DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands except share amounts) December 31, December 31, September 30, 2010 2009 2010 ----------- ----------- ----------- ASSETS: Cash and due from banks $ 86,193 $ 39,338 $ 70,761 Investment securities held to maturity 6,641 7,240 6,639 Investment securities available for sale 85,642 43,162 64,675 Trading securities 1,490 - 1,420 Mortgage-backed securities available for sale 144,518 224,773 165,221 Federal funds sold and other short-term investments 4,536 3,785 23,848 Real Estate Loans: One-to-four family and cooperative apartment 116,886 131,475 119,991 Multifamily and underlying cooperative (1) 2,497,339 2,377,278 2,456,348 Commercial real estate (1) 833,314 834,724 823,018 Construction and land acquisition 15,238 44,544 16,348 Unearned discounts and net deferred loan fees 5,013 4,017 4,526 ----------- ----------- ----------- Total real estate loans 3,467,790 3,392,038 3,420,231 ----------- ----------- ----------- Other loans 2,394 3,221 2,327 Allowance for loan losses (19,166) (21,505) (16,942) ----------- ----------- ----------- Total loans, net 3,451,018 3,373,754 3,405,616 ----------- ----------- ----------- Loans held for sale 3,308 416 4,879 Premises and fixed assets, net 31,613 29,841 31,224 Federal Home Loan Bank of New York capital stock 51,718 54,083 47,848 Other real estate owned, net - 755 85 Goodwill 55,638 55,638 55,638 Other assets 117,980 119,489 118,914 ----------- ----------- ----------- TOTAL ASSETS $ 4,040,295 $ 3,952,274 $ 3,996,768 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits: Non-interest bearing checking $ 125,730 $ 106,449 $ 119,966 Interest Bearing Checking 108,078 114,416 104,705 Savings 329,182 302,340 318,239 Money Market 727,939 708,578 743,305 ----------- ----------- ----------- Sub-total 1,290,929 1,231,783 1,286,215 ----------- ----------- ----------- Certificates of deposit 1,059,652 985,053 1,094,451 ----------- ----------- ----------- Total Due to Depositors 2,350,581 2,216,836 2,380,666 ----------- ----------- ----------- Escrow and other deposits 68,542 65,895 91,965 Securities sold under agreements to repurchase 195,000 230,000 195,000 Federal Home Loan Bank of New York advances 990,525 1,009,675 904,525 Subordinated Notes Sold - 25,000 - Trust Preferred Notes Payable 70,680 70,680 70,680 Other liabilities 36,233 39,415 31,470 ----------- ----------- ----------- TOTAL LIABILITIES 3,711,561 3,657,501 3,674,306 ----------- ----------- ----------- STOCKHOLDERS' EQUITY: Common stock ($0.01 par, 125,000,000 shares authorized, 51,219,609 shares and 51,131,784 shares issued at December 31, 2010 and December 31, 2009, respectively and 34,593,180 shares and 34,395,531 shares outstanding at December 31, 2010 and December 31, 2009, respectively) 512 511 511 Additional paid-in capital 225,585 214,654 224,239 Retained earnings 329,668 306,787 323,777 Unallocated common stock of Employee Stock Ownership Plan (3,470) (3,701) (3,528) Unearned common stock of Restricted Stock Awards (2,684) (2,505) (3,226) Common stock held by the Benefit Maintenance Plan (7,979) (8,007) (7,979) Treasury stock (16,626,429 shares and 16,736,253 shares at December 31, 2010, and December 31, 2009, respectively) (206,546) (207,884) (206,259) Accumulated other comprehensive loss, net (6,352) (5,082) (5,073) ----------- ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 328,734 294,773 322,462 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,040,295 $ 3,952,274 $ 3,996,768 =========== =========== =========== (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 ---------------------------------------- September December 31, 30, December 31, 2010 2010 2009 ------------ ------------ ------------ Interest income: Loans secured by real estate $ 50,752 $ 50,648 $ 49,277 Other loans 26 28 33 Mortgage-backed securities 1,621 1,846 2,551 Investment securities 268 290 359 Federal funds sold and other short-term investments 857 702 744 ------------ ------------ ------------ Total interest income 53,524 53,514 52,964 ------------ ------------ ------------ Interest expense: Deposits and escrow 7,005 7,383 7,706 Borrowed funds 11,385 11,855 13,173 ------------ ------------ ------------ Total interest expense 18,390 19,238 20,879 ------------ ------------ ------------ Net interest income 35,134 34,276 32,085 Provision for loan losses 3,262 667 4,491 ------------ ------------ ------------ Net interest income after provision for loan losses 31,872 33,609 27,594 ------------ ------------ ------------ Non-interest income: Service charges and other fees 748 1,284 1,091 Mortgage banking income (loss), net 240 316 (1,708) Other than temporary impairment ("OTTI") charge on securities (1) (163) (1,639) (1,433) Gain (loss) on sale of other real estate owned and other assets 9 (10) - Gain (loss) on trading securities 46 86 505 Other 1,140 1,031 884 ------------ ------------ ------------ Total non-interest income (loss) 2,020 1,068 (661) ------------ ------------ ------------ Non-interest expense: Compensation and benefits 9,300 8,514 8,455 Occupancy and equipment 2,276 2,190 2,075 Other 4,026 4,188 4,206 ------------ ------------ ------------ Total non-interest expense 15,602 14,892 14,736 ------------ ------------ ------------ Income before taxes 18,290 19,785 12,197 Income tax expense 7,730 8,430 4,100 ------------ ------------ ------------ Net Income $ 10,560 $ 11,355 $ 8,097 ============ ============ ============ Earnings per Share: Basic $ 0.32 $ 0.34 $ 0.24 ============ ============ ============ Diluted $ 0.31 $ 0.34 $ 0.24 ============ ============ ============ Average common shares outstanding for Diluted EPS 33,538,319 33,394,522 33,143,496 For the Year Ended -------------------------- December 31, December 31, 2010 2009 ------------ ------------ Interest income: Loans secured by real estate $ 202,591 $ 193,689 Other loans 123 143 Mortgage-backed securities 7,820 11,548 Investment securities 1,277 874 Federal funds sold and other short-term investments 2,983 2,914 ------------ ------------ Total interest income 214,794 209,168 ------------ ------------ Interest expense: Deposits and escrow 29,991 42,792 Borrowed funds 49,422 54,893 ------------ ------------ Total interest expense 79,413 97,685 ------------ ------------ Net interest income 135,381 111,483 Provision for loan losses 11,209 13,152 ------------ ------------ Net interest income after provision for loan losses 124,172 98,331 ------------ ------------ Non-interest income: Service charges and other fees 3,913 4,209 Mortgage banking income (loss), net 1,069 (1,774) Other than temporary impairment ("OTTI") charge on securities (1) (2,475) (7,915) Gain (loss) on sale of other real estate owned and other assets 627 339 Gain (loss) on trading securities 289 505 Other 4,632 3,891 ------------ ------------ Total non-interest income (loss) 8,055 (745) ------------ ------------ Non-interest expense: Compensation and benefits 35,224 31,814 Occupancy and equipment 9,372 7,878 Other 17,381 17,618 ------------ ------------ Total non-interest expense 61,977 57,310 ------------ ------------ Income before taxes 70,250 40,276 Income tax expense 28,861 14,087 ------------ ------------ Net Income $ 41,389 $ 26,189 ============ ============ Earnings per Share: Basic $ 1.24 $ 0.79 ============ ============ Diluted $ 1.24 $ 0.79 ============ ============ Average common shares outstanding for Diluted EPS 33,366,562 33,029,655 (1) Total OTTI charges on securities were $1,858 and $2,980 during the three months ended September 30, 2010 and December 30, 2009, respectively, and $2,757 and $10,919 during the years ended December 31, 2010 and 2009, respectively. The non-credit component of OTTI recognized in accumulated other comprehensive loss was $219 and $1,547 during the three months ended September 30, 2010 and December 31, 2009, respectively, and $282 and $3,004 during the years ended December 31, 2010 and 2009, respectively. There were no non-credit OTTI charges recognized during the three months ended December 31, 2010. DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED SELECTED FINANCIAL HIGHLIGHTS (Dollars In thousands except per share amounts) For the Three Months Ended ---------------------------------------- December 31, September 30, December 31, 2010 2010 2009 ------------ ------------ ------------ Performance Ratios (Based upon Reported Earnings): Reported EPS (Diluted) $ 0.31 $ 0.34 $ 0.24 Return on Average Assets 1.05% 1.11% 0.83% Return on Average Stockholders' Equity 12.94% 14.23% 11.07% Return on Average Tangible Stockholders' Equity 15.29% 16.92% 13.38% Net Interest Spread 3.51% 3.44% 3.28% Net Interest Margin 3.71% 3.60% 3.48% Non-interest Expense to Average Assets 1.55% 1.46% 1.51% Efficiency Ratio 41.87% 40.35% 45.55% Effective Tax Rate 42.26% 42.61% 33.61% Book Value and Tangible Book Value Per Share: Stated Book Value Per Share $ 9.50 $ 9.33 $ 8.57 Tangible Book Value Per Share 8.07 7.86 7.09 Average Balance Data: Average Assets $ 4,016,457 $ 4,090,033 $ 3,902,218 Average Interest Earning Assets 3,789,755 3,806,510 3,685,509 Average Stockholders' Equity 326,529 319,090 292,480 Average Tangible Stockholders' Equity 276,184 268,477 242,071 Average Loans 3,454,730 3,440,764 3,332,367 Average Deposits 2,353,411 2,406,853 2,197,708 Asset Quality Summary: Net charge-offs $ 1,211 $ 6,817 $ 2,970 Non-accrual Loans 20,168 19,598 11,294 Nonperforming Loans/Total Loans 0.58% 0.57% 0.33% Nonperforming Assets (1) 20,732 20,242 12,737 Nonperforming Assets/Total Assets 0.51% 0.51% 0.32% Allowance for Loan Loss/Total Loans 0.55% 0.49% 0.63% Allowance for Loan Loss/Nonperforming Loans 95.03% 86.45% 190.41% Loans Delinquent 30 to 89 Days at period end $ 21,483 $ 15,729 $ 29,548 Regulatory Capital Ratios: Consolidated Tangible Stockholders' Equity to Tangible Assets at period end 7.01% 6.90% 6.26% Tangible Capital Ratio (Bank Only) 8.22% 8.01% 7.59% Leverage Capital Ratio (Bank Only) 8.22% 8.01% 7.59% Risk Based Capital Ratio (Bank Only) 11.95% 11.07% 11.22% For the Year Ended -------------------------- December 31, December 31, 2010 2009 ------------ ------------ Performance Ratios (Based upon Reported Earnings): Reported EPS (Diluted) $ 1.24 $ 0.79 Return on Average Assets 1.01% 0.66% Return on Average Stockholders' Equity 13.15% 9.20% Return on Average Tangible Stockholders' Equity 15.68% 11.08% Net Interest Spread 3.34% 2.73% Net Interest Margin 3.53% 2.96% Non-interest Expense to Average Assets 1.52% 1.44% Efficiency Ratio 42.74% 48.65% Effective Tax Rate 41.08% 34.98% Book Value and Tangible Book Value Per Share: Stated Book Value Per Share $ 9.50 $ 8.57 Tangible Book Value Per Share 8.07 7.09 Average Balance Data: Average Assets $ 4,083,387 $ 3,966,441 Average Interest Earning Assets 3,837,007 3,761,865 Average Stockholders' Equity 314,774 284,610 Average Tangible Stockholders' Equity 263,946 236,455 Average Loans 3,455,649 3,287,445 Average Deposits 2,357,001 2,268,442 Asset Quality Summary: Net charge-offs $ 13,821 $ 8,993 Non-accrual Loans 20,168 11,294 Nonperforming Loans/Total Loans 0.58% 0.33% Nonperforming Assets (1) 20,732 12,737 Nonperforming Assets/Total Assets 0.51% 0.32% Allowance for Loan Loss/Total Loans 0.55% 0.63% Allowance for Loan Loss/Nonperforming Loans 95.03% 190.41% Loans Delinquent 30 to 89 Days at period end $ 21,483 $ 29,548 Regulatory Capital Ratios: Consolidated Tangible Stockholders' Equity to Tangible Assets at period end 7.01% 6.26% Tangible Capital Ratio (Bank Only) 8.22% 7.59% Leverage Capital Ratio (Bank Only) 8.22% 7.59% Risk Based Capital Ratio (Bank Only) 11.95% 11.22% (1) Amount comprised of total non-accrual 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 ----------------------------------------- December 31, 2010 ---------------------------------------- Average Average Yield/ Balance Interest Cost ------------- ------------ ------------ Assets: Interest-earning assets: Real estate loans $ 3,453,522 $ 50,752 5.88% Other loans 1,208 26 8.61 Mortgage-backed securities 148,032 1,621 4.38 Investment securities 82,288 268 1.30 Other short-term investments 104,705 857 3.27 ------------- ------------ ------------ Total interest earning assets 3,789,755 $ 53,524 5.65% ------------- ------------ Non-interest earning assets 226,702 ------------- Total assets $ 4,016,457 ============= Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest Bearing Checking $ 99,464 $ 129 0.51% Money Market accounts 727,566 1,202 0.66 Savings accounts 321,825 206 0.25 Certificates of deposit 1,073,640 5,468 2.02 ------------- ------------ ------------ Total interest bearing deposits 2,222,495 7,005 1.25 Borrowed Funds 1,194,118 11,385 3.78 ------------- ------------ ------------ Total interest-bearing liabilities 3,416,613 $ 18,390 2.14% ------------- ------------ ------------ Non-interest bearing checking accounts 130,916 Other non-interest-bearing liabilities 142,399 ------------- Total liabilities 3,689,928 Stockholders' equity 326,529 ------------- Total liabilities and stockholders' equity $ 4,016,457 ============= Net interest income $ 35,134 ============ Net interest spread 3.51% ============ Net interest-earning assets $ 373,142 ============= Net interest margin 3.71% ============ Ratio of interest-earning assets to interest-bearing liabilities 110.92% ============ Deposits (including non-interest bearing checking accounts) $ 2,353,411 $ 7,005 1.18% Interest earning assets (excluding prepayment and other fees) 5.56% For the Three Months Ended ---------------------------------------- September 30, 2010 ---------------------------------------- Average Average Yield/ Balance Interest Cost ------------- ------------ ------------ Assets: Interest-earning assets: Real estate loans $ 3,439,448 $ 50,648 5.89% Other loans 1,316 28 8.51 Mortgage-backed securities 166,672 1,846 4.43 Investment securities 64,325 290 1.80 Other short-term investments 134,749 702 2.08 ------------- ------------ ------------ Total interest earning assets 3,806,510 $ 53,514 5.62% ------------- ------------ Non-interest earning assets 283,523 ------------- Total assets $ 4,090,033 ============= Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest Bearing Checking $ 98,588 $ 99 0.40% Money Market accounts 760,509 1,221 0.64 Savings accounts 317,243 202 0.25 Certificates of deposit 1,107,791 5,861 2.10 ------------- ------------ ------------ Total interest bearing deposits 2,284,131 7,383 1.28 Borrowed Funds 1,213,607 11,855 3.88 ------------- ------------ ------------ Total interest-bearing liabilities 3,497,738 $ 19,238 2.18% ------------- ------------ ------------ Non-interest bearing checking accounts 122,722 Other non-interest-bearing liabilities 150,483 ------------- Total liabilities 3,770,943 Stockholders' equity 319,090 ------------- Total liabilities and stockholders' equity $ 4,090,033 ============= Net interest income $ 34,276 ============ Net interest spread 3.44% ============ Net interest-earning assets $ 308,772 ============= Net interest margin 3.60% ============ Ratio of interest-earning assets to interest-bearing liabilities 108.83% ============ Deposits (including non-interest bearing checking accounts) $ 2,406,853 $ 7,383 1.22% Interest earning assets (excluding prepayment and other fees) 5.54% For the Three Months Ended ---------------------------------------- December 31, 2009 ---------------------------------------- Average Average Yield/ Balance Interest Cost ------------- ------------ ------------ Assets: Interest-earning assets: Real estate loans $ 3,330,848 $ 49,277 5.92% Other loans 1,519 33 8.69 Mortgage-backed securities 226,224 2,551 4.51 Investment securities 46,329 359 3.10 Other short-term investments 80,589 744 3.69 ------------- ------------ ------------ Total interest earning assets 3,685,509 $ 52,964 5.75% ------------- ------------ Non-interest earning assets 216,709 ------------- Total assets $ 3,902,218 ============= Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest Bearing Checking $ 106,428 $ 237 0.88% Money Market accounts 713,234 1,651 0.92 Savings accounts 298,604 200 0.27 Certificates of deposit 969,370 5,618 2.30 ------------- ------------ ------------ Total interest bearing deposits 2,087,636 7,706 1.46 Borrowed Funds 1,268,568 13,173 4.12 ------------- ------------ ------------ Total interest-bearing liabilities 3,356,204 $ 20,879 2.47% ------------- ------------ ------------ Non-interest bearing checking accounts 110,072 Other non-interest-bearing liabilities 143,462 ------------- Total liabilities 3,609,738 Stockholders' equity 292,480 ------------- Total liabilities and stockholders' equity $ 3,902,218 ============= Net interest income $ 32,085 ============ Net interest spread 3.28% ============ Net interest-earning assets $ 329,305 ============= Net interest margin 3.48% ============ Ratio of interest-earning assets to interest-bearing liabilities 109.81% ============ Deposits (including non-interest bearing checking accounts) $ 2,197,708 $ 7,706 1.39% Interest earning assets (excluding prepayment and other fees) 5.70% DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS (Dollars In thousands) At December At September At December 31, 30, 31, Non-Performing Loans 2010 2010 2009 ----------- ----------- ------------ One- to four-family $ 180 $ 224 $ 371 Multifamily residential and mixed use (1) 8,654 12,934 7,820 Commercial real estate (1) 11,274 6,396 3,070 Cooperative apartment 43 25 26 Other 17 19 7 ----------- ----------- ------------ Total Non-Performing Loans (2) $ 20,168 $ 19,598 $ 11,294 ----------- ----------- ------------ Other Non-Performing Assets Other real estate owned (3) - 85 755 Pooled bank trust preferred securities 564 559 688 ----------- ----------- ------------ Total Non-Performing Assets $ 20,732 $ 20,242 $ 12,737 ----------- ----------- ------------ Troubled Debt Restructurings not included in non-performing loans Multifamily residential and mixed use 2,098 - - Commercial real estate 8,736 Construction - 6,600 - Mixed Use 1,588 1,040 1,040 Other - - - ----------- ----------- ------------ Total Troubled Debt Restructurings ("TDRs") (1) $ 12,422 $ 7,640 $ 1,040 ----------- ----------- ------------ (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. (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 $10.1 million at December 31, 2010, $3.6 million at September 30, 2010 and $4.6 million at December 31, 2009, respectively, are included in the non-performing loan table, but excluded from the TDR amount shown above. (3) Amount was fully comprised of multifamily residential loans at both September 30, 2010 and December 31, 2009. PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES At December At September 31, 30, 2010 2010 ----------- ----------- Total Non-Performing Assets $ 20,732 $ 20,242 Loans over 90 days past due on accrual status 8,340 (4) - ----------- ----------- PROBLEM ASSETS $ 29,072 $ 20,242 ----------- ----------- Tier 1 Capital - Dime Savings Bank of Williamsburgh $ 326,554 $ 314,587 Allowance for loan losses 19,166 16,942 ----------- ----------- TANGIBLE CAPITAL PLUS RESERVES $ 345,720 $ 331,529 ----------- ----------- PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES 8.4% 6.1% (4) These loans are expected to be either satisfied or re-financed during 2011, and are not expected to result in any loss of contractual principal or interest. These loans are not included in non-performing loans.
Contact Information: Contact: Kenneth Ceonzo Director of Investor Relations 718-782-6200 extension 8279