Dime Community Bancshares, Inc. Posts Quarterly Earnings
Quarterly EPS of $0.28; Annualized Loan Growth of 17%; Annualized Deposit Growth of 13%
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Dividend Yield: 5.6%
EPS Growth %: -58.7%
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BROOKLYN, NY -- (Marketwired) -- 10/22/15 -- 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 ended September 30, 2015. Consolidated net income for the quarter was $10.1 million, or $0.28 per diluted share, compared to $11.5 million, or $0.32 per diluted share, for the quarter ended June 30, 2015, and $11.8 million, or $0.33 per diluted share, for the quarter ended September 30, 2014.
Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "Loan prepayment fee income caused most of the variance in quarter-over-quarter EPS variance, dropping by $2 million, or roughly 3 cents per share, to $2.1 million. Loan growth remains substantial, the loan portfolio being up 17% annualized, and a weighted average rate on new loans of 3.44%, only slightly below the current loan portfolio yield of 3.66%. Deposit growth was also up by 13% annualized, with no change in cost of deposits on a linked quarter basis. Checking account growth, a primary initiative for the bank, was up 27% annualized, and, as a component of total deposits, has now reached 10.1%."
Mr. Palagiano continued, "We remain on pace to achieve our double digit growth target for 2015, and have been pleased with the success of our deposit gathering initiatives utilized to fund this growth. During the first nine months of 2015, we have experienced over 35% growth in business related deposits."
Management's Discussion of Quarterly Operating Results
- Net Interest Margin
Net interest margin ("NIM") was 2.84% during the quarter ended September 30, 2015, compared to 3.05% during the June 2015 quarter, and 3.09% during the September 2014 quarter. Income recognized from loan prepayment activity, which varies from quarter to quarter, had a positive impact on the Company's NIM during each of the reporting periods presented. However, the impact of prepayment activity was significantly lower during the September 2015 quarter. For the third quarter 2015, income from prepayment activity totaled $2.1 million, benefiting NIM by 19 basis points, compared to $4.1 million, or 39 basis points of impact upon NIM, during the quarter ended June 30, 2015. During the most recent quarter, the average yield on interest earning assets declined by 5 basis points (excluding prepayment income), while the average cost of funds declined by 6 basis points. The "core" NIM, which excludes the impact of prepayment income, was 2.65% during the September 2015 quarter, down only one basis point from the June 2015 quarter, and down slightly from 2.71% during the September 2014 quarter.
Core NIM is not expected to fluctuate significantly as long as the current interest rate environment remains in effect.
The average yield on real estate loans, exclusive of the impact of prepayment income, declined 7 basis points during the most recent quarter, as the average interest rate on amortized/satisfied loans continued to exceed the interest rate on newly originated loans. This was the primary contributor to the 5 basis point decline in the yield on interest earnings assets (excluding prepayment income) during the most recent quarter.
The 6 basis point decline in the average cost of funds during the most recent quarter resulted primarily from a 28 basis point reduction in the average cost of borrowings.
- Net Interest Income
Net interest income was $31.8 million in the quarter ended September 30, 2015, $1.3 million below the $33.1 million reported in the June 2015 quarter, and $145,000 below the $32.0 million reported in the September 2014 quarter. The reductions from both the June 2015 and September 2014 quarters resulted from lower loan prepayment income recognized during the September 2015 quarter. Loan prepayment income totaled $2.1 million, $4.2 million and $3.9 million during the respective September 2015, June 2015 and September 2014 quarters. The September 2015 quarterly average interest earning assets were $143.1 million higher than their June 2015 quarterly level and $339.9 million above their September 2014 quarterly level. This growth in average interest earning assets helped to partially offset the reduction to net interest income from the lower loan prepayment income recognized during the September 2015 quarter.
- Provision/Allowance For Loan Losses
A loan loss provision of $416,000 was recorded during the most recent quarter, due primarily to net growth of $185.5 million in loans during the period. Since net charge offs were nominal during the most recent quarter, the allowance for loan losses increased by nearly the full amount of the $416,000 quarterly provision during the period.
The bank's allowance, and periodic provision, for loan losses is significantly impacted by both loan portfolio growth (as reserves are established for new loans), and, for the great majority of loans, a rolling 4-year charge-off experience.
Throughout most of 2014, and the first six months of 2015, a benefit to the allowance and provision for loan losses that resulted from a reduction in the aggregate rolling 4-year loss experience exceeded the additional reserves required as a result of portfolio growth. This resulted in credits (negative provisions) to the allowance. In the September 2015 quarter, the added reserves from portfolio growth exceeded the benefit of the reduction in the aggregate rolling 4-year loss experience, resulting in a $416,000 provision.
Going forward, provided there are no new significant losses, the bank anticipates the next few quarters will require low or no provisioning, as these two significant components largely offset each other. Subsequently, any benefit from a reduction in the aggregate rolling 4-year loss experience is expected to be negligible.
- Non-Interest Income
Non-interest income was $1.9 million for the quarter ended September 30, 2015, an increase of $222,000 from the June 2015 quarter. The increase resulted primarily from higher seasonal administrative fees collected on portfolio loans. Non-interest income was $82,000 above the September 2014 quarter, due to additional income recognized from Bank Owned Life Insurance assets, as the Company purchased additional BOLI policies in October 2014.
- Non-Interest Expense
Non-interest expense was $16.1 million in the quarter ended September 30, 2015, down $242,000 from the June 2015 quarter, and approximately $200,000 below the $16.3 million projected level. Salaries and benefits expense were reduced by $165,000 during the September 2015 quarter as a result of market valuation adjustments on equity-based assets earmarked for future defined benefit payments.
Non-interest expense was 1.37% of average assets during the most recent quarter, compared to 1.44% during the June 2015 quarter. The efficiency ratio approximated 48% during the September 2015 quarter.
- Income Tax Expense
The effective tax rate approximated 41% during the most recent quarter, above the forecasted 39% level, due to adjustments resulting from the completion and filing of the 2014 tax return.
Management's Discussion of the September 30, 2015 Balance Sheet
Total assets were $4.83 billion at September 30, 2015, up $188.0 million, or 16.2% annualized, from June 30, 2015.
- Real Estate Loans
Real estate loan portfolio growth was $186.3 million on a net basis for the quarter. Real estate loan originations were $380.6 million, at a weighted average interest rate of 3.44%. Of this amount, $112.0 million represented loan refinances from the existing portfolio. Loan amortization and satisfactions totaled $195.0 million, or 17.8% (annualized) of the quarterly average portfolio balance, at an average rate of 4.24%. The average yield on the loan portfolio (excluding income recognized from prepayment activity) during the quarter ended September 30, 2015 was 3.66%, compared to 3.73% during the June 2015 quarter and 3.90% during the September 2014 quarter.
- Credit Summary
Non-performing loans were $1.6 million, or 0.04% of total loans, at September 30, 2015, up from $959,000, or 0.02% of total loans, at June 30, 2015. During the three months ended September 30, 2015, three real estate loans totaling $555,000 were added to non-accrual status. Accruing loans delinquent between 30 and 89 days were $2.6 million, or 0.06% of total loans, at September 30, 2015, compared to $349,000, or 0.01% of total loans, at June 30, 2015. This increase reflected a $2.2 million loan which became 30 to 89 days delinquent during the September 30, 2015 quarter. This loan is well secured and is therefore unlikely to remain a long-term concern.
The allowance for loan losses was 0.42% of total loans at September 30, 2015, down slightly from 0.43% at June 30, 2015.
At September 30, 2015, non-performing assets represented 1.2% of the sum of tangible capital plus the allowance for loan losses (this statistic is otherwise known as the "Texas Ratio") (see table at the end of this news release). This number compares very favorably to both national and regional industry averages.
- Deposits and Borrowed Funds
Increasing deposit funding, especially core deposit funding, is viewed as a significant component of the Company's long term strategic growth plan. Although total deposits grew at a meaningful rate of 13% annualized during the quarter, loans actually grew faster, at a 17% pace. Therefore the loan-to-deposit ratio grew from 146% at June 30, 2015 to 148% at September 30, 2015.
Deposits increased by $95.7 million during the quarter ended September 30, 2015, 13% annualized, with no change in cost of deposits on a linked quarter basis. Recent deposit gathering initiatives focused upon money markets and business checking accounts led to growth of $88.6 million and $18.2 million in their respective balances during the period. Offsetting this growth was a reduction of $10.6 million in certificates of deposits ("CDs"). Checking account growth, a primary initiative for the bank, was up 27% annualized, and, as a component of total deposits, has now reached 10.1%.
The bank recently announced that it will open a unique 500-square foot banking "community space" on Bedford Avenue in Williamsburg, Brooklyn. This new retail location, which is expected to open in 2016, will be designed around several ATMs and a free Wi-Fi center with charging station and a community bulletin board, among other elements. A nearby full service retail branch is also planned to open during the third quarter of 2016.
Total borrowings increased $36.0 million during the September 2015 quarter. During the first nine months of 2015, deposit growth has been emphasized in order to fund asset growth. However, since loan growth outpaced deposit growth in the most recent quarter, additional borrowings were needed during the period.
While the great majority of borrowing activity during the most recent quarter involved shorter-term Federal Home Loan Bank of New York advances, $62.5 million of longer-term fixed rate borrowings were undertaken with a weighted average term to maturity of 4.0 years and a weighted average cost of 1.51%. Similar duration borrowings will continue to be employed periodically to help mitigate interest rate risk.
- Capital
The bank and Company commenced compliance with the Basel III capital rules effective January 1, 2015. The consolidated leverage ratio (Tier 1 capital to average assets) was 10.91% at September 30, 2015, well in excess of all Basel III capital requirements (inclusive of conservation buffer amounts).
The bank's leverage ratio (Tier 1 capital to average assets) was 9.36% at September 30, 2015, down from 9.47% at June 30, 2015, as a result of asset growth of $188.0 million during the quarter. The bank's "Tier 1" and "Total" capital ratios were 12.04% and 12.57%, respectively, at September 30, 2015, also well in excess of the most stringent Basel III requirements.
Reported diluted earnings per share exceeded the quarterly cash dividend per share by 100% during the quarter ended September 30, 2015, equating to a 50% payout ratio. Additions to capital from earnings during the most recent quarterly period raised tangible book value per share by $0.15 sequentially, to $11.76 at September 30, 2015.
Outlook for the Quarter Ending December 31, 2015
At September 30, 2015, Dime had outstanding loan commitments totaling $209.0 million, all of which are likely to close during the quarter ending December 31, 2015, at an average interest rate approximating 3.31%. Loan prepayments and amortization are projected to fall within the targeted annualized range of 15% - 20% during the December 2015 quarter.
The Company has a balance sheet growth objective approximating 12% for the year ending December 31, 2015, with a preference toward utilizing retail deposits for most of its funding needs.
The Federal Open Market Committee recently elected to postpone monetary policy actions that had been anticipated to result in interest rate increases. As a result, deposit and borrowing funding costs are expected to remain near current historically low levels through the December 2015 quarter. During the quarter ending December 31, 2015, the bank has $190.2 million of CDs scheduled to mature at an average rate of 0.97%, and $403.0 million of borrowings maturing at an average rate of 0.81%. No significant increase or reduction in funding costs is anticipated to occur from the rollover or re-positioning of these funds.
Loan loss reserve provisions or credits will continue to depend upon annualized loan portfolio growth, incurred and anticipated losses, the aging of historical loss experience, and the overall performance of the loan portfolio.
Non‐interest expense is expected to approximate $16.2 million during the December 2015 quarter, in line with 2015 forecasted levels noted by management throughout the year.
The Company projects that the consolidated effective tax rate will approximate 40.0% in the December 2015 quarter.
Recently Disclosed Property Sale Transaction
The bank announced on October 7, 2015 that it had entered into an agreement to sell real estate parcels in Williamsburg, Brooklyn that are currently utilized as its primary back office operations center. This sale transaction, which is expected to close in February 2016, is currently expected to generate an after-tax profit in the range of $35 - $40 million. While the bank may execute a qualified like-kind property exchange under Section 1031 of the Internal Revenue Code, any such exchange will not impact the ultimate financial statement effect, as deferred income tax expense will be recorded on any financial statement gain recognized.
Utilizing an estimated after-tax gain of $37.5 million (the mid-point of the range noted above), and the components of the tangible book value calculation as of September 30, 2015, the sale transaction would be approximately $1.01 accretive to tangible book value during the quarter in which the closing occurs.
ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company (NASDAQ: DCOM) had $4.83 billion in consolidated assets as of September 30, 2015, and is the parent company of the bank. The bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-five branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Dime can be found on the Dime's Internet website at www.dime.com.
This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.
Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company's control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of Dime; changes in accounting principles, policies or guidelines may cause the Company's financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company's business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands except share amounts)
September 30, June 30, December 31,
2015 2015 2014
------------- ---------- -------------
ASSETS:
Cash and due from banks $ 74,073 $ 67,946 $ 78,187
Investment securities held to
maturity 5,349 5,300 5,367
Investment securities available
for sale 3,684 3,842 3,806
Trading securities 8,697 8,777 8,559
Mortgage-backed securities
available for sale 446 459 26,409
Federal funds sold and other
short-term investments - - 250
Real Estate Loans:
One-to-four family and
cooperative/condomnium
apartment 69,618 70,875 73,500
Multifamily and loans underlying
cooperatives (1) 3,560,134 3,426,991 3,292,753
Commercial real estate 853,633 799,882 745,463
Unearned discounts and net
deferred loan fees 7,239 6,561 5,695
------------- ---------- -------------
Total real estate loans 4,490,624 4,304,309 4,117,411
------------- ---------- -------------
Other loans 1,468 1,954 1,829
Allowance for loan losses (18,959) (18,553) (18,493)
------------- ---------- -------------
Total loans, net 4,473,133 4,287,710 4,100,747
------------- ---------- -------------
Loans held for sale - 333 -
Premises and fixed assets, net 15,296 15,263 25,065
Premises held for sale 8,799 8,799 -
Federal Home Loan Bank of New York
capital stock 54,348 52,728 58,407
Other Real Estate Owned 148 148 18
Goodwill 55,638 55,638 55,638
Other assets 132,881 137,592 134,654
------------- ---------- -------------
TOTAL ASSETS $ 4,832,492 $4,644,535 $ 4,497,107
============= ========== =============
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Deposits:
Non-interest bearing checking $ 229,436 $ 210,957 $ 187,593
Interest Bearing Checking 76,007 75,677 78,430
Savings 369,044 370,127 372,753
Money Market 1,467,303 1,378,718 1,094,698
------------- ---------- -------------
Sub-total 2,141,790 2,035,479 1,733,474
------------- ---------- -------------
Certificates of deposit 887,707 898,328 926,318
------------- ---------- -------------
Total Due to Depositors 3,029,497 2,933,807 2,659,792
------------- ---------- -------------
Escrow and other deposits 131,132 87,239 91,921
Federal Home Loan Bank of New York
advances 1,069,725 1,033,725 1,173,725
Trust Preferred Notes Payable 70,680 70,680 70,680
Other liabilities 47,579 41,137 41,264
------------- ---------- -------------
TOTAL LIABILITIES 4,348,613 4,166,588 4,037,382
------------- ---------- -------------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par,
125,000,000 shares authorized,
53,145,798 shares, 53,145,798
shares and 52,871,443 shares
issued at September 30, 2015,
June 30, 2015 and December 31,
2014,respectively, and 37,188,874
shares, 37,189,352 shares and
36,855,019 shares outstanding at
September 30, 2015, June 30, 2015
and December 31, 2014,
respectively) 532 532 529
Additional paid-in capital 259,906 259,637 254,358
Retained earnings 445,326 440,335 427,126
Accumulated other comprehensive
loss, net of deferred taxes (9,173) (9,349) (8,547)
Unallocated common stock of
Employee Stock Ownership Plan (2,371) (2,429) (2,545)
Unearned Restricted Stock Award
common stock (2,709) (3,165) (3,066)
Common stock held by the Benefit
Maintenance Plan (9,354) (9,354) (9,164)
Treasury stock (15,956,924 shares,
15,956,446 shares and 16,016,424
shares at September 30, 2015,
June 30, 2015 and December 31,
2014, respectively) (198,278) (198,260) (198,966)
------------- ---------- -------------
TOTAL STOCKHOLDERS' EQUITY 483,879 477,947 459,725
------------- ---------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,832,492 $4,644,535 $ 4,497,107
============= ========== =============
(1) While the loans within this category are often considered "commercial
real estate" in nature, multifamily and loans underlying cooperatives
are here reported separately from commercial real estate loans in order
to emphasize the residential nature of the collateral underlying this
significant component of the total loan portfolio.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In thousands except share and per share amounts)
For the Three Months Ended
-------------------------------------------
September 30, June 30, September 30,
2015 2015 2014
------------- ------------- -------------
Interest income:
Loans secured by real
estate $ 42,109 $ 43,473 $ 43,477
Other loans 22 24 26
Mortgage-backed securities 1 2 223
Investment securities 254 121 68
Federal funds sold and
other short-term
investments 510 578 551
------------- ------------- -------------
Total interest income 42,896 44,198 44,345
------------- ------------- -------------
Interest expense:
Deposits and escrow 5,890 5,670 4,976
Borrowed funds 5,192 5,458 7,410
------------- ------------- -------------
Total interest expense 11,082 11,128 12,386
------------- ------------- -------------
Net interest income 31,814 33,070 31,959
Provision (credit) for loan
losses 416 (1,135) (501)
------------- ------------- -------------
Net interest income after
provision (credit) for loan
losses 31,398 34,205 32,460
------------- ------------- -------------
Non-interest income:
Service charges and other
fees 1,013 799 1,084
Mortgage banking income,
net 41 41 71
Gain (loss) on sale of
securities and other
assets (138) (4) -
Gain (loss) on trading
securities - (21) (43)
Other 983 862 705
------------- ------------- -------------
Total non-interest income 1,899 1,677 1,817
------------- ------------- -------------
Non-interest expense:
Compensation and benefits 9,255 9,540 8,760
Occupancy and equipment 2,531 2,490 2,513
Federal deposit insurance
premiums 575 576 547
Other 3,763 3,760 2,904
------------- ------------- -------------
Total non-interest
expense 16,124 16,366 14,724
------------- ------------- -------------
Income before taxes 17,173 19,516 19,553
Income tax expense 7,092 7,987 7,788
------------- ------------- -------------
Net Income $ 10,081 $ 11,529 $ 11,765
============= ============= =============
Earnings per Share ("EPS"):
Basic $ 0.28 $ 0.32 $ 0.33
============= ============= =============
Diluted $ 0.28 $ 0.32 $ 0.33
============= ============= =============
Average common shares
outstanding for Diluted EPS 36,421,454 36,259,377 35,974,339
For the Nine Months Ended
----------------------------
September 30, September 30,
2015 2014
------------- -------------
Interest income:
Loans secured by real
estate $ 127,370 $ 126,311
Other loans 70 80
Mortgage-backed securities 184 707
Investment securities 544 274
Federal funds sold and
other short-term
investments 1,738 1,609
------------- -------------
Total interest income 129,906 128,981
------------- -------------
Interest expense:
Deposits and escrow 16,780 14,590
Borrowed funds 18,148 21,583
------------- -------------
Total interest expense 34,928 36,173
------------- -------------
Net interest income 94,978 92,808
Provision (credit) for loan
losses (891) (1,350)
------------- -------------
Net interest income after
provision(credit) for loan
losses 95,869 94,158
------------- -------------
Non-interest income:
Service charges and other
fees 2,562 2,507
Mortgage banking income,
net 154 1,153
Gain (loss) on sale of
securities and other
assets 1,287 649
Gain (loss) on trading
securities 35
Other 2,874 2,098
------------- -------------
Total non-interest income 6,877 6,442
------------- -------------
Non-interest expense:
Compensation and benefits 25,637 27,384
Occupancy and equipment 7,965 7,656
Federal deposit insurance
premiums 1,703 1,576
Other 11,049 9,229
------------- -------------
Total non-interest
expense 46,354 45,845
------------- -------------
Income before taxes 56,392 54,755
Income tax expense 23,004 22,496
------------- -------------
Net Income $ 33,388 $ 32,259
============= =============
Earnings per Share ("EPS"):
Basic $ 0.92 $ 0.90
============= =============
Diluted $ 0.92 $ 0.90
============= =============
Average common shares
outstanding for Diluted EPS 36,250,370 35,940,745
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars In thousands except per share amounts)
For the Three Months Ended
-------------------------------------------
September 30, June 30, September 30,
2015 2015 2014
------------- ------------- -------------
Reconciliation of Reported and
Adjusted ("Core") Net Income
(1):
Net Income $ 10,081 $ 11,529 $ 11,765
Less: After tax gain on sale of
securities - - -
Add: After-tax expense
associated with the prepayment
of borrowings - - -
Less: After tax gain on the
sale of real estate - - -
Less: After tax credit on
curtailment of postretirement
health benefits - - -
------------- ------------- -------------
Adjusted ("Core") net income $ 10,081 $ 11,529 $ 11,765
============= ============= =============
Performance Ratios (Based upon
Reported Net Income):
Reported Earnings Per Share
("EPS") (Diluted) $ 0.28 $ 0.32 $ 0.33
Return on Average Assets 0.86% 1.01% 1.09%
Return on Average Stockholders'
Equity 8.38% 9.78% 10.37%
Return on Average Tangible
Stockholders' Equity 9.28% 10.84% 11.74%
Net Interest Spread 2.69% 2.88% 2.92%
Net Interest Margin 2.84% 3.05% 3.09%
Non-interest Expense to Average
Assets 1.37% 1.44% 1.36%
Efficiency Ratio 47.63% 47.07% 43.54%
Effective Tax Rate 41.30% 40.93% 39.83%
Performance Ratios (Based upon
"Core Net Income" as
calculated above):
EPS (Diluted) $ 0.28 $ 0.32 $ 0.33
Return on Average Assets 0.86% 1.01% 1.09%
Return on Average Stockholders'
Equity 8.38% 9.78% 10.37%
Return on Average Tangible
Stockholders' Equity 9.28% 10.84% 11.74%
Net Interest Spread 2.69% 2.88% 2.92%
Net Interest Margin 2.84% 3.05% 3.09%
Non-interest Expense to Average
Assets 1.37% 1.44% 1.36%
Efficiency Ratio 47.63% 47.07% 43.54%
Effective Tax Rate 41.30% 40.93% 39.83%
Book Value and Tangible Book
Value Per Share:
Stated Book Value Per Share $ 13.01 $ 12.85 $ 12.38
Tangible Book Value Per Share 11.76 11.61 10.98
Average Balance Data:
Average Assets $ 4,691,008 $ 4,555,381 $ 4,321,228
Average Interest Earning Assets 4,478,684 4,335,579 4,138,802
Average Stockholders' Equity 481,069 471,628 453,813
Average Tangible Stockholders'
Equity 434,735 425,522 400,822
Average Loans 4,370,325 4,216,209 4,017,867
Average Deposits 2,988,325 2,911,493 2,636,593
Asset Quality Summary:
Net (recoveries) charge-offs $ 10 ($ 1,451) $ 34
Non-performing Loans (excluding
loans held for sale) 1,590 959 11,527
Non-performing Loans/ Total
Loans 0.04% 0.02% 0.28%
Nonperforming Assets (2) $ 2,965 $ 2,659 $ 13,929
Nonperforming Assets/Total
Assets 0.06% 0.06% 0.32%
Allowance for Loan Loss/Total
Loans 0.42% 0.43% 0.47%
Allowance for Loan Loss/Non-
performing Loans 1192.39% 1934.62% 165.69%
Loans Delinquent 30 to 89 Days
at period end $ 2,554 $ 349 $ 1,113
Consolidated Capital Ratios
Tangible Stockholders' Equity
to Tangible Assets at period 9.15% 9.40% 9.35%
Tier 1 Capital to Average
Assets (3) 10.91% 11.12% N/A
Regulatory Capital Ratios (Bank
Only):
Common Equity Tier 1 Capital to
Risk-Weighted Assets (3) 9.09% 9.30% N/A
Tier 1 Capital to Risk-Weighted
Assets ("Tier 1 Capital
Ratio") (3) 12.04% 12.44% N/A
Total Capital to Risk-Weighted
Assets ("Total Capital Ratio")
(3) 12.57% 12.99% N/A
Tier 1 Capital to Average
Assets (3) 9.36% 9.47% N/A
For the Nine Months Ended
----------------------------
September 30, September 30,
2015 2014
------------- -------------
Reconciliation of Reported and
Adjusted ("Core") Net Income
(1):
Net Income $ 33,388 $ 32,259
Less: After tax gain on sale of
securities (764) -
Add: After-tax expense
associated with the prepayment
of borrowings 750 -
Less: After tax gain on the
sale of real estate - (356)
Less: After tax credit on
curtailment of postretirement
health benefits (1,868) -
------------- -------------
Adjusted ("Core") net income $ 31,506 $ 31,903
============= =============
Performance Ratios (Based upon
Reported Net Income):
Reported Earnings Per Share
("EPS") (Diluted) $ 0.92 $ 0.90
Return on Average Assets 0.97% 1.01%
Return on Average Stockholders'
Equity 9.44% 9.62%
Return on Average Tangible
Stockholders' Equity 10.47% 10.95%
Net Interest Spread 2.72% 2.84%
Net Interest Margin 2.90% 3.04%
Non-interest Expense to Average
Assets 1.35% 1.44%
Efficiency Ratio 46.09% 46.51%
Effective Tax Rate 40.79% 41.08%
Performance Ratios (Based upon
"Core Net Income" as
calculated above):
EPS (Diluted) $ 0.87 $ 0.89
Return on Average Assets 0.92% 1.00%
Return on Average Stockholders'
Equity 8.90% 9.52%
Return on Average Tangible
Stockholders' Equity 9.88% 10.83%
Net Interest Spread 2.77% 2.84%
Net Interest Margin 2.94% 3.04%
Non-interest Expense to Average
Assets 1.45% 1.44%
Efficiency Ratio 48.81% 46.51%
Effective Tax Rate 40.52% 41.04%
Book Value and Tangible Book
Value Per Share:
Stated Book Value Per Share $ 13.01 $ 12.38
Tangible Book Value Per Share 11.76 10.98
Average Balance Data:
Average Assets $ 4,588,901 $ 4,258,512
Average Interest Earning Assets 4,372,022 4,071,994
Average Stockholders' Equity 471,789 446,962
Average Tangible Stockholders'
Equity 425,266 392,921
Average Loans 4,253,539 3,928,115
Average Deposits 2,883,537 2,596,830
Asset Quality Summary:
Net (recoveries) charge-offs ($ 1,357) ($ 295)
Non-performing Loans (excluding
loans held for sale) 1,590 11,527
Non-performing Loans/ Total
Loans 0.04% 0.28%
Nonperforming Assets (2) $ 2,965 $ 13,929
Nonperforming Assets/Total
Assets 0.06% 0.32%
Allowance for Loan Loss/Total
Loans 0.42% 0.47%
Allowance for Loan Loss/Non-
performing Loans 1192.39% 165.69%
Loans Delinquent 30 to 89 Days
at period end $ 2,554 $ 1,113
Consolidated Capital Ratios
Tangible Stockholders' Equity
to Tangible Assets at period 9.15% 9.35%
Tier 1 Capital to Average
Assets (3) 10.91% N/A
Regulatory Capital Ratios (Bank
Only):
Common Equity Tier 1 Capital to
Risk-Weighted Assets (3) 9.09% N/A
Tier 1 Capital to Risk-Weighted
Assets ("Tier 1 Capital
Ratio") (3) 12.04% N/A
Total Capital to Risk-Weighted
Assets ("Total Capital Ratio")
(3) 12.57% N/A
Tier 1 Capital to Average
Assets (3) 9.36% N/A
(1) Adjusted net income is a "non-GAAP" measure. A reconciliation from the
comparable GAAP measure is provided herein.
(2) Amount comprised of total non-accrual loans and the recorded balance of
pooled bank trust preferred security investments that were deemed to
meet the criteria of a non-performing asset.
(3) The ratios presented as of September 30, 2015 and June 30, 2015 are
based upon new regulatory capital measures that became effective on
January 1, 2015.
Since these ratios were not effective as of September 30, 2014,
comparative measures are not available as of that date, and are thus not
presented.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars In thousands)
For the Three Months Ended
--------------------------------
September 30, 2015
--------------------------------
Average
Average Yield/
Balance Interest Cost
---------- ---------- ---------
Assets:
Interest-earning assets:
Real estate loans $4,368,777 $ 42,109 3.86%
Other loans 1,548 22 5.68
Mortgage-backed securities 439 1 0.91
Investment securities 18,602 254 5.46
Federal funds sold and other short-
term investments 89,318 510 2.28
---------- ---------- ---------
Total interest earning assets 4,478,684 $ 42,896 3.83%
---------- ----------
Non-interest earning assets 212,324
----------
Total assets $4,691,008
==========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking accounts $ 75,082 $ 74 0.39%
Money Market accounts 1,417,796 2,717 0.76
Savings accounts 370,454 45 0.05
Certificates of deposit 891,769 3,054 1.36
---------- ---------- ---------
Total interest bearing deposits 2,755,101 5,890 0.85
Borrowed Funds 1,091,258 5,192 1.89
---------- ---------- ---------
Total interest-bearing liabilities 3,846,359 $ 11,082 1.14%
---------- ----------
Non-interest bearing checking accounts 233,224
Other non-interest-bearing liabilities 130,356
----------
Total liabilities 4,209,939
Stockholders' equity 481,069
----------
Total liabilities and stockholders' equity $4,691,008
==========
Net interest income $ 31,814
==========
Net interest spread 2.69%
=========
Net interest-earning assets $ 632,325
==========
Net interest margin 2.84%
=========
Ratio of interest-earning assets to
interest-bearing liabilities 116.44%
==========
Deposits (including non-interest bearing
checking accounts) $2,988,325 $ 5,890 0.78%
---------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee
income $ 2,145
---------------------------------------------------------------------------
Real estate loans (excluding net
prepayment and late payment fee income) 3.66%
---------------------------------------------------------------------------
Interest earning assets (excluding net
prepayment and late payment fee income) 3.64%
---------------------------------------------------------------------------
Net Interest income (excluding net
prepayment and late payment fee income) $ 29,669
---------------------------------------------------------------------------
Net Interest margin (excluding net
prepayment and late payment fee income) 2.65%
---------------------------------------------------------------------------
For the Three Months Ended
--------------------------------
June 30, 2015
--------------------------------
Average
Average Yield/
Balance Interest Cost
---------- ---------- ---------
Assets:
Interest-earning assets:
Real estate loans $4,214,674 $ 43,473 4.13%
Other loans 1,535 23 5.99
Mortgage-backed securities 461 2 1.74
Investment securities 18,491 121 2.62
Federal funds sold and other short-
term investments 100,418 579 2.31
---------- ---------- ---------
Total interest earning assets 4,335,579 $ 44,198 4.08%
---------- ----------
Non-interest earning assets 219,802
----------
Total assets $4,555,381
==========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking accounts $ 75,739 $ 60 0.32%
Money Market accounts 1,335,793 2,441 0.73
Savings accounts 373,430 45 0.05
Certificates of deposit 916,684 3,124 1.37
---------- ---------- ---------
Total interest bearing deposits 2,701,646 5,670 0.84
Borrowed Funds 1,010,119 5,458 2.17
---------- ---------- ---------
Total interest-bearing liabilities 3,711,765 $ 11,128 1.20%
---------- ----------
Non-interest bearing checking accounts 209,847
Other non-interest-bearing liabilities 162,141
----------
Total liabilities 4,083,753
Stockholders' equity 471,628
----------
Total liabilities and stockholders' equity $4,555,381
==========
Net interest income $ 33,070
==========
Net interest spread 2.88%
=========
Net interest-earning assets $ 623,814
==========
Net interest margin 3.05%
=========
Ratio of interest-earning assets to
interest-bearing liabilities 116.81%
==========
Deposits (including non-interest bearing
checking accounts) $2,911,493 $ 5,670 0.78%
---------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee
income $ 4,194
---------------------------------------------------------------------------
Real estate loans (excluding net
prepayment and late payment fee income) 3.73%
---------------------------------------------------------------------------
Interest earning assets (excluding net
prepayment and late payment fee income) 3.69%
---------------------------------------------------------------------------
Net Interest income (excluding net
prepayment and late payment fee income) $ 28,876
---------------------------------------------------------------------------
Net Interest margin (excluding net
prepayment and late payment fee income) 2.66%
---------------------------------------------------------------------------
For the Three Months Ended
--------------------------------
September 30, 2014
--------------------------------
Average
Average Yield/
Balance Interest Cost
---------- ---------- ---------
Assets:
Interest-earning assets:
Real estate loans $4,015,816 $ 43,477 4.33%
Other loans 2,051 26 5.07
Mortgage-backed securities 27,011 223 3.30
Investment securities 15,827 68 1.72
Federal funds sold and other short-
term investments 78,097 551 2.82
---------- ---------- ---------
Total interest earning assets 4,138,802 $ 44,345 4.29%
---------- ----------
Non-interest earning assets 182,426
----------
Total assets $4,321,228
==========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking accounts $ 76,623 $ 51 0.26%
Money Market accounts 1,153,517 1,692 0.58
Savings accounts 378,527 47 0.05
Certificates of deposit 852,188 3,186 1.48
---------- ---------- ---------
Total interest bearing deposits 2,460,855 4,976 0.80
Borrowed Funds 1,119,859 7,410 2.63
---------- ---------- ---------
Total interest-bearing liabilities 3,580,714 $ 12,386 1.37%
---------- ----------
Non-interest bearing checking accounts 175,738
Other non-interest-bearing liabilities 110,962
----------
Total liabilities 3,867,414
Stockholders' equity 453,814
----------
Total liabilities and stockholders' equity $4,321,228
==========
Net interest income $ 31,959
==========
Net interest spread 2.92%
=========
Net interest-earning assets $ 558,088
==========
Net interest margin 3.09%
=========
Ratio of interest-earning assets to
interest-bearing liabilities 115.59%
==========
Deposits (including non-interest bearing
checking accounts) $2,636,593 $ 4,976 0.75%
---------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee
income $ 3,943
---------------------------------------------------------------------------
Real estate loans (excluding net
prepayment and late payment fee income) 3.94%
---------------------------------------------------------------------------
Interest earning assets (excluding net
prepayment and late payment fee income) 3.90%
---------------------------------------------------------------------------
Net Interest income (excluding net
prepayment and late payment fee income) $ 28,016
---------------------------------------------------------------------------
Net Interest margin (excluding net
prepayment and late payment fee income) 2.71%
---------------------------------------------------------------------------
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS
("TDRs")
(Dollars In thousands)
At September 30, At June 30, At September 30,
Non-Performing Loans 2015 2015 2014
---------------- ----------- ----------------
One- to four-family and
cooperative/condominium
apartment $ 834 $ 749 $ 1,363
Multifamily residential and
mixed use residential real
estate (1)(2) 547 - 1,039
Mixed use commercial real
estate (2) - - 4,400
Commercial real estate 207 207 4,717
Other 2 3 8
---------------- ----------- ----------------
Total Non-Performing Loans (3) $ 1,590 $ 959 $ 11,527
---------------- ----------- ----------------
Other Non-Performing Assets
Non-performing loans held
for sale - 333 1,481
Other real estate owned 148 148 18
Pooled bank trust preferred
securities (4) 1,227 1,219 903
---------------- ----------- ----------------
Total Non-Performing Assets $ 2,965 $ 2,659 $ 13,929
---------------- ----------- ----------------
TDRs not included in non-
performing loans (3)
One- to four-family and
cooperative/condominium
apartment 599 601 607
Multifamily residential and
mixed use residential real
estate (1)(2) 704 712 1,115
Mixed use commercial real
estate (2) 4,365 4,385 -
Commercial real estate 3,444 3,459 9,025
---------------- ----------- ----------------
Total Performing TDRs $ 9,112 $ 9,157 $ 10,747
---------------- ----------- ----------------
(1) Includes loans underlying cooperatives.
(2) While the loans within these categories are often considered "commercial
real estate" in nature, they are classified separately in the table
above to provide further emphasis of the discrete composition of their
underlying real estate collateral.
(3) Total non-performing loans include some loans that were modified in a
manner that met the criteria for a TDR. These non-accruing TDRs, which
totaled $207 at September 30, 2015, $207 at June 30, 2015 and $9,117 at
September 30, 2014, are included in the non-performing loan table, but
excluded from the TDR amount shown above.
(4) As of the dates indicated, certain pooled bank trust preferred
securities were deemed to meet the criteria of a non-performing asset.
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES
At September 30, At June 30, At September 30,
2015 2015 2014
---------------- ----------- ----------------
Total Non-Performing Assets $ 2,965 $ 2,659 $ 13,929
Loans 90 days or more past
due on accrual status (5) 2,503 1,044 2,400
---------------- ----------- ----------------
TOTAL PROBLEM ASSETS $ 5,468 $ 3,703 $ 16,329
---------------- ----------- ----------------
Tier One Capital - The Dime
Savings Bank of
Williamsburgh $ 432,919 $ 425,334 $ 399,062
Allowance for loan losses 18,959 18,553 19,098
---------------- ----------- ----------------
TANGIBLE CAPITAL PLUS
RESERVES $ 451,878 $ 443,887 $ 418,160
---------------- ----------- ----------------
PROBLEM ASSETS AS A
PERCENTAGE OF
TANGIBLE CAPITAL AND
RESERVES 1.2% 0.8% 3.9%
(5) These loans were, as of the respective dates indicated, expected to be
either satisfied, made current or re-financed within the following
twelve months, and were not expected to result in any loss of
contractual principal or interest. These loans are not included in non-
performing loans.
Contact: Kenneth CeonzoDirector of Investor Relations718-782-6200 extension 8279
Source: Dime Community Bancshares
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