EX-99 2 ex_99.htm EXHIBIT 99
Exhibit 99
 
 
DIME COMMUNITY BANCSHARES, INC. REPORTS STRONG QUARTERLY EARNINGS
Quarterly EPS of $0.30; solid loan growth and strong deposit growth with loan-to-deposit ratio reduced to 138%

Brooklyn, NY – July 27, 2016 - Dime Community Bancshares, Inc. (NASDAQ: DCOM) today reported net income of $11.2 million for the second quarter of 2016, or $0.30 per diluted common share, compared with $50.0 million, or $1.36 per diluted common share, in the first quarter of 2016. Net income in the first quarter of 2016 (excluding the impact of the gain on sale of real estate taxed at the statutory rate) was $12.6 million, or $0.34 per diluted common share and $11.5 million, or $0.32 per diluted common share, in the second quarter of 2015.

Highlights for the second quarter of 2016 included:

· Average real estate loans grew 26.7% (annualized) on a linked quarter basis and 21.9% over the second quarter of 2015;

· Average deposits grew 34.1% (annualized) on a linked quarter basis and 24.1% over the second quarter of 2015; the strong deposit growth benefited the loan-to-deposit ratio, which declined to 137.8% in the second quarter of 2016 from 147.0% in the first quarter of 2016;

· Strong credit quality, with nonperforming loans to total loans of eight basis points; and

· Efficiency ratio of 47.8%, compared to 49.5% in the first quarter of 2016 and 47.1% in the second quarter of 2015.

Vincent F. Palagiano, Chairman and Chief Executive Officer of the Company, commented, “We are pleased to report another solid quarter of performance, despite the significant headwinds we face from continued low interest rates. Steady loan growth and strong deposit growth led to increased net interest income despite a decline in net interest margin. It’s important to note that we delivered these results while maintaining our risk profile and managing our capital effectively.”

According to President and Chief Operating Officer Kenneth J. Mahon, “We continue to execute on our strategy to create superior long-term shareholder value. Our focus on deposit growth saw the loan-to-deposit ratio fall to 137.8%, the lowest level since 2007. This quarter continued to show pristine credit quality, with exceptionally low levels of nonperforming loans, and we stayed focused on our cost base, with well-controlled expenses leading to a superior efficiency ratio.”
 
Page 2
Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income in the second quarter of 2016 was $35.6 million, an increase of $979,000 (2.8%) over the first quarter of 2016 and an increase of $2.5 million (7.7%) over the second quarter of 2015.  Net Interest Margin ("NIM") was 2.68% during the second quarter of 2016, compared to 2.80% in the first quarter of 2016 and 3.05% in the second quarter of 2015. NIM was negatively impacted in the second quarter of 2016 due to lower income recognized from loan prepayment activity. For the second quarter of 2016, income from prepayment activity totaled $2.0 million, benefiting NIM by 15 basis points, compared to $2.6 million, or 22 basis points, during the first quarter of 2016 and $4.2 million, or 39 basis points, during the second quarter of 2015. Average earning assets were $5.31 billion for the second quarter of 2016, a 28.5% (annualized) increase from $4.96 billion for the first quarter of 2016 and a 22.4% increase from $4.34 billion for the second quarter of 2015. For the second quarter of 2016, the average yield on interest earning assets (excluding prepayment income) was 3.50%, four basis points lower than the 3.54% for first quarter 2016 and 19 basis points lower than the 3.69% for second quarter 2015, while the average cost of funds was 1.14%, two basis points higher than the 1.12% for first quarter 2016 and six basis points lower than the 1.20% for second quarter 2015.

Real Estate Loans

Real estate loan portfolio growth was $151.5 million (11.9% annualized) on a net basis during the second quarter of 2016. Real estate loan originations were $357.3 million during the quarter, at a weighted average interest rate of 3.34%. Of this amount, $104.9 million represented loan refinances from the existing portfolio. Loan amortization and satisfactions totaled $206.1 million, or 16.1% (annualized) of the quarterly average portfolio balance, at an average rate of 4.08%. The average yield on the loan portfolio (excluding income recognized from prepayment activity) was 3.53% during the second quarter of 2016, compared to 3.57% during the first quarter of 2016, and 3.73% during the second quarter of 2015. Average real estate loans were $5.14 billion in the second quarter of 2016, an increase of $321.0 million (26.7% annualized) from the first quarter of 2016 and an increase of $923.4 million (21.9%) from the second quarter of 2015.

Deposits and Borrowed Funds

Deposit growth was $340.5 million (39.6% annualized) during the second quarter of 2016. Given the strong growth in deposits, the loan-to-deposit ratio fell to 137.8% at June 30, 2016, from 147.0% at March 31, 2016 and 146.8% at June 30, 2015. Core deposits increased to $2.75 billion during the second quarter of 2016, from $2.46 billion during the first quarter of 2016 and $2.04 billion during the second quarter of 2015. The average cost of deposits increased three basis points on a linked quarter basis to 0.85%.

Total borrowings decreased $260.0 million during the second quarter of 2016 as compared to the first quarter of 2016. The reduction in borrowings was due to deposit growth outpacing loan growth, and reflects management’s desire to decrease reliance on borrowed funds and to grow both its number of customers and deposits.
 
Page 3
Non-Interest Income

Non-interest income was $2.3 million during the second quarter of 2016, which was $751,000 (48.3%) higher than the first quarter of 2016, excluding the gain on the sale of real estate, reflecting additional income recognized from mortality proceeds from Bank Owned Life Insurance assets and strong mortgage service fee income. Non-interest income was $628,000 (37.4%) higher than the second quarter of 2015, reflecting additional income recognized from mortality proceeds from Bank Owned Life Insurance assets and higher service fees.

Non-Interest Expense

Non-interest expense was $18.1 million during the second quarter of 2016, which was $223,000 (1.2%) higher than the first quarter of 2016, related to higher occupancy expense. Non-interest expense was $1.7 million (10.5%) higher than the second quarter of 2015, related to higher occupancy, marketing, and data processing expense. The increase in occupancy expense reflects the accounting expense for the new headquarters lease. The increase above the $17.5 million forecast resulted primarily from the aforementioned occupancy expense.

The ratio of non-interest expense to average assets was 1.31% during the second quarter of 2016, compared to 1.38% during the first quarter of 2016 and 1.44% during the second quarter of 2015, reflecting period-over-period average asset growth of 26.2% (annualized) and 20.9%, respectively. The efficiency ratio was 47.8% during the second quarter of 2016, compared to 49.5% during the first quarter of 2016 and 47.1% during the second quarter of 2015.  The efficiency ratio improvement on a linked quarter basis was due to stronger net interest income and higher non-interest income while non-interest expense was relatively flat.

Income Tax Expense

The effective income tax rate approximated 42.2% during the second quarter of 2016, the same rate as the first quarter of 2016.

Credit Quality

Non-performing loans were $4.3 million, or 0.08% of total loans, at June 30, 2016, up from $1.4 million at March 31, 2016, which is mainly due to the addition of one loan. Loans delinquent between 30 and 89 days were $535,000, or 0.01% of total loans, at June 30, 2016, down from $2.3 million at March 31, 2016. The allowance for loan losses was 0.36% of total loans at June 30, 2016, consistent with the 0.37% at March 31, 2016. At June 30, 2016, non-performing assets represented 2.0% of the sum of tangible capital plus the allowance for loan losses (this statistic is otherwise known as the "Texas Ratio") (see table at the end of this news release).  A loan loss provision of $442,000 was recorded during the second quarter of 2016, compared to a loan loss credit of $21,000 during the first quarter of 2016, primarily due to growth in the loan portfolio.
 
Page 4
Capital Management
 
The Company’s consolidated Tier 1 capital to average assets (“leverage ratio”) was 10.47% at June 30, 2016, in excess of Basel III requirements.

The bank’s regulatory capital ratios continued to be in excess of Basel III requirements as well, inclusive of conservation buffer amounts. At June 30, 2016, the bank’s leverage ratio was 9.13%, while Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 11.82% and 12.27%, respectively.

Reported diluted earnings per share exceeded the quarterly cash dividend per share by 114.3% during the second quarter of 2016, equating to a 46.7% payout ratio. Tangible book value per share was $13.35 at June 30, 2016, a 15.0% increase from $11.61 at June 30, 2015.

Outlook for the Quarter Ending September 30, 2016

At June 30, 2016, the bank had outstanding loan commitments totaling $280.2 million, at an average interest rate approximating 3.42%, all of which are likely to close during the quarter ending September 30, 2016. Loan prepayments and amortization are expected to fall within the projected annualized range of 15% - 20% during the September 2016 quarter.

The Company has a balance sheet growth objective of 15% – 18% for the year ending December 31, 2016, with a preference toward utilizing retail deposits for most of its funding needs.

Deposit and borrowing funding costs are expected to remain near current historically low levels through the September 2016 quarter. At June 30, 2016, the bank had $80.7 million of CDs at an average rate of 0.86%, and $315.0 million of borrowings, at an average rate of 0.96%, scheduled to mature during the September 2016 quarter. No significant increase or reduction in funding costs is anticipated from the rollover or re-positioning of these funds.

The bank recorded a loan loss provision during the just completed quarter of $442,000, mainly due to loan portfolio growth. During the remainder of 2016, quarterly loan loss provisions are expected to continue to be mainly a function of loan growth.

Non‐interest expense is expected to approximate $18 million during the September 2016 quarter.
 
The Company projects that the consolidated effective tax rate will approximate 42.0% in the September 2016 quarter.
 
Page 5
ABOUT DIME COMMUNITY BANCSHARES, INC.

Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the “Company) had $5.56 billion in consolidated assets as of June 30, 2016, and is the parent company of The Dime Savings Bank of Williamsburgh (the “bank”). The bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-five 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," "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 Dime; 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 Chief Administrative Officer
718-782-6200 extension 8260
 
Page 6
DIME COMMUNITY BANCSHARES,  INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands except share amounts)
 
   
June 30,
2016
    
March 31,
2016
    
December 31,
2015
  
ASSETS:
                  
Cash and due from banks
  
$
89,927
    
$
192,917
    
$
64,154
  
Investment securities held to maturity
    
5,319
      
5,290
      
5,242
  
Investment securities available for sale
    
3,837
      
3,787
      
3,756
  
Trading securities
    
6,814
      
10,368
      
10,201
  
Mortgage-backed securities available for sale
    
406
      
417
      
431
  
Federal funds sold and other short-term investments
    
-
      
-
      
-
  
Real Estate Loans:
                        
One-to-four family and cooperative/condomnium apartment
    
81,343
      
74,734
      
72,095
  
Multifamily and loans underlying cooperatives (1)
    
4,206,399
      
4,077,657
      
3,752,328
  
Commercial real estate
    
911,050
      
895,196
      
863,184
  
Unearned discounts and net deferred loan fees
    
7,989
      
7,706
      
7,579
  
Total real estate loans
    
5,206,781
      
5,055,293
      
4,695,186
  
Other loans
    
2,336
      
1,354
      
1,590
  
Allowance for loan losses
    
(18,909
)
    
(18,513
)
    
(18,514
)
Total loans, net
    
5,190,208
      
5,038,134
      
4,678,262
  
Premises and fixed assets, net
    
13,800
      
13,770
      
15,150
  
Premises held for sale
    
1,379
      
1,379
      
8,799
  
Federal Home Loan Bank of New York capital stock
    
52,814
      
63,681
      
58,713
  
Other Real Estate Owned
    
18
      
18
      
148
  
Goodwill
    
55,638
      
55,638
      
55,638
  
Other assets
    
136,037
      
131,960
      
132,378
  
TOTAL ASSETS
  
$
5,556,197
    
$
5,517,359
    
$
5,032,872
  
LIABILITIES AND STOCKHOLDERS' EQUITY:
                        
Deposits:
                        
Non-interest bearing checking
  
$
261,634
    
$
250,339
    
$
259,182
  
Interest Bearing Checking
    
90,172
      
82,850
      
78,994
  
Savings
    
369,168
      
368,685
      
368,671
  
Money Market
    
2,024,770
      
1,756,823
      
1,618,617
  
Sub-total
    
2,745,744
      
2,458,697
      
2,325,464
  
Certificates of deposit
    
1,034,522
      
981,059
      
858,846
  
Total Due to Depositors
    
3,780,266
      
3,439,756
      
3,184,310
  
Escrow and other deposits
    
92,290
      
126,315
      
77,130
  
Federal Home Loan Bank of New York advances
    
1,017,125
      
1,277,125
      
1,166,725
  
Trust Preferred Notes Payable
    
70,680
      
70,680
      
70,680
  
Other liabilities
    
46,225
      
63,576
      
40,080
  
TOTAL LIABILITIES
    
5,006,586
      
4,977,452
      
4,538,925
  
STOCKHOLDERS' EQUITY:
                        
Common stock ($0.01 par, 125,000,000 shares authorized, 53,520,581 shares, 53,326,753 shares and 53,326,753 shares issued at June 30, 2016, March 31, 2016 and December 31, 2015, respectively, and 37,654,771 shares,  37,399,150 shares and 37,371,992 shares outstanding at June 30, 2016, March 31, 2016 and December 31, 2015, respectively)
    
535
      
533
      
533
  
Additional paid-in capital
    
266,984
      
263,206
      
262,798
  
Retained earnings
    
502,569
      
496,518
      
451,606
  
Accumulated other comprehensive loss, net of deferred taxes
    
(8,803
)
    
(8,548
)
    
(8,801
)
Unallocated common stock of Employee Stock Ownership Plan
    
(2,198
)
    
(2,256
)
    
(2,313
)
Unearned Restricted Stock Award common stock
    
(2,754
)
    
(2,279
)
    
(2,271
)
Common stock held by the Benefit Maintenance Plan
    
(9,576
)
    
(9,353
)
    
(9,354
)
Treasury stock (15,865,810 shares, 15,927,603 shares and 15,954,761 shares at June 30, 2016, March 31, 2016 and December 31, 2015, respectively)
    
(197,146
)
    
(197,914
)
    
(198,251
)
TOTAL STOCKHOLDERS' EQUITY
    
549,611
      
539,907
      
493,947
  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
5,556,197
    
$
5,517,359
    
$
5,032,872
  
 
(1)
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,
2016
    
March 31,
2016
    
June 30,
2015
    
June 30,
2016
    
June 30,
2015
  
Interest income:
                              
Loans secured by real estate
  
$
47,358
    
$
45,651
    
$
43,473
    
$
93,009
    
$
85,261
  
Other loans
    
24
      
24
      
24
      
48
      
48
  
Mortgage-backed securities
    
2
      
2
      
2
      
4
      
183
  
Investment securities
    
265
      
173
      
121
      
438
      
290
  
Federal funds sold and other short-term investments
    
721
      
661
      
578
      
1,382
      
1,228
  
Total interest  income
    
48,370
      
46,511
      
44,198
      
94,881
      
87,010
  
Interest expense:
                                        
Deposits  and escrow
    
7,597
      
6,794
      
5,670
      
14,391
      
10,890
  
Borrowed funds
    
5,163
      
5,086
      
5,458
      
10,249
      
12,956
  
Total interest expense
    
12,760
      
11,880
      
11,128
      
24,640
      
23,846
  
Net interest income
    
35,610
      
34,631
      
33,070
      
70,241
      
63,164
  
Provision (Credit) for loan losses
    
442
      
(21
)
    
(1,135
)
    
421
      
(1,307
)
Net interest income after provision (credit) for loan losses
    
35,168
      
34,652
      
34,205
      
69,820
      
64,471
  
                                         
Non-interest income:
                                        
Service charges and other fees
    
758
      
685
      
799
      
1,443
      
1,549
  
Mortgage banking income, net
    
27
      
28
      
41
      
55
      
113
  
Gain (loss) on sale of real estate
    
(4
)
    
68,187
      
-
      
68,183
      
-
  
Gain (loss) on sale of securities and other assets
    
-
      
40
      
(4
)
    
40
      
1,384
  
Gain (loss) on trading securities
    
33
      
6
      
(21
)
    
39
      
41
  
Other
    
1,491
      
795
      
862
      
2,286
      
1,891
  
Total non-interest income
    
2,305
      
69,741
      
1,677
      
72,046
      
4,978
  
Non-interest expense:
                                        
Compensation and benefits
    
9,532
      
9,708
      
9,540
      
19,240
      
16,381
  
Occupancy and equipment
    
3,115
      
2,627
      
2,490
      
5,742
      
5,434
  
Federal deposit insurance premiums
    
581
      
739
      
576
      
1,320
      
1,127
  
Other
    
4,864
      
4,795
      
3,760
      
9,659
      
7,288
  
Total non-interest expense
    
18,092
      
17,869
      
16,366
      
35,961
      
30,230
  
                                         
Income before taxes
    
19,381
      
86,524
      
19,516
      
105,905
      
39,219
  
Income tax expense
    
8,173
      
36,487
      
7,987
      
44,660
      
15,912
  
                                         
Net Income
  
$
11,208
    
$
50,037
    
$
11,529
    
$
61,245
    
$
23,307
  
                                         
Earnings per Share ("EPS"):
                                        
Basic
  
$
0.30
    
$
1.37
    
$
0.32
    
$
1.67
    
$
0.65
  
Diluted
  
$
0.30
    
$
1.36
    
$
0.32
    
$
1.67
    
$
0.64
  
                                         
Average common shares outstanding for Diluted EPS
    
36,818,581
      
36,662,951
      
36,259,377
      
36,741,066
      
36,158,821
  
 
Page 8
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars In thousands except per share amounts)

   
For the Three Months Ended
    
For the Six Months Ended
  
   
June 30,
2016
    
March 31,
2016
    
June 30,
2015
    
June 30,
2016
    
June 30,
2015
  
Performance Ratios (Based upon Reported Net Income):
                              
Reported EPS (Diluted)
  
$
0.30
    
$
1.36
    
$
0.32
    
$
1.67
    
$
0.64
  
Return on Average Assets
    
0.81
%
    
3.87
%
    
1.01
%
    
2.29
%
    
1.03
%
Return on Average Stockholders' Equity
    
8.23
%
    
39.47
%
    
9.78
%
    
23.28
%
    
9.98
%
Return on Average Tangible Stockholders' Equity
    
9.01
%
    
43.49
%
    
10.84
%
    
25.57
%
    
11.08
%
Net Interest Spread
    
2.50
%
    
2.63
%
    
2.88
%
    
2.57
%
    
2.74
%
Net Interest Margin
    
2.68
%
    
2.80
%
    
3.05
%
    
2.74
%
    
2.93
%
Non-interest Expense to Average Assets
    
1.31
%
    
1.38
%
    
1.44
%
    
1.35
%
    
1.33
%
Efficiency Ratio
    
47.75
%
    
49.45
%
    
47.07
%
    
48.58
%
    
45.31
%
Effective Tax Rate
    
42.17
%
    
42.17
%
    
40.93
%
    
42.17
%
    
40.57
%
                                         
Book Value and Tangible Book Value Per Share:
                                        
Stated Book Value Per Share
  
$
14.60
    
$
14.44
    
$
12.85
    
$
14.60
    
$
12.85
  
Tangible Book Value Per Share
    
13.35
      
13.18
      
11.61
      
13.35
      
11.61
  
                                         
Average Balance Data:
                                        
Average Assets
  
$
5,509,549
    
$
5,171,368
    
$
4,555,381
    
$
5,340,459
    
$
4,537,849
  
Average Interest Earning Assets
    
5,308,434
      
4,955,643
      
4,335,579
      
5,132,039
      
4,318,692
  
Average Stockholders' Equity
    
545,033
      
507,151
      
471,628
      
526,092
      
467,149
  
Average Tangible Stockholders' Equity
    
497,850
      
460,249
      
425,522
      
479,049
      
420,769
  
Average Loans
    
5,139,564
      
4,818,516
      
4,216,209
      
4,979,040
      
4,195,146
  
Average Deposits
    
3,612,933
      
3,329,433
      
2,911,493
      
3,340,695
      
2,831,143
  
                                         
Asset Quality Summary:
                                        
Net charge-offs (recoveries)
  
$
45
    
$
(20
)
  
$ 
(1,451
)
  
$
25
    
$ 
(1,367
)
Non-performing Loans (excluding loans held for sale)
    
4,329
      
1,442
      
959
      
4,329
      
959
  
Non-performing Loans/ Total Loans
    
0.08
%
    
0.03
%
    
0.02
%
    
0.08
%
    
0.02
%
Nonperforming Assets (1)
  
$
5,600
    
$
2,705
    
$
2,659
    
$
5,600
    
$
2,656
  
Nonperforming Assets/Total Assets
    
0.10
%
    
0.05
%
    
0.06
%
    
0.10
%
    
0.06
%
Allowance for Loan Loss/Total Loans
    
0.36
%
    
0.37
%
    
0.43
%
    
0.36
%
    
0.43
%
Allowance for Loan Loss/Non-performing Loans
    
436.80
%
    
1283.84
%
    
1934.62
%
    
436.80
%
    
1934.62
%
Loans Delinquent 30 to 89 Days at period end
  
$
535
    
$
2,291
    
$
349
    
$
535
    
$
349
  
                                         
Consolidated Capital Ratios
                                        
Tangible Stockholders' Equity to Tangible Assets at period end
    
9.14
%
    
9.02
%
    
9.40
%
    
9.14
%
    
9.40
%
Tier 1 Capital to Average Assets
    
10.47
%
    
10.97
%
    
11.12
%
    
9.40
%
    
11.12
%
                                         
Regulatory Capital Ratios (Bank Only):
                                        
Common Equity Tier 1 Capital to Risk-Weighted Assets
    
11.82
%
    
11.50
%
    
9.30
%
    
11.82
%
    
9.30
%
Tier 1 Capital to Risk-Weighted Assets ("Tier 1 Capital Ratio")
    
11.82
%
    
11.50
%
    
12.44
%
    
11.82
%
    
12.44
%
Total Capital to Risk-Weighted Assets ("Total Capital Ratio")
    
12.27
%
    
11.93
%
    
12.99
%
    
12.27
%
    
12.99
%
Tier 1 Capital to Average Assets
    
9.13
%
    
9.57
%
    
9.47
%
    
9.13
%
    
9.47
%
                                         
Reconciliation of Reported and Adjusted ("non-GAAP") Net Income:
                                        
Net Income
  
$
11,208
    
$
50,037
    
$
11,529
    
$
61,245
    
$
23,307
  
Less:  After tax gain on sale of securities
    
-
      
-
      
-
      
-
      
(764
)
Add: After-tax expense associated with the prepayment of borrowings
    
-
      
-
      
-
      
-
      
750
  
Less:  After tax gain on the sale of real estate (2)
    
-
      
(37,483
)
    
-
      
(37,483
)
    
-
  
Less:  After tax credit on curtailment of postretirement health benefits
    
-
      
-
      
-
      
-
      
(1,868
)
Adjusted ("non-GAAP") net income
  
$
11,208
    
$
12,554
    
$
11,529
    
$
23,762
    
$
21,425
  
                                         
Performance Ratios (Based upon "non-GAAP Net Income" as calculated above):
                                        
Reported EPS (Diluted)
  
$
0.30
    
$
0.34
    
$
0.32
    
$
0.65
    
$
0.59
  
Return on Average Assets
    
0.81
%
    
0.97
%
    
1.01
%
    
0.89
%
    
0.94
%
Return on Average Stockholders' Equity
    
8.23
%
    
9.90
%
    
9.78
%
    
9.03
%
    
9.17
%
Return on Average Tangible Stockholders' Equity
    
9.01
%
    
10.91
%
    
10.84
%
    
9.92
%
    
10.18
%
Net Interest Spread
    
2.50
%
    
2.63
%
    
2.88
%
    
2.57
%
    
2.74
%
Net Interest Margin
    
2.68
%
    
2.80
%
    
3.05
%
    
2.74
%
    
2.93
%
Non-interest Expense to Average Assets
    
1.31
%
    
1.38
%
    
1.44
%
    
1.35
%
    
1.48
%
Efficiency Ratio
    
47.75
%
    
49.45
%
    
47.07
%
    
48.58
%
    
49.39
%
 
(1)
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.
(2)
The gain on the sale of real estate was taxed at the company's statutory tax rate of 45%.
 
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, 2016
  
March 31, 2016
June 30, 2015
  
   
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
  
$
5,138,053
    
$
47,358
      
3.69
%
  
$
4,817,095
    
$
45,651
      
3.79
%
  
$
4,214,674
    
$
43,473
      
4.13
%
Other loans
    
1,511
      
24
      
6.35
      
1,421
      
24
      
6.76
      
1,535
      
23
      
5.99
  
Mortgage-backed securities
    
400
      
2
      
2.00
      
414
      
2
      
1.93
      
461
      
2
      
1.74
  
Investment securities
    
20,203
      
265
      
5.25
      
20,217
      
173
      
3.42
      
18,491
      
121
      
2.62
  
Other short-term investments
    
148,267
      
721
      
1.95
      
116,496
      
661
      
2.27
      
100,418
      
579
      
2.31
  
Total interest earning assets
    
5,308,434
    
$
48,370
      
3.64
%
    
4,955,643
    
$
46,511
      
3.75
%
    
4,335,579
    
$
44,198
      
4.08
%
Non-interest earning assets
    
201,115
                      
215,725
                      
219,802
                  
Total assets
  
$
5,509,549
                    
$
5,171,368
                    
$
4,555,381
                  
                                                                         
Liabilities and Stockholders' Equity:
                                                                        
Interest-bearing liabilities:
                                                                        
Interest Bearing Checking accounts
  
$
84,835
    
$
61
      
0.29
%
  
$
79,839
    
$
56
      
0.28
%
  
$
75,739
    
$
60
      
0.32
%
Money Market accounts
    
1,892,046
      
3,865
      
0.82
      
1,689,903
      
3,379
      
0.80
      
1,335,793
      
2,441
      
0.73
  
Savings accounts
    
369,266
      
44
      
0.05
      
367,707
      
45
      
0.05
      
373,430
      
45
      
0.05
  
Certificates of deposit
    
1,010,864
      
3,627
      
1.44
      
931,007
      
3,314
      
1.43
      
916,684
      
3,124
      
1.37
  
Total interest bearing deposits
    
3,357,011
      
7,597
      
0.91
      
3,068,456
      
6,794
      
0.89
      
2,701,646
      
5,670
      
0.84
  
Borrowed Funds
    
1,145,058
      
5,163
      
1.81
      
1,182,114
      
5,086
      
1.73
      
1,010,119
      
5,458
      
2.17
  
Total interest-bearing liabilities
    
4,502,069
    
$
12,760
      
1.14
%
    
4,250,570
    
$
11,880
      
1.12
%
    
3,711,765
    
$
11,128
      
1.20
%
Non-interest bearing checking accounts
    
255,922
                      
260,977
                      
209,847
                  
Other non-interest-bearing liabilities
    
206,526
                      
152,670
                      
162,141
                  
Total liabilities
    
4,964,517
                      
4,664,217
                      
4,083,753
                  
Stockholders' equity
    
545,032
                      
507,151
                      
471,628
                  
Total liabilities and stockholders' equity
  
$
5,509,549
                    
$
5,171,368
                    
$
4,555,381
                  
Net interest income
          
$
35,610
                    
$
34,631
                    
$
33,070
          
Net interest spread
                    
2.50
%
                    
2.63
%
                    
2.88
%
Net interest-earning assets
  
$
806,365
                    
$
705,073
                    
$
623,814
                  
Net interest margin
                    
2.68
%
                    
2.80
%
                    
3.05
%
Ratio of interest-earning assets to interest-bearing liabilities
            
117.91
%
                    
116.59
%
                    
116.81
%
        
                                                                         
Deposits (including non-interest bearing  checking accounts)
  
$
3,612,933
    
$
7,597
      
0.85
%
  
$
3,329,433
    
$
6,794
      
0.82
%
  
$
2,911,493
    
$
5,670
      
0.78
%
                                                                         
SUPPLEMENTAL INFORMATION  
                                                                  
Loan prepayment and late payment fee income
    
$
1,978
                    
$
2,618
                    
$
4,194
          
Real estate loans (excluding net prepayment and late payment fee income)
            
3.53
%
                    
3.57
%
                    
3.73
%
Interest earning assets (excluding net prepayment and late payment fee income)
              
3.50
%
                    
3.54
%
                    
3.69
%
Net Interest income (excluding net prepayment and late payment fee income)
    
$
33,632
                    
$
32,013
                    
$
28,876
          
Net Interest margin (excluding net prepayment and late payment fee income)
          
2.53
%
                    
2.58
%
                    
2.66
%
 
Page 10
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,
2016
    
At March 31,
2016
    
At June 30,
2015
  
One- to four-family and cooperative/condominium apartment
  
$
487
    
$
1,102
    
$
749
  
Multifamily residential and mixed use residential real estate (1)(2)
    
3,784
      
287
      
-
  
Mixed use commercial real estate (2)
    
54
      
53
      
-
  
Commercial real estate
    
-
      
-
      
207
  
Other
    
4
      
-
      
3
  
Total Non-Performing Loans (3)
  
$
4,329
    
$
1,442
    
$
959
  
Other Non-Performing Assets
                        
Non-performing loans held for sale
    
-
      
-
      
333
  
Other real estate owned
    
18
      
18
      
148
  
Pooled bank trust preferred securities (4)
    
1,253
      
1,245
      
1,219
  
Total Non-Performing Assets
  
$
5,600
    
$
2,705
    
$
2,659
  
                         
TDRs not included in non-performing loans (3)
                        
One- to four-family and cooperative/condominium apartment
    
32
      
-
      
-
  
Multifamily residential and mixed use residential real estate (1)(2)
    
1,058
      
1,069
      
1,312
  
Mixed use commercial real estate (2)
    
4,303
      
4,324
      
4,385
  
Commercial real estate
    
3,396
      
3,412
      
3,459
  
Total Performing TDRs
  
$
8,789
    
$
8,805
    
$
9,156
  

(1)
Includes loans underlying cooperatives.

(2)
While the loans within these categories are often considered "commercial real estate" in nature, they are classified separately in this table because there is a residential component to the income, which makes them generally viewed as less risky than pure commercial real estate loans.

(3)
Total non-performing loans include some loans that were modified in a manner that met the criteria for a TDR.  These non-accruing TDRs totaled $207 at June 30, 2015, and are included in the non-performing loan table, but excluded from the TDR amount shown above. There were no non-accruing TDRs at June 30, 2016 or March 31, 2016.

(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

   
At June 30,
2016
    
At March 31,
2016
    
At June 30,
2015
  
Total Non-Performing Assets
  
$
5,600
    
$
2,705
    
$
2,659
  
Loans 90 days or more past due on accrual status (5)
    
4,534
      
4,713
      
1,044
  
TOTAL PROBLEM ASSETS
  
$
10,134
    
$
7,418
    
$
3,703
  
                         
Tier One Capital - The Dime Savings Bank of Williamsburgh
  
$
496,757
    
$
487,759
    
$
425,334
  
Allowance for loan losses
    
18,909
      
18,513
      
18,553
  
TANGIBLE CAPITAL PLUS RESERVES
  
$
515,666
    
$
506,272
    
$
443,887
  
                         
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES
    
2.0
%
    
1.5
%
    
0.8
%

(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.