Dime Community Bancshares, Inc. (NASDAQ:DCOM) Q4 2022 Earnings Call Transcript

Avi Reddy: Yes. Chris, I think we typically shouldn’t see too much seasonality with our numbers. We try to accrue and pretty much true up towards the end of the year. So I know that some banks that have a significant amount of seasonality probably a little bit less for us. I would say, in general, we kind of met all the goals we set out at the start of the year. So we should be okay on that. I think we try to focus on the full year number because, again, there could be movements up and down. I mean you are right, Q1 sometimes a little bit more, but not too much more for us. I think within the $206 million to $209 million, like I said, we got the FDIC and we got some items for the pension, which hopefully are not recurring for 2024, right?

So 2023 is a little bit of an abnormal year. There’s also some investments that we’re making in our digital platforms that are part of that. And then in addition to that, there’s employee costs and just the cost of running our business. So nothing too much out of the ordinary for us, but we hope to come in line or better than that $206 million to $209 million for the full year, like we did for the last two years.

Chris O’Connell: Got it. And so that tension comes in at $0.5 million to the quarterly run rate starting in the first quarter?

Avi Reddy: Yes. I mean the way the pension works is, you get an estimate at the start of the year, you accrue for the whole year in a certain run rate, and then you do a true-up at the end of the year. So that would kind of be straight line, correct exactly.

Chris O’Connell: Okay. Great. And just given the updated outlook on the margin in the near term year for the first part of the year. How do you guys feel about the sub-50% efficiency ratio target?

Avi Reddy: Yes. I mean, look, we can control the things we can, right? So when you focus on expense to assets, we were at 1.55% this past quarter. And I think being there or being better than that is a goal of the company and we’re highly focused on that. I think when you think about the efficiency ratio, you go back to when we put the two companies together and our goal was to be at sub-50%. I think we’d be — I mean, apart from the first quarter, I think we’ve beaten that every single quarter. Some quarters we operated at 44%. This past quarter was 47%, right? So look, every quarter, it may go up or down. But I think in the medium to longer term, we definitely want to be a sub-50% efficiency ratio bank, which we’ve definitely demonstrated over the course of the last 24 months.

Chris O’Connell: Great. And as far as just the loan growth, you guys seem to have a robust pipeline still, especially outlook for the first half of the year. Where are you guys seeing the biggest opportunity for growth? And are you getting any kickback from your customers on higher rates on the new originations?