http://media.marketwire.com/attachments/200904/519426_dcomblue2009.jpghttp://at.marketwire.com/accesstracking/AccessTrackingLogServlet?PrId=977496&ProfileId=051205&sourceType=1BROOKLYN, NY -- (Marketwire) -- 01/24/13 -- 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 At September At December
31, 2012 30, 2012 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 At September At December
31, 2012 30, 2012 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:
Kenneth Ceonzo
Director of Investor Relations
718-782-6200 extension 8279