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[DIME LOGO]
ACQUISITION OF KEYCORP'S LONG ISLAND FRANCHISE
MAY 27, 1999
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TRANSACTION SUMMARY
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- - 28 RETAIL OFFICES ON LONG ISLAND WITH $1.3 BILLION OF DEPOSITS
-- 62% core deposits
-- Average deposit cost of 3.27%
-- 120,000 deposit accounts
- - APPROXIMATELY $415 MILLION OF BUSINESS AND CONSUMER LOANS
-- No MBS, 1-4 family mortgages or NPAs acquired
-- Average loan yield of 8.03%
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TRANSACTION TERMS
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- - KEYCORP IS EXITING THE LONG ISLAND MARKET
-- Equivalent to a whole-institution acquisition
- - PURCHASE PRICE IS TAX DEDUCTIBLE
-- Premium of approximately $210 million pre-tax or 16.25%, and $130
million after-tax or 10%
- - ANTICIPATED CLOSING IN THE THIRD QUARTER OF 1999
- - NO EQUITY TO BE ISSUED IN CONNECTION WITH THIS TRANSACTION
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STRATEGIC RATIONALE
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- - ACCELERATES DIME'S TRANSITION TO A MORE "BANK-LIKE" BUSINESS MIX
-- Business loans increase by 96% (138% with pending Citigroup auto
finance acquisition)
-- Adds commercial banking infrastructure (i.e., platform, loan
officers)
-- Adds $820 million of core deposits
-- Improves net interest margin
- - ATTRACTIVE LOAN AND DEPOSIT MIX
-- Loan yield of 8.03% and cost of deposits of 3.27%
-- Purchasing performing loans only
- - UNIQUE EXPANSION OPPORTUNITY
-- Commercial bank and thrift alternatives on Long Island are scarce
and expensive
- - ATTRACTIVELY PRICED VERSUS WHOLE BANK ALTERNATIVES
-- Deposit premium of 16.25% (10% after-tax) compares favorably to
deposit premiums paid in recent Long Island whole bank deals
-Roslyn/TR Financial (44%) and Astoria/LISB (36%)
-- Average deposit premium of 29% in comparable sized whole bank deals
announced since 1/1/97 nationwide
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STRATEGIC RATIONALE (CONT'D)
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- - SIGNIFICANTLY IMPROVES DIME'S COMPETITIVE POSITION ON LONG ISLAND
-- In Nassau County, move from #8 to #5 with 8.2% of total deposits
-- In Suffolk County, move from #8 to #5 with 7.1% of total deposits
- - STRONG AVERAGE BRANCH SIZE OF $47 MILLION IN DEPOSITS
- - HIGHLY ATTRACTIVE MARKETS
-- Long Island population over 2.7 million
-- Highest median household income in nation
- - FINANCIALLY COMPELLING
-- Accretive to GAAP EPS, significantly accretive to Cash EPS
-- IRR of 18%+
-- Deposit premium tax deductible
-- Economies in marketing, advertising and back-office areas
-- KeyCorp is exiting the Long Island market reducing runoff risk to
Dime
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STRONG BRANCH FIT AND IMPROVED LONG ISLAND COMPETITIVE POSITION
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[MAP OF COMPETITIVE POSITION]
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DIME - NJ
27 branches
$2.5 billion in deposits
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(*) Source: SNL Securities; MapInfo.
Data as of 6/98. Dollars in thousands. Reflects pending acquisitions.
MARKET
NASSAU BRANCHES DEPOSITS SHARE RANK
- ------ -------- -------- ----- ----
Dime 15 $2,211,841 6.7% 8
Key 10 490,394 1.5 16
-- ---------- ---
Pro Forma 25 $2,702,235 8.2% 5
== ========== ===
SUFFOLK
- -------
Dime 8 $1,030,935 4.4% 8
Key 18 637,657 2.7 12
-- ---------- ---
Pro Forma 26 $1,668,502 7.1% 5
== ========== ===
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PRO FORMA MARKET SHARE ANALYSIS
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NASSAU
TOTAL MARKET
RANK INSTITUTION BRANCHES DEPOSITS SHARE
- ---- ----------- -------- -------- -----
1. Chase Manhattan 36 $3,821,279 11.6%
2. ABN Amro (EAB) 39 3,374,089 10.3
3. Astoria 32 3,094,855 9.4
4. GreenPoint 21 2,932,660 8.9
DIME PRO FORMA 25 2,702,235 8.2
5. Fleet 58 2,692,282 8.2
6. Roslyn 13 2,674,050 8.1
7. Citigroup 20 2,229,830 6.8
8. DIME 15 2,211,841 6.7
9. Bank of New York 48 1,634,055 5.0
10. HSBC Americas 23 1,612,007 4.9
16. KEYCORP 10 490,394 1.5
SUFFOLK
TOTAL MARKET
RANK INSTITUTION BRANCHES DEPOSITS SHARE
- ---- ----------- -------- -------- -----
1. Fleet 39 $4,611,752 19.7%
2. Chase Manhattan 36 3,724,415 15.9
3. North Fork 49 2,449,957 10.5
4. Astoria 26 1,962,640 8.4
DIME PRO FORMA 26 1,668,592 7.1
5. ABN Amro (EAB) 23 1,541,751 6.6
6. Bank of New York 48 1,297,960 5.6
7. HSBC Americas 26 1,058,465 4.5
8. DIME 8 1,030,935 4.4
9. GreenPoint 8 805,201 3.5
10. Suffolk Bancorp 23 790,243 3.4
12. KEYCORP 18 637,657 2.7
(*) Source: SNL Securities, 6/98. Dollars in thousands. Reflects pending
acquisitions.
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ATTRACTIVE MARKETS
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- - NASSAU AND SUFFOLK COUNTIES HAVE A POPULATION OF 2.7 MILLION, MORE THAN 19
OF THE 50 STATES
- - MEDIAN HOUSEHOLD INCOME OF $63,852 (67% HIGHER THAN NATIONAL MEDIAN)
- - STRONG ECONOMY
-- 3.3% unemployment rate
-- Driven by growth in technology and service industries
- - SIZEABLE BUSINESS BANKING MARKET
-- 5,000+ companies with annual sales of $5 million to $25 million
-- 1,000+ companies with annual sales of $25 million to $250 million
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ATTRACTIVE LOAN AND DEPOSIT MIX
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At March 31, 1999
KEYCORP LONG ISLAND BRANCHES
[PIE CHART]
CONSUMER LOANS & LINES 22.9%
BUSINESS LOANS 77.1%
TOTAL LOANS (mm): $415
WEIGHTED AVG. YIELD: 8.03%
[PIE CHART]
NOW & SUPER NOW 8.2%
NON-INTEREST BEARING 13.6%
RETIREMENT 5.7%
CDs 31.0%
SAVINGS 7.5%
MONEY MARKET 34.0%
TOTAL DEPOSITS (mm): $1,318
WEIGHTED AVG. COST: 3.27%
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DIME'S Q2 ACQUISITIONS ACCELERATE TRANSITION TO MORE BANK-LIKE BUSINESS MIX
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Loan Composition
[PIE CHART] [PIE CHART]
DIME (a) PRO FORMA (b)
BUSINESS 2.6% [ARROW >] BUSINESS 5.6%
CONSUMER 8.9% SUBSTANTIALLY CONSUMER 14.1%
COMMERCIAL REAL ESTATE 21.5% IMPROVED MIX COMMERCIAL REAL ESTATE 19.6%
RESIDENTIAL REAL ESTATE 67.0% RESIDENTIAL REAL ESTATE 60.7%
[ARROW >]
TOTAL LOANS (mm): $12,883 10% INCREASE TOTAL LOANS (mm): $14,228
(a) As of 3/31/99. Pro forma for recently completed Lakeview acquisition.
(b) Pro forma for Citigroup auto finance and KeyCorp branch acquisitions.
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DIME'S Q2 ACQUISITIONS ACCELERATE TRANSITION TO MORE BANK-LIKE BUSINESS MIX
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Deposit Composition
[PIE CHART] [PIE CHART]
DIME (a) PRO FORMA (b)
DEMAND 13.2% [ARROW >] DEMAND 14.0%
SAVINGS 17.4% IMPROVES MIX SAVINGS 16.5%
TIME 48.8% TIME 47.7%
MONEY MARKET 20.6% MONEY MARKET 21.8%
[ARROW >]
TOTAL DEPOSITS (mm): $13,628 10% INCREASE TOTAL DEPOSITS (mm): $14,984
[ARROW >]
TOTAL DEMAND DEPOSITS (mm): $ 1,795 17% INCREASE TOTAL DEMAND DEPOSITS (mm): $2,094
(a) As of 3/31/99. Pro forma for recently completed Lakeview acquisition.
(b) Pro forma for Citigroup auto finance and KeyCorp branch acquisitions.
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STRATEGIC ACQUISITIONS - SECOND QUARTER ANNOUNCEMENTS
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($ Millions)
KEY-
CITIGROUP LONG
AUTO FINANCE ISLAND COMBINED
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Business Loans $159 $ 320 $ 479
Consumer Loans 771 95 866
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Total Loans $930 $ 415 $1,345
==== ====== ======
Demand Deposits $ 18 $ 281 $ 299
Other Core Deposits 20 539 559
Time Deposit -- 498 498
---- ------ ------
Total Deposits $ 38 $1,318 $1,356
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FAVORABLE PRICING
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[BAR GRAPH]
DEPOSIT
PREMIUM %
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Average for Metro New York
Whole Bank Acquisitions (a) 33.87%
Average for Comparable
Branch Deals (b) 17.00%
DME/KEY - LI 16.25%
Source: SNL Securities.
(a) Includes whole bank retail transactions in the Metro New York market
announced since 1/1/98 in excess of $50 million in value. Specific deals:
Dime Community/Financial Bancorp; Roslyn/TR Financial and Astoria/LISB.
(b) Includes all commercial bank branch transactions where over $1 billion in
deposits was transferred with loans greater than 10% of deposits acquired
since 1/1/97. Specific deals: Huntington/NationsBank; Union Planters/First
Chicago NBD and Sovereign/CoreStates.
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FINANCIALLY ATTRACTIVE
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- - Accretive to GAAP EPS in 2000
- - 5+% accretive to Cash EPS
- - Goodwill tax deductible, reducing premium to 10% after-tax
- - IRR substantially in excess of cost of capital
- - No restructuring charge
- - No equity to be issued in connection with this transaction
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SUMMARY
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- - Accelerates transition to more bank-like business mix
- - Significantly improves competitive position in highly attractive Long
Island market
- - KeyCorp is exiting the market
- - High credit quality
- - Accretive to GAAP EPS and significantly accretive to Cash EPS
- - Inexpensive expansion opportunity versus comparable whole bank deals
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FORWARD-LOOKING INFORMATION
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This presentation contains certain forward-looking statements regarding Dime and
Dime following the completion of the acquisitions discussed herein as well as
estimates of financial condition and financial performance on a combined basis.
Among other things, the statement that Dime expects the KeyCorp transaction to
be accretive to earnings is forward-looking in nature and subject to
uncertainty. A variety of factors could cause actual results and experience to
differ materially from the anticipated results or other expectations expressed
in such forward-looking statements. Such factors include, but are not limited
to, risks and uncertainties related to the execution of the transactions,
including integration activities, interest rate movements, competition from both
financial and non-financial institutions, changes in applicable laws and
regulations, the timing and occurrence (or non-occurrence) of transactions and
events that may be subject to circumstances beyond Dime's control and general
economic conditions. Dime assumes no obligation to update these forward-looking
statements or to update the reasons why actual results could differ from those
projected in the forward-looking statements.
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