- Dime Community Bancshares Reports Earnings
Quarterly EPS of $0.30, Core Net Interest Margin Constant at 3.33%Company Release - 04/26/2012 16:05BROOKLYN, NY -- (Marketwire) -- 04/26/12 -- 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 March 31, 2012.
Consolidated net income for the quarter ended March 31, 2012 was $10.2 million, or 30 cents per diluted share, compared to $12.7 million, or 38 cents per diluted share, for the quarter ended December 31, 2011, and $11.1 million, or 33 cents per diluted share, for the quarter ended March 31, 2011.
EPS declined $0.08 linked quarter, reflecting $0.05 of prepayment expense incurred during the March 2012 quarter associated with the prepayment of $95.0 million of borrowings, a $0.04 income tax recovery recorded in the December 2011 quarter, and $0.03 of higher operating expenses, which ran below normalized levels during the December 2011 quarter, and returned to normalized levels in the March 2012 quarter. Partially offsetting these items was an additional $0.04 of fee income earned on loan prepayments in the March 2012 quarter above the December 31, 2011 quarter.
Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "In this interest rate environment, we are all watching the prepayment speeds on loans. The annualized prepayment speed in this first quarter was 24%, compared to 19% last quarter. As has been our practice in the past, we applied prepayment fee income to pay off a portion of our borrowings, in order to better align our funding and asset durations. We also reduced our non-accrual loans through note sales, and ended the March 2012 quarter with non-accrual loans representing only 43 basis points of total loans. The allowance level once again exceeds 100% of total non-accrual loans. Core net interest margin remained stable, while capital levels and ratios continue to grow. While earnings remain high, our focus now continues to be on setting the foundation for the next phase of the business cycle, and potential future growth."
OPERATING RESULTS FOR THE QUARTER ENDED MARCH 31, 2012
Net Interest Margin
Linked quarter net interest margin ("NIM") declined 7 basis points from 3.54% to 3.47%. The average yield on portfolio real estate loans increased by 25 basis points linked quarter, to 5.87%, due primarily to $4.4 million of prepayment income, which added 0.51% to the average yield on real estate loans compared to 0.23% in the December 2011 quarter. The cost of interest bearing deposits declined by 5 basis points, while the cost of borrowed funds increased by 103 basis points, both linked quarter. Absent $3.2 million of costs incurred during the March 2012 quarter to prepay $95 million of borrowings, the average borrowing costs would have declined 5 basis points on a linked quarter basis. This prepayment, by eliminating a negative carrying cost on pledged securities, is expected to add approximately 2 basis points to the NIM during the quarter ending June 30, 2012.NIM, excluding the effects of both loan prepayment fees and borrowing prepayment costs, remained constant at 3.33% from the December 2011 quarter to the March 2012 quarter, reflecting a decline of 3 basis points in the average yield on interest earning assets that was substantially offset by a decline of 3 basis points in the average cost of interest bearing liabilities. The average balances of both deposits and real estate loans remained relatively unchanged on a linked quarter basis.
The Company remains measured in its approach to growing the loan portfolio through this period of both aggressive competition and a very low interest rate environment driven by the Federal Reserve's accommodative monetary policy. As a result, while both loan amortization (including satisfactions) and federal agency investment securities call activity ran ahead of forecasted levels during the quarter ended March 31, 2012, the Company did not fully deploy the incremental proceeds into new loans and agency security purchases, and instead prepaid $95 million of borrowings. In addition, the Bank targeted further rate reductions on its retail deposit products reflecting competitive practices in Dime's market area.
As a result of the additional funds received from federal agency investment securities calls, loan amortization, and mortgagor escrow deposits, the Company ended the March 2012 quarter with approximately $125 million in cash balances, up from $43 million at December 31, 2011. A portion of this liquidity is expected to be deployed during the remainder of 2012 in the form of either real estate loan originations or purchases of agency-issued securities.
Net Interest Income
Net interest income was $33.4 million in the quarter ended March 31, 2012, down $733,000 from the December 2011 quarter and $1.6 million from the $35.0 million reported in the March 2011 quarter. Prepayment fee income totaled $4.4 million during the March 2012 quarter, up from $1.8 million recognized in the December 2011 quarter and $1.3 million during the March 31, 2011 quarter. The Company utilized $3.2 million of this prepayment fee income to offset the cost incurred to prepay some borrowings during the March 2012 quarter. Absent the impact of both loan prepayment fee income and borrowing prepayment costs, net interest income was $32.0 million during the March 2012 quarter, down $151,000 from the December 2011 quarter and $1.5 million from the March 31, 2011 quarter. Adjusted for the effects of prepayment fee income on loans and borrowing prepayment costs, the decline in net interest income from the March 2011 quarter resulted primarily from a decline of 13 basis points in the average spread between the yield earned on the Company's interest earning assets and the cost of the Company's interest bearing liabilities, reflecting the ongoing low interest rate environment.Interest Rate Risk Management Activities
The Company prepaid $40 million of borrowings secured by securities sold under agreement to repurchase ("Repos") during the quarter ended March 31, 2012. These borrowings had an average cost of 3.17% and were collateralized by securities with an average yield that was less than 1%, thus creating a negative carrying cost of over 2%. The Company therefore elected to utilize income and cash flows generated from loan prepayments, as well as deposit balances, to prepay these borrowings and eliminate the negative carrying cost. The Company also prepaid $55 million of Federal Home Loan Bank of New York ("FHLBNY") advances that were due to mature later in 2012, in order to reduce its level of excess liquidity. The prepayment cost was negligible on the $55 million of FHLBNY advances, and they could be readily replaced at comparable terms should the need arise.At March 31, 2012, the Company had $335.0 million of "putable borrowings" (i.e. borrowings that are callable by the issuer) outstanding, with a weighted average maturity of 4.5 years. Since the weighted average cost of these borrowings is 4.2%, they are not anticipated to be put back to the Bank in the near term.
Provision/Allowance For Loan Losses
At March 31, 2012, the allowance for loan losses as a percentage of total loans stood at 0.57%, down slightly from the prior quarter. During the quarter ended March 31, 2012, the Company recognized $2.3 million of charge-offs. Of this total, approximately one-half related to one borrower relationship that remained in the portfolio at period end, and the remainder resulted from losses experienced on the disposition of approximately $12.2 million of portfolio loans on non-accrual status as of December 31, 2011. Non-performing loans held in portfolio declined from $26.0 million at December 31, 2011 to $14.8 million at March 31, 2012, and loans delinquent between 30 and 89 days, which had previously declined $24.6 million during the December 2011 quarter, declined an additional $3.6 million to a balance of $5.7 million as of March 31, 2012. As a result of all of this activity, the Company determined that it needed to record a provision of $1.5 million to the allowance for loan losses during the March 2012 quarter. Since the net charge-off activity exceeded the required provision, the allowance for loan losses declined $786,000 during the quarter ended March 31, 2012.Non-Interest Income
Non-interest income was $1.8 million for the quarter ended March 31, 2012, a reduction of $346,000 from the previous quarter, primarily reflecting both an increase of $149,000 in other-than-temporary impairment charges on the Company's investment in pooled bank trust preferred securities, and a reduction of approximately $140,000 in servicing income recognized on the Bank's loans.Non-Interest Expense
Non-interest expense was $16.4 million in the quarter ended March 31, 2012, up $1.6 million from the prior quarter, reflecting increases in compensation and benefits, FDIC deposit insurance premiums and marketing expenses. The $16.4 million of operating expenses incurred during the March 2012 quarter fell slightly below the $16.5 million forecasted in the outlook section of the Company's previous earnings release.Non-interest expense was 1.62% of average assets during the most recent quarter, resulting in an efficiency ratio of 46.5%. This remains among the lowest efficiency ratios in the industry, and a longstanding hallmark of Dime.
Income Tax Expense
The effective tax rate approximated 40.8% during the quarter ended March 31, 2012, near the 41% level forecasted in the Company's previous earnings release. During the quarter ended December 31, 2011, the Company concluded that a reserve for an uncertain tax position (formerly known as FASB FIN 48) was no longer warranted, resulting in a $1.1 million reduction in income tax expense during the period. Excluding this item, the Company's consolidated effective tax rate was 41.6% during the December 31, 2011 quarter.BALANCE SHEET
Total assets were $4.02 billion at March 31, 2012, substantially unchanged from December 31, 2011. Real estate loans and investment securities available for sale declined by $40.7 million and $50.1 million, respectively, during the quarter ended March 31, 2012, reflecting both higher than anticipated loan amortization and investment security call activity during the period. As of March 31, 2012, a portion of the additional cash flows generated from the increased loan amortization and investment security call activity were deployed through the purchase of $23.2 million of adjustable-rate, agency-issued mortgage backed securities ("MBS"), and the remainder was retained in cash and due from banks, which increased by $81.4 million from December 31, 2011 to March 31, 2012. Excess liquid funds held in cash and due from banks as of March 31, 2012 are expected to be deployed during the remainder of 2012. As a result of the $23.2 million purchase, MBS increased $12.4 million during the quarter ended March 31, 2012.The Company additionally utilized net deposit inflows of $43.4 million, $38.2 million of added mortgagor escrow deposit balances, and cash flows from ongoing operations to reduce Repo borrowings by $40.0 million and FHLBNY advances by $55.0 million during the quarter ended March 31, 2012.
Real Estate Loans
Real estate loans declined $40.7 million during the most recent quarter. Real estate loan originations were $181.4 million during the March 2012 quarter, at an average rate of 4.12%. Loan amortization and satisfactions totaled $210.0 million during the quarter, or 24.4% of the average portfolio balance on an annualized basis. The average rate on amortized or satisfied loan balances during the most recent quarter was 5.53%. The loan pipeline stood at $144.5 million at March 31, 2012, with a weighted average rate of 4.16%. The average yield on the loan portfolio (excluding prepayment income) during the quarter ended March 31, 2012 was 5.34%, compared to 5.39% during the December 2011 quarter and 5.67% during the March 2011 quarter.Credit Summary
Non-accrual loans (excluding held for sale loans) were $14.8 million, or 0.43% of total loans, at March 31, 2012, down from $26.0 million, or 0.75% of loans, at December 31, 2011. The reduction resulted primarily from the disposal of twelve non-accrual portfolio loans totaling $12.2 million during the March 2012 quarter. Loans delinquent between 30 and 89 days and accruing interest were $5.7 million, or approximately 0.17% of total loans, at March 31, 2012, compared to $9.3 million, or 0.27% of loans, at December 31, 2011.The sum of non-performing assets and accruing loans past due 90 days or more represented 5.9% of tangible capital plus the allowance for loan losses (a statistic otherwise known as the "Texas Ratio") at March 31, 2012 (see table on page 13). This number compares very favorably to both industry and regional averages.
Within a $300.3 million pool of loans sold to Fannie Mae with recourse exposure, total loans 30 days or more delinquent approximated $1.3 million at March 31, 2012, down from $2.1 million at December 31, 2011.
Deposits and Borrowed Funds
Deposits increased $43.4 million from December 31, 2011 to March 31, 2012, led by growth in money markets, savings and non-interest bearing checking balances of $26.9 million, $7.5 million and $7.1 million, respectively. Certificates of deposit ("CDs") also increased $4.3 million during the March 2012 quarter. At March 31, 2012, average deposit balances approximated $91.8 million per branch. The Bank remains selective in the products, rates and terms on which it competes for deposits, focusing on products that encourage long-term customer retention, and discouraging renewals of promotional deposits in cases where customer relationships have not proved durable.As previously mentioned, during the March 2012 quarter, the Company prepaid $40.0 million of high-cost Repo borrowings and $55.0 million of short-term FHLBNY advances. These funds will be replaced as needed.
Capital
Dime continues to grow its tangible capital ratio through both retaining earnings and limiting asset growth. The Bank's tangible capital ratio was 9.28% at March 31, 2012, up 17 basis points from 9.11% at December 31, 2011. The Bank's tier-one risk-based capital ratio was 11.81% at March 31, 2012, up from 11.56% at December 31, 2011, and its total risk-based capital ratio was 12.47% at March 31, 2012, compared to 12.24% at December 31, 2011.At the Company, consolidated tangible capital was 8.13% of tangible assets at March 31, 2012, an increase of 18 basis points from December 31, 2011. The Company also had approximately $70.0 million of trust preferred securities that were issued as debt outstanding at March 31, 2012, which, when added to Tier 1 (tangible) capital, increased its consolidated Tier 1 (tangible) capital ratio to approximately 9.9%.
Reported earnings per share exceeded the quarterly cash dividend rate per share by 114% during the most recent quarter, resulting in a 47% payout ratio. Tangible book value per share increased $0.18 sequentially during the most recent quarter, to $9.15 at March 31, 2012. This growth was fueled by a return of approximately 12.8% on average tangible equity during the most recent quarter.
OUTLOOK FOR THE QUARTER ENDING JUNE 30, 2012
There is no immediate intention to meaningfully grow the loan portfolio at present rates, thus the Company expects to maintain its current pace of loan originations through the second quarter of 2012, with the goal of maintaining the absolute level of the loan portfolio -- currently approximately $3.42 billion. Funding for loan originations is currently forecasted to come primarily from loan amortization and satisfactions, as well as from existing liquid balances as of March 31, 2012. The Company is operating at a strong level of profitability and will continue to grow capital, which will be available for leverage at an appropriate time in the future.Loans contractually scheduled to mature or reprice during the remainder of the year ending December 31, 2012 totaled $204.4 million with an average rate of 5.98% at March 31, 2012, of which $62.4 million, with an average rate of 5.79%, are scheduled to mature or reprice during the quarter ending June 30, 2012. Satisfaction and amortization rates (including prepayments and loan refinancing activity), which approximated 24.4% on an annualized basis during the most recent quarter, are expected to moderate to the 15 - 20% annualized range during the June 2012 quarter.
The loan commitment pipeline was approximately $144.5 million at March 31, 2012, with an approximate weighted average rate of 4.16%, and was comprised primarily of multifamily residential loans.
On the liability side, deposit funding costs are expected to remain near current historically low levels through the second quarter of 2012. The Bank has $494.3 million of CDs maturing at an average cost of 1.24% during the remainder of the year ending December 31, 2012, of which $252.5 million at an average cost of 1.40% are expected to mature during the June 2012 quarter. Offering rates on 12-month term CDs currently range between 50 and 75 basis points. Borrowings totaling $107.3 million at an average rate of 3.80% are scheduled to mature or reprice during the second quarter of 2012, although the Bank will continue to look for opportunities to restructure its borrowed funds portfolio in order to either enhance profitability or reduce interest rate risk.
Assuming current levels hold for delinquent and troubled loans, management expects loan loss provisioning to approximate the level recorded during the March 2012 quarter.
Absent any unforeseen items, the quarterly non-interest expense level is expected to approximate $16.6 million throughout 2012.
The Company projects that the consolidated effective tax rate will approximate 41.0% throughout 2012.
ABOUT DIME COMMUNITY BANCSHARES
The Company (NASDAQ: DCOM) had $4.02 billion in consolidated assets as of March 31, 2012, and is the parent company of the Bank. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-six branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Dime can be found on the Dime's Internet website at www.dime.com.This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.
Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company's control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of Dime; changes in accounting principles, policies or guidelines may cause the Company's financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company's business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates.
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands except share amounts) March 31, December 31, 2012 2011 ------------ ------------ ASSETS: Cash and due from banks $ 124,749 $ 43,309 Investment securities held to maturity 6,225 6,511 Investment securities available for sale 124,750 174,868 Trading securities 1,886 1,774 Mortgage-backed securities available for sale 106,314 93,877 Federal funds sold and other short-term investments - 951 Real Estate Loans: One-to-four family and cooperative apartment 94,405 100,712 Multifamily and underlying cooperative (1) 2,580,994 2,599,456 Commercial real estate (1) 738,165 751,586 Construction and land acquisition 592 3,199 Unearned discounts and net deferred loan fees 3,516 3,463 ------------ ------------ Total real estate loans 3,417,672 3,458,416 ------------ ------------ Other loans 2,063 2,449 Allowance for loan losses (19,468) (20,254) ------------ ------------ Total loans, net 3,400,267 3,440,611 ------------ ------------ Loans held for sale 1,445 3,022 Premises and fixed assets, net 32,485 32,646 Federal Home Loan Bank of New York capital stock 47,014 49,489 Other real estate owned, net - - Goodwill 55,638 55,638 Other assets 118,085 118,484 ------------ ------------ TOTAL ASSETS $ 4,018,858 $ 4,021,180 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits: Non-interest bearing checking $ 148,162 $ 141,079 Interest Bearing Checking 96,978 99,308 Savings 361,200 353,708 Money Market 798,979 772,055 ------------ ------------ Sub-total 1,405,319 1,366,150 ------------ ------------ Certificates of deposit 981,810 977,551 ------------ ------------ Total Due to Depositors 2,387,129 2,343,701 ------------ ------------ Escrow and other deposits 109,974 71,812 Securities sold under agreements to repurchase 155,000 195,000 Federal Home Loan Bank of New York advances 884,775 939,775 Trust Preferred Notes Payable 70,680 70,680 Other liabilities 42,931 39,178 ------------ ------------ TOTAL LIABILITIES 3,650,489 3,660,146 ------------ ------------ STOCKHOLDERS' EQUITY: Common stock ($0.01 par, 125,000,000 shares authorized, 51,627,345 shares, and 51,566,098 shares issued at March 31, 2012, and December 31, 2011, respectively,and 35,170,103 shares and 35,109,045 shares outstanding at March 31, 2012 and December 31, 2011, respectively) 516 516 Additional paid-in capital 232,506 231,521 Retained earnings 363,559 358,079 Unallocated common stock of Employee Stock Ownership Plan (3,181) (3,239) Unearned common stock of Restricted Stock Awards (2,599) (3,037) Common stock held by the Benefit Maintenance Plan (8,655) (8,655) Treasury stock (16,457,252 shares, and 16,457,053 shares at March 31, 2012, and December 31, 2011, respectively) (204,442) (204,442) Accumulated other comprehensive loss, net (9,335) (9,709) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 368,369 361,034 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,018,858 $ 4,021,180 ============ ============ (1) While the loans within both of these categories are often considered "commercial real estate" in nature, they are classified separately in the statement above to provide further emphasis upon the discrete composition of their underlying real estate collateral. DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars In thousands except per share amounts) For the Three Months Ended ---------------------------------------- March 31, December 31, March 31, 2012 2011 2011 ------------ ------------ ------------ Interest income: Loans secured by real estate $ 50,513 $ 48,409 $ 50,629 Other loans 20 23 26 Mortgage-backed securities 947 1,069 1,452 Investment securities 315 382 316 Federal funds sold and other short-term investments 674 551 772 ------------ ------------ ------------ Total interest income 52,469 50,434 53,195 ------------ ------------ ------------ Interest expense: Deposits and escrow 5,726 6,050 6,785 Borrowed funds 13,349 10,257 11,367 ------------ ------------ ------------ Total interest expense 19,075 16,307 18,152 ------------ ------------ ------------ Net interest income 33,394 34,127 35,043 Provision for loan losses 1,457 1,541 1,426 ------------ ------------ ------------ Net interest income after provision for loan losses 31,937 32,586 33,617 ------------ ------------ ------------ Non-interest income: Service charges and other fees 795 827 763 Mortgage banking income (loss), net 121 136 93 Other than temporary impairment ("OTTI") charge on securities (1) (181) (32) (63) Gain (loss) on sale of other real estate owned and other assets - - - Gain (loss) on trading securities 106 71 46 Other 949 1,134 1,071 ------------ ------------ ------------ Total non-interest income (loss) 1,790 2,136 1,910 ------------ ------------ ------------ Non-interest expense: Compensation and benefits 9,935 9,196 9,727 Occupancy and equipment 2,471 2,388 2,689 Federal deposit insurance premiums 599 455 1,224 Other 3,403 2,742 3,220 ------------ ------------ ------------ Total non-interest expense 16,408 14,781 16,860 ------------ ------------ ------------ Income before taxes 17,319 19,941 18,667 Income tax expense 7,072 7,214 7,587 ------------ ------------ ------------ Net Income $ 10,247 $ 12,727 $ 11,080 ============ ============ ============ Earnings per Share: Basic $ 0.30 $ 0.38 $ 0.33 ============ ============ ============ Diluted $ 0.30 $ 0.38 $ 0.33 ============ ============ ============ Average common shares outstanding for Diluted EPS 34,141,575 33,926,905 33,725,726 ---------------------------------- (1) Total OTTI charges on securities are summarized as follows for the periods presented: Credit component (shown above) $ 181 $ 32 $ 63 Non-credit component not included in earnings 6 - - ------------ ------------ ------------ Total OTTI $ 187 $ 32 $ 63 ------------ ------------ ------------ DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED SELECTED FINANCIAL HIGHLIGHTS (Dollars In thousands except per share amounts) For the Three Months Ended ---------------------------------------- March 31, December 31, March 31, 2012 2011 2011 ------------ ------------ ------------ Performance Ratios (Based upon Reported Earnings): Reported EPS (Diluted) $ 0.30 $ 0.38 $ 0.33 Return on Average Assets 1.01% 1.26% 1.08% Return on Average Stockholders' Equity 11.22% 14.19% 13.31% Return on Average Tangible Stockholders' Equity 12.84% 16.42% 15.63% Net Interest Spread 3.20% 3.31% 3.38% Net Interest Margin 3.47% 3.54% 3.62% Non-interest Expense to Average Assets 1.62% 1.46% 1.65% Efficiency Ratio 46.54% 40.80% 45.60% Effective Tax Rate 40.83% 36.18% 40.64% Book Value and Tangible Book Value Per Share: Stated Book Value Per Share $ 10.47 $ 10.28 $ 9.72 Tangible Book Value Per Share 9.15 8.97 8.29 Average Balance Data: Average Assets $ 4,053,115 $ 4,054,595 $ 4,089,222 Average Interest Earning Assets 3,844,480 3,860,798 3,872,270 Average Stockholders' Equity 365,362 358,717 332,946 Average Tangible Stockholders' Equity 319,212 309,969 283,473 Average Loans 3,441,696 3,449,209 3,470,051 Average Deposits 2,358,200 2,354,877 2,368,300 Asset Quality Summary: Net charge-offs $ 2,263 $ 2,863 $ 980 Non-accrual Loans 14,808 25,952 19,200 Non-accrual Loans/ Total Loans 0.43% 0.75% 0.56% Nonperforming Assets (1) $ 17,029 $ 29,985 $ 19,770 Nonperforming Assets/Total Assets 0.42% 0.75% 0.48% Allowance for Loan Loss/Total Loans 0.57% 0.58% 0.57% Allowance for Loan Loss/Non- accrual Loans 131.47% 78.04% 102.41% Loans Delinquent 30 to 89 Days at period end $ 5,727 $ 9,281 $ 12,103 Consolidated Tangible Stockholders' Equity to Tangible Assets at period end 8.13% 7.95% 7.04% Regulatory Capital Ratios (Bank Only): Leverage Capital Ratio 9.28% 9.11% 8.21% Tier One Risk Based Capital Ratio 11.81% 11.56% 8.21% Total Risk Based Capital Ratio 12.47% 12.24% 12.28% (1) Amount comprised of total non-accrual loans (including held for sale loans), other real estate owned and the recorded balance of two pooled bank trust preferred security investments for which the Bank has not received any contractual payments of interest or principal in over 90 days. DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME (Dollars In thousands) For the Three Months Ended ----------------------------------- March 31, 2012 ----------------------------------- Average Average Yield/ Balance Interest Cost ----------- ----------- ---------- Assets: Interest-earning assets: Real estate loans $ 3,440,621 $ 50,513 5.87% Other loans 1,075 20 7.44 Mortgage-backed securities 83,704 947 4.53 Investment securities 160,792 315 0.78 Other short-term investments 158,288 674 1.70 ----------- ----------- ---------- Total interest earning assets 3,844,480 $ 52,469 5.46% ----------- ----------- Non-interest earning assets 208,635 ----------- Total assets $ 4,053,115 =========== Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest Bearing Checking $ 89,930 $ 49 0.22% Money Market accounts 782,446 1,126 0.58 Savings accounts 357,371 163 0.18 Certificates of deposit 978,097 4,388 1.80 ----------- ----------- ---------- Total interest bearing deposits 2,207,844 5,726 1.04 Borrowed Funds 1,192,982 13,349 4.50 ----------- ----------- ---------- Total interest-bearing liabilities 3,400,826 $ 19,075 2.26% ----------- ----------- Non-interest bearing checking accounts 150,356 Other non-interest-bearing liabilities 136,571 ----------- Total liabilities 3,687,753 Stockholders' equity 365,362 ----------- Total liabilities and stockholders' equity $ 4,053,115 =========== Net interest income $ 33,394 =========== Net interest spread 3.20% ========== Net interest-earning assets $ 443,654 =========== Net interest margin 3.47% ========== Ratio of interest-earning assets to interest-bearing liabilities 113.05% =========== Deposits (including non-interest bearing checking accounts) $ 2,358,200 $ 5,726 0.98% ----------- ----------- ---------- SUPPLEMENTAL INFORMATION Loan prepayment and late payment fee income $ 4,549 ----------- ----------- ---------- Borrowing prepayment costs $ 3,191 ----------- ----------- ---------- Real estate loans (excluding prepayment and late payment fees) 5.34% ----------- ----------- ---------- Interest earning assets (excluding prepayment and late payment fees) 4.99% ----------- ----------- ---------- Borrowings (excluding prepayment costs) 3.42% ----------- ----------- ---------- Interest bearing liabilities (excluding borrowing prepayment costs) 1.88% ----------- ----------- ---------- Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs) $ 32,036 ----------- ----------- ---------- Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs) 3.33% ----------- ----------- ---------- For the Three Months Ended ----------------------------------- December 31, 2011 ----------------------------------- Average Average Yield/ Balance Interest Cost ----------- ----------- ---------- Assets: Interest-earning assets: Real estate loans $ 3,448,215 $ 48,409 5.62% Other loans 994 23 9.26 Mortgage-backed securities 95,227 1,069 4.49 Investment securities 160,171 382 0.95 Other short-term investments 156,191 551 1.41 ----------- ----------- ---------- Total interest earning assets 3,860,798 $ 50,434 5.22% ----------- ----------- Non-interest earning assets 193,797 ----------- Total assets $ 4,054,595 =========== Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest Bearing Checking $ 91,704 $ 55 0.24% Money Market accounts 771,531 1,229 0.63 Savings accounts 350,155 181 0.21 Certificates of deposit 995,611 4,585 1.83 ----------- ----------- ---------- Total interest bearing deposits 2,209,001 6,050 1.09 Borrowed Funds 1,174,368 10,257 3.47 ----------- ----------- ---------- Total interest-bearing liabilities 3,383,369 $ 16,307 1.91% ----------- ----------- ---------- Non-interest bearing checking accounts 145,876 Other non-interest-bearing liabilities 166,633 ----------- Total liabilities 3,695,878 Stockholders' equity 358,717 ----------- Total liabilities and stockholders' equity $ 4,054,595 =========== Net interest income $ 34,127 =========== Net interest spread 3.31% ========== Net interest-earning assets $ 477,429 =========== Net interest margin 3.54% ========== Ratio of interest-earning assets to interest-bearing liabilities 114.11% =========== Deposits (including non-interest bearing checking accounts) $ 2,354,877 $ 6,050 1.02% ----------- ----------- ---------- SUPPLEMENTAL INFORMATION Loan prepayment and late payment fee income $ 1,940 ----------- ----------- ---------- Borrowing prepayment costs - ----------- ----------- ---------- Real estate loans (excluding prepayment and late payment fees) 5.39% ----------- ----------- ---------- Interest earning assets (excluding prepayment and late payment fees) 5.02% ----------- ----------- ---------- Borrowings (excluding prepayment costs) 3.47% ----------- ----------- ---------- Interest bearing liabilities (excluding borrowing prepayment costs) 1.91% ----------- ----------- ---------- Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs) $ 32,187 ----------- ----------- ---------- Net Interest margin (excluding loan prepayment and latepayment fees and borrowing prepayment costs) 3.33% ----------- ----------- ---------- For the Three Months Ended ----------------------------------- March 31, 2011 ----------------------------------- Average Average Yield/ Balance Interest Cost ----------- ----------- ---------- Assets: Interest-earning assets: Real estate loans $ 3,468,902 $ 50,629 5.84% Other loans 1,149 26 9.05 Mortgage-backed securities 129,635 1,452 4.48 Investment securities 134,299 316 0.94 Other short-term investments 138,285 772 2.23 ----------- ----------- ---------- Total interest earning assets 3,872,270 $ 53,195 5.49% ----------- ----------- Non-interest earning assets 216,952 ----------- Total assets $ 4,089,222 =========== Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest Bearing Checking $ 99,305 $ 110 0.45% Money Market accounts 732,274 1,258 0.70 Savings accounts 333,129 193 0.23 Certificates of deposit 1,068,006 5,224 1.98 ----------- ----------- ---------- Total interest bearing deposits 2,232,714 6,785 1.23 Borrowed Funds 1,256,205 11,367 3.67 ----------- ----------- ---------- Total interest-bearing liabilities 3,488,919 $ 18,152 2.11% ----------- ----------- ---------- Non-interest bearing checking accounts 135,586 Other non-interest-bearing liabilities 131,771 ----------- Total liabilities 3,756,276 Stockholders' equity 332,946 ----------- Total liabilities and stockholders' equity $ 4,089,222 =========== Net interest income $ 35,043 =========== Net interest spread 3.38% ========== Net interest-earning assets $ 383,351 =========== Net interest margin 3.62% ========== Ratio of interest-earning assets to interest-bearing liabilities 110.99% =========== Deposits (including non-interest bearing checking accounts) $ 2,368,300 $ 6,785 1.16% SUPPLEMENTAL INFORMATION Loan prepayment and late payment fee income $ 1,470 ----------- ----------- ---------- Borrowing prepayment costs - ----------- ----------- ---------- Real estate loans (excluding prepayment and late payment fees) 5.67% ----------- ----------- ---------- Interest earning assets (excluding prepayment and late payment fees) 5.56% ----------- ----------- ---------- Borrowings (excluding prepayment costs) 3.67% ----------- ----------- ---------- Interest bearing liabilities (excluding borrowing prepayment costs) 2.11% ----------- ----------- ---------- Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs) $ 33,573 ----------- ----------- ---------- Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs) 3.47% ----------- ----------- ---------- DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS (Dollars In thousands) At At March 31, December 31, At March 31, Non-Performing Loans 2012 2011 2011 ------------ ------------ ------------ One- to four-family and cooperative apartment $ 1,206 $ 793 $ 62 Multifamily residential and mixed use residential (1) 4,253 9,295 5,451 Mixed Use Commercial (1) 840 4,777 Commercial real estate 8,506 11,083 13,667 Construction - - - Other 3 4 20 ------------ ------------ ------------ Total Non-Performing Loans (2) $ 14,808 $ 25,952 $ 19,200 ------------ ------------ ------------ Other Non-Performing Assets Other real estate owned - - - Non-performing one- to four-family loans held for sale 1,000 Non-performing multifamily loan held for sale 393 393 - Non-performing construction loan held for sale - 2,628 - Pooled bank trust preferred securities 828 1,012 570 ------------ ------------ ------------ Total Non-Performing Assets $ 17,029 $ 29,985 $ 19,770 ------------ ------------ ------------ Troubled Debt Restructurings not included in non-performing loans One- to four-family and cooperative apartment 623 625 417 Multifamily residential and mixed use (1) 2,458 1,802 1,673 Mixed Use Commercial (1) 1,140 1,148 1,582 Commercial real estate 39,973 37,113 8,729 Construction - - - Other - - - ------------ ------------ ------------ Total Performing Troubled Debt Restructurings ("TDRs") $ 44,194 $ 40,688 $ 12,401 ------------ ------------ ------------ (1) While the loans within these categories are often considered "commercial real estate" in nature, they are classified separately in the statement above to provide further emphasis upon the discrete composition of their underlying real estate collateral. (2) Total non-performing loans include some loans that have been modified in a manner that would meet the criteria for a TDR. These non-accruing TDR's, which totaled $8.1 million at March 31, 2012, $8.1 million at December 31, 2011 and $7.4 million at March 31,2011, respectively, are included in the non-performing loan table, but excluded from the TDR amount shown above. PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES At At March 31, December 31, At March 31, 2012 2011 2011 ------------ ------------ ------------ Total Non-Performing Assets $ 17,029 $ 29,985 $ 19,770 Loans over 90 days past due on accrual status (4) 5,818 3,820 4,033 ------------ ------------ ------------ PROBLEM ASSETS $ 22,847 $ 33,805 $ 23,803 ------------ ------------ ------------ Tier One Capital - Dime Savings Bank of Williamsburgh $ 366,593 $ 359,838 $ 334,234 Allowance for loan losses 19,468 20,254 19,663 ------------ ------------ ------------ TANGIBLE CAPITAL PLUS RESERVES $ 386,061 $ 380,092 $ 353,897 ------------ ------------ ------------ PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES 5.9% 8.9% 6.7% (4) These loans are expected to be either satisfied, made current or re- financed within the next twelve months, and are not expected to result in any loss of contractual principal or interest. These loans are not included in non-performing loans.Contact: Kenneth Ceonzo Director of Investor Relations 718-782-6200 extension 8279
Source: Dime Community Bancshares, Inc.