What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-28 · 417 added, 396 removed, 1544 unchanged (34% of the section changed)

15 unchanged sentences

Restricted stock

Bank Owned Life Insurance ("BOLI")

Other intangible assets

4 unchanged sentences

Non-interest-bearing deposits

Total deposits

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

Deposits (excluding mortgage escrow deposits)

Non-interest-bearing mortgage escrow deposits

Interest-bearing mortgage escrow deposits

Total mortgage escrow deposits

FHLBNY advances

Other short-term borrowings

8 unchanged sentences

Preferred stock, Series A ($ 0.01 par, $ 25.00 liquidation value, 10,000,000 shares authorized and 5,299,200 shares issued and outstanding at December 31, 2023 and December 31, 2022)

Common stock ($ 0.01 par, 80,000,000 shares authorized, 41,621,772 shares and 41,610,939 shares issued at December 31, 2022 and December 31, 2021, respectively, and 38,573,000 shares and 39,877,833 shares outstanding at December 31, 2022 and December 31, 2021, respectively)

Common stock ($ 0.01 par, 80,000,000 shares authorized, 41,637,256 and 41,621,772 shares issued at December 31, 2023 and December 31, 2022, and 38,822,654 shares and 38,573,000 shares outstanding at December 31, 2023 and December 31, 2022, respectively)

Additional paid-in capital

8 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands except per share amounts)

14 unchanged sentences

Loan level derivative income

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

Gain on sale of SBA loans

Gain on sale of residential loans

Net gain on equity securities

Net gain on sale of securities and other assets

Net (loss) gain on equity securities

Net (loss) gain on sale of securities and other assets

Loss on termination of derivatives

6 unchanged sentences

Federal deposit insurance premiums

Loss from extinguishment of debt for FHLB advances and subordinated debt

Curtailment loss (gain)

Loss from extinguishment of debt for FHLBNY advances and subordinated debt

Curtailment loss

Merger expenses and transaction costs

16 unchanged sentences

Change in net unrealized gain (loss) during the period

Reclassification adjustment for net gains included in net gain on sale of securities and other assets

Reclassification adjustment for net losses (gains) included in net (loss) gain on sale of securities and other assets

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

2 unchanged sentences

Reclassification adjustment for curtailment loss

Change in the net actuarial gain

Change in the net actuarial (loss) gain

Change in unrealized gain (loss) on derivatives:

Change in net unrealized gain (loss) during the period

Change in net unrealized (loss) gain during the period

Reclassification adjustment for loss included in loss on termination of derivatives

Reclassification adjustment for expense included in interest expense

Other comprehensive (loss) income before income taxes

Deferred tax benefit

Total other comprehensive (loss) income, net of tax

Other comprehensive income (loss) before income taxes

Deferred tax expense (benefit)

Total other comprehensive income (loss), net of tax

Total comprehensive income

4 unchanged sentences

(Dollars in thousands except per share data)

Year Ended December 31, 2023

Comprehensive

1 unchanged sentence

Stockholders’

("BMP")

Beginning balance as of January 1, 2020

Ending balance as of December 31, 2020

Cumulative change in accounting principle (Note 1)

Adjusted balance on January 1, 2021

Other comprehensive income, net of tax

Reverse merger with Bridge Bancorp Inc.

Exercise of stock options, net

1 unchanged sentence

Stock-based compensation

Proceeds from preferred stock issuance, net

Shares received to satisfy distribution of retirement benefits

Shares received related to tax withholding

1 unchanged sentence

Cash dividends declared and paid to common stockholders

Redemption of real estate investment trust ("REIT") preferred stock

Purchase of treasury stock

1 unchanged sentence

Ending balance as of December 31, 2021

Cumulative change in accounting principle (Note 1)

Adjusted balance on January 1, 2021

Other comprehensive loss, net of tax

Reverse merger with Bridge Bancorp Inc.

Exercise of stock options, net

Release of shares, net of forfeitures

Stock-based compensation

Shares received to satisfy distribution of retirement benefits

Shares received related to tax withholding

1 unchanged sentence

Cash dividends declared to common stockholders

Redemption of real estate investment trust ("REIT") preferred stock

Purchase of treasury stock

1 unchanged sentence

Ending balance as of December 31, 2022

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

Release of shares, net of forfeitures

4 unchanged sentences

Purchase of treasury stock

( 1,431,241 )

Ending balance as of December 31, 2023

7 unchanged sentences

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

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

Net gain on equity securities

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

Net loss (gain) on equity securities

Net gain on sale of loans held for sale

1 unchanged sentence

Net depreciation, amortization and accretion

Amortization of fair value hedge basis point adjustments

Amortization of other intangible assets

6 unchanged sentences

Gain from death benefits from BOLI

(Increase) decrease in other assets

Increase (decrease) in other liabilities

Decrease (increase) in other assets

(Decrease) increase in other liabilities

Net cash provided by operating activities

5 unchanged sentences

Purchases of securities held-to-maturity

Acquisition of marketable equity securities

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

4 unchanged sentences

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

Net (increase) decrease in loans

(Increase) decrease in loans

( 1,359,782 )

1 unchanged sentence

Proceeds from the sale of fixed assets and premises held for sale

(Purchases) redemptions of restricted stock, net

Purchases of restricted stock, net

Net cash received in business combination

2 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

(Decrease) increase in deposits

Increase (decrease) in deposits

Proceeds (repayments) from FHLBNY advances, short-term, net

( 1,228,865 )

Repayments of FHLBNY advances, long-term

Proceeds from FHLBNY advances, long-term

(Repayments) proceeds of other short-term borrowings, net

Proceeds (repayments) of FHLBNY advances, long-term

(Repayments) proceeds from FHLBNY advances, long-term

Repayments of other short-term borrowings, net

Proceeds from subordinated debentures issuance, net

Redemption of subordinated debentures

Proceeds from preferred stock issuance, net

Proceeds from exercise of stock options

8 unchanged sentences

( 1,099,029 )

(Decrease) increase in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS, END OF PERIOD

See Notes to Consolidated Financial Statements.

DIME COMMUNITY BANCSHARES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Dollars in thousands)

Year Ended December 31,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

4 unchanged sentences

Loans transferred to held for investment

Premises transferred to (from) held for sale

Premises transferred to held for sale

Operating lease assets in exchange for operating lease liabilities

Cumulative change due to Current Expected Credit Loss ("CECL") Standard adoption

Cumulative change due to CECL Standard adoption

Net non-cash liabilities assumed in Merger (See Note 2)

See Notes to Consolidated Financial Statements.

DIME COMMUNITY BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except for share amounts)

13 unchanged sentences

Merger for further information.

As of December 31, 2022, we operated 59 branch locations throughout Long Island and New York City boroughs of Brooklyn, Queens, Manhattan and the Bronx.

As of December 31, 2023, we operated 60 branch locations throughout Long Island and New York City boroughs of Brooklyn, Queens, Manhattan, Staten Island, and the Bronx.

The Company is a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, Dime Community Bank.

13 unchanged sentences

These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which has spread to most countries, including the United States.

The pandemic has adversely affected economic activity globally, nationally and locally.

In March 2020, the United States declared a National Public Health Emergency in response to the COVID-19 pandemic.

The outbreak of COVID-19 has materially, adversely impacted labor supply, supply chains, and certain industries in which our customers and vendors operate, and could continue to materially impair their ability to fulfill their obligations to us.

Further additional outbreaks of COVID-19 variants could lead to economic recession and other severe disruptions in the U.S.

economy, may disrupt banking and other financial activity in the areas in which we operate, and could potentially create widespread business continuity issues for us.

Future government actions in response to the COVID-19 pandemic, including vaccination mandates, may also affect our workforce, human capital resources, and infrastructure.

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020.

The CARES Act was intended to provide relief and lessen a severe economic downturn.

The stimulus package included direct financial aid to American families and economic stimulus to significantly impacted industry sectors.

The package also included extensive emergency funding for hospitals and healthcare providers.

Subsequently, the 2021 Consolidated Appropriations Act was enacted to provide supplemental relief.

It is possible that there will be continued material, adverse impacts to significant estimates, asset valuations, and business operations, including intangible assets, investments, loans, deferred tax assets, derivative counterparty risk, changes in consumer behavior, and supply chain interruptions.

Summary of Significant Accounting Policies

Cash and Cash Equivalents - Cash and cash equivalents include cash and deposits with other financial institutions with maturities fewer than 90 days.

Cash and Cash Equivalents - Cash and cash equivalents include cash and deposits with other financial institutions with original maturities fewer than 90 days.

Net cash flows are reported for customer loan and deposit transactions, and interest bearing deposits in other financial institutions.

6 unchanged sentences

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.

2 unchanged sentences

Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Restricted Stock – Restricted stock represents Federal Home Loan Bank of New York (“FHLB” or “FHLBNY”) capital stock, Federal Reserve Bank (“FRB”) capital stock, and Bankers’ Bank capital stock, which are reported at cost.

Restricted Stock – Restricted stock represents FHLBNY capital stock, FRB capital stock, and Atlantic Community Bankers Bank (“ACBB”) capital stock, which are reported at cost.

The Bank is a member of the FHLB system.

3 unchanged sentences

Membership requires the purchase of shares of FRB capital stock.

The Bank has a relationship with Atlantic Community Bankers Bank (“ACBB”).

The Bank has a relationship with ACBB.

The relationship requires the purchase of shares of ACBB capital stock.

2 unchanged sentences

Loans originated and intended for sale are generally sold with servicing rights retained.

Certain loans in which the borrower does not adhere to all of the terms and conditions of the legal contract were best resolved through the sale of the asset rather than through litigation through our workout department.

These loans were reclassified.

Certain loans in which the borrower does not adhere to all of the terms and conditions of the legal contract were best resolved through the sale of the loan rather than through litigation through our workout department.

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.

2 unchanged sentences

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 the consolidated balance sheet.

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 is a troubled debt restructuring (“TDR”), the payment is applied to the principal balance.

A TDR loan performing in accordance with its modified terms is maintained on accrual status.

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, the payment is applied to the principal balance.

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Non-accrual loans that are modified to borrowers experiencing financial difficulty remain on non-accrual status until the borrower has demonstrated performance under the modified terms.

Unless otherwise noted, the above policy is applied consistently to all loan segments.

20 unchanged sentences

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.

current levels of subordination, vintage, geographic concentration, analyst reports and forecasts, credit ratings and other market data.

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.

6 unchanged sentences

For a loan that does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis.

The methodology for determining the allowance for credit losses on loans held for investment is considered a critical accounting policy by management given the judgement required for determining assumptions used, uncertainty of economic forecasts, and subjectivity of any qualitative factors considered.

The methodology for determining the allowance for credit losses on loans held for investment is considered a critical accounting policy by management given the judgment required for determining assumptions used, uncertainty of economic forecasts, and subjectivity of any qualitative factors considered.

The Company evaluates its loan pooling methodology at least annually.

13 unchanged sentences

Similarly, government regulations, such as the existing New York City Rent Regulation and Rent Stabilization laws, could limit future increases in the revenue from these buildings.

Commercial real estate and commercial mixed-use loans - Loans in this classification consist of commercial real estate, both owner-occupied and non-owner occupied, and may have a residential aspect of less than 50% of the property’s rental income.

The Bank’s underwriting standards for commercial real estate loans generally require:

Commercial real estate and commercial mixed-use loans - Loans in this classification consist of CRE, both owner-occupied and non-owner occupied, and may have a residential aspect of less than 50% of the property’s rental income.

The Bank’s underwriting standards for CRE loans generally require:

(1) a maximum loan-to-value ratio of 75% based upon an appraisal performed by an independent, state licensed appraiser, and (2) sufficient rental income from the underlying property to adequately service the debt, represented by a minimum debt service ratio of 1.25x.

Included in commercial real estate loans are also certain SBA loans in which the loan is secured by underlying real estate as collateral.

Included in CRE loans are also certain SBA loans in which the loan is secured by underlying real estate as collateral.

The Bank may sell a portion of the loan, guaranteed by the SBA, to a third-party investor.

Repayment of commercial real estate loans is often dependent upon successful operation or management of the collateral properties, as well as the success of the business and retail tenants occupying the properties.

Repayment of such loans is generally more vulnerable to weak economic conditions, such as unemployment rates and commercial real estate prices.

Repayment of CRE loans is often dependent upon successful operation or management of the collateral properties, as well as the success of the business and retail tenants occupying the properties.

Repayment of such loans is generally more vulnerable to weak economic conditions, such as unemployment rates and CRE prices.

Acquisition, development, and construction loans - Loans in this classification consist of loans to purchase land intended for further development, including single-family homes, multi-family housing, and commercial income properties.

In general, the maximum loan-to-value ratio for a land acquisition loan is 50% of the appraised value of the

The credit quality of this portfolio is largely dependent on economic factors, such as unemployment rates and commercial real estate prices.

In general, the maximum loan-to-value ratio for a land acquisition loan is 50% of the appraised value of the property.

The credit quality of this portfolio is largely dependent on economic factors, such as unemployment rates and CRE prices.

Commercial, industrial and agricultural loans - Loans in this classification consist of lines of credit, revolving lines of credit, and term loans, generally to businesses or high net worth individuals.

1 unchanged sentence

The lines of credit are generally secured by the assets of the business, though they may at times be issued on an unsecured basis.

Generally speaking, they are subject to renewal on an annual basis based upon review of the borrower’s financial statements.

speaking, they are subject to renewal on an annual basis based upon review of the borrower’s financial statements.

Term loans are generally secured by either specific or general asset liens of the borrower’s business.

These loans are granted based upon the strength of the cash generation ability of the borrower.

Included in Commercial and Industrial (“C&I”) loans are also certain SBA loans in which the loan is secured by underlying assets of the business (excludes SBA Paycheck Protection Program (“PPP”) loans from allowance for credit losses as these loans carry a 100% guarantee from the SBA).

Included in C&I loans are also certain SBA loans in which the loan is secured by underlying assets of the business (excludes SBA Paycheck Protection Program (“PPP”) loans from allowance for credit losses as these loans carry a 100% guarantee from the SBA).

The Bank may sell a portion of the loan, guaranteed by the SBA, to a third-party investor.

3 unchanged sentences

The credit quality of this portfolio is largely dependent on economic factors, such as unemployment rates.

Troubled debt restructurings (“TDRs”) – As allowed by ASC 326, the Company elected to maintain pools of loans accounted for under ASC 310-30.

Loan restructurings - The Company adopted ASU No.

2022-02 on January 1, 2023, which eliminates the recognition and measurement of a TDR.

Due to the removal of the TDR designation, the Company applies the loan refinancing and restructuring guidance to determine whether a modification or other forms of restructuring result in a new loan or a continuation of an existing loan.

Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include conditions where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and/or a combinations of these modifications.

The disclosures related to loan restructuring are only for modifications that directly affect cash flows.

Troubled debt restructurings - As allowed by ASC 326, the Company elected to maintain pools of loans accounted for under ASC 310-30.

In accordance with the standard, management did not reassess whether modifications to individual acquired financial assets accounted for in pools were TDRs as of the date of adoption.

19 unchanged sentences

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.

Collectively evaluated loans and the associated allowance for credit losses totaled $ 10.52 billion and $ 57.1 million at December 31, 2022, respectively.

Collectively evaluated loans totaled $ 10.73 billion and $ 10.52 billion at December 31, 2023 and 2022, respectively.

The associated allowance for credit losses on the collectively evaluated loans totaled $ 55.4 million and $ 57.1 million at December 31, 2023 and 2022, respectively.

Individually evaluated loans - Loans that do not share risk characteristics are evaluated on an individual basis based on various factors and are not included in the collective pool evaluation.

1 unchanged sentence

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.

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 collateral if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral.

Individually evaluated loans and the associated allowance for credit losses totaled $ 47.6 million and $ 26.4 million at December 31, 2022, respectively.

Individually evaluated loans totaled $ 35.4 million and $ 47.6 million at December 31, 2023 and 2022, respectively.

The associated allowance for credit losses on the individually evaluated loans totaled $ 16.3 million and $ 26.4 million at December 31, 2023 and 2022, respectively.

The fair value of real estate collateral is determined based on recent appraised values.

9 unchanged sentences

For further discussion of our loan accounting and acquisitions, see Note 2 - Merger and Note 5 - Loans.

Derivatives – The Company may engage in two types of derivatives depending on the Company’s intentions and belief as to the likely effectiveness as a hedge.

These two types are (1) a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”) or (2) an instrument with no hedging designation (“freestanding derivatives”).

Derivatives - The Company may engage in three types of derivatives depending on the Company’s intentions and belief as to the likely effectiveness as a hedge.

These three types are (1) a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (2) a hedge with the exposure to changes in fair value of an asset, liability, or firm commitment attributable to particular risk, such as interest risk (“fair value hedge”) or (3) an instrument with no hedging designation (“freestanding derivatives”).

For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction affects earnings.

Changes in fair value of the fair value derivative and the hedged item related to the hedged risk are recoginized in earnings.

Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings as non-interest income.

3 unchanged sentences

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 liabilities on the balance sheet.

This documentation includes linking cash flow hedges to specific liabilities on the consolidated statements of financial condition.

The Company also formally assesses, both at the hedge’s inception and on an on-going basis, whether the derivative instruments that are used are highly effective in offsetting changes in cash flows of the hedged items.

1 unchanged sentence

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 are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transaction will affect earnings.

When a cash flow hedge is discontinued but the hedged cash flows are still expected to occur, gains or losses that

were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transaction will affect earnings.

The Company is exposed to losses if a counterparty fails to make its payments under a contract in which the Company is in the net receiving position.

4 unchanged sentences

Physical possession of residential real estate collateralizing a one-to-four family residential loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through execution of a deed in lieu of foreclosure or through a similar legal agreement.

These assets are subsequently accounted for at the lower of cost or fair value

less estimated costs to sell.

These assets are subsequently accounted for at the lower of cost or fair value less estimated costs to sell.

Declines in the recorded balance subsequent to acquisition by the Company are recorded through expense.

4 unchanged sentences

Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives generally ranging from three to ten years .

Leases - On January 1, 2019, the Company adopted ASC 2016-02 "Leases (ASC Topic 842)"

and subsequent amendments thereto, which requires the Company to recognize most leases on the balance sheet.

Leases - On January 1, 2019, the Company adopted ASC 2016-02 "Leases (ASC Topic 842)" and subsequent amendments thereto, which requires the Company to recognize most leases on the consolidated statements of financial condition.

The Company adopted the standard under a modified retrospective approach as of the date of adoption and elected to apply several of the available practical expedients, including:

4 unchanged sentences

These amounts were determined based on the present value of remaining minimum lease payments, discounted using the Company’s incremental borrowing rate as of the date of adoption.

There was no material impact to the timing of expense or income recognition in the Company’s Consolidated Statements of Income.

There was no material impact to the timing of expense or income recognition in the Company’s consolidated statements of operations.

Disclosures about the Company’s leasing activities are presented in Note 8.

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Core deposit intangible assets are amortized on an accelerated method over their estimated useful lives of ten years .

Servicing Right Assets ("SRA") – When real estate or C&I loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.

Servicing Right Assets - When real estate or C&I loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.

SRAs are carried at the lower of cost or fair value and are amortized in proportion to, and over the period of, anticipated net servicing income.

5 unchanged sentences

Transfers of Financial Assets - Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished.

exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

BOLI – BOLI is carried 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 amounts due that are probable at settlement.

Increases in the contract value are recorded as non-interest income in the consolidated statements of income and insurance proceeds received are recorded as a reduction of the contract value.

Control over transferred assets is deemed to be surrendered when the assets have been legally isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Bank Owned Life Insurance - BOLI is carried 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 amounts due that are probable at settlement.

Increases in the contract value are recorded as non-interest income in the consolidated statements of operations and insurance proceeds received are recorded as a reduction of the contract value.

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.

1 unchanged sentence

A valuation allowance, if needed, reduces deferred tax assets to the amount deemed more likely than not to be realized.

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.

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 satisfying the "more likely than not"

test, no tax benefit is recorded.

For tax positions not satisfying the "more likely than not" test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to tax matters in income tax expense.

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2021 Equity Incentive Plan (the “2021 Equity Incentive Plan”), the Dime Community Bancshares, Inc.

2019 Equity Incentive Plan, (the “2019 Equity Incentive Plan”), and the 2012 Stock-Based Compensation Plan (the “2012 Equity Incentive Plan”), (collectively the “Stock Plans”);

2019 Equity Incentive Plan, (the “2019 Equity Incentive

Plan”), and the 2012 Stock-Based Compensation Plan (the “2012 Equity Incentive Plan”), (collectively the “Stock Plans”);

which are discussed more fully in Note 20 Stock-Based Compensation.

4 unchanged sentences

Basic and Diluted EPS - Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average common shares outstanding during the reporting period.

Diluted EPS is computed using the same method as basic EPS, but reflects the potential dilution that would occur if "in the money"

stock options were exercised and converted into common stock, and prior to 2021, if all likely aggregate Long Term Incentive Plan ("LTIP") performance-based share awards (“PSA”) were issued.

Diluted EPS is computed using the same method as basic EPS, but reflects the potential dilution that would occur if "in the money" stock options were exercised and converted into common stock, and prior to 2021, if all likely aggregate Long Term Incentive Plan ("LTIP") performance-based share awards (“PSA”) were issued.

In determining the weighted average shares outstanding for basic and diluted EPS, treasury shares are excluded.

Vested restricted stock award ("RSA") shares are included in the calculation of the weighted average shares outstanding for basic and diluted EPS.

Unvested RSA and PSA shares are recognized as a special class of participating securities under ASC 260, and are included in the calculation of the weighted average shares outstanding for basic and diluted EPS.

2 unchanged sentences

Comprehensive and accumulated comprehensive income are summarized in Note 3.

Disclosures about Segments of an Enterprise and Related Information - The Company has one reportable segment, "Community Banking."

All of the Company’s activities are interrelated, and each activity is dependent and assessed based on the manner in which it supports the other activities of the Company.

Disclosures about Segments of an Enterprise and Related Information - The Company has one reportable segment, "Community Banking." All of the Company’s activities are interrelated, and each activity is dependent and assessed based on the manner in which it supports the other activities of the Company.

For example, lending is dependent upon the ability of the Bank to fund itself with retail deposits and other borrowings and to manage interest rate and credit risk.

13 unchanged sentences

Results for reporting periods beginning after January 1, 2021 are presented under the CECL Standard while prior period amounts will continue to be reported in accordance with previously applicable GAAP.

The adoption of the CECL Standard resulted in an initial decrease of $ 3.9 million to the allowance for credit losses and an increase of $ 1.4 million to the reserve for unfunded commitments in other liabilities.

The after-tax cumulative-effect adjustment of $ 1.7 million was recorded in retained earnings as of January 1, 2021.

There were no held-to-maturity securities as of January 1, 2021 and, therefore, no impact from the adoption of the CECL Standard.

Standards That Have Not Yet Been Adopted

Standards Adopted in 2023

ASU 2020-04, Reference Rate Reform (Topic 848)

3 unchanged sentences

Once optional expedients are elected, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic within the Codification.

We are evaluating the impact of ASU 2020-04 and expect the LIBOR transition will not have a material effect on the Company's consolidated financial statements.

As of July 1, 2023, the Company has transitioned LIBOR based transactions to other indexes.

The LIBOR transition did not have a material effect on the Company's consolidated financial statements.

ASU 2021-01, Reference Rate Reform (Topic 848):

2 unchanged sentences

ASU 2020-01 is effective upon issuance and generally can be applied through December 31, 2022.

The adoption of ASU 2021-01 is not expected to have a material effect on the Company's consolidated financial statements.

As of July 1, 2023, the Company has transitioned LIBOR based derivatives to other indexes such as fallback rate SOFR.

The LIBOR transition did not have a material effect on the Company's consolidated financial statements.

ASU 2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging-Portfolio Layer Method

ASU 2022-01 clarifies the accounting for and promotes consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple layers.

The amendments in ASU 2022-01 apply to all entities that elect to apply the portfolio layer method of hedge accounting in accordance with Topic 815.

For public business entities, ASU 2022-01 is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

If an entity adopts ASU 2022-01 in an interim period, the effect of adopting the amendments related to basis adjustments should be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date).

The adoption of ASU 2022-01 is not expected to have a material effect on the Company's consolidated financial statements.

On March 28, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging – Portfolio Layer Method.

The purpose of this updated guidance is to further align risk management objectives with hedge accounting results on the application of the last-of-layer method, which was first introduced in ASU 2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities.

ASU 2022-01 became effective for public business entities for fiscal years beginning after December 15, 2022, with early adoption in the interim period, permitted.

For entities who have already adopted ASU 2017-12, immediate adoption is allowed.

This ASU became effective for the Company on January 1, 2023, on a prospective basis.

This standard did not have a material impact on the consolidated financial statements.

ASU 2022-02, Financial Instruments-Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures

ASU 2022-02 eliminates troubled debt restructuring (“TDR”) recognition and measurement guidance and, instead, requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan.

ASU 2022-02 eliminates TDR recognition and measurement guidance and, instead, requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan.

ASU 2022-02 enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.

For entities that have adopted the amendments of ASU 2016-13, the amendments in ASU 2022-02 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

This ASU is effective for the Company on January 1, 2023.

The Company plans to adopt ASU 2022-02 on its effective date using the modified retrospective method.

The adoption of ASU 2022-02 is not expected to have a material effect on the Company's consolidated financial statements.

This ASU became effective for the Company on January 1, 2023.

The Company adopted ASU 2022-02 on its effective date using the modified retrospective method.

The adoption of ASU 2022-02 did not have a material impact on the Company's consolidated financial statements.

As described in Note 1.

37 unchanged sentences

In the fourth quarter of 2021, we obtained additional information and evidence that resulted in a subsequent adjustment to decrease the estimated fair value of our acquired BNB Bank Pension Plan assets, which resulted in an increase to goodwill resulting from the Merger of $ 458 thousand, net of tax.

The subsequent adjustment to assets acquired was recorded in other assets in the consolidated balance sheet.

The subsequent adjustment to assets acquired was recorded in other assets in the consolidated statements of financial condition.

(In thousands)

51 unchanged sentences

Comprehensive

(In thousands)

Balance as of January 1, 2022

Other comprehensive (loss) income before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Amounts reclassified from accumulated other comprehensive income (loss)

Net other comprehensive (loss) income during the period

Balance as of December 31, 2022

Other comprehensive (loss) income before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Net other comprehensive (loss) income during the period

Other comprehensive income (loss) before reclassifications

Amounts reclassified from accumulated other comprehensive income (loss)

Net other comprehensive income (loss) during the period

Balance as of December 31, 2023

4 unchanged sentences

Change in net unrealized gain (loss) during the period

Reclassification adjustment for net gains included in net gain on sale of securities and other assets

Reclassification adjustment for net losses (gains) included in net (loss) gain on sale of securities and other assets

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

Tax expense (benefit)

Net change in unrealized gain (loss) on securities, net of reclassification adjustments and tax

2 unchanged sentences

Reclassification adjustment for curtailment loss

Change in the net actuarial gain

Change in the net actuarial (loss) gain

Tax (benefit) expense

Net change in pension and other postretirement obligations

Change in unrealized gain (loss) on derivatives:

Change in net unrealized gain (loss) during the period

Change in net unrealized (loss) gain during the period

Reclassification adjustment for loss included in loss on termination of derivatives

Reclassification adjustment for expense included in interest expense

Tax expense (benefit)

Net change in unrealized gain (loss) on derivatives, net of reclassification adjustments and tax

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax

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

4 unchanged sentences

Corporate securities

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

Agency collateralized mortgage obligations ("CMOs")

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

State and municipal obligations

17 unchanged sentences

Securities held-to-maturity:

Corporate securities

Pass-through MBS issued by GSEs

Total securities held-to-maturity

During the year ended December 31, 2023, there were no transfers of securities from available-for-sale to securities held-to-maturity.

There were no transfers of securities from held-to-maturity to available-for-sale during the year ended December 31, 2023.

The Company reassessed classification of certain investments and transferred securities with a book value of $ 372.2 million from available-for-sale to securities held-to-maturity during the year ended December 31, 2022.

2 unchanged sentences

There were no transfers from securities held-to-maturity during the year ended December 31, 2022.

There were $ 140.4 million transferred from securities available-for-sale to securities held-to-maturity during year ended December 31, 2021.

There were $ 140.4 million transferred from securities available-for-sale to securities held-to-maturity during the year ended December 31, 2021.

There were no transfers from securities held-to-maturity during the year ended December 31, 2021.

There were no transfers to or from securities held-to-maturity during the year ended December 31, 2020.

The carrying amount of securities pledged at December 31, 2023 and 2022 was $ 457.7 million and $ 631.4 million, respectively.

The pledged securities are mainly used as collateral for a portion of the Company’s municipal deposit portfolio.

At December 31, 2023 and 2022, there were no holdings of securities of any one issuer, other than the U.S.

20 unchanged sentences

(In thousands)

Securities available-for-sale

Tax expense on gains

Tax benefit on losses

Equity securities included in other assets in the consolidated statements of financial condition had a fair value of $ 2.2 million as of December 31, 2023.

Net loss on equity securities of $ 758 thousand was recognized for the year ended December 31, 2023.

Marketable equity securities were fully liquidated in connection with the termination of the BMP.

4 unchanged sentences

Marketable equity securities

The remaining gain or loss on securities shown in the consolidated statements of income was due to market valuation changes.

Net gains on marketable equity securities of $ 131 thousand and $ 361 thousand were recognized for the years ended December 31, 2021 and 2020, respectively.

There were no sales of securities held-to-maturity during the years ended December 31, 2022, 2021, and 2020.

The related gain or loss on marketable equity securities shown in the consolidated statements of operations was due to market valuation changes.

Net gain on marketable equity securities of $ 131 thousand were recognized for the year ended December 31, 2021.

There were no sales of securities held-to-maturity during the years ended December 31, 2023, 2022, or 2021.

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

24 unchanged sentences

government were to technically default.

Accrued interest receivable on securities totaling $ 5.4 million and $ 4.4 million at December 31, 2022 and 2021 respectively, was included in other assets in the consolidated balance sheet and excluded from the amortized cost and estimated fair value totals in the table above.

Accrued interest receivable on securities totaled $ 5.3 million and $ 5.4 million at December 31, 2023 and 2022 respectively, and was excluded from the amortized cost and estimated fair value totals in the table above.

Management evaluates available-for-sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors.

14 unchanged sentences

(In thousands)

December 31, 2022

December 31, 2021

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

Multifamily residential and residential mixed-use

Commercial real estate ("CRE")

Acquisition, development, and construction

Total real estate loans

Commercial and industrial ("C&I")

Fair value hedge basis point adjustments (1)

Total loans, net of fair value hedge basis point adjustments

Allowance for credit losses

Loans held for investment, net

Included in C&I loans was Small Business Administration (“SBA”) PPP loans totaling $ 5.8 million and $ 66.0 million at December 31, 2022 and 2021, respectively.

SBA PPP loans carry a 100 % guarantee from the SBA.

The Company may hold an allowance for credit losses as a result of individual loan analysis.

In June 2021, the Company sold $ 596.2 million of SBA PPP loans and recorded a gain of $ 20.7 million in gain on sale of SBA loans in the consolidated statements of income.

(1) At December 31, 2023, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged one-to-four family residential mortgage loans, multifamily residential mortgage loans and CRE loans.

C&I loans included SBA PPP loans totaling $ 1.1 million and $ 5.8 million at December 31, 2023 and 2022, respectively.

In June 2021, the Company sold $ 596.2 million of SBA PPP loans and recorded a gain of $ 20.7 million in gain on sale of SBA loans in the consolidated statements of operations.

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

2 unchanged sentences

(In thousands)

Beginning balance as of January 1, 2020

Provision for credit losses

Ending balance as of December 31, 2020

Impact of adopting CECL as of January 1, 2021

Adjusted beginning balance as of January 1, 2021

Beginning balance as of January 1, 2021

Day 1 acquired PCD loans

Provision for credit losses

Ending balance as of December 31, 2021

Provision (credit) for credit losses

2 unchanged sentences

Ending balance as of December 31, 2023

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

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

December 31, 2023

3 unchanged sentences

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

Acquisition, development, and construction

The Company did not recognize interest income on non-accrual loans held for investment during the year ended December 31, 2022.

December 31, 2022

Non-accrual with

(In thousands)

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

The Company did not recognize interest income on non-accrual loans held for investment during the years ended December 31, 2023 or 2022.

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

5 unchanged sentences

Multifamily residential and residential mixed-use

Acquisition, development, and construction

Total real estate

5 unchanged sentences

Multifamily residential and residential mixed-use

Acquisition, development, and construction

Total real estate

Accruing Loans 90 Days or More Past Due:

The Company continued accruing interest on loans with an outstanding balance of $ 3.0 million at December 31, 2021, all of which were 90 days or more past due.

These loans were either well secured, awaiting a forbearance extension or formal payment deferral, or will likely be forgiven through the PPP or repurchased by the SBA, and, therefore, remained on accrual status and were deemed performing assets at the dates indicated above.

At December 31, 2023 and 2022, there were no accruing loans 90 days or more past due.

Collateral Dependent Loans:

At December 31, 2022, the Company had collateral dependent loans which were individually evaluated to determine expected credit losses.

December 31, 2022

December 31, 2021

The Company had collateral dependent loans which were individually evaluated to determine expected credit losses as follows:

Year Ended December 31,

Associated Allowance

5 unchanged sentences

for Credit Losses

Acquisition, development, and construction

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 2023.

The following table sets forth selected information about related party loans for the year ended December 31, 2022:

The following table sets forth selected information about related party loans:

(In thousands)

December 31, 2023

Beginning balance

Effect of changes in composition of related parties

Balance at end of period

As of December 31, 2022, the Company had TDRs totaling $ 22.1 million.

The Company has allocated $ 9.1 million of allowance for those loans at December 31, 2022, with no commitments to lend additional amounts.

Loan Restructurings

The Company adopted ASU No.

2022-02 on January 1, 2023, which eliminates the recognition and measurement of a TDR.

The disclosures related to loan restructuring are only for modifications that directly affect cash flows.

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

For the Year Ended December 31, 2023

Extension and

Payment Delay

(Dollars in thousands)

Payment Delay

Rate Reduction

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

Multifamily residential and residential mixed-use

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

For the Year Ended December 31, 2023

Weighted Average

Payment Delay

Interest Rate

(Dollars in thousands)

Term Extensions

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

Multifamily residential and residential mixed-use

The Bank monitors the performance of loans modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table describes the performance of loans that have been modified during the year ended December 31, 2023.

December 31, 2023

(Dollars in thousands)

Days Past Due

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

Multifamily residential and residential mixed-use

There were no loans made to borrowers experiencing financial difficulty that were modified during the year ended December 31, 2023, that subsequently defaulted.

For the purposes of this disclosure, a payment default is defined as 90 or more days past due and still accruing.

Non-accrual loans that are modified to borrowers experiencing financial difficulty remain on non-accrual status until the borrower has demonstrated performance under the modified terms.

Prior to our adoption of ASU 2022-02, as of December 31, 2022, the Company had TDRs totaling $ 22.1 million.

The Company had allocated $ 9.1 million of allowance for those loans at December 31, 2022, with no commitments to lend additional amounts.

As of December 31, 2021, the Company had TDRs totaling $ 942 thousand.

The Company has allocated $ 483 thousand of allowance for those loans at December 31, 2021, with no commitments to lend additional amounts.

The Company had allocated $ 48 3 thousand of allowance for those loans at December 31, 2021, with no commitments to lend additional amounts.

During the year ended December 31, 2022, TDR modifications included reduction of outstanding principal, extensions of maturity dates, or favorable interest rates and loan terms than the prevailing market interest rates and loan terms.

During the year ended December 31, 2022, the Company modified one CRE loan as a TDR, and one Acquistion, Development, and Construction loan, which subsequently paid off during the year.

During the year ended December 31, 2022, the Company modified one CRE loan as a TDR, and one Acquisition, Development, and Construction loan, which subsequently paid off during the year.

During the year ended December 31, 2021, the Company modified one CRE loan as a TDR, which subsequently paid off during the year.

3 unchanged sentences

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

Acquisition, development, and construction

There were no loans modified in a manner that met the criteria of a TDR during the year ended December 31, 2020.

There were no TDR charge-offs during the years ended December 31, 2022 and 2021.

19 unchanged sentences

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

YTD Gross Charge-Offs

Multifamily residential and residential mixed-use:

1 unchanged sentence

Total multifamily residential and residential mixed-use

YTD Gross Charge-Offs

Special mention

Acquisition, development, and construction:

YTD Gross Charge-Offs

Special mention

Total acquisition, development, and construction:

YTD Gross Charge-Offs

Special mention

YTD Gross Charge-Offs

Special mention

YTD Gross Charge-Offs

December 31, 2022

5 unchanged sentences

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

YTD Gross Charge-Offs

Multifamily residential and residential mixed-use:

1 unchanged sentence

Total multifamily residential and residential mixed-use

YTD Gross Charge-Offs

Special mention

Acquisition, development, and construction:

YTD Gross Charge-Offs

Special mention

Total acquisition, development, and construction:

YTD Gross Charge-Offs

Special mention

YTD Gross Charge-Offs

Special mention

YTD Gross Charge-Offs

For other loans, the Company evaluates credit quality based on payment activity.

1 unchanged sentence

The following is a summary of the credit risk profile of other loans by internally assigned grade:

Year Ended December 31,

(In thousands)

December 31, 2022

December 31, 2021

LOAN SERVICING ACTIVITIES

2 unchanged sentences

Servicing loans for others generally consists of collecting loan payments, maintaining escrow accounts, disbursing payments to investors, paying taxes and insurance and processing foreclosures.

In connection with loans serviced for others, the Bank held borrowers’ escrow balances of $ 1.3 million and $ 2.9 million at December 31, 2022 and 2021, respectively.

In connection with loans serviced for others, the Bank held borrowers’ escrow balances of $ 1.3 million at December 31, 2023 and 2022.

There are no restrictions on the Company’s consolidated assets or liabilities related to loans sold with servicing rights retained.

Upon sale of these loans, the Company recorded an SRA in other assets, and has elected to account for the SRA under the "amortization method"

prescribed under GAAP.

Upon sale of these loans, the Company recorded an SRA in other assets, and has elected to account for the SRA under the "amortization method" prescribed under GAAP.

The activity for SRAs for the periods indicated are as follows:

23 unchanged sentences

Premises Held for Sale

During the year ended December 31, 2023, the Company transferred one real estate property utilized as a retail branch to premises held for sale totaling $ 905 thousand.

There were no premises held for sale as of December 31, 2022.

The aggregate recorded balance of the Company’s premises held for sale was $ 556 thousand at December 31, 2021

During the year ended December 31, 2021, the Company transferred two real estate properties utilized as retail branches to premises held for sale totaling $ 2.8 million.

During each of the years ended December 31, 2022 and 2021, the Company sold one real estate property utilized as a retail branch totaling $ 1.9 million and $ 2.2 million, respectively.

The Company recorded a gain of $ 1.4 million and $ 550 thousand in gain on sale of securities and other assets in the consolidated statements of income.

Maturities of the Company’s operating lease liabilities at December 31, 2022 are as follows:

During the year ended December 31, 2022, the Company sold one real estate property utilized as a retail branch for $ 1.9 million and recorded an associated gain of $ 1.4 million in Gain on sale of securities and other assets in the consolidated statements of operations.

The following table presents the Company’s remaining maturities of undiscounted lease payments, as well as a reconciliation to the discounted operating lease liabilities in the Consolidated Statements of Financial Condition at December 31, 2023:

(In thousands)

3 unchanged sentences

Other information related to our operating leases was as follows:

Year Ended December 31,

(In thousands)

1 unchanged sentence

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

Year Ended December 31,

Weighted average remaining lease term

3 unchanged sentences

The Company performs its annual goodwill impairment test in the fourth quarter of every year, or more frequently if events or changes in circumstance indicate the asset might be impaired.

It was determined during the annual impairment testing that no impairment was needed for the years ended December 31, 2022, 2021 and 2020 as the fair value of the Company’s single reporting unit was determined to exceed the carrying amount of the reporting unit.

It was determined during the annual impairment testing that no impairment was needed for the years ended December 31, 2023, 2022 and 2021.

The following table presents the change in Goodwill for the years ended December 31, 2023, 2022 and 2021:

6 unchanged sentences

Other Intangible Assets

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

December 31, 2022

December 31, 2021

The following table presents the carrying amount and accumulated amortization of intangible assets that are amortizable, all of which are core deposit intangibles:

Year Ended December 31,

(In thousands)

7 unchanged sentences

The following is a summary of restricted stock:

Year Ended December 31,

(In thousands)

December 31, 2022

December 31, 2021

FHLBNY capital stock

FRB capital stock

Bankers' Bank capital stock

ACBB capital stock

Restricted stock

3 unchanged sentences

Members are required to own a particular amount of stock based on the level of borrowings and other factors.

The Bank increased its outstanding FHLBNY advances by $ 1.11 billion during the year ended December 31, 2022, resulting in an increase of required FHLBNY stock.

The Bank increased its outstanding FHLBNY advances by $ 182.0 million during the year ended December 31, 2023, resulting in an increase of required FHLBNY stock.

The Bank owned 734,751 shares and 636,274 shares at December 31, 2023 and 2022, respectively.

The Bank recorded dividend income on the FHLBNY capital stock of $ 0.9 million, $ 1.9 million and $ 3.0 million during the years ended December 31, 2022, 2021 and 2020, respectively.

The Bank recorded dividend income on the FHLBNY capital stock of $ 5.4 million, $ 853 thousand and $ 1.9 million during the years ended December 31, 2023, 2022 and 2021, respectively.

FRB Capital Stock

2 unchanged sentences

The Bank owned 502,197 shares at December 31, 2023 and 499,052 shares at December 31, 2022.

The Bank recorded dividend income on the FRB capital stock of $ 828 thousand and $ 442 thousand during the years ended December 31, 2022 and 2021, respectively, and no dividend income for the year ended December 31, 2020.

Bankers’ Bank Capital Stock

The Bank has a relationship with Atlantic Community Bankers Bank.

The Bank recorded dividend income on the FRB capital stock of $ 1.0 million, $ 828 thousand, and $ 442 thousand during the years ended December 31, 2023, 2022, and 2021, respectively.

ACBB Capital Stock

The Bank has a relationship with ACBB.

The relationship requires the purchase of shares of ACBB capital stock between $ 2,500 and $ 3,250 per share.

The Bank owned 60 shares at December 31, 2023 and 2022.

The Bank recorded dividend income on the ACBB capital stock of $ 1 thousand during the years ended December 31, 2022 and 2021, and no dividend income during the year ended December 31, 2020.

The Bank recorded dividend

income on the ACBB capital stock of $ 2 thousand during the year ended December 31, 2023 and $ 1 thousand during the years ended December 31, 2022, and 2021, respectively.

Deposits are summarized as follows:

December 31, 2022

December 31, 2021

Year Ended December 31,

(Dollars in thousands)

Certificates of deposit ("CDs")

Interest-bearing checking

Non-interest-bearing checking (1)

(1) Includes mortgage escrow deposits.

The following table presents a summary of scheduled maturities of CDs outstanding at December 31, 2023:

3 unchanged sentences

2029 and beyond

CDs that met or exceeded the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250 thousand were $ 420.4 million and $ 200.1 million December 31, 2022 and 2021, respectively.

CDs that met or exceeded the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250 thousand were $ 115.3 million and $ 129.6 million at December 31, 2023 and 2022, respectively.

DERIVATIVES AND HEDGING ACTIVITIES

6 unchanged sentences

To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

The Company engages in both cash flow hedges and freestanding derivatives.

The Company engages in far value hedges, cash flow hedges and freestanding derivatives.

Fair Values of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Financial Condition

The tables below present the fair value of the Company’s derivative assets and liabilities as well as their classification on the consolidated statements of financial condition as of December 31, 2023 and December 31, 2022.

December 31, 2023

December 31, 2022

(Dollars in thousands)

Derivatives designated as hedging instruments

Cash flow hedges - interest rate products

Derivatives not designated as hedging instruments

Interest rate products

December 31, 2023

December 31, 2022

(Dollars in thousands)

Derivatives designated as hedging instruments

Fair value hedges - interest rate products

Cash flow hedges - interest rate products

Derivatives not designated as hedging instruments

Interest rate products

Other contracts

Effect of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Operations

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations as of December 31, 2023 and December 31, 2022.

December 31, 2023

December 31, 2022

Effects of fair value or cash flow hedges are recorded

The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships

Interest contracts

Derivatives designated as hedging instruments

Gain or (loss) on cash flow hedging relationships

Interest contracts

Gain (loss) reclassified from AOCI into income

Fair Value Hedges

The Company uses fair value hedges to protect against changes in fair value of certain interest rate sensitive assets.

Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

In October 2023, the Company entered into interest rate swaps with a notional amount totaling $ 500.0 million which was designated as a fair value hedge on a closed pool of certain fixed rate loans that are settled daily to market.

As of December 31, 2023, the Company posted $ 6.5 million to the Chicago Mercantile Exchange ("CME") clearing house related to the

fair value derivatives settled daily to market.

The Company pays an average fixed rate of 4.82 % and receives a floating rate based on the US federal funds effective rate for the life of the agreement without an exchange of the underlying notional amount.

For derivatives that are designated as fair value hedges, the gain or loss on the derivatives as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in earnings.

The amortized cost basis of the closed portfolio of the fixed rate mortgage loans on December 31, 2023 totaled $ 729.5 million.

The amount identified as the last-of-layer in the open hedge relationship was $ 500.0 million, which is the amount of loans in the closed portfolio anticipated to be outstanding for the designated hedge period.

The basis adjustment associated with the hedge was a $ 6.6 million asset as of December 31, 2023, which would be allocated across the entire remaining closed pool upon termination or maturity of the hedged relationship.

During the year ended December 31, 2023, the Company recorded a $ 561 thousand credit from the swap transaction as a component of interest income in the consolidated statements of operations.

As of December 31, 2023, the following amounts were recorded on the consolidated statements of financial condition related to cumulative basis adjustment for fair value hedges:

Year Ended December 31,

(Dollars in thousands)

Carrying Amount of the Hedged Assets

Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets

Carrying Amount of the Hedged Assets

Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets

Fixed Rate Loans

Cash Flow Hedges

Cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

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

The Company uses cash flow hedges to protect against variability in cash flows associated with existing or forecasted issuances of short-term borrowing.

Cash flow hedges on liabilities involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt.

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt.

During the next twelve months, the Company estimates that an additional $ 6.4 million will be reclassified as a decrease to interest expense.

During the year ended December 31, 2022, the Company did no t terminate any derivatives.

During the years ended December 31, 2023 and 2022, the Company did no t terminate any derivatives.

During the year ended December 31, 2021, the Company terminated 34 derivatives with notional values totaling $ 785.0 million, resulting in a termination value of $ 16.5 million which was recognized in loss on termination of derivatives in non-interest income.

During the year ended December

31, 2020, the Company terminated two derivatives with notional values totaling $ 30.0 million, resulting in a termination value of $ 175 thousand, which was expected to be recognized in interest expense over the remaining term of the original derivative.

Due to the terminations during the year ended December 31, 2021, the remaining termination value was recognized as part of the loss on terminations during the year ended December 31, 2021.

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

December 31, 2022

December 31, 2021

(Dollars in thousands)

Included in derivative assets/(liabilities):

Interest rate swaps related to FHLBNY advances

The table below presents the effect of the cash flow hedge accounting on accumulated other comprehensive loss as of December 31, 2023, 2022 and 2021.

1 unchanged sentence

(In thousands)

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

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

Gain recognized on termination of derivatives

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

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

The cash flow hedges involve derivative agreements with third-party counterparties that contain provisions requiring the Bank to post cash collateral if the derivative exposure exceeds a threshold amount.

As of December 31, 2022 and 2021, the Bank did no t post collateral to the third-party counterparties.

As of December 31, 2022 and 2021, the Company received $ 17.8 million and $ 4.6 million, respectively, in collateral from its third-party counterparties under the agreements in a net asset position.

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

All cash flow hedges are recorded gross on the statement of financial condition.

Certain cash flow hedges involve derivative agreements with third-party counterparties that contain provisions requiring the Bank to post cash collateral if the derivative exposure exceeds a threshold amount.

As of December 31, 2023 and 2022, the Company received $ 13.5 million and $ 17.8 million, respectively, in collateral from its third-party counterparties under

the agreements in a net asset position.

Additionally, the Bank entered certain cash flow hedges that are CME exchanged and settled daily to market.

As of December 31, 2023, the Company posted $ 4.9 million to the CME clearing house that are accounted for as settlements of the derivative liabilities.

Freestanding Derivatives

14 unchanged sentences

Loan level interest rate floors with borrower

Loan level interest rate swaps with third-party counterparties

1 unchanged sentence

Loan level interest rate floors with third-party counterparties

December 31, 2022

4 unchanged sentences

Loan level interest rate floors with borrower

Loan level interest rate swaps with third-party counterparties

1 unchanged sentence

Loan level interest rate floors with third-party counterparties

Loan level derivative income is recognized on the mark-to-market of the interest rate swap as a fair value adjustment at the time the transaction is closed.

5 unchanged sentences

Certain interest rate swap agreements with third-party counterparties contain provisions that require the Company to post collateral if the derivative exposure exceeds a threshold amount and receive collateral for agreements in a net asset position.

As of December 31, 2022, the Company did no t post collateral to its third-party counterparties.

As of December 31, 2023 and December 31, 2022, the Company did no t post collateral to its third-party counterparties.

As of December 31, 2021, posted collateral was $ 14.0 million.

As of December 31, 2023, the Company received $ 94.7 million in collateral from its third-party counterparties under the agreements in a net asset position.

As of December 31, 2021, the Company did not receive collateral from its third-party counterparties.

As of December 31, 2022, the Company received $ 135.3 million in collateral from its third-party counterparties under the agreements in a net asset position.

Risk Participation Agreements

5 unchanged sentences

The Company’s agreements with certain of its derivative counterparties state that if the Bank fails to maintain its status as a well-capitalized institution, the Bank could be required to terminate its derivative positions with the counterparty.

As of December 31, 2022, 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 $ 137.3 million for those related to loan level derivatives.

If the Company had breached any of the above provisions at December 31, 2022, it could have been required to settle its obligations under the agreements at the termination value with the respective counterparty.

For derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, any breach of the above provisions by the Company may require settlement of its obligations under the agreements at the termination value with the respective counterparty.

As of December 31, 2023, there were no derivatives in a net liability position, and therefore the termination value was zero .

There were no provisions breached for the year ended December 31, 2023.

FHLBNY ADVANCES

The Bank had borrowings from the FHLBNY (“Advances”) totaling $ 1.13 billion and $ 25.0 million at December 31, 2022 and 2021, respectively, all of which were fixed rate.

The average interest rate on outstanding FHLBNY Advances was 4.55 % and 0.35 % at December 31, 2022 and 2021, respectively.

In accordance with its Advances, Collateral Pledge and Security Agreement with the FHLBNY, the Bank was eligible to borrow up to $ 4.13 billion as of December 31, 2022 and $ 4.19 billion as of December 31, 2021, and maintained sufficient qualifying collateral, as defined by the FHLBNY.

At December 31, 2022 there were no callable Advances.

During the years ended December 2022, 2021, and 2020, the Company’s prepayment penalty expense was recognized as a loss on extinguishment of debt.

The Bank had borrowings from the FHLBNY (“Advances”) totaling $ 1.31 billion and $ 1.13 billion at December 31, 2023 and 2022, respectively, all of which were fixed rate.

In accordance with its Advances, Collateral Pledge and Security Agreement with the FHLBNY, the Bank was eligible to borrow or secure municipal letters of credit up to $ 4.09 billion as of December 31, 2023 and $ 4.13 billion as of December 31, 2022, and maintained sufficient qualifying collateral, as defined by the FHLBNY.

We pledge real estate loans including Residential, Multifamily and CRE.

At December 31, 2023 there were no callable Advances and the Bank had $ 1.19 billion of remaining borrowing capacity through the FHLBNY.

During the years ended December 31, 2023 and 2022, the Company did no t have any prepayment penalty expense recognized as a loss on extinguishment of debt.

During the year ended December 31, 2021, the Company’s prepayment penalty expense was recognized as a loss on extinguishment of debt.

The following table is a summary of FHLBNY extinguishments for the periods presented:

4 unchanged sentences

Loss on extinguishment of debt

The following tables present the contractual maturities and weighted average interest rates of FHLBNY advances for each of the next five years.

There were no FHLBNY advances with an overnight contractual maturity at December 31, 2022 and 2021.

As of December 31, 2022, there were $ 1.10 billion of FHLBNY advances with contractual maturities during 2023 and $ 36.0 million of FHLBNY advances with contractual maturities after 2023.

As of December 31, 2021, there were $ 25.0 million of FHLBNY advances with contractual maturities during 2022 and no FHLBNY advances with contractual maturities after 2023:

December 31, 2022

The following table presents the contractual maturities of FHLBNY advances for each of the next five years.

There were no FHLBNY advances with an overnight contractual maturity at December 31, 2023 or 2022.

(Dollars in thousands)

Contractual Maturity

2023, fixed rate at rates from 3.85 % to 5.65 %

2024, fixed rate at rates from 4.85 % to 5.67 %

2027, fixed rate at 4.25 %

Total FHLBNY advances

December 31, 2021

(Dollars in thousands)

Contractual Maturity

2028, fixed rate at 4.04 %

Total FHLBNY advances

Total FHLBNY advances had a weighted average interest rate of 5.23 % and 4.55 % at December 31, 2023 and December 31, 2022, respectively.

SUBORDINATED DEBENTURES

5 unchanged sentences

The repayment of the subordinated notes due 2027 resulted in a pre-tax write-off of debt issuance costs of $ 740 thousand, which was recognized in loss on extinguishment of debt in non-interest expense.

The remaining $ 40.0 million of fixed-to-floating rate subordinated debentures were issued by the Company in September 2015, 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, for the first five years .

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 CME Term SOFR plus 372 basis points.

The subordinated debentures totaled $ 200.2 million at December 31, 2023 and $ 200.3 million at December 31, 2022.

4 unchanged sentences

(In thousands)

December 31, 2022

December 31, 2021

Repurchase agreements

2 unchanged sentences

The Bank utilizes securities sold under agreements to repurchase (“repurchase agreements”) as part of its borrowing policy to add liquidity.

Repurchase agreements represent funds received from customers, generally on an overnight basis, which are collateralized by investment securities, of which 100 % were pass-through MBS issued by GSEs with a carrying amount of $ 1.4 million at December 31, 2022.

Repurchase agreements are financing arrangements with $ 1.4 million maturing during the first quarter of 2023.

At maturity, the securities underlying the agreements are returned to the Bank.

Repurchase agreements represent funds received from customers, generally on an overnight basis, which are collateralized by investment securities, of which 100 % were pass-through MBS issued by GSEs.

There were no repurchase agreements at December 31, 2023.

Repurchase agreements are financing arrangements that at maturity, the securities underlying the agreements are returned to the Bank.

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.

2 unchanged sentences

In accordance with the Bank’s policies, eligible counterparties are defined and monitored to minimize exposure.

Interest expense on repurchase agreements for the years ended December 31, 2022 and 2021 was $ 1 thousand and $ 1 thousand, respectively.

There was no interest expense on repurchase agreements for the years ended December 31, 2020.

There was no interest expense on repurchase agreements for the year ended December 31, 2023.

Interest expense on repurchase agreements for the years ended December 31, 2022 and 2021 was $ 1 thousand, respectively.

The Bank is a member of AFX, through which it may either borrow or lend funds on an overnight or short-term basis with other member institutions.

The availability of funds changes daily.

Interest expense on AFX borrowings for the years ended December 31, 2022, 2021 and 2020 was $ 1.4 million, $ 1 thousand, and $ 45 thousand, respectively.

Interest expense on AFX borrowings for the years ended December 31, 2023, 2022 and 2021 was $ 101 thousand, $ 1.4 million, and $ 1 thousand, respectively.

The Company’s consolidated Federal, State and City income tax provisions were comprised of the following:

Year Ended December 31,

Year Ended December 31, 2021

Year Ended December 31, 2020

(In thousands)

Current expense

State and city

Total current expense

Deferred expense

State and city

Total deferred expense

The preceding table excludes tax effects recorded directly to stockholders’ equity in connection with unrealized gains and losses on securities available-for-sale (including losses on such securities upon their transfer to held-to-maturity), interest rate derivatives, and adjustments to other comprehensive income relating to the minimum pension liability, unrecognized gains of pension and other postretirement obligations and changes in the non-credit component of OTTI.

6 unchanged sentences

Benefit plan differences

Adjustments for prior period returns and tax items

Investment in BOLI

3 unchanged sentences

Effective tax rate

The increase in the effective tax rate in 2022 and 2021 compared to 2020 was primarily the result of the loss of benefits from the Company’s REIT due to the increase in the Company’s total assets, and non-deductible expenses.

The increase in effective tax rate in 2023 was primarily the result of an increase in the Section 162M limitation due to executive severance.

Deferred tax assets and liabilities are recorded for temporary differences between the book and tax bases of assets and liabilities.

17 unchanged sentences

The Company and its subsidiary are subject to U.S.

federal income tax as well as income tax of the State, City of New York and the State of New Jersey.

federal income tax as well as income tax of the State of New York, City of New York and the State of New Jersey.

Under generally accepted accounting principles, the Company uses the asset and liability method of accounting for income taxes.

5 unchanged sentences

At December 31, 2023, the remaining federal NOL carryforward was $ 2.2 million.

At December 31, 2022, the Company had New York State NOL carryforward of $ 1.1 million, and recorded a deferred tax asset that it expects to recover within the carryforward period.

At December 31, 2022, the Company had New York City NOL carryforward of zero .

At December 31, 2023, the Company had a New York State NOL carryforward of $ 543 thousand, and recorded a deferred tax asset that it expects to recover within the carryforward period.

At December 31, 2023, the Company had a New York City NOL carryforward balance of zero .

The New York State NOLs at December 31, 2023 included NOLs acquired in connection with the Merger.

At December 31, 2023 and 2022, the Bank had accumulated bad debt reserves totaling $ 15.1 million for which no provision for income tax was required to be recorded.

These bad debt reserves could be subject to recapture into taxable income under certain

circumstances, including a distribution of the bad debt benefits to the Holding Company or the failure of the Bank to qualify as a bank for federal income tax purposes.

These bad debt reserves could be subject to recapture into taxable income under certain circumstances, including a distribution of the bad debt benefits to the Holding Company or the failure of the Bank to qualify as a bank for federal income tax purposes.

Should the reserves as of December 31, 2023 be fully recaptured, the Bank would recognize $ 4.8 million in additional income tax expense.

8 unchanged sentences

The tax position is measured at the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement.

The Company had no unrecognized tax benefits as of December 31, 2022 or 2021.

The Company had no unrecognized tax benefits as

of December 31, 2023 or 2022.

The Company does not anticipate any material change to unrecognized tax benefits during the year ended December 31, 2024.

2 unchanged sentences

MERGER RELATED EXPENSES

Merger-related expenses were recorded in the consolidated statements of income as a component of non-interest expense and include costs relating to the Merger, as described in Note 2.

Merger-related expenses were recorded in the consolidated statements of operations as a component of non-interest expense and include costs relating to the Merger, as described in Note 2.

These charges represent one-time costs associated with merger activities and do not represent ongoing costs of the fully integrated combined organization.

Accounting guidance requires that merger-related transactional and restructuring costs incurred by the Company be charged to expense as incurred.

There were no costs associated with merger expenses and transaction costs for the year ended December 31, 2022.

Costs associated with employee severance and other merger-related compensation expense incurred in connection with the Merger totaled $ 15.9 million for the year ended December 31, 2021 and were recorded in merger expenses and transaction costs expense in the consolidated statements of income.

Transaction costs (inclusive of costs to terminate leases) in connection with the Merger totaled $ 28.9 million and $ 4.7 million, respectively, for the years ended December 31, 2021 and 2020, and were recorded in merger expenses and transaction costs in the consolidated statements of income.

There were no costs associated with merger expenses and transaction costs for the year ended December 31, 2023 and December 31, 2022.

Transaction costs (inclusive of costs to terminate leases) in connection with the Merger totaled $ 28.9 million, for the year ended December 31, 2021, and were recorded in merger expenses and transaction costs in the consolidated statements of operations.

BRANCH RESTRUCTURING COSTS

1 unchanged sentence

The combinations took place in October 2021.

Costs associated with early lease terminations and accelerated depreciation of fixed assets totaled $ 5.1 million for the year ended December 31, 2021 and were recorded in branch restructuring costs in the consolidated statements of income.

There were no branch restructuring costs for the years ended December 31, 2022 and 2020.

There were no branch restructuring costs for the years ended December 31, 2023 or 2022.

RETIREMENT AND POSTRETIREMENT PLANS

11 unchanged sentences

The Bank sponsors the Employee Retirement Plan, a tax-qualified, noncontributory, defined-benefit retirement plan.

Prior to April 1, 2000, substantially all full-time employees of at least 21 years of age were eligible for participation after one year of

Prior to April 1, 2000, substantially all full-time employees of at least 21 years of age were eligible for participation after one year of service.

Effective April 1, 2000, the Bank froze all participant benefits under the Employee Retirement Plan.

On December 21, 2023, the Company’s Board of Directors adopted a resolution to terminate the Employee Retirement Plan effective December 31, 2023.

Retirement benefits of the plan were vested as they were earned.

For the years ended December 31, 2023 and 2022, the Bank used December 31 as its measurement date for the Employee Retirement Plan.

26 unchanged sentences

Amortization of unrealized loss

Gain (loss) recognized during the year

Loss recognized during the year

Balance at the end of the period

6 unchanged sentences

Expected long-term return on plan assets used to determine benefit obligation at period end

The Employee Retirement 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.

At December 31, 2023, the Employee Retirement Plan’s assets included included debt securities.

Debt 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 Employee Retirement 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 9.0 % and 5.0 %, respectively.

The long-term rate of return considers historical returns for the S&P 500 index and corporate bonds

representing cumulative returns of approximately 9.0 % and 5.0 %, respectively.

These returns were considered along with the target allocations of asset categories.

5 unchanged sentences

Equity securities

Debt securities (bond mutual funds)

Debt securities

Cash equivalents

10 unchanged sentences

Cash and cash equivalents

mid cap/small cap

International

Equities blend

Fixed income securities:

Mortgage-backed

High yield bonds and bond funds

Total Plan Assets

14 unchanged sentences

Total Plan Assets

Benefit payments are anticipated to be made as follows:

Year Ended December 31,

Benefit payments for the fiscal year ending December 31 st are anticipated to be made as follows:

(In thousands)

BNB Bank Pension Plan

2 unchanged sentences

For the year ended December 31, 2023, the Bank used December 31 as its measurement date for the BNB Bank Pension Plan.

Effective December 31, 2023, the Bank froze all participant benefits under the BNB Pension Plan, the impact of which is reflected in the recorded curtailment as of December 31, 2023.

On December 21, 2023, the Company’s Board of Directors adopted a resolution to terminate the BNB Bank Pension Plan effective December 31, 2023.

Retirement benefits of the plan were vested as they were earned.

The funded status of the BNB Bank Pension Plan was as follows:

3 unchanged sentences

Projected benefit obligation at beginning of year

Acquired in the Merger

Interest cost

4 unchanged sentences

Balance at beginning of year

Acquired in the Merger

Return on plan assets

12 unchanged sentences

Balance at beginning of period

Gain recognized during the year

Loss recognized during the year

Balance at the end of the period

6 unchanged sentences

Expected long-term return on plan assets used to determine benefit obligation at period end

The BNB Bank 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.

At December 31, 2023, the BNB Bank Pension Plan’s assets included cash equivalents and debt securities.

The weighted average expected long-term rate of return is estimated based on current trends in BNB Bank 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.

2 unchanged sentences

These returns were considered along with the target allocations of asset categories.

When these overall return expectations were applied to the BNB Bank Pension Plan’s target allocation, the expected annual rate of return was determined to be 7.25 % at December 31, 2022.

When these overall return expectations were applied to the BNB Bank Pension Plan’s target allocation, the expected annual rate of return was determined to be 7.25 % at December 31, 2023 and 2022.

The Bank did not make any contributions to the BNB Bank Pension Plan during the year ended December 31, 2023.

3 unchanged sentences

Equity securities

Debt securities (bond mutual funds)

Debt securities

Cash equivalents

1 unchanged sentence

(See Note 24 for a discussion of the fair value hierarchy).

December 31, 2022

Fair Value Measurements Using:

Fair Value Measurements

at December 31, 2023

Active Markets for

4 unchanged sentences

Cash and cash equivalents

mid cap/small cap

International

Equities blend

Fixed income securities:

Mortgage-backed

High yield bonds and bond funds

Total Plan Assets

14 unchanged sentences

Total Plan Assets

Benefit payments are anticipated to be made as follows:

Year Ended December 31,

Benefit payments for the fiscal year ending December 31 st are anticipated to be made as follows:

(In thousands)

The Company maintains a 401(k) Plan (the “401(k) Plan”) that existed before the Merger.

3 unchanged sentences

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.

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.

1 unchanged sentence

Legacy Dime employees were allowed to rollover Company common stock shares in-kind held in the former Dime Community Bank KSOP Plan (“Dime KSOP Plan”) and hold in the 401(k) Plan.

The 401(k) held Company common stock within the accounts of participants totaling $ 7.8 million at December 31, 2022.

During the year ended December 31, 2022, total expense recognized as a component of salaries and employee benefits expense for the 401(k) Plan was $ 2.3 million.

The 401(k) held Company common stock within the accounts of participants totaling $ 6.3 million and $ 7.8 million at December 31, 2023 and 2022, respectively.

Total expense recognized as a component of

salaries and employee benefits expense for the 401(k) Plan was $ 2.5 million during the year ended December 31, 2023 and $ 2.3 million during the years December 31, 2022, and December 31, 2021, respectively.

Dime KSOP Plan

2 unchanged sentences

As such, all participants were required to transfer their assets out of the Dime KSOP Plan.

The KSOP held Legacy Dime common stock within the accounts of participants totaling $ 40 thousand and $ 33.7 million at December 31, 2021 and 2020.

During the years ended December 31, 2021, 2020 and 2019, total expense recognized as a component of salaries and employee benefits expense for the Dime KSOP Plan was $ 0.3 million, $ 1.9 million and $ 1.9 million, respectively.

The KSOP held Legacy Dime common stock within the accounts of participants totaling $ 40 thousand at December 31, 2021.

During the year ended December 31, 2021, total expense recognized as a component of salaries and employee benefits expense for the Dime KSOP Plan was $ 338 thousand.

BMP and Outside Director Retirement Plan

The Holding Company and Bank maintained the BMP, which existed in order to compensate executive officers for any curtailments in benefits due to statutory limitations on benefit plans.

As of December 31, 2020, the BMP had investments, held in a rabbi trust, in the Common Stock of $ 2.2 million.

Benefit accruals under the defined benefit portion of the BMP were suspended on April 1, 2000, when they were suspended under the Employee Retirement Plan.

1 unchanged sentence

The Outside Director Retirement Plan was frozen on March 31, 2005, and only outside directors serving prior to that date are eligible for benefits.

As of December 31, 2021 and 2020, the Bank used December 31 as its measurement date for both the BMP and Outside Director Retirement Plan.

As of December 31, 2021, the Bank used December 31 st as its measurement date for both the BMP and Outside Director Retirement Plan.

In connection with the Merger, the Outside Director Retirement Plan and the BMP were terminated, resulting in lump sum payments to the participants in the amounts of $ 2.8 million for the Outside Director Retirement Plan and $ 6.2 million for the BMP.

The total expense recognized as a curtailment loss during the three months ended March 31, 2021 was $ 1.5 million.

The total expense recognized as a curtailment loss during the year ended December 31, 2021 was $ 1.5 million.

The combined funded status of the defined benefit portions of the BMP and the Director Retirement Plan was as follows:

Year Ended December 31,

(In thousands)

December 31, 2021

Reconciliation of projected benefit obligation:

11 unchanged sentences

The combined net periodic cost for the defined benefit portions of the BMP and the Director Retirement Plan included the following components:

Year Ended December 31,

(In thousands)

December 31, 2021

Interest cost

3 unchanged sentences

The combined change in accumulated other comprehensive loss that resulted from the BMP and Director Retirement Plan is summarized as follows:

Year Ended December 31,

(In thousands)

December 31, 2021

Balance at beginning of year

4 unchanged sentences

Period end component of accumulated other comprehensive loss, net of tax

Major assumptions utilized to determine the net periodic cost and benefit obligations for both the BMP and Director Retirement Plan were as follows:

At or For the Year Ended December 31,

Discount rate used for net periodic benefit cost – BMP

Discount rate used for net periodic benefit cost – Director Retirement Plan

Discount rate used to determine BMP benefit obligation at year end

Discount rate used to determine Director Retirement Plan benefit obligation at year end

Postretirement Benefit Plan

2 unchanged sentences

The Postretirement Benefit Plan was amended effective March 31, 2015 to eliminate plan participation for post-amendment retirees.

During the year ended December 31, 2020, Legacy Dime approved the termination of the Postretirement Benefit Plan in anticipation of the Merger.

As a result of the decision to terminate the plan, no additional benefits will be paid after January 31, 2021, and a curtailment gain of $ 1.6 million was recognized through net periodic cost during the year ended December 31, 2020.

The plan was terminated during the year ended December 31, 2020.

The funded status of the Postretirement Benefit Plan was as follows:

Year Ended December 31,

(In thousands)

December 31, 2021

Reconciliation of projected benefit obligation:

11 unchanged sentences

Funded status at end of year

The Postretirement Benefit Plan net periodic cost included the following components:

Year Ended December 31,

(In thousands)

Interest cost

Curtailment gain

Amortization of unrealized loss

Net periodic benefit cost

The change in accumulated other comprehensive loss that resulted from the Postretirement Benefit Plan is summarized as follows:

Year Ended December 31,

(In thousands)

Balance at beginning of period

Amortization of unrealized loss

Recognition of prior service cost

Loss recognized during the year

Balance at the end of the period

Period end component of accumulated other comprehensive loss, net of tax

Major assumptions utilized to determine the net periodic cost were as follows:

At or For the Year Ended December 31,

Discount rate used for net periodic benefit cost

Discount rate used to determine benefit obligation at period end

STOCK-BASED COMPENSATION

10 unchanged sentences

Average Exercise

(In thousands)

(Dollars in thousands except share and per share amounts)

Options outstanding at January 1, 2023

18 unchanged sentences

Compensation expense on all RSAs is based upon the fair value of the shares on the respective dates of the grant.

During the year ended December 31, 2020, Legacy Dime modified certain RSAs to accelerate the vesting of all outstanding awards in connection with the Merger.

Total expense recognized as part of the acceleration was approximately $ 2.5 million.

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

6 unchanged sentences

Year Ended December 31,

(Dollars in thousands)

(In thousands)

Compensation expense recognized

5 unchanged sentences

Shares of common stock are issued on the grant date and held as unvested stock awards until the end of the performance period.

Shares are issued at the stretch opportunity in order to ensure that an

adequate number of shares are allocated for shares expected to vest at the end of the performance period.

Shares are issued at the stretch opportunity in order to ensure that an adequate number of shares are allocated for shares expected to vest at the end of the performance period.

Compensation expense on PSAs is based upon the fair value of the shares on the date of the grant for the expected aggregate share payout as of the period end.

During the year ended December 31, 2020, Legacy Dime modified certain PSAs to accelerate the vesting of all outstanding awards in connection with the Merger.

Total expense recognized as part of the acceleration was approximately $ 1.7 million.

There were no outstanding PSAs at December 31, 2020.

As of December 31, 2023 and 2022, 195,066 shares and 60,755 shares have been granted, respectively.

9 unchanged sentences

(In thousands)

Compensation expense recognized

Income tax benefit recognized on vesting of PSAs

Compensation (benefit) expense recognized

Income tax expense recognized on vesting of PSAs

As of December 31, 2023, there was $ 2.7 million of total unrecognized compensation cost related to unvested PSAs based on the expected aggregate share payout to be recognized over a weighted-average period of 2.3 years.

Sales Incentive Awards

Legacy Dime maintained a sales incentive award program for certain officers, which meets the criteria for equity-based accounting.

For each quarter an individual earned their shares based on their sales performance in that quarter.

The shares then vested one year from the quarter in which they are earned.

Shares of common stock were issued on the grant date and held as unvested stock awards until the end of the performance period.

They were issued at the maximum opportunity in order to ensure that an adequate number of shares were allocated for shares expected to vest at the end of the performance period.

During the year ended December 31, 2020, Legacy Dime modified certain performance-based share awards to accelerate the vesting of all outstanding awards in connection with the Merger.

Total compensation expense recognized as part of the acceleration was approximately $ 341 thousand.

There were no outstanding sales incentive share awards at December 31, 2020.

Total compensation expenses of $ 727 thousand and $ 171 thousand were recognized during the years ended December 31, 2020 and 2019.

There was no sales incentive awards compensation expense recognized during the year ended December 31, 2022 and 2021.

There was no activity related to sales incentive awards during the year ended December 31, 2022 and 2021.

EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average common shares outstanding during the reporting period.

Diluted EPS is computed using the same method as basic EPS, but reflects the potential dilution that would occur if "in the money"

stock options were exercised and converted into common stock, and prior to 2021, if all likely aggregate PSAs were issued.

In determining the weighted average shares outstanding for basic and diluted EPS, treasury shares are excluded.

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Weighted-average common and equivalent shares outstanding

Common and equivalent shares resulting from the dilutive effect of "in-the-money"

outstanding stock options are calculated based upon the excess of the average market value of the common stock over the exercise price of outstanding in-the-money stock options during the period.

Common and equivalent shares resulting from the dilutive effect of "in-the-money" outstanding stock options are calculated based upon the excess of the average market value of the common stock over the exercise price of outstanding in-the-money stock options during the period.

There were 69,479 , 134,447 and 167,053 weighted-average stock options outstanding for the years ended December 31, 2023, 2022 and 2021, respectively, which were not considered in the calculation of diluted EPS since their exercise prices exceeded the average market price during the period.

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Loan Commitments and Lines of Credit

The contractual amounts of financial instruments with off-balance sheet risk at year-end were as follows:

The contractual amounts of financial instruments with off-balance sheet risk were as follows:

Year Ended December 31,

(In thousands)

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Substantially all of the Bank’s commitments expire within three months of their acceptance by the prospective borrowers.

The credit risk associated with these commitments is based on the loan type which is comprised of multifamily residential, residential mixed-use, commercial real estate, commercial mixed-use, C&I, and one-to-four family residential loans.

The credit risk associated with these commitments is based on the loan type which is comprised of multifamily residential, residential mixed-use, CRE, commercial mixed-use, C&I, and one-to-four family residential loans.

At December 31, 2023, the Bank had an available line of credit with the FHLBNY equal to its excess borrowing capacity.

At December 31, 2023, this amount approximated $ 1.19 billion.

During the year ended December 31, 2017, the Bank completed a securitization of $ 280.2 million of its multifamily loans through a Federal Home Loan Mortgage Corporation (“FHLMC”) sponsored “Q-deal” securitization completed in December 2017.

During the year ended December 31, 2017, the Bank completed a securitization of $ 280.2 million of its multifamily loans through a FHLMC sponsored “Q-deal” securitization completed in December 2017.

With respect to the securitization transaction, the Company also has continuing involvement through a reimbursement agreement executed with Freddie Mac.

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For securities that do not trade on a daily basis, pricing applications apply available information such as benchmarking and matrix pricing.

The market inputs normally sought in the evaluation of securities include benchmark yields, reported trades, broker/dealer quotes (obtained only from market makers or

broker/dealers recognized as market participants), issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data.

The market inputs normally sought in the evaluation of securities include benchmark yields, reported trades, broker/dealer quotes (obtained only from market makers or broker/dealers recognized as market participants), issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data.

For certain securities, additional inputs may be used or some market inputs may not be applicable.

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All MBS, CMOs, treasury securities, and agency notes are guaranteed either implicitly or explicitly by GSEs as of December 31, 2023 and December 31, 2022.

In accordance with the Company’s investment policy, corporate securities are rated "investment grade"

at the time of purchase and the financials of the issuers are reviewed quarterly.

In accordance with the Company’s investment policy, corporate securities are rated "investment grade" at the time of purchase and the financials of the issuers are reviewed quarterly.

Obtaining market values as of December 31, 2023 and December 31, 2022 for these securities utilizing significant observable inputs was not difficult due to their liquid nature.

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Financial Liabilities:

Derivative – fair value hedges

Derivative – freestanding derivatives, net

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That is, they are subject to fair value adjustments in certain circumstances.

Financial assets measured at fair value on a non-recurring basis include certain individually evaluated loans (or impaired loans prior to the adoption of ASC 326) reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.

Financial assets measured at fair value on a non-recurring basis include certain individually evaluated loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.

December 31, 2023

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Individually evaluated loans with an allowance for credit losses at December 31, 2023 had a carrying amount of $ 6.3 million, which is made up of the outstanding balance of $ 7.3 million, net of a valuation allowance of $ 1.0 million.

Collateral dependent individually analyzed loans as of December 31, 2022 resulted in a credit loss provision of $ 0.7 million, which is included in the amounts reported in the consolidated statements of income for the year ended December 31, 2022.

Individually evaluated loans with an allowance for credit losses at December 31, 2021 had a carrying amount of $ 1.9 million, which is made up of the outstanding balance of $ 2.5 million, net of a valuation allowance of $ 600 thousand.

Collateral dependent individually analyzed loans as of December 31, 2023 resulted in a credit loss recovery of $ 371 thousand, which is included in the amounts reported in the consolidated statements of operations for the year ended December 31, 2023.

Individually evaluated loans with an allowance for credit losses at December 31, 2022 had a carrying amount of $ 1.2 million, which is made up of the outstanding balance of $ 2.5 million, net of a valuation allowance of $ 1.3 million.

Financial Instruments Not Measured at Fair Value

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Savings, money market and checking accounts (1)

Certificates of Deposits ("CDs")

FHLBNY advances

Subordinated debt, net

Other short-term borrowings

Accrued interest payable

(1) Includes mortgage escrow deposits.

Fair Value Measurements

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Accrued interest payable

(1) Includes mortgage escrow deposits.

REGULATORY CAPITAL MATTERS

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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.

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, 2023 and 2022.

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;

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The following tables present actual capital levels and minimum required levels for the Company and the Bank under Basel III rules at December 31, 2023 and 2022:

At December 31, 2023

To Be Categorized

(Dollars in thousands)

Adequacy Purposes (1)

as “Well Capitalized” (1)

December 31, 2022

(Dollars in thousands)

Tier 1 capital / % of average total assets

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(1) In accordance with the Basel III rules.

At December 31, 2022

To Be Categorized

(Dollars in thousands)

Adequacy Purposes (1)

as “Well Capitalized” (1)

December 31, 2021

(Dollars in thousands)

Tier 1 capital / % of average total assets

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CONDENSED HOLDING COMPANY ONLY FINANCIAL STATEMENTS

The following statements of condition as of December 31, 2022 and 2021, and the related statements of income and cash flows for the years ended December 31, 2022, 2021 and 2020, reflect the Holding Company’s investment in its wholly-owned subsidiary, the Bank, using, as deemed appropriate, the equity method of accounting:

The following statements of financial condition as of December 31, 2023 and 2022, and the related statements of operations and cash flows for the years ended December 31, 2023, 2022 and 2021, reflect the Holding Company’s investment in its wholly-owned subsidiary, the Bank, using, as deemed appropriate, the equity method of accounting:

DIME COMMUNITY BANCSHARES, INC.

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Securities available-for-sale, at fair value

Marketable equity securities, at fair value

Investment in subsidiaries

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DIME COMMUNITY BANCSHARES, INC.

CONDENSED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (1)

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (1)

Year Ended December 31,

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Equity in undistributed earnings of subsidiaries

(1) Other comprehensive income for the Holding Company approximated other comprehensive income for the consolidated Company during the years ended December 31, 2022, 2021 and 2020.

(1) Comprehensive income for the Holding Company approximated comprehensive income for the consolidated Company during the years ended December 31, 2023, 2022 and 2021.

DIME COMMUNITY BANCSHARES, INC.

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Year Ended December 31,

(In thousands)

Cash flows from operating activities:

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Proceeds sales of marketable equity securities

Purchases of securities available-for-sale and marketable equity securities

Reimbursement from subsidiary, including purchases of securities available-for-sale

Purchases of securities available-for-sale

Net cash received in business combination

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Redemption of subordinated debentures

Redemption of preferred stock

Proceeds from preferred stock issuance, net

Proceeds from exercise of stock options

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Cash dividends paid to common stockholders

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and due from banks

Net cash used in financing activities

Net increase (decrease) in cash and due from banks

Cash and due from banks, beginning of period

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data