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EX-99.2 - EXHIBIT 99.2 - DIME COMMUNITY BANCSHARES INCex99_2.htm
8-K - 8-K - DIME COMMUNITY BANCSHARES INCform8k.htm

Exhibit 99.1

 
DIME COMMUNITY BANCSHARES, INC. INCREASES EARNINGS BY 7.5% OVER THE LINKED QUARTER

Brooklyn, NY – July 27, 2017 - Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company” or “Dime”), the parent company of Dime Community Bank (the “bank”), today reported net income of $12.0 million for the quarter ended June 30, 2017, or $0.32 per diluted common share, compared with net income of $11.2 million for the quarter ended March 31, 2017, or $0.30 per diluted common share, and net income of $11.2 million for the quarter ended June 30, 2016, or $0.30 per diluted common share.
 
Highlights for the second quarter of 2017 included:
 
·
Successfully issued $115.0 million of subordinated debt in June 2017 at 4.50%, matching the lowest coupon with similar maturity for all community bank holding company subordinated debt issuances since 2016;
·
Business Banking division, which includes commercial and industrial (“C&I”) and direct-sourced commercial real estate (“CRE”) loans, demonstrated continued momentum with second quarter originations of $64.7 million. In addition, we continued the expansion of Business Banking’s services by launching our Small Business Administration (“SBA”) lending program;
·
Strong expense discipline, with an efficiency ratio of 49.0%, compared to 53.0% in the first quarter of 2017, and 47.8% in the second quarter of 2016;
·
Net interest margin (“NIM”), adjusted for income related to prepayment activity and the subordinated debt issuance in June 2017, increased by 3 basis points on a linked quarter basis; and
·
Reported book value (“BV”) per share and tangible book value (“TBV”) per share grew to $15.41 and $13.93, respectively; the sale of the Williamsburg branch office property, which is expected to close in the third quarter, will further benefit BV and TBV per share.
 
Kenneth J. Mahon, President and Chief Executive Officer of the Company, commented, “In the second quarter, we continued to prudently grow the balance sheet and saw ongoing strength from our relationship-lending Business Banking division. The Business Banking division originated $64.7 million in total loans during the second quarter, of which $28.8 million was CRE and $35.9 million was C&I. Given approximately 50% of the Business Banking division’s year-to-date originations are floating rate, we are also building up our level of asset sensitivity.”
 
Mr. Mahon continued, “Dime also remained dedicated to its key competitive strengths of managing expenses and pristine credit quality and is well positioned for the future.”
 

Page 2
Management’s Discussion of Quarterly Operating Results
 
Net Interest Income
 
Net interest income in the second quarter of 2017 was $38.1 million, an increase of $566,000 (+1.5%) from the first quarter of 2017 and an increase of $2.4 million (6.9%) over the second quarter of 2016.  NIM was 2.57% during the second quarter of 2017, flat with the first quarter of 2017, and down from 2.68% during the second quarter of 2016.  During the second quarter of 2017, income from prepayment activity totaled $1.0 million, benefiting NIM by 7 basis points, compared to $1.4 million, or 9 basis points, during the first quarter of 2017, and $2.0 million, or 15 basis points, during the second quarter of 2016. Excluding the impact of income recognized from loan prepayment activity, which varies from quarter to quarter, NIM would have been 2 basis points higher during the second quarter of 2017 compared to the linked quarter. Additionally, the NIM for the second quarter of 2017 was negatively impacted by 1 basis point due to the issuance of the subordinated debt in June 2017. The Company used the proceeds from the subordinated debt issuance to redeem its existing trust preferred securities in July 2017.
 
Average earning assets were $5.92 billion for the second quarter of 2017, a 6.5% (annualized) increase from $5.82 billion for the first quarter of 2017, and an 11.5% increase from $5.31 billion for the second quarter of 2016.
 
For the second quarter of 2017, the average yield on interest earning assets (excluding prepayment income) was 3.47%, 3 basis points higher than the 3.44% yield for the first quarter of 2017 and 3 basis points lower than the 3.50% yield for the second quarter of 2016. The average cost of funds was 1.14% for the second quarter of 2017, up by 1 basis point compared with the first quarter 2017, and flat compared with the second quarter of 2016.
 
Loans
 
Real estate loan portfolio growth was $85.9 million (6.0% annualized) during the second quarter of 2017. Real estate loan originations were $238.4 million during the quarter, at a weighted average interest rate of 3.85%. Of this amount, $58.3 million represented loan refinances from the existing portfolio. Real estate loan amortization and satisfactions totaled $150.9 million, or 10.5% (annualized) of the portfolio balance, at an average rate of 4.0%. The annualized loan payoff rate of 10.5% for the second quarter of 2017 was lower than both the first quarter of 2017 (10.8%) and the second quarter of 2016 (16.1%). Average real estate loans were $5.76 billion in the second quarter of 2017, an increase of $72.0 million (5.1% annualized) from the first quarter of 2017 and an increase of $621.5 million (12.1%) from the second quarter of 2016. Included in total real estate loan originations during the second quarter of 2017 were $28.8 million of originations from the Business Banking division at a weighted average rate of 4.67%.
 
The Business Banking division originated $35.9 million of C&I loans at a weighted average rate of 4.77% during the second quarter of 2017. Total C&I loan balance at the end of the second quarter was $68.2 million.
 

Page 3
Deposits
 
Deposits declined by $90.0 million from the first quarter of 2017, and increased by $23.1 million from the fourth quarter of 2016. Within deposits, core deposits declined $16.5 million from the first quarter of 2017, and increased by $174.9 million from the fourth quarter of 2016.  The decline in deposits during the second quarter of 2017 was primarily the result of a decrease in certificates of deposits as management elected not to offer higher rates in the quarter. The loan-to-deposit ratio was 133.0% at June 30, 2017 compared to 137.8% at June 30, 2016 and 127.6% at March 31, 2017. The average cost of total deposits decreased one basis point on a linked quarter basis to 0.85%.
 
Borrowed Funds
 
Total borrowings, excluding the subordinated debt issued in June 2017, increased $180.9 million during the second quarter of 2017 as compared to the first quarter of 2017.
 
On June 8, 2017, the Company announced that it priced an underwritten public offering of $115.0 million of fixed-to-floating rate subordinated notes due June 15, 2027 (the “Notes”). The Notes will initially bear a fixed interest rate of 4.50% per year for the first five years. The Company used part of the net proceeds from the offering to redeem its $70.7 million of trust preferred securities which had a 7% annual coupon on July 17, 2017.
 
Non-Interest Income
 
Non-interest income was $1.7 million during the second quarter of 2017, which was flat compared to the first quarter of 2017 and down by $558,000 compared to second quarter 2016, which included mortality proceeds from bank owned life insurance assets.
 
Non-Interest Expense
 
Non-interest expense was $19.5 million during the second quarter of 2017, lower than the first quarter of 2017 by $1.3 million primarily related to salaries expense and related employee benefits, and higher than the second quarter of 2016 by $1.4 million related to occupancy and equipment, data processing, and marketing costs.
 
The ratio of non-interest expense to average assets was 1.27% during the second quarter of 2017, compared to 1.38% during the first quarter of 2017, and 1.31% during the second quarter of 2016. The efficiency ratio was 49.0% during the second quarter of 2017, lower than the 53.0% during the first quarter of 2017, and above the 47.8% during the second quarter of 2016.
 
Income Tax Expense
 
The effective income tax rate was 37.8% during the June 2017 quarter, slightly below the March 2017 quarter tax rate of 38.2%.
 

Page 4
Credit Quality
 
Non-performing loans were $3.4 million, or 0.06% of total loans, at June 30, 2017, a slight decrease from $3.8 million, or 0.07% of total loans, at March 31, 2017. The allowance for loan losses was 0.37% of total loans at June 30, 2017, consistent with March 31, 2017. At June 30, 2017, non-performing assets represented 1.0% of the sum of tangible capital plus the allowance for loan losses (this non-GAAP statistic is otherwise known as the “Texas Ratio”) (see “Problem Assets as a Percentage of Tangible Capital and Reserves” table at the end of this news release), which is comparable to 1.1% at March 31, 2017.  A loan loss provision of $1.0 million was recorded during the second quarter of 2017, compared to a provision of $450,000 during the first quarter of 2017, and $442,000 during the second quarter of 2016.
 
Capital Management
 
The Company’s consolidated Tier 1 capital to average assets (“leverage ratio”) was 9.86% at June 30, 2017, in excess of regulatory requirements.
 
The bank’s regulatory capital ratios continued to be in excess of regulatory requirements as well, inclusive of conservation buffer amounts. Additionally, during the second quarter of 2017, the Company contributed $20.0 million of capital to the bank from proceeds of the subordinated debt issuance. At June 30, 2017, the bank’s leverage ratio was 9.25%, while Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 11.44% and 11.88%, respectively.
 
Diluted earnings per common share, exceeded the quarterly $0.14 cash dividend per share by 128.6% during the second quarter of 2017, equating to a 43.8% dividend payout ratio.
 
Tangible book value per share was $13.93 at June 30, 2017.
 
Outlook for the Quarter Ending September 30, 2017
 
At June 30, 2017, the bank had outstanding real estate loan commitments totaling $85.2 million, at an average interest rate approximating 3.79%, all of which are likely to close during the quarter ending September 30, 2017.  Loan commitments at June 30, 2017 are lower than previous quarters reflective of lower loan prepayment and refinance activity. Loan prepayments and amortization are expected to fall within a projected annualized range of 10% - 15% during the quarter.
 
Loan loss provision for the third quarter of 2017 is expected to be driven by loan portfolio growth, subject to management’s assessment of the adequacy of the allowance for loan losses.
 
The third quarter of 2017 will include two weeks of interest expense related to the trust preferred securities that were redeemed on July 17, 2017.
 
Non‐interest expense is expected to be approximately $20 million during the September 2017 quarter.
 
The previously announced sale of the Williamsburg branch office property is expected to close in the third quarter of 2017 and generate an after-tax gain of approximately $5-6 million.
 
The Company projects that the consolidated effective tax rate will approximate 38.5% in the September 2017 quarter.
 

Page 5
ABOUT DIME COMMUNITY BANCSHARES, INC.
 
The Company had $6.26 billion in consolidated assets as of June 30, 2017. The bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-seven branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and the bank can be found on Dime’s website at www.dime.com.
 
This news release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “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 Company and/or 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.
 
Contact: Anthony J. Rose
Executive Vice President and Director of Investor Relations
718-782-6200 extension 5260
 

Page 6
DIME COMMUNITY BANCSHARES,  INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share amounts)

   
June 30,
2017
   
March 31,
2017
   
December 31,
2016
 
ASSETS:
                 
Cash and due from banks
 
$
110,044
   
$
87,834
   
$
113,503
 
Investment securities held to maturity
   
5,315
     
5,332
     
5,378
 
Investment securities available for sale
   
4,049
     
4,001
     
3,895
 
Mortgage-backed securities available for sale
   
3,496
     
3,520
     
3,558
 
Trading securities
   
2,687
     
7,153
     
6,953
 
Loans:
                       
One-to-four family residential, including condominium and cooperative apartment
   
70,982
     
75,131
     
74,022
 
Multifamily residential and residential mixed use (1)(2)
   
4,746,075
     
4,687,196
     
4,592,282
 
Commercial and commercial mixed use real estate
   
975,771
     
949,658
     
958,459
 
Acquisition, development, and construction (“ADC”)
   
4,000
     
-
     
-
 
Unearned discounts and net deferred loan fees
   
10,105
     
9,002
     
8,244
 
Total real estate loans
   
5,806,933
     
5,720,987
     
5,633,007
 
Commercial and industrial (“C&I”)
   
68,199
     
30,189
     
2,058
 
Other loans
   
1,749
     
973
     
1,357
 
Allowance for loan losses
   
(21,985
)
   
(20,954
)
   
(20,536
)
Total loans, net
   
5,854,896
     
5,731,195
     
5,615,886
 
Premises and fixed assets, net
   
22,315
     
21,620
     
18,405
 
Premises held for sale
   
1,379
     
1,379
     
1,379
 
Federal Home Loan Bank of New York capital stock
   
50,961
     
41,411
     
44,444
 
Bank Owned Life Insurance (“BOLI”)
   
87,424
     
86,873
     
86,328
 
Goodwill
   
55,638
     
55,638
     
55,638
 
Other assets
   
59,980
     
49,414
     
50,063
 
TOTAL ASSETS
 
$
6,258,184
   
$
6,095,370
   
$
6,005,430
 
LIABILITIES AND STOCKHOLDERS’ EQUITY:
                       
Deposits:
                       
Non-interest bearing checking
 
$
313,351
   
$
290,786
   
$
297,434
 
Interest Bearing Checking
   
112,867
     
115,914
     
106,525
 
Savings
   
365,668
     
369,457
     
366,921
 
Money Market
   
2,729,968
     
2,762,211
     
2,576,081
 
Sub-total
   
3,521,854
     
3,538,368
     
3,346,961
 
Certificates of deposit
   
896,626
     
970,114
     
1,048,465
 
Total Due to Depositors
   
4,418,480
     
4,508,482
     
4,395,426
 
Escrow and other deposits
   
91,196
     
135,817
     
103,001
 
Federal Home Loan Bank of New York advances
   
944,575
     
763,725
     
831,125
 
Subordinated Notes Payable
   
113,545
     
-
     
-
 
Trust Preferred Notes Payable
   
70,680
     
70,680
     
70,680
 
Other liabilities
   
39,260
     
43,441
     
39,330
 
TOTAL LIABILITIES
   
5,677,736
     
5,522,145
     
5,439,562
 
STOCKHOLDERS’ EQUITY:
                       
Common stock ($0.01 par, 125,000,000 shares authorized, 53,614,924 shares, 53,614,807 shares and 53,572,745 shares issued at June 30, 2017, March 31, 2017 and December 31, 2016, respectively, and 37,675,379 shares, 37,569,348 shares and 37,455,853 shares outstanding at June 30, 2017, March 31, 2017 and December 31, 2016, respectively)
   
536
     
536
     
536
 
Additional paid-in capital
   
280,453
     
279,553
     
278,356
 
Retained earnings
   
516,165
     
509,453
     
503,539
 
Accumulated other comprehensive loss, net of deferred taxes
   
(5,647
)
   
(5,514
)
   
(5,939
)
Unearned Restricted Stock Award common stock
   
(4,433
)
   
(3,012
)
   
(1,932
)
Common stock held by the Benefit Maintenance Plan
   
(7,029
)
   
(6,859
)
   
(6,859
)
Treasury stock (15,939,545 shares, 16,045,459 shares and 16,116,892 shares at June 30, 2017, March 31, 2017 and December 31, 2016, respectively)
   
(199,597
)
   
(200,932
)
   
(201,833
)
TOTAL STOCKHOLDERS’ EQUITY
   
580,448
     
573,225
     
565,868
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
6,258,184
   
$
6,095,370
   
$
6,005,430
 
 
(1)
Includes loans underlying cooperatives.
(2)
While the loans within this category are often considered “commercial real estate” in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant  component of the total loan portfolio.
 

Page 7
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except share and per share amounts)

    
For the Three Months Ended
   
For the Six Months Ended
  
June 30,
2017
   
March 31,
2017
   
June 30,
2016
   
June 30,
2017
   
June 30,
2016
Interest income:
                             
Loans secured by real estate
 
$
51,137
   
$
50,475
   
$
47,358
   
$
101,612
   
$
93,009
 
Commercial and industrial (“C&I”)
   
474
     
41
     
6
     
515
     
11
 
Other loans
   
18
     
18
     
18
     
36
     
37
 
Mortgage-backed securities
   
14
     
14
     
2
     
28
     
4
 
Investment securities
   
164
     
190
     
265
     
354
     
438
 
Other short-term investments
   
611
     
717
     
721
     
1,328
     
1,382
 
Total interest  income
   
52,418
     
51,455
   
$
48,370
     
103,873
     
94,881
 
Interest expense:
                                       
Deposits  and escrow
   
9,509
     
9,507
     
7,597
     
19,016
     
14,391
 
Borrowed funds
   
4,856
     
4,461
     
5,163
     
9,317
     
10,249
 
Total interest expense
   
14,365
     
13,968
     
12,760
     
28,333
     
24,640
 
Net interest income
   
38,053
     
37,487
     
35,610
     
75,540
     
70,241
 
Provision for loan losses
   
1,047
     
450
     
442
     
1,497
     
421
 
Net interest income after  provision for loan losses
   
37,006
     
37,037
     
35,168
     
74,043
     
69,820
 
                                         
Non-interest income:
                                       
Service charges and other fees
   
919
     
794
     
758
     
1,713
     
1,443
 
Mortgage banking income, net
   
65
     
16
     
27
     
81
     
55
 
Gain on trading securities
   
59
     
75
     
33
     
134
     
39
 
Gain (loss) on sale of real estate
   
-
     
-
     
(4
)
   
-
     
68,183
 
Gain on sale of securities and other assets
   
-
     
-
     
-
     
-
     
40
 
Income from BOLI
   
551
     
545
     
1,043
     
1,096
     
1,603
 
Other
   
153
     
348
     
448
     
501
     
683
 
Total non-interest income
   
1,747
     
1,778
     
2,305
     
3,525
     
72,046
 
Non-interest expense:
                                       
Salaries and employee benefits
   
8,960
     
10,024
     
8,686
     
18,984
     
17,516
 
ESOP and RRP benefit expense
   
381
     
296
     
846
     
677
     
1,724
 
Occupancy and equipment
   
3,500
     
3,628
     
3,115
     
7,128
     
5,742
 
Data processing costs
   
1,503
     
1,607
     
1,256
     
3,110
     
2,451
 
Marketing
   
1,466
     
1,466
     
1,178
     
2,932
     
2,355
 
Federal deposit insurance premiums
   
712
     
655
     
581
     
1,367
     
1,320
 
Other
   
2,947
     
3,093
     
2,430
     
6,040
     
4,853
 
Total non-interest expense
   
19,469
     
20,769
     
18,092
     
40,238
     
35,961
 
                                         
Income before taxes
   
19,284
     
18,046
     
19,381
     
37,330
     
105,905
 
Income tax expense
   
7,295
     
6,889
     
8,173
     
14,184
     
44,660
 
                                         
Net Income
 
$
11,989
   
$
11,157
   
$
11,208
   
$
23,146
   
$
61,245
 
                                         
Earnings per Share (“EPS”): (1)
                                       
Basic
 
$
0.32
   
$
0.30
   
$
0.30
   
$
0.62
   
$
1.67
 
Diluted
 
$
0.32
   
$
0.30
   
$
0.30
   
$
0.61
   
$
1.67
 
                                         
Average common shares outstanding for Diluted EPS
   
37,635,798
     
37,549,576
     
36,818,581
     
37,590,198
     
36,741,066
 

(1)
The quarterly EPS amounts, when added, may not coincide with the year to date EPS due to rounding differences.
 

Page 8
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share amounts)

    
At or For the Three Months Ended
   
At or For the Six Months Ended
  
June 30,
2017
   
March 31,
2017
   
June 30,
2016
   
June 30,
2017
   
June 30,
2016
Per Share Data:
                             
Reported EPS (Diluted) (1)
 
$
0.32
   
$
0.30
   
$
0.30
   
$
0.61
   
$
1.67
 
Cash dividends paid per share
   
0.14
     
0.14
     
0.14
     
0.28
     
0.28
 
Book value per share
   
15.41
     
15.26
     
14.60
     
15.41
     
14.60
 
Tangible book value per share (2)
   
13.93
     
13.78
     
13.12
     
13.93
     
13.12
 
Dividend payout ratio
   
43.75
%
   
46.67
%
   
46.67
%
   
45.90
%
   
16.77
%
                                         
Performance Ratios (Based upon Reported Net Income):
                                       
Return on average assets
   
0.78
%
   
0.74
%
   
0.81
%
   
0.76
%
   
2.29
%
Return on average common equity
   
8.32
%
   
7.83
%
   
8.23
%
   
8.08
%
   
23.28
%
Return on average tangible common equity (2)
   
9.20
%
   
8.68
%
   
9.16
%
   
8.94
%
   
26.04
%
Net interest spread
   
2.40
%
   
2.40
%
   
2.50
%
   
2.40
%
   
2.57
%
Net interest margin
   
2.57
%
   
2.57
%
   
2.68
%
   
2.57
%
   
2.74
%
Average Interest Earning Assets to Average Interest Bearing Liabilities
   
117.18
%
   
116.36
%
   
117.91
%
   
116.77
%
   
117.27
%
Non-interest expense to average assets
   
1.27
%
   
1.38
%
   
1.31
%
   
1.32
%
   
1.35
%
Efficiency ratio
   
48.99
%
   
53.00
%
   
47.75
%
   
50.98
%
   
48.58
%
Loans to deposits at end of period
   
133.01
%
   
127.59
%
   
137.80
%
   
133.01
%
   
137.80
%
Effective tax rate
   
37.83
%
   
38.17
%
   
42.17
%
   
38.00
%
   
42.17
%
                                         
Average Balance Data:
                                       
Average assets
 
$
6,128,378
   
$
6,026,914
   
$
5,509,549
   
$
6,077,646
   
$
5,340,459
 
Average interest earning assets
   
5,918,173
     
5,824,309
     
5,308,434
     
5,871,241
     
5,132,039
 
Average loans
   
5,802,417
     
5,691,098
     
5,139,564
     
5,746,758
     
4,979,040
 
Average deposits
   
4,476,004
     
4,485,510
     
3,612,933
     
4,480,757
     
3,340,695
 
Average common equity
   
576,689
     
569,723
     
545,033
     
573,206
     
526,092
 
Average tangible common equity (2)
   
521,051
     
514,085
     
489,396
     
517,568
     
470,455
 
                                         
Asset Quality Summary:
                                       
Non-performing loans (excluding loans held for sale)
 
$
3,374
   
$
3,801
   
$
4,329
   
$
3,374
   
$
4,329
 
Non-performing assets (3)
   
4,661
     
5,080
     
5,600
   
$
4,661
     
5,600
 
Net charge-offs
   
16
     
32
     
46
     
48
     
26
 
Non-performing loans/ Total loans
   
0.06
%
   
0.07
%
   
0.08
%
   
0.06
%
   
0.08
%
Non-performing assets/ Total assets
   
0.07
%
   
0.08
%
   
0.10
%
   
0.07
%
   
0.10
%
Allowance for loan loss/ Total loans
   
0.37
%
   
0.36
%
   
0.36
%
   
0.37
%
   
0.36
%
Allowance for loan loss/ Non-performing loans
   
651.60
%
   
551.28
%
   
436.80
%
   
651.60
%
   
436.80
%
Loans delinquent 30 to 89 days at period end
 
$
1,872
   
$
173
   
$
535
   
$
1,872
   
$
535
 
                                         
Capital Ratios - Consolidated:
                                       
Tangible common equity to tangible assets (2)
   
8.46
%
   
8.57
%
   
8.98
%
   
8.46
%
   
8.98
%
Tier 1 common equity ratio
   
10.78
     
11.08
     
11.91
     
10.78
     
11.91
 
Tier 1 risk-based capital ratio
   
12.17
     
12.53
     
13.53
     
12.17
     
13.53
 
Total risk-based capital ratio
   
14.96
     
12.98
     
13.98
     
14.96
     
13.98
 
Tier 1 leverage ratio
   
9.86
     
9.91
     
10.47
     
9.86
     
10.47
 
                                         
Capital Ratios - Bank Only:
                                       
Tier 1 common equity ratio
   
11.44
%
   
11.25
%
   
11.82
%
   
11.44
%
   
11.82
%
Tier 1 risk-based capital ratio
   
11.44
     
11.25
     
11.82
     
11.44
     
11.82
 
Total risk-based capital ratio
   
11.88
     
11.70
     
12.27
     
11.88
     
12.27
 
Tier 1 leverage ratio
   
9.25
     
8.88
     
9.13
     
9.25
     
9.13
 
                                         

(1)
The quarterly EPS amounts, when added, may not coincide with the year to date EPS due to rounding differences.
(2)
See “Non-GAAP Reconciliation” table for reconciliation of tangible common equity and tangible assets.
(3)
Amount comprised of total non-accrual loans, other real estate owned, and the recorded balance of pooled bank trust preferred security investments that were deemed to meet the criteria of a non-performing asset.
 

Page 9
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)
   
     
For the Three Months Ended
   
June 30, 2017
   
March 31, 2017
   
June 30, 2016
Average
Balance
   
Interest
   
Average
Yield/
Cost
   
Average
Balance
   
Interest
   
Average
Yield/
Cost
   
Average
Balance
   
Interest
   
Average
Yield/
Cost
Assets:
                                                     
Interest-earning assets:
                                                     
Real estate loans
 
$
5,759,565
   
$
51,137
     
3.55
%
 
$
5,687,557
   
$
50,475
     
3.55
%
 
$
5,138,053
   
$
47,358
     
3.69
%
Commercial and industrial loans
   
41,776
     
474
     
4.54
     
2,474
     
41
     
6.63
     
384
     
6
     
6.25
 
Other loans
   
1,076
     
18
     
6.69
     
1,067
     
18
     
6.75
     
1,127
     
18
     
6.39
 
Mortgage-backed securities
   
3,460
     
14
     
1.62
     
3,489
     
14
     
1.61
     
400
     
2
     
2.00
 
Investment securities
   
16,970
     
164
     
3.87
     
16,841
     
190
     
4.51
     
20,203
     
265
     
5.25
 
Other short-term investments
   
95,326
     
611
     
2.56
     
112,881
     
717
     
2.54
     
148,267
     
721
     
1.95
 
Total interest earning assets
   
5,918,173
   
$
52,418
     
3.54
%
   
5,824,309
   
$
51,455
     
3.53
%
   
5,308,434
   
$
48,370
     
3.64
%
Non-interest earning assets
   
210,205
                     
202,605
                     
201,115
                 
Total assets
 
$
6,128,378
                   
$
6,026,914
                   
$
5,509,549
                 
                                                                         
Liabilities and Stockholders’ Equity:
                                                                       
Interest-bearing liabilities:
                                                                       
Interest Bearing Checking accounts
 
$
114,257
   
$
65
     
0.23
%
 
$
110,797
   
$
58
     
0.21
%
 
$
84,835
   
$
61
     
0.29
%
Money Market accounts
   
2,767,455
     
6,139
     
0.89
     
2,693,219
     
5,780
     
0.87
     
1,892,046
     
3,865
     
0.82
 
Savings accounts
   
367,995
     
46
     
0.05
     
368,087
     
45
     
0.05
     
369,266
     
44
     
0.05
 
Certificates of deposit
   
925,535
     
3,259
     
1.41
     
1,022,155
     
3,624
     
1.44
     
1,010,864
     
3,627
     
1.44
 
Total interest bearing deposits
   
4,175,242
     
9,509
     
0.91
     
4,194,258
     
9,507
     
0.92
     
3,357,011
     
7,597
     
0.91
 
Borrowed Funds
   
875,057
     
4,856
     
2.23
     
811,288
     
4,461
     
2.23
     
1,145,058
     
5,163
     
1.81
 
Total interest-bearing liabilities
   
5,050,299
   
$
14,365
     
1.14
%
   
5,005,546
   
$
13,968
     
1.13
%
   
4,502,069
     
12,760
     
1.14
%
Non-interest bearing checking accounts
   
300,762
                     
291,252
                     
255,922
                 
Other non-interest-bearing liabilities
   
200,628
                     
160,393
                     
206,526
                 
Total liabilities
   
5,551,689
                     
5,457,191
                     
4,964,517
                 
Stockholders’ equity
   
576,689
                     
569,723
                     
545,032
                 
Total liabilities and stockholders’ equity
 
$
6,128,378
                   
$
6,026,914
                   
$
5,509,549
                 
Net interest income
         
$
38,053
                   
$
37,487
                   
$
35,610
         
Net interest spread
                   
2.40
%
                   
2.40
%
                   
2.50
%
Net interest-earning assets
 
$
867,874
                   
$
818,763
                   
$
806,365
                 
Net interest margin
                   
2.57
%
                   
2.57
%
                   
2.68
%
Ratio of interest-earning assets to interest-bearing liabilities
           
117.18
%
                   
116.36
%
                   
117.91
%
       
                                                                         
Deposits (including non-interest bearing checking accounts)
 
$
4,476,004
   
$
9,509
     
0.85
%
 
$
4,485,510
   
$
9,507
     
0.86
%
 
$
3,612,933
   
$
7,597
     
0.85
%
                                                                         
SUPPLEMENTAL INFORMATION
                                                                       
Loan prepayment and late payment fee income
   
$
1,029
                   
$
1,354
                   
$
1,978
         
Real estate loans (excluding net prepayment and late payment fee income)
             
3.48
%
                   
3.45
%
                   
3.53
%
Interest earning assets (excluding net prepayment and late payment fee income)
             
3.47
%
                   
3.44
%
                   
3.50
%
Net Interest income (excluding net prepayment and late payment fee income)
   
$
37,024
                   
$
36,133
                   
$
33,632
         
Net Interest margin (excluding net prepayment and late payment fee income)
             
2.50
%
                   
2.48
%
                   
2.53
%
 

Page 10
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF LOAN COMPOSITION AND WEIGHTED AVERAGE RATES (“WAR”) (1)
(Dollars in thousands)

    
At June 30, 2017
   
At March 31, 2017
   
At June 30, 2016
  
Balance
   
WAR
   
Balance
   
WAR
   
Balance
   
WAR
Loan balances at period end:
                                   
One-to-four family residential, including condominium and cooperative apartment
 
$
70,982
     
4.29
%
 
$
75,131
     
4.30
%
 
$
74,022
     
4.34
%
Multifamily residential and residential mixed use (2)(3)
   
4,746,075
     
3.38
     
4,687,196
     
3.37
     
4,592,282
     
3.45
 
Commercial and commercial mixed use real estate
   
975,771
     
3.91
     
949,658
     
3.90
     
958,459
     
3.96
 
Acquisition, development, and construction (“ADC”)
   
4,000
     
5.25
     
-
     
-
     
-
     
-
 
Total real estate loans
   
5,796,828
     
3.49
     
5,711,985
     
3.47
     
5,624,763
     
3.55
 
                                                 
Commercial and industrial (“C&I”)
 
$
68,199
     
4.62
%
 
$
30,189
     
4.21
%
 
$
501
     
6.55
%

(1)
Weighted average rate is calculated by aggregating interest based on the current loan rate from each loan in the category, divided by the total amount of loans in the category.
(2)
Includes loans underlying cooperatives.
(3)
While the loans within this category are often considered “commercial real estate” in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant  component of the total loan portfolio.
 

Page 11
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS (“TDRs”)
(Dollars in thousands)

Non-Performing Loans
 
At June 30,
2017
   
At March 31,
2017
   
At June 30,
2016
 
One-to-four family residential, including condominium and cooperative apartment
 
$
654
   
$
678
   
$
487
 
Multifamily residential and residential mixed use (1)(2)
   
2,618
     
2,623
     
3,784
 
Commercial mixed use real estate (2)
   
101
     
495
     
54
 
Other
   
1
     
5
     
4
 
Total Non-Performing Loans (3)
 
$
3,374
   
$
3,801
   
$
4,329
 
Other Non-Performing Assets
                       
Other real estate owned
   
-
     
-
     
18
 
Pooled bank trust preferred securities (4)
   
1,287
     
1,279
     
1,253
 
Total Non-Performing Assets
 
$
4,661
   
$
5,080
   
$
5,600
 
                         
One- to four-family and cooperative/condominium apartment
   
399
     
402
     
414
 
Multifamily residential and mixed use residential real estate (1)(2)
   
639
     
649
     
676
 
Mixed use commercial real estate (2)
   
4,218
     
4,240
     
4,303
 
Commercial real estate
   
3,330
     
3,347
     
3,396
 
Total Performing TDRs
 
$
8,586
   
$
8,638
   
$
8,789
 

(1)
Includes loans underlying cooperatives.
(2)
While the loans within this category are often considered “commercial real estate” in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying this significant  component of the total loan portfolio.
(3)
There were no non-accruing TDRs for the periods indicated.
(4)
As of the dates presented, certain pooled bank trust preferred securities were deemed to meet the criteria of a non-performing asset.

  
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES
(Dollars in thousands)
 
   
At June 30,
2017
   
At March 31,
2017
   
At June 30,
2016
 
Total Non-Performing Assets
 
$
4,661
   
$
5,080
   
$
5,600
 
Loans 90 days or more past due on accrual status (5)
   
1,265
     
719
     
4,534
 
TOTAL PROBLEM ASSETS
 
$
5,926
   
$
5,799
   
$
10,134
 
                         
Tangible Capital - Bank only (6)
 
$
555,059
   
$
524,006
   
$
488,041
 
Allowance for loan losses and reserves for contingent liabilities
   
22,010
     
20,979
     
20,561
 
TANGIBLE CAPITAL PLUS RESERVES
 
$
577,069
   
$
544,985
   
$
508,602
 
                         
TEXAS RATIO (PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES)
   
1.0
%
   
1.1
%
   
2.0
%

(5)
These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed within the following twelve months, and were not expected to result in any loss of contractual principal or interest.  These loans are not included in non-performing loans.
(6)
See “Non-GAAP Reconciliation” table for reconciliation of tangible common equity and tangible assets.
 

Page 12
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(Dollars in thousands except per share amounts)

 
At or For the Three Months Ended
   
At or For the Six Months Ended
 
   
June 30,
2017
   
March 31,
2017
   
June 30,
2016
   
June 30,
2017
   
June 30,
2016
 
Reconciliation of Reported and Adjusted (“non-GAAP”) Net Income:
                             
Reported net income
 
$
11,989
   
$
11,157
   
$
11,208
   
$
23,146
   
$
61,245
 
Less:  After tax gain on the sale of real estate (1)
   
-
     
-
     
-
     
-
     
(37,483
)
Adjusted (“non-GAAP”) net income
 
$
11,989
   
$
11,157
   
$
11,208
   
$
23,146
   
$
23,762
 
                                         
Adjusted Ratios (Based upon “non-GAAP Net Income” as calculated above):
                                       
Adjusted EPS (Diluted)
 
$
0.32
   
$
0.30
   
$
0.30
   
$
0.61
   
$
0.65
 
Adjusted return on average assets
   
0.78
%
   
0.74
%
   
0.81
%
   
0.76
%
   
0.89
%
Adjusted return on average common equity
   
8.32
%
   
7.83
%
   
8.23
%
   
8.08
%
   
9.03
%
Adjusted return on average tangible common equity
   
9.20
%
   
8.68
%
   
9.16
%
   
8.94
%
   
10.10
%
Adjusted net interest spread
   
2.40
%
   
2.40
%
   
2.50
%
   
2.40
%
   
2.57
%
Adjusted net interest margin
   
2.57
%
   
2.57
%
   
2.68
%
   
2.57
%
   
2.74
%
Adjusted non-interest expense to average assets
   
1.27
%
   
1.38
%
   
1.31
%
   
1.32
%
   
1.35
%
Adjusted efficiency ratio
   
48.99
%
   
53.00
%
   
47.75
%
   
50.98
%
   
48.58
%
                                         
Reconciliation of Tangible Assets:
                                       
Total assets
 
$
6,258,184
   
$
6,095,370
   
$
5,556,197
   
$
6,258,184
   
$
5,556,197
 
Less:
                                       
Goodwill
   
55,638
     
55,638
     
55,638
     
55,638
     
55,638
 
Tangible assets
   
6,202,546
     
6,039,732
     
5,500,559
     
6,202,546
     
5,500,559
 
                                         
Reconciliation of Tangible Common Equity - Consolidated:
                                       
Total common equity
 
$
580,448
   
$
573,225
   
$
549,611
   
$
580,448
   
$
549,611
 
Less:
                                       
Goodwill
   
55,638
     
55,638
     
55,638
     
55,638
     
55,638
 
Tangible common equity
   
524,810
     
517,587
     
493,973
     
524,810
     
493,973
 
                                         
Reconciliation of Tangible Common Equity - Bank only:
                                       
Total common equity
 
$
610,697
   
$
579,644
   
$
543,679
   
$
610,697
   
$
543,679
 
Less:
                                       
Goodwill
   
55,638
     
55,638
     
55,638
     
55,638
     
55,638
 
Tangible common equity
   
555,059
     
524,006
     
488,041
     
555,059
     
488,041
 

(1)
The gain on the sale of real estate was taxed at the company’s statutory tax rate of 45%.