-- The annualized loan amortization rate increased from 10% to
approximately 16% sequentially. Prepayment fee income was $2.1 million,
compared to $768,000 in the March 2006 quarter and $1.3 million in the June
2005 quarter.
-- Deposits decreased 3% on an annualized basis, as the Bank continued
its disciplined pricing approach to deposit funding.
-- Real estate loan originations totaled $134.8 million at an average
rate of 6.44%, compared to $130.1 million at an average interest rate of
6.14% during the first quarter of 2006.
-- Loans in the pipeline approximated $144.7 million at quarter-end,
including commitments for sale to Fannie Mae of $94.9 million.
-- Net interest margin was 2.79%, three basis points higher sequentially.
-- The Company sold mutual fund investments associated with its Benefit
Maintenance Plan, recording a pre-tax gain of $1.1 million.
-- The Company repurchased 206,659 shares of its common stock.
-- Quarterly non-interest expense remained relatively constant from the
March 2006 quarter and increased 6% year-over-year.
Vincent F. Palagiano, Chairman and Chief Executive Officer, commented, "The
June 2006 quarter featured an unexpected rise in loan prepayments and
associated fee income that was driven by a spike in both property sales and
refinancing activity by property owners in our marketplace."
Mr. Palagiano continued, "Although we do not believe that this is the
beginning of a trend, the activity of the past quarter did benefit our
profitability. First, by collecting the fees, we experienced earnings
growth during the quarter despite continued pressures from the market yield
curve. Secondly, the weighted average interest rate on loans that prepaid
during the quarter fell below the 6.50% average we were able to receive on
new loan originations during the period. Finally, by receiving a higher
than expected level of cash flow from the loan portfolio in the quarter,
our liquidity was enhanced, which enabled us to maintain a greater level of
pricing discipline on our deposits, thus helping to somewhat minimize the
increase in our deposit funding costs while short-term rates continue to
rise."
FINANCIAL RESULTS
For the quarter ended June 30, 2006, the Company's pre-tax income,
excluding gains and losses on the sale of assets, was $12.6 million,
compared to $16.0 million in the same quarter of the previous year. The
$3.4 million decrease was primarily due to a decline of $2.5 million in net
interest income.
Average earning assets declined by $203 million year-over-year. The net
interest margin contracted 14 basis points, from 2.93% during the June 2005
quarter to 2.79% during the June 2006 quarter.
On a linked quarter basis, the Company's pre-tax income, excluding gains
and losses on the sale of assets, increased $423,000, from $12.2 million in
the March 2006 quarter to $12.6 million during the quarter ended June 30,
2006, primarily due to an increase in net interest income of $410,000. The
net interest margin increased 3 basis points, to 2.79%, during the June
2006 quarter, from 2.76% in the March 2006 quarter.
Effective January 1, 2006, the Company reclassified prepayment and late
charge fees on loans in all periods presented from non-interest income into
interest income as a result of a classification change made by the Office
of Thrift Supervision. In preference of conformed presentation, the
Company now recognizes all prepayment and late charge fees on loans as
interest income instead of non-interest income on both its financial and
regulatory reports. Prepayment fee and late charge income added 33 basis
points to the yield on real estate loans and 29 basis points to the overall
yield on interest earning assets during the quarter ended June 30, 2006,
thus accounting for the entire increase in net interest margin on a linked
quarter basis.
Excluding all prepayment fee income from the calculation of net interest
margin, the margin deteriorated on a linked quarter basis from 2.64% to
2.50%.
Prepayment fee income was $2.1 million in the quarter ended June 30, 2006,
up from $768,000 in the quarter ended March 31, 2006, and $1.3 million in
the quarter ended June 30, 2005. While loan repayment speeds (which
include prepayments) fell near the 10 - 12% range anticipated by management
during the first half of 2006, the 16% level experienced during the June
2006 quarter was higher than expected, and resulted from unforeseen growth
in both property sales and refinancing activity by property owners in the
local real estate market. Management still anticipates loan repayment
rates to approximate 10% - 12% for 2006, as compared with speeds of 14% and
24% in 2005 and 2004 respectively.
The yield on interest earning assets increased 26 basis points on a linked
quarter basis, reflecting increased prepayment fee income, an increase in
yield on the Company's real estate loans and mortgage backed securities,
and the movement of a greater percentage of the total interest earning
assets from securities into real estate loans, the Company's highest
yielding asset. The yield on real estate loans was 6.00% during the
quarter ended June 30, 2006 and 5.76% during the quarter ended March 31,
2006. The yields on newly originated real estate loans continued to
increase, averaging 6.44% during the second quarter of 2006, up from 5.74%
during the second quarter of 2005 and 6.14% during the first quarter of
2006. This, combined with both a reduction in the levels of lower-yielding
securities and an increase in the yield on existing real estate loans, also
contributed greatly to the increase of 26 basis points in yield on earning
assets on a linked quarter basis.
Average deposits per branch approximated $92 million at June 30, 2006,
lower than the $104 million average at June 30, 2005 and the $93 million
average at March 31, 2006. The loan-to-deposit ratio was 138% at June 30,
2006, compared to 122% at June 30, 2005 and 136% at March 31, 2006. Core
deposits comprised 47% of total deposits at June 30, 2006, compared to 53%
at June 30, 2005 and 48% at March 31, 2006.
During 2005, the Bank's rates on repricing core deposits lagged those of
the price leaders in its markets. This strategy served to protect margin,
not deposits. Commencing in the first quarter of 2006, there has been a
slight shift in the Bank's deposit pricing posture for competitive reasons.
With the average rate on new loans now consistently trending above 6
percent, attracting and retaining new deposits at today's rates appears
more palatable to managing the Bank's interest rate risk than it did
throughout 2005. While this strategy was not reflected in the results of
the June 2006 quarter, it continues to be management's overall anticipated
strategy for the remainder of 2006.
During the second quarter of 2006, the Company experienced an annualized
decline of 3% in deposits, with a decrease of $35.0 million in core
deposits partially offset by an increase of $18.7 million in certificates
of deposit. The deposit flows continued to trend toward certificates of
deposit as customers gained greater acceptance of market rates offered on
time deposit accounts. However, with an increase in the yield on its
interest earning assets, the Company continued to avoid significant erosion
in its net interest margin despite a prolonged flattened yield curve
environment.
The Company also added $30.0 million in borrowings during the June 2006
quarter, with a weighted average term to maturity of less than one year.
Non-interest income, excluding gains or losses on the sale of assets,
totaled $2.4 million during the quarter ended June 30, 2006, compared to
$2.6 million in the quarter ended June 30, 2005 and $2.3 million in the
quarter ended March 31, 2006. The decline from the June 2005 quarter
resulted primarily from a reduction of $196,000 in retail banking fee
income reflecting both a reduction in deposit balances and increased
competition for deposit accounts during the period July 2005 through June
2006.
The Company sold loans to Fannie Mae totaling $21.0 million, $15.7 million
and $27.1 million during the quarters ended June 30, 2006, June 30, 2005
and March 31, 2006, respectively. The gains recorded on these sales were
$253,000, $152,000 and $399,000 during the quarters ended June 30, 2006,
June 30, 2005 and March 31, 2006, respectively. The majority of the loans
sold during each of these periods were designated for sale upon
origination. The loans sold during the quarter ended June 30, 2006 had a
weighted average term to the earlier of maturity or next repricing of 13.6
years.
During the quarter ended June 30, 2006, the Company recorded a pre-tax gain
of $1.1 million on the sale of mutual fund investments associated with its
Benefit Maintenance Plan. The gain came as a result of a decision to
reallocate the investments held to fund future supplemental retirement
benefits. Since these available-for-sale investments were carried at
market value under Generally Accepted Accounting Principles, the after-tax
gain was previously reflected in the Company's stockholders' equity. The
act of reallocating the investments caused the Company to pass this gain
through the income statement.
During the quarter ended June 30, 2005, the Company incurred a pre-tax loss
of $5.2 million related to the sale of $276 million of investment and
mortgage-backed securities as part of a restructuring of its securities
portfolio. During the quarter ended March 31, 2006, the Company sold a
parcel of real estate obtained in its acquisition of Financial Bancorp in
1999, recognizing a pre-tax gain of $478,000.
Non-interest expense totaled $10.5 million during the quarter ended June
30, 2006, relatively flat sequentially, and an increase of $595,000, or
6.0%, over the June 2005 quarter. The increase of $595,000 resulted
partially from an increase of $214,000 in data processing systems expense
resulting from the termination of promotional pricing the Company received
throughout the second quarter of 2005 from its new data systems contract
that commenced in November 2004. Salaries and benefits increased $179,000
year-over-year as a result of both staff additions and regular salary
increases, and occupancy and equipment expense increased $102,000 during
the same period due primarily to the addition of the Valley Stream Branch.
Finally, other expenses (excluding data processing systems expense)
increased $120,000 year-over-year primarily as a result of a curtailment
credit of $179,000 recorded during the June 2005 quarter on the Retirement
Plan for the Company's non-employee Directors.
Non-interest expense to average assets was 1.34% in the June 2006 quarter,
compared to 1.19% for the quarter ended June 30, 2005, and 1.34% for the
quarter ended March 2006. Average assets decreased by $200 million from
June 30, 2005 to June 30, 2006.
The effective tax rate was 35.1% for the quarter ended June 30, 2006, 35.8%
for the quarter ended March 31, 2006 and 33.9% for the quarter ended June
30, 2005. The reduced effective tax rate during the June 2005 quarter
resulted from the tax impact of the loss recorded from the sale of
investment and mortgage-backed securities during the period. The effective
tax rate is expected to approximate 36.0% for the full year ending December
31, 2006.
REAL ESTATE LENDING AND CREDIT QUALITY
Real estate loan originations totaled $134.8 million during the quarter
ended June 30, 2006, of which $40.9 million, or 30%, represented commercial
real estate. The average rate on total loan originations during the quarter
was 6.44%, compared to 5.74% in the quarter ended June 30, 2005 and 6.14%
during the quarter ended March 31, 2006. Commercial real estate
represented 24% of the gross loan portfolio at June 30, 2006, compared with
22% as of December 31, 2005. The commercial real estate portfolio grew at
a 26.1% rate year-over-year.
Real estate loan prepayment and amortization during the June 2006 quarter
approximated 16% of the loan portfolio on an annualized basis, compared to
14% during the June 2005 quarter and 10% during the March 2006 quarter.
The average interest rate on real estate loan prepayment and amortization
during the most recent quarter was 5.86%.
Non-performing loans were $2.9 million at June 30, 2006, representing only
0.11% of total loans. During the quarter ended June 30, 2006, four loans
totaling $2.9 million were added to non-performing status. Management does
not currently expect to incur any significant losses on these loans.
STOCKHOLDERS' EQUITY AND SHARE REPURCHASE PROGRAM
The Company's total stockholders' equity at June 30, 2006 was $293.1
million, or 9.38% of total assets, compared to $292.7 million, or 9.32% of
total assets at March 31, 2006. After outlays for dividends paid to
shareholders and share repurchases, by the end of the second quarter of
2006 the Company's tangible equity had climbed to $242.2 million, as
compared to $240.8 million at March 31, 2006. The quarterly cash dividend
paid in May 2006 represented a payout ratio of 53.9% of second quarter 2006
earnings. At June 30, 2006, tangible stockholders' equity was 7.87% of
tangible assets and the tangible book value per share was $6.58.
During the quarter ended June 30, 2006, the return on average stockholders'
equity was 12.4%, the return on average tangible equity was 15.0%, and the
cash return on average tangible equity was 15.6%.
During the second quarter of 2006, the Company repurchased into treasury
206,659 shares, or 0.6%, of its common stock outstanding at March 31, 2006.
As of June 30, 2006, the Company had an additional 227,413 shares remaining
eligible for repurchase under its tenth stock repurchase program, approved
in May 2004. On December 15, 2005, the Board of Directors approved the
Company's eleventh stock repurchase program, which authorizes the purchase,
at the discretion of management, of an additional 1,847,977 shares.
OUTLOOK
Management has consistently stated that as the Fed Funds rate moves closer
to a point that the Federal Reserve considers to be "neutral," and new loan
yields provide a reasonable spread over funding costs, the Company will be
more inclined to accelerate balance sheet growth.
Comments drawn from the minutes of the most recent Federal Open Market
Committee meeting continue to indicate that the ongoing interest rate
tightening process is drawing near its end. The 10-year bond yield is now
consistently trading above 5%, and loan pricing appears to be firming above
6%. These are encouraging signs, which could enable the Bank to resume
balance sheet growth during the remainder of the year. The impact of loan
pricing upon the demand for new loans will greatly influence the Company's
ability to grow assets in a timely manner. Management is slowly becoming
more aggressive in deposit pricing so as to stabilize deposit balances.
In the meantime, as noted earlier, tangible equity (the capital base upon
which future balance sheet growth can be leveraged) continues to grow.
At present, the overall yield on the Company's interest-earning assets is
rising, despite the lagging movement of yields on real estate loans
compared to general market rates. The average yield on interest earning
assets, excluding the effects of prepayment fee income, rose on a linked
quarter basis, from 5.46% to 5.54%.
The cost of deposits rose from 2.45% during the March 31, 2006 quarter to
2.80% during the June 2006 quarter. This trend is likely to continue,
whether or not the Bank grows deposits. The rising cost of deposits is due
to a combination of repricing lower rate deposits already on the books,
plus the cost of attracting new deposits.
At 12.9% annualized during the first six months of 2006, prepayment and
amortization rates continued to be near the range anticipated by
management, and are expected to remain in the 10% to 12% range during the
remainder of 2006. At June 30, 2006, the multifamily and mixed use loan
commitment pipeline approximated $144.7 million, including $94.9 million of
loan commitments intended for sale to Fannie Mae. The average rate on the
commitment pipeline was 6.69%.
Operating expenses are expected to be approximately $10.9 million in the
third quarter of 2006 (representing the 2006 quarterly run rate), with the
majority of the increase resulting from new costs associated with both the
recently opened Valley Stream branch and other retail banking initiatives.
Share repurchases are expected to be in line with recent practices. The
Company is positioned, however, to be opportunistic in the purchase of its
own shares should conditions warrant. Based on this outlook, the Company
now expects third quarter 2006 earnings per diluted share will be in the
range of $0.18 to $0.20.
ABOUT DIME COMMUNITY BANCSHARES
Dime Community Bancshares, Inc., a unitary thrift holding company, is the
parent company of The Dime Savings Bank of Williamsburgh, founded in 1864,
and headquartered in Brooklyn, New York. With $3.12 billion in assets as
of June 30, 2006, the Bank has twenty-one branches located throughout
Brooklyn, Queens, the Bronx and Nassau County, New York. More information
on the Company and Bank can be found on the Bank's Internet website at
www.dimedirect.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 the Bank; 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
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands except share amounts)
June 30,
2006 December 31,
(Unaudited) 2005
----------- -----------
ASSETS:
Cash and due from banks $ 19,191 $ 40,199
Investment securities held to maturity 380 455
Investment securities available for sale 31,376 44,832
Mortgage-backed securities available for sale 170,272 193,453
Federal funds sold and other short-term assets 63,037 60,014
Real estate Loans:
One-to-four family and cooperative apartment 161,699 145,754
Multifamily and underlying cooperative 1,847,399 1,873,940
Commercial real estate 634,131 576,561
Construction and land acquisition 13,874 12,098
Unearned discounts and net deferred loan fees 850 501
----------- -----------
Total real estate loans 2,657,953 2,608,854
----------- -----------
Other loans 2,489 2,341
Allowance for loan losses (16,033) (15,785)
----------- -----------
Total loans, net 2,644,409 2,595,410
----------- -----------
Loans held for sale - 900
Premises and fixed assets, net 17,412 16,527
Federal Home Loan Bank of New York capital stock 32,420 29,917
Goodwill 55,638 55,638
Other assets 89,786 88,881
----------- -----------
TOTAL ASSETS $ 3,123,921 $ 3,126,226
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Checking, NOW and Super NOW $ 132,112 $ 135,698
Savings 321,329 335,527
Money Market 445,383 464,962
----------- -----------
Sub-total 898,824 936,187
----------- -----------
Certificates of deposit 1,031,674 978,585
----------- -----------
Total Due to depositors 1,930,498 1,914,772
----------- -----------
Escrow and other deposits 46,335 47,518
Securities sold under agreements to repurchase 120,380 205,455
Federal Home Loan Bank of New York advances 596,500 531,500
Subordinated Notes Sold 25,000 25,000
Trust Preferred Notes Payable 72,165 72,165
Other liabilities 39,954 38,102
----------- -----------
TOTAL LIABILITIES 2,830,832 2,834,512
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par, 125,000,000 shares
authorized, 50,808,468 shares and 50,633,881
shares issued at June 30, 2006 and December 31,
2005, respectively, and 36,790,735 shares and
36,956,907 shares outstanding at June 30, 2006
and December 31, 2005, respectively) 508 506
Additional paid-in capital 205,013 204,083
Retained earnings 282,132 274,579
Unallocated common stock of Employee Stock
Ownership Plan (4,511) (4,627)
Unearned common stock of Recognition and
Retention Plan (3,583) (2,979)
Common stock held by the Benefit Maintenance Plan (7,941) (7,941)
Treasury stock (14,017,733 shares and 13,676,974
shares at June 30, 2006 and December 31, 2005,
respectively) (173,509) (168,579)
Accumulated other comprehensive loss, net (5,020) (3,328)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 293,089 291,714
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,123,921 $ 3,126,226
=========== ===========
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In thousands except per share amounts)
For the Three Months Ended
June 30, March 31, June 30,
----------- ---------- ----------
2006 2006 2005
----------- ---------- ----------
Interest income:
Loans secured by real estate $ 39,844 $ 37,839 $ 36,673
Other loans 45 49 63
Mortgage-backed securities 1,753 1,845 3,270
Investment securities 469 482 755
Other 1,522 1,156 1,887
----------- ---------- ----------
Total interest income 43,633 41,371 42,648
----------- ---------- ----------
Interest expense:
Deposits and escrow 13,554 11,496 10,185
Borrowed funds 9,228 9,434 9,077
----------- ---------- ----------
Total interest expense 22,782 20,930 19,262
----------- ---------- ----------
Net interest income 20,851 20,441 23,386
Provision for loan losses 60 60 60
----------- ---------- ----------
Net interest income after provision for
loan losses 20,791 20,381 23,326
----------- ---------- ----------
Non-interest income (loss):
Service charges and other fees 1,457 1,497 1,514
Net gain (loss) on sales and
redemptions of assets 1,317 877 (5,024)
Other 919 786 1,092
----------- ---------- ----------
Total non-interest income
(loss) 3,693 3,160 (2,418)
----------- ---------- ----------
Non-interest expense:
Compensation and benefits 5,804 5,868 5,625
Occupancy and equipment 1,379 1,412 1,277
Core deposit intangible
amortization - - -
Other 3,345 3,168 3,031
----------- ---------- ----------
Total non-interest expense 10,528 10,448 9,933
----------- ---------- ----------
Income before taxes 13,956 13,093 10,975
Income tax expense 4,896 4,685 3,717
----------- ---------- ----------
Net Income $ 9,060 $ 8,408 $ 7,258
=========== ========== ==========
Earnings per Share:
Basic $ 0.26 $ 0.24 $ 0.21
=========== ========== ==========
Diluted $ 0.26 $ 0.24 $ 0.20
=========== ========== ==========
Average common shares outstanding for
Diluted EPS 35,202,812 35,373,046 35,644,728
For the Six Months Ended
June 30, June 30,
----------- ----------
2006 2005
----------- ----------
Interest income:
Loans secured by real estate $ 77,683 $ 73,231
Other loans 94 119
Mortgage-backed securities 3,598 7,760
Investment securities 951 1,361
Other 2,678 2,841
----------- ----------
Total interest income 85,004 85,312
----------- ----------
Interest expense:
Deposits and escrow 25,050 19,566
Borrowed funds 18,662 17,650
----------- ----------
Total interest expense 43,712 37,216
----------- ----------
Net interest income 41,292 48,096
Provision for loan losses 120 120
----------- ----------
Net interest income after provision for
loan losses 41,172 47,976
----------- ----------
Non-interest income (loss):
Service charges and other fees 2,954 2,922
Net gain (loss) on sales and
redemptions of assets 2,194 (4,889)
Other 1,705 1,869
----------- ----------
Total non-interest income
(loss) 6,853 (98)
----------- ----------
Non-interest expense:
Compensation and benefits 11,672 11,232
Occupancy and equipment 2,791 2,614
Core deposit intangible
amortization - 48
Other 6,513 5,797
----------- ----------
Total non-interest expense 20,976 19,691
----------- ----------
Income before taxes 27,049 28,187
Income tax expense 9,581 10,058
----------- ----------
Net Income $ 17,468 $ 18,129
=========== ==========
Earnings per Share:
Basic $ 0.50 $ 0.52
=========== ==========
Diluted $ 0.50 $ 0.51
=========== ==========
Average common shares outstanding for
Diluted EPS 35,287,490 35,697,973
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
Core Earnings and Core Cash Earnings Reconciliations
(Dollars In thousands except per share amounts)
Core earnings and related data are "Non-GAAP Disclosures." These
disclosures present information which management considers useful to the
readers of this report since they present a measure of the results of the
Company's ongoing operations (exclusive of significant non-recurring items
such as gains or losses on sales of investment or mortgage-backed
securities) during the period.
In addition, Core cash earnings and related data are also "Non-GAAP
Disclosures." These disclosures present information which management
considers useful to the readers of this report since they present a
measure of the tangible equity generated from operations during each period
presented. Tangible equity generation is a significant financial measure
since banks are subject to regulatory requirements involving the
maintenance of minimum tangible capital levels.
The following tables present a reconciliation of GAAP net income and both
core earnings and core cash earnings, as well as financial performance
ratios determined based upon core earnings and core cash earnings, for each
of the periods presented:
For the Three Months Ended
----------------------------
June 30, March 31, June 30,
2006 2006 2005
-------- -------- --------
Net income as reported $ 9,060 $ 8,408 $ 7,258
Pre-tax net (gain) loss on sale of securities
and other assets (1,064) (478) 5,176
Pre-tax income from borrowings restructuring - (43) -
Tax effect of adjustments 378 190 (2,143)
-------- -------- --------
Core Earnings $ 8,374 $ 8,077 $ 10,291
-------- -------- --------
Cash Earnings Additions:
Core Deposit Intangible Amortization - - -
Non-cash stock benefit plan expense 358 367 352
-------- -------- --------
Core Cash Earnings $ 8,732 $ 8,444 $ 10,643
-------- -------- --------
Performance Ratios (Based upon Core Cash
Earnings):
Core Cash EPS (Diluted) $ 0.25 $ 0.24 $ 0.30
Core Cash Return on Average Assets 1.11% 1.08% 1.28%
Core Cash Return on Average Tangible
Stockholders' Equity 14.46% 14.13% 18.29%
For the Six Months Ended
------------------
June 30, June 30,
2006 2005
-------- --------
Net income as reported $ 17,468 $ 18,129
Pre-tax net (gain) loss on sale of securities
and other assets (1,542) 5,176
Pre-tax income from borrowings restructuring (43) -
Tax effect of adjustments 568 (2,143)
-------- --------
Core Earnings $ 16,451 $ 21,162
-------- --------
Cash Earnings Additions:
Core Deposit Intangible Amortization - 48
Non-cash stock benefit plan expense 725 695
-------- --------
Core Cash Earnings $ 17,176 $ 21,905
-------- --------
Performance Ratios (Based upon Core Cash
Earnings):
Core Cash EPS (Diluted) $ 0.49 $ 0.61
Core Cash Return on Average Assets 1.10% 1.31%
Core Cash Return on Average Tangible
Stockholders' Equity 14.30% 18.98%
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars In thousands except per share amounts)
For the Three Months Ended
----------- ----------- -----------
June 30, March 31, June 30,
2006 2006 2005
----------- ----------- -----------
Performance Ratios (Based upon
Reported Earnings):
Reported EPS (Diluted) $ 0.26 $ 0.24 $ 0.20
Return on Average Assets 1.16% 1.08% 0.87%
Return on Average Stockholders'
Equity 12.37% 11.55% 10.18%
Return on Average Tangible
Stockholders' Equity 15.00% 14.07% 12.47%
Net Interest Spread 2.36% 2.35% 2.62%
Net Interest Margin 2.79% 2.76% 2.93%
Non-interest Expense to Average
Assets 1.34% 1.34% 1.19%
Efficiency Ratio 45.33% 45.98% 38.22%
Effective Tax Rate 35.08% 35.78% 33.87%
Performance Ratios (Based upon Core
Earnings):
Core EPS (Diluted) $ 0.24 $ 0.23 $ 0.29
Core Return on Average Assets 1.07% 1.04% 1.23%
Core Return on Average Stockholders'
Equity 11.44% 11.09% 14.44%
Core Return on Average Tangible
Stockholders' Equity 13.87% 13.52% 17.69%
Book Value and Tangible Book Value
Per Share:
Stated Book Value Per Share $ 7.97 $ 7.92 $ 7.74
Tangible Book Value Per Share 6.58 6.52 6.28
Average Balance Data:
Average Assets $ 3,134,815 $ 3,118,817 $ 3,335,107
Average Interest Earning Assets 2,992,772 2,966,577 3,195,935
Average Stockholders' Equity 292,882 291,227 285,103
Average Tangible Stockholders'
Equity 241,554 238,972 232,728
Average Loans 2,658,556 2,629,336 2,501,574
Average Deposits 1,942,554 1,900,259 2,132,556
Asset Quality Summary:
Net charge-offs (recoveries) $ 8 $ 11 $ (14)
Nonperforming Loans 2,885 365 5,025
Nonperforming Loans/Total Loans 0.11% 0.01% 0.20%
Nonperforming Assets/Total Assets 0.09% 0.01% 0.15%
Allowance for Loan Loss/Total Loans 0.60% 0.59% 0.61%
Allowance for Loan
Loss/Nonperforming Loans 555.74% 4309.04% 309.13%
Regulatory Capital Ratios:
Consolidated Tangible Equity to
Tangible Assets at period end 7.87% 7.79% 7.24%
Tangible Capital Ratio (Bank Only) 9.39% 9.04% 8.72%
Leverage Capital Ratio (Bank Only) 9.39% 9.04% 8.72%
Risk-Based Capital Ratio (Bank
Only) 13.38% 12.90% 13.38%
For the Six Months Ended
------------------------
June 30, June 30,
2006 2005
----------- -----------
Performance Ratios (Based upon
Reported Earnings):
Reported EPS (Diluted) $ 0.50 $ 0.51
Return on Average Assets 1.12% 1.08%
Return on Average Stockholders'
Equity 11.96% 12.81%
Return on Average Tangible
Stockholders' Equity 14.55% 15.71%
Net Interest Spread 2.35% 2.72%
Net Interest Margin 2.77% 3.01%
Non-interest Expense to Average
Assets 1.34% 1.18%
Efficiency Ratio 45.65% 37.23%
Effective Tax Rate 35.42% 35.68%
Performance Ratios (Based upon Core
Earnings):
Core EPS (Diluted) $ 0.47 $ 0.59
Core Return on Average Assets 1.05% 1.26%
Core Return on Average Stockholders'
Equity 11.27% 14.95%
Core Return on Average Tangible
Stockholders' Equity 13.70% 18.33%
Book Value and Tangible Book Value
Per Share:
Stated Book Value Per Share $ 7.97 $ 7.74
Tangible Book Value Per Share 6.58 6.28
Average Balance Data:
Average Assets $ 3,126,816 $ 3,346,123
Average Interest Earning Assets 2,979,675 3,200,304
Average Stockholders' Equity 292,054 283,071
Average Tangible Stockholders'
Equity 240,182 230,843
Average Loans 2,643,946 2,491,565
Average Deposits 1,921,407 2,158,240
Asset Quality Summary:
Net charge-offs (recoveries) $ 19 $ (15)
Nonperforming Loans 2,885 5,025
Nonperforming Loans/Total Loans 0.11% 0.20%
Nonperforming Assets/Total Assets 0.09% 0.15%
Allowance for Loan Loss/Total Loans 0.60% 0.61%
Allowance for Loan
Loss/Nonperforming Loans 555.74% 309.13%
Regulatory Capital Ratios:
Consolidated Tangible Equity to
Tangible Assets at period end 7.87% 7.24%
Tangible Capital Ratio (Bank Only) 9.39% 8.72%
Leverage Capital Ratio (Bank Only) 9.39% 8.72%
Risk-Based Capital Ratio (Bank
Only) 13.38% 13.38%
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
ANALYSIS OF NET INTEREST INCOME
For the Three Months Ended
June 30, 2006
----------- ----------- ----------
Average
Average Yield/
Balance Interest Cost
----------- ----------- ----------
(Dollars in Thousands)
Assets:
Interest-earning assets:
Real Estate Loans $ 2,656,658 $ 39,844 6.00%
Other loans 1,898 45 9.48
Mortgage-backed securities 182,101 1,753 3.85
Investment securities 31,023 469 6.05
Other short-term investments 121,092 1,522 5.03
----------- ----------- ----------
Total interest earning assets 2,992,772 $ 43,633 5.84%
----------- -----------
Non-interest earning assets 142,043
-----------
Total assets $ 3,134,815
===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
NOW, Super Now accounts $ 36,778 $ 91 0.99%
Money Market accounts 452,288 2,578 2.29
Savings accounts 325,403 476 0.59
Certificates of deposit 1,030,354 10,409 4.05
----------- ----------- ----------
Total interest bearing
deposits 1,844,823 13,554 2.95
Borrowed Funds 783,544 9,228 4.72
----------- ----------- ----------
Total interest-bearing
liabilities 2,628,367 22,782 3.48%
----------- -----------
Checking accounts 97,731
Other non-interest-bearing
liabilities 115,835
-----------
Total liabilities 2,841,933
Stockholders' equity 292,882
-----------
Total liabilities and stockholders'
equity $ 3,134,815
===========
Net interest income $ 20,851
===========
Net interest spread (1) 2.36%
==========
Net interest-earning assets $ 364,405
===========
Net interest margin (1) 2.79%
==========
Ratio of interest-earning assets
to interest-bearing liabilities 113.86%
==========
Average deposits (including
non-interest
bearing checking accounts) $ 1,942,554 $ 13,554 2.80%
For the Three Months Ended
March 31, 2006
----------- ----------- ----------
Average
Average Yield/
Balance Interest Cost
----------- ----------- ----------
(Dollars in Thousands)
Assets:
Interest-earning assets:
Real Estate Loans $ 2,627,262 $ 37,839 5.76%
Other loans 2,074 49 9.45
Mortgage-backed securities 192,672 1,845 3.83
Investment securities 38,329 482 5.03
Other short-term investments 106,240 1,156 4.35
----------- ----------- ----------
Total interest earning assets 2,966,577 $ 41,371 5.58%
----------- -----------
Non-interest earning assets 152,240
-----------
Total assets $ 3,118,817
===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
NOW, Super Now accounts $ 37,239 $ 91 0.99%
Money Market accounts 455,676 2,079 1.85
Savings accounts 330,646 455 0.56
Certificates of deposit 981,346 8,871 3.67
----------- ----------- ----------
Total interest bearing
deposits 1,804,907 11,496 2.58
Borrowed Funds 826,298 9,434 4.63
----------- ----------- ----------
Total interest-bearing
liabilities 2,631,205 20,930 3.23%
----------- -----------
Checking accounts 95,352
Other non-interest-bearing
liabilities 101,033
-----------
Total liabilities 2,827,590
Stockholders' equity 291,227
-----------
Total liabilities and stockholders'
equity $ 3,118,817
===========
Net interest income $ 20,441
===========
Net interest spread (1) 2.35%
==========
Net interest-earning assets $ 335,372
===========
Net interest margin (1) 2.76%
==========
Ratio of interest-earning assets
to interest-bearing liabilities 112.75%
==========
Average deposits (including
non-interest
bearing checking accounts) $ 1,900,259 $ 11,496 2.45%
For the Three Months Ended
June 30, 2005
----------- ----------- ----------
Average
Average Yield/
Balance Interest Cost
----------- ----------- ----------
(Dollars in Thousands)
Assets:
Interest-earning assets:
Real Estate Loans $ 2,499,139 $ 36,704 5.87%
Other loans 2,436 32 10.34
Mortgage-backed securities 369,470 3,270 3.54
Investment securities 90,384 755 3.34
Other short-term investments 234,506 1,887 3.22
----------- ----------- ----------
Total interest earning assets 3,195,935 $ 42,648 5.34%
----------- -----------
Non-interest earning assets 139,172
-----------
Total assets $ 3,335,107
===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
NOW, Super Now accounts $ 40,801 $ 103 1.02%
Money Market accounts 670,907 2,869 1.72
Savings accounts 358,382 493 0.55
Certificates of deposit 966,386 6,720 2.80
----------- ----------- ----------
Total interest bearing
deposits 2,036,476 10,185 2.01
Borrowed Funds 809,248 9,077 4.51
----------- ----------- ----------
Total interest-bearing
liabilities 2,845,724 19,262 2.72%
----------- -----------
Checking accounts 96,080
Other non-interest-bearing
liabilities 108,200
-----------
Total liabilities 3,050,004
Stockholders' equity 285,103
-----------
Total liabilities and stockholders'
equity $ 3,335,107
===========
Net interest income $ 23,386
===========
Net interest spread (1) 2.62%
==========
Net interest-earning assets $ 350,211
===========
Net interest margin (1) 2.93%
==========
Ratio of interest-earning assets
to interest-bearing liabilities 112.31%
==========
Average deposits (including
non-interest
bearing checking accounts) $ 2,132,556 $ 10,185 1.92%
Contact Information: Contact: Kenneth Ceonzo Director of Investor Relations 718-782-6200 extension 8279