Dime Community Bancshares, Inc. Reports Solid Quarterly Earnings
Quarterly EPS of $0.29; strong deposit growth on linked quarter basis with loan-to-deposit ratio now at 132%, the lowest level in 9 years
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Overall Analyst Rating:
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Dividend Yield: 5.6%
Revenue Growth %: -15.2%
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BROOKLYN, NY -- (Marketwired) -- 10/27/16 -- Dime Community Bancshares, Inc. (NASDAQ: DCOM) today reported net income of $10.5 million for the third quarter of 2016, or $0.29 per diluted common share, compared with $11.2 million, or $0.30 per diluted common share, in the second quarter of 2016.
Highlights for the third quarter of 2016 included:
- Real estate loans grew 21.6% (annualized) on a linked quarter basis and 22.2% over the third quarter of 2015;
- Deposits grew 40.1% (annualized) on a linked quarter basis and 37.3% over the third quarter of 2015;
- Loan-to-deposit ratio declined to 132.0% in the third quarter of 2016 from 137.8% in the second quarter of 2016;
- The bank's excellent credit quality on its $5.4 billion commercial real estate ("CRE") portfolio continues, with nonperforming loans to total loans of seven (7) basis points;
- Quarterly loan loss provisioning of $1.2 million based solely on growth of our New York City-based CRE loan portfolio; and
- Consistent operational excellence, with the efficiency ratio of 48.8%, compared to 47.8% in the second quarter of 2016 and 47.6% in the third quarter of 2015.
Vincent F. Palagiano, Chairman and Chief Executive Officer of the Company, commented, "The high rate of growth this quarter is gratifying, especially funded by the strong growth in deposits. We were able to grow loans significantly as we continue to execute on our strategy and remain on track to meet our balance sheet growth objective for 2016. This quarter, given the strong deposit growth, we were able to lower our loan-to-deposit ratio to 132%, the lowest level in nine years."
According to President and Chief Operating Officer Kenneth J. Mahon, "I'm pleased that we were able to maintain our focus on our two competitive advantages of low operating costs and low credit costs during a quarter of exceptionally strong growth. We maintained strong underwriting standards while growing loan balances, continued to build deeper relationships with our customers, and prudently managed our expense base. We remain focused on expense discipline, which is evidenced by our ability to lower the ratio of non-interest expense to average assets, a key measure of operating efficiency."
Management's Discussion of Quarterly Operating Results
Net Interest Income
Net interest income in the third quarter of 2016 was $35.3 million, a decrease of $263,000 (0.7%) from the second quarter of 2016 and an increase of $3.5 million (11.1%) over the third quarter of 2015. Net Interest Margin ("NIM") was 2.59% during the third quarter of 2016, compared to 2.68% in the second quarter of 2016 and 2.84% in the third quarter of 2015. NIM was negatively impacted in the third quarter of 2016 primarily by lower yields on loan originations compared to portfolio loans that amortized or refinanced. NIM was also negatively impacted due to lower income recognized from loan prepayment activity. For the third quarter of 2016, income from prepayment activity totaled $1.7 million, benefiting NIM by 12 basis points, compared to $2.0 million, or 15 basis points, during the second quarter of 2016 and $2.1 million, or 19 basis points, during the third quarter of 2015.
Average earning assets were $5.45 billion for the third quarter of 2016, a 10.9% (annualized) increase from $5.31 billion for the second quarter of 2016 and a 21.8% increase from $4.48 billion for the third quarter of 2015.
For the third quarter of 2016, the average yield on interest earning assets (excluding prepayment income) was 3.47%, three basis points lower than the 3.50% for second quarter 2016 and 17 basis points lower than the 3.64% for third quarter 2015, while the average cost of funds was 1.15%, one basis point higher than the 1.14% for both second quarter 2016 and third quarter 2015. For the year ending December 31, 2017, $414.7 million of real estate loans with an average coupon of 3.60% are expected to reprice or mature.
Real Estate Loans
Real estate loan portfolio growth was $281.7 million (21.6% annualized) during the third quarter of 2016. Real estate loan originations were $445.5 million during the quarter, at a weighted average interest rate of 3.25%. Of this amount, $62.4 million represented loan refinances from the existing portfolio. Loan amortization and satisfactions totaled $169.1 million, or 12.7% (annualized) of the quarterly average portfolio balance, at an average rate of 3.94%. The annualized loan amortization and satisfaction rate of 12.7% for third quarter 2016 was lower than both second quarter 2016 (16.1%) and third quarter 2015 (17.8%). The average yield on the loan portfolio (excluding income recognized from prepayment activity) was 3.48% during the third quarter of 2016, compared to 3.53% during the second quarter of 2016, and 3.66% during the third quarter of 2015. Average real estate loans were $5.33 billion in the third quarter of 2016, an increase of $190.7 million (14.8% annualized) from the second quarter of 2016 and an increase of $959.9 million (22.0%) from the third quarter of 2015.
Deposits and Borrowed Funds
Deposit growth was $379.0 million (40.1% annualized) during the third quarter of 2016. Given the strong growth in deposits, the loan-to-deposit ratio fell to 132.0% at September 30, 2016, from 137.8% at June 30, 2016 and 148.3% at September 30, 2015. Core deposits increased to $3.09 billion during the third quarter of 2016, from $2.75 billion during the second quarter of 2016 and $2.14 billion during the third quarter of 2015. The average cost of deposits increased one basis point on a linked quarter basis to 0.86%.
Total borrowings decreased $135.0 million during the third quarter of 2016 as compared to the second quarter of 2016. The reduction in borrowings was due to deposit growth outpacing loan growth, and reflected management's desire to decrease reliance on borrowed funds and to grow both its number of customers and deposits.
Non-Interest Income
Non-interest income was $2.1 million during the third quarter of 2016, which was $234,000 (10.2%) lower than the second quarter of 2016, given the additional income recognized from mortality proceeds from Bank Owned Life Insurance assets in the second quarter of 2016, which offset strong mortgage servicing fee income during the third quarter of 2016. Non-interest income was $172,000 (9.1%) higher than the third quarter of 2015, which reflects the $138,000 of market valuation adjustments on trading securities held in trust for retirement benefits.
Non-Interest Expense
Non-interest expense was $18.2 million during the third quarter of 2016, which was $140,000 (0.8%) higher than the second quarter of 2016, mostly related to higher occupancy expense. Non-interest expense was $2.1 million (13.1%) higher than the third quarter of 2015, related to higher occupancy, data processing, and marketing expense.
The ratio of non-interest expense to average assets, a key measure of operating efficiency, was 1.29% during the third quarter of 2016, compared to 1.31% during the second quarter of 2016 and 1.37% during the third quarter of 2015, reflecting period-over-period average asset growth of 10.4% (annualized) and 20.5%, respectively, which outpaced non-interest expense growth. The efficiency ratio was 48.8% during the third quarter of 2016, compared to 47.8% during the second quarter of 2016 and 47.6% during the third quarter of 2015.
Income Tax Expense
The effective income tax rate approximated 41.5% during the third quarter of 2016, relatively in-line with the 42.2% recorded in the second quarter of 2016.
Credit Quality
Non-performing loans were $3.9 million, or 0.07% of total loans, at September 30, 2016, down from $4.3 million at June 30, 2016, or 0.08% of total loans. The allowance for loan losses was 0.37% of total loans at September 30, 2016, consistent with the 0.36% at June 30, 2016. At September 30, 2016, non-performing assets represented 1.4% 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). A loan loss provision of $1.2 million was recorded during the third quarter of 2016, compared to a loan loss provision of $442,000 during the second quarter of 2016, primarily due to growth in the loan portfolio.
"Dime's superlative credit performance continues to reflect the low risk nature of the multifamily collateral securing its loans as well as the conservative nature of Dime's underwriting and origination practices," stated Kenneth J. Mahon. "Vacancies remain low, and even though many new market rate units are in the pipeline, employment is robust throughout the five boroughs with population increases for New York City expected over the coming decade. These underlying economic and demographic conditions, we believe, will provide continued demand for affordable multifamily housing finance and related deposit and other banking services."
Capital Management
The Company's consolidated Tier 1 capital to average assets ("leverage ratio") was 10.29% at September 30, 2016, in excess of Basel III requirements.
The bank's regulatory capital ratios continued to be in excess of Basel III requirements as well, inclusive of conservation buffer amounts. At September 30, 2016, the bank's leverage ratio was 9.04%, while Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 11.22% and 11.67%, respectively.
Reported diluted earnings per share exceeded the quarterly cash dividend per share by 107.1% during the third quarter of 2016, equating to a 48.3% payout ratio. Tangible book value per share was $13.52 at September 30, 2016, a 15.0% increase from $11.76 at September 30, 2015.
Outlook for the Quarter Ending December 31, 2016
At September 30, 2016, the bank had outstanding loan commitments totaling $201.5 million, at an average interest rate approximating 3.22%, all of which are likely to close during the quarter ending December 31, 2016. Loan prepayments and amortization are expected to fall within the projected annualized range of 15% - 20% during the December 2016 quarter.
The Company has a balance sheet growth objective of 15% - 18% for the year ending December 31, 2016, with a preference toward utilizing retail deposits for most of its funding needs. It now appears that asset growth will approach 20% for the year, with a lower loan-to-deposit ratio than a year ago.
Deposit and borrowing funding costs are expected to remain near current historically low levels through the December 2016 quarter. At September 30, 2016, the bank had $93.1 million of Certificate of Deposits at an average rate of 0.82%, and $161.0 million of borrowings, at an average rate of 0.67%, scheduled to mature during the December 2016 quarter. No significant increase or reduction in funding costs is anticipated from the rollover or re-positioning of these funds.
The bank recorded a loan loss provision during the just completed quarter of $1.2 million, mainly due to loan portfolio growth. During the December 2016 quarter, loan loss provisions are expected to continue mainly as a function of loan growth.
Non‐interest expense is expected to approximate $18.5 million during the December 2016 quarter.
The Company projects that the consolidated effective tax rate will approximate 42.0% in the December 2016 quarter.
ABOUT DIME COMMUNITY BANCSHARES, INC.
Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the "Company) had $5.82 billion in consolidated assets as of September 30, 2016, and is the parent company of Dime Community Bank (the "bank" or "Dime"). 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 the bank can be found on Dime's 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
(Dollars in thousands except share amounts)
September 30, June 30, December 31,
2016 2016 2015
------------- ------------- -------------
ASSETS:
Cash and due from banks $80,870 $89,927 $64,154
Investment securities held to
maturity 5,356 5,319 5,242
Investment securities available
for sale 3,933 3,837 3,756
Mortgage-backed securities
available for sale 3,647 406 431
Trading securities 6,890 6,814 10,201
Real Estate Loans:
One-to-four family and
cooperative/condomnium
apartment 75,297 75,452 72,095
Multifamily and loans
underlying cooperatives (1) 4,450,025 4,211,421 3,752,328
Commercial real estate 955,048 911,919 863,184
Unearned discounts and net
deferred loan fees 8,121 7,989 7,579
------------- ------------- -------------
Total real estate loans 5,488,491 5,206,781 4,695,186
------------- ------------- -------------
Other loans 1,675 2,336 1,590
Allowance for loan losses (20,049) (18,909) (18,514)
------------- ------------- -------------
Total loans, net 5,470,117 5,190,208 4,678,262
------------- ------------- -------------
Premises and fixed assets, net 15,666 13,800 15,150
Premises held for sale 1,379 1,379 8,799
Federal Home Loan Bank of New
York capital stock 46,739 52,814 58,713
Other Real Estate Owned 18 18 148
Goodwill 55,638 55,638 55,638
Other assets 131,533 136,037 132,378
------------- ------------- -------------
TOTAL ASSETS $5,821,786 $5,556,197 $5,032,872
============= ============= =============
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Deposits:
Non-interest bearing checking $270,698 $261,634 $259,182
Interest Bearing Checking 94,313 90,172 78,994
Savings 365,966 369,168 368,671
Money Market 2,360,346 2,024,770 1,618,617
------------- ------------- -------------
Sub-total 3,091,323 2,745,744 2,325,464
------------- ------------- -------------
Certificates of deposit 1,067,941 1,034,522 858,846
------------- ------------- -------------
Total Due to Depositors 4,159,264 3,780,266 3,184,310
------------- ------------- -------------
Escrow and other deposits 117,309 92,290 77,130
Federal Home Loan Bank of New
York advances 882,125 1,017,125 1,166,725
Trust Preferred Notes Payable 70,680 70,680 70,680
Other liabilities 37,117 46,225 40,080
------------- ------------- -------------
TOTAL LIABILITIES 5,266,495 5,006,586 4,538,925
------------- ------------- -------------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par,
125,000,000 shares authorized,
53,520,581 shares, 53,520,581
shares and 53,326,753 shares
issued at September 30, 2016,
June 30, 2016 and December 31,
2015, respectively, and
37,543,852 shares, 37,654,771
shares and 37,371,992 shares
outstanding at September 30,
2016, June 30, 2016 and
December 31, 2015,
respectively) 535 535 533
Additional paid-in capital 265,227 266,984 262,798
Retained earnings 507,956 502,569 451,606
Accumulated other comprehensive
loss, net of deferred taxes (8,110) (8,803) (8,801)
Unallocated common stock of
Employee Stock Ownership Plan (2,140) (2,198) (2,313)
Unearned Restricted Stock Award
common stock (2,303) (2,754) (2,271)
Common stock held by the
Benefit Maintenance Plan (6,859) (9,576) (9,354)
Treasury stock (15,976,729
shares, 15,865,810 shares and
15,954,761 shares at September
30, 2016, June 30, 2016 and
December 31, 2015,
respectively) (199,015) (197,146) (198,251)
------------- ------------- -------------
TOTAL STOCKHOLDERS' EQUITY 555,291 549,611 493,947
------------- ------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,821,786 $5,556,197 $5,032,872
============= ============= =============
(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 Nine Months
For the Three Months Ended Ended
--------------------------------- ---------------------
September September September September
30, June 30, 30, 30, 30,
2016 2016 2015 2016 2015
---------- ---------- ---------- ---------- ----------
Interest income:
Loans secured by
real estate $48,090 $47,358 $42,109 $141,099 $127,370
Other loans 28 24 22 76 70
Mortgage-backed
securities 2 2 1 6 184
Investment
securities 129 265 254 567 544
Federal funds
sold and other
short-term
investments 707 721 510 2,089 1,738
---------- ---------- ---------- ---------- ----------
Total interest
income 48,956 48,370 42,896 143,837 129,906
---------- ---------- ---------- ---------- ----------
Interest expense:
Deposits and
escrow 8,635 7,597 5,890 23,026 16,780
Borrowed funds 4,974 5,163 5,192 15,223 18,148
---------- ---------- ---------- ---------- ----------
Total interest
expense 13,609 12,760 11,082 38,249 34,928
---------- ---------- ---------- ---------- ----------
Net interest
income 35,347 35,610 31,814 105,588 94,978
Provision (Credit)
for loan losses 1,168 442 416 1,589 (891)
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision
(credit) for loan
losses 34,179 35,168 31,398 103,999 95,869
---------- ---------- ---------- ---------- ----------
Non-interest
income:
Service charges
and other fees 1,123 758 1,013 2,566 2,562
Mortgage banking
income, net 16 27 41 71 154
Gain (loss) on
sale of real
estate - (4) - 68,183 -
Gain (loss) on
sale of
securities and
other assets - - - 40 1,384
Gain (loss) on
trading
securities 69 33 (138) 108 (97)
Other 863 1,491 983 3,149 2,874
---------- ---------- ---------- ---------- ----------
Total non-
interest
income 2,071 2,305 1,899 74,117 6,877
---------- ---------- ---------- ---------- ----------
Non-interest
expense:
Compensation and
benefits 9,431 9,532 9,255 28,671 25,637
Occupancy and
equipment 3,250 3,115 2,531 8,992 7,965
Federal deposit
insurance
premiums 613 581 575 1,933 1,703
Other 4,938 4,864 3,763 14,597 11,049
---------- ---------- ---------- ---------- ----------
Total non-
interest
expense 18,232 18,092 16,124 54,193 46,354
---------- ---------- ---------- ---------- ----------
Income before
taxes 18,018 19,381 17,173 123,923 56,392
Income tax expense 7,481 8,173 7,092 52,141 23,004
---------- ---------- ---------- ---------- ----------
Net Income $10,537 $11,208 $10,081 $71,782 $33,388
========== ========== ========== ========== ==========
Earnings per Share
("EPS"):
Basic $0.29 $0.30 $0.28 $1.95 $0.92
========== ========== ========== ========== ==========
Diluted $0.29 $0.30 $0.28 $1.95 $0.92
========== ========== ========== ========== ==========
Average common
shares
outstanding for
Diluted EPS 36,788,307 36,818,581 36,421,454 36,756,618 36,250,370
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share amounts)
For the Nine Months
For the Three Months Ended Ended
---------------------------------- ----------------------
September September September September
30, June 30, 30, 30, 30,
2016 2016 2015 2016 2015
---------- ---------- ---------- ---------- ----------
Performance
Ratios (Based
upon Reported
Net Income):
Reported EPS
(Diluted) $ 0.29 $ 0.30 $ 0.28 $ 1.95 $ 0.92
Return on
Average Assets 0.75% 0.81% 0.86% 1.76% 0.97%
Return on
Average
Stockholders'
Equity 7.63% 8.23% 8.38% 17.89% 9.44%
Return on
Average
Tangible
Stockholders'
Equity 8.34% 9.00% 9.28% 19.62% 10.47%
Net Interest
Spread 2.44% 2.50% 2.69% 2.52% 2.72%
Net Interest
Margin 2.59% 2.68% 2.84% 2.69% 2.90%
Non-interest
Expense to
Average Assets 1.29% 1.31% 1.37% 1.33% 1.35%
Efficiency Ratio 48.82% 47.75% 47.63% 48.66% 46.09%
Effective Tax
Rate 41.52% 42.17% 41.30% 42.08% 40.79%
Book Value and
Tangible Book
Value Per
Share:
Stated Book
Value Per Share $ 14.79 $ 14.60 $ 13.01 $ 14.79 $ 13.01
Tangible Book
Value Per Share 13.52 13.35 11.76 13.52 11.76
Average Balance
Data:
Average Assets $5,653,103 $5,509,549 $4,691,008 $5,444,673 $4,588,901
Average Interest
Earning Assets 5,453,070 5,308,434 4,478,684 5,239,049 4,372,022
Average
Stockholders'
Equity 552,370 545,032 481,069 534,851 471,789
Average Tangible
Stockholders'
Equity 505,170 497,945 434,735 487,788 425,266
Average Loans 5,330,442 5,139,564 4,370,325 5,096,174 4,253,539
Average Deposits 3,973,753 3,612,933 2,988,325 3,638,706 2,883,537
Asset Quality
Summary:
Net charge-offs
(recoveries) $ 29 $ 45 $ 10 $ 54 ($ 1,357)
Non-performing
Loans
(excluding
loans held for
sale) 3,875 4,329 1,590 3,875 1,590
Non-performing
Loans/ Total
Loans 0.07% 0.08% 0.04% 0.07% 0.04%
Nonperforming
Assets (1) $ 5,155 $ 5,600 $ 2,965 $ 5,155 $ 2,965
Nonperforming
Assets/Total
Assets 0.09% 0.10% 0.06% 0.09% 0.06%
Allowance for
Loan Loss/Total
Loans 0.37% 0.36% 0.42% 0.37% 0.42%
Allowance for
Loan Loss/Non-
performing
Loans 517.39% 436.80% 1192.39% 517.39% 1192.39%
Loans Delinquent
30 to 89 Days
at period end $ 20 $ 535 $ 2,554 $ 20 $ 2,554
Consolidated
Capital Ratios
Tangible
Stockholders'
Equity to
Tangible Assets
at period end 8.80% 9.14% 9.15% 8.80% 9.15%
Tier 1 Capital
to Average
Assets 10.29% 10.47% 10.91% 10.29% 10.91%
Regulatory
Capital Ratios
(Bank Only):
Common Equity
Tier 1 Capital
to Risk-
Weighted Assets 11.22% 11.82% 12.04% 11.22% 12.04%
Tier 1 Capital
to Risk-
Weighted Assets
("Tier 1
Capital Ratio") 11.22% 11.82% 12.04% 11.22% 12.04%
Total Capital to
Risk-Weighted
Assets ("Total
Capital Ratio") 11.67% 12.27% 12.57% 11.67% 12.57%
Tier 1 Capital
to Average
Assets 9.04% 9.13% 9.36% 9.04% 9.36%
Reconciliation
of Reported and
Adjusted ("non-
GAAP") Net
Income:
Net Income $ 10,537 $ 11,208 $ 10,081 $ 71,782 $ 33,388
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 (2) - - - (37,483) -
Less: After tax
credit on
curtailment of
postretirement
health benefits - - - - (1,868)
---------- ---------- ---------- ---------- ----------
Adjusted ("non-
GAAP") net
income $ 10,537 $ 11,208 $ 10,081 $ 34,299 $ 31,506
========== ========== ========== ========== ==========
Performance
Ratios (Based
upon "non-GAAP
Net Income" as
calculated
above):
Reported EPS
(Diluted) $ 0.29 $ 0.30 $ 0.28 $ 0.93 $ 0.87
Return on
Average Assets 0.75% 0.81% 0.86% 0.84% 0.92%
Return on
Average
Stockholders'
Equity 7.63% 8.23% 8.38% 8.55% 8.90%
Return on
Average
Tangible
Stockholders'
Equity 8.34% 9.00% 9.28% 9.38% 9.88%
Net Interest
Spread 2.44% 2.50% 2.69% 2.52% 2.77%
Net Interest
Margin 2.59% 2.68% 2.84% 2.69% 2.94%
Non-interest
Expense to
Average Assets 1.29% 1.31% 1.37% 1.33% 1.45%
Efficiency Ratio 48.82% 47.75% 47.63% 48.66% 48.81%
(1) Amount comprised of total non-accrual loans, other real estate owned,
and the recorded balance of pooled bank trust preferred security
investments that were deemed to meet the criteria of a non-performing
asset.
(2) The gain on the sale of real estate was taxed at the company's statutory
tax rate of 45%.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)
For the Three Months Ended
--------------------------------------------------------
September 30, 2016 June 30, 2016
--------------------------- ---------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
--------------------------- ---------------------------
Assets:
Interest-earning
assets:
Real estate
loans $5,328,712 $48,090 3.61% $5,138,053 $47,358 3.69%
Other loans 1,730 28 6.47 1,511 24 6.35
Mortgage-backed
securities 456 2 1.75 400 2 2.00
Investment
securities 16,718 129 3.09 20,203 265 5.25
Other short-
term
investments 105,454 707 2.68 148,267 721 1.95
--------------------------- ---------------------------
Total
interest
earning
assets 5,453,070 $48,956 3.59% 5,308,434 $48,370 3.64%
------------------- -------------------
Non-interest
earning assets 200,033 201,115
---------- ----------
Total assets $5,653,103 $5,509,549
========== ==========
Liabilities and
Stockholders'
Equity:
Interest-bearing
liabilities:
Interest
Bearing
Checking
accounts $91,979 $55 0.24% $84,835 $61 0.29%
Money Market
accounts 2,196,387 4,702 0.85 1,892,046 3,865 0.82
Savings
accounts 366,921 46 0.05 369,266 44 0.05
Certificates of
deposit 1,056,346 3,832 1.44 1,010,864 3,627 1.44
--------------------------- ---------------------------
Total
interest
bearing
deposits 3,711,633 8,635 0.93 3,357,011 7,597 0.91
Borrowed Funds 983,756 4,974 2.01 1,145,058 5,163 1.81
--------------------------- ---------------------------
Total
interest-
bearing
liabilities 4,695,389 $13,609 1.15% 4,502,069 $12,760 1.14%
------------------- -------------------
Non-interest
bearing checking
accounts 262,120 255,922
Other non-
interest-bearing
liabilities 143,224 206,526
---------- ----------
Total
liabilities 5,100,733 4,964,517
Stockholders'
equity 552,370 545,032
---------- ----------
Total liabilities
and stockholders'
equity $5,653,103 $5,509,549
========== ==========
Net interest income $35,347 $35,610
======== ========
Net interest spread 2.44% 2.50%
======= =======
Net interest-
earning assets $757,681 $806,365
========== ==========
Net interest margin 2.59% 2.68%
======= =======
Ratio of interest-
earning assets to
interest-bearing
liabilities 116.14% 117.91%
======== ========
Deposits (including
non-interest
bearing checking
accounts) $3,973,753 $8,635 0.86% $3,612,933 $7,597 0.85%
----------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Loan prepayment and late
payment fee income $1,695 $1,978
----------------------------------------------------------------------------
Real estate loans (excluding
net prepayment and late
payment fee income) 3.48% 3.53%
----------------------------------------------------------------------------
Interest earning assets
(excluding net prepayment and
late payment fee income) 3.47% 3.50%
----------------------------------------------------------------------------
Net Interest income (excluding
net prepayment and late
payment fee income) $33,652 $33,632
----------------------------------------------------------------------------
Net Interest margin (excluding
net prepayment and late
payment fee income) 2.47% 2.53%
----------------------------------------------------------------------------
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
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%
----------------------------------------------
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS
("TDRs")
(Dollars in thousands)
At September At September
30, At June 30, 30,
Non-Performing Loans 2016 2016 2015
------------- ------------- -------------
One- to four-family and
cooperative/condominium
apartment $ 485 $ 487 $ 834
Multifamily residential and
mixed use residential real
estate (1)(2) 3,219 3,784 547
Mixed use commercial real estate
(2) 169 54 -
Commercial real estate - - 207
Other 2 4 2
------------- ------------- -------------
Total Non-Performing Loans (3) $ 3,875 $ 4,329 $ 1,590
------------- ------------- -------------
Other Non-Performing Assets
Non-performing loans held for
sale - - -
Other real estate owned 18 18 148
Pooled bank trust preferred
securities (4) 1,262 1,253 1,227
------------- ------------- -------------
Total Non-Performing Assets $ 5,155 $ 5,600 $ 2,965
------------- ------------- -------------
TDRs not included in non-
performing loans (3)
One- to four-family and
cooperative/condominium
apartment 410 414 599
Multifamily residential and
mixed use residential real
estate (1)(2) 667 676 704
Mixed use commercial real estate
(2) 4,282 4,303 4,365
Commercial real estate 3,380 3,396 3,444
------------- ------------- -------------
Total Performing TDRs $ 8,739 $ 8,789 $ 9,112
------------- ------------- -------------
(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 totaled
$207 at September 30, 2015, and are included in the non-performing loan
table, but excluded from the TDR amount shown above. There were no non-
accruing TDRs at September 30, 2016 or June 30, 2016.
(4) As of the dates presented, 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 At September
30, At June 30, 30,
2016 2016 2015
------------- ------------- -------------
Total Non-Performing Assets $ 5,155 $ 5,600 $ 2,965
Loans 90 days or more past due on
accrual status (5) 2,165 4,534 2,503
------------- ------------- -------------
TOTAL PROBLEM ASSETS $ 7,320 $ 10,134 $ 5,468
------------- ------------- -------------
Tier One Capital - Dime Community
Bank $ 505,166 $ 496,757 $ 432,919
Allowance for loan losses 20,049 18,909 18,959
------------- ------------- -------------
TANGIBLE CAPITAL PLUS RESERVES $ 525,215 $ 515,666 $ 451,878
------------- ------------- -------------
PROBLEM ASSETS AS A PERCENTAGE OF
TANGIBLE CAPITAL AND RESERVES 1.4% 2.0% 1.2%
(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: Anthony J. RoseExecutive Vice President and Chief Administrative Officer 718-782-6200 extension 5260
Source: Dime Community Bancshares
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