EX-99 2 releasefor8kfiling.htm EXHIBIT 99.1 Contact:  

EXHIBIT 99.1



Contact:  

Kenneth J. Mahon

Exec. VP and Chief Financial Officer

718-782-6200 extension 8265


Stephanie Prince

Director of Corporate Marketing

718-782-6200 extension 8250


DIME COMMUNITY BANCSHARES REPORTS THIRD QUARTER 2004 EARNINGS

 Loan Growth Increases at 15% annual rate

Net Interest Margin Improved to 2.92%


Brooklyn, NY – October 21, 2004 - Dime Community Bancshares, Inc. (NASDAQ: DCOM, the "Company"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank"), today reported net income of $11.2 million, or 31 cents per diluted share, for the quarter ended September 30, 2004, compared to $15.2 million, or 41 cents per diluted share, for the quarter ended September 30, 2003 and $12.4 million, or 34 cents per diluted share for the quarter ended June 30, 2004.


Earnings, excluding income from prepayment fees on loans and gains or losses on the sale of securities, were $9.9 million or 28 cents per diluted share for the quarter ended September 30, 2004, compared to $11.6 million, or 31 cents per diluted share, for the quarter ended September 30, 2003 and $10.1 million, or 28 cents per diluted share for the quarter ended June 30, 2004.


Highlights for the quarter ended September 30, 2004 include:

•

Real estate loan originations totaled $279.5 million, resulting in a 15% annualized growth rate in the loan portfolio.

•

Total assets declined by 6.3% annualized as higher cost deposits were allowed to run off and not replaced with borrowed funds.

•

Net interest margin improved slightly to 2.92%, two basis points higher sequentially, as refinance activity slowed and a greater level of interest earning assets were shifted into real estate loans.

•

The Bank maintained its industry-leading credit quality with non-performing assets representing only 2 basis points of total assets at period end, a decline from 4 basis points of assets at June 30, 2004.

•

The Company remains among the industry leaders in cost efficiency, with a quarterly efficiency ratio of 36.2%.

•

The Company repurchased 264,200 shares into treasury during the quarter.

“We are pleased with our performance in the third quarter given continuing shifts in business conditions,” said Vincent F. Palagiano, chairman and chief executive officer.  “Loan growth, asset quality, and our efficiency ratio remained within recent trends. We largely maintained our deposit base despite a sizeable number of CD maturities and increased competition for deposits. We did permit a portion of our higher-cost deposits to run off, leading to a ten basis point sequential decline in deposit costs. Our decision to fund newly originated loans largely through the sale and roll-off of lower yielding mortgage-backed securities also contributed to the stabilization of our net interest margin. All of these measures resulted in the continued generation of returns on assets and shareholders equity that maintain Dime’s high ranking among the 100 largest publicly traded thrifts in the U.S.”


FINANCIAL RESULTS

For the quarter ended September 30, 2004, the Company’s pretax income was $18.0 million compared to $25.0 million in the same quarter of the previous year.  The decrease of $7.0 million was comprised of a decline of $1.4 million in net interest income, a decrease of $4.9 million in non-interest income (largely due to a decline of $3.7 million in prepayment fees) and an increase of $721,000 in non-interest expense.


The effective tax rate was 37.5% for the quarter ended September 30, 2004.  The effective tax rate for the full year 2004 remains estimated to approximate 38%.


On a linked quarter basis, the Company’s net income declined from $12.4 million in the June 30, 2004 quarter, a decrease of $1.2 million.  This was attributable primarily to pretax prepayment fee income that totaled $2.4 million during the September 2004 quarter as compared to $3.8 million recorded in the June 2004 quarter.


Net interest margin widened slightly to 2.92% during the September 2004 quarter from 2.90% in the June 2004 quarter.  The net interest margin stabilized during the quarter in part due to a greater proportion of earning assets deployed into the loan portfolio, 76.7% versus 71.4%, as cash flows from the amortization and sales of mortgage-backed securities were used to fund higher yielding, newly originated real estate loans.  During the quarter ended September 30, 2004, the average yield on newly originated real estate loans was 5.23%, up from 4.80% during the quarter ended June 30, 2004.  


A decline in the average cost of deposits also contributed to net interest margin expansion during the September 2004 quarter as a portion of higher cost, promotional deposits were allowed to run off, resulting in a 10 basis point decline in the average cost of deposits.


Average deposits per branch approximated $112 million at September 30, 2004. The loan-to-deposit ratio was 113%, compared with 109% in the September 2003 quarter and 104% in the June 2004 quarter. Core deposits comprised 59% of total deposits at September 30, 2004, compared to 61% at September 30, 2003, and 58% at June 30, 2004. Core deposit growth has exceeded 6% over the past twelve months.


Non-interest income totaled $4.5 million during the quarter ended September 30, 2004, compared to $9.4 million in the quarter ended September 30, 2003 and $6.7 million in the quarter ended June 30, 2004. The decline resulted primarily from decreases in prepayment fee income, the largest component of non-interest income, which totaled $2.4 million in the quarter ended September 30, 2004, $6.1 million in the quarter ended September 30, 2003 and $3.8 million in the quarter ended June 30, 2004.


The Company recorded a net loss of $288,000 on the sale of $111.3 million in loans to Fannie Mae during the quarter ended September 30, 2004. On a flow basis $58.2 million were sold at a gain of $194,000, and $53.1 million were sold out of portfolio at a loss of $482,000 reflecting portfolio restructuring. During the quarter ended September 30, 2003, a gain of $646,000 was recorded on the sale of $49.3 million in loans.  The Company recorded a gain of $207,000 on the sale of $26.8 million in loans to Fannie Mae during the quarter ended June 30, 2004.  


The Company recorded a loss of $139,000 on the sale of securities of $109.1 million during the quarter ended September 30, 2004. There were no sales of securities during either quarter ended September 30, 2003 or June 30, 2004.  


Non-interest expenses were $10.5 million during the quarter ended September 30, 2004, an increase of 7% from the prior year quarter.  This increase resulted from added salary and benefit expense, increased expenses related to the Employee Stock Ownership Plan as well as non-recurring costs associated with the conversion of the Bank’s data processing systems.  Non-interest expense was flat sequentially.


Mr. Palagiano concluded, “We at Dime continue to believe that following a long-term strategic path is the best way to maximize value creation for our shareholders. As such, our standards of conservative lending and sound asset/liability and interest rate risk management do not change with shifts in the marketplace. By continuing to control asset and expense growth and preserving our high tangible capital ratio, we believe that we are maintaining the maximum flexibility to manage our balance sheet growth during future, more favorable periods.”


REAL ESTATE LENDING AND CREDIT QUALITY

Real estate loan originations totaled $279.5 million during the quarter ended September 30, 2004. The average rate on these originations was 5.23% during the quarter ended September 30, 2004, up from 4.80% during the quarter ended June 30, 2004.  Real estate loan prepayment and amortization during the September 2004 quarter approximated 21% of the loan portfolio on an annualized basis, compared to 59% during the September 2003 quarter and 35% during the June 2004 quarter.  


At September 30, 2004 the loan commitment pipeline approximated $85.8 million, at an average rate of 5.50%, of which $12.5 million is intended for sale to Fannie Mae.


The Company maintained its long record of outstanding credit quality during the most recent quarter. Non-performing loans declined to $851,000 at September 30, 2004, representing 0.02% of total assets.  Non-performing assets have remained below 5 basis points of total assets for the previous seven quarters.


SHARE REPURCHASE PROGRAM

During the September 2004 quarter, the Company repurchased 264,200 shares of its common stock into treasury.  As of September 30, 2004, the Company had an additional 1.7 million shares remaining eligible for repurchase under its tenth stock repurchase program, approved in May 2004.  


OUTLOOK

For the full year of 2004, the Company estimates earnings per share in the range of  $1.26 to $1.28. This estimate assumes lower prepayment fee income and a slowdown in loan originations during the fourth quarter. Prepayment fee income for the full year 2004 is expected to account for approximately $0.16 per diluted share. Fourth quarter diluted earnings per share, excluding prepayment fee income and gains or losses on the sale of securities, are estimated to approximate the level of the third quarter. The net interest margin is expected to remain stable.


In 2005 it is anticipated that there will be a significant decrease in prepayment fee income. This is based on an expectation that rising intermediate-term interest rates will cause loan refinancing to slow considerably, coupled with the reduced amount of premium coupon loans remaining in the Company’s loan portfolio.


CONFERENCE CALL


Management will conduct a conference call at 10:00 A.M. Eastern Time, on Friday, October 22, 2004, to discuss the Company’s operating performance for the quarterly period ended September 30, 2004.


The conference call will also be available via the Internet by accessing the following Web address: www.dsbwdirect.com or www.vcall.com.  Web users should go to the site at least fifteen minutes prior to the call to register, download and install any necessary audio software. The webcast will be available until November 22, 2004.


ABOUT DIME COMMUNITY BANCSHARES

Dime Community Bancshares, Inc., a unitary thrift holding company, is the parent company of The Dime Savings Bank of Williamsburgh, Brooklyn, New York, founded in 1864.  With $3.42 billion in assets as of September 30, 2004, the Bank has twenty 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.


Statements made herein that are forward looking in nature within the meaning of the Private Securities Litigation Reform Act of 1995 are subject to risks and uncertainties that could cause actual results to differ materially.  Such risks and uncertainties include, but are not limited to, those related to overall business conditions and market interest rates, particularly in the markets in which the Company operates, fiscal and monetary policy, changes in regulations affecting financial institutions and other risks and uncertainties discussed in the Company's Securities and Exchange Commission filings.  The Company disclaims any obligation to publicly announce future events or developments which may affect the forward-looking statements herein.

- tables to follow -

DIME COMMUNITY BANCSHARES,  INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands except share amounts)

  

September 30,

  
  

2004

 

December 31,

ASSETS:

 

(Unaudited)

 

2003

     

Cash and due from banks

 

$26,914 

 

$24,073 

Investment securities held to maturity

 

650 

 

710 

Investment securities available for sale

 

54,350 

 

37,107 

Mortgage-backed securities held to maturity

 

525 

 

770 

Mortgage-backed securities available for sale

 

564,761 

 

461,967 

Federal funds sold and other short-term assets

 

62,839 

 

95,286 

Real estate Loans:

    

   One-to-four family and cooperative apartment

 

138,085 

 

138,039 

   Multi-family and underlying cooperative

 

1,910,254 

 

1,737,306 

   Commercial real estate

 

408,327 

 

309,810 

   Construction and land acquisition

 

16,378 

 

2,880 

   Unearned discounts and net deferred loan fees

 

(454)

 

(1,517)

     

   Total real estate loans

 

2,472,590 

 

2,186,518 

     

   Other loans

 

3,457 

 

4,072 

   Allowance for loan losses

 

(15,382)

 

(15,018)

     

Total loans, net

 

2,460,665 

 

2,175,572 

     

Loans held for sale

 

55,209 

 

2,050 

Premises and fixed assets, net

 

16,634 

 

16,400 

Federal Home Loan Bank of New York capital stock

 

25,325 

 

26,700 

Other real estate owned, net

 

-  

 

-  

Goodwill

 

55,638 

 

55,638 

Other assets

 

91,667 

 

75,388 

     

TOTAL ASSETS

 

$3,415,177 

 

$2,971,661 

     

LIABILITIES AND STOCKHOLDERS' EQUITY:

    

Deposits:

    

Checking and NOW

 

$134,464 

 

$129,349 

Savings

 

362,789 

 

366,592 

Money Market

 

812,961 

 

745,387 

     

    Sub-total

 

1,310,214 

 

1,241,328 

     

Certificates of deposit

 

923,042 

 

800,350 

     

Total Due to depositors

 

2,233,256 

 

2,041,678 

     

Escrow and other deposits

 

62,840 

 

39,941 

Securities sold under agreements to repurchase

 

205,649 

 

12,675 

Federal Home Loan Bank of New York advances

 

506,500 

 

534,000 

Subordinated Notes Sold

 

25,000 

 

25,000 

Trust Preferred Notes Payable

 

72,165 

 

-  

Other liabilities

 

29,239 

 

34,448 

     

TOTAL LIABILITIES

 

3,134,649 

 

2,687,742 

STOCKHOLDERS' EQUITY:

    

Common stock ($0.01 par, 125,000,000 shares authorized,

    

   49,988,887 shares and 49,160,657 shares issued at

    

   September 30, 2004 and December 31, 2003, respectively,

    

   and 37,350,143 shares and 38,115,111 shares outstanding

    

   at September 30, 2004 and December 31, 2003, respectively)

500 

 

492 

Additional paid-in capital

 

196,750 

 

185,991 

Retained earnings

 

252,979 

 

231,771

Unallocated common stock of Employee Stock Ownership Plan

(4,863)

 

(5,202)

Unearned common stock of Recognition and Retention Plan

 

(2,639)

 

(2,617)

Common stock held by the Benefit Maintenance Plan

 

(7,348)

 

(5,584)

Treasury stock (12,638,744 shares and 11,045,546 shares  

    

   at September 30, 2004 and December 31, 2003, respectively)

(151,901)

 

(120,086)

Accumulated other comprehensive (loss) income, net

 

(2,950)

 

(846)

     

TOTAL STOCKHOLDERS' EQUITY

 

280,528 

 

283,919 

     

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$3,415,177 

 

$2,971,661 


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands except per share amounts)

 

For the Three Months  Ended

 

For the Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

September 30,

 

2004

 

2004

 

2003

 

2004

2003

         

Interest income:

        

     Loans secured by real estate

$35,462

 

$34,450

 

$36,024

 

$103,527

$111,092

     Other loans

65

 

60

 

70

 

188

207

     Mortgage-backed securities

5,440

 

6,146

 

4,815

 

16,298

13,692

     Investment securities

416

 

375

 

492

 

1,103

1,994

     Other

323

 

386

 

610

 

1,052

2,542

          Total interest  income

41,706

 

41,417

 

 42,011

 

122,168

129,527

Interest expense:

        

     Deposits  and escrow

9,488

 

10,242

 

9,112

 

 28,734

29,890

     Borrowed funds

8,165

 

7,301

 

7,419

 

21,391

22,284

         Total interest expense

17,653

 

17,543

 

16,531

 

50,125

52,174

              Net interest income

24,053

 

23,874

 

25,480

 

72,043

77,353

Provision for loan losses  

60

 

60

 

88

 

180

208

Net interest income after

        

   provision for loan losses

23,993

 

23,814

 

25,392

 

71,863

77,145

         

Non-interest income:

        

     Service charges and other fees

1,619

 

1,742

 

1,803

 

4,921

4,761

     Net (loss) gain on sales and

        

         redemptions of assets

 (427)

 

207

 

646

 

356

1,500

     Other

3,306

 

4,783

 

6,957

 

11,570

13,264

          Total non-interest income

4,498

 

6,732

 

9,406

 

16,847

19,525

Non-interest expense:

        

     Compensation and benefits

5,675

 

6,178

 

5,337

 

17,570

15,726

     Occupancy and equipment

1,404

 

1,253

 

1,264

 

3,920

3,782

     Core deposit intangible amortization

206

 

206

 

206

 

618

619

     Other

3,205

 

2,915

 

2,962

 

9,299

9,007

          Total non-interest expense

10,490

 

10,552

 

9,769

 

31,407

29,134

         

          Income before taxes

18,001

 

19,994

 

25,029

 

57,303

67,536

Income tax expense

6,755

 

7,588

 

9,857

 

21,311

26,130

         

Net Income

$11,246

 

$12,406

 

$15,172

 

$35,992

$41,406

         

Earnings per Share:

        

  Basic

$0.32

 

$0.35

 

$0.43

 

$1.02

$1.15

  Diluted

$0.31

 

$0.34

 

$0.41

 

$0.99

$1.11

         

Average common shares

        

   outstanding for Diluted EPS

35,998,094

 

 36,135,121

 

37,262,262

 

36,332,435

37,356,816


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(In thousands except per share amounts)

 

For the Three Months  Ended

 

For the Nine Months  Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

2004

 

2004

 

2003

 

2004

 

2003

          

Performance and Other Selected Ratios:

         

Return on Average Assets

1.30%

 

1.44%

 

1.96%

 

1.44%

 

1.79%

Return on Average Stockholders' Equity

16.41%

 

18.42%

 

22.07%

 

17.51%

 

20.35%

Return on Average Tangible Stockholders' Equity

20.15%

 

22.84%

 

27.61%

 

21.71%

 

25.88%

Net Interest Spread

2.72%

 

2.66%

 

3.23%

 

2.79%

 

3.25%

Net Interest Margin

2.92%

 

2.90%

 

3.46%

 

3.03%

 

3.52%

Non-interest Expense to Average Assets

1.22%

 

1.22%

 

1.26%

 

1.26%

 

1.26%

Efficiency Ratio

36.20%

 

34.71%

 

28.53%

 

35.47%

 

30.55%

Effective Tax Rate

37.53%

 

37.95%

 

39.38%

 

37.19%

 

38.69%

          

Per Share Data:

         

Reported EPS (Diluted)

$0.31

 

$0.34

 

$0.41

 

$0.99

 

$1.11

Stated Book Value

7.51

 

7.22

 

7.44

 

7.51

 

7.44

Tangible Book Value

6.09

 

5.94

 

5.95

 

6.09

 

5.95

          

Average Balance Data:

         

Average Assets

$ 3,448,112

 

$ 3,448,906

 

$ 3,100,382

 

$ 3,330,404

 

$ 3,080,870

Average Interest Earning Assets

3,292,610

 

3,295,823

 

2,948,501

 

3,173,196

 

2,927,578

Average Stockholders' Equity

274,176

 

269,337

 

274,990

 

274,033

 

271,228

Average Tangible Stockholders' Equity

223,288

 

217,315

 

219,765

 

220,898

 

213,314

Average Loans

2,525,371

 

2,351,624

 

2,200,161

 

2,365,129

 

2,189,140

Average Deposits

2,276,974

 

2,349,850

 

2,072,793

 

2,257,155

 

2,052,003

          

Asset Quality Summary:

         

Net charge-offs (recoveries)

$ 6

 

$ 37

 

$ 15

 

$ 73

 

$ 45

Nonperforming Loans

851

 

1,413

 

860

 

851

 

860

Nonperforming Loans/ Total Loans

0.03%

 

0.06%

 

0.04%

 

0.03%

 

0.04%

Nonperforming Assets/Total Assets

0.02%

 

0.04%

 

0.03%

 

0.02%

 

0.03%

Allowance for Loan Loss/Total Loans

0.61%

 

0.60%

 

0.71%

 

0.61%

 

0.71%

Allowance for Loan Loss/Nonperforming Loans

1807.52%

 

1028.66%

 

1816.40%

 

1807.52%

 

1816.40%

          

Regulatory Capital Ratios (Bank Only):

         

Tangible Capital Ratio

7.86%

 

7.30%

 

7.52%

 

7.86%

 

7.52%

Leverage Capital Ratio

7.86%

 

7.30%

 

7.52%

 

7.86%

 

7.52%

Risk -Based Capital Ratio

14.84%

 

14.46%

 

14.49%

 

14.84%

 

14.49%

Non-GAAP Disclosures – Cash Earnings

   Reconciliation and Ratios (1):

         

Net Income

$11,246

 

$12,406

 

$15,172

 

$35,992

 

$41,406

Additions to Net Income:

         

Core Deposit Intangible Amortization

206

 

206

 

206

 

618

 

618

Non-cash stock benefit plan expense

651

 

685

 

645

 

2,131

 

1,825

Cash Earnings

$12,103

 

$13,297

 

$16,023

 

$38,741

 

$43,849

          

Cash EPS (Diluted)

0.34

 

 0.37

 

0.43

 

1.07

 

1.17

Cash Return on Average Assets

1.40%

 

1.54%

 

2.07%

 

1.55%

 

1.90%

Cash Return on Average Tangible

    Stockholders' Equity

21.68%

 

24.48%

 

29.16%

 

23.38%

 

27.41%


(1)    Cash 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 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.  


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

ANALYSIS OF NET INTEREST INCOME

 

For the Three Months Ended

 

 

September 30, 2004

 

 

June 30, 2004

 

 

September 30, 2003

   

Average

   

Average

   

Average

 

Average

 

Yield/

 

Average

 

Yield/

 

Average

 

Yield/

 

Balance

Interest

Cost

 

Balance

Interest

Cost

 

Balance

Interest

Cost

 

(Dollars In Thousands)

Assets:

           

  Interest-earning assets:

           

    Real Estate Loans

$2,522,106

$35,462

5.62%

 

$2,348,236

$34,450

5.87%

 

$2,196,516

$36,024

6.56%

    Other loans

3,265

65

7.96

 

3,388

 60

7.08

 

3,645

70

7.68

    Mortgage-backed securities

630,131

5,440

3.45

 

750,157

6,146

3.28

 

606,628

4,815

3.17

    Investment securities

50,458

416

3.30

 

45,188

375

3.32

 

52,361

492

3.76

    Other short-term investments

86,650

323

1.49

 

148,854

386

1.04

 

89,351

 610

2.73

      Total interest earning assets

3,292,610

$41,706

5.07%

 

3,295,823

$41,417

5.03%

 

2,948,501

$42,011

5.70%

  Non-interest earning assets

155,502

   

153,083

   

151,881

  

Total assets

$3,448,112

   

$3,448,906

   

$3,100,382

  
            

Liabilities and Stockholders' Equity:

           

  Interest-bearing liabilities:

           

    NOW, Super Now accounts

$44,003

$117

1.05%

 

$41,128

$105

1.02%

 

$33,343

$83

0.99%

    Money Market accounts

827,387

2,985

1.43

 

844,621

3,177

1.51

 

731,904

2,706

1.47

    Savings accounts

368,391

505

0.54

 

371,427

500

0.54

 

369,904

499

0.54

    Certificates of deposit

942,465

5,881

2.48

 

998,037

6,460

2.60

 

846,185

5,824

2.73

    Borrowed Funds

797,944

8,165

4.06

 

718,812

7,301

4.07

 

675,467

7,419

4.36

      Total interest-bearing liabilities

2,980,190

$17,653

2.35%

 

2,974,025

$17,543

2.37%

 

2,656,803

$16,531

2.47%

  Checking accounts

94,728

   

94,637

   

91,457

  

  Other non-interest-bearing liabilities

99,018

   

110,907

   

77,132

  

      Total liabilities

3,173,936

   

3,179,569

   

2,825,392

  

  Stockholders' equity

274,176

   

269,337

   

274,990

  

Total liabilities and

   stockholders' equity


$3,448,112

   


$3,448,906

   


$3,100,382

  

Net interest income

 

$24,053

   

$23,874

   

$25,480

 

Net interest spread (1)

  

2.72%

   

2.66%

   

3.23%

Net interest-earning assets

$312,420

   

$321,798

   

$291,698

  

Net interest margin (1)

  

2.92%

   

2.90%

   

3.46%

Ratio of interest-earning assets

           

   to interest-bearing liabilities

  

110.48%

   

110.82%

   

110.98%