-- Real estate loan originations totaled $136.0 million, with an average
interest rate of 5.84%.
-- The loan portfolio grew at an annualized rate of 2%.
-- Loan sales to Fannie Mae totaled $25.5 million. The loans sold had an
average interest rate of 5.48% and an average term to repricing of 18.0
years.
-- The annualized loan amortization rate increased slightly to 15% from
14% sequentially.
-- Total assets declined by 1.3% sequentially.
-- Net interest margin was 2.71%, four basis points lower sequentially.
-- Non-interest expense increased 8% sequentially and 2% year-over-year.
-- The Company repurchased 239,784 shares into treasury during the
quarter.
-- The Tangible Equity ratio continues to climb, and is now 7.44%.
Vincent F. Palagiano, Chairman and Chief Executive Officer, commented, "The
third quarter diluted earnings per share were in line with our
expectations. As the policy actions of the Federal Open Market Committee
continue to result in both higher short-term interest rates and a flattened
yield curve, our decision to shorten the duration of our securities
portfolio during the second quarter of 2005 has helped us achieve a greater
overall benefit to our asset yields."
"In addition," stated Mr. Palagiano, "our discipline in pricing deposits
has helped the overall cost of our deposits significantly lag the upward
movement in short-term interest rates, although it has come at a price of
reduced deposit balances." Deposits declined by $70.4 million on a linked
quarter basis.
For the second consecutive quarter, yields on newly originated real estate
loans of 5.84% were above the average portfolio loan yield of 5.64%. This,
combined with a reduction in total assets, led to a reduction of only 4
basis points in net interest margin sequentially.
According to Mr. Palagiano, "In fact, year over year, in the face of
decidedly higher short term rates and a flattening yield curve, the
Company's net interest margin has declined only 21 basis points. These
results make us confident that the balance sheet management plan we put
into effect four quarters ago was the correct one and will lead to an
earlier rebound in earnings when a better environment for balance sheet
growth returns."
FINANCIAL RESULTS
For the quarter ended September 30, 2005, the Company's pre-tax income was
$14.2 million, compared to $18.0 million in the same quarter of the
previous year. This $3.8 million decrease was primarily due to decreases
of $3.1 million in net interest income and $460,000 in non-interest income,
coupled with an increase of $246,000 in non-interest expense. Average
earning assets declined by $202 million year-over-year and the net interest
margin contracted 21 basis points from 2.92% during the September 2004
quarter to 2.71% during the September 2005 quarter.
On a linked quarter basis, the Company's pre-tax income (excluding the $5.2
million pre-tax loss on the sale of investment and mortgage-backed
securities recorded during the June 2005 quarter) decreased $2.0 million
from $16.2 million in the June 2005 quarter, to $14.2 million during the
quarter ended September 30, 2005, primarily due to a decline in net
interest income of $989,000 and an increase in non-interest expense of
$803,000 during the comparative period. Net interest margin declined 4
basis points to 2.71% during the September 2005 quarter from 2.75% in the
June 2005 quarter. The decline was tempered by an increase in the average
yield on interest earning assets of 14 basis points, reflecting both an
increase in yield on the Company's securities portfolio, which continues to
remain liquid, along with the movement of a greater percentage of the total
interest earning assets into real estate loans, the Company's highest
yielding asset. The average yield on real estate loans, the largest
component of interest earning assets, remained constant sequentially at
5.64%.
Average deposits per branch approximated $101 million at September 30,
2005, lower than the $112 million average at September 30, 2004 and the
$104 million average at June 30, 2005. The loan-to-deposit ratio was 128%
at September 30, 2005, compared to 113% at September 30, 2004 and 122% at
June 30, 2005. Core deposits comprised 49% of total deposits at September
30, 2005, compared to 59% at September 30, 2004 and 53% at June 30, 2005.
Traditionally, newly originated real estate loans with 5-year or 7-year
terms to repricing are 'short funded' with retail deposits. Management
believes that an unnecessary element of interest rate risk, and risk to
future profitability, is added to the balance sheet by aggressively
pursuing loan growth during periods in which short-term interest rates are
rising faster than long-term interest rates. Because balance sheet growth
has been constrained, the Bank has not aggressively competed for
promotional deposits. As a result, promotional rate accounts declined from
29% to 25% of total deposits since September 2004, accounting for almost
70% of the decline in deposits during the nine-month period. Conversely,
the Bank has experienced only marginal deposit erosion in its core customer
base.
The decline in the proportion of promotional accounts has helped minimize
the rise in the overall cost of deposits. While short-term interest rates
have increased 200 basis points from October 2004 through September 2005,
the average cost of the Bank's deposits has risen only by 41 basis points,
from 1.65% during the quarter ended September 30, 2004 to 2.06%, during the
quarter ended September 30, 2005. The Company's non-aggressive deposit
pricing posture is transitory in nature, likely lasting until the Fed
signals that the overnight rate is approaching what it considers to be
'neutral.'
During the first nine months of 2005, the Bank has maintained strict
pricing discipline on its promotional and non-promotional money market
accounts. As a result, a component of money market deposits has migrated
into CDs, as rates on CD accounts become more favorable, causing the
erosion in the 'core' deposit ratio.
Non-interest income, excluding gains or losses on the sale of assets,
totaled $3.8 million during the quarter ended September 30, 2005, compared
to $4.9 million in the quarter ended September 30, 2004 and $4.1 million in
the quarter ended June 30, 2005. The variances resulted primarily from
prepayment fee income, which totaled $1.3 million in the quarter ended
September 30, 2005, $2.4 million in the quarter ended September 30, 2004
and $1.3 million in the quarter ended June 30, 2005. While prepayment fee
income is lower than a year ago, the overall level of prepayments and
amortization on loans is at the high end of management's forecasted range
for 2005 of 12% to 15%.
The Company recorded a net gain of $284,000 on the sale of $25.5 million in
loans to Fannie Mae during the quarter ended September 30, 2005. The
Company recorded a net loss of $288,000 on the sale of $111.3 million in
loans to Fannie Mae during the quarter ended September 30, 2004, and a net
gain of $152,000 on the sale of $15.7 million in loans to Fannie Mae during
the quarter ended June 30, 2005. The majority of the loans sold during the
quarters ended September 30, 2005 and June 30, 2005 were sold on a flow
basis. The loan sales during the quarter ended September 30, 2004 were
made from the bank's existing loan portfolio, and therefore resulted in a
minor net loss being recorded.
There were no gains or losses recorded on sales of securities during the
quarter ended September 30, 2005. As mentioned previously, the Company
recorded a pre-tax loss of $5.2 million on the sale of $276 million of
investment and mortgage-backed securities during the quarter ended June 30,
2005. The Company recorded a loss of $139,000 on the sale of $109.1
million of securities during the quarter ended September 30, 2004.
Non-interest expense totaled $10.7 million during the quarter ended
September 30, 2005, an increase of $246,000, or 2%, from the prior year
quarter, and an increase of $803,000, or 8%, sequentially. The increase of
$246,000 in non-interest expense from the prior year quarter reflected a
net increase in salary and benefits expenses partially offset by the
cessation of quarterly charges related to the amortization of a core
deposit premium paid on an earlier acquisition. The increase of $803,000
in non-interest expense on a linked quarter basis reflected an increase of
$427,000 in salary and benefits partially due to the filling of open and
new staff and management positions. The additions to staff were made to
prepare the Company for future growth. The remaining increase in linked
quarter operating expenses resulted primarily from an increase of $249,000
in data systems expense due to the expiration of promotional pricing the
Company received during the first six months of operation on its new data
system, coupled with a $179,000 non-recurring curtailment credit booked
during the June 2005 quarter related to the freezing of benefits on the
Company's Outside Director Retirement Plan.
The Company's efficiency ratio for the quarter ended September 30, 2005 was
43.5%, compared to 36.2% in the year ago quarter and 38.2% in the quarter
ended June 30, 2005.
The effective tax rate was 35.9% for the quarter ended September 30, 2005
and 33.9% for the quarter ended June 30, 2005. The increase from the
previous quarter resulted from the tax impact of the loss recorded from the
sale of investment and mortgage-backed securities during the quarter ended
June 30, 2005. The effective tax rate is expected to approximate 36.0% for
the full year ending December 31, 2005.
Mr. Palagiano concluded, "We continue to successfully navigate through this
difficult interest rate environment. We have continued to grow equity and
have added to our management group in order to best prepare the Company for
future growth, while still generating a return on equity of 12.6%, and a
cash return on average tangible equity of 16.1%. While we continue to
expect market pressures on both the asset and liability sides of our
balance sheet in the upcoming quarters, we remain focused upon generating
consistent returns while protecting the long term financial health and
integrity of the Company."
The Company's tangible capital ratio has now reached 7.44%, and tangible
book value per share is $6.39, an increase of 5% since September 30, 2004.
During the same period, the Company repurchased 929,100 shares, or 2.5%, of
common stock outstanding since September 30, 2004. The dividend payout
ratio was 48% for the quarter ended June 30, 2005.
REAL ESTATE LENDING AND CREDIT QUALITY
Real estate loan originations totaled $136.0 million during the quarter
ended September 30, 2005, of which $29.5 million, or 22%, represented pure
commercial real estate. The average rate on total loan originations during
the quarter was 5.84%, compared to 5.23% in the quarter ended September 30,
2004 and 5.74% realized during the quarter ended June 30, 2005. Pure
commercial real estate represented 13.0% of the gross loan portfolio at
September 30, 2005, compared with 11.1% as of December 31, 2004. Real
estate loan prepayment and amortization during the September 2005 quarter
approximated 15% of the loan portfolio on an annualized basis, compared to
21% during the September 2004 quarter and 14% during the June 2005 quarter.
The average interest rate on real estate loan prepayment and amortization
during the most recent quarter was 6.14%.
For the first nine months of 2005 total real estate loan originations were
$430.3 million with an average rate of 5.70%. The real estate loan
prepayment and amortization rate was 15% for the first nine months of the
year, and the average interest rate on the real estate loan prepayment and
amortization during this period was 6.31%.
At September 30, 2005, the multifamily and mixed use loan commitment
pipeline approximated $142.3 million, including loan commitments intended
for sale to Fannie Mae of $25.6 million. The average rate on the commitment
pipeline was 5.88%.
The Bank continued its solid credit quality performance during the most
recent quarter. Non-performing loans were $4.6 million at September 30,
2005, representing 0.14% of total assets.
STOCKHOLDERS EQUITY & SHARE REPURCHASE PROGRAM
The Company's total stockholders' equity at September 30, 2005 was $289.5
million, or 8.96% of total assets, compared to $280.5 million, or 8.21% of
total assets at September 30, 2004. Tangible stockholders' equity was
$236.4 million at quarter end, equal to 7.44% of tangible assets, compared
to $227.4 million, or 6.76% of tangible assets, at September 30, 2004.
During the quarter ended September 30, 2005, the return on average
stockholders' equity was 12.6%, the return on tangible equity was 15.5% and
the cash return on average tangible equity (which management considers the
best measurement of the Company's internal capital generation), was 16.1%.
During the September 2005 quarter, the Company repurchased 239,784 shares
of its common stock into treasury. As of September 30, 2005, the Company
had an additional 795,972 shares remaining eligible for repurchase under
its tenth stock repurchase program, approved in May 2004.
"The Company continues to be a buyer of its own shares," stated Palagiano,
"and has both the cash and capital to be opportunistic in the acquisition
of additional shares, following the ebbs and flows of the marketplace."
OUTLOOK
Management's expectation is that the Federal Reserve will continue to raise
the Fed Funds rate at a measured pace, as it has consistently announced.
The Company has taken significant actions necessary to facilitate future
growth, such as bolstering liquidity and increasing capital. However, the
current interest rate environment continues to remain an impediment for
rapid, large-scale growth. As a result, management will continue to weigh
its options and act in a manner it deems most prudent for the long-term
benefit of the Company and its shareholders. As we have stated previously,
as the Federal Reserve moves closer to a point that it considers Fed Funds
to be 'neutral,' and new loan yields provide a reasonable spread over
funding costs, the Company will be more inclined to accelerate balance
sheet growth. In that regard, the recent rise in intermediate bond yields
has been encouraging.
At present, the overall yield on the Company's interest-earning assets is
rising, despite the lagging movement of yields on real estate loans
compared to general market rates. The average yield on interest earning
assets rose on a linked quarter basis, from 5.16% to 5.30%. The Company's
decision to liquidate $276 million of mortgage-backed securities in May
2005 and reinvest in overnight funds has helped boost earnings as the Fed
has continued to raise the overnight rate since the transaction occurred.
From the existing balance sheet, the potential exists to increase interest
income by quickly converting that significant balance sheet liquidity into
higher yielding real estate loans without the need to grow assets. The
average portfolio yield on real estate loans was flat during the most
recent quarter at 5.64%, and is expected to increase slowly over the next
few quarters. While the Company maintains a large portion of short-term
investments, it expects the yield on such investments to continue to rise
as short-term interest rates increase.
In the near term, management believes that deposit-funding costs will
continue to rise. Although the Company's incurred deposit costs have
lagged the increase in short-term interest rates during the past nine
months, it has come at the loss of $195 million of deposit funds during the
period. The Company expects to stabilize, if not yet grow, deposit
balances for the next several quarters, which is likely to cause deposit
costs to grow. Even under those conditions, net interest margin is still
projected to contract only 3 to 5 basis points for the upcoming fourth
quarter.
At 15% this quarter, prepayment and amortization rates continue to be
within the range (although at the high end of the range) previously
discussed by management, and are expected to remain at or below that level
for the balance of the year. There is adequate liquidity to meet projected
loan originations based on the current and projected pipeline; and
operating expenses are expected to remain around the $10.5 million mark for
the fourth quarter. Share repurchases are expected to be in line with
recent practices, however the Company is poised to be opportunistic in the
purchase of its own shares should conditions warrant. Based on this
outlook, the Company now expects fourth quarter earnings per share will be
in the range of $0.23 to $0.25.
ABOUT DIME COMMUNITY BANCSHARES
Dime Community Bancshares, Inc., a unitary thrift holding company, is the
parent company of The Dime Savings Bank of Williamsburgh, Brooklyn, New
York, founded in 1864. With $3.23 billion in assets as of September 30,
2005, the Bank has twenty 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.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands except share amounts)
September 30,
2005 December 31,
(Unaudited) 2004
----------- -----------
ASSETS:
Cash and due from banks $ 29,939 $ 26,581
Investment securities
held to maturity 520 585
Investment securities
available for sale 55,605 54,840
Mortgage-backed securities
held to maturity - 465
Mortgage-backed securities
available for sale 207,696 519,420
Federal funds sold and
other short-term assets 196,702 103,291
Real estate Loans:
One-to-four family and
cooperative apartment 140,887 138,125
Multi-family and
underlying cooperative 1,871,455 1,916,118
Commercial real estate 539,412 424,060
Construction and land
acquisition 9,836 15,558
Unearned discounts and
net deferred loan fees 20 (463)
----------- -----------
Total real estate loans 2,561,610 2,493,398
----------- -----------
Other loans 2,351 2,916
Allowance for loan losses (15,462) (15,543)
----------- -----------
Total loans, net 2,548,499 2,480,771
----------- -----------
Loans held for sale 5,208 5,491
Premises and fixed assets, net 16,499 16,652
Federal Home Loan Bank of New
York capital stock 25,325 25,325
Goodwill 55,638 55,638
Other assets 88,946 88,207
----------- -----------
TOTAL ASSETS $ 3,230,577 $ 3,377,266
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Checking and NOW $ 133,235 $ 138,402
Savings 343,952 362,656
Money Market 513,199 749,040
----------- -----------
Sub-total 990,386 1,250,098
----------- -----------
Certificates of deposit 1,024,535 959,951
----------- -----------
Total Due to depositors 2,014,921 2,210,049
----------- -----------
Escrow and other deposits 76,379 48,284
Securities sold under
agreements to repurchase 205,520 205,584
Federal Home Loan Bank of
New York advances 506,500 506,500
Subordinated Notes Sold 25,000 25,000
Trust Preferred Notes Payable 72,165 72,165
Other liabilities 40,619 27,963
----------- -----------
TOTAL LIABILITIES 2,941,104 3,095,545
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par,
125,000,000 shares
authorized, 50,524,150
shares and 50,111,988
shares issued at September
30, 2005 and December 31,
2004, respectively, and
37,026,976 shares and
37,165,740 shares
outstanding at September 30,
2005 and December 31, 2004,
respectively) 505 501
Additional paid-in capital 202,923 198,183
Retained earnings 270,547 258,237
Unallocated common stock
of Employee Stock
Ownership Plan (4,679) (4,749)
Unearned common stock of
Recognition and Retention
Plan (3,036) (2,612)
Common stock held by the
Benefit Maintenance Plan (7,941) (7,348)
Treasury stock (13,497,174
shares and 12,946,248 shares
at September 30, 2005 and
December 31, 2004,
respectively) (166,018) (157,263)
Accumulated other
comprehensive loss, net (2,828) (3,228)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 289,473 281,721
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,230,577 $ 3,377,266
=========== ===========
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
For the Three Months Ended
September 30, June 30, September 30,
2005 2005 2004
------------- ------------- -------------
Interest income:
Loans secured by real estate $ 36,079 $ 35,261 $ 35,462
Other loans 25 27 65
Mortgage-backed securities 2,010 3,270 5,440
Investment securities 601 755 416
Other 2,230 1,887 323
------------- ------------- -------------
Total interest income 40,945 41,200 41,706
------------- ------------- -------------
Interest expense:
Deposits and escrow 10,690 10,185 9,488
Borrowed funds 9,306 9,077 8,165
------------- ------------- -------------
Total interest expense 19,996 19,262 17,653
------------- ------------- -------------
Net interest income 20,949 21,938 24,053
Provision for loan losses 60 60 60
------------- ------------- -------------
Net interest income after
provision for loan losses 20,889 21,878 23,993
------------- ------------- -------------
Non-interest income:
Service charges and other fees 1,561 1,514 1,619
Net gain (loss) on sales and
redemptions of assets 284 (5,024) (427)
Prepayment fee income 1,315 1,338 2,352
Other 878 1,202 954
------------- ------------- -------------
Total non-interest income
(loss) 4,038 (970) 4,498
------------- ------------- -------------
Non-interest expense:
Compensation and benefits 6,059 5,625 5,675
Occupancy and equipment 1,389 1,277 1,404
Core deposit intangible
amortization - - 206
Other 3,288 3,031 3,205
------------- ------------- -------------
Total non-interest expense 10,736 9,933 10,490
------------- ------------- -------------
Income before taxes 14,191 10,975 18,001
Income tax expense 5,089 3,717 6,755
------------- ------------- -------------
Net Income $ 9,102 $ 7,258 $ 11,246
============= ============= =============
Earnings per Share:
Basic $ 0.26 $ 0.21 $ 0.32
============= ============= =============
Diluted $ 0.26 $ 0.20 $ 0.31
============= ============= =============
Average common shares
outstanding for Diluted EPS 35,553,132 35,644,728 35,998,094
For the Nine Months Ended
September 30, September 30,
2005 2004
------------- -------------
Interest income:
Loans secured by real estate $ 106,188 $ 103,527
Other loans 84 188
Mortgage-backed securities 9,770 16,298
Investment securities 1,962 1,103
Other 5,071 1,052
------------- -------------
Total interest income 123,075 122,168
------------- -------------
Interest expense:
Deposits and escrow 30,256 28,734
Borrowed funds 26,956 21,391
------------- -------------
Total interest expense 57,212 50,125
------------- -------------
Net interest income 65,863 72,043
Provision for loan losses 180 180
------------- -------------
Net interest income after
provision for loan losses 65,683 71,863
------------- -------------
Non-interest income:
Service charges and other fees 4,483 4,921
Net gain (loss) on sales and
redemptions of assets (4,605) 356
Prepayment fee income 4,237 8,730
Other 3,007 2,840
------------- -------------
Total non-interest income
(loss) 7,122 16,847
------------- -------------
Non-interest expense:
Compensation and benefits 17,290 17,570
Occupancy and equipment 4,002 3,920
Core deposit intangible
amortization 48 618
Other 9,087 9,299
------------- -------------
Total non-interest expense 30,427 31,407
------------- -------------
Income before taxes 42,378 57,303
Income tax expense 15,147 21,311
------------- -------------
Net Income $ 27,231 $ 35,992
============= =============
Earnings per Share:
Basic $ 0.77 $ 1.02
============= =============
Diluted $ 0.76 $ 0.99
============= =============
Average common shares
outstanding for Diluted EPS 35,653,116 36,332,435
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
Core Earnings and Core Cash Earnings Reconciliations
(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
September 30, June 30, September 30,
2005 2005 2004
-------- -------- ---------
Net income as reported $ 9,102 $ 7,258 $ 11,246
Pre-tax net loss (gain)
on sale of securities - 5,176 139
Tax effect of adjustments - (2,143) (59)
-------- -------- ---------
Core Earnings $ 9,102 $ 10,291 $ 11,326
-------- -------- ---------
Cash Earnings Additions:
Core Deposit Intangible
Amortization - - 206
Non-cash stock benefit
plan expense 359 352 651
-------- -------- ---------
Core Cash Earnings $ 9,461 $ 10,643 $ 12,183
-------- -------- ---------
Performance Ratios
(Based upon Core Cash Earnings):
Core Cash EPS (Diluted) 0.27 0.30 0.34
Core Cash Return on Average Assets 1.17% 1.28% 1.41%
Core Cash Return on Average
Tangible Stockholders' Equity 16.13% 18.29% 21.82%
For the Nine Months Ended
September 30, September 30,
2005 2004
--------- ---------
Net income as reported $ 27,231 $ 35,992
Pre-tax net loss (gain) on
sale of securities 5,176 (377)
Tax effect of adjustments (2,143) 44
--------- ---------
Core Earnings $ 30,264 $ 35,659
--------- ---------
Cash Earnings Additions:
Core Deposit Intangible
Amortization 48 618
Non-cash stock benefit
plan expense 1,054 2,131
--------- ---------
Core Cash Earnings $ 31,366 $ 38,408
--------- ---------
Performance Ratios
(Based upon Core Cash Earnings:
Core Cash EPS (Diluted) 0.88 1.06
Core Cash Return on Average Assets 1.26% 1.54%
Core Cash Return on Average Tangible
Stockholders' Equity 18.02% 23.18%
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(In thousands except per share amounts)
For the Three Months Ended
September 30, June 30, September 30,
2005 2005 2004
------------ ---------- -----------
Performance Ratios (Based
upon Reported Earnings):
Reported EPS (Diluted) $ 0.26 $ 0.20 $ 0.31
Return on Average Assets 1.12% 0.87% 1.30%
Return on Average
Stockholders' Equity 12.62% 10.18% 16.41%
Return on Average
Tangible Stockholders'
Equity 15.52% 12.47% 20.15%
Net Interest Spread 2.44% 2.45% 2.72%
Net Interest Margin 2.71% 2.75% 2.92%
Non-interest Expense to
Average Assets 1.32% 1.19% 1.22%
Efficiency Ratio 43.46% 38.22% 36.20%
Effective Tax Rate 35.86% 33.87% 37.53%
Performance Ratios (Based upon
Core Earnings):
Core EPS (Diluted) $ 0.26 $ 0.29 $ 0.31
Core Return on Average
Assets 1.12% 1.23% 1.31%
Core Return on Average
Stockholders' Equity 12.62% 14.44% 16.52%
Core Return on Average
Tangible Stockholders'
Equity 15.52% 17.69% 20.29%
Book Value and Tangible Book Value
Per Share:
Stated Book Value Per Share $ 7.82 $ 7.74 7.51
Tangible Book Value Per Share 6.39 6.28 6.09
Average Balance Data:
Average Assets $ 3,247,216 $ 3,335,107 $ 3,448,112
Average Interest
Earning Assets 3,090,823 3,195,935 3,292,610
Average Stockholders' Equity 288,431 285,103 274,176
Average Tangible
Stockholders' Equity 234,560 232,728 223,288
Average Loans 2,560,963 2,501,574 2,525,371
Average Deposits 2,056,864 2,132,556 2,276,974
Asset Quality Summary:
Net charge-offs (recoveries) $ (2) $ (14) $ 6
Nonperforming Loans 4,608 5,025 851
Nonperforming Loans/
Total Loans 0.18% 0.20% 0.03%
Nonperforming Assets/
Total Assets 0.14% 0.15% 0.02%
Allowance for Loan Loss/
Total Loans 0.60% 0.61% 0.61%
Allowance for Loan Loss/
Nonperforming Loans 335.55% 309.13% 1807.52%
Regulatory Capital Ratios:
Consolidated Tangible Equity
to Tangible Assets at period
end 7.44% 7.24% 6.76%
Tangible Capital Ratio
(Bank Only) 9.20% 8.72% 7.86%
Leverage Capital Ratio
(Bank Only) 9.20% 8.72% 7.86%
Risk-Based Capital Ratio
(Bank Only) 13.84% 13.38% 14.84%
For the Nine Months Ended
September 30, September 30,
2005 2004
--------------- ---------------
Performance Ratios (Based upon
Reported Earnings):
Reported EPS (Diluted) $ 0.76 $ 0.99
Return on Average Assets 1.10% 1.44%
Return on Average Stockholders'
Equity 12.75% 17.51%
Return on Average Tangible
Stockholders' Equity 15.64% 21.72%
Net Interest Spread 2.49% 2.79%
Net Interest Margin 2.78% 3.03%
Non-interest Expense to
Average Assets 1.22% 1.26%
Efficiency Ratio 39.22% 35.47%
Effective Tax Rate 35.74% 37.19%
Performance Ratios
(Based upon Core Earnings):
Core EPS (Diluted) $ 0.85 $ 0.98
Core Return on Average
Assets 1.22% 1.43%
Core Return on Average
Stockholders' Equity 14.17% 17.35%
Core Return on Average
Tangible Stockholders' Equity 17.39% 21.52%
Book Value and Tangible
Book Value Per Share:
Stated Book Value Per Share $ 7.82 $ 7.51
Tangible Book Value Per Share 6.39 6.09
Average Balance Data:
Average Assets $ 3,313,154 $ 3,330,404
Average Interest Earning
Assets 3,163,811 3,173,196
Average Stockholders' Equity 284,857 274,033
Average Tangible Stockholders'
Equity 232,098 220,898
Average Loans 2,514,698 2,365,129
Average Deposits 2,124,448 2,257,155
Asset Quality Summary:
Net charge-offs (recoveries) $ (17) $ 73
Nonperforming Loans 4,608 851
Nonperforming Loans/ Total Loans 0.18% 0.03%
Nonperforming Assets/Total Assets 0.14% 0.02%
Allowance for Loan Loss/Total Loans 0.60% 0.61%
Allowance for Loan Loss/
Nonperforming Loans 335.55% 1807.52%
Regulatory Capital Ratios:
Consolidated Tangible Equity to
Tangible Assets at period end 7.44% 6.76%
Tangible Capital Ratio (Bank Only) 9.20% 7.86%
Leverage Capital Ratio (Bank Only) 9.20% 7.86%
Risk -Based Capital Ratio
(Bank Only) 13.84% 14.84%
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
ANALYSIS OF NET INTEREST INCOME
For the Three Months Ended
--------------------------
September 30, 2005
--------------------------
Average
Average Yield/
Balance Interest Cost
--------------------------------------
(Dollars In Thousands)
Assets:
Interest-earning
assets:
Real Estate Loans $ 2,558,690 $ 36,079 5.64%
Other loans 2,273 25 4.40
Mortgage-backed
securities 218,204 2,010 3.68
Investment securities 65,259 601 3.68
Other short-term
investments 246,397 2,230 3.62
----------- ---------- ------
Total interest
earning assets 3,090,823 $ 40,945 5.30%
----------- ---------- ------
Non-interest earning
assets 156,393
-----------
Total assets $ 3,247,216
===========
Liabilities and
Stockholders' Equity:
Interest-bearing
liabilities:
NOW, Super Now
accounts $ 39,728 $ 100 1.00%
Money Market accounts 570,067 2,284 1.59
Savings accounts 349,384 486 0.55
Certificates of
deposit 1,003,995 7,820 3.09
----------- ---------- ------
Total interest
bearing deposits 1,963,174 10,690 2.16
Borrowed Funds 809,185 9,306 4.56
----------- ---------- ------
Total interest-
bearing liabilities 2,772,359 19,996 2.86%
----------- ---------- ------
Checking accounts 93,690
Other non-interest-
bearing liabilities 92,736
Total liabilities 2,958,785
-----------
Stockholders' equity 288,431
-----------
Total liabilities and
stockholders' equity $ 3,247,216
===========
Net interest income $ 20,949
==========
Net interest spread 2.44%
======
Net interest-earning
assets $ 318,782
===========
Net interest margin 2.71%
======
Ratio of interest-
earning assets to
interest-bearing
liabilities 111.50%
======
Average deposits
(including non-interest
bearing checking
accounts) 2,056,864 10,690 2.06%
For the Three Months Ended
--------------------------
June 30, 2005
--------------------------
Average
Average Yield/
Balance Interest Cost
--------------------------------------
(Dollars In Thousands)
Assets:
Interest-earning assets:
Real Estate Loans $ 2,499,139 $ 35,261 5.64%
Other loans 2,436 27 4.43
Mortgage-backed securities 369,470 3,270 3.54
Investment securities 90,384 755 3.34
Other short-term investments 234,506 1,887 3.22
----------- ---------- ------
Total interest earning
assets 3,195,935 $41,200 5.16%
----------- ----------
Non-interest earning assets 139,172
-----------
Total assets $ 3,335,107
===========
Liabilities and
Stockholders' Equity:
Interest-bearing liabilities:
NOW, Super Now accounts $ 40,801 $ 103 1.01%
Money Market accounts 670,907 2,869 1.72
Savings accounts 358,382 493 0.55
Certificates of deposit 966,386 6,720 2.79
----------- ---------- ------
Total interest bearing
deposits 2,036,476 10,185 2.01
Borrowed Funds 809,248 9,077 4.50
----------- ---------- ------
Total interest-bearing
liabilities 2,845,724 19,262 2.71%
----------- ----------
Checking accounts 96,080
Other non-interest-
bearing liabilities 108,200
-----------
Total liabilities 3,050,004
Stockholders' equity 285,103
-----------
Total liabilities and
stockholders' equity $ 3,335,107
===========
Net interest income $ 21,938
==========
Net interest spread 2.45%
======
Net interest-earning assets $ 350,211
===========
Net interest margin 2.75%
======
Ratio of interest-earning
assets to interest-bearing
liabilities 112.31%
======
Average deposits (including
non-interest bearing
checking accounts) 2,132,556 10,185 1.92%
For the Three Months Ended
September 30, 2004
-----------------------------------------
Average
Average Yield/
Balance Interest Cost
-----------------------------------------
(Dollars In Thousands)
Assets:
Interest-earning assets:
Real Estate Loans $ 2,522,106 $ 35,462 5.62%
Other loans 3,265 65 7.96
Mortgage-backed securities 630,131 5,440 3.45
Investment securities 50,458 416 3.30
Other short-term
investments 86,650 323 1.49
------------- ------------- -------------
Total interest earning
assets 3,292,610 $ 41,706 5.07%
------------- -------------
Non-interest earning assets 155,502
-------------
Total assets $ 3,448,112
=============
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
NOW, Super Now accounts $ 44,003 $ 117 1.05%
Money Market accounts 827,387 2,985 1.43
Savings accounts 368,391 505 0.54
Certificates of deposit 942,465 5,881 2.48
------------- ------------- -------------
Total interest bearing
deposits 2,182,246 9,488 1.72
Borrowed Funds 797,944 8,165 4.06
------------- ------------- -------------
Total interest-bearing
liabilities 2,980,190 17,653 2.35%
------------- -------------
Checking accounts 94,728
Other non-interest-bearing
liabilities 99,018
-------------
Total liabilities 3,173,936
Stockholders' equity 274,176
-------------
Total liabilities and
stockholders' equity $ 3,448,112
=============
Net interest income $ 24,053
=============
Net interest spread 2.72%
=============
Net interest-earning assets $ 312,420
=============
Net interest margin 2.92%
=============
Ratio of interest-earning assets
to interest-bearing liabilities 110.48%
=============
Average deposits (including
non-interest bearing checking
accounts) 2,276,974 9,488 1.65%
Contact Information: Contact: Kenneth J. Mahon Executive VP and Chief Financial Officer 718-782-6200 extension 8265 Kenneth Ceonzo Director of Investor Relations 718-782-6200 extension 8279