Dime Community Bancshares, Inc. Reports Earnings
EPS of $1.23 for the Year and $0.31 for the Quarter; Annualized Deposit Growth of 20% in Most Recent Quarter
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Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 5.6%
EPS Growth %: -59.8%
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BROOKLYN, NY -- (Marketwired) -- 01/27/16 -- 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, 2015. Consolidated net income was $44.8 million, or $1.23 per diluted share, for the year ended December 31, 2015, compared to $44.2 million, or $1.23 per diluted share, for the year ended December 31, 2014. Consolidated net income for the quarter ended December 31, 2015 was $11.4 million, or $0.31 per diluted share, compared to $10.1 million, or $0.28 per diluted share, for the quarter ended September 30, 2015, and $12.0 million, or $0.33 per diluted share, for the quarter ended December 31, 2014.
Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "We finished 2015 with solid quarterly earnings that benefitted from both a slight uptick in prepayment fee income and a $439,000 credit (net recovery) to the loan loss reserves. We also achieved our annual growth target, ending 2015 with total assets exceeding $5.0 billion, and experiencing a 38% annual growth in non-interest bearing deposits, due in large part to the efforts of our business banking division."
Mr. Palagiano concluded, "I want to once again thank our management and staff for their hard work and commitment towards achieving our goals during 2015. We look forward to building upon this positive momentum in 2016."
Management's Discussion of 2015 versus 2014 Results
Net interest income increased $4.0 million, or 3.2%, for the year ended December 31, 2015 compared to the year ended December 31, 2014, reflecting both $1.8 million of growth in interest income and a $2.2 million decline in interest expense. The growth in interest income was attributable to $339.5 million of additional interest earning assets during 2015 compared to 2014, which more than offset a reduction of 28 basis points in their average yield year-over-year. The reduction in interest expense was attributable to a shift in the funding mix toward both lower costing deposits and shorter duration borrowings. This shift reduced the average funding cost by 16 basis points year over year (19 basis points excluding the impact of a $1.4 million borrowing prepayment cost incurred in 2015).
Reported Net Interest Margin ("NIM") fell to 2.89% for 2015, from 3.03% for 2014. Loan prepayment fee income, net of accelerated amortization of the premium paid on purchased loans, added $11.3 million to net interest income in 2015 and $12.5 million in 2014. After adjusting for the net impact of prepayment income, the "core" NIM declined year-over-year, from 2.73% for 2014 to 2.67% for 2015.
Further comparing 2015 to 2014, credit loss provisions increased by $542,000, due primarily to loan portfolio growth, non-interest income declined $422,000 due primarily to a valuation decline in equity securities designated as trading, and operating expenses increased by $1.4 million due to higher marketing, data processing and consulting expenses. The ratio of non-interest expense to average assets declined year-over-year from 1.42% in 2014 to 1.34% in 2015 and the efficiency ratio improved as well in 2015.
The net result of all of the above was a $526,000 increase in Net Income on a year-over-year basis, with diluted earnings per share remaining at the $1.23 level from 2014. Average common diluted shares outstanding were 36.3 million in 2015 versus 35.9 million in 2014, an increase of 1.0%, having a dilutive effect of $0.015 cents per share.
Total consolidated assets grew by 11.9% in 2015, fueled by growth in total real estate loans of 14.0%. Loan originations were $1.3 billion for 2015, up from $948.2 million in 2014, and were supplemented by the purchase of approximately $100.0 million in loan participations on well-secured multifamily/mixed use loans. The loan amortization rate was 20% in 2015, up slightly from 19% in 2014. The increased loan originations and $100.0 million loan participation purchase enabled the Company to meet its 12% loan growth target for the year. Tangible (leverage) common equity grew by $34.5 million in 2015, or 8.4%, to $447.1 million, primarily through earnings. Despite an 11.9% growth in assets during the most recent year, the Tier 1 core leverage ratio (tangible common equity) remained high, ending the most recent year at 9.0%.
Management's Discussion of Quarterly Operating Results
- Net Interest Margin
Net Interest Margin ("NIM") was 2.88% during the quarter ended December 31, 2015, compared to 2.84% during the September 2015 quarter, and 3.02% during the December 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. For the fourth quarter 2015, income from prepayment activity totaled $2.7 million, benefiting NIM by 23 basis points, compared to $2.1 million, or 19 basis points of impact upon NIM, during the quarter ended September 30, 2015. During the most recent quarter, the average yield on interest earning assets declined by 2 basis points (excluding prepayment income), while the average cost of funds declined by 1 basis point. The "core" NIM, which excludes the impact of prepayment income, was 2.65% during the December 2015 quarter, unchanged from the September 2015 quarter, and down slightly from 2.67% during the December 2014 quarter.
The average yield on real estate loans, exclusive of the impact of prepayment income, declined 3 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 2 basis point decline in the yield on interest earnings assets (excluding prepayment income) during the most recent quarter.
The 1 basis point decline in the average cost of funds during the most recent quarter resulted primarily from a 5 basis point reduction in the average cost of borrowings.
- Net Interest Income
Net interest income was $33.6 million in the quarter ended December 31, 2015, $1.8 million above the $31.8 million reported in the September 2015 quarter, and $1.9 million above the $31.7 million reported in the December 2014 quarter. The additions from both the September 2015 and December 2014 quarters resulted from higher quarterly average interest earning assets, which, for the quarter ended December 31, 2015, exceeded both their September 2015 and December 2014 quarterly levels by $179.2 million and $457.9 million, respectively. An additional $530,000 of prepayment income recognized in the December 2015 quarter also contributed to the growth in net interest income from the September 2015 quarter. The positive impact from the growth in average interest earning assets far exceeded the adverse impact of the 2 basis point reduction in net interest margin (excluding prepayment income) from the December 2014 quarter.
- Provision/Allowance For Loan Losses
A loan loss credit (net recovery) of $439,000 was recorded during the most recent quarter, due primarily to a reduction in the impact of the rolling 4-year charge-off experience.
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 an evaluation of the bank's rolling 4-year charge-off experience.
Throughout 2014 and 2015, as the loan portfolio was growing, the loan loss provision calculated to account for portfolio growth was more than offset by the diminishment of the bank's "experience factor," the rolling 4-year charge off experience, resulting in loan reserve recoveries. In fact, in the years since 2011, the bank's charge off rate has not been material. As a result, it is expected that there will be no benefit from reserve recoveries beginning in 2016.
- Non-Interest Income
Non-interest income was $1.7 million for the quarter ended December 31, 2015, a reduction of $160,000 from the September 2015 quarter. The reduction resulted primarily from higher seasonal administrative fees collected on portfolio loans in the September 2015 quarter. Non-interest income was $857,000 below the December 2014 quarter, due to a non-recurring gain of approximately $1.0 million recognized on the sale of securities during the December 2014 quarter.
- Non-Interest Expense
Non-interest expense was $16.1 million in the quarter ended December 31, 2015, unchanged from the September 2015 quarter, and slightly below the $16.2 million projected level.
Non-interest expense was 1.32% of average assets during the most recent quarter, compared to 1.37% during the September 2015 quarter. The efficiency ratio approximated 46% during the December 2015 quarter.
- Income Tax Expense
The effective income tax rate approximated 42% during the most recent quarter, above the forecasted 40% level, due primarily to year-end adjustments.
Management's Discussion of the December 31, 2015 Balance Sheet
Total assets were $5.03 billion at December 30, 2015, up $200.4 million, or 16.6% annualized, from September 30, 2015.
- Real Estate Loans
Real estate loan portfolio growth was $205.0 million on a net basis for the quarter. Real estate loan originations were $281.4 million, at a weighted average interest rate of 3.39%. Of this amount, $73.3 million represented loan refinances from the existing portfolio. Loan amortization and satisfactions totaled $176.9 million, or 15.4% (annualized) of the quarterly average portfolio balance, at an average rate of 4.10%. During the December 2015 quarter, the Company also purchased $100.0 million of participations in well-secured New York City multifamily/mixed use real estate loans with an average yield approximating 3.0%. The average yield on the loan portfolio (excluding income recognized from prepayment activity) was 3.63% during the quarter ended December 31, 2015, compared to 3.66% during the September 2015 quarter and 3.85% during the December 2014 quarter.
- Credit Summary
Non-performing loans were $1.6 million, or 0.03% of total loans, at December 31, 2015, relatively unchanged from September 30, 2015. Accruing loans delinquent between 30 and 89 days were $3.0 million, or 0.06% of total loans, at December 31, 2015, up slightly from September 30, 2015. The allowance for loan losses was 0.39% of total loans at December 31, 2015, down from 0.42% at September 30, 2015. At December 31, 2015, non-performing assets represented 1.6% 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 20% annualized during the quarter, due to the significant growth in loans during the period, the loan-to-deposit ratio remained relatively unchanged at 148% as of December 31, 2015.
Deposits increased by $154.8 million, or 20% annualized, during the quarter ended December 31, 2015. Despite the recent policy actions of the Federal Open Market Committee to increase the target federal funds rate, the average cost of deposits increased only 1 basis point on a linked quarter basis. Recent deposit gathering initiatives focused upon money markets and non-interest bearing checking accounts led to growth of $151.3 million and $29.7 million in their respective balances during the period. Offsetting this growth was a reduction of $28.9 million in certificates of deposits ("CDs"). Checking and non-interest bearing account growth, a primary initiative for the bank, was up 43% annualized, and, as a component of total deposits, reached 10.6%.
Total borrowings increased $97.0 million during the December 2015 quarter. Throughout most 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 utilized 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, $37.5 million of longer-term fixed rate borrowings were undertaken with a weighted average term to maturity of 4.2 years and a weighted average cost of 1.60%. Similar duration borrowings are likely 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 10.70% at December 31, 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 9.17% at December 31, 2015, down from 9.36% at September 30, 2015, as a result of asset growth of $200.4 million during the quarter. The bank's "Tier 1" and "Total" capital ratios were 11.55% and 12.03%, respectively, at December 31, 2015, also in excess of the Basel III requirements.
Reported diluted earnings per share exceeded the quarterly cash dividend per share by 121% during the quarter ended December 31, 2015, equating to a 45% payout ratio. Additions to capital from earnings during the most recent quarterly period raised tangible book value per share by $0.20 sequentially, to $11.96 at December 31, 2015.
Outlook for the Quarter Ending March 31, 2016
At December 31, 2015, Dime had outstanding loan commitments totaling $304.3 million, all of which are likely to close during the quarter ending March 31, 2016, at an average interest rate approximating 3.14%. Loan prepayments and amortization are projected to fall within the projected annualized range of 15% - 20% during the March 2016 quarter.
The Company has a balance sheet growth range objective of 15% - 18% for the year ending December 31, 2016, with a preference toward utilizing retail deposits for most of its funding needs.
Despite the recent policy actions of The Federal Open Market Committee, deposit and borrowing funding costs are expected to remain near current historically low levels through the March 2016 quarter. At December 31, 2015, the bank had $73.0 million of CDs at an average rate of 0.68%, and $487.5 million of borrowings at an average rate of 0.58% scheduled to mature during the March 2016 quarter. 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. The portion of the March 2016 quarterly loan loss provision attributable solely to loan portfolio growth is forecasted to approximate $800,000.
Non‐interest expense, which, absent non-recurring items, often runs higher in the first quarter of each year and lower in the final quarter of each year, is expected to approximate $17.5 million during the March 2016 quarter.
The Company projects that the consolidated effective tax rate will approximate 40.0% in the March 2016 quarter.
Recently Disclosed Pending Property Sale
The bank announced on October 7, 2015 that it entered into an agreement to sell real estate parcels in Williamsburg, Brooklyn that are currently utilized as its primary back office operations center. This transaction, which is expected to close during the first quarter of 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 capital, 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 December 31, 2015, the sale 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 $5.03 billion in consolidated assets as of December 31, 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)
December 31, September 30, December 31,
2015 2015 2014
------------- ------------- -------------
ASSETS:
Cash and due from banks $ 64,154 $ 74,073 $ 78,187
Investment securities held to
maturity 5,242 5,349 5,367
Investment securities available
for sale 3,756 3,684 3,806
Trading securities 10,201 8,697 8,559
Mortgage-backed securities
available for sale 431 446 26,409
Federal funds sold and other
short-term investments - - 250
Real Estate Loans:
One-to-four family and
cooperative/condomnium
apartment 72,095 69,618 73,500
Multifamily and loans
underlying cooperatives (1) 3,752,328 3,560,134 3,292,753
Commercial real estate 863,184 853,633 745,463
Unearned discounts and net
deferred loan fees 7,579 7,239 5,695
------------- ------------- -------------
Total real estate loans 4,695,186 4,490,624 4,117,411
------------- ------------- -------------
Other loans 1,590 1,468 1,829
Allowance for loan losses (18,514) (18,959) (18,493)
------------- ------------- -------------
Total loans, net 4,678,262 4,473,133 4,100,747
------------- ------------- -------------
Premises and fixed assets, net 15,150 15,296 25,065
Premises held for sale 8,799 8,799 -
Federal Home Loan Bank of New
York capital stock 58,713 54,348 58,407
Other Real Estate Owned 148 148 18
Goodwill 55,638 55,638 55,638
Other assets 132,378 132,881 134,654
------------- ------------- -------------
TOTAL ASSETS $ 5,032,872 $ 4,832,492 $ 4,497,107
============= ============= =============
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Deposits:
Non-interest bearing checking $ 259,182 $ 229,436 $ 187,593
Interest Bearing Checking 78,994 76,007 78,430
Savings 368,671 369,044 372,753
Money Market 1,618,617 1,467,303 1,094,698
------------- ------------- -------------
Sub-total 2,325,464 2,141,790 1,733,474
------------- ------------- -------------
Certificates of deposit 858,846 887,707 926,318
------------- ------------- -------------
Total Due to Depositors 3,184,310 3,029,497 2,659,792
------------- ------------- -------------
Escrow and other deposits 77,130 131,132 91,921
Federal Home Loan Bank of New
York advances 1,166,725 1,069,725 1,173,725
Trust Preferred Notes Payable 70,680 70,680 70,680
Other liabilities 40,080 47,579 41,264
------------- ------------- -------------
TOTAL LIABILITIES 4,538,925 4,348,613 4,037,382
------------- ------------- -------------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par,
125,000,000 shares authorized,
53,326,753 shares, 53,145,798
shares and 52,871,443 shares
issued at December 31, 2015,
September 30, 2015 and
December 31, 2014,
respectively, and 37,371,992
shares, 37,188,874 shares and
36,855,019 shares outstanding
at December 31, 2015,
September 30, 2015 and
December 31, 2014,
respectively) 533 532 529
Additional paid-in capital 262,798 259,906 254,358
Retained earnings 451,606 445,326 427,126
Accumulated other comprehensive
loss, net of deferred taxes (8,801) (9,173) (8,547)
Unallocated common stock of
Employee Stock Ownership Plan (2,313) (2,371) (2,545)
Unearned Restricted Stock Award
common stock (2,271) (2,709) (3,066)
Common stock held by the
Benefit Maintenance Plan (9,354) (9,354) (9,164)
Treasury stock (15,954,761
shares, 15,956,924 shares and
16,016,424 shares at December
31, 2015, September 30, 2015
and December 31, 2014,
respectively) (198,251) (198,278) (198,966)
------------- ------------- -------------
TOTAL STOCKHOLDERS' EQUITY 493,947 483,879 459,725
------------- ------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,032,872 $ 4,832,492 $ 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 separatelyfrom 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
-------------------------------------------
December 31, September 30, December 31,
2015 2015 2014
------------- ------------- -------------
Interest income:
Loans secured by real
estate $ 43,977 $ 42,109 $ 42,897
Other loans 23 22 25
Mortgage-backed securities 2 1 207
Investment securities 331 254 286
Federal funds sold and
other short-term
investments 552 510 556
------------- ------------- -------------
Total interest income 44,885 42,896 43,971
------------- ------------- -------------
Interest expense:
Deposits and escrow 6,225 5,890 5,002
Borrowed funds 5,074 5,192 7,241
------------- ------------- -------------
Total interest expense 11,299 11,082 12,243
------------- ------------- -------------
Net interest income 33,586 31,814 31,728
Provision (credit) for loan
losses (439) 416 (522)
------------- ------------- -------------
Net interest income after
provision (credit) for loan
losses 34,025 31,398 32,250
------------- ------------- -------------
Non-interest income:
Service charges and other
fees 761 1,013 684
Mortgage banking income,
net 29 41 72
Gain on sale of securities
and other assets - - 997
Gain (loss) on trading
securities (14) (138) (80)
Other 963 983 923
------------- ------------- -------------
Total non-interest income 1,739 1,899 2,596
------------- ------------- -------------
Non-interest expense:
Compensation and benefits 9,354 9,255 8,895
Occupancy and equipment 2,549 2,531 2,521
Federal deposit insurance
premiums 602 575 575
Other 3,634 3,763 3,240
------------- ------------- -------------
Total non-interest
expense 16,139 16,124 15,231
------------- ------------- -------------
Income before taxes 19,625 17,173 19,615
Income tax expense 8,241 7,092 7,628
------------- ------------- -------------
Net Income $ 11,384 $ 10,081 $ 11,987
============= ============= =============
Earnings per Share ("EPS"):
Basic $ 0.31 $ 0.28 $ 0.33
============= ============= =============
Diluted $ 0.31 $ 0.28 $ 0.33
============= ============= =============
Average common shares
outstanding for Diluted EPS 36,521,748 36,421,454 35,971,661
For the Year Ended
----------------------------
December 31, December 31,
2015 2014
------------- -------------
Interest income:
Loans secured by real
estate $ 171,347 $ 169,208
Other loans 93 105
Mortgage-backed securities 186 914
Investment securities 875 560
Federal funds sold andother
short-term investments 2,290 2,165
------------- -------------
Total interest income 174,791 172,952
------------- -------------
Interest expense:
Deposits and escrow 23,005 19,591
Borrowed funds 23,222 28,825
------------- -------------
Total interest expense 46,227 48,416
------------- -------------
Net interest income 128,564 124,536
Provision (credit) for loan
losses (1,330) (1,872)
------------- -------------
Net interest income after
provision (credit) for loan
losses 129,894 126,408
------------- -------------
Non-interest income:
Service charges and other
fees 3,323 3,191
Mortgage banking income,
net 183 1,225
Gain on sale of securities
and other assets 1,384 997
Gain (loss) on trading
securities (111) 604
Other 3,837 3,021
------------- -------------
Total non-interest income 8,616 9,038
------------- -------------
Non-interest expense:
Compensation and benefits 34,990 36,279
Occupancy and equipment 10,514 10,177
Federal deposit insurance
premiums 2,304 2,151
Other 14,685 12,469
------------- -------------
Total non-interest
expense 62,493 61,076
------------- -------------
Income before taxes 76,017 74,370
Income tax expense 31,245 30,124
------------- -------------
Net Income $ 44,772 $ 44,246
============= =============
Earnings per Share ("EPS"):
Basic $ 1.24 $ 1.23
============= =============
Diluted $ 1.23 $ 1.23
============= =============
Average common shares
outstanding for Diluted EPS 36,322,333 35,948,516
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,
2015 2015 2014
------------- ------------- -------------
Reconciliation of Reported and
Adjusted ("Core") Net Income
(1):
Net Income $ 11,384 $ 10,081 $ 11,987
Less: After tax gain on sale of
securities - - (547)
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 $ 11,384 $ 10,081 $ 11,440
============= ============= =============
Performance Ratios (Based upon
Reported Net Income):
Reported Earnings Per Share
("EPS") (Diluted) $ 0.31 $ 0.28 $ 0.33
Return on Average Assets 0.93% 0.86% 1.09%
Return on Average Stockholders'
Equity 9.32% 8.38% 10.45%
Return on Average Tangible
Stockholders' Equity 10.30% 9.28% 11.74%
Net Interest Spread 2.72% 2.69% 2.85%
Net Interest Margin 2.88% 2.84% 3.02%
Non-interest Expense to Average
Assets 1.32% 1.37% 1.38%
Efficiency Ratio 45.67% 47.63% 45.59%
Effective Tax Rate 41.99% 41.30% 38.89%
Performance Ratios (Based upon
"Core Net Income" as
calculated above):
EPS (Diluted) $ 0.31 $ 0.28 $ 0.32
Return on Average Assets 0.93% 0.86% 1.04%
Return on Average Stockholders'
Equity 9.32% 8.38% 9.98%
Return on Average Tangible
Stockholders' Equity 10.30% 9.28% 11.21%
Net Interest Spread 2.72% 2.69% 2.46%
Net Interest Margin 2.88% 2.84% 2.64%
Non-interest Expense to Average
Assets 1.32% 1.37% 1.38%
Efficiency Ratio 45.67% 47.63% 45.59%
Effective Tax Rate 41.99% 41.30% 38.55%
Book Value and Tangible Book
Value Per Share:
Stated Book Value Per Share $ 13.22 $ 13.01 $ 12.47
Tangible Book Value Per Share 11.96 11.76 11.20
Average Balance Data:
Average Assets $ 4,875,199 $ 4,691,008 $ 4,403,001
Average Interest Earning Assets 4,657,917 4,478,684 4,200,047
Average Stockholders' Equity 488,845 481,069 458,679
Average Tangible Stockholders'
Equity 442,277 434,735 408,350
Average Loans 4,555,291 4,370,325 4,073,732
Average Deposits 3,109,044 2,988,325 2,634,222
Asset Quality Summary:
Net (recoveries) charge-offs $ 6 $ 10 $ 83
Non-performing Loans (excluding
loans held for sale) 1,611 1,590 6,198
Non-performing Loans/ Total
Loans 0.03% 0.04% 0.15%
Nonperforming Assets (2) $ 2,995 $ 2,965 $ 7,120
Nonperforming Assets/Total
Assets 0.06% 0.06% 0.16%
Allowance for Loan Loss/Total
Loans 0.39% 0.42% 0.45%
Allowance for Loan Loss/Non-
performing Loans 1149.22% 1192.39% 298.37%
Loans Delinquent 30 to 89 Days
at period end $ 2,970 $ 2,554 $ 1,429
Consolidated Capital Ratios
Tangible Stockholders' Equity
to Tangible Assets at period
end 8.98% 9.15% 9.29%
Tier 1 Capital to Average
Assets 10.70% 10.91% 11.20%
Regulatory Capital Ratios (Bank
Only):
Common Equity Tier 1 Capital to
Risk-Weighted Assets 8.88% 9.09% 12.33%
Tier 1 Capital to Risk-Weighted
Assets ("Tier 1 Capital
Ratio") 11.55% 12.04% 12.33%
Total Capital to Risk-Weighted
Assets ("Total Capital Ratio") 12.03% 12.57% 12.89%
Tier 1 Capital to Average
Assets 9.17% 9.36% 9.64%
For the Year Ended
----------------------------
December 31, December 31,
2015 2014
------------- -------------
Reconciliation of Reported and
Adjusted ("Core") Net Income
(1):
Net Income $ 44,772 $ 44,246
Less: After tax gain on sale of
securities (764) (547)
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 $ 42,890 $ 43,343
============= =============
Performance Ratios (Based upon
Reported Net Income):
Reported Earnings Per Share
("EPS") (Diluted) $ 1.23 $ 1.23
Return on Average Assets 0.96% 1.03%
Return on Average Stockholders'
Equity 9.40% 9.83%
Return on Average Tangible
Stockholders' Equity 10.42% 11.13%
Net Interest Spread 2.72% 2.84%
Net Interest Margin 2.89% 3.03%
Non-interest Expense to Average
Assets 1.34% 1.42%
Efficiency Ratio 45.98% 46.28%
Effective Tax Rate 41.10% 40.51%
Performance Ratios (Based upon
"Core Net Income" as
calculated above):
EPS (Diluted) $ 1.18 $ 1.21
Return on Average Assets 0.92% 1.01%
Return on Average Stockholders'
Equity 9.01% 9.63%
Return on Average Tangible
Stockholders' Equity 9.98% 10.90%
Net Interest Spread 2.72% 2.84%
Net Interest Margin 2.92% 3.03%
Non-interest Expense to Average
Assets 1.41% 1.42%
Efficiency Ratio 48.00% 46.28%
Effective Tax Rate 40.92% 40.20%
Book Value and Tangible Book
Value Per Share:
Stated Book Value Per Share $ 13.22 $ 12.47
Tangible Book Value Per Share 11.96 11.20
Average Balance Data:
Average Assets $ 4,660,476 $ 4,294,634
Average Interest Earning Assets 4,443,495 4,104,007
Average Stockholders' Equity 476,053 449,890
Average Tangible Stockholders'
Equity 429,566 397,669
Average Loans 4,328,977 3,964,520
Average Deposits 2,939,914 2,606,178
Asset Quality Summary:
Net (recoveries) charge-offs ($ 1,351) ($ 212)
Non-performing Loans (excluding
loans held for sale) 1,611 6,198
Non-performing Loans/ Total
Loans 0.03% 0.15%
Nonperforming Assets (2) $ 2,995 $ 7,120
Nonperforming Assets/Total
Assets 0.06% 0.16%
Allowance for Loan Loss/Total
Loans 0.39% 0.45%
Allowance for Loan Loss/Non-
performing Loans 1149.22% 298.37%
Loans Delinquent 30 to 89 Days
at period end $ 2,970 $ 1,429
Consolidated Capital Ratios
Tangible Stockholders' Equity
to Tangible Assets at period
end 8.98% 9.29%
Tier 1 Capital to Average
Assets 10.70% 11.20%
Regulatory Capital Ratios (Bank
Only):
Common Equity Tier 1 Capital to
Risk-Weighted Assets 8.88% 12.33%
Tier 1 Capital to Risk-Weighted
Assets ("Tier 1 Capital
Ratio") 11.55% 12.33%
Total Capital to Risk-Weighted
Assets ("Total Capital Ratio") 12.03% 12.89%
Tier 1 Capital to Average
Assets 9.17% 9.64%
(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.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars In thousands)
For the Three Months Ended
-----------------------------------
December 31, 2015
-----------------------------------
Average
Average Yield/
Balance Interest Cost
----------- ----------- ----------
Assets:
Interest-earning assets:
Real estate loans $ 4,553,788 $ 43,977 3.86%
Other loans 1,503 23 6.12
Mortgage-backed securities 425 2 1.88
Investment securities 18,773 331 7.05
Federal funds sold and other short-
term investments 83,428 552 2.65
----------- ----------- ----------
Total interest earning assets 4,657,917 $ 44,885 3.85%
----------- -----------
Non-interest earning assets 217,282
-----------
Total assets $ 4,875,199
===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking accounts $ 76,932 $ 56 0.29%
Money Market accounts 1,548,821 3,060 0.78
Savings accounts 365,563 46 0.05
Certificates of deposit 873,910 3,063 1.39
----------- ----------- ----------
Total interest bearing deposits 2,865,226 6,225 0.86
Borrowed Funds 1,094,438 5,074 1.84
----------- ----------- ----------
Total interest-bearing liabilities 3,959,664 $ 11,299 1.13%
----------- -----------
Non-interest bearing checking
accounts 243,818
Other non-interest-bearing
liabilities 182,872
-----------
Total liabilities 4,386,354
Stockholders' equity 488,845
-----------
Total liabilities and stockholders'
equity $ 4,875,199
===========
Net interest income $ 33,586
===========
Net interest spread 2.72%
==========
Net interest-earning assets $ 698,253
===========
Net interest margin 2.88%
==========
Ratio of interest-earning assets to
interest-bearing liabilities 117.63%
===========
Deposits (including non-interest
bearing checking accounts) $ 3,109,044 $ 6,225 0.79%
---------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee
income $ 2,675
---------------------------------------------------------------------------
Real estate loans (excluding net
prepayment and late payment fee
income) 3.63%
---------------------------------------------------------------------------
Interest earning assets (excluding net
prepayment and late payment fee
income) 3.62%
---------------------------------------------------------------------------
Net Interest income (excluding net
prepayment and late payment fee
income) $ 30,911
---------------------------------------------------------------------------
Net Interest margin (excluding net
prepayment and late payment fee
income) 2.65%
---------------------------------------------------------------------------
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
December 31, 2014
-----------------------------------
Average
Average Yield/
Balance Interest Cost
----------- ----------- ----------
Assets:
Interest-earning assets:
Real estate loans $ 4,071,822 $ 42,897 4.21%
Other loans 1,910 25 5.24
Mortgage-backed securities 25,660 207 3.23
Investment securities 15,870 286 7.21
Federal funds sold and other short-
term investments 84,785 556 2.62
----------- ----------- ----------
Total interest earning assets 4,200,047 $ 43,971 4.19%
----------- -----------
Non-interest earning assets 202,954
-----------
Total assets $ 4,403,001
===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking accounts $ 76,743 $ 52 0.27%
Money Market accounts 1,132,049 1,710 0.60
Savings accounts 375,667 47 0.05
Certificates of deposit 866,055 3,193 1.46
----------- ----------- ----------
Total interest bearing deposits 2,450,514 5,002 0.81
Borrowed Funds 1,169,742 7,241 2.46
----------- ----------- ----------
Total interest-bearing liabilities 3,620,256 $ 12,243 1.34%
----------- -----------
Non-interest bearing checking
accounts 183,708
Other non-interest-bearing
liabilities 140,358
-----------
Total liabilities 3,944,322
Stockholders' equity 458,679
-----------
Total liabilities and stockholders'
equity $ 4,403,001
===========
Net interest income $ 31,728
===========
Net interest spread 2.85%
==========
Net interest-earning assets $ 579,791
===========
Net interest margin 3.02%
==========
Ratio of interest-earning assets to
interest-bearing liabilities 116.02%
===========
Deposits (including non-interest
bearing checking accounts) $ 2,634,222 $ 5,002 0.75%
---------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee
income $ 3,695
---------------------------------------------------------------------------
Real estate loans (excluding net
prepayment and late payment fee
income) 3.85%
---------------------------------------------------------------------------
Interest earning assets (excluding net
prepayment and late payment fee
income) 3.84%
---------------------------------------------------------------------------
Net Interest income (excluding net
prepayment and late payment fee
income) $ 28,033
---------------------------------------------------------------------------
Net Interest margin (excluding net
prepayment and late payment fee
income) 2.67%
---------------------------------------------------------------------------
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS
("TDRs")
(Dollars In thousands)
At December 31, At September 30, At December 31,
Non-Performing Loans 2015 2015 2014
--------------- ---------------- ---------------
One- to four-family and
cooperative/condominium
apartment $ 1,113 $ 834 $ 1,310
Multifamily residential
and mixed use
residential real estate
(1)(2) 287 547 167
Mixed use commercial real
estate (2) - - -
Commercial real estate 207 207 4,717
Other 4 2 4
--------------- ---------------- ---------------
Total Non-Performing Loans
(3) $ 1,611 $ 1,590 $ 6,198
--------------- ---------------- ---------------
Other Non-Performing Assets
Non-performing loans held
for sale - - -
Other real estate owned 148 148 18
Pooled bank trust
preferred securities (4) 1,236 1,227 904
--------------- ---------------- ---------------
Total Non-Performing Assets $ 2,995 $ 2,965 $ 7,120
--------------- ---------------- ---------------
TDRs not included in non-
performing loans (3)
One- to four-family and
cooperative/condominium
apartment 598 599 605
Multifamily residential
and mixed use
residential real estate
(1)(2) 696 704 1,105
Mixed use commercial real
estate (2) 4,344 4,365 4,400
Commercial real estate 3,428 3,444 8,990
--------------- ---------------- ---------------
Total Performing TDRs $ 9,066 $ 9,112 $ 15,100
--------------- ---------------- ---------------
(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 this table
because there is a residential component to the income, which makes them
generally viewed as less risky than pure commercial real estate loans.
(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 December 31, 2015, $207 at September 30, 2015 and $4,717
at December 31, 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 December 31, At September 30, At December 31,
2015 2015 2014
--------------- ---------------- ---------------
Total Non-Performing
Assets $ 2,995 $ 2,965 $ 7,120
Loans 90 days or more
past due on accrual
status (5) 4,532 2,503 3,332
--------------- ---------------- ---------------
TOTAL PROBLEM ASSETS $ 7,527 $ 5,468 $ 10,452
--------------- ---------------- ---------------
Tier One Capital - The
Dime Savings Bank of
Williamsburgh $ 440,374 $ 432,919 $ 406,910
Allowance for loan
losses 18,514 18,959 18,493
--------------- ---------------- ---------------
TANGIBLE CAPITAL PLUS
RESERVES $ 458,888 $ 451,878 $ 425,403
--------------- ---------------- ---------------
PROBLEM ASSETS AS A
PERCENTAGE OF TANGIBLE
CAPITAL AND RESERVES 1.6 % 1.2 % 2.5 %
(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 Ceonzo
Director of Investor Relations
718-782-6200 extension 8279
Source: Dime Community Bancshares
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