Dime Community Bancshares, Inc. Provides Update on Investment Portfolio Repositioning and Pension Termination

Rhea-AI Summary

Dime Community Bancshares (NASDAQ: DCOM) has completed a strategic repositioning of its available-for-sale investment securities portfolio in Q4 2024. The company sold $379 million of lower-yielding securities with a 1.20% weighted average yield and 3.3-year duration, replacing them with new securities offering a 5.08% weighted average yield and 4.2-year duration. This repositioning will result in a one-time pre-tax loss of approximately $43 million in Q4 2024.

Additionally, DCOM initiated the termination of a legacy pension plan, expecting a $1 million expense in Q4 2024 and an additional $2 million expense in Q1 2025 when remaining benefit obligations are distributed.

Positive

• Portfolio repositioning improved yield from 1.20% to 5.08% on $379 million in securities

Negative

• One-time pre-tax loss of $43 million in Q4 2024 from securities sale
• Additional $3 million in expenses from pension plan termination across Q4 2024 and Q1 2025

News Market Reaction

-0.64%

1 alert

-0.64% News Effect

On the day this news was published, DCOM declined 0.64%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

HAUPPAUGE, N.Y., Dec. 12, 2024 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime”), the parent company of Dime Community Bank (the “Bank”), today announced the completion of a repositioning of its available-for-sale investment securities portfolio. During the fourth quarter:

• The Company executed the sale of $379 million of lower-yielding available-for-sale debt securities. The securities sold had a weighted average yield of 1.20% and a weighted average duration of 3.3 years.
• The Company purchased $379 million of debt securities. The securities purchased had a weighted average yield of 5.08% and a weighted average duration of 4.2 years.

The Company expects to recognize a one-time pre-tax loss on sale of securities of approximately $43 million in the quarter ending December 31, 2024.

The Company also began the distribution of payments to eligible participants of a legacy pension plan, that its Board of Directors had approved for termination. The termination, undertaken to support prudent expense management, is expected to result in an expense of approximately $1 million in the quarter ending December 31, 2024. The remaining benefit obligations of the plan are expected to be distributed in the first quarter of 2025 at which time the Company will recognize an additional expense of approximately $2 million.

ABOUT DIME COMMUNITY BANCSHARES, INC.

Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company with over $13.7 billion in assets and the number one deposit market share among community banks on Greater Long Island ⁽¹⁾.

Dime Community Bancshares, Inc.
Investor Relations Contact:
Avinash Reddy
Senior Executive Vice President – Chief Financial Officer
Phone: 718-782-6200; Ext. 5909
Email: avinash.reddy@dime.com

¹ Aggregate deposit market share for Kings, Queens, Nassau & Suffolk counties for community banks with less than $20 billion in assets.

FAQ

What is the expected financial impact of DCOM's investment portfolio repositioning in Q4 2024?

The portfolio repositioning will result in a one-time pre-tax loss of approximately $43 million in Q4 2024, but improves the yield from 1.20% to 5.08% on $379 million in securities.

How much will DCOM's pension plan termination cost in total?

The pension plan termination will cost approximately $3 million total, with $1 million in Q4 2024 and an additional $2 million in Q1 2025.

What is the new yield on DCOM's repositioned securities portfolio?

The newly purchased securities have a weighted average yield of 5.08% with a weighted average duration of 4.2 years.

How much in securities did DCOM sell and purchase in Q4 2024?

DCOM sold and purchased $379 million in securities as part of its portfolio repositioning strategy.