Dime(US:DCOM)2023-01-27 16:32Financial Data and Key Metrics Changes - For the full year 2022, the company reported over $145 million in net income and EPS of $3.73 per share, with a return on assets (ROA) averaging over 1.2% [3][6] - The reported net income for the fourth quarter was $38.2 million, with a net interest margin (NIM) of 3.15% [7][101] - The tangible book value per share increased by $0.86 for the quarter, representing a 15.4% growth [6] Business Line Data and Key Metrics Changes - Business loan balances grew by $215 million in the fourth quarter, contributing to a total loan growth of $450 million [101][74] - Core cash operating expenses for 2022 were $198 million, aligning with full-year guidance, while the fourth quarter's core cash operating expense was approximately $50 million [8][107] Market Data and Key Metrics Changes - The loan-to-deposit ratio ended the year at 103%, up from 97% in the prior quarter, slightly above the target range of 95% to 100% [32][140] - Average total deposits for the quarter decreased by 2%, with the cost of total deposits increasing by 46 basis points [140] Company Strategy and Development Direction - The company aims to manage its cost of funds and prioritize NIM in an inverted yield curve environment while maintaining solid asset quality [29][116] - The focus for 2023 includes growing deposits through competitive repricing and enhancing customer relationships, particularly in the C&I and owner-occupied CRE sectors [101][130] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the competitive deposit gathering environment and emphasized the importance of maintaining a strong funding base [114][116] - The company anticipates that cumulative deposit betas will end up in the 30% range, with deposit costs expected to peak towards the back half of 2023 [119][140] Other Important Information - The company has a strong pipeline of approximately $1.5 billion, with a focus on C&I and owner-occupied CRE loans [37][91] - The existing allowance for credit losses stands at 79 basis points, which is above historical pre-pandemic levels [31][138] Q&A Session Summary Question: Could you go through your fee income guidance again? - The company expects fee income for 2023 to be between $35 million and $37 million, with a focus on loan swap programs and treasury management [34][141] Question: When do you think the margin might bottom out? - Management indicated that the margin is expected to stabilize towards the back half of the year, with a target NIM in the 320 to 330 basis points range in the medium to long term [35][49] Question: Can you quantify the improvement in criticized and classified assets? - Management noted a significant decline in classified assets, with a reserve ratio of around 80 basis points for real estate loans [14][138] Question: What is the current state of your deposit beta? - The current deposit beta is approximately 19.7%, with expectations for it to increase as market rates rise [9][115] Question: How do you view the current credit quality? - Management reported no significant material stress in any product line, with a conservative approach to credit provisioning [21][132]