 2020, 2019 and 2018, respectively, that were not included in the computation of diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 because the options’ exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. ​ There were 8,941 RSUs that were antidilutive for the year ended December 31, 2020. There were no RSUs that were antidilutive for the year ended December 31, 2019. There were 3,156 RSUs that were antidilutive for the year ended December 31, 2018. ​ Page -93- 17. COMMITMENTS AND CONTINGENCIES AND OTHER MATTERS In the normal course of business, there are various outstanding commitments and contingent liabilities, such as claims and legal actions, guarantees and commitments to extend credit, which are not reflected in the accompanying consolidated financial statements. No material losses are anticipated as a result of these commitments and contingencies. Loan Commitments and Related Financial Instruments Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer-financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, often including obtaining collateral at exercise of the commitment. The following represents commitments outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2020 2019 Standby letters of credit ​ $ 25,501 ​ $ 23,670 Loan commitments outstanding (1) ​ 150,515 ​ 117,044 Unused lines of credit ​ 808,296 ​ 674,194 Total commitments outstanding ​ $ 984,312 ​ $ 814,908 (1) Of the $ 150.5 million of loan commitments outstanding at December 31, 2020, $ 5.1 million are fixed rate commitments and $ 145.4 million are variable rate commitments. Of the $ 117.0 million of loan commitments outstanding at December 31, 2019, $ 5.9 million are fixed rate commitments and $ 111.1 million are variable rate commitments. Litigation The Company and its subsidiaries are subject to certain pending and threatened legal actions that arise out of the normal course of business. In the opinion of management, the resolution of any such pending or threatened litigation is not expected to have a material adverse effect on the Company’s consolidated financial statements. Other Effective March 26, 2020, the FRB Board reduced the reserve requirement ratios to zero percent, which eliminated reserve requirements for all depository institutions. During 2020, the Bank invested overnight with the FRB and the average balance maintained during 2020 was $ 342.4 million. During 2020, the Bank maintained an overnight line of credit with the FHLB. The Bank has the ability to borrow against its unencumbered residential and commercial mortgages and investment securities owned by the Bank. At December 31, 2020, the Bank had aggregate lines of credit of $ 418.0 million with unaffiliated correspondent banks to provide short-term credit for liquidity requirements. Of these aggregate lines of credit, $ 398.0 million is available on an unsecured basis. As of December 31, 2020, the Bank had no such borrowings outstanding. In March 2001, the Bank entered into a Master Repurchase Agreement with the FHLB whereby the FHLB agrees to purchase securities from the Bank, upon the Bank’s request, with the simultaneous agreement to sell the same or similar securities back to the Bank at a future date. Securities are limited, under the agreement, to government securities, securities issued, guaranteed or collateralized by any agency or instrumentality of the U.S. Government or any government sponsored enterprise, and non-agency AA and AAA rated mortgage-backed securities. At December 31, 2020, there was up to $ 1.9 billion available for transactions under this agreement, assuming availability of required collateral. ​ Page -94- 18. REGULATORY CAPITAL REQUIREMENTS The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital requirements that involve quantitative measures of the Company’s and Bank’s assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classifications also are subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total, tier 1, and common equity tier 1 capital to risk-weighted assets and of tier 1 capital to average assets. Tier 1 capital, risk-weighted assets and average assets are as defined by regulation. The required minimums for the Company and Bank are set forth in the tables that follow. The Company and the Bank met all capital adequacy requirements at December 31, 2020 and 2019. Under the Basel III Capital Rules the Company and the Bank are subject to the following minimum capital to risk-weighted assets ratios: a) 4.5 % based on common equity tier 1 capital ("CET1"); b) 6.0 % based on tier 1 capital; and c) 8.0 % based on total regulatory capital. A minimum leverage ratio (tier 1 capital as a percentage of total average assets) of 4.0 % is also required under the Basel III Capital Rules. The Basel III Capital Rules additionally require institutions to retain a capital conservation buffer, composed of CET1, of 2.5 % above these required minimum capital ratio levels. Including the capital conservation buffer, the Company and the Bank effectively have the following minimum capital to risk-weighted assets ratios: a) 7.0 % based on CET1; b) 8.5 % based on tier 1 capital; and c) 10.5 % based on total regulatory capital. The Company and the Bank made the one-time, permanent election to continue to exclude the effects of accumulated other comprehensive income or loss items included in stockholders’ equity for the purposes of determining the regulatory capital ratios. As of December 31, 2020, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” the Bank must maintain minimum total risk-based, tier 1 risk-based, common equity tier 1 risk-based, and tier 1 leverage ratios as set forth in the tables below. Since that notification, there are no conditions or events that management believes have changed the institution’s category. The following tables present actual capital levels and minimum required levels for the Company and the Bank under Basel III rules at December 31, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Minimum To Be Well ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Adequacy Requirement with ​ Capitalized Under Prompt ​ ​ ​ Actual Capital ​ Adequacy Requirement ​ Capital Conservation Buffer ​ Corrective Action Provisions ​ (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio ​ Common equity tier 1 capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 424,652 ​ 10.3 % $ 185,479 ​ 4.5 % $ 288,523 ​ 7.0 % ​ n/a ​ n/a ​ Bank ​ 503,524 ​ 12.2 ​ 185,465 ​ 4.5 ​ 288,502 ​ 7.0 $ 267,895 ​ 6.5 % Total capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 537,664 ​ 13.0 ​ 329,740 ​ 8.0 ​ 432,784 ​ 10.5 n/a ​ n/a ​ Bank ​ 544,536 ​ 13.2 ​ 329,716 ​ 8.0 ​ 432,753 ​ 10.5 412,145 ​ 10.0 ​ Tier 1 capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 424,652 ​ 10.3 ​ 247,305 ​ 6.0 ​ 350,349 ​ 8.5 n/a ​ n/a ​ Bank ​ 503,524 ​ 12.2 ​ 247,287 ​ 6.0 ​ 350,324 ​ 8.5 329,716 ​ 8.0 ​ Tier 1 capital to average assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 424,652 ​ 6.8 ​ 249,502 ​ 4.0 ​ n/a ​ n/a n/a ​ n/a ​ Bank ​ 503,524 ​ 8.1 ​ 249,389 ​ 4.0 ​ n/a ​ n/a 311,737 ​ 5.0 ​ ​ Page -95- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Minimum To Be Well ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Adequacy Requirement with ​ Capitalized Under Prompt ​ ​ ​ Actual Capital ​ Adequacy Requirement ​ Capital Conservation Buffer ​ Corrective Action Provisions ​ (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio ​ Common equity tier 1 capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 397,800 ​ 10.2 % $ 176,121 ​ 4.5 % $ 273,967 ​ 7.0 % ​ n/a ​ n/a ​ Bank ​ 474,056 ​ 12.1 ​ 176,114 ​ 4.5 ​ 273,954 ​ 7.0 $ 254,386 ​ 6.5 % Total capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 510,862 ​ 13.1 ​ 313,105 ​ 8.0 ​ 410,950 ​ 10.5 n/a ​ n/a ​ Bank ​ 507,118 ​ 13.0 ​ 313,091 ​ 8.0 ​ 410,932 ​ 10.5 391,363 ​ 10.0 ​ Tier 1 capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 397,800 ​ 10.2 ​ 234,828 ​ 6.0 ​ 332,674 ​ 8.5 n/a ​ n/a ​ Bank ​ 474,056 ​ 12.1 ​ 234,818 ​ 6.0 ​ 332,659 ​ 8.5 313,091 ​ 8.0 ​ Tier 1 capital to average assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 397,800 ​ 8.5 ​ 187,386 ​ 4.0 ​ n/a ​ n/a n/a ​ n/a ​ Bank ​ 474,056 ​ 10.1 ​ 187,377 ​ 4.0 ​ n/a ​ n/a 234,222 ​ 5.0 ​ ​ ​ ​ Page -96- 19. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION Condensed financial information of Dime Community Bancshares, Inc. (Parent Company only) follows: Condensed Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2020 2019 Assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 280 $ 3,663 Other assets ​ ​ 554 ​ 174 Investment in the Bank ​ ​ 596,703 ​ 573,410 Total assets ​ $ 597,537 $ 577,247 ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders’ equity: ​ ​ ​ ​ ​ Subordinated debentures ​ $ 79,059 $ 78,920 Other liabilities ​ ​ 647 ​ 1,173 Total liabilities ​ ​ 79,706 ​ 80,093 ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ ​ 517,831 ​ 497,154 Total liabilities and stockholders’ equity ​ $ 597,537 $ 577,247 ​ Condensed Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2020 2019 2018 Dividends from the Bank ​ $ 26,500 ​ $ 24,500 ​ $ 15,000 Interest expense ​ 4,401 ​ 4,539 ​ 4,539 Non-interest expense ​ 252 ​ 104 ​ 135 Income before income taxes and equity in undistributed earnings of the Bank ​ 21,847 ​ 19,857 ​ 10,326 Income tax benefit ​ ( 1,280 ) ​ ( 994 ) ​ ( 1,005 ) Income before equity in undistributed earnings of the Bank ​ 23,127 ​ 20,851 ​ 11,331 Equity in undistributed earnings of the Bank ​ 18,915 ​ 30,840 ​ 27,896 Net income ​ $ 42,042 ​ $ 51,691 ​ $ 39,227 ​ Condensed Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2020 2019 2018 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 42,042 ​ $ 51,691 ​ $ 39,227 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ Equity in undistributed earnings of the Bank ​ ( 18,915 ) ​ ( 30,840 ) ​ ( 27,896 ) Amortization ​ 139 ​ 139 ​ 140 (Increase) decrease in other assets ​ ( 379 ) ​ ( 73 ) ​ 108 (Decrease) increase in other liabilities ​ ( 526 ) ​ 39 ​ 11 Net cash provided by operating activities ​ 22,361 ​ 20,956 ​ 11,590 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Net proceeds from issuance of common stock ​ 1,267 ​ 1,102 ​ 1,017 Purchase of treasury stock ​ ( 4,633 ) ​ ( 625 ) ​ — Repurchase of surrendered stock from vesting of stock plans ​ ( 3,181 ) ​ ( 887 ) ​ ( 586 ) Cash dividends paid ​ ( 19,197 ) ​ ( 18,420 ) ​ ( 18,342 ) Net cash used in financing activities ​ ( 25,744 ) ​ ( 18,830 ) ​ ( 17,911 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (decrease) increase in cash and cash equivalents ​ ( 3,383 ) ​ 2,126 ​ ( 6,321 ) Cash and cash equivalents at beginning of year ​ 3,663 ​ 1,537 ​ 7,858 Cash and cash equivalents at end of year ​ $ 280 ​ $ 3,663 ​ $ 1,537 ​ ​ ​ ​ Page -97- 20. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the components of other comprehensive (loss) income and related income tax effects: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2020 2019 2018 Unrealized holding gains (losses) on available for sale securities ​ $ 9,069 $ 15,524 $ ( 8,429 ) Reclassification adjustments for (gains) losses realized in income ​ ( 3,525 ) ( 201 ) 7,921 Income tax effect ​ ​ ( 1,628 ) ​ ( 4,467 ) ​ 160 Net change in unrealized gains (losses) on available for sale securities ​ ​ 3,916 ​ 10,856 ​ ( 348 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized net losses arising during the period ​ ​ ( 3,245 ) ​ ( 1,076 ) ​ ( 1,567 ) Reclassification adjustments for amortization realized in income ​ ​ 581 ​ 487 ​ 384 Income tax effect ​ ​ 799 ​ 179 ​ 351 Net change in post-retirement obligation ​ ​ ( 1,865 ) ​ ( 410 ) ​ ( 832 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in fair value of derivatives used for cash flow hedges ​ ​ ( 10,455 ) ​ ( 3,601 ) ​ 2,493 Reclassification adjustments for losses (gains) realized in income ​ ​ 5,016 ​ ( 1,588 ) ​ ( 1,068 ) Income tax effect ​ ​ 1,601 ​ 1,514 ​ ( 418 ) Net change in unrealized (losses) gains on cash flow hedges ​ ​ ( 3,838 ) ​ ( 3,675 ) ​ 1,007 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income ​ $ ( 1,787 ) $ 6,771 $ ( 173 ) ​ The following is a summary of the accumulated other comprehensive (loss) income balances, net of income taxes, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ December 31, ​ Comprehensive ​ ​ December 31, (In thousands) 2019 Income (Loss) 2020 Unrealized (losses) gains on available for sale securities ​ $ ( 829 ) ​ $ 3,916 ​ $ 3,087 Unrealized losses on pension benefits ​ ( 6,775 ) ​ ( 1,865 ) ​ ( 8,640 ) Unrealized losses on cash flow hedges ​ ( 737 ) ​ ( 3,838 ) ​ ( 4,575 ) Accumulated other comprehensive loss, net of income taxes ​ $ ( 8,341 ) ​ $ ( 1,787 ) ​ $ ( 10,128 ) ​ The following represents the reclassifications out of accumulated other comprehensive (loss) income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Affected Line Item in the (In thousands) 2020 2019 2018 Consolidated Statements of Income Realized gains (losses) on sale of available for sale securities ​ $ 3,525 ​ $ 201 ​ $ ( 7,921 ) Net securities gains (losses) Amortization of defined benefit pension plan and defined benefit plan component of the SERP: ​ ​ ​ ​ ​ Prior service credit ​ ​ 77 ​ 77 ​ 77 Other operating expenses Transition obligation ​ ​ — ​ — ​ ( 5 ) Other operating expenses Actuarial losses ​ ​ ( 658 ) ​ ( 564 ) ​ ( 456 ) Other operating expenses Realized (losses) gains on cash flow hedges ​ ​ ( 1,651 ) ​ 1,588 ​ 1,068 Interest expense Realized loss on the termination of swaps ​ ​ ( 3,365 ) ​ ​ — ​ ​ — ​ Loss on termination of swaps Total reclassifications, before income tax ​ ​ ( 2,072 ) ​ ​ 1,302 ​ ​ ( 7,237 ) ​ Income tax benefit (expense) ​ ​ 606 ​ ( 380 ) ​ 2,105 Income tax expense Total reclassifications, net of income tax ​ $ ( 1,466 ) ​ $ 922 ​ $ ( 5,132 ) ​ ​ ​ Page -98- 21. QUARTERLY FINANCIAL DATA (UNAUDITED) Selected Consolidated Quarterly Financial Data follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 Quarter Ended (In thousands, except per share amounts) March 31, June 30, September 30, December 31, Interest income ​ $ 44,602 ​ $ 45,850 ​ $ 46,296 ​ $ 47,484 Interest expense ​ 7,952 ​ 5,418 ​ 5,589 ​ 4,492 Net interest income ​ ​ 36,650 ​ 40,432 ​ 40,707 ​ 42,992 Provision for credit losses ​ ​ 5,000 ​ 4,500 ​ 1,500 ​ 500 ​ Net interest income after provision for credit losses ​ ​ 31,650 ​ 35,932 ​ 39,207 ​ 42,492 Non-interest income ​ ​ 5,217 ​ 2,252 ​ ​ 6,790 ​ 5,444 Non-interest expense ​ ​ 24,843 ​ 24,399 ​ ​ 28,937 (1) 35,078 (2) Income before income taxes ​ ​ 12,024 ​ 13,785 ​ 17,060 ​ 12,858 Income tax expense ​ ​ 2,676 ​ 3,129 ​ 3,999 ​ 3,881 ​ Net income ​ $ 9,348 $ 10,656 $ 13,061 $ 8,977 Basic earnings per share ​ $ 0.47 $ 0.54 $ 0.66 $ 0.45 Diluted earnings per share ​ $ 0.47 $ 0.54 $ 0.66 $ 0.45 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 Quarter Ended (In thousands, except per share amounts) March 31, June 30, September 30, December 31, Interest income ​ $ 44,515 ​ $ 46,352 ​ $ 46,354 ​ $ 44,320 Interest expense ​ 10,192 ​ 10,835 ​ 9,639 ​ 8,672 Net interest income ​ ​ 34,323 ​ 35,517 ​ 36,715 ​ 35,648 Provision for loan losses ​ ​ 600 ​ 3,500 ​ 1,000 ​ 600 ​ Net interest income after provision for loan losses ​ ​ 33,723 ​ 32,017 ​ 35,715 ​ 35,048 Non-interest income ​ ​ 5,218 ​ 5,499 ​ ​ 6,244 ​ 8,426 Non-interest expense ​ ​ 22,599 ​ 24,004 ​ ​ 24,204 ​ 25,332 ​ Income before income taxes ​ ​ 16,342 ​ 13,512 ​ 17,755 ​ 18,142 Income tax expense ​ ​ 3,415 ​ 2,859 ​ 3,852 ​ 3,934 ​ Net income ​ $ 12,927 $ 10,653 $ 13,903 $ 14,208 Basic earnings per share ​ $ 0.65 $ 0.53 $ 0.70 $ 0.71 Diluted earnings per share ​ $ 0.65 $ 0.53 $ 0.70 $ 0.71 (1) 2020 amount includes pre-tax merger expenses of $ 2.4 million. (2) 2020 amount includes pre-tax merger expenses of $ 2.1 million. ​ ​ 22. NET FRAUD LOSS The Company incurred a pre-tax charge of $ 8.9 million in the year ended December 31, 2018 relating to the fraudulent conduct of a business customer through its deposit accounts at the Bank. The Company continues to work with the appropriate law enforcement authorities in connection with this matter. The customer has filed a petition pursuant to Chapter 11 of the bankruptcy code. In September 2020, the Company resolved its claim for the loss with its insurance carrier to the full extent of the available coverage. ​ ​ ​ Page -99- 23. SUBSEQUENT EVENT Merger Agreement with Dime Community Bancshares, Inc. On July 1, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Legacy Dime. Pursuant to the Merger Agreement, on February 1, 2021, Legacy Dime merged with and into Bridge, with Bridge as the surviving corporation under the name “Dime Community Bancshares, Inc.” At 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 Company’s common stock, par value $ 0.01 per share. The Company issued 21,232,920 shares of its common stock to Legacy Dime shareholders in connection with the Merger. 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 Company preferred stock having the same powers, preferences and rights as the Dime Preferred Stock. The Company issued 5,299,200 shares of its 5.50 % Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series A to Dime Preferred Stock holders in connection with the Merger. 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 commercial bank and a wholly-owned subsidiary of the Company, with BNB Bank as the surviving bank, under the name “Dime Community Bank.” In connection with the Merger, the Company assumed $ 115.0 million in aggregate principal amount of 4.50 % Fixed-to-Floating Rate Subordinated Debentures due 2027 of Legacy Dime. Page -100- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and the Audit Committee Dime Community Bancshares, Inc. Hauppauge, New York Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Dime Community Bancshares, Inc. (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively referred to as “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework: (2013) issued by COSO. Change in Accounting Principle As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for credit losses effective January 1, 2020, due to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Codification No. 326, Financial Instruments – Credit Losses (ASC 326). The Company adopted the new credit loss standard using the modified retrospective method such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles. The adoption of the new credit loss standard and its subsequent application is also communicated as a critical audit matter below. Basis for Opinions The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report On Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ Page -101- Allowance for Credit Losses – Loans: Qualitative Factors As described in Note 1 to the consolidated financial statements, the Company adopted Accounting Standards Update 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (the “CECL Standard”) as of January 1, 2020. See change in accounting principle explanatory paragraph above. The adoption of the CECL Standard resulted in an after-tax cumulative-effect adjustment of $1.5 million recorded in retained earnings as of January 1, 2020. As of December 31, 2020, the allowance for credit losses was $44.2 million and the provision for credit losses was $11.5 million for the year then ended; see Notes 1 and 4 to the consolidated financial statements. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses includes a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics. The Company employs a loss-rate model based on probability of default and loss given default estimates, utilizing a transition matrix approach. This model calculates an expected loss percentage for each loan pool by considering the probability of default, based upon the historical transition or migration of loans from performing (various pass loan risk ratings) to criticized, and classified loan risk ratings to default. Loans are pooled by loan risk ratings based loan product type and other homogeneous characteristics. Credit loss assumptions are applied to the loan pools using life-of-loan analysis runout periods and the historical severity of loss, based on the aggregate net lifetime losses (loss given default) per loan pool. The Company adjusts for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio. These adjustment factors (qualitative 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 including the terms of the loans; (4) the experience, ability, and depth of the lending management and other relevant staff; (5) the volume and severity of past due and adversely classified or graded loans and the volume of non-accrual loans; (6) the quality of the Company’s loan review system; (7) the value of underlying collateral for collateralized loans; (8) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (9) the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio. The factors above include management’s expectation of future conditions based on a reasonable and supportable forecasts of the economic conditions. We determined that auditing management’s implementation and subsequent application of the qualitative factors used to reflect current and forecasted conditions in the allowance for credit losses for loans to be a critical audit matter due to the extent of audit effort and degree of auditor judgment required to evaluate the qualitative factors, given the volume and nature of inputs and the significant management judgment required. To address this critical audit matter, we tested the operating effectiveness of the Company's controls related to the qualitative factors, including the following: • Management’s implementation and subsequent application of significant judgments related to the qualitative factors and the resulting allocation to the allowance for credit losses • Management's review over the completeness and accuracy of the data used as the basis for the qualitative factors • Management's testing over the mathematical accuracy of the allowance for credit losses • An internal committee’s review of the allowance for credit losses and provision for credit losses Our substantive procedures related to the qualitative factors included the following: • Performing analytical procedures over the current and forecast qualitative factors • Evaluating the reasonableness of management’s initial selection and subsequent application of qualitative factors and the resulting allocation to the allowance for credit losses • Testing the completeness and accuracy of certain data used in the qualitative factor calculations • Testing the mathematical accuracy of the allowance for credit loss calculation Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ ​ ​ ​ ​ ​ ​ Crowe LLP ​ We have served as the Company’s auditor since 2002. New York, New York March 15, 2021 ​ Page -102- Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ​