EX-99 2 exhibit99.htm EARNINGS RELEASE FOR THE PERIOD ENDED DECEMBER 31, 2007 exhibit99.htm

Exhibit 99

 
DIME COMMUNITY BANCSHARES REPORTS EARNINGS
 
Diluted Earnings Per Share of 17 Cents in Fourth Quarter and 67 Cents for 2007 Fiscal Year

Brooklyn, NY – January 25, 2008 - Dime Community Bancshares, Inc. (Nasdaq: DCOM) (the "Company"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank" or "Dime"), today reported net income of $5.4 million, or 17 cents per diluted share, for the quarter ended December 31, 2007, compared to $6.0 million, or 17 cents per diluted share, for the quarter ended December 31, 2006 and $5.5 million, or 17 cents per diluted share, for the quarter ended September 30, 2007.
 
At $0.17 per share, core earnings equaled reported earnings during the quarters ended December 31, 2007 and 2006.  Core earnings were $5.0 million, or $0.15 per diluted share, for the quarter ended September 30, 2007.  Reported earnings exceeded core earnings during the quarter ended September 30, 2007 due to $546,000 of non-recurring income related to a Bank Owned Life Insurance ("BOLI") benefit payment.
 
For the year ended December 31, 2007, reported earnings totaled $22.4 million, or $0.67 per diluted share, compared to $30.6 million, or $0.87 per diluted share, during the year ended December 31, 2006.  Core earnings were $21.9 million, or $0.65 per diluted share, during the year ended December 31, 2007, compared to $29.1 million, or $0.83 per diluted share, during the year ended December 31, 2006.  During the year ended December 31, 2007, reported earnings exceeded core earnings due to the aforementioned non-recurring income related to a BOLI benefit payment. During the year ended December 31, 2006, reported earnings exceeded core earnings due to both non-recurring gains on the sale of securities and non-recurring income received on prepaid borrowings, which added after-tax income of $1.5 million during 2006.
 
According to Vincent F. Palagiano, Chairman and Chief Executive Officer of the Company, "The fourth quarter 2007 earnings were on the high end of our expectations, due primarily to an increase in prepayment fee income.  Otherwise, our overall business environment for much of the fourth quarter of 2007 remained the same from the previous quarters of 2007, characterized by stubbornly higher deposit funding costs."
 
Mr. Palagiano continued, "As for the 2007 year, despite difficulty in maintaining our historical levels of earnings, we still had much to feel pleased with.  First, since we have no direct exposure to the subprime loan market on our balance sheet, we have not experienced any of the credit-related issues that have been featured so prominently in the news media recently.  In addition, by remaining steadfast and patient, we were able to take advantage of favorable market conditions in recent months in order to lock in wholesale (i.e. non-deposit) funding at beneficial long-term interest rates and prepare our balance sheet for profitable growth in 2008 and beyond.  With a substantial portion of our mortgage portfolio anticipated to reprice during the next 24 to 36 months at more favorable funding spreads, we believe that conditions are present to support earnings growth from net interest income for our Company beginning next quarter."
 
Dime will also soon announce details of the opening of two new branches in its core Brooklyn market in the first half of 2008.  The branches will be located in Borough Park and on Montague Street in downtown Brooklyn.  Both markets are among the strongest deposit markets in Brooklyn and represent traditional banking markets where the 'Dime' brand resonates.

Mr. Palagiano noted, "As the retail deposit markets return to equilibrium, these new branches will significantly enhance Dime’s position as the largest community bank headquartered in Brooklyn."
 
Fiscal Year Highlights
§  
Total assets increased by $327.8 million, or 10.3%.
§  
Total deposits increased by $171.5 million, or 8.5%.
§  
Net interest margin declined 31 basis points.
§  
Real estate loan originations totaled $574.5 million, with an average interest rate of 6.38%.
§  
The real estate loan portfolio grew 6.4%.
§  
Loans sold in the secondary market totaled $77.6 million, with a weighted average term to the earlier of maturity or next repricing of 9.1 years.
§  
The Bank's credit profile remained outstanding, with non-performing loans approximating 0.10% of total loans.
§  
The Company repurchased 2,298,726 shares into treasury during the year, or 6.3% of beginning shares outstanding, at an average price of $12.90 per share.
§  
The Company remained well capitalized, with the tangible equity ratio standing at 6.29% at year-end.
 
Fourth Quarter 2007 Highlights
 
§  
Real estate loan originations were $175.3 million at an average rate of 6.10%, compared to $164.9 million at an average interest rate of 6.56% during the quarter ended 
   September 30, 2007.
§  
The annualized loan amortization rate was 15%, compared to 11% during the previous quarter.  Prepayment fee income was $1.2 million, compared to $727,000 in the
   September 2007 quarter and $561,000 in the December 2006 quarter.
§  
Linked quarter average cost of deposits increased slightly from 3.52% to 3.55%.
§  
Net interest margin was 2.27%, a slight decline from the previous quarter.
§  
The Company repurchased 311,102 shares of its common stock, compared to 742,640 shares repurchased in the September 2007 quarter.
§  
Quarterly non-interest expense decreased 3% sequentially on compensation expense; 3rd quarter compensation expense was slightly higher due to a seasonal adjustment.
 
OPERATING RESULTS
 
For the quarter ended December 31, 2007, the Company’s pre-tax income, excluding gains and losses on the sale of assets, was $8.9 million, compared to $9.4 million in the same quarter of the previous year.  The $460,000 decrease was due to an increase of $958,000 in non-interest expense and a decline of $110,000 in non-interest income, which were partially offset by an increase of $608,000 in net interest income.
 
Excluding the effects of prepayment and late fee income, net interest income would have remained constant from the December 2006 quarter and the net interest margin would have decreased 14 basis points during the quarter ended December 31, 2007 compared to the quarter ended December 31, 2006 due primarily to an increase of 20 basis points in the average cost of deposits. The increase in deposit costs reflected both growth in deposit balances related to the volume of promotional activities during 2007, as well as increased competition experienced from lending conduits that sought bank deposits for funding when their sources of short-term wholesale financing became unavailable.
 
Pre-tax income, excluding gains and losses on the sale of loans, was $8.7 million during the September 2007 quarter.  The $237,000 increase from the September 2007 quarter to the December 2007 quarter resulted from an increase of $702,000 in net interest income and a decline of $379,000 in non-interest expense, which were partially offset by a decline of $844,000 in non-interest income (excluding gains or losses on the sale of assets).
 
The majority of the increase in net interest income from the September 2007 quarter to the December 2007 quarter resulted from increased prepayment fee and late charge income.  Excluding the effects of prepayment fee and late charge income, net interest income would have increased $184,000 and the net interest margin would have declined 7 basis points from the September 2007 quarter to the December 2007 quarter.  This decline resulted from an increase of 6 basis points in the average cost of interest bearing liabilities, reflecting increases in both higher-cost borrowing and promotional deposit balances, coupled with a decline in the yield on interest earning assets reflecting reductions in interest rates during the last six months of 2007.
 
The average yield on portfolio real estate loans, excluding the effects of prepayment and late fee income, was 5.82% during the quarter ended December 31, 2007, compared to 5.72% during the quarter ended December 31, 2006 and 5.84% during the quarter ended September 30, 2007.  Interest rates on newly originated real estate loans averaged 6.10% during the fourth quarter of 2007, compared to a weighted average rate on loans repaid of 5.75% during the period.
 
Non-interest income, excluding gains or losses on the sale of loans, totaled $2.2 million during the quarter ended December 31, 2007, down $844,000 from the September 2007 quarter, and  $110,000 from the December 2006 quarter.  The reduction in non-interest income from the September 2007 quarter resulted primarily from a non-recurring $546,000 BOLI benefit payment received during the September 2007 quarter, along with a $212,000 reduction in a loan administration fees, due to seasonality.  The net decline of $110,000 from the December 2006 quarter resulted from minor decreases in several loan and deposit fee categories.
 
The Company executed third-party loan sales totaling $30.4 million, $10.1 million and $5.0 million, recording gains of $204,000, $79,000 and $84,000, during the quarters ended December 31, 2007, September 30, 2007 and December 31, 2006, respectively.  The loans sold during the quarter ended December 31, 2007 had a weighted average term to the earlier of maturity or next repricing of 6.6 years.
 
Non-interest expense totaled $11.3 million during the quarter ended December 31, 2007, up $958,000 from the December 2006 quarter and down $379,000 from the September 2007 quarter.  The growth in non-interest expense from the December 2006 quarter resulted from several items, including a $239,000 charge for the early termination of leased equipment and $236,000 in expense associated with equity awards granted during 2007.  The decline in non-interest expense from the September 2007 quarter reflected a reduction of $566,000 in salaries and benefits.  Non-interest expense to average assets was 1.36% in the December 2007 quarter, compared to 1.32% for the quarter ended December 31, 2006 and 1.45% for the quarter ended September 30, 2007.
 
The effective tax rate was 40.2% for the quarter ended December 31, 2007 and 37.1% for the year ended December 31, 2007.  The effective tax rate is expected to approximate 37% for the year ending December 31, 2008.  The increase in effective tax rate during the fourth quarter of 2007 related to the dissolution of a subsidiary.
 
REAL ESTATE LENDING AND CREDIT QUALITY
 
Real estate loan originations totaled $175.3 million during the quarter ended December 31, 2007. The average rate on real estate loan originations during the quarter ended December 31, 2007 was 6.10%, compared to 6.50% during the quarter ended December 31, 2006 and 6.56% during the quarter ended September 30, 2007.  Offering rates on multifamily loans closed during the quarter ended December 31, 2007 declined from the previous quarter, however, this decline was less than the decline in their benchmark treasury rates during the same period, as origination spreads to their benchmark rates widened during the period.
 
Real estate loan prepayments and amortization during the December 2007 quarter approximated 15% of the real estate loan portfolio on an annualized basis, compared to 9% during the December 2006 quarter and 11% during the September 2007 quarter.
 
Non-performing loans were $2.8 million at December 31, 2007, representing only 0.10% of total loans.
 
DEPOSITS
 
Deposits increased $106.0 million from September 30, 2007 to December 31, 2007 as a result of seasonal promotional marketing.  Core (non-certificate) deposits increased $55.4 million and certificates of deposit increased by $50.6 million.  Demand deposits increased by $11.7 million, or 8.4%, to $150.1 million from September 30, 2007 to December 31, 2007, and by $19.4 million, or 14.8%, during the year ended December 31, 2007.  This increase was driven by the growth in Prime Dime, an interest-bearing checking account, coupled with an increase in Dime’s Professional Banking commercial deposit gathering program.
 
Mr. Palagiano noted, "We are pleased that deposit growth was concentrated in core money market and checking accounts.  Unless rate relief comes in the form of lower deposit rates, it is likely that we will see significant reductions to our promotional deposits during the first quarter of 2008.  In the meantime, we will avail ourselves of the wholesale funding market where it presents more advantageous funding opportunities."

Despite the challenging deposit market, average deposit cost for the quarter ended December 31, 2007 was 3.55%, an increase of just 3 basis points as compared to the quarter ended September 30, 2007.

Average deposits per branch approximated $104 million at December 31, 2007, up from $96 million at December 31, 2006 and $99 million at September 30, 2007.  Core deposits comprised 51% of total deposits at December 31, 2007, relatively unchanged from September 30, 2007 and up from 47% at December 31, 2006 (reflecting growth of $164.2 million in money market accounts during the year ended December 31, 2007).  The loan-to-deposit ratio was 132% at December 31, 2007, compared to 135% at December 31, 2006 and 137% at September 30, 2007.
 
STOCKHOLDERS' EQUITY AND SHARE REPURCHASE PROGRAM
 
The Company’s total stockholders' equity at December 31, 2007 was $268.9 million, or 7.68% of total assets, compared to $270.0 million, or 8.18% of total assets, at September 30, 2007. The decline in stockholders' equity as a percentage of assets resulted from an increase of $199.7 million in period-end assets coupled with $4.1 million in treasury stock repurchases during the period.
 
During the fourth quarter of 2007, the Company repurchased into treasury 311,102 shares, or nearly 1% of its common stock outstanding at September 30, 2007.   As of December 31, 2007, the Company had an additional 1,175,549 shares remaining eligible for repurchase under its twelfth stock repurchase program, approved in June 2007.
 
After outlays for dividends paid to shareholders and share repurchases, by the end of 2007 the Company’s tangible stockholders' equity had declined to $217.2 million, compared to $219.9 million at September 30, 2007.  The quarterly cash dividend paid in November 2007 represented a payout ratio of 82.4% of fourth quarter 2007 earnings.  At December 31, 2007, the consolidated tangible stockholders’ equity ratio was 6.29% of tangible assets and the tangible book value per share was $6.41.
 
For the quarter ended December 31, 2007, the return on average stockholders’ equity was 8.11%, the return on average tangible equity was 10.00%, and the cash return on average tangible equity was 10.83%.
 
OUTLOOK
 
Mr. Palagiano stated, "For the first time in many quarters we are in a position to expect earnings per share to trend upward.  While there are significant future uncertainties about economic and credit conditions, our Company remains a liability-sensitive institution, and any downward movement in short-term interest rates should be helpful to net interest income over time."

The decline in both short- and medium-term interest rates during the last six months of 2007 resulted in a decline in the average yield on the Company's interest-earning assets (exclusive of the effects of prepayment and late fee income) from 5.78% during the September 2007 quarter to 5.73% during the December 2007 quarter.  However, approximately $308 million in portfolio mortgage loans with a below current market weighted average coupon of 5.28% contractually reprice or mature during 2008.  During the year ending December 31, 2009, an additional $360 million in mortgage loans with a weighted average coupon of 5.38% are scheduled to reprice.
 
The average cost of deposits increased from 3.52% during the September 2007 quarter to 3.55% during the December 2007 quarter.  During the first quarter of 2008, average deposit costs are expected to lower, as maturing accounts are anticipated to re-price at lower rates and balance sheet growth is expected to be funded primarily through wholesale borrowings or non-promotional deposits.  Recent and any future actions by the Federal Open Market Committee resulting in lower short-term rates should help to reduce the average cost of deposits, and, would likely provide more attractive wholesale borrowings rates.

Prepayment and amortization rates, which approximated 11.6% during 2007 (inclusive of loan refinancing activity), are expected to increase to the 20% to 25% range during 2008, due primarily to increased loan refinancing activity.  At December 31, 2007, the real estate loan commitment pipeline approximated $152.8 million, including $9.4 million of loan commitments intended for sale to Fannie Mae.  The real estate loan pipeline had a weighted average interest rate approximating 6.14% at December 31, 2007, relatively unchanged from the loan origination rate of 6.10% experienced during the fourth quarter.
 
Absent growth in assets, we would expect to see some improvement in the net interest margin during 2008.  However, during the fourth quarter of 2007, the Company elected to commence balance sheet growth and expects to continue to grow its balance sheet during the first quarter of 2008.  This growth may come at interest rate spreads below the Bank's embedded margin of 2.27%, but should contribute favorably to earnings.
 
Operating expenses are expected to approximate $11.6 million in the first quarter of 2008.  The Company will continue to repurchase its common stock, and has sufficient capital to remain opportunistic, if conditions warrant.  The Company currently expects first quarter 2008 earnings per diluted share to again be in the range of $0.17 to $0.19.
 
ABOUT DIME COMMUNITY BANCSHARES
 
The Company (Nasdaq: DCOM) had $3.50 billion in consolidated assets as of December 31, 2007, and is the parent company of the Bank.  The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently 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.dimewill.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)

 
December 31,
    
 
2007
  
December 31,
 
(Unaudited)
  
2006
ASSETS:
      
Cash and due from banks
$ 101,708
  
$ 26,264
Investment securities held to maturity
80
  
235
Investment securities available for sale
34,095
  
29,548
Mortgage-backed securities available for sale
162,764
  
154,437
Federal funds sold and other short-term investments
128,014
  
78,752
Real Estate Loans:
      
   One-to-four family and cooperative apartment
145,592
  
153,847
   Multifamily and underlying cooperative
1,949,025
  
1,855,106
   Commercial real estate
728,129
  
666,927
   Construction and land acquisition
49,387
  
23,340
   Unearned discounts and net deferred loan fees
1,833
  
                          1,048
   Total real estate loans
2,873,966
  
                  2,700,268
   Other loans
2,169
  
                          2,205
   Allowance for loan losses
(15,387)
  
                      (15,514)
Total loans, net
2,860,748
  
                  2,686,959
Loans held for sale
890
  
                          1,200
Premises and fixed assets, net
23,878
  
                        22,886
Federal Home Loan Bank of New York capital stock
39,029
  
                        31,295
Goodwill
55,638
  
                        55,638
Other assets
94,331
  
                        86,163
TOTAL ASSETS
$ 3,501,175
  
$ 3,173,377
LIABILITIES AND STOCKHOLDERS' EQUITY:
      
Deposits:
      
Non-interest bearing checking
$91,671
  
$95,215
NOW, Super NOW and Interest Bearing Checking
58,414
  
                        35,519
Savings
274,067
  
                      298,522
Money Market
678,759
  
                      514,607
    Sub-total
$1,102,911
  
$943,863
Certificates of deposit
1,077,087
  
                  1,064,669
Total Due to Depositors
2,179,998
  
                  2,008,532
Escrow and other deposits
52,209
  
                        46,373
Securities sold under agreements to repurchase
155,080
  
                      120,235
Federal Home Loan Bank of New York advances
706,500
  
                      571,500
Subordinated Notes Sold
25,000
  
                        25,000
Trust Preferred Notes Payable
                72,165
  
                        72,165
Other liabilities
                41,371
  
                        38,941
TOTAL LIABILITIES
          3,232,323
  
                  2,882,746
STOCKHOLDERS' EQUITY:
      
Common stock ($0.01 par, 125,000,000 shares authorized, 50,906,278 shares and 50,862,867
      
   shares issued at December 31, 2007 and December 31, 2006, respectively, and 33,909,902 shares
      
   and 36,456,354 shares outstanding at December 31, 2007 and December 31, 2006, respectively)
                      509
  
                              509
Additional paid-in capital
              208,369
  
                      206,601
Retained earnings
              288,112
  
                      285,420
Unallocated common stock of Employee Stock Ownership Plan
                 (4,164)
  
                         (4,395)
Unearned common stock of Recognition and Retention Plan
                    (634)
  
                         (3,452)
Common stock held by the Benefit Maintenance Plan
                 (7,941)
  
                         (7,941)
Treasury stock (16,996,376 shares and 14,406,513 shares at December 31, 2007
      
   and December 31, 2006, respectively)
            (211,121)
  
                    (179,011)
Accumulated other comprehensive loss, net
                 (4,278)
  
                         (7,100)
TOTAL STOCKHOLDERS' EQUITY
              268,852
  
                      290,631
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$3,501,175
  
$3,173,377


 
 
 


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In thousands except per share amounts)

 
For the Three Months  Ended
  
For the Year Ended
 
December 31,    
 
September 30,   
 
December 31,   
 
December 31,  
   
 
2007             
   
2007          
 
2006        
 
2007        
 
December 31,   
 
(Unaudited)     
 
(Unaudited)     
 
(Unaudited)   
 
(Unaudited)    
 
2006        
Interest income:
                  
     Loans secured by real estate
$42,854
  
$41,420
  
$38,705
  
$165,221
  
$155,510
     Other loans
46
  
45
  
49
  
                178
  
190
     Mortgage-backed securities
1,809
  
1,588
  
1,586
  
             6,344
  
6,850
     Investment securities
818
  
374
  
872
  
             2,011
  
2,277
     Federal funds sold and other
                  
        short-term investments
1,670
  
1,474
  
1,921
  
             8,406
  
5,983
          Total interest  income
              47,197
  
              44,901
  
             43,133
  
          182,160
  
              170,810
Interest expense:
                  
     Deposits  and escrow
              19,105
  
              18,919
  
             16,590
  
            75,761
  
                56,659
     Borrowed funds
              10,012
  
                8,604
  
               9,071
  
            35,386
  
                36,681
         Total interest expense
              29,117
  
              27,523
  
             25,661
  
          111,147
  
                93,340
              Net interest income
              18,080
  
              17,378
  
             17,472
  
            71,013
  
                77,470
Provision for loan losses
                     60
  
                     60
  
                   60
  
                240
  
                    240
Net interest income after
                  
   provision for loan losses
              18,020
  
              17,318
  
             17,412
  
            70,773
  
                77,230
                   
Non-interest income:
                  
     Service charges and other fees
                1,295
  
                1,609
  
               1,525
  
             5,542
  
                 5,985
     Net gain on sales of assets
                   204
  
                     79
  
                   84
  
                750
  
                 3,057
     Other
                   913
  
                1,443
  
                  793
  
             4,128
  
                 3,348
          Total non-interest income
                2,412
  
                3,131
  
               2,402
  
            10,420
  
                12,390
Non-interest expense:
                  
     Compensation and benefits
                6,101
  
                6,667
  
               5,753
  
            25,416
  
                23,432
     Occupancy and equipment
                1,859
  
                1,566
  
               1,466
  
             6,431
  
                 5,762
     Other
                3,378
  
                3,484
  
               3,161
  
            13,655
  
                12,782
          Total non-interest expense
              11,338
  
              11,717
  
             10,380
  
            45,502
  
                41,976
                   
          Income before taxes
                9,094
  
                8,732
  
               9,434
  
            35,691
  
                47,644
Income tax expense
                3,657
  
                3,188
  
               3,469
  
            13,248
  
                17,052
                   
Net Income
$5,437
  
$5,544
  
$5,965
  
$22,443
  
$30,592
                   
Earnings per Share:
                  
  Basic
$0.17
  
$0.17
  
$0.17
  
$0.67
  
$0.88
  Diluted
$0.17
  
$0.17
  
$0.17
  
$0.67
  
$0.87
                   
Average common shares
                  
   outstanding for Diluted EPS
        32,737,939
  
        33,106,224
  
       34,873,327
  
     33,641,875
  
         35,118,128
 
 
 
 
 
 
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
Unaudited Core Earnings and Core Cash Earnings Reconciliations
(Dollars In thousands except per share amount)

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.

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 stockholders' equity is derived from stockholders' equity, with various adjustment items that are based upon standards of the Company's primary regulator, the Office of Thrift Supervision.   Tangible stockholders' equity generation is a significant financial measure since banks are subject to regulatory requirements involving the maintenance of minimum tangible capital levels.  A reconciliation between GAAP and tangible stockholders' equity can be found in the Company's audited financial statements for the year ended December 31, 2006.

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
  
For the Year  Ended
 
December 31,
  
September 30,
  
December 31,
  
December 31,
  
December 31,
 
2007
  
2007
  
2006
  
2007
  
2006
                   
Net income as reported
$ 5,437
  
$ 5,544
  
$ 5,965
  
$ 22,443
  
$ 30,592
Pre-tax net gain on sale of securities and other assets
                       -
  
                            -
      
                      -
  
                 (1,542)
Pre-tax income from BOLI benefit payment
    
                      (546)
  
                      -
  
                 (546)
  
                  -
Pre-tax income from borrowings restructuring
                       -
  
                            -
  
                      -
  
                      -
  
                    (807)
Tax effect of adjustments
                       -
  
                            -
      
                      -
  
                      839
Core Earnings
$ 5,437
  
$ 4,998
  
$ 5,965
  
$ 21,897
  
$ 29,082
Cash Earnings Additions :
                
0
Non-cash stock benefit plan expense
                   453
  
                        528
  
                  183
  
               1,768
  
                   1,250
Core Cash Earnings
$ 5,890
  
$ 5,526
  
$ 6,148
  
$ 23,665
  
$ 30,332
Core Cash EPS (Diluted)
$ 0.18
  
$ 0.17
  
$ 0.18
  
$ 0.70
  
$ 0.86
Core Cash Return on Average Assets
0.70%
  
0.69%
  
0.78%
  
0.73%
  
0.97%
Core Cash Return on Average Tangible Stockholders' Equity
10.83%
  
10.01%
  
10.13%
  
10.43%
  
12.57%
 
 
 
 
 
 
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars In thousands except per share amounts)

 
For the Three Months  Ended
  
For the Year Ended
 
December 31,
  
September 30,
  
December 31,
  
December 31,
  
December 31,
 
2007
  
2007
  
2006
  
2007
  
2006
                   
Performance Ratios (Based upon Reported Earnings):
                
Reported EPS (Diluted)
$0.17
  
$0.17
  
$0.17
  
$ 0.67
  
$0.87
Return on Average Assets
0.65%
  
0.69%
  
0.76%
  
0.69%
  
0.98%
Return on Average Stockholders' Equity
8.11%
  
8.20%
  
8.11%
  
8.11%
  
10.43%
Return on Average Tangible Stockholders' Equity
10.00%
  
10.04%
  
9.83%
  
9.89%
  
12.68%
Net Interest Spread
1.92%
  
1.92%
  
1.91%
  
1.88%
  
2.19%
Net Interest Margin
2.27%
  
2.28%
  
2.34%
  
2.29%
  
2.60%
Non-interest Expense to Average Assets
1.36%
  
1.45%
  
1.32%
  
1.39%
  
1.34%
Efficiency Ratio
55.89%
  
57.35%
  
52.45%
  
56.40%
  
48.36%
Effective Tax Rate
40.21%
  
36.51%
  
36.77%
  
37.12%
  
35.79%
                   
Performance Ratios (Based upon Core Earnings):
                  
Core EPS (Diluted)
$ 0.17
  
$ 0.15
  
$ 0.17
  
$ 0.65
  
$ 0.83
Core Return on Average Assets
0.65%
  
0.62%
  
0.76%
  
0.67%
  
0.93%
Core Return on Average Stockholders' Equity
8.11%
  
7.39%
  
8.11%
  
7.92%
  
9.92%
Core Return on Average Tangible Stockholders' Equity
10.00%
  
9.05%
  
9.83%
  
9.65%
  
12.05%
                   
                   
Book Value and Tangible Book Value Per Share:
                  
Stated Book Value Per Share
$ 7.93
  
$ 7.89
  
$ 7.97
  
$ 7.93
  
$ 7.97
Tangible Book Value Per Share
                    6.41
  
                       6.43
  
                     6.63
  
                     6.41
  
                     6.63
                   
Average Balance Data:
                  
Average Assets
$ 3,345,437
  
$ 3,224,578
  
$ 3,145,446
  
$ 3,263,018
  
$ 3,126,640
Average Interest Earning Assets
          3,180,603
  
            3,054,499
  
          2,992,771
  
          3,105,459
  
           2,978,147
Average Stockholders' Equity
             268,177
  
                270,350
  
              294,385
  
              276,582
  
              293,199
Average Tangible Stockholders' Equity
             217,501
  
                220,915
  
              242,652
  
              226,977
  
              241,301
Average Loans
          2,861,060
  
            2,786,862
  
          2,662,497
  
          2,777,220
  
           2,651,601
Average Deposits
          2,132,528
  
            2,130,472
  
          1,963,369
  
          2,128,350
  
           1,931,561
                   
Asset Quality Summary:
                  
Net charge-offs
$ 5
  
$ 7
  
$ 8
  
$ 9
  
$ 27
Nonperforming Loans
                  2,856
  
                    1,792
  
                  3,606
  
                  2,856
  
                   3,606
Nonperforming Loans/ Total Loans
0.10%
  
0.06%
  
0.13%
  
0.10%
  
0.13%
Nonperforming Assets/Total Assets
0.08%
  
0.05%
  
0.11%
  
0.08%
  
0.11%
Allowance for Loan Loss/Total Loans
0.53%
  
0.54%
  
0.57%
  
0.53%
  
0.57%
Allowance for Loan Loss/Nonperforming Loans
538.76%
  
857.92%
  
430.23%
  
538.76%
  
430.23%
                   
Regulatory Capital Ratios:
                  
Consolidated Tangible Stockholders' Equity to
   Tangible Assets at period end
6.29%
  
6.75%
  
7.74%
  
6.29%
  
7.74%
Tangible Capital Ratio (Bank Only)
7.88%
  
8.75%
  
9.05%
  
7.88%
  
9.05%
Leverage Capital Ratio (Bank Only)
7.88%
  
8.75%
  
9.05%
  
7.88%
  
9.05%
Risk Based Capital Ratio (Bank Only)
11.92%
  
12.65%
  
12.61%
  
11.92%
  
12.61%
 
 
 
 
 
 
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars In thousands)

 
Three Months Ended
 
December 31, 2007
  
September 30, 2007
  
December 31, 2006
     
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
$2,859,240
$42,854
6.00%
  
$2,785,057
$41,420
5.95%
  
$2,660,517
$38,705
5.82%
    Other loans
             1,820
               46
           10.11
  
             1,805
                45
             9.97
  
              1,980
              49
             9.90
    Mortgage-backed securities
         167,273
          1,809
             4.33
  
         153,738
           1,588
             4.13
  
          163,072
         1,586
             3.89
    Investment securities
           28,217
             818
           11.60
  
           22,921
              374
             6.53
  
            29,678
            872
           11.75
    Other short-term investments
         124,052
          1,670
             5.38
  
           90,978
           1,474
             6.48
  
          137,524
         1,921
             5.59
      Total interest earning assets
3,180,602
$47,197
5.94%
  
3,054,499
$44,901
5.88%
  
2,992,771
$43,133
5.76%
  Non-interest earning assets
164,835
      
170,079
      
152,675
    
Total assets
$3,345,437
      
$3,224,578
      
$3,145,446
    
                       
Liabilities and Stockholders' Equity:
                      
  Interest-bearing liabilities:
                      
    NOW, Super NOW and
        nterest Bearing Checking
$53,231
$306
2.28%
  
$45,609
$220
1.91%
  
$34,069
$92
1.07%
    Money Market accounts
  663,395
   6,663
             3.98
  
  654,192
  6,348
 3.85
  
 491,946
4,152
             3.35
    Savings accounts
         275,606
             372
             0.54
  
         284,366
              388
             0.54
  
          301,348
            442
             0.58
    Certificates of deposit
      1,049,843
        11,764
             4.45
  
      1,053,972
         11,963
             4.50
  
       1,042,809
       11,904
             4.53
          Total interest bearing deposits
      2,042,075
        19,105
             3.71
  
      2,038,139
         18,919
             3.68
  
       1,870,172
       16,590
             3.52
   Borrowed Funds
         833,973
        10,012
             4.76
  
         717,926
           8,604
             4.75
  
          771,152
         9,071
             4.67
      Total interest-bearing liabilities
2,876,048
29,117
4.02%
  
2,756,065
27,523
3.96%
  
2,641,324
25,661
3.85%
  Non-interest bearing checking accounts
90,453
      
92,333
      
93,197
    
  Other non-interest-bearing liabilities
110,759
      
105,830
      
116,540
    
      Total liabilities
3,077,260
      
2,954,228
      
2,851,061
    
  Stockholders' equity
268,177
      
270,350
      
294,385
    
Total liabilities and stockholders' equity
$3,345,437
      
$3,224,578
      
$3,145,446
    
Net interest income
  
$18,080
      
$17,378
      
$17,472
  
Net interest spread
    
1.92%
      
1.92%
      
1.91%
Net interest-earning assets
$304,554
      
$298,434
      
$351,447
    
Net interest margin
    
2.27%
      
2.28%
      
2.34%
Ratio of interest-earning assets
                      
   to interest-bearing liabilities
  
110.59%
      
110.83%
        
113.31%
                       
Deposits (including non-interest bearing
                      
   checking accounts)
$ 2,132,528
$ 19,105
3.55%
  
$ 2,130,472
$ 18,919
3.52%
  
$ 1,963,369
$ 16,590
3.35%
Interest earning assets (excluding
   prepayment fees and late charges
   
5.73%
      
5.78%
      
5.68%

 
Contact:
Kenneth Ceonzo
 
Director of Investor Relations
 
718-782-6200 extension 8279