DIME COMMUNITY BANCSHARES REPORTS EARNINGS FOR THE
QUARTER ENDED SEPTEMBER 30, 2010
Diluted EPS of $0.34; Net Interest Margin of 3.60%
Brooklyn, NY – October 25, 2010 - Dime Community Bancshares, Inc. (Nasdaq: DCOM) (the "Company" or “Dime”), the parent company of The Dime Savings Bank of Williamsburgh (the “Bank”), today reported consolidated net income of $11.4 million, or 34 cents per diluted share, for the quarter ended September 30, 2010, up from $10.0 million, or 30 cents per diluted share, for the quarter ended June 30, 2010, and up from $8.3 million, or 25 cents per diluted share for the quarter ended September 30, 2009.
Vincent F. Palagiano, Chairman and CEO of Dime, commented, “The Company again posted a solid gain in EPS this quarter, the result of two main factors: higher net interest margin and lower credit costs. Earnings would have been higher but for a permanent change to the New York State and City Savings Bank tax law resulting in a higher effective tax rate, and an “other than temporary impairment” (“OTTI”) charge for pooled trust preferred securities. All of the traditional credit metrics remain outstanding, with manageable levels of non-performing loans and assets, as well as 30 to 89 day delinquent loans.”
Significant Unusual or Non-Recurring Items Impacting Earnings for the Most Recent Quarter
The Company’s earnings for the quarter ended September 30, 2010 reflected an after-tax OTTI charge of approximately $899,000 on its investment in bank pooled trust preferred securities (“TRUPs”). As of September 30, 2010, the Bank had taken OTTI charges on six of its eight owned TRUPs, which had a $3.9 million book balance on that date. At September 30, 2010, these six bonds had been charged down to 32% of their original book value through earnings (with an additional 22% of their original book value written down through stockholders’ equity). The remaining two TRUPs (with a book value of $7.5 million at September 30, 2010) continue to perform and the Bank currently expects to receive all principal and interest payments due under their contractual terms.
Also last quarter, the New York State legislature passed a rather significant change to New York State and City Savings Bank tax law by eliminating the long-standing “percentage of taxable income” as a method for determining bad debt deductions. Since this change was made retroactive to January 1, 2010, the Company recognized approximately $700,000 of additional tax expense in the September 2010 quarter to reconcile the first two quarters of 2010, and, commencing in the September 2010 quarter, saw a permanent rise in its New York State and City income taxes. As a result, the new consolidated tax rate for the Company (Federal, New York State and New York City) is now expected to approximate 40%.
OPERATING RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2010
Net Interest Income
Dime's net interest margin grew 25 basis points to 3.60% during the quarter ended September 30, 2010. The yield on interest earning assets increased 15 basis points due primarily to the redeployment of approximately $112 million in low-yielding short term investments into real estate loans and agency securities. As a result, a greater percentage of the interest earning asset group became comprised of real estate loans and federal agency securities, with average yields of 5.89% and 1.38%, respectively, during the most recent quarter. Although the rates on new loans are at a cyclical low, the spread to 5- and 10-year Treasury bonds (and Federal Home Loan Bank advances) is very favorable. It typically takes several quarters for changes in new loan origination rates (either higher or lower) to ha ve an impact on the portfolio rate. For that reason, in spite of lower loan rates on newly-originated loans, the average yield on the existing loan portfolio was 5.89% during the September 2010 quarter compared to 5.87% in the trailing quarter and 5.93% a year earlier. The direction and magnitude of the change in the loan portfolio yield over the next several quarters should be determined by the volume of loan refinancing from within the existing portfolio, and/or significant loan portfolio growth at these interest rate levels.
On the funding side, the average cost of interest bearing liabilities declined by 13 basis points quarter-over-quarter, due primarily to a reduction of 11 basis points in average deposit costs. Rates on money market deposits declined slightly, and the average rate on the CD portfolio also fell as higher-rate maturing CDs priced down to today’s levels. Repricing rates on 1-year CDs at the end of September 2010 were 75 basis points compared to a runoff rate approximating 2.0%. Despite the decline in rates, total deposit balances declined only 2% during the most recent quarter, mostly through the loss of promotional rate deposits.
During the September 2010 quarter, the Bank repaid $140 million of FHLB advances with a weighted average cost of 3.74%. Dime replaced $24.0 million of these borrowings with a new 5-year fixed rate Federal Home Loan Bank of New York (“FHLBNY”) advance carrying an average cost of 1.70%. The repayment of these higher rate borrowings favorably impacted net interest margin.
The net result of these changes is that although average interest earning assets declined by $155.2 million during the quarter, net interest income rose by $1.1 million.
Provision/Allowance For Loan Losses
At September 30th, the allowance for loan losses (“ALL”) as a percentage of total loans stood at 0.49%, a decline of 18 basis points from 0.67% at the end of the prior quarter. At June 30, 2010, approximately 25% of the Bank’s ALL balance (or 0.17% of the 0.67% ratio to total loans) was comprised of allocated reserves for losses deemed probable to occur on impaired loans. During the most recent quarter, the Bank established the likely realizable value of these impaired loans, and reduced their book value and the ALL by that amount. This resulted in $5.6 million of the $6.8 million total charge-offs recognized against the ALL during the quarter. Following the regular quarterly analysis of the loan portfolio, the Bank provided $667,000 to the ALL. As shown on page 12 of this release, problem assets as a percentage of tangible capital plus the ALL was 6.1% at September 30, 2010.
Non-Interest Income
Non-interest income was $1.1 million for the quarter ended September 30, 2010, a decline of $1.4 million from the previous quarter, due primarily to an increase in pre-tax OTTI charges of $1.1 million recognized on the Bank’s previously discussed portfolio of TRUPs. There was also a decline in the gain on the sale of securities of $263,000 from the prior quarter, and a decline in lease income from the prior quarter (the Company having recognized in June a favorable adjustment to lease income related to the transition from a cash basis to accrual basis recognition of such income). Offsetting these declines was an increase of $312,000 in mortgage servicing portfolio revenue recognized during the September 2010 quarter.
Non-Interest Expense
Non-interest expense was 1.46% of average assets during the most recent quarter, resulting in an efficiency ratio of 40.4%. In the aggregate, non-interest expenses declined $899,000 from the previous quarter primarily as a result of: 1) a decline of $604,000 in lease operating expense that reflected an accounting change charged in the June 2010 quarter to transition from a strictly cash basis to a straight line accrual basis; and 2) a reduction of approximately $450,000 in marketing expenses, reflecting lower deposit promotional activities during the current quarter.
Income Tax Expense
The Company's customary consolidated effective tax rate previously approximated 37%. As discussed above, during the most recent quarter, New York State enacted a change in tax law associated with bad debt deductions permissible by savings banks effective retroactively to January 1, 2010. As a result, Dime was required to recognize an adjustment during the most recent quarter for the difference between the previous and new rules for the first six months of 2010. Dime’s consolidated effective tax rate thus increased to 42.6% during the most recent quarter. The catch-up charge approximated $700,000, or 2 cents per diluted share. Looking forward, the consolidated effective tax rate is expected to approximate 40%.
BALANCE SHEET
Total assets declined $151.5 million, to $4.00 billion at September 30, 2010. The decline in assets was experienced primarily in cash and due from banks that were utilized to reduce outstanding FHLBNY advances.
Real Estate Loans
Real estate loans declined by $36.1 million during the most recent quarter. Real estate loan originations were $81.4 million during the most recent quarter at an average rate of 5.42%. Loan amortization, exclusive of the disposition of problem loans, totaled $100.7 million, or 11.8% of the average portfolio balance. The average rate on amortized or satisfied loan balances was 6.15%.
The loan pipeline stood at $175.5 million at September 30, 2010, with a weighted average rate of 4.73%. Yields on new loan commitments are again reaching historic lows due to current Federal Reserve monetary policy, which also is resulting in low Treasury yields. During the past quarter, Dime did not aggressively seek loan growth at these yield levels. As a result, total assets and the total loan portfolio have mildly contracted.
Non Performing/ Problem Loans
Non performing loans increased $907,000 during the most recent quarter, approximating 0.57% of total loans at September 30, 2010. During the most recent quarter, management reclassified eight loans approximating $6.0 million as non-accrual due to concerns surrounding the likelihood of repayment under their original contractual terms. These borrowers were making monthly payments as of September 30, 2010.
Loans delinquent between 30 and 89 days remained range bound at $15.7 million, or 0.46% of loans, at September 30, 2010, compared to $11.1 million at June 30, 2010.
Within the $392.6 million pool of loans sold to Fannie Mae with recourse exposure, $1.4 million were delinquent between 30 and 89 days, and $2.2 million were delinquent 90 days or more at September 30, 2010.
Deposits
Deposits declined $59.2 million during the most recent quarter, led by reductions of $23.0 million and $43.1 million in promotional CDs and money market accounts, respectively. Non-interest bearing checking accounts increased $10 million during the most recent quarter, attributable to growth in commercial checking accounts.
During the most recent quarter, Dime opened its 25th retail banking office, located in Garden City Park, New York. Average deposits in branches open in excess of one year approximated $97.8 million at September 30, 2010, and core deposits comprised 54% of the total. Dime continues a measured de novo strategy, with its next new branch, to be located on 86th Street in Bay Ridge, Brooklyn, scheduled to open in early 2011.
While management continues to view deposits as its preferred funding source, the current interest rate environment provides a unique opportunity to acquire historically low-cost, long duration wholesale FHLBNY advances, and thus management will continue to assess these funding opportunities in order to help maintain pricing discipline on deposits and manage interest rate risk.
Tangible Capital
Dime continues to grow its tangible capital through retained earnings, as its reported earnings exceeded its quarterly cash dividend by 140% during the most recent quarter. Tangible book value per share increased $0.21 during the most recent quarter to $7.86 at September 30, 2010. This growth was fueled by a return of approximately 17% on average tangible equity during the most recent quarter.
Dime’s consolidated tangible capital approximated 6.90% of tangible assets at September 30, 2010, up 44 basis points from June 30, 2010. The Bank’s tangible capital ratio approximated 8.01% at September 30, 2010.
OUTLOOK FOR THE QUARTER ENDING DECEMBER 31, 2010
The average cost of deposits decreased to 1.22% during the September 2010 quarter from 1.33% during the June 2010 quarter, as Dime continued to take advantage of its balance sheet liquidity and historically low short-term interest rates. Deposit funding costs should remain near their historically low level for the remainder of 2010.
Amortization rates (including prepayments and loan refinancing activity), which approximated 12% on an annualized basis during the most recent quarter, are expected to remain in the 10% to 15% range during the final quarter of 2010, with the potential for prepayment speeds to increase again given the current low Treasury benchmark rates.
At September 30, 2010, the loan commitment pipeline was approximately $175.5 million, comprised primarily of multifamily residential loans, with an approximate weighted average rate of 4.73%. Most of the funding is expected to come from the balance sheet, with total assets remaining unchanged.
Operating expenses for the December 2010 quarter are expected to approximate $15.5 million.
Quarterly loan loss provisions were $667,000 during the September 2010 quarter, $3.8 million during the June 2010 quarter, and $3.4 million during the March 2010 quarter. Management expects loan loss provisioning to remain range-bound.
ABOUT DIME COMMUNITY BANCSHARES
The Company (Nasdaq: DCOM) had $4.00 billion in consolidated assets as of September 30, 2010, and is the parent company of Dime. Dime was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-five branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Dime can be found on the Dime's Internet website at www.dime.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 Dime; 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.
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES | |
| UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION |
| (In thousands except share amounts) |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| ASSETS: | | | | | | | | | |
| Cash and due from banks | | $ | 70,761 | | | $ | 39,338 | | | $ | 164,655 | |
| Investment securities held to maturity | | | 6,639 | | | | 7,240 | | | | 7,165 | |
| Investment securities available for sale | | | 64,675 | | | | 43,162 | | | | 40,956 | |
| Trading securities | | | 1,420 | | | | - | | | | 1,329 | |
| Mortgage-backed securities available for sale | | | 165,221 | | | | 224,773 | | | | 184,723 | |
| Federal funds sold and other short-term investments | | | 23,848 | | | | 3,785 | | | | 45,455 | |
| Real Estate Loans: | | | | | | | | | | | | |
| One-to-four family and cooperative apartment | | | 119,991 | | | | 131,475 | | | | 123,434 | |
| Multifamily and underlying cooperative (1) | | | 2,460,882 | | | | 2,377,278 | | | | 2,469,271 | |
| Commercial real estate (1) | | | 823,018 | | | | 834,724 | | | | 837,523 | |
| Construction and land acquisition | | | 16,348 | | | | 44,544 | | | | 26,127 | |
| Unearned discounts and net deferred loan fees | | | 4,526 | | | | 4,017 | | | | 4,476 | |
| Total real estate loans | | | 3,424,765 | | | | 3,392,038 | | | | 3,460,831 | |
| Other loans | | | 2,327 | | | | 3,221 | | | | 4,211 | |
| Allowance for loan losses | | | (16,942 | ) | | | (21,505 | ) | | | (23,350 | ) |
| Total loans, net | | | 3,410,150 | | | | 3,373,754 | | | | 3,441,692 | |
| Loans held for sale | | | 345 | | | | 416 | | | | 692 | |
| Premises and fixed assets, net | | | 31,224 | | | | 29,841 | | | | 30,491 | |
| Federal Home Loan Bank of New York capital stock | | | 47,848 | | | | 54,083 | | | | 53,068 | |
| Other real estate owned, net | | | 85 | | | | 755 | | | | 350 | |
| Goodwill | | | 55,638 | | | | 55,638 | | | | 55,638 | |
| Other assets | | | 118,914 | | | | 119,489 | | | | 122,081 | |
| TOTAL ASSETS | | $ | 3,996,768 | | | $ | 3,952,274 | | | $ | 4,148,295 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| Non-interest bearing checking | | $ | 119,966 | | | $ | 106,449 | | | $ | 109,985 | |
| Interest Bearing Checking | | | 104,705 | | | | 114,416 | | | | 106,226 | |
| Savings | | | 318,239 | | | | 302,340 | | | | 314,747 | |
| Money Market | | | 743,305 | | | | 708,578 | | | | 791,413 | |
| Sub-total | | | 1,286,215 | | | | 1,231,783 | | | | 1,322,371 | |
| Certificates of deposit | | | 1,094,451 | | | | 985,053 | | | | 1,117,444 | |
| Total Due to Depositors | | | 2,380,666 | | | | 2,216,836 | | | | 2,439,815 | |
| Escrow and other deposits | | | 91,965 | | | | 65,895 | | | | 77,699 | |
| Securities sold under agreements to repurchase | | | 195,000 | | | | 230,000 | | | | 195,000 | |
| Federal Home Loan Bank of New York advances | | | 904,525 | | | | 1,009,675 | | | | 1,020,525 | |
| Subordinated Notes Sold | | | - | | | | 25,000 | | | | - | |
| Trust Preferred Notes Payable | | | 70,680 | | | | 70,680 | | | | 70,680 | |
| Other liabilities | | | 31,470 | | | | 39,415 | | | | 29,849 | |
| TOTAL LIABILITIES | | | 3,674,306 | | | | 3,657,501 | | | | 3,833,568 | |
| STOCKHOLDERS' EQUITY: | | | | | | | | | | | | |
| Common stock ($0.01 par, 125,000,000 shares authorized, 51,151,115 shares and 51,131,784 | | | | | | | | | | | | |
| shares issued at September 30, 2010 and December 31, 2009, respectively and 34,547,769 shares and | | | | | | | | | |
| 34,395,531 shares outstanding at September 30, 2010 and December 31, 2009, respectively) | | | 511 | | | | 511 | | | | 511 | |
| Additional paid-in capital | | | 224,239 | | | | 214,654 | | | | 223,802 | |
| Retained earnings | | | 323,777 | | | | 306,787 | | | | 317,088 | |
| Unallocated common stock of Employee Stock Ownership Plan | | | (3,528 | ) | | | (3,701 | ) | | | (3,586 | ) |
| Unearned common stock of Restricted Stock Awards | | | (3,226 | ) | | | (2,505 | ) | | | (3,573 | ) |
| Common stock held by the Benefit Maintenance Plan | | | (7,979 | ) | | | (8,007 | ) | | | (7,979 | ) |
Treasury stock (16,603,346 shares and 16,736,253 shares at September 30, 2010, and December 31, 2009, respectively) | | | (206,259 | ) | | | (207,884 | ) | | | (206,259 | ) |
| Accumulated other comprehensive loss, net | | | (5,073 | ) | | | (5,082 | ) | | | (5,277 | ) |
| TOTAL STOCKHOLDERS' EQUITY | | | 322,462 | | | | 294,773 | | | | 314,727 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 3,996,768 | | | $ | 3,952,274 | | | $ | 4,148,295 | |
| | | | | | | | | | | | | |
| (1) While the loans within both of these categories are often considered "commercial real estate" in nature, they are classified separately in the statement above to | |
| provide further emphasis upon the discrete composition of their underlying real estate collateral. | | | | | | | | | | | | |
| 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 | |
| | | | | | | | | | | | | | | | |
| Interest income: | | | | | | | | | | | | | | | |
| Loans secured by real estate | | $ | 50,648 | | | $ | 51,068 | | | $ | 48,422 | | | $ | 151,839 | | | $ | 144,412 | |
| Other loans | | | 28 | | | | 30 | | | | 35 | | | | 97 | | | | 110 | |
| Mortgage-backed securities | | | 1,846 | | | | 2,082 | | | | 2,748 | | | | 6,199 | | | | 8,997 | |
| Investment securities | | | 290 | | | | 312 | | | | 76 | | | | 1,009 | | | | 515 | |
| Federal funds sold and other short-term investments | | | 702 | | | | 681 | | | | 809 | | | | 2,125 | | | | 2,170 | |
| Total interest income | | | 53,514 | | | | 54,173 | | | | 52,090 | | | | 161,269 | | | | 156,204 | |
| Interest expense: | | | | | | | | | | | | | | | | | | | | |
| Deposits and escrow | | | 7,383 | | | | 8,010 | | | | 9,156 | | | | 22,986 | | | | 35,086 | |
| Borrowed funds | | | 11,855 | | | | 12,958 | | | | 13,965 | | | | 38,036 | | | | 41,720 | |
| Total interest expense | | | 19,238 | | | | 20,968 | | | | 23,121 | | | | 61,022 | | | | 76,806 | |
| Net interest income | | | 34,276 | | | | 33,205 | | | | 28,969 | | | | 100,247 | | | | 79,398 | |
| Provision for loan losses | | | 667 | | | | 3,834 | | | | 3,769 | | | | 7,948 | | | | 8,661 | |
Net interest income after provision for loan losses | | | 33,609 | | | | 29,371 | | | | 25,200 | | | | 92,299 | | | | 70,737 | |
| | | | | | | | | | | | | | | | | | | | | |
| Non-interest income: | | | | | | | | | | | | | | | | | | | | |
| Service charges and other fees | | | 1,284 | | | | 945 | | | | 1,376 | | | | 3,165 | | | | 3,118 | |
| Mortgage banking income (loss) , net | | | 316 | | | | 303 | | | | 246 | | | | 829 | | | | (66 | ) |
Other than temporary impairment ("OTTI") charge on securities (1) | | | (1,639 | ) | | | (508 | ) | | | (556 | ) | | | (2,312 | ) | | | (6,482 | ) |
| Gain (loss) on sale of other real estate owned and other assets | | | (10 | ) | | | 282 | | | | - | | | | 618 | | | | 339 | |
| Gain (loss) on trading securities | | | 86 | | | | (66 | ) | | | - | | | | 243 | | | | | |
| Other | | | 1,031 | | | | 1,501 | | | | 1,038 | | | | 3,492 | | | | 3,006 | |
| Total non-interest income (loss) | | | 1,068 | | | | 2,457 | | | | 2,104 | | | | 6,035 | | | | (85 | ) |
| Non-interest expense: | | | | | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 8,514 | | | | 8,522 | | | | 7,941 | | | | 25,923 | | | | 23,358 | |
| Occupancy and equipment | | | 2,190 | | | | 2,648 | | | | 1,926 | | | | 7,096 | | | | 5,894 | |
| Other | | | 4,188 | | | | 4,621 | | | | 3,774 | | | | 13,355 | | | | 13,321 | |
| Total non-interest expense | | | 14,892 | | | | 15,791 | | | | 13,641 | | | | 46,374 | | | | 42,573 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income before taxes | | | 19,785 | | | | 16,037 | | | | 13,663 | | | | 51,960 | | | | 28,079 | |
| Income tax expense | | | 8,430 | | | | 6,033 | | | | 5,337 | | | | 21,131 | | | | 9,987 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Income | | $ | 11,355 | | | $ | 10,004 | | | $ | 8,326 | | | $ | 30,829 | | | $ | 18,092 | |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings per Share: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.34 | | | $ | 0.30 | | | $ | 0.25 | | | $ | 0.93 | | | $ | 0.55 | |
| Diluted | | $ | 0.34 | | | $ | 0.30 | | | $ | 0.25 | | | $ | 0.93 | | | $ | 0.55 | |
| | | | | | | | | | | | | | | | | | | | | |
| Average common shares outstanding | | | | | | | | | | | | | | | | | | | | |
| for Diluted EPS | | | 33,394,522 | | | | 33,341,885 | | | | 33,126,941 | | | | 33,328,574 | | | | 33,005,549 | |
| | | | | | | | | | | | | | | | | | | | | |
| (1) Total OTTI charges on securities were $1,858, $521 and $675 during the three months ended September 30, 2010, June 30, 2010 and September 30, 2009, |
| respectively, and $736 and $7,939 during the nine months ended September 30, 2010 and 2009, respectively. The non-credit component of |
| OTTI recognized in accumulated other comprehensive loss was $219, $13 and $119 during the three months ended September 30, 2010, |
| June 30, 2010 and September 30, 2009, respectively, and $313 and $1,457 during the nine months ended September 30, 2010 and 2009, respectively. | | |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Performance Ratios (Based upon Reported Earnings): | | | | | | | | | | | | | | | |
| Reported EPS (Diluted) | | $ | 0.34 | | | $ | 0.30 | | | $ | 0.25 | | | $ | 0.93 | | | $ | 0.55 | |
| Return on Average Assets | | | 1.11 | % | | | 0.95 | % | | | 0.85 | % | | | 1.00 | % | | | 0.60 | % |
| Return on Average Stockholders' Equity | | | 14.23 | % | | | 12.80 | % | | | 11.66 | % | | | 13.22 | % | | | 8.55 | % |
| Return on Average Tangible Stockholders' Equity | | | 16.92 | % | | | 15.29 | % | | | 14.07 | % | | | 15.82 | % | | | 10.29 | % |
| Net Interest Spread | | | 3.44 | % | | | 3.16 | % | | | 2.91 | % | | | 3.28 | % | | | 2.55 | % |
| Net Interest Margin | | | 3.60 | % | | | 3.35 | % | | | 3.11 | % | | | 3.47 | % | | | 2.80 | % |
| Non-interest Expense to Average Assets | | | 1.46 | % | | | 1.50 | % | | | 1.39 | % | | | 1.51 | % | | | 1.42 | % |
| Efficiency Ratio | | | 40.35 | % | | | 43.92 | % | | | 43.13 | % | | | 43.05 | % | | | 49.82 | % |
| Effective Tax Rate | | | 42.61 | % | | | 37.62 | % | | | 39.06 | % | | | 40.67 | % | | | 35.57 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Book Value and Tangible Book Value Per Share: | | | | | | | | | | | | | | | | | | | | |
| Stated Book Value Per Share | | $ | 9.33 | | | $ | 9.11 | | | $ | 8.42 | | | $ | 9.33 | | | $ | 8.42 | |
| Tangible Book Value Per Share | | | 7.86 | | | | 7.65 | | | | 6.97 | | | | 7.86 | | | | 6.97 | |
| | | | | | | | | | | | | | | | | | | | | |
| Average Balance Data: | | | | | | | | | | | | | | | | | | | | |
| Average Assets | | $ | 4,090,033 | | | $ | 4,211,629 | | | $ | 3,912,313 | | | $ | 4,105,697 | | | $ | 3,987,849 | |
| Average Interest Earning Assets | | | 3,806,510 | | | | 3,961,750 | | | | 3,721,680 | | | | 3,852,759 | | | | 3,787,316 | |
| Average Stockholders' Equity | | | 319,090 | | | | 312,634 | | | | 285,688 | | | | 310,856 | | | | 281,987 | |
| Average Tangible Stockholders' Equity | | | 268,477 | | | | 261,736 | | | | 236,680 | | | | 259,821 | | | | 234,538 | |
| Average Loans | | | 3,440,764 | | | | 3,479,613 | | | | 3,267,984 | | | | 3,455,969 | | | | 3,272,472 | |
| Average Deposits | | | 2,406,853 | | | | 2,419,758 | | | | 2,255,479 | | | | 2,242,875 | | | | 2,292,019 | |
| | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Summary: | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 6,817 | | | $ | 5,024 | | | $ | 3,619 | | | $ | 12,610 | | | $ | 6,023 | |
| Nonperforming Loans | | | 19,598 | | | | 18,691 | | | | 14,162 | | | | 19,598 | | | | 14,162 | |
| Nonperforming Loans/ Total Loans | | | 0.57 | % | | | 0.54 | % | | | 0.43 | % | | | 0.57 | % | | | 0.43 | % |
| Nonperforming Assets (1) | | | 20,242 | | | | 19,634 | | | | 16,090 | | | | 20,242 | | | | 16,090 | |
| Nonperforming Assets/Total Assets | | | 0.51 | % | | | 0.47 | % | | | 0.41 | % | | | 0.51 | % | | | 0.41 | % |
| Allowance for Loan Loss/Total Loans | | | 0.49 | % | | | 0.67 | % | | | 0.61 | % | | | 0.49 | % | | | 0.61 | % |
| Allowance for Loan Loss/Nonperforming Loans | | | 86.45 | % | | | 124.93 | % | | | 143.07 | % | | | 86.45 | % | | | 143.07 | % |
| Loans Delinquent 30 to 89 Days at period end | | $ | 15,729 | | | $ | 11,133 | | | $ | 11,340 | | | $ | 15,729 | | | $ | 11,340 | |
| | | | | | | | | | | | | | | | | | | | | |
| Regulatory Capital Ratios: | | | | | | | | | | | | | | | | | | | | |
Consolidated Tangible Stockholders' Equity to Tangible Assets at period end | | | 6.90 | % | | | 6.46 | % | | | 6.23 | % | | | 6.90 | % | | | 6.23 | % |
| Tangible Capital Ratio (Bank Only) | | | 8.01 | % | | | 7.70 | % | | | 8.03 | % | | | 8.01 | % | | | 8.03 | % |
| Leverage Capital Ratio (Bank Only) | | | 8.01 | % | | | 7.70 | % | | | 8.03 | % | | | 8.01 | % | | | 8.03 | % |
| Risk Based Capital Ratio (Bank Only) | | | 11.07 | % | | | 11.91 | % | | | 11.73 | % | | | 11.07 | % | | | 11.73 | % |
| | | | | | | | | | | | | | | | | | | | | |
(1) Amount comprised of total nonperforming loans, other real estate owned and the recorded balance of two pooled bank trust preferred security investments for which the Bank has not received any contractual payments of interest or principal in over 90 days. | | |
| | | | | | | | | | |
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES |
| UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME |
| (Dollars In thousands) |
| | | | | | | | | | | | |
| | For the Three Months Ended |
| | September 30, 2010 | | June 30, 2010 | | September 30, 2009 |
| | | | | | | | | | Average | | |
| | | Interest | | | | Interest | | | Balance | Interest | |
| Assets: | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | |
| Real estate loans | $3,439,448 | $50,648 | 5.89% | | $3,478,236 | $51,068 | 5.87% | | $3,266,416 | $48,422 | 5.93% |
| Other loans | 1,316 | 28 | 8.51 | | 1,377 | 30 | 8.71 | | 1,568 | 35 | 8.93 |
| Mortgage-backed securities | 166,672 | 1,846 | 4.43 | | 184,613 | 2,082 | 4.51 | | 246,354 | 2,748 | 4.46 |
| Investment securities | 64,325 | 290 | 1.80 | | 50,709 | 312 | 2.46 | | 26,039 | 76 | 1.17 |
| Other short-term investments | 134,749 | 702 | 2.08 | | 246,815 | 681 | 1.10 | | 181,303 | 809 | 1.78 |
| Total interest earning assets | 3,806,510 | $53,514 | 5.62% | | 3,961,750 | $54,173 | 5.47% | | 3,721,680 | $52,090 | 5.60% |
| Non-interest earning assets | 283,523 | | | | 249,879 | | | | 190,633 | | |
| Total assets | $4,090,033 | | | | $4,211,629 | | | | $3,912,313 | | |
| | | | | | | | | | | | |
| Liabilities and Stockholders' Equity: | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | |
| Interest Bearing Checking | $98,588 | $99 | 0.40% | | $102,711 | $191 | 0.75% | | $105,938 | $179 | 0.67% |
| Money Market accounts | 760,509 | 1,221 | 0.64 | | 785,323 | 1,647 | 0.84 | | 730,634 | 1,738 | 0.94 |
| Savings accounts | 317,243 | 202 | 0.25 | | 311,201 | 200 | 0.26 | | 297,450 | 201 | 0.27 |
| Certificates of deposit | 1,107,791 | 5,861 | 2.10 | | 1,106,346 | 5,972 | 2.17 | | 1,016,246 | 7,038 | 2.75 |
| Total interest bearing deposits | 2,284,131 | 7,383 | 1.28 | | 2,305,581 | 8,010 | 1.39 | | 2,150,268 | 9,156 | 1.69 |
| Borrowed Funds | 1,213,607 | 11,855 | 3.88 | | 1,336,282 | 12,958 | 3.89 | | 1,265,644 | 13,965 | 4.38 |
| Total interest-bearing liabilities | 3,497,738 | $19,238 | 2.18% | | 3,641,863 | $20,968 | 2.31% | | 3,415,912 | $23,121 | 2.69% |
| Non-interest bearing checking accounts | 122,722 | | | | 114,177 | | | | 105,211 | | |
| Other non-interest-bearing liabilities | 150,483 | | | | 142,955 | | | | 105,502 | | |
| Total liabilities | 3,770,943 | | | | 3,898,995 | | | | 3,626,625 | | |
| Stockholders' equity | 319,090 | | | | 312,634 | | | | 285,688 | | |
| Total liabilities and stockholders' equity | $4,090,033 | | | | $4,211,629 | | | | $3,912,313 | | |
| Net interest income | | $34,276 | | | | $33,205 | | | | $28,969 | |
| Net interest spread | | | 3.44% | | | | 3.16% | | | | 2.91% |
| Net interest-earning assets | $308,772 | | | | $319,887 | | | | $305,768 | | |
| Net interest margin | | | 3.60% | | | | 3.35% | | | | 3.11% |
| Ratio of interest-earning assets | | | | | | | | | | | |
| to interest-bearing liabilities | | 108.83% | | | | 108.78% | | | | 108.95% | |
| | | | | | | | | | | | |
| Deposits (including non-interest bearing | | | | | | | | | | | |
| checking accounts) | $2,406,853 | $7,383 | 1.22% | | $2,419,758 | $8,010 | 1.33% | | $2,255,479 | $9,156 | 1.61% |
| | | | | | | | | | | | |
| Interest earning assets (excluding prepayment and other fees) | | 5.54% | | | | 5.40% | | | | 5.53% |
| DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES | |
| UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS | |
| (Dollars In thousands) | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Non-Performing Loans | | | | | | | | | |
| One- to four-family | | $ | 224 | | | $ | 634 | | | $ | 371 | |
| Multifamily residential and mixed use (1) | | | 12,934 | | | | 13,739 | | | | 11,020 | |
| Commercial real estate (1) | | | 6,396 | | | | 4,277 | | | | 2,739 | |
| Cooperative apartment | | | 25 | | | | 25 | | | | 26 | |
| Other | | | 19 | | | | 16 | | | | 6 | |
| Total Non- Performing Loans (2) | | $ | 19,598 | | | $ | 18,691 | | | $ | 14,162 | |
| Other Non-Performing Assets | | | | | | | | | | | | |
Other real estate owned (3) | | | 85 | | | | 350 | | | | 168 | |
| Pooled bank trust preferred securities | | | 559 | | | | 593 | | | | 1,760 | |
| Total Non-Performing Assets | | $ | 20,242 | | | $ | 19,634 | | | $ | 16,090 | |
| | | | | | | | | | | | | |
| Troubled Debt Restructurings not included in non-performing loans | | | | | | | | | | | | |
| Multifamily residential | | | - | | | | - | | | | - | |
| Commercial real estate | | | 6,600 | | | | - | | | | - | |
| Mixed Use | | | 1,040 | | | | 1,040 | | | | 1,040 | |
| Other | | | - | | | | - | | | | - | |
| Total Troubled Debt Restructurings ("TDRs") (1) | | $ | 7,640 | | | $ | 1,040 | | | $ | 1,040 | |
| (1) While the loans within both of these categories are often considered "commercialreal estate" in nature, they are classified separately in the statement above |
| to provide further emphasis upon the discrete composition oftheir underlying real estate collateral. | | | | |
| | | | | | |
| (2) Total non-performing loans include loans that have been modified in a manner that would meet the criteria for a TDR should the loans return | | |
| to accrual status. These loans, which are included in the non-performing loan table, but excluded from the TDR amount shown above, | | |
| totaled $3.6 million at September 30, 2010, $4.6 million at June 30, 2010 and $4.6 million at September 30,2009, respectively. | | |
| | | | | | |
| (3) Amount was fully comprised of multifamily residential loans at September 30, 2010 and June 30, 2010. | | | | |
| PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Total Non-Performing Assets | | $ | 20,242 | | | $ | 19,634 | |
| Loans over 90 days past due on accrual status | | | - | | | | - | |
| PROBLEM ASSETS | | $ | 20,242 | | | $ | 19,634 | |
| | | | | | | | | |
| Tier 1 Capital - Dime Savings Bank of Williamsburgh | | $ | 314,587 | | | $ | 313,882 | |
| Allowance for loan losses | | | 16,942 | | | | 23,350 | |
| TANGIBLE CAPITAL PLUS RESERVES | | $ | 331,529 | | | $ | 337,232 | |
| | | | | | | | | |
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES | | | 6.1 | % | | | 5.8 | % |
| Contact: | Kenneth Ceonzo |
| | Director of Investor Relations |
| | 718-782-6200 extension 8279 |
