Exhibit 19
Dime Financial P.O. Box 700
CORPORATION Wallingford, CT 06492
(203) 269-8881
Dime Financial Corporation - First Quarter Results
Dime Financial Corporation ("DFC") (NASDAQ: DIBK) announced net
income of $2.6 million or $0.49 per share on a diluted basis for the quarter
ended March 31, 1998 compared with net income of $3.8 million or $0.72 per
share on a diluted basis for the quarter ended March 31, 1997. The change in
net income from 1997 reflects the Company's return to taxation at a combined
Federal and State income tax rate of approximately 40%. No income tax
expense was recorded during the first quarter of 1997 due to the fact that
the Company recognized a deferred tax asset amount sufficient to offset any
income tax expense. Income on a pre-tax basis increased 19% to $4.5 million
for the quarter ended March 31, 1998 compared with pre-tax income of $3.8
million for the first quarter of 1997. The increase in pre-tax income was
caused primarily by growth in the Company's balance sheet as total assets
climbed to a record $1.0 billion, representing an increase of $202.0 million
or nearly 25% from March 31, 1997. In addition, the Board of Directors
announced the payment of a quarterly dividend of $0.12 per share payable on
May 22, 1998 to shareholders of record on May 8, 1998. Also, on March 31,
1998, the Company and HUBCO, Inc. announced the signing of a definitive
merger agreement. The transaction is subject to shareholder and regulatory
approval and is expected to be completed during the third quarter of 1998.
Net interest income, the key component of the Company's earnings,
totalled $7.4 million for the quarter ended March 31, 1998, representing a
net interest spread of 2.46% and a net interest margin of 3.02% compared
with net interest income of $6.7 million for the quarter ended March 31,
1997 representing a net interest spread of 2.92% and a net interest margin
of 3.46%. The increase in net interest income was primarily the result of a
larger volume of interest-earning assets partially offset by a decrease in
the net interest rate spread and net interest margin. The decrease in the
net interest rate spread and net interest margin was due primarily to the
combination of a higher cost of deposits, a lower loan yield, and a greater
volume of lower-yielding investment securities as a percentage of interest-
earning assets. The provision to the allowance for loan losses totaled
$50,000 for the quarter ended March 31, 1998, unchanged from the provision
during the first quarter of 1997.
Total operating expenses equalled $3.5 million for the quarter ended
March 31, 1998 compared with operating expenses of $3.4 million for the
quarter ended March 31, 1997. OREO operations expense totaled $54,000 for
the first quarter of 1998 compared with $51,000 during the first quarter of
1997. Expenses related to the previously announced merger with HUBCO, Inc.
totaled $150,000 during the first quarter of 1998. Additional expenses are
expected in the remaining quarters prior to the merger. The Company's
efficiency ratio, which excludes merger-related and OREO operations
expenses, equalled 41.91% for the first quarter of 1998 compared with 45.90%
during the first quarter of 1997.
Total assets grew to $1.0 billion at March 31, 1998 compared with
$814.4 million at March 31, 1997, representing an increase of $202 million
or nearly 25%. Total loans, net of the allowance for loan losses, equalled
$362.9 million at March 31, 1998 compared with total loans of $380.1 million
at March 31, 1997, a decrease of 4.5%. Investment securities rose to $582.0
million at March 31, 1998, representing 57% of total assets compared with
investment securities of $367.5 million, at March 31, 1997, representing 45%
of total assets.
Total deposits equaled $853.3 million at March 31, 1998 compared with
deposits of $687.1 million at March 31, 1997, an increase of $166.1 million
or 24%. More traditional retail deposits increased $103.6 million from the
year earlier period while solicited municipal deposits and retail brokered
certificates grew $62.5 million to total $70.4 million at March 31, 1998.
Retail brokered certificates equaled $7.9 million at March 31, 1997 and
there were no solicited municipal deposits at March 31, 1997.
Non-performing loans equalled $2.4 million at March 31, 1998,
representing 0.65% of total loans outstanding compared with non-performing
loans of $2.7 million at March 31, 1997, representing 0.69% of total loans
outstanding. Other real estate owned ("OREO") totalled $496,000 at March 31,
1998 compared with OREO of $916,000 at March 31, 1997. Total non-performing
assets were $2.9 million at March 31, 1998 compared with $3.6 million at
March 31, 1997. The allowance for loan losses at March 31, 1998 totaled
$11.9 million and equalled 3.17% of total loans outstanding compared with an
allowance for loan losses of $12.7 million at March 31, 1997 representing
3.23% of total loans outstanding.
Total shareholders' equity was $82.4 million at March 31, 1998
compared with shareholders' equity of $63.8 million at March 31, 1997. Book
value per share equalled $15.70 at March 31, 1998 compared with $12.41 at
March 31, 1997. The Tier 1 regulatory capital ratio at March 31, 1998 for
The Dime Savings Bank of Wallingford, DFC's wholly owned bank subsidiary
("Dime"), was 8.08% compared with a Tier 1 regulatory capital ratio of 8.31%
at March 31, 1997. The risk-based capital ratio of Dime at March 31, 1998
equalled 21.65% compared with a risk-based capital ratio of 19.92% at March
31, 1997. These ratios are in excess of the regulatory minimums.
Dime Financial Corporation and Subsidiary
Consolidated Statements of Condition
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March 31, December 31, March 31,
(In thousands, except share data) 1998 1997 1997
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Assets
Cash and amounts due from banks $ 11,669 $ 9,016 $ 9,824
Interest bearing deposits 51 661 63
Federal funds sold 29,210 26,755 27,615
Investment securities available for sale (a) 24,961 17,605 24,806
Investment securities held to maturity (b) 167,226 135,037 133,279
Mortgage-backed securities available for sale (c) 389,795 380,741 209,370
Investment in Federal Home Loan Bank of Boston stock 7,192 7,192 7,192
Loans receivable:
Mortgage Loans:
Residential real estate - owner occupied 266,433 267,583 281,902
Residential real estate - non-owner occupied 26,186 27,440 30,665
Commercial real estate 25,052 26,189 32,897
Builders' and Land 624 594 578
Commercial loans 16,104 10,305 3,414
Consumer loans 40,353 41,899 43,298
Allowance for loan losses (11,871) (12,352) (12,693)
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Loans receivable, net 362,881 361,658 380,061
Premises and equipment, net 4,578 4,474 4,916
Accrued income receivable 7,354 6,586 6,353
Other real estate owned, net 496 481 916
Other assets 9,007 9,162 7,705
Excess of cost over fair value of net assets acquired 1,981 2,068 2,331
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Total assets $1,016,401 $961,436 $814,431
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Liabilities and Shareholders' equity Liabilities:
Deposits $ 853,260 $817,091 $687,149
Federal Home Loan Bank of Boston advances 73,000 58,000 58,000
Other liabilities 7,714 7,060 5,528
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Total liabilities 933,974 882,151 750,677
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Shareholders' equity:
Preferred stock; no par value; authorized 1,000,000 shares;
none issued and outstanding --- --- ---
Common stock; $1.00 par value; authorized 9,000,000 shares;
issued 5,599,674 shares, 5,515,249 and 5,487,494, respectively;
outstanding 5,248,067 shares, 5,163,642 and 5,135,887, respectively 5,599 5,515 5,487
Additional paid-in capital 53,576 52,597 52,283
Retained earnings 25,459 23,477 12,099
Net unrealized gain (loss) on available for sale securities 691 594 (3,217)
Treasury stock--351,607 shares at cost (2,898) (2,898) (2,898)
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Total shareholders' equity 82,427 79,285 63,754
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Total liabilities and shareholders' equity $1,016,401 $961,436 $814,431
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<Fa> amortized cost: $24,539 at March 31, 1998; $17,351 at December 31,
1997; and $25,266 at March 31, 1997.
<Fb> market value: $166,865 at March 31, 1998; $134,948 at December 31,
1997; and $130,820 at March 31, 1997.
<Fc> amortized cost: $389,073 at March 31, 1998; $380,010 at December 31,
1997; and $213,784 at March 31, 1997.
Dime Financial Corporation and Subsidiary
Consolidated Statements of Operations
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Three months ended March 31,
(In thousands, except share data) 1998 1997
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Interest Income:
Interest and fees on loans $ 7,608 $ 8,055
Interest-bearing deposits 2 1
Federal funds sold 366 309
Interest and dividends on investments:
U.S. treasury securities 56 57
U.S. government agency obligations 2,800 2,325
REMIC/CMO's 3,953 1,321
Non-agency REMIC/CMO's 1,463 1,134
Mortgage-backed securities 863 635
Asset-backed securities 180 248
Equity securities 67 ---
Dividends on Federal Home Loan Bank of Boston Stock 115 114
Asset Hedge Premiums (11) ---
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Total Interest Income 17,462 14,199
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Interest Expense
Interest to depositors 9,024 6,551
Interest on Federal Home Loan Bank of Boston advances 1,015 962
Liability Hedge Premiums 14 ---
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Total Interest Expense 10,053 7,513
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Net Interest Income 7,409 6,686
Provision for loan losses 50 50
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Net interest income after provision 7,359 6,636
Investment securities gains, net 118 11
Other operating income 563 515
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Income before other operating expenses 8,040 7,162
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Other Operating Expenses:
Salaries and employee benefits 1,792 1,649
Professional and other services 526 583
Bank occupancy and equipment expense 496 465
FDIC Assessment 24 18
Net (benefit) cost of operation of other real estate 54 51
Merger related expenses 150 ---
Other operating expenses 503 622
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Total Other Operating Expenses 3,545 3,388
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Income before income taxes 4,495 3,774
Income tax expense (benefit) 1,885 ---
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Net income $ 2,610 $ 3,774
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Basic Earnings per Share $ 0.50 $ 0.73
Weighted Average Common outstanding 5,218 5,135
Diluted Earnings per Share $ 0.49 $ 0.72
Weighted Average Common Shares and
Common Stock Equivalents outstanding 5,370 5,246
Selected Financial Highlights
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Three months ended March 31,
(Dollars in thousands) 1998 1997
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Average yield on interest-earning assets 7.27% 7.47%
Average cost of funds 4.81% 4.55%
Net interest rate spread 2.46% 2.92%
Net interest margin 3.02% 3.46%
Return on average assets 1.06% 1.94%
Return on average equity 12.94% 23.84%
Leverage capital ratio 8.13% 8.33%
Diluted earnings per share $ 0.49 $ 0.72
Book value per share $ 15.70 $ 12.41
Dime Financial Corporation And Subsidiary
Selected Financial Data
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March 31, December 31, March 31,
(in thousands) 1998 1997 1997
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Non-Performing Asset Information:
Non-Performing Loans:
Residential Real Estate - owner occupied $1,096 $ 473 $ 955
Residential Real Estate - non-owner occupied 120 330 476
Commercial Real Estate 1,044 1,250 865
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Total Mortgage Loans 2,260 2,053 2,296
Commercial Loans 68 77 229
Consumer Loans 94 158 172
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Total Non-Performing Loans 2,422 2,288 2,697
Other Real Estate Owned 496 481 916
Total Non-Performing Assets $2,918 $2,769 $3,613
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March 31, December 31, March 31,
(in thousands) 1998 1997 1997
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Average Balance Information
For the quarters ended:
Interest earning assets:
Gross loans $373,838 $378,189 $396,407
Investment securities 561,352 521,964 339,921
Federal funds sold / interest bearing deposits 27,726 22,799 23,566
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Total interest earning assets 962,916 922,952 759,894
Total Assets $982,293 $938,914 $776,981
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Interest bearing liabilities:
Interest bearing deposits $782,542 $761,176 $610,510
Borrowings 65,889 50,652 58,000
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Total interest bearing liabilities 848,431 811,828 668,510
Total Liabilities 901,614 862,634 713,677
Shareholders' Equity 80,679 76,280 63,304
Total Liabilities & Shareholders' Equity $982,293 $938,914 $776,981
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