SOURCE: Dime Community Bancshares, Inc.

Dime Community Bancshares, Inc.

January 27, 2014 16:10 ET

Dime Community Bancshares, Inc. Reports Earnings

2013 EPS of $1.23; Quarterly EPS of $0.29; Credit Quality Remains Solid

BROOKLYN, NY--(Marketwired - Jan 27, 2014) -  Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the "Company" or "Dime"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank"), today reported financial results for the quarter and fiscal year ended December 31, 2013. Consolidated net income was $43.5 million, or $1.23 per diluted share, for the year ended December 31, 2013, compared to $40.3 million, or $1.17 per diluted share, for the year ended December 31, 2012. Consolidated net income for the quarter ended December 31, 2013 was $10.3 million, or $0.29 per diluted share, compared to $10.6 million, or $0.30 per diluted share, for the quarter ended September 30, 2013, and $6.7 million, or $0.19 per diluted share, for the quarter ended December 31, 2012. Excluding non-recurring items, net income would have been $12.8 million, or $0.37 per diluted share, during the three months ended December 31, 2012, compared to $0.29 for the quarter ended December 31, 2013.

Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "The combination of low operating expenses and low credit costs enabled Dime to once again earn double digit returns, even in the face of tighter spreads. Return on average tangible (leverage) equity exceeded 11.9%, and return on average assets was 1.09% for the year."

Management's Discussion of 2013 versus 2012 Results

Net interest income was up $18.6 million, or 16.9% for the year ended December 31, 2013 compared to the year ended December 31, 2012, reflecting a decline of $39.1 million in interest expense that exceeded a $20.5 million decline in interest income. Interest expense was abnormally high in 2012, driven by $28.8 million for the cost of an early extinguishment of high-costing wholesale borrowings. This was a partial balance sheet restructuring transaction of a non-recurring nature.

Reported Net Interest Margin ("NIM") showed a year-over-year gain, rising to 3.39% for 2013, from 2.92% for 2012. However, after adjusting for certain items (prepayment fee income and prepayment penalty on early extinguishment of debt), the "core" NIM declined year-over-year, from 3.28% for 2012 to 3.03% for 2013.

Further comparing 2013 to 2012, non-interest income, excluding gains or losses on trading securities and the disposal of assets, declined by $1.9 million (due primarily to a large reduction in the liability for losses on loans sold to Fannie Mae recognized during 2012); credit loss provisions declined by $3.5 million; and operating expenses remained flat. Loan prepayment fee income (included in interest income) was $13.4 million in 2013, versus $14.6 million in 2012. There was another significant transaction of a non-recurring nature in December 2012: a $13.7 million pre-tax gain on the sale of property.

The net outcome of all of the above was a $3.2 million increase in Net Income, or a $0.06 increase in earnings per diluted share, on a year-over-year basis. Average common diluted shares outstanding were 35.3 million in 2013 versus 34.4 million in 2012, an increase of 2.7%.

Total consolidated assets grew by 3.1% in 2013, fueled by growth in total real estate loans of 5.5%. Loan originations topped $1.0 billion for 2013, but the loan portfolio grew by only $193.7 million, evidence of the prepayment in the portfolio due to sustained low 5 and 10-year Treasury rates. Tangible (leverage) common equity grew by $38.8 million in 2013, or 11.2%, to $384.2 million, primarily through earnings, but supplemented with stock option exercises. As a result, the Tier 1 core leverage ratio (tangible common equity) grew to 9.7% at December 31, 2013 from 9.0% a year earlier.

Management's Discussion of Quarterly Operating Results

  • Net Interest Margin

    Net Interest Margin was 3.24% during the quarter ended December 31, 2013 compared to 3.35% during the September 2013 quarter. The "core" NIM, which excludes the effect of loan prepayment fee income, decreased from 2.98% during the September 2013 quarter to 2.90% during the December 2013 quarter, caused primarily by a reduction of 12 basis points in the average yield on real estate loans (also excluding the effects of loan prepayment fee income).

    A 1 basis point decline in the average cost of deposits helped to reduce the average cost of all interest bearing liabilities, as bank deposit rates (mainly short term) remained low in the Bank's market area.

    Declining loan yields resulted from the cumulative effect of portfolio prepayment and amortization activities during 2013 (in particular, the first six months of the year), as U.S. Treasury yields hovered at historically low levels. During the latter half of 2013, there was a slight uptick in 5 to 10-year Treasuries, which has not quite yet been reflected in the pricing on multifamily and commercial real estate loans. According to Mr. Palagiano, "Competition remained heavy among New York bank competitors for our typical loan product. As long as there are portfolios to be filled, pricing will continue to be favorable to borrowers." For Dime, pricing for prime, low loan-to-value multifamily property loans remains in the 3.5% to 4.0% range.

  • Net Interest Income

    Net interest income was $30.8 million in the quarter ended December 31, 2013, down $886,000 from $31.7 million reported in the September 2013 quarter, and up $22.2 million from $8.6 million reported in the December 2012 quarter. Prepayment fee income on loans totaled $3.2 million during the December 2013 quarter, compared to $3.4 million recognized in the September 2013 quarter and $3.7 million during the December 2012 quarter. During the three months ended December 31, 2012, the Company recognized a $25.6 million pre-tax charge on the borrowing prepayment. Absent the impact of loan prepayment fee income and borrowing prepayment costs, net interest income was $27.6 million during the December 31, 2013 quarter, down $670,000 from the September 30, 2013 quarter and $2.8 million from the December 31, 2012 quarter. The decline in net interest income (excluding loan prepayment fee income) from the September 2013 quarter resulted primarily from a decline of 11 basis points in the average yield earned on the Company's interest earning assets, reflecting the ongoing loan refinancing activity.

  • Provision/Allowance For Loan Losses

    The Company recognized a recapture of $56,000 to the allowance for loan losses and net charge-offs of $331,000 during the December 2013 quarter, resulting in a combined reduction of $387,000 in the allowance for loan losses from September 30, 2013 to December 31, 2013. The $56,000 recapture to the allowance for loan losses recognized during the December 2013 quarter reflected the continued stability of the credit quality of the Bank's loan portfolio.

    As a result, the allowance for loan losses as a percentage of total loans stood at 0.54%, down slightly from 0.56% at the close of the prior quarter.

  • Non-Interest Income

    Non-interest income was $1.8 million for the quarter ended December 31, 2013, a reduction of $171,000 from the previous quarter, due primarily to lower fees collected on portfolio loans.

  • Non-Interest Expense

    Non-interest expense was $15.5 million in the quarter ended December 31, 2013, in line with both the previous quarter and the forecasted level of $15.5 million.

    Non-interest expense was 1.55% of average assets during the most recent quarter. The efficiency ratio approximated 47.5% during the same period.

  • Income Tax Expense

    The effective tax rate approximated 40.1% during the most recent quarter, generally in line with the 40.0% forecasted level.

Management's Discussion of the 4th Quarter 2013 Balance Sheet

Total assets were $4.03 billion at December 31, 2013, up $12.8 million from September 30, 2013. 

The total real estate loan portfolio grew by approximately $30.4 million, funded in part from cash on hand. $213.5 million of real estate loans closed during the quarter, compared to $289.6 million in the 3rd quarter of 2013. For comparative and trending purposes, loan originations in the 1st and 2nd quarters of 2013 were $325.0 million and $242.8 million, respectively.

Deposits declined by $102.0 million during the most recent quarter, comprised mainly of repricing promotional single service households for which the Bank declined to compete. Federal Home Loan Bank of New York ("FHLBNY") advances increased by $137.5 million during the same quarter.

  • Real Estate Loans

    Real estate loan originations were $213.5 million during the December 2013 quarter, at a weighted average interest rate of 3.80%. Of this amount, $61.3 million represented loan refinances from the existing portfolio.

    Also during the quarter, loan amortization and satisfactions, including the $61.3 million of refinances of existing loans, totaled $193.5 million, or 21.0% (annualized) of the quarterly average portfolio balance, at an average rate of 5.35%. Total loan commitments stood at $139.8 million at December 31, 2013, with a weighted average rate of 3.77%. The average yield on the loan portfolio (excluding prepayment fee income) during the quarter ended December 31, 2013 was 4.16%, compared to 4.28% during the September 2013 quarter and 4.85% during the December 2012 quarter.

  • Credit Summary

    Non-performing loans were $12.5 million, or 0.34% of total loans, at December 31, 2013, up from $8.8 million, or 0.24% of total loans, at September 30, 2013. This increase resulted primarily from the addition of one $4.4 million loan to non-accrual status. Accruing loans delinquent between 30 and 89 days decreased to $1.6 million, or approximately 0.04% of total loans, at December 31, 2013, compared to $3.8 million, or 0.10% of total loans, at September 30, 2013.

    At December 31, 2013, non-performing assets represented 3.7% of the sum of tangible capital plus the allowance for loan losses (this statistic is otherwise known as the "Texas Ratio") (see table below). This number compares very favorably to both industry and regional averages.

    The remaining pool of loans serviced for Fannie Mae totaled $208.4 million as of December 31, 2013, down from $216.1 million at September 30, 2013. Within the pool of serviced loans previously sold to Fannie Mae with recourse exposure, total loans delinquent 30 days or more approximated $400,000 at both December 31, 2013 and September 30, 2013. Due to both ongoing amortization and the near absence of problem loans within the Fannie Mae portfolio, the Company determined that its liability for the first loss position could be reduced by $60,000, which was recognized during the quarter ended December 31, 2013.

  • Deposits and Borrowed Funds

    Retail deposits decreased $102.0 million from September 30, 2013 to December 31, 2013, reflecting net outflows of $79.1 million in money market deposits and $24.2 million in certificates of deposit ("CDs") during the period. The Bank did not implement any significant promotional deposit activities during the December 2013 quarter, and enacted slight reductions in rates that resulted in a reduction of 1 basis point in the average cost of deposits during the December 2013 quarter. The Bank also closed its Sunnyside branch during the December 2013 quarter, relocating the deposits to its nearby Long Island City branch location. At December 31, 2013, bank-wide average deposit balances approximated $100.3 million per branch.

    The Bank transacted $226.0 million of new fixed-rate FHLBNY borrowings during the quarter ended December 31, 2013, of which $88.5 million were utilized to replace borrowings that matured during the period. Of the $226.0 million of new borrowings, $126.0 million had a weighted average maturity of 3.7 years and a weighted average cost of 1.15%, providing an offset to the fixed rate loan portfolio, and an element of NIM protection should funding rates rise during the term. The remaining balance of new advances, approximately $100 million, were short-term in nature, and had a weighted average maturity of 1 month and a weighted average cost of 0.39%. Management expects to replace the short-term borrowings with both permanent longer-term advances and deposits in the upcoming quarter. The Bank intends to continue the use of longer-term FHLBNY advances to supplement deposit funding when deemed appropriate.

  • Capital

    The Company's consolidated Tier 1 core leverage ratio (tangible common equity) grew during the most recent quarter as a result of both increased retained earnings and stock option exercise activity. Consolidated tangible capital was 9.67% of tangible assets at December 31, 2013, an increase of 16 basis points from September 30, 2013.

    The Bank's tangible (leverage) capital ratio was 9.52% at December 31, 2013, down from 10.24% at September 30, 2013, due to both asset growth and aggregate dividends of $37.3 million paid to the Company during the December 2013 quarter. The Bank's Total Risk-Based Capital Ratio was 13.36% at December 31, 2013, compared to 14.07% at September 30, 2013.

    Reported diluted EPS exceeded the quarterly cash dividend rate per share by 107% during the December 2013 quarter, equating to a 48% payout ratio. Additions to capital from earnings and stock option exercises during the most recent quarterly period caused tangible book value per share to increase $0.17 sequentially during the most recent quarter, to $10.47 at December 31, 2013.

OUTLOOK FOR THE YEAR 2014 AND THE QUARTER ENDING MARCH 31, 2014

At December 31, 2013, Dime had outstanding loan commitments totaling $139.8 million, all of which are likely to close during the quarter ending March 31, 2014, at an average interest rate approximating 3.77%.

For the year ending December 31, 2014, balance sheet growth is targeted to approximate 8.0 - 10.0%, subject to change to reflect market conditions. Loan prepayments and amortization are currently projected to run in the 15% - 20% range throughout the year.

On the liability side, deposit funding costs are expected to remain near current historically low levels through the first quarter of 2014. The Bank has $115.8 million of CDs maturing at an average cost of 0.86% during the quarter ending March 31, 2014. Offering rates on 12-month term CDs currently approximate 50 basis points. The Company has $100 million in short-term borrowings due to mature during the quarter ending March 31, 2014. In the coming quarter, management expects to utilize a combination of FHLBNY advances and retail deposits to fund growth. Advances are anticipated to be of longer duration (3 to 5 year fixed terms) to provide a closer duration match to new loans and a hedge against future higher interest rates.

The Bank anticipates launching promotional deposit campaigns throughout the first quarter of 2014, the success of which will determine the direction and degree of change in the cost of deposits, with a slight upward bias in the March 2014 quarter, and fully reflected in the June 2014 quarter.

Loan loss provisioning will likely continue to be a function of loan portfolio growth, incurred and anticipated losses, and the overall credit quality of the loan portfolio.

Absent any unforeseen items, non-interest expense is expected to approximate $15.5 million during the March 2014 quarter. The Company projects that the consolidated effective tax rate will approximate 41.0% in the March 2014 quarter.

ABOUT DIME COMMUNITY BANCSHARES, INC.

The Company (NASDAQ: DCOM) had $4.03 billion in consolidated assets as of December 31, 2013, and is the parent company of the Bank. The Bank 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)  
                   
    December 31,     September 30,     December 31,  
    2013     2013     2012  
ASSETS:                  
Cash and due from banks   $ 45,777     $ 65,713     $ 79,076  
Investment securities held to maturity     5,341       5,622       5,927  
Investment securities available for sale     18,649       18,468       32,950  
Trading securities     6,822       5,262       4,874  
Mortgage-backed securities available for sale     31,543       34,226       49,021  
Real Estate Loans:                        
  One-to-four family and cooperative apartment     73,956       78,504       91,876  
  Multifamily and loans underlying cooperatives (1)     2,917,380       2,859,729       2,670,973  
  Commercial real estate (1)     700,606       723,312       735,224  
  Construction and land acquisition     268       299       476  
  Unearned discounts and net deferred loan fees     5,170       5,095       4,836  
  Total real estate loans     3,697,380       3,666,939       3,503,385  
  Other loans     2,139       2,109       2,423  
  Allowance for loan losses     (20,153 )     (20,540 )     (20,550 )
Total loans, net     3,679,366       3,648,508       3,485,258  
Loans held for sale     -       -       560  
Premises and fixed assets, net     29,701       29,850       30,518  
Federal Home Loan Bank of New York capital stock     48,051       41,863       45,011  
Goodwill     55,638       55,638       55,638  
Other Real Estate Owned     18       -       -  
Other assets     107,185       110,175       116,566  
TOTAL ASSETS   $ 4,028,091     $ 4,015,325     $ 3,905,399  
LIABILITIES AND STOCKHOLDERS' EQUITY:                        
Deposits:                        
Non-interest bearing checking   $ 174,457     $ 170,250     $ 159,144  
Interest Bearing Checking     87,301       87,995       95,159  
Savings     376,900       379,113       371,792  
Money Market     1,040,079       1,119,212       961,359  
  Sub-total     1,678,737       1,756,570       1,587,454  
Certificates of deposit     828,409       852,594       891,975  
Total Due to Depositors     2,507,146       2,609,164       2,479,429  
Escrow and other deposits     69,404       98,160       82,753  
Federal Home Loan Bank of New York advances     910,000       772,500       842,500  
Trust Preferred Notes Payable     70,680       70,680       70,680  
Other liabilities     35,698       42,076       38,463  
TOTAL LIABILITIES     3,592,928       3,592,580       3,513,825  
STOCKHOLDERS' EQUITY:                        
Common stock ($0.01 par, 125,000,000 shares authorized, 52,854,483 shares, 52,692,461 shares and 52,021,149 shares issued at December 31, 2013, September 30, 2013 and December 31, 2012, respectively, and 36,712,951 shares, 36,548,503 shares, and 35,714,269 shares outstanding at December 31, 2013, September 30, 2013 and December 31, 2012, respectively)     528       526       520  
Additional paid-in capital     251,910       250,105       239,041  
Retained earnings     402,986       397,664       379,166  
Unallocated common stock of Employee Stock Ownership Plan     (2,776 )     (2,834 )     (3,007 )
Unearned Restricted Stock Award common stock     (3,193 )     (3,693 )     (3,122 )
Common stock held by the Benefit Maintenance Plan     (9,013 )     (9,013 )     (8,800 )
Treasury stock (16,141,532 shares, 16,143,958 shares and 16,306,880 shares at December 31, 2013, September 30, 2013 and December 31, 2012, respectively)     (200,520 )     (200,550 )     (202,584 )
Accumulated other comprehensive loss, net of deferred taxes     (4,759 )     (9,460 )     (9,640 )
TOTAL STOCKHOLDERS' EQUITY     435,163       422,745       391,574  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 4,028,091     $ 4,015,325     $ 3,905,399  
                         
(1) While the loans within both of these categories are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying a significant component of the total loan portfolio.  
   
   
   
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES  
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Dollars In thousands except share and per share amounts)  
                   
    For the Three Months Ended  
    December 31,     September 30,     December 31,  
    2013     2013     2012  
Interest income:                        
    Loans secured by real estate   $ 41,303     $ 42,451     $ 45,414  
    Other loans     26       25       28  
    Mortgage-backed securities     290       310       569  
    Investment securities     188       84       220  
    Federal funds sold and other short-term investments     422       416       518  
      Total interest income     42,229       43,286       46,749  
Interest expense:                        
    Deposits and escrow     4,687       4,908       5,330  
    Borrowed funds     6,775       6,725       32,868  
      Total interest expense     11,462       11,633       38,198  
        Net interest income     30,767       31,653       8,551  
Provision for loan losses     (56 )     240       63  
Net interest income after provision for loan losses     30,823       31,413       8,488  
                         
Non-interest income:                        
    Service charges and other fees     905       1,015       605  
    Mortgage banking income, net     123       76       293  
    Other than temporary impairment ("OTTI") charge on securities (1)     -       -       -  
    Gain (loss) on sale of securities and other assets     -       (21 )     14,704  
    Gain (loss) on trading securities     78       104       (23 )
    Other     731       834       919  
      Total non-interest income     1,837       2,008       16,498  
Non-interest expense:                        
    Compensation and benefits     9,578       9,466       9,012  
    Occupancy and equipment     2,716       2,697       2,621  
    Federal deposit insurance premiums     480       515       500  
    Other     2,687       2,897       2,584  
      Total non-interest expense     15,461       15,575       14,717  
                           
      Income before taxes     17,199       17,846       10,269  
Income tax expense     6,891       7,215       3,534  
                         
Net Income   $ 10,308     $ 10,631     $ 6,735  
                         
Earnings per Share ("EPS"):                        
  Basic   $ 0.29     $ 0.30     $ 0.19  
  Diluted   $ 0.29     $ 0.30     $ 0.19  
                         
Average common shares outstanding for Diluted EPS     35,717,449       35,527,503       34,594,167  
                         
(1) Total OTTI charges on securities are summarized as follows for the periods presented:  
Credit component (shown above)   $ -     $ -     $ -  
Non-credit component not included in earnings     -       -       -  
Total OTTI charges   $ -     $ -     $ -  
                         
                   
                   
    For the Year Ended        
    December 31,     December 31,        
    2013     2012        
Interest income:                        
    Loans secured by real estate   $ 171,594     $ 189,149          
    Other loans     101       104          
    Mortgage-backed securities     1,413       3,025          
    Investment securities     503       1,263          
    Federal funds sold and other short-term investments     1,845       2,413          
      Total interest income     175,456       195,954          
Interest expense:                        
    Deposits and escrow     19,927       21,779          
    Borrowed funds     27,042       64,333          
      Total interest expense     46,969       86,112          
        Net interest income     128,487       109,842          
Provision for loan losses     369       3,921          
Net interest income after provision for loan losses     128,118       105,921          
                         
Non-interest income:                        
    Service charges and other fees     3,459       3,445          
    Mortgage banking income, net     473       1,768          
    Other than temporary impairment ("OTTI") charge on securities (1)     -       (181 )        
    Gain (loss) on sale of securities and other assets     89       14,748          
    Gain (loss) on trading securities     265       113          
    Other     3,177       3,956          
      Total non-interest income     7,463       23,849          
Non-interest expense:                        
    Compensation and benefits     38,293       37,647          
    Occupancy and equipment     10,451       10,052          
    Federal deposit insurance premiums     1,951       2,057          
    Other     11,997       12,816          
      Total non-interest expense     62,692       62,572          
                             
      Income before taxes     72,889       67,198          
Income tax expense     29,341       26,890          
                         
Net Income   $ 43,548     $ 40,308          
                         
Earnings per Share ("EPS"):                        
  Basic   $ 1.23     $ 1.18          
  Diluted   $ 1.23     $ 1.17          
                         
Average common shares outstanding for Diluted EPS     35,306,272       34,364,453          
                         
(1) Total OTTI charges on securities are summarized as follows for the periods presented:  
Credit component (shown above)   $ -     $ 181          
Non-credit component not included in earnings     -       6          
Total OTTI charges   $ -     $ 187          
                         
                         
                         
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES  
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS  
(Dollars In thousands except per share amounts)  
                   
    For the Three Months Ended  
    December 31,     September 30,     December 31,  
    2013     2013     2012  
                         
Reconciliation of Reported and Adjusted Earnings (1):                        
Net Income   $ 10,308     $ 10,631     $ 6,735  
Add: After-tax expense associated with the prepayment of borrowings     -       -       14,032  
Add: After-tax charge for OTTI on securities     -       -       -  
Less: After tax gain on sale of real estate     -       -       (7,529 )
Less: After tax gain on sale of equity mutual funds     -       -       (487 )
Adjusted net income   $ 10,308     $ 10,631     $ 12,751  
                         
Performance Ratios (Based upon Reported Earnings):                        
Reported EPS (Diluted)   $ 0.29     $ 0.30     $ 0.19  
Return on Average Assets     1.03 %     1.07 %     0.69 %
Return on Average Stockholders' Equity     9.62 %     10.19 %     7.06 %
Return on Average Tangible Stockholders' Equity     10.84 %     11.49 %     7.97 %
Net Interest Spread     3.04 %     3.17 %     0.29 %
Net Interest Margin     3.24 %     3.35 %     0.93 %
Non-interest Expense to Average Assets     1.55 %     1.56 %     1.51 %
Efficiency Ratio     47.53 %     46.38 %     141.95 %
Effective Tax Rate     40.07 %     40.43 %     34.41 %
                         
Performance Ratios (Based upon "Adjusted Net Income" as calculated above):                  
EPS (Diluted)   $ 0.29     $ 0.30     $ 0.37  
Return on Average Assets     1.03 %     1.07 %     1.31 %
Return on Average Stockholders' Equity     9.62 %     10.19 %     13.37 %
Return on Average Tangible Stockholders' Equity     10.84 %     11.49 %     15.09 %
Net Interest Spread     3.04 %     3.17 %     3.09 %
Net Interest Margin     3.24 %     3.35 %     3.30 %
Non-interest Expense to Average Assets     1.55 %     1.56 %     1.51 %
Efficiency Ratio     47.53 %     46.38 %     40.94 %
Effective Tax Rate     40.07 %     40.43 %     39.96 %
                         
Book Value and Tangible Book Value Per Share:                        
Stated Book Value Per Share   $ 11.85     $ 11.57     $ 10.96  
Tangible Book Value Per Share     10.47       10.30       9.67  
                         
Average Balance Data:                        
Average Assets   $ 3,997,842     $ 3,980,840     $ 3,890,420  
Average Interest Earning Assets     3,803,406       3,782,043       3,686,130  
Average Stockholders' Equity     428,396       417,459       381,368  
Average Tangible Stockholders' Equity     380,417       369,982       337,961  
Average Loans     3,667,231       3,646,845       3,443,136  
Average Deposits     2,547,115       2,623,840       2,459,385  
                         
Asset Quality Summary:                        
Net charge-offs   $ 331     $ 202     $ 207  
Non-performing Loans (excluding loans held for sale)     12,549       8,838       8,888  
Non-performing Loans/ Total Loans     0.34 %     0.24 %     0.25 %
Nonperforming Assets (2)   $ 13,465     $ 9,735     $ 10,340  
Nonperforming Assets/Total Assets     0.33 %     0.24 %     0.26 %
Allowance for Loan Loss/Total Loans     0.54 %     0.56 %     0.59 %
Allowance for Loan Loss/Non-performing Loans     160.59 %     232.41 %     231.21 %
Loans Delinquent 30 to 89 Days at period end   $ 1,603     $ 3,763     $ 7,171  
                         
Consolidated Tangible Stockholders' Equity to Tangible Assets at period end     9.67 %     9.51 %     8.97 %
                         
Regulatory Capital Ratios (Bank Only):                        
Tier One Core Leverage Ratio (Tangible Common Equity)     9.52 %     10.24 %     9.98 %
Tier One Risk Based Capital Ratio     12.64 %     13.35 %     12.95 %
Total Risk Based Capital Ratio     13.36 %     14.07 %     13.67 %
                   
                   
    For the Year Ended        
    December 31,     December 31,        
    2013     2012        
                         
Reconciliation of Reported and Adjusted Earnings (1):                        
Net Income   $ 43,548     $ 40,308          
Add: After-tax expense associated with the prepayment of borrowings     -       14,032          
Add: After-tax charge for OTTI on securities     -       99          
Less: After tax gain on sale of real estate properties     -       (7,529 )        
Less: After tax gain on sale of equity mutual funds     -       (511 )        
Adjusted net income   $ 43,548     $ 46,399          
                         
Performance Ratios (Based upon Reported Earnings):                        
Reported EPS (Diluted)   $ 1.23     $ 1.17          
Return on Average Assets     1.09 %     1.02 %        
Return on Average Stockholders' Equity     10.58 %     10.73 %        
Return on Average Tangible Stockholders' Equity     11.93 %     12.24 %        
Net Interest Spread     3.19 %     2.58 %        
Net Interest Margin     3.39 %     2.92 %        
Non-interest Expense to Average Assets     1.57 %     1.59 %        
Efficiency Ratio     46.23 %     52.58 %        
Effective Tax Rate     40.25 %     40.02 %        
                         
Performance Ratios (Based upon "Adjusted Net Income" as calculated above):                  
EPS (Diluted)   $ 1.23     $ 1.35          
Return on Average Assets     1.09 %     1.18 %        
Return on Average Stockholders' Equity     10.58 %     12.36 %        
Return on Average Tangible Stockholders' Equity     11.93 %     14.09 %        
Net Interest Spread     3.19 %     3.06 %        
Net Interest Margin     3.39 %     3.28 %        
Non-interest Expense to Average Assets     1.57 %     1.59 %        
Efficiency Ratio     46.23 %     42.34 %        
Effective Tax Rate     40.25 %     40.74 %        
                         
Book Value and Tangible Book Value Per Share:                        
Stated Book Value Per Share   $ 11.85     $ 10.96          
Tangible Book Value Per Share     10.47       9.67          
                         
Average Balance Data:                        
Average Assets   $ 3,983,310     $ 3,947,043          
Average Interest Earning Assets     3,787,188       3,762,007          
Average Stockholders' Equity     411,763       375,511          
Average Tangible Stockholders' Equity     365,101       329,282          
Average Loans     3,606,039       3,402,838          
Average Deposits     2,589,485       2,397,586          
                         
Asset Quality Summary:                        
Net charge-offs (recoveries)   $ 766     $ 3,707          
Non-performing Loans (excluding loans held for sale)     12,549       8,888          
Non-performing Loans/ Total Loans     0.34 %     0.25 %        
Nonperforming Assets (2)   $ 13,465     $ 10,340          
Nonperforming Assets/Total Assets     0.33 %     0.26 %        
Allowance for Loan Loss/Total Loans     0.54 %     0.59 %        
Allowance for Loan Loss/Non-performing Loans     160.59 %     231.21 %        
Loans Delinquent 30 to 89 Days at period end   $ 1,603     $ 7,171          
                         
Consolidated Tangible Stockholders' Equity to Tangible Assets at period end     9.67 %     8.97 %        
                         
Regulatory Capital Ratios (Bank Only):                        
Tier One Core Leverage Ratio (Tangible Common Equity)     9.52 %     9.98 %        
Tier One Risk Based Capital Ratio     12.64 %     12.95 %        
Total Risk Based Capital Ratio     13.36 %     13.67 %        
                         
(1) Adjusted earnings is a "non-GAAP" measure. A reconciliation from the comparable GAAP measure is provided herein.  
(2) Amount comprised of total non-accrual loans (including loans held for sale) and the recorded balance of pooled bank trust preferred security investments for which the Bank had 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  
    December 31, 2013  
              Average  
    Average         Yield/  
    Balance   Interest     Cost  
Assets:                    
  Interest-earning assets:                    
    Real estate loans   $ 3,665,008   $ 41,303     4.51 %
    Other loans     2,223     26     4.68  
    Mortgage-backed securities     31,631     290     3.67  
    Investment securities     29,048     188     2.59  
    Other short-term investments     75,496     422     2.24  
      Total interest earning assets     3,803,406   $ 42,229     4.44 %
  Non-interest earning assets     194,436              
Total assets   $ 3,997,842              
                     
Liabilities and Stockholders' Equity:                    
  Interest-bearing liabilities:                    
    Interest Bearing Checking accounts   $ 89,293   $ 47     0.21 %
    Money Market accounts     1,063,748     1,343     0.50  
    Savings accounts     376,965     47     0.05  
    Certificates of deposit     842,099     3,250     1.53  
        Total interest bearing deposits     2,372,105     4,687     0.78  
  Borrowed Funds     867,438     6,775     3.10  
      Total interest-bearing liabilities     3,239,543   $ 11,462     1.40 %
  Non-interest bearing checking accounts     175,010              
  Other non-interest-bearing liabilities     154,893              
      Total liabilities     3,569,446              
  Stockholders' equity     428,396              
Total liabilities and stockholders' equity   $ 3,997,842              
Net interest income         $ 30,767        
Net interest spread                 3.04 %
Net interest-earning assets   $ 563,863              
Net interest margin                 3.24 %
Ratio of interest-earning assets to interest-bearing liabilities           117.41 %      
                     
Deposits (including non-interest bearing checking accounts)                    
    $ 2,547,115   $ 4,687     0.73 %
                     
SUPPLEMENTAL INFORMATION                    
Loan prepayment and late payment fee income         $ 3,216        
Borrowing prepayment costs           -        
Real estate loans (excluding prepayment and late payment fees)                 4.16 %
Interest earning assets (excluding prepayment and late payment fees)                 4.10 %
Borrowings (excluding prepayment costs)   $ 867,438   $ 6,775     3.10 %
Interest bearing liabilities (excluding borrowing prepayment costs)                 1.40 %
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)         $ 27,551        
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)                 2.90 %
                     
                 
    For the Three Months Ended  
    September 30, 2013  
              Average  
    Average         Yield/  
    Balance   Interest     Cost  
Assets:                    
  Interest-earning assets:                    
    Real estate loans   $ 3,644,557   $ 42,451     4.66 %
    Other loans     2,288     25     4.37  
    Mortgage-backed securities     35,219     310     3.52  
    Investment securities     29,122     84     1.15  
    Other short-term investments     70,857     416     2.35  
      Total interest earning assets     3,782,043   $ 43,286     4.58 %
  Non-interest earning assets     198,797              
Total assets   $ 3,980,840              
                     
Liabilities and Stockholders' Equity:                    
  Interest-bearing liabilities:                    
    Interest Bearing Checking accounts   $ 88,471   $ 49     0.22 %
    Money Market accounts     1,122,644     1,413     0.50  
    Savings accounts     380,088     48     0.05  
    Certificates of deposit     862,792     3,398     1.56  
        Total interest bearing deposits     2,453,995     4,908     0.79  
  Borrowed Funds     810,191     6,725     3.29  
      Total interest-bearing liabilities     3,264,186   $ 11,633     1.41 %
  Non-interest bearing checking accounts     169,845              
  Other non-interest-bearing liabilities     129,350              
      Total liabilities     3,563,381              
  Stockholders' equity     417,459              
Total liabilities and stockholders' equity   $ 3,980,840              
Net interest income         $ 31,653        
Net interest spread                 3.17 %
Net interest-earning assets   $ 517,857              
Net interest margin                 3.35 %
Ratio of interest-earning assets to interest-bearing liabilities           115.86 %      
                     
Deposits (including non-interest bearing checking accounts)   $ 2,623,840   $ 4,908     0.74 %
                     
SUPPLEMENTAL INFORMATION                    
Loan prepayment and late payment fee income         $ 3,467        
Borrowing prepayment costs           -        
Real estate loans (excluding prepayment and late payment fees)                 4.28 %
Interest earning assets (excluding prepayment and late payment fees)                 4.21 %
Borrowings (excluding prepayment costs)   $ 810,191   $ 6,725     3.29 %
Interest bearing liabilities (excluding borrowing prepayment costs)                 1.41 %
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)         $ 28,186        
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)                 2.98 %
                     
                 
    For the Three Months Ended  
    December 31, 2012  
              Average  
    Average         Yield/  
    Balance   Interest     Cost  
Assets:                    
  Interest-earning assets:                    
    Real estate loans   $ 3,440,784   $ 45,414     5.28 %
    Other loans     2,352     28     4.76  
    Mortgage-backed securities     60,129     569     3.79  
    Investment securities     48,089     220     1.83  
    Other short-term investments     134,776     518     1.54  
      Total interest earning assets     3,686,130   $ 46,749     5.07 %
  Non-interest earning assets     204,290              
Total assets   $ 3,890,420              
                     
Liabilities and Stockholders' Equity:                    
  Interest-bearing liabilities:                    
    Interest Bearing Checking accounts   $ 94,870   $ 96     0.40 %
    Money Market accounts     929,856     1,296     0.55  
    Savings accounts     369,796     138     0.15  
    Certificates of deposit     910,335     3,800     1.66  
        Total interest bearing deposits     2,304,857     5,330     0.92  
    Borrowed Funds     876,604     32,868     14.92  
      Total interest-bearing liabilities     3,181,461   $ 38,198     4.78 %
    Non-interest bearing checking accounts     154,528              
    Other non-interest-bearing liabilities     173,063              
      Total liabilities     3,509,052              
  Stockholders' equity     381,368              
Total liabilities and stockholders' equity   $ 3,890,420              
Net interest income         $ 8,551        
Net interest spread                 0.29 %
Net interest-earning assets   $ 504,669              
Net interest margin                 0.93 %
Ratio of interest-earning assets to interest-bearing liabilities           115.86 %      
                     
Deposits (including non-interest bearing checking accounts)   $ 2,459,385   $ 5,330     0.86 %
                     
SUPPLEMENTAL INFORMATION                    
Loan prepayment and late payment fee income         $ 3,708        
Borrowing prepayment costs         $ 25,582        
Real estate loans (excluding prepayment and late payment fees)                 4.85 %
Interest earning assets (excluding prepayment and late payment fees)                 4.67 %
Borrowings (excluding prepayment costs)   $ 867,438   $ 7,286     3.31 %
Interest bearing liabilities (excluding borrowing prepayment costs)                 1.58 %
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)         $ 30,425        
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)                 3.30 %
                     
                     
                     
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES  
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS  
(Dollars In thousands)  
       
    At
December 31,
    At
September 30,
    At
December 31,
 
Non-Performing Loans   2013     2013     2012  
  One- to four-family and cooperative apartment   $ 1,242     $ 1,136     $ 938  
  Multifamily residential and mixed use residential real estate (1)(2)     1,197       1,993       507  
  Mixed use commercial real estate (2)     4,400       -       1,170  
  Commercial real estate     5,707       5,707       6,265  
  Construction     -       -       -  
  Other     3       2       8  
Total Non-Performing Loans (3)   $ 12,549     $ 8,838     $ 8,888  
Other Non-Performing Assets                        
  Other real estate owned     18       -       -  
  Pooled bank trust preferred securities (4)     898       897       892  
  Non-performing loans held for sale:                     -  
    Mixed use commercial real estate     -       -       -  
    Multifamily residential and mixed use residential real estate     -       -       560  
Total Non-Performing Assets   $ 13,465     $ 9,735     $ 10,340  
                         
Troubled Debt Restructurings ("TDRs") not included in non-performing loans (3)                  
  One- to four-family and cooperative apartment     934       938       948  
  Multifamily residential and mixed use residential real estate (1)(2)     1,148       1,899       1,953  
  Mixed use commercial real estate (2)     -       711       729  
  Commercial real estate     16,538       29,570       41,228  
Total Performing TDRs   $ 18,620     $ 33,118     $ 44,858  
                         
(1) Includes loans underlying cooperatives.  
   
(2) While the loans within these categories are often considered "commercial real estate" in nature, they are classified separately in the table above to provide further emphasis of the discrete composition of their underlying real estate collateral.  
   
(3) Total non-performing loans include some loans that were modified in a manner that met the criteria for a TDR. These non-accruing TDRs, which totaled $5,707 at December 31, 2013, $5,707 at September 30, 2013 and $6,265 at December 31, 2012, are included in the non-performing loan table, but excluded from the TDR amount shown above.  
   
(4) These assets were deemed non-performing since the Company had, as of the dates indicated, not received any payments of principal or interest on them for a period of at least 90 days.  
                         
                         
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES           
                   
    At
December 31,
    At
September 30,
    At
December 31,
 
    2013     2013     2012  
Total Non-Performing Assets   $ 13,465     $ 9,735     $ 10,340  
Loans 90 days or more past due on accrual status (5)     1,031       1,398       190  
  TOTAL PROBLEM ASSETS   $ 14,496     $ 11,133     $ 10,530  
                         
Tier One Capital - The Dime Savings Bank of Williamsburgh   $ 376,717     $ 404,022     $ 383,042  
Allowance for loan losses     20,153       20,540       20,550  
  TANGIBLE CAPITAL PLUS RESERVES   $ 396,870     $ 424,562     $ 403,592  
                         
PROBLEM ASSETS AS A PERCENTAGE OF                        
  TANGIBLE CAPITAL AND RESERVES     3.7 %     2.6 %     2.6 %
                         
(5) These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed within the following twelve months, and were not expected to result in any loss of contractual principal or interest. These loans are not included in non-performing loans.  
   

Contact Information

  • Contact:
    Kenneth Ceonzo
    Director of Investor Relations
    718-782-6200 extension 8279