EXHIBIT 99
DIME COMMUNITY BANCSHARES REPORTS THIRD QUARTER EARNINGS
Diluted Earnings Per Share of 20 Cents
Brooklyn, NY - October 25, 2006 - Dime Community Bancshares, Inc. (NASDAQ: DCOM), (the "Company"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank"), today reported net income of $7.2 million, or 20 cents per diluted share, for the quarter ended September 30, 2006, compared to $9.1 million, or 26 cents per diluted share, for each of the quarters ended September 30, 2005 and June 30, 2006, respectively.
Core earnings were $6.7 million, or $0.19 per diluted share, for the quarter ended September 30, 2006, compared to $9.1 million, or $0.26 per diluted share, for the quarter ended September 30, 2005 and $8.4 million, or $0.24 per diluted share, for the quarter ended June 30, 2006. During the quarter ended September 30, 2006, reported earnings exceeded core earnings due to a non-recurring, pre-tax reduction of $764,000 in interest expense related to a restructuring of $170.0 million of borrowings. During the quarter ended June 30, 2006, reported earnings exceeded core earnings due to a pre-tax gain of $1.1 million on the sale of mutual fund investments associated with the Company's Benefit Maintenance Plan.
According to Vincent F. Palagiano, Chairman and Chief Executive Officer of the Company, “As you will see, the biggest factors affecting income again this quarter were the level of prepayment income and the cost of deposits. Prepayment income was lower, although more in line with our expectations for this year. Rising deposit costs merely reflect conditions in the deposit marketplace as we re-enter the market for new deposits.”
Mr. Palagiano continued, “Yields on new loan production remained above 6%. Although the environment is not ideal, if loan demand continues at the current moderate pace, conditions are present for renewed, profitable growth, even with higher deposit costs and lower margins. From our point of view, the Fed’s decision to pause its monetary tightening strategy, combined with a less robust lending environment, appears to have mitigated some of the aggressive rate competition for bank deposits, mainly certificates of deposit.”
Third Quarter 2006 Highlights
| § | The Company recorded a non-recurring reduction to interest expense of $764,000 related to the restructuring of $170.0 million of borrowings. Upon completing the transaction, the average interest rate on these borrowed funds dropped from 4.53% to 3.79%. |
| § | The annualized loan amortization rate decreased slightly from 16% to approximately 15% sequentially. Prepayment fee income was $1.3 million, compared to $2.1 million in the June 2006 quarter and $1.3 million in the September 2005 quarter. |
| § | The Bank’s credit profile remained outstanding, with nonperforming loans remaining unchanged from the prior quarter at 0.11% of total loans. |
| § | Deposits remained relatively constant, although linked quarter average cost of deposits rose from 2.80% to 3.10% during the quarter. |
| § | Real estate loan originations rose to $174.5 million at an average rate of 6.58%, compared to $134.8 million at an average interest rate of 6.44% during the second quarter of 2006. |
| § | Loans in the pipeline approximated $89.8 million at quarter-end, including commitments for sale to Fannie Mae of $6.5 million. |
| § | Net interest margin was 2.53%, 26 basis points lower sequentially. |
| § | The Company repurchased 179,448 shares of its common stock. The consolidated tangible equity ratio remained nearly unchanged at 7.88%. |
| § | Quarterly non-interest expense remained relatively constant from the June 2006 quarter, and declined by 1% year-over-year. |
FINANCIAL RESULTS
For the quarter ended September 30, 2006, the Company’s pre-tax income, excluding gains and losses on the sale of assets, was $10.4 million, compared to $13.9 million in the same quarter of the previous year. The $3.5 million decrease was due to a decline of $3.6 million in net interest income that was offset slightly by a decline of $116,000 in non-interest expense.
Average earning assets declined by $128.9 million year-over-year. The net interest margin contracted 36 basis points, from 2.89% during the September 2005 quarter to 2.53% during the September 2006 quarter.
On a linked quarter basis, the Company’s pre-tax income, excluding gains and losses on the sale of assets, decreased $2.2 million, from $12.6 million during the June 2006 quarter to $10.4 million during the quarter ended September 30, 2006, primarily due to a decline in net interest income of $2.2 million. The net interest margin decreased 26 basis points, to 2.53% during the September 2006 quarter from 2.79% in the June 2006 quarter.
Prepayment fee income was $1.3 million in the quarter ended September 30, 2006, compared to $2.1 million in the quarter ended June 30, 2006, and $1.3 million in the quarter ended September 30, 2005.While loan repayment speeds declined from the previous quarter, they still fell above the 10 - 12% range anticipated by management for 2006. The average interest rate on loan repayments was 5.99% during the September 2006 quarter compared to an average origination rate of 6.58%. For the first nine months of 2006, annualized loan repayment speeds approximated 13%, compared with speeds of 14% and 24% during the years ended December 31, 2005 and 2004, respectively.
Excluding all prepayment fee income from the calculation of net interest margin, the margin deteriorated on a linked quarter basis from 2.50% to 2.35% due to an increase of 30 basis points in the average cost of deposits that resulted from increases in interest rates during 2005 and 2006.
The yield on interest earning assets decreased 8 basis points on a linked quarter basis, due solely to the decline in prepayment fee income. Excluding the effect of prepayment fee income, the yield on interest earning assets would have increased 5 basis points on a linked quarter basis, reflecting both an increase in yield on the Company's real estate loans (excluding prepayment fee income) and mortgage backed securities, both of which resulted from interest rate increases during 2005 and 2006, and the movement of a greater percentage of the total interest earning assets from securities into real estate loans, the Company's highest yielding asset. The average yield on real estate loans, excluding the effects of prepayment fee income, was 5.70% during the quarter ended September 30, 2006 and 5.67% during the quarter ended June 30, 2006. The interest rates on newly originated real estate loans continued to increase, averaging 6.58% during the third quarter of 2006, up from 5.84% during the third quarter of 2005 and 6.44% during the second quarter of 2006. This, combined with both a reduction in the levels of lower-yielding securities and the increase in yield on existing real estate loans also contributed greatly to the increase of 5 basis points in yield on earning assets (excluding prepayment fee income) on a linked quarter basis.
During the third quarter of 2006, deposits remained relatively constant, with an increase of $5.0 million in core (non-certificate) deposits offset by a decrease of $5.0 million in certificates of deposit, as promotional activities during the most recent quarter resulted in the transfer of deposit funds from certificates of deposit into money market accounts.
Average deposits per branch approximated $92 million at September 30, 2006, unchanged from the June 2006 quarter and lower than the $101 million average at September 30, 2005. The loan-to-deposit ratio was 137% at September 30, 2006, compared to 128% at September 30, 2005 and 138% at June 30, 2006. The decline in the average deposits per branch and the increase in the loan-to-deposit ratio in the September 2006 quarter compared to the September 2005 quarter resulted primarily from a reduction of $84.2 million in deposits from their September 30, 2005 level. This was due to a decline in money market deposits from September 2005 through June 2006, a period during which the Bank elected not to compete aggressively to retain money market deposits in light of rising short-term interest rates. Core deposits comprised 47% of total deposits at both September 30, 2006 and June 30, 2006, decreasing slightly from the 49% level at September 30, 2005 as a result of the decline in money market deposits from September 30, 2005 through both June 30, 2006 and September 30, 2006.
During the quarter ended September 30, 2006, the Company restructured $170.0 million of wholesale borrowings. Under this restructuring, $120.0 million of securities sold under agreement to repurchase ("reverse repos") and $50.0 million in FHLBNY advances with a 1-year average life were prepaid and replaced with borrowings having a final maturity of 10 years (callable after 1 - 3 years). The prepaid borrowings had a weighted average interest rate of 4.53%, and were replaced with a combination of reverse repos and FHLBNY advances having an initial weighted average interest rate of 3.79%. The new FHLBNY advances have a fixed weighted average interest rate of 4.36%. The new reverse repos are variable rate initially, and, if not called by the lender, convert to a fixed rate of 4.90% until maturity. The Company recorded a non-recurring reduction of $764,000 in interest expense related to the prepayment.
Non-interest income, excluding gains or losses on the sale of assets, totaled $2.4 million during the quarter ended September 30, 2006, relatively constant from both the September 2005 and June 2006 quarters.
The Company sold loans to Fannie Mae totaling $92.3 million, $25.5 million and $21.0 million, recording gains of $779,000, $284,000 and $253,000, during the quarters ended September 30, 2006, September 30, 2005 and June 30, 2006, respectively. All of the loans sold during each of these periods were designated for sale upon origination. The loans sold during the quarter ended September 30, 2006 had a weighted average term to the earlier of maturity or next repricing of 10.2 years.
During the quarter ended June 30, 2006, the Company recorded a pre-tax gain of $1.1 million on the sale of mutual fund investments associated with its Benefit Maintenance Plan. The gain resulted from a reallocation of investments held to fund future supplemental retirement benefits. Since these available-for-sale investments were carried at market value under U.S. Generally Accepted Accounting Principles, the after-tax gain was previously reflected in the Company's stockholders' equity. The act of reallocating the investments caused the Company to recognize a gain in its income statement. There were no sales of securities or other assets during the quarters ended September 30, 2006 and 2005.
Non-interest expense totaled $10.6 million during the quarter ended September 30, 2006, relatively flat sequentially, and a decrease of $116,000, or 1.1%, from the September 2005 quarter. The decrease of $116,000 was due partially to a decline of $159,000 in data processing systems expense that resulted from a settlement of expenses with the Company’s previous systems provider that occurred in the September 2005 quarter.
Non-interest expense to average assets was 1.37% in the September 2006 quarter, compared to 1.32% for the quarter ended September 30, 2005, and 1.34% for the quarter ended June 2006. The increase in the ratio resulted primarily from a decline of $138 million in average assets from the September 2005 quarter to the September 2006 quarter, as the Company permitted liabilities to runoff without being replaced during the period (thus reducing interest earning assets) in response to unfavorable market conditions.
The effective tax rate was 35.9% for the quarter ended September 30, 2006, 35.1% for the quarter ended June 30, 2006 and 35.9% for the quarter ended September 30, 2005. The effective tax rate is expected to approximate 36.0% for the full year ending December 31, 2006.
REAL ESTATE LENDING AND CREDIT QUALITY
Real estate loan originations totaled $174.5 million during the quarter ended September 30, 2006, of which $33.3 million, or 19%, represented commercial real estate. The average rate on total loan originations during the quarter was 6.58%, compared to 5.84% in the quarter ended September 30, 2005 and 6.44% during the quarter ended June 30, 2006. Commercial real estate represented 25% of the gross loan portfolio at September 30, 2006, compared with 22% as of December 31, 2005. The commercial real estate portfolio grew at a 21% rate year-over-year.
Real estate loan prepayment and amortization during the September 2006 quarter approximated 15% of the loan portfolio on an annualized basis, unchanged from the September 2005 quarter and down slightly from 16% during the June 2006 quarter. The average interest rate on real estate loan prepayment and amortization during the most recent quarter was 5.99%.
Non-performing loans were $2.9 million at September 30, 2006, representing only 0.11% of total loans. There were no new loans added to non-performing status during the September 2006 quarter. Management does not currently expect to incur any significant losses on these loans.
STOCKHOLDERS' EQUITY AND SHARE REPURCHASE PROGRAM
The Company’s total stockholders’ equity at September 30, 2006 was $295.7 million, or 9.43% of total assets, compared to $293.1 million, or 9.38% of total assets, at June 30, 2006. After outlays for dividends paid to shareholders and share repurchases, by the end of the third quarter of 2006 the Company’s tangible equity had climbed to $243.4 million, as compared to $242.2 million at June 30, 2006. The quarterly cash dividend paid in August 2006 represented a payout ratio of 70% of third quarter 2006 earnings. At September 30, 2006, tangible stockholders’ equity was 7.88% of tangible assets and the tangible book value per share was $6.64.
During the quarter ended September 30, 2006, the return on average stockholders’ equity was 9.7%, the return on average tangible equity was 11.8%, and the cash return on average tangible equity was 12.4%.
During the third quarter of 2006, the Company repurchased into treasury 179,448 shares, or 0.5%, of its common stock outstanding at June 30, 2006. As of September 30, 2006, the Company had an additional 47,965 shares remaining eligible for repurchase under its tenth stock repurchase program, approved in May 2004. On December 15, 2005, the Board of Directors approved the Company's eleventh stock repurchase program, which authorizes the purchase, at the discretion of management, of an additional 1,847,977 shares.
OUTLOOK
At present, the overall yield on the Company's interest-earning assets is rising (excluding the effects of prepayment fee income). The average yield on interest earning assets, excluding the effects of prepayment fee income, rose on a linked quarter basis, from 5.54% to 5.59%.
The cost of deposits rose from 2.80% during the June 30, 2006 quarter to 3.10% during the September 2006 quarter. This trend is likely to continue, whether or not the Bank grows deposits. The rising cost of deposits is due to a combination of repricing lower rate deposits already on the books, plus the cost of attracting new deposits.
At 13.6% annualized during the first nine months of 2006, prepayment and amortization rates were slightly in excess of the range anticipated by management, and are expected to fall within a 10% to 12% range during the final quarter of 2006. At September 30, 2006, the real estate loan commitment pipeline approximated $89.8 million, with a weighted average interest rate of 6.63%, including $6.5 million of loan commitments intended for sale to Fannie Mae.
Operating expenses are expected to be approximately $10.7 million in the fourth quarter of 2006. Share repurchases are expected to be in line with recent practices. The Company is positioned, however, to be opportunistic in the purchase of its own shares should conditions warrant. Based on this outlook, the Company now expects fourth quarter 2006 earnings per diluted share to be in the range of $0.16 to $0.18.
“The cost of deposits will continue to determine the direction of earnings,” Mr. Palagiano stated. “While there is disagreement about the direction of the economy and Fed policy, we believe that most of the increase in deposit rates is behind us. We believe deposit costs are already near their peak and will level off within the next quarter or two. With a strong capital base and a low level of nonperforming assets, we look forward to regaining momentum in both growth and earnings.”
ABOUT DIME COMMUNITY BANCSHARES
Dime Community Bancshares, Inc., a unitary thrift holding company, is the parent company of The Dime Savings Bank of Williamsburgh, founded in 1864, and headquartered in Brooklyn, New York. With $3.14 billion in assets as of September 30, 2006, the Bank has twenty-one branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Bank can be found on the Bank's Internet website at www.dimedirect.com.
This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.
Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Bank; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates.
- Tables to follow -
Contact: | Kenneth Ceonzo |
| | Director of Investor Relations |
| | 718-782-6200 extension 8279 |
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands except share amounts)
| | September 30, | | |
| | 2006 | | December 31, |
| | (Unaudited) | | 2005 |
ASSETS: | | | |
| Cash and due from banks | $ 22,539 | | $ 40,199 |
| Investment securities held to maturity | 380 | | 455 |
| Investment securities available for sale | 29,170 | | 44,832 |
| Mortgage-backed securities available for sale | 162,938 | | 193,453 |
| Federal funds sold and other short-term assets | 94,082 | | 60,014 |
Real estate Loans: | | | |
| One-to-four family and cooperative apartment | 158,861 | | 145,754 |
| Multifamily and underlying cooperative | 1,811,961 | | 1,873,940 |
| Commercial real estate | 653,806 | | 576,561 |
| Construction and land acquisition | 15,738 | | 12,098 |
| Unearned discounts and net deferred loan fees | 924 | | 501 |
| Total real estate loans | 2,641,290 | | 2,608,854 |
| Other loans | 2,234 | | 2,341 |
| Allowance for loan losses | (15,956) | | (15,785) |
Total loans, net | 2,627,568 | | 2,595,410 |
| Loans held for sale | - | | 900 |
| Premises and fixed assets, net | 22,610 | | 16,527 |
| Federal Home Loan Bank of New York capital stock | 31,745 | | 29,917 |
| Goodwill | 55,638 | | 55,638 |
| Other assets | 90,930 | | 88,881 |
TOTAL ASSETS | $ 3,137,600 | | $ 3,126,226 |
LIABILITIES AND STOCKHOLDERS' EQUITY: | | | |
Deposits: | | | |
| Checking, NOW and Super NOW | $127,541 | | $135,698 |
| Savings | 305,716 | | 335,527 |
| Money Market | 470,541 | | 464,962 |
| Sub-total | 903,798 | | 936,187 |
| Certificates of deposit | 1,026,897 | | 978,585 |
Total Due to depositors | 1,930,695 | | 1,914,772 |
| Escrow and other deposits | 68,035 | | 47,518 |
| Securities sold under agreements to repurchase | 120,380 | | 205,455 |
| Federal Home Loan Bank of New York advances | 581,500 | | 531,500 |
| Subordinated Notes Sold | 25,000 | | 25,000 |
| Trust Preferred Notes Payable | 72,165 | | 72,165 |
| Other liabilities | 44,078 | | 38,102 |
TOTAL LIABILITIES | 2,841,853 | | 2,834,512 |
STOCKHOLDERS' EQUITY: | | | |
Common stock ($0.01 par, 125,000,000 shares authorized, 50,862,445 shares and 50,633,881 shares issued at September 30, 2006 and December 31, 2005, respectively, and 36,665,264 shares and 36,956,907 shares outstanding at September 30, 2006 and December 31, 2005, respectively) | 509 | | 506 |
| Additional paid-in capital | 206,351 | | 204,083 |
| Retained earnings | 284,367 | | 274,579 |
| Unallocated common stock of Employee Stock Ownership Plan | (4,453) | | (4,627) |
| Unearned common stock of Recognition and Retention Plan | (3,518) | | (2,979) |
| Common stock held by the Benefit Maintenance Plan | (7,941) | | (7,941) |
Treasury stock (14,197,181 shares and 13,676,974 shares at September 30, 2006 and December 31, 2005, respectively) | (176,034) | | (168,579) |
| Accumulated other comprehensive loss, net | (3,534) | | (3,328) |
TOTAL STOCKHOLDERS' EQUITY | 295,747 | | 291,714 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,137,600 | | $3,126,226 |
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In thousands except per share amounts)
| | For the Three Months Ended | | For the Nine Months Ended |
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, |
| | 2006 | | 2006 | | 2005 | | 2006 | | 2005 |
Interest income: | | | | | | | | | |
| Loans secured by real estate | $39,122 | | $39,844 | | $37,472 | | $116,805 | | $110,753 |
| Other loans | 47 | | 45 | | 29 | | 141 | | 96 |
| Mortgage-backed securities | 1,666 | | 1,753 | | 2,010 | | 5,264 | | 9,770 |
| Investment securities | 454 | | 469 | | 601 | | 1,405 | | 1,963 |
| Other | 1,384 | | 1,522 | | 2,230 | | 4,062 | | 5,071 |
Total interest income | 42,673 | | 43,633 | | 42,342 | | 127,677 | | 127,653 |
Interest expense: | | | | | | | | | |
| Deposits and escrow | 15,019 | | 13,554 | | 10,690 | | 40,069 | | 30,256 |
| Borrowed funds | 8,948 | | 9,228 | | 9,306 | | 27,610 | | 26,956 |
Total interest expense | 23,967 | | 22,782 | | 19,996 | | 67,679 | | 57,212 |
Net interest income | 18,706 | | 20,851 | | 22,346 | | 59,998 | | 70,441 |
Provision for loan losses | 60 | | 60 | | 60 | | 180 | | 180 |
Net interest income after provision for loan losses | 18,646 | | 20,791 | | 22,286 | | 59,818 | | 70,261 |
Non-interest income: | | | | | | | | | |
| Service charges and other fees | 1,507 | | 1,457 | | 1,561 | | 4,461 | | 4,483 |
Net gain (loss) on sales and redemptions of assets | 779 | | 1,317 | | 284 | | 2,973 | | (4,605) |
| Other | 849 | | 919 | | 796 | | 2,554 | | 2,666 |
Total non-interest income | 3,135 | | 3,693 | | 2,641 | | 9,988 | | 2,544 |
Non-interest expense: | | | | | | | | | |
| Compensation and benefits | 6,006 | | 5,804 | | 6,059 | | 17,678 | | 17,290 |
| Occupancy and equipment | 1,504 | | 1,379 | | 1,389 | | 4,295 | | 4,002 |
| Core deposit intangible amortization | - | | - | | - | | - | | 48 |
| Other | 3,110 | | 3,345 | | 3,288 | | 9,623 | | 9,087 |
Total non-interest expense | 10,620 | | 10,528 | | 10,736 | | 31,596 | | 30,427 |
Income before taxes | 11,161 | | 13,956 | | 14,191 | | 38,210 | | 42,378 |
Income tax expense | 4,002 | | 4,896 | | 5,089 | | 13,583 | | 15,147 |
Net Income | $7,159 | | $9,060 | | $9,102 | | $24,627 | | $27,231 |
| | | | | | | | | | |
Earnings per Share: | | | | | | | | | |
Basic | $0.21 | | $0.26 | | $0.26 | | $0.70 | | $0.77 |
Diluted | $0.20 | | $0.26 | | $0.26 | | $0.70 | | $0.76 |
| | | | | | | | | | |
Average common shares outstanding for Diluted EPS | 35,028,903 | | 35,202,812 | | 35,553,132 | | 35,200,367 | | 35,653,116 |
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
Core Earnings and Core Cash Earnings Reconciliations
(Dollars In thousands except per share amounts)
Core earnings and related data are "Non-GAAP Disclosures." These disclosures present information which management considers useful to the readers of this report since they present a measure of the results of the Company's ongoing operations (exclusive of significant non-recurring items such as gains or losses on sales of investment or mortgage-backed securities) during the period.
In addition, Core cash earnings and related data are also "Non-GAAP Disclosures." These disclosures present information which management considers useful to the readers of this report since they present a measure of the tangible equity generated from operations during each period presented. Tangible equity generation is a significant financial measure since banks are subject to regulatory requirements involving the maintenance of minimum tangible capital levels.
The following tables present a reconciliation of GAAP net income and both core earnings and core cash earnings, as well as financial performance ratios determined based upon core earnings and core cash earnings, for each of the periods presented:
| | For the Three Months Ended | | For the Nine Months Ended |
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, |
| | 2006 | | 2006 | | 2005 | | 2006 | | 2005 |
| | | | | | | | | | |
Net income as reported | $ 7,159 | | $ 9,060 | | $ 9,102 | | $ 24,627 | | $ 27,231 |
| Pre-tax net (gain) loss on sale of securities and other assets | | | (1,064) | | - | | (1,542) | | 5,176 |
| Pre-tax income from borrowings restructuring | (764) | | - | | - | | (807) | | - |
| Tax effect of adjustments | 271 | | 378 | | - | | 839 | | (2,143) |
Core Earnings | $ 6,666 | | $ 8,374 | | $ 9,102 | | $ 23,117 | | $ 30,264 |
Cash Earnings Additions : | | | | | | | | | |
| Core Deposit Intangible Amortization | - | | - | | - | | - | | 48 |
| Non-cash stock benefit plan expense | 342 | | 358 | | 359 | | 1,067 | | 1,054 |
Core Cash Earnings | $ 7,008 | | $ 8,732 | | $ 9,461 | | $ 24,184 | | $ 31,366 |
Performance Ratios (Based upon Core Cash Earnings): | | | | | | | | | |
| Core Cash EPS (Diluted) | $ 0.20 | | $ 0.25 | | 0.27 | | $ 0.69 | | 0.88 |
| Core Cash Return on Average Assets | 0.90% | | 1.11% | | 1.17% | | 1.03% | | 1.26% |
| Core Cash Return on Average Tangible Stockholders' Equity | 11.55% | | 14.46% | | 16.13% | | 13.38% | | 18.02% |
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars In thousands except per share amounts)
| | For the Three Months Ended | | For the Nine Months Ended |
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, |
| | 2006 | | 2006 | | 2005 | | 2006 | | 2005 |
Performance Ratios (Based upon Reported Earnings): | | | | | | | | | |
| Reported EPS (Diluted) | $0.20 | | $0.26 | | $0.26 | | $0.70 | | $0.76 |
| Return on Average Assets | 0.92% | | 1.16% | | 1.12% | | 1.05% | | 1.10% |
| Return on Average Stockholders' Equity | 9.73% | | 12.37% | | 12.62% | | 11.21% | | 12.75% |
| Return on Average Tangible Stockholders' Equity | 11.80% | | 15.00% | | 15.52% | | 13.63% | | 15.64% |
| Net Interest Spread | 2.15% | | 2.36% | | 2.61% | | 2.29% | | 2.68% |
| Net Interest Margin | 2.53% | | 2.79% | | 2.89% | | 2.69% | | 2.97% |
| Non-interest Expense to Average Assets | 1.37% | | 1.34% | | 1.32% | | 1.35% | | 1.22% |
| Efficiency Ratio | 50.42% | | 45.33% | | 43.46% | | 47.15% | | 39.22% |
| Effective Tax Rate | 35.86% | | 35.08% | | 35.86% | | 35.55% | | 35.74% |
| | | | | | | | | | |
Performance Ratios (Based upon Core Earnings): | | | | | | | | | |
| Core EPS (Diluted) | $ 0.19 | | $ 0.24 | | $ 0.26 | | $ 0.66 | | $ 0.85 |
| Core Return on Average Assets | 0.86% | | 1.07% | | 1.12% | | 0.99% | | 1.22% |
| Core Return on Average Stockholders' Equity | 9.06% | | 11.44% | | 12.62% | | 10.53% | | 14.17% |
| Core Return on Average Tangible Stockholders' Equity | 10.99% | | 13.87% | | 15.52% | | 12.79% | | 17.39% |
| | | | | | | | | | |
Book Value and Tangible Book Value Per Share: | | | | | | | | | |
| Stated Book Value Per Share | $ 8.07 | | $ 7.97 | | $ 7.82 | | $ 8.07 | | $ 7.82 |
| Tangible Book Value Per Share | 6.64 | | 6.58 | | 6.39 | | 6.64 | | 6.39 |
| | | | | | | | | | |
Average Balance Data: | | | | | | | | | |
| Average Assets | $ 3,109,183 | | $ 3,134,815 | | $ 3,247,216 | | $ 3,120,938 | | $ 3,313,154 |
| Average Interest Earning Assets | 2,961,903 | | 2,992,772 | | 3,090,823 | | 2,973,751 | | 3,163,811 |
| Average Stockholders' Equity | 294,305 | | 292,882 | | 288,431 | | 292,805 | | 284,857 |
| Average Tangible Stockholders' Equity | 242,658 | | 241,554 | | 234,560 | | 240,967 | | 232,098 |
| Average Loans | 2,656,014 | | 2,658,556 | | 2,560,963 | | 2,647,969 | | 2,514,698 |
| Average Deposits | 1,920,061 | | 1,942,554 | | 2,056,864 | | 1,920,958 | | 2,124,448 |
| | | | | | | | | | |
Asset Quality Summary: | | | | | | | | | |
| Net charge-offs (recoveries) | $ - | | $ 8 | | ($ 2) | | $ 19 | | ($ 17) |
| Nonperforming Loans | 2,889 | | 2,885 | | 4,608 | | 2,889 | | 4,608 |
| Nonperforming Loans/ Total Loans | 0.11% | | 0.11% | | 0.18% | | 0.11% | | 0.18% |
| Nonperforming Assets/Total Assets | 0.09% | | 0.09% | | 0.14% | | 0.09% | | 0.14% |
| Allowance for Loan Loss/Total Loans | 0.60% | | 0.60% | | 0.60% | | 0.60% | | 0.60% |
| Allowance for Loan Loss/Nonperforming Loans | 552.30% | | 555.74% | | 335.55% | | 552.30% | | 335.55% |
| | | | | | | | | | |
Regulatory Capital Ratios: | | | | | | | | | |
| Consolidated Tangible Equity to Tangible Assets at period end | 7.88% | | 7.87% | | 7.44% | | 7.88% | | 7.44% |
| Tangible Capital Ratio (Bank Only) | 9.64% | | 9.39% | | 9.20% | | 9.64% | | 9.20% |
| Leverage Capital Ratio (Bank Only) | 9.64% | | 9.39% | | 9.20% | | 9.64% | | 9.20% |
| Risk -Based Capital Ratio (Bank Only) | 13.61% | | 13.38% | | 13.84% | | 13.61% | | 13.84% |
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars In thousands)
| | For the Three Months Ended |
| | September 30, 2006 | | June 30, 2006 | | September 30, 2005 |
| | | | Average | | | | Average | | | | Average |
| | Average | | Yield/ | | Average | | Yield/ | | Average | | Yield/ |
| | Balance | Interest | Cost | | Balance | Interest | Cost | | Balance | Interest | Cost |
| | (Dollars In Thousands) |
| Assets: | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | |
| Real Estate Loans | $2,654,055 | $39,122 | 5.90% | | $2,656,658 | $39,844 | 6.00% | | $2,558,690 | $37,472 | 5.86% |
| Other loans | 1,959 | 47 | 9.60 | | 1,898 | 45 | 9.48 | | 2,273 | 29 | 5.10 |
| Mortgage-backed securities | 172,116 | 1,666 | 3.87 | | 182,101 | 1,753 | 3.85 | | 218,204 | 2,010 | 3.68 |
| Investment securities | 31,376 | 454 | 5.79 | | 31,023 | 469 | 6.05 | | 65,259 | 601 | 3.68 |
| Other short-term investments | 102,397 | 1,384 | 5.41 | | 121,092 | 1,522 | 5.03 | | 246,397 | 2,230 | 3.62 |
| Total interest earning assets | 2,961,903 | $42,673 | 5.76% | | 2,992,772 | $43,633 | 5.84% | | 3,090,823 | $42,342 | 5.48% |
| Non-interest earning assets | 147,280 | | | | 142,043 | | | | 156,393 | | |
| Total assets | $3,109,183 | | | | $3,134,815 | | | | $3,247,216 | | |
| | | | | | | | | | | | |
| Liabilities and Stockholders' Equity: | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | |
| NOW, Super Now accounts | $33,814 | $85 | 1.00% | | $36,778 | $91 | 0.99% | | $39,728 | $100 | 1.00% |
| Money Market accounts | 455,629 | 3,228 | 2.81 | | 452,288 | 2,578 | 2.29 | | 570,067 | 2,284 | 1.59 |
| Savings accounts | 312,891 | 493 | 0.63 | | 325,403 | 476 | 0.59 | | 349,384 | 486 | 0.55 |
| Certificates of deposit | 1,023,738 | 11,213 | 4.35 | | 1,030,354 | 10,409 | 4.05 | | 1,003,995 | 7,820 | 3.10 |
| Total interest bearing deposits | 1,826,072 | 15,019 | 3.26 | | 1,844,823 | 13,554 | 2.95 | | 1,963,174 | 10,690 | 2.17 |
| Borrowed Funds | 809,054 | 8,948 | 4.39 | | 783,544 | 9,228 | 4.72 | | 809,185 | 9,306 | 4.58 |
| Total interest-bearing liabilities | 2,635,126 | 23,967 | 3.61% | | 2,628,367 | 22,782 | 3.48% | | 2,772,359 | 19,996 | 2.87% |
| Checking accounts | 93,989 | | | | 97,731 | | | | 93,690 | | |
| Other non-interest-bearing liabilities | 85,763 | | | | 115,835 | | | | 92,736 | | |
| Total liabilities | 2,814,878 | | | | 2,841,933 | | | | 2,958,785 | | |
| Stockholders' equity | 294,305 | | | | 292,882 | | | | 288,431 | | |
| Total liabilities and stockholders' equity | $3,109,183 | | | | $3,134,815 | | | | $3,247,216 | | |
| Net interest income | | $18,706 | | | | $20,851 | | | | $22,346 | |
| Net interest spread | | | 2.15% | | | | 2.36% | | | | 2.61% |
| Net interest-earning assets | $326,777 | | | | $364,405 | | | | $318,464 | | |
| Net interest margin | | | 2.53% | | | | 2.79% | | | | 2.89% |
| Ratio of interest-earning assets | | | | | | | | | | | |
| to interest-bearing liabilities | | | 112.40% | | | | 113.86% | | | | 111.49% |
| | | | | | | | | | | | |
| Average deposits (including non-interest | | | | | | | | | | | |
| bearing checking accounts) | $ 1,920,061 | $ 15,019 | 3.10% | | $ 1,942,554 | $ 13,554 | 2.80% | | $ 2,056,864 | $ 10,690 | 2.06% |
