SOURCE: Dime Community Bancshares, Inc.

Dime Community Bancshares, Inc.

January 24, 2013 08:00 ET

Dime Community Bancshares Reports Earnings

Over $450 Million in Loans Closed During the Quarter, Representing a 22% Annualized Loan Growth Rate

BROOKLYN, NY--(Marketwire - Jan 24, 2013) - 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, 2012.

Consolidated net income for the quarter ended December 31, 2012 was $6.7 million, or 19 cents per diluted share, compared to $11.8 million, or 34 cents per diluted share, for the quarter ended September 30, 2012, and $12.7 million, or 38 cents per diluted share, for the quarter ended December 31, 2011.

During the quarter ended December 31, 2012, the Company recognized an after-tax charge of $14.0 million, or $0.40 per share, on the prepayment of borrowed funds, which was partially offset by after-tax gains of $7.5 million, or $0.22 per share, on the disposal of three real estate parcels. The Company also recognized an after tax gain of $487,000, or $0.01 per share, on the sale of an equity mutual fund investment. Excluding these three transactions, net income would have been $12.8 million, or $0.37 per diluted share, during the three months ended December 31, 2012.

Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "For those who tracked our loan pipeline at the end of last quarter, you know that we were anticipating a strong quarter for originations, and it is certainly reflected in this quarter's loan growth. It was also a very active quarter in other ways as well. In addition to growing the loan portfolio at a 22% annualized rate (supported by over $450 million of originations), $155 million of high cost, long-term borrowings were prepaid and three bank-owned properties were sold at a significant gain, offsetting a portion of the borrowing prepayment fee. The three parcels were comprised of vacant land in Williamsburg, Brooklyn, and two multi-tenant commercial parcels, each containing a Dime branch. As Dime will remain a tenant in only one of the parcels, by virtue of the deposits in the other branch being serviced in the future by a branch less than a quarter mile away, operating expenses will be reduced modestly. Absent these material transactions, earnings would have been 37 cents per diluted share, three cents ahead of the prior quarter."

Mr. Palagiano continued, "Once again, the Company reported a solid quarter, as elevated loan refinance activity contributed approximately six cents to diluted earnings per share via prepayment fee income, and virtually no credit costs were recognized, as our loan portfolio continued its remarkable performance."

Net income was $40.3 million, or $1.17 per diluted share, for the year ended December 31, 2012. Excluding the significant financial transactions that occurred during the fourth quarter, net income would have been $46.4 million, or $1.35 per diluted share. This would have represented the 3rd highest level achieved by the Company since its initial public offering in 1996.

Mr. Palagiano noted, "Late in 2012, Dime transitioned from a period of no-growth to more of a measured-growth strategy, with an expectation that the Fed will adhere to its projection for maintaining low short-term interest rates through the end of 2015, and that credit costs will remain at current levels. The leverage capital ratio at the Bank level was 9.98% as of year-end (with a total risk based capital ratio of 13.7%), which is well above both regulatory, and bank-defined, guidelines for remaining well-capitalized. This leaves plenty of room for traditional capital leverage, and enhanced revenues from an expanding balance sheet should help to mitigate some of the pressure on earnings from a contracting net interest margin. The Bank typically ranks among the top 5 multifamily lenders in its delineated lending market (primarily Manhattan, Brooklyn and Queens), and our expectation is that this will continue in 2013."

Mr. Palagiano concluded, "I want to once again thank our officers and staff for all of their efforts that contributed to the successful results achieved in 2012."

OPERATING RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2012

Net Interest Margin
The interest (or "make whole") fee to prepay borrowings caused a 278 basis point drag on net interest margin ("NIM") during the quarter, which led to a reported NIM of 0.93% during the December 2012 quarter, compared to a reported NIM of 3.59% during the September 2012 quarter. For forecasting purposes, the "core" NIM, excluding both the effect of loan prepayment fees and borrowing prepayment charges, increased from 3.24% during the September 2012 quarter to 3.30% during the December 2012 quarter, reflecting a decline of 15 basis points in the average cost of interest bearing liabilities that was partially offset by a decline of 8 basis points in the average yield on interest earning assets (primarily reflecting a reduction of 27 basis points in the average yield on real estate loans exclusive of the effects of prepayment fee income).

The reduction in the average cost of interest bearing liabilities primarily reflected the benefits of the prepayment of the $155.0 million of higher cost borrowed funds that occurred early in the quarter ended December 31, 2012. In addition, the average cost of deposits declined by 2 basis points as the Company continued to avail itself of the beneficially low deposit offering rates in its market.

A reduction of $114.9 million in the combined average balance of investment securities and other short-term investments also contributed favorably to the increase in the adjusted NIM, as the average yield on a substantial portion of these assets approximated 0.50% and had a negative carrying cost (asset yield below the cost of funding) to the Company.

Because the Company utilized $155.0 million of its liquid cash balances to prepay borrowings, cash balances ended the year at $79.1 million, down from $194.7 million at September 30, 2012.

The 27 basis point decline in the average yield on real estate loans (excluding the effects of prepayment fee income) on a linked quarter basis resulted from portfolio refinance and amortization activities, and reflected marketplace competition which produced tighter spreads on multifamily loans, as U.S. Treasury yields continued to hover at historically low levels.

Net Interest Income
Net interest income was $8.6 million in the quarter ended December 31, 2012, down $24.8 million from the September 2012 quarter and down $25.6 million from the $34.1 million reported in the December 2011 quarter. These reductions resulted primarily from the $25.6 million pre-tax charge on the borrowing prepayment. Prepayment fee income on loans totaled $3.7 million during the December 2012 quarter, compared to $3.3 million recognized in the September 2012 quarter and $1.9 million during the December 2011 quarter. Absent the impact of loan prepayment fee income and borrowing prepayment costs, net interest income was $30.4 million during the December 31, 2012 quarter, up $359,000 from the September 2012 quarter and down $1.8 million from the December 31, 2011 quarter. The decline in net interest income (absent the impact of loan prepayment fee income and borrowing prepayment costs) from the December 2011 quarter resulted primarily from a decline of 35 basis points in the average yield earned on the Company's interest earning assets, reflecting the ongoing asset repricing throughout this prolonged period of accommodative monetary policy.

Provision/Allowance For Loan Losses
The Company recognized net charge-offs of $207,000 on real estate loans during the December 2012 quarter, and determined that only a minor provision for loan losses of $63,000 was warranted during the same period. This led to a net decrease of $144,000 in the allowance for loan losses during the quarter ended December 31, 2012.

At December 31, 2012, the allowance for loan losses as a percentage of total loans stood at 0.59%, down from 0.62% at the close of the prior quarter, primarily attributable to the growth in the loan portfolio and a small reduction in the allowance for loan losses during the December 2012 quarter.

Non-Interest Income
Non-interest income was $16.5 million for the quarter ended December 31, 2012, an increase of $13.9 million from the previous quarter, primarily reflecting the pre-tax gains of $13.7 million on the sales of the three real estate parcels and $887,000 on the sale of an equity mutual fund investment. Mortgage banking income increased $34,000 due to a larger recovery recognized on the liability for the first loss position on loans sold with recourse to Fannie Mae during the comparative period. Partially offsetting the increase in mortgage banking income was a reduction related to loan servicing fees totaling $375,000. Excluding these non-recurring items, normalized non-interest income declined by approximately $439,000 on a linked quarter basis due primarily to lower fee income associated with ATM activities and loan commitments.

Non-Interest Expense
Non-interest expense was $14.7 million in the quarter ended December 31, 2012, down $1.1 million from the prior quarter, and $1.3 million below the forecasted level of $16.0 million, due primarily to an aggregate reduction in marketing and legal expenses of $708,000.

Non-interest expense was 1.51% of average assets during the most recent quarter. The efficiency ratio, excluding the impact of both the $25.6 million pre-tax borrowing prepayment charge and the gains recognized on the sales of both real estate and the equity mutual fund, approximated 40.9%. This remains among the lowest efficiency ratios in the industry, and is a longstanding hallmark of Dime.

Income Tax Expense
Due to tax benefits recognized as a result of the significant financial transactions that occurred during the period, the effective tax rate approximated 34% during the most recent quarter. Excluding those, the effective tax rate approximated 40% during the December 2012 quarter, slightly below the 41% forecasted level.

BALANCE SHEET
Total assets were $3.91 billion at December 31, 2012, down $49.0 million from September 30, 2012. Cash and due from banks and federal funds sold and other short-term investments declined by $115.6 million and $60.0 million respectively, as these liquid funds were utilized to both prepay $155.0 million of borrowings and pay semi-annual real estate tax payments out of escrow deposits.

Real estate loans increased approximately $180.0 million during the most recent quarter. Deposits also increased $60.3 million during the same period.

Real Estate Loans
Real estate loan originations were $454.5 million during the December 2012 quarter, at an average rate of 3.42%. Of this amount, $102.2 million represented loan refinances from the existing portfolio. Loan amortization and satisfactions, also including the $102.2 million of refinances of existing loans, totaled $253.3 million during the quarter, or 29.7% of the average portfolio balance on an annualized basis. The average rate on amortized or satisfied loan balances during the most recent quarter was 5.74%. Total loan commitments stood at $138.8 million at December 31, 2012, with a weighted average rate of 3.73%. The average yield on the loan portfolio (excluding prepayment fee income) during the quarter ended December 31, 2012 was 4.85%, compared to 5.12% during the September 2012 quarter and 5.39% during the December 2011 quarter.

Credit Summary
Non-performing loans (excluding loans held for sale) were $8.9 million, or 0.25% of total loans, at December 31, 2012, down from $10.7 million, or 0.32% of total loans, at September 30, 2012. Loans delinquent between 30 and 89 days and accruing interest were $7.2 million, or approximately 0.20% of total loans, at December 31, 2012, compared to $4.3 million, or 0.13% of total loans, at September 30, 2012.

The sum of non-performing assets represented 2.6% of tangible capital plus the allowance for loan losses (a statistic otherwise known as the "Texas Ratio") at December 31, 2012 (see table at the end of this release). This number compares very favorably to both industry and regional averages.

Within the pool of serviced loans previously sold to Fannie Mae with recourse exposure, total loans delinquent 30 days or more approximated $703,000 at December 31, 2012, down from $2.0 million at September 30, 2012. The remaining pool of loans serviced for Fannie Mae totaled $256.7 million as of December 31, 2012, down from $279.8 million as of September 30, 2012. Due to both ongoing amortization and stabilization of problem loans within the Fannie Mae portfolio, the Company determined that its liability for the first loss position could be reduced by $178,000, which was recognized during the quarter ended December 31, 2012.

As of December 31, 2012, the Company's loan portfolio had experienced only minor performance issues stemming from Hurricane Sandy, which, on October 28 and 29, 2012, caused extensive damage to real estate properties throughout its market area.

Deposits and Borrowed Funds
Deposits increased $60.3 million from September 30, 2012 to December 31, 2012, due primarily to net inflows of $76.0 million in money market deposits. The Bank is being somewhat more aggressive in its promotional deposit pricing as part of its long-term strategy to emphasize deposits to fund growth rather than borrowings. At December 31, 2012, average deposit balances approximated $95.4 million per branch. The Bank remains selective in the products, rates and terms on which it competes for deposits, focusing on products that encourage long-term customer retention, and discouraging renewals of promotional deposits in cases where customer relationships have not proved durable.

During the December 2012 quarter, the Company prepaid its entire $155.0 million balance of securities sold under agreements to repurchase borrowings and increased its Federal Home Loan Bank of New York ("FHLBNY") advances by $75.0 million. Despite the long-term goal to emphasize deposits to fund growth, the Company will continue to use FHLBNY advances to supplement deposit funding when appropriate.

Capital
The Company's consolidated tangible common equity ratio (Tier 1 core leverage) grew this quarter as a result of both retained earnings and a reduction in tangible assets. Consolidated tangible capital was 8.97% of tangible assets at December 31, 2012, an increase of 21 basis points from September 30, 2012. The Company also had approximately $70.7 million of trust preferred debt securities outstanding at December 31, 2012, which, when added to Tier 1 (tangible) capital, increased its consolidated Tier 1 (tangible) capital ratio to approximately 10.4%.

The Bank's tangible capital ratio was 9.98% at December 31, 2012, up from 9.83% at September 30, 2012. The Bank's Total Risk-Based Capital Ratio was 13.67% at December 31, 2012, compared to 14.33% at September 30, 2012.

Reported earnings per share exceeded the quarterly cash dividend rate per share by 36%. Excluding the effects of the significant financial transactions that occurred during the most recent quarter, earnings per share exceeded the quarterly cash dividend rate per share by 164%, a 38% payout ratio. Despite the charge on the borrowing prepayment, additions to capital from earnings and stock option exercises during the most recent quarterly period caused tangible book value per share to increase $0.09 sequentially during the most recent quarter, to $9.67 at December 31, 2012.

OUTLOOK FOR THE QUARTER ENDING MARCH 31, 2013
At December 31, 2012, Dime had outstanding loan commitments accepted totaling $138.8 million (of which $66 million related to loan refinances from the current portfolio), all of which are likely to close during the quarter ending March 31, 2013. Total loan originations for the first quarter of 2013 are expected to approximate $225 million at an average interest rate expected to approximate 3.5%.

As discussed earlier in the release, the Company has transitioned into a period of measured loan portfolio and balance sheet growth, in part to utilize capital efficiently and in part to mitigate the effects of a contracting margin. For the year ending December 31, 2013, balance sheet growth is targeted to approximate 5.0%, subject to change to reflect market conditions. Loan prepayments and amortization remained elevated during the most recent quarter, however, are currently anticipated to fall below their 30% annualized 2012 level during the year ending December 2013, and are expected to approximate 25% - 30% during the March 2013 quarter.

On the liability side, deposit funding costs are expected to remain near current historically low levels through the first quarter of 2013. The Bank has $146.0 million of CDs maturing at an average cost of 0.86% during the quarter ending March 31, 2013. Offering rates on 12-month term CDs currently approximate 50 basis points. The Company has $95.0 million of borrowings (predominantly short-term in nature) due to mature during the quarter ending March 31, 2013. The Company currently anticipates they will be replaced with deposits. Beginning this month, the Bank initiated a deposit campaign, using promotional rates, which is receiving a successful response. Through this release date, over $60 million of deposits have been raised. As a result, there should be some slight increase in cost of deposits, as measured on a linked quarter basis.

If current positive credit trends continue, as expected, loan loss provisioning will continue to be a function only of loan portfolio growth.

Absent any unforeseen items, non-interest expense is expected to approximate $15.5 million during the March 2013 quarter.

The Company projects that the consolidated effective tax rate will approximate 41.0% in the March 2013 quarter.

ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company (NASDAQ: DCOM) had $3.91 billion in consolidated assets as of December 31, 2012, and is the parent company of the Bank. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-six 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,  
  2012     2012     2011  
ASSETS:                
Cash and due from banks $ 79,076     $ 194,702     $ 43,309  
Investment securities held to maturity   5,927       5,957       6,511  
Investment securities available for sale   32,950       55,026       174,868  
Trading securities   4,874       3,432       1,774  
Mortgage-backed securities available for sale   49,021       81,792       93,877  
Federal funds sold and other short-term investments   -       59,999       951  
Real Estate Loans:                      
  One-to-four family and cooperative apartment   91,876       88,825       100,712  
  Multifamily and underlying cooperative (1)   2,670,973       2,490,470       2,599,456  
  Commercial real estate (1)   735,224       739,509       751,586  
  Construction and land acquisition   476       528       3,199  
  Unearned discounts and net deferred loan fees   4,836       4,169       3,463  
  Total real estate loans   3,503,385       3,323,501       3,458,416  
  Other loans   2,423       2,492       2,449  
  Allowance for loan losses   (20,550 )     (20,694 )     (20,254 )
Total loans, net   3,485,258       3,305,299       3,440,611  
Loans held for sale   560       387       3,022  
Premises and fixed assets, net   30,518       33,363       32,646  
Federal Home Loan Bank of New York capital stock   45,011       41,636       49,489  
Goodwill   55,638       55,638       55,638  
Other assets   116,566       117,127       118,484  
TOTAL ASSETS $ 3,905,399     $ 3,954,358     $ 4,021,180  
LIABILITIES AND STOCKHOLDERS' EQUITY:                      
Deposits:                      
Non-interest bearing checking $ 159,144     $ 151,269     $ 141,079  
Interest Bearing Checking   95,159       91,514       99,308  
Savings   371,792       365,977       353,708  
Money Market   961,359       885,388       772,055  
  Sub-total   1,587,454       1,494,148       1,366,150  
Certificates of deposit   891,975       925,018       977,551  
Total Due to Depositors   2,479,429       2,419,166       2,343,701  
Escrow and other deposits   82,753       111,066       71,812  
Securities sold under agreements to repurchase   -       155,000       195,000  
Federal Home Loan Bank of New York advances   842,500       767,500       939,775  
Trust Preferred Notes Payable   70,680       70,680       70,680  
Other liabilities   38,463       43,408       39,178  
TOTAL LIABILITIES   3,513,825       3,566,820       3,660,146  
STOCKHOLDERS' EQUITY:                      
Common stock ($0.01 par, 125,000,000 shares authorized, 52,021,149 shares, 51,905,791 shares and 51,566,098 shares issued at December 31, 2012, September 30, 2012 and December 31, 2011, respectively,and 35,714,269 shares, 35,598,196 shares and 35,109,045 shares outstanding at December 31, 2012, September 30, 2012 and December 31, 2011, respectively)   520       519       516  
Additional paid-in capital   239,041       237,192       231,521  
Retained earnings   379,166       377,266       358,079  
Unallocated common stock of Employee Stock Ownership Plan   (3,007 )     (3,065 )     (3,239 )
Unearned common stock of Restricted Stock Awards   (3,122 )     (3,594 )     (3,037 )
Common stock held by the Benefit Maintenance Plan   (8,800 )     (8,800 )     (8,655 )
Treasury stock (16,306,880 shares, 16,307, 595 shares and 16,457,053 shares at December 31, 2012, September 30, 2012 and December 31, 2011, respectively)   (202,584 )     (202,584 )     (204,442 )
Accumulated other comprehensive loss, net   (9,640 )     (9,396 )     (9,709 )
TOTAL STOCKHOLDERS' EQUITY   391,574       387,538       361,034  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,905,399     $ 3,954,358     $ 4,021,180  
                       
(1) While the loans within both of these categories are often considered "commercial real estate" in nature, they are classified separately in the statement above to provide further emphasis of the discrete composition of their underlying real estate collateral.  
   
   
   
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,  
    2012     2012     2011  
Interest income:                  
  Loans secured by real estate   $ 45,414     $ 45,963     $ 48,409  
  Other loans     28       28       23  
  Mortgage-backed securities     569       677       1,069  
  Investment securities     220       223       382  
  Federal funds sold and other short-term investments     518       582       551  
    Total interest income     46,749       47,473       50,434  
Interest expense:                        
  Deposits and escrow     5,330       5,302       6,050  
  Borrowed funds     32,868       8,773       10,257  
    Total interest expense     38,198       14,075       16,307  
      Net interest income     8,551       33,398       34,127  
Provision for loan losses     63       126       1,541  
Net interest income after provision for loan losses     8,488       33,272       32,586  
                         
Non-interest income:                        
  Service charges and other fees     605       1,244       827  
  Mortgage banking income, net     293       259       136  
  Other than temporary impairment ("OTTI")                        
  charge on securities (1)     -       -       (32 )
 
 
Gain on sale of securities and other assets  
 
 
 
14,704  
 
 
 
 
 
-  
 
 
 
 
 
-  
 
  Gain (loss) on trading securities     (23 )     67       71  
  Other     919       1,004       1,134  
    Total non-interest income     16,498       2,574       2,136  
Non-interest expense:                        
  Compensation and benefits     9,012       9,220       9,196  
  Occupancy and equipment     2,621       2,527       2,388  
  Federal deposit insurance premiums     500       502       455  
  Other     2,584       3,522       2,742  
    Total non-interest expense     14,717       15,771       14,781  
                         
    Income before taxes     10,269       20,075       19,941  
Income tax expense     3,534       8,280       7,214  
                         
Net Income   $ 6,735     $ 11,795     $ 12,727  
                         
Earnings per Share:                        
  Basic   $ 0.19     $ 0.34     $ 0.38  
  Diluted   $ 0.19     $ 0.34     $ 0.38  
                         
Average common shares outstanding for Diluted EPS      34,594,167       34,497,817       33,926,905  
                         
(1) Total OTTI charges on securities are summarized as follows for the periods presented:                        
Credit component (shown above)   $ -     $ -     $ 32  
Non-credit component not included in earnings     -       -       -  
Total OTTI charges   $ -     $ -     $ 32  
                         
                         
                         
      For the Twelve Months Ended          
      December 31,       December 31,          
      2012       2011          
Interest income:                        
  Loans secured by real estate   $ 189,149     $ 200,034          
  Other loans     104       97          
  Mortgage-backed securities     3,025       5,043          
  Investment securities     1,263       1,401          
  Federal funds sold and other short-term investments                        
    2,413       2,641          
    Total interest income     195,954       209,216          
Interest expense:                        
  Deposits and escrow     21,779       26,131          
  Borrowed funds     64,333       43,583          
    Total interest expense     86,112       69,714          
      Net interest income     109,842       139,502          
Provision for loan losses     3,921       6,846          
Net interest income after provision for loan losses                        
  105,921       132,656          
                         
Non-interest income:                        
  Service charges and other fees     3,445       3,662          
  Mortgage banking income, net     1,768       569          
  Other than temporary impairment ("OTTI")                        
  charge on securities (1)     (181 )     (727 )        
  Gain on sale of securities and other assets     14,748       28          
  Gain (loss) on trading securities     113       (26 )        
  Other     3,956       4,423          
    Total non-interest income     23,849       7,929          
Non-interest expense:                        
  Compensation and benefits     37,647       36,600          
  Occupancy and equipment     10,052       10,129          
  Federal deposit insurance premiums     2,057       2,618          
  Other     12,816       12,341          
    Total non-interest expense     62,572       61,688          
                         
    Income before taxes     67,198       78,897          
Income tax expense     26,890       31,588          
                         
Net Income   $ 40,308     $ 47,309          
                         
Earnings per Share:                        
  Basic   $ 1.18     $ 1.40          
  Diluted   $ 1.17     $ 1.40          
                         
Average common shares outstanding for Diluted EPS     34,364,453       33,801,427          
                         
(1) Total OTTI charges on securities are summarized as follows for the periods presented:                        
Credit component (shown above)   $ 181     $ 727          
Non-credit component not included in earnings     6       25          
Total OTTI charges   $ 187     $ 752          
                         
                         
                         
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,  
  2012     2012     2011  
                 
Reconciliation of Reported and Adjusted Earnings (1):                
Net Income $ 6,735     $ 11,795     $ 12,727  
Add: After-tax expense associated the prepayment of borrowings   14,032       -       -  
Add: After-tax charge for OTTI on securities   -       -       18  
Less: After tax gain on sale of real estate properties   (7,529 )     -       -  
Less: After tax gain on sale of equity mutual funds   (487 )     -       -  
Less: Non-recurring recovery of income tax liability   -       -       (1,088 )
Adjusted net income $ 12,751     $ 11,795     $ 11,657  
                       
Performance Ratios (Based upon Reported Earnings):                      
Reported EPS (Diluted) $ 0.19     $ 0.34     $ 0.38  
Return on Average Assets   0.69 %     1.21 %     1.26 %
Return on Average Stockholders' Equity   7.06 %     12.32 %     14.19 %
Return on Average Tangible Stockholders' Equity   7.97 %     14.05 %     16.42 %
Net Interest Spread   0.29 %     3.38 %     3.31 %
Net Interest Margin   0.93 %     3.59 %     3.54 %
Non-interest Expense to Average Assets   1.51 %     1.62 %     1.46 %
Efficiency Ratio   141.95 %     43.92 %     40.80 %
Effective Tax Rate   34.41 %     41.25 %     36.18 %
                       
Performance Ratios (Based upon Adjusted Earnings):                      
Reported EPS (Diluted) $ 0.37     $ 0.34     $ 0.34  
Return on Average Assets   1.31 %     1.21 %     1.15 %
Return on Average Stockholders' Equity   13.37 %     12.32 %     13.00 %
Return on Average Tangible Stockholders' Equity   15.09 %     14.05 %     15.04 %
Net Interest Spread   3.09 %     3.38 %     3.31 %
Net Interest Margin   3.30 %     3.59 %     3.54 %
Non-interest Expense to Average Assets   1.51 %     1.62 %     1.46 %
Efficiency Ratio   40.94 %     43.92 %     40.80 %
Effective Tax Rate   39.96 %     41.25 %     41.63 %
                       
Book Value and Tangible Book Value Per Share:                      
Stated Book Value Per Share $ 10.96     $ 10.89     $ 10.28  
Tangible Book Value Per Share   9.67       9.58       8.97  
                       
Average Balance Data:                      
Average Assets $ 3,890,420     $ 3,900,029     $ 4,054,595  
Average Interest Earning Assets   3,686,130       3,716,268       3,860,798  
Average Stockholders' Equity   381,368       383,031       358,717  
Average Tangible Stockholders' Equity   337,961       335,709       309,969  
Average Loans   3,443,136       3,332,417       3,449,209  
Average Deposits   2,459,385       2,395,680       2,354,877  
                       
Asset Quality Summary:                      
Net charge-offs (recoveries) $ 207     $ (325 )   $ 2,863  
Non-performing Loans (2)   8,888       10,690       25,952  
Non-performing Loans/ Total Loans   0.25 %     0.32 %     0.75 %
Nonperforming Assets (3) $ 10,340     $ 11,580       29,985  
Nonperforming Assets/Total Assets   0.26 %     0.29 %     0.75 %
Allowance for Loan Loss/Total Loans   0.59 %     0.62 %     0.58 %
Allowance for Loan Loss/Non-performing Loans   217.51 %     193.59 %     78.04 %
Loans Delinquent 30 to 89 Days at period end $ 7,171     $ 4,322     $ 9,281  
                       
Consolidated Tangible Stockholders' Equity to                      
  Tangible Assets at period end   8.97 %     8.76 %     7.95 %
                       
Regulatory Capital Ratios (Bank Only):                      
Leverage Capital Ratio   9.98 %     9.83 %     9.11 %
Tier One Risk Based Capital Ratio   12.95 %     13.56 %     11.56 %
    13.67 %     14.33 %     12.24 %
Total Risk Based Capital Ratio
 
                       
(1) Adjusted earnings is a "non-GAAP" measure. A reconciliation from the comparable GAAP measure is provided herein.  
                       
(2) Amount excludes $560,000 of loans held for sale that were on non-accrual status at December 31, 2012.          
                       
(3) Amount comprised of total non-accrual loans, 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.  
           
                       
                       
    For the Twelve Months Ended          
    December 31,       December 31,          
    2012       2011          
                       
Reconciliation of Reported and Adjusted Earnings (1):                      
Net Income $ 40,308     $ 47,309          
Add: After-tax expense associated the prepayment of borrowings   14,032       61          
Add: After-tax charge for OTTI on securities   99       399          
Less: After tax gain on sale of real estate properties   (7,529 )     -          
Less: After tax gain on sale of equity mutual funds   (511 )     (7 )        
Less: Non-recurring recovery of income tax liability   -       (1,088 )        
Adjusted net income $ 46,399     $ 46,674          
                       
Performance Ratios (Based upon Reported Earnings):                      
Reported EPS (Diluted) $ 1.17     $ 1.40          
Return on Average Assets   1.02 %     1.16 %        
Return on Average Stockholders' Equity   10.73 %     13.65 %        
Return on Average Tangible Stockholders' Equity   12.24 %     15.93 %        
Net Interest Spread   2.58 %     3.38 %        
Net Interest Margin   2.92 %     3.60 %        
Non-interest Expense to Average Assets   1.59 %     1.51 %        
Efficiency Ratio   52.58 %     41.64 %        
Effective Tax Rate   40.02 %     40.04 %        
                       
Performance Ratios (Based upon Adjusted Earnings):                      
Reported EPS (Diluted) $ 1.35     $ 1.38          
Return on Average Assets   1.18 %     1.14 %        
Return on Average Stockholders' Equity   12.36 %     13.47 %        
Return on Average Tangible Stockholders' Equity   14.09 %     15.71 %        
Net Interest Spread   3.06 %     3.38 %        
Net Interest Margin   3.28 %     3.60 %        
Non-interest Expense to Average Assets   1.59 %     1.51 %        
Efficiency Ratio   42.34 %     41.64 %        
Effective Tax Rate   40.74 %     40.54 %        
                       
Book Value and Tangible Book Value Per Share:                      
Stated Book Value Per Share $ 10.96     $ 10.28          
Tangible Book Value Per Share   9.67       8.97          
                       
Average Balance Data:                      
Average Assets $ 3,947,043     $ 4,093,408          
Average Interest Earning Assets   3,762,007       3,875,803          
Average Stockholders' Equity   375,511       346,521          
Average Tangible Stockholders' Equity   329,282       297,041          
Average Loans   3,402,838       3,447,035          
Average Deposits   2,397,586       2,388,172          
                       
Asset Quality Summary:                      
Net charge-offs (recoveries) $ 3,707     $ 5,925          
Non-performing Loans (2)   9,448       25,952          
Non-performing Loans/ Total Loans   0.25 %     0.75 %        
Nonperforming Assets (3) $ 10,340       29,985          
Nonperforming Assets/Total Assets   0.26 %     0.75 %        
Allowance for Loan Loss/Total Loans   0.59 %     0.58 %        
Allowance for Loan Loss/Non-performing Loans   217.51 %     78.04 %        
Loans Delinquent 30 to 89 Days at period end $ 7,171     $ 9,281          
                       
Consolidated Tangible Stockholders' Equity to                      
  Tangible Assets at period end   8.97 %     7.95 %        
                       
Regulatory Capital Ratios (Bank Only):                      
Leverage Capital Ratio   9.98 %     9.11 %        
Tier One Risk Based Capital Ratio   12.95 %     11.56 %        
Total Risk Based Capital Ratio   13.67 %     12.24 %        
                       
(1) Adjusted earnings is a "non-GAAP" measure. A reconciliation from the comparable GAAP measure is provided herein.  
                       
(2) Amount excludes $560,000 of loans held for sale that were on non-accrual status at December 31, 2012.          
                       
(3) Amount comprised of total non-accrual loans, 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, 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) $ 876,604   $ 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
%
                   
                   
    For the Three Months Ended  
  September 30, 2012  
                Average  
Average    Yield/ 
    Balance    Interest    Cost 
Assets:                  
  Interest-earning assets:                  
    Real estate loans $ 3,329,996   $ 45,963     5.52 %
    Other loans   2,421     28     4.63  
    Mortgage-backed securities   86,037     677     3.15  
    Investment securities   97,926     223     0.91  
    Other short-term investments   199,888     582     1.16  
      Total interest earning assets   3,716,268   $ 47,473     5.11 %
  Non-interest earning assets   183,761              
Total assets $ 3,900,029              
                   
Liabilities and Stockholders' Equity:                  
   Interest-bearing liabilities:                  
    Interest Bearing Checking accounts $ 93,132   $ 48     0.21 %
    Money Market accounts   850,288     1,155     0.54  
    Savings accounts   365,976     141     0.15  
    Certificates of deposit   935,278     3,958     1.68  
      Total interest bearing deposits   2,244,674     5,302     0.94  
  Borrowed Funds   993,289     8,773     3.51  
    Total interest-bearing liabilities   3,237,963   $ 14,075     1.73 %
  Non-interest bearing checking accounts   151,006              
  Other non-interest-bearing liabilities   128,028              
    Total liabilities   3,516,997              
  Stockholders' equity   383,032              
Total liabilities and stockholders' equity $ 3,900,029              
Net interest income       $ 33,398        
Net interest spread               3.38 %
Net interest-earning assets $ 478,305              
Net interest margin               3.59 %
Ratio of interest-earning assets to interest-bearing liabilities        
114.77
%      
                   
Deposits (including non-interest bearing checking accounts)  
$2,395,680
   
$5,302
   
0.88
%
                   
SUPPLEMENTAL INFORMATION                  
Loan prepayment and late payment fee income       $ 3,332        
Borrowing prepayment costs         -        
Real estate loans (excluding prepayment and late payment fees)               5.12 %
Interest earning assets (excluding prepayment and late payment fees)               4.75 %
Borrowings (excluding prepayment costs) $ 993,289   $ 8,773     3.51 %
Interest bearing liabilities (excluding borrowing prepayment costs)               1.73 %
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)       $ 30,066        
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)              
3.24
%
                   
                   
    For the Three Months Ended  
  December 31, 2011  
                Average  
    Average           Yield/  
    Balance     Interest     Cost  
Assets:                  
  Interest-earning assets:                  
    Real estate loans $ 3,448,215   $ 48,409     5.62 %
    Other loans   994     23     9.26  
    Mortgage-backed securities   95,227     1,069     4.49  
    Investment securities   160,171     382     0.95  
    Other short-term investments   156,191     551     1.41  
      Total interest earning assets   3,860,798   $ 50,434     5.23 %
  Non-interest earning assets   193,797              
Total assets $ 4,054,595              
                   
Liabilities and Stockholders' Equity:                  
  Interest-bearing liabilities:                  
    Interest Bearing Checking accounts $ 91,704   $ 55     0.24 %
    Money Market accounts   771,531     1,229     0.63  
    Savings accounts   350,155     181     0.21  
    Certificates of deposit   995,611     4,585     1.83  
      Total interest bearing deposits   2,209,001     6,050     1.09  
  Borrowed Funds   1,174,368     10,257     3.47  
    Total interest-bearing liabilities   3,383,369   $ 16,307     1.92 %
  Non-interest bearing checking accounts   145,876              
  Other non-interest-bearing liabilities   166,633              
    Total liabilities   3,695,878              
  Stockholders' equity   358,717              
Total liabilities and stockholders' equity $ 4,054,595              
Net interest income       $ 34,127        
Net interest spread               3.31 %
Net interest-earning assets $ 477,429              
Net interest margin               3.54 %
Ratio of interest-earning assets to interest-bearing liabilities        
114.11
%      
                   
Deposits (including non-interest bearing checking accounts) $ 2,354,877   $ 6,050     1.02 %
                   
SUPPLEMENTAL INFORMATION                  
Loan prepayment and late payment fee income       $ 1,940        
Borrowing prepayment costs         -        
Real estate loans (excluding prepayment and late payment fees)               5.39 %
Interest earning assets (excluding prepayment and late payment fees)               5.02 %
Borrowings (excluding prepayment costs) $ 1,174,368   $ 10,257     3.47 %
Interest bearing liabilities (excluding borrowing prepayment costs)               1.92 %
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)       $ 32,187        
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)              
3.33
%
                   
                   
                   
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES  
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS  
(Dollars In thousands)  
       
       
    At December 31, 2012     At September 30, 2012     At December 31, 2011  
Non-Performing Loans                        
  One- to four-family and cooperative apartment   $ 938     $ 1,150     $ 793  
  Multifamily residential and mixed use residential (1)     507       1,008       9,295  
  Mixed Use Commercial (1)     1,170       721       4,777  
  Commercial real estate     6,265       7,805       11,083  
  Construction     -       -       -  
  Other     8       6       4  
Total Non-Performing Loans (2)   $ 8,888     $ 10,690     $ 25,952  
Other Non-Performing Assets                        
  Other real estate owned     -       -       -  
  Non-performing mixed use commercial loans held for sale     560       -          
  Non-performing multifamily residential loans held for sale     -       -       393  
  Non-performing construction loans held for sale     -       -       2,628  
  Pooled bank trust preferred securities     892       890       1,012  
Total Non-Performing Assets   $ 10,340     $ 11,580     $ 29,985  
                         
Troubled Debt Restructurings ("TDRs") not included in non-performing loans                        
  One- to four-family and cooperative apartment     948       290       625  
  Multifamily residential and mixed use residential (1)     1,953       2,298       1,802  
  Mixed use commercial (1)     729       736       1,148  
  Commercial real estate     41,228       39,782       37,113  
  Construction     -       -       -  
  Other     -       -       -  
Total Performing TDRs   $ 44,858     $ 43,106     $ 40,688  
                         
(1) While the loans within these categories are often considered "commercial real estate" in nature, they are classified separately in the statement above to provide further emphasis of the discrete composition of their underlying real estate collateral.  
           
(2) Total non-performing loans include some loans that have been modified in a manner that would meet the criteria for a TDR. These non-accruing TDR's, which totaled $6.3 million at December 31, 2012, $8.1 million at September 30, 2012 and $8.1 million at December 31, 2011, are included in the non-performing loan table, but excluded from the TDR amount shown above.  
           
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES  
                         
      At December 31, 2012       At September 30, 2012       At December 31, 2011  
Total Non-Performing Assets   $ 10,340     $ 11,580     $ 29,985  
Loans 90 days or more past due on accrual status (3)     190       -       3,820  
  PROBLEM ASSETS   $ 10,530     $ 11,580     $ 33,805  
                         
Tier One Capital - The Dime Savings Bank of Williamsburgh   $ 383,042     $ 381,700     $ 359,838  
Allowance for loan losses     20,550       20,694       20,254  
  TANGIBLE CAPITAL PLUS RESERVES   $ 403,592     $ 402,394     $ 380,092  
                         
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES     2.6 %     2.9 %     8.9 %
                         
(3) These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed within the next twelve months, and are 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