Market Overview

Dime Community Bancshares, Inc. Reports 207% Linked Quarter Increase in Business Banking Originations

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BROOKLYN, N.Y., July 26, 2018 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (NASDAQ:DCOM) (the "Company" or "Dime" or "its"), the parent company of Dime Community Bank (the "Bank"), today reported net income of $12.3 million for the quarter ended June 30, 2018, or $0.33 per diluted common share, compared with net income of $14.7 million for the quarter ended March 31, 2018, or $0.39 per diluted common share, and net income of $12.0 million for the quarter ended June 30, 2017, or $0.32 per diluted common share. The linked quarter decline in EPS was attributable to the absence of gains from sales of securities in the current quarter compared to $1.4 million in the prior quarter, a reduction in prepayment related fee income to $1.6 million in the current quarter compared to $2.3 million in the prior quarter, and a $97.4 million linked quarter reduction in average earning-assets due to increased payoffs in the multifamily loan portfolio as the Company continues to focus on re-mixing the loan portfolio via its team-based Business Banking division buildout.

Highlights for the second quarter of 2018 included:

  • Robust Business Banking division loan originations of $142.5 million in the second quarter, a 207% increase versus the first quarter of 2018;
  • New Business Banking loan originations for the second quarter were at significantly higher rates than the overall loan portfolio; the weighted average rate ("WAR") on new Business Banking real estate originations was 4.81% and the WAR on new C&I originations was 5.72 % for the three months ended June 30, 2018, compared to the total real estate and C&I loan portfolio WAR of 3.66% at June 30, 2018;
  • Strong growth in checking account balances; on a year-over-year basis, the sum of average non-interest bearing checking account balances and average interest-bearing checking account balances increased by 11% to $462.4 million for the current quarter;
  • Loan-to-deposit ratio declined to 124% at June 30, 2018, versus 133% at June 30, 2017;
  • Consolidated Company commercial real estate ("CRE") concentration ratio declined to 714.6% at June 30, 2018;
  • Newly formed Residential Lending group, led by industry veteran Nancy Tomich, commenced accepting residential loan applications in June 2018; the first loan closing  is expected to take place in early August;
  • Nonperforming assets and loans 90 days or more past due on accrual status declined to $6.4 million at June 30, 2018, and represented only 0.10% of total assets at that date;
  • Reported book value per share and tangible book value per share (which consists of common equity less goodwill, divided by number of shares outstanding) (see "Non-GAAP Reconciliation" tables at the end of this news release) grew to $16.37 and $14.89, respectively, at June 30, 2018; and
  • Successfully completed conversion of core systems in June 2018.

Kenneth J. Mahon, President and CEO of the Company, stated "The strong growth that we experienced in our Business Banking division gives us a great deal of confidence in achieving our full year 2018 portfolio growth targets for this business. The Business Banking division ended the second quarter with approximately $66 million of low-cost relationship-based checking and leasehold deposits at an average cost of approximately 2 basis points, compared to approximately $48 million of checking and leasehold deposits at an average cost of approximately 1 basis point for the first quarter."

Mr. Mahon concluded, "I want to thank all of Dime's employees for their dedication and hard work towards successfully completing our core systems conversion. The transition to our new core platform is a key building block in our journey towards becoming a successful community commercial bank."

Management's Discussion of Quarterly Operating Results

Net Interest Income

Net interest income in the second quarter of 2018 was $36.1 million, a decrease of $1.9 million (5.0%) from the first quarter of 2018 and a decrease of $1.9 million (5.0%) over the second quarter of 2017. Net interest margin ("NIM") was 2.39% during the second quarter of 2018, compared to 2.47% in the first quarter of 2018, and 2.57% during the second quarter of 2017.  The linked quarter decrease in NIM was due to a 10 basis point increase in the average cost of funds and a $0.7 million linked quarter reduction in income related to loan prepayment activity.  Net interest margin, excluding income related to prepayment activity decreased by 4 basis points versus the first quarter of 2018.  This compares to a 9 basis point decline when comparing the first quarter of 2018 to the fourth quarter of 2017.

Average interest-earning assets were $6.05 billion for the second quarter of 2018; a 6.3% (annualized) decrease from $6.15 billion for the first quarter of 2018, and a 2.2% increase from $5.92 billion for the second quarter of 2017. The linked quarter decline in average interest-earnings assets was primarily driven by a decline in real estate loans, as the volume of loan payoffs exceeded new originations.

Average securities and other short-term investments were $596.6 million for the second quarter of 2018, a 20.4% (annualized) increase from $567.7 million for the first quarter of 2018, and a 415.4% increase from $115.8 million for the second quarter of 2017.

For the second quarter of 2018, the average yield on interest-earning assets was 3.57%, a decrease of 1 basis point compared with the first quarter of 2018, and an increase of 3 basis points compared to the second quarter of 2017.  The average cost of funds (which includes Federal Home Loan Bank advances) was 1.40% for the second quarter of 2018, an increase of 10 basis points versus the first quarter of 2018, and an increase of 26 basis points versus the second quarter of 2017.

Loans

The real estate loan portfolio declined by $129.6 million (9.7% annualized) during the second quarter of 2018 due primarily to increased loan payoffs versus the first quarter of 2018.  Real estate loan originations were $122.9 million during the second quarter of 2018, at a weighted average interest rate of 4.82%, compared to $75.0 million of originations for the prior quarter, at a weighted average interest rate of 4.17%. Real estate loan amortization and satisfactions totaled $253.2 million, or 19.2% (annualized) of the portfolio balance, at an average rate of 3.73%. The annualized loan payoff rate of 19.2% for the second quarter of 2018 was higher than both the first quarter of 2018 (13.6%) and the second quarter of 2017 (10.5%) due to higher prepayment volume. The increase in real estate loan payoffs during the second quarter of 2018 was primarily due to 1 large relationship that paid off totaling approximately $53.5 million. Average real estate loans were $5.31 billion in the second quarter of 2018, a decrease of $127.6 million (9.4% annualized) from the first quarter of 2018, and a decrease of $451.7 million (7.8%) from the second quarter of 2017.

Included in total real estate loan originations during the second quarter of 2018 were $74.2 million of originations from the Business Banking division at a weighted average rate of 4.81%, compared to $21.2 million of originations at a weighted average rate of 4.21% during the first quarter of 2018.

Commercial and industrial ("C&I") loan originations were $68.3 million during the second quarter of 2018, at a weighted average rate of 5.72%, compared to $25.3 million at a weighted average rate of 4.81% during the first quarter of 2018. Total C&I loan balances were $172.0 million at the end of the second quarter of 2018, compared to $145.8 million at the end of the first quarter of 2018.  C&I loan amortization and satisfactions totaled $40.5 million due in part to a $22.0 million loan that originated and paid-off during the second quarter, resulting in additional prepayment fee income of $0.2 million. 

Deposits and Borrowed Funds

The Company continues to focus on growing relationship-based deposits sourced from its retail branches and Business Banking division.  Mr. Mahon commented, "A key part of our business model transformation is the generation of low cost deposits, and this was validated by the 11% year-over-year growth in average total checking accounts."

The average cost of total deposits increased 9 basis points on a linked quarter basis to 1.09% as the Bank increased rates on selective money market and certificates of deposit products in light of increased competition. Overall, total deposits decreased by $71.0 million during the second quarter of 2018 from the linked quarter. Mr. Mahon continued, "Total deposits declined in the second quarter primarily due to $115 million of net outflows from our DimeDirect internet channel. Competition in the online space is not expected to abate in the near term, especially given the recent entry of several large national banks.  Our focus remains on generating core business deposits, and as such our posted online rates now lag other banks by a significant margin. As mentioned previously, we intend to manage the balance sheet and the loan-to-deposit ratio with the goal of keeping deposit betas as low as possible."

The loan-to-deposit ratio was 124.0% at June 30, 2018, compared to 124.3% at March 31, 2018 and 133.0% at June 30, 2017.

Total borrowings increased slightly by $33.3 million during the second quarter of 2018 as compared to the first quarter of 2018.   Mr. Mahon commented: "Given rising interest rates over the course of the past year we made a conscious decision to extend durations on our borrowings portfolio. At June 30, 2018, only 23% of our $1 billion borrowing portfolio consists of bullet advances that have a remaining term of less than a year, compared to 47% of the $945 million borrowing portfolio from the year-ago period."

Non-Interest Income

Non-interest income was $2.2 million during the second quarter of 2018, which was $1.0 million lower compared to the first quarter of 2018, and an increase of $0.5 million compared to the second quarter of 2017.  The linked quarter decrease in non-interest income was primarily the result of $1.4 million of gains during the first quarter of 2018 from the sale of securities that the Bank had retained from its Freddie Mac sponsored Q-deal securitization, offset by $0.4 million of increased loan fees during the second quarter of 2018.

Non-Interest Expense

Total non-interest expense was $20.8 million during the second quarter of 2018, $21.7 million during the first quarter of 2018, and $19.5 million during the second quarter of 2017. The year-over-year increase in non-interest expense was primarily the result of a $1.9 million increase in salaries and employee benefits.

The ratio of non-interest expense to average assets was 1.33% during the second quarter of 2018, lower than 1.36% during the first quarter of 2018, and higher than 1.27% during the second quarter of 2017.

The efficiency ratio was 54.4% during the second quarter of 2018, 54.6% during the first quarter of 2018, and higher than the 49.0% during the second quarter of 2017.

Income Tax Expense

The reported effective tax rate for the second quarter of 2018 increased slightly to 25.0% during the second quarter of 2018.

Credit Quality

Non-performing loans at June 30, 2018 were $1.6 million, or 0.03% of total loans, a decrease from $1.7 million, or 0.03% of total loans, at March 31, 2018.  The allowance for loan losses was 0.39% of total loans at both June 30, 2018, and March 31, 2018. At June 30, 2018, non-performing assets represented 1.1% of the sum of tangible common equity plus the allowance for loan losses and reserve for contingent liabilities (this non-Generally Accepted Accounting Principle ("GAAP") statistic is otherwise known as the "Texas Ratio") (see "Problem Assets as a Percentage of Tangible Capital and Reserves" table and "Non-GAAP Reconciliation" table at the end of this news release), which is lower than the ratio of 2.7% at March 31, 2018.  A loan loss provision of $1.1 million was recorded during the second quarter of 2018, compared to a loan loss provision of $0.2 million during the first quarter of 2018, and a provision for loan losses of $1.0 million during the second quarter of 2017.  The provision during the second quarter of 2018 was primarily due to charge-offs on two relationships that were previously on non-accrual status and also growth in the overall C&I loan portfolio.

Capital Management

The Company's consolidated Tier 1 capital to average assets ("leverage ratio"), which was 9.09% at June 30, 2018, was in excess of all applicable regulatory requirements.

The bank's regulatory capital ratios continued to be in excess of all applicable regulatory requirements inclusive of conservation buffer amounts.  At June 30, 2018, the bank's leverage ratio was 9.94%, while Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 13.09% and 13.55%, respectively. Mr. Mahon commented, "Our capital levels are very strong and we expect that our business model transformation will result in the CRE concentration ratio, which was 714.6% at June 30, 2018 on a consolidated basis, continuing to trend down over time."

Diluted earnings per common share of $0.33 exceeded the quarterly $0.14 cash dividend per share by 136% during the second quarter of 2018, equating to a 42.4% dividend payout ratio.

Book value per share was $16.37 and tangible book value per share (common equity less goodwill divided by number of shares outstanding) (see "Non-GAAP Reconciliation" tables at the end of this news release) was $14.89 at June 30, 2018.

Earnings Call Information

The Company will conduct a conference call at 5:30 p.m. (ET) on Thursday, July 26, 2018, during which President and Chief Executive Officer, Kenneth J. Mahon, will discuss the Company's second quarter financial performance.  There will be a question and answer period after the CEO remarks. Dial-in information for the live call is 1-888-317-6016. Upon dialing in, request to be joined into Dime Community Bancshares, Inc. call with the conference operator.

The conference call will be simultaneously webcast (listen only), and archived for a period of one year, at https://services.choruscall.com/links/dcom180726.html. Dial-in information for the replay is 1-877-344-7529 using access code #10122039. Replay will be available July 26, 2018 (7:30 p.m.) through August 2, 2018 (11:59 p.m.).

ABOUT DIME COMMUNITY BANCSHARES, INC.

The Company had $6.25 billion in consolidated assets as of June 30, 2018. The bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-nine branches located throughout Brooklyn, Queens, the Bronx, Nassau County and Suffolk 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. Accordingly, you should not place undue reliance on such statements. Factors that could affect our results 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; unanticipated or significant increases in loan losses; 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; there may be failures or breaches of information technology security systems; 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: Avinash Reddy
Senior Vice President – Corporate Development and Treasurer
718-782-6200 extension 5909

 
DIME COMMUNITY BANCSHARES,  INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share amounts)
         
   June 30,  March 31,    December 31,
     2018      2018        2017  
ASSETS:        
Cash and due from banks $150,992   $188,826     $169,455  
Mortgage-backed securities available for sale   414,938     354,410       351,384  
Marketable equity securities, at fair value   6,368     6,433       -  
Investment securities available for sale   5,078     -       4,006  
Trading securities   -     -       2,715  
Real Estate Loans:        
One-to-four family and cooperative/condominium apartment   60,159     62,596       63,095  
Multifamily residential and residential mixed use (1)(2)   4,106,094     4,280,951       4,381,180  
Commercial real estate   1,053,582     1,007,595       1,010,603  
Acquisition, development, and construction ("ADC")   10,526     9,413       9,189  
Total real estate loans   5,230,361     5,360,555       5,464,067  
Commercial and industrial ("C&I")   172,522     145,818       136,671  
Other loans   1,477     1,053       1,379  
Allowance for loan losses   (20,984 )   (21,204 )     (21,033 )
Total loans, net   5,383,376     5,486,222       5,581,084  
Premises and fixed assets, net   25,340     25,276       24,326  
Loans held for sale   430     -       -  
Federal Home Loan Bank of New York capital stock   53,874     52,514       59,696  
Bank Owned Life Insurance ("BOLI")   109,977     109,257       108,545  
Goodwill   55,638     55,638       55,638  
Other assets   47,164     47,341       46,611  
TOTAL ASSETS $6,253,175   $6,325,917     $6,403,460  
LIABILITIES AND STOCKHOLDERS' EQUITY:        
Deposits:        
Non-interest bearing checking $356,626   $325,071     $307,746  
Interest-bearing checking   121,060     124,527       124,283  
Savings   349,790     357,152       362,092  
Money Market   2,280,915     2,399,200       2,517,439  
Sub-total   3,108,391     3,205,950       3,311,560  
Certificates of deposit   1,251,002     1,224,491       1,091,887  
Total Due to Depositors   4,359,393     4,430,441       4,403,447  
Escrow and other deposits   89,302     131,953       82,168  
Federal Home Loan Bank of New York advances   1,043,650     1,010,400       1,170,000  
Subordinated Notes Payable, net   113,686     113,649       113,612  
Other liabilities   31,612     31,517       35,666  
TOTAL LIABILITIES   5,637,643     5,717,960       5,804,893  
STOCKHOLDERS' EQUITY:        
Common stock ($0.01 par, 125,000,000 shares authorized, 53,690,825 shares and 53,624,453 shares        
issued at June 30, 2018 and December 31, 2017, respectively, and 37,591,261 shares and 37,419,070        
shares outstanding at June 30, 2018 and December 31, 2017, respectively)   537     537       536  
Additional paid-in capital   278,194     277,070       276,730  
Retained earnings   551,818     544,762       535,130  
Accumulated other comprehensive loss, net of deferred taxes   (4,578 )   (4,037 )     (3,641 )
Unearned Restricted Stock Award common stock   (4,821 )   (3,855 )     (2,894 )
Common stock held by the Benefit Maintenance Plan   (2,148 )   (2,196 )     (2,736 )
Treasury stock (16,099,564 shares and 16,205,383 shares at June 30, 2018 and December 31, 2017, respectively)   (203,470 )   (204,324 )     (204,558 )
TOTAL STOCKHOLDERS' EQUITY   615,532     607,957       598,567  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,253,175   $6,325,917     $6,403,460  
         
(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.    
   


 
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,   March 31,   June 30,   June 30,   June 30,
  2018   2018     2017   2018   2017
Interest income:                  
Loans secured by real estate $47,828   $49,575     $51,137   $97,403   $101,612
Commercial and industrial ("C&I")   2,156     1,656       474     3,812     515
Other loans   18     19       18     37     36
Mortgage-backed securities   2,406     2,257       14     4,663     28
Investment securities   49     15       164     64     354
Other short-term investments   1,547     1,511       611     3,058     1,328
  Total interest  income   54,004     55,033       52,418     109,037     103,873
Interest expense:                  
Deposits and escrow   11,988     10,751       9,509     22,739     19,016
Borrowed funds   5,882     6,267       4,856     12,149     9,317
  Total interest expense   17,870     17,018       14,365     34,888     28,333
    Net interest income   36,134     38,015       38,053     74,149     75,540
Provision for loan losses    1,113     193       1,047     1,306     1,497
Net interest income after  provision                  
  for loan losses   35,021     37,822       37,006     72,843     74,043
                   
Non-interest income:                  
Service charges and other fees   1,299     911       919     2,210     1,713
Mortgage banking income, net   102     111       65     213     81
Gain (loss) on equity and trading securities   19     (4 )     59     15     134
Gain on sale of securities and other assets   -     1,370       -     1,370     -
Gain on sale of loans   35     90       -     125     -
Income from BOLI   720     712       551     1,432     1,096
Other   62     54       153     116     501
  Total non-interest income   2,237     3,244       1,747     5,481     3,525
Non-interest expense:                  
Salaries and employee benefits   10,884     11,177       8,960     22,061     18,984
Stock benefit plan compensation expense   407     388       381     795     677
Occupancy and equipment   3,697     3,872       3,500     7,569     7,128
Data processing costs   1,797     1,754       1,503     3,551     3,110
Marketing   146     1,047       1,466     1,193     2,932
Federal deposit insurance premiums   474     665       712     1,139     1,367
Other   3,422     2,831       2,947     6,253     6,040
  Total non-interest expense   20,827     21,734       19,469     42,561     40,238
                   
  Income before taxes   16,431     19,332       19,284     35,763     37,330
Income tax expense   4,110     4,587       7,295     8,697     14,184
                   
Net Income $12,321   $14,745     $11,989   $27,066   $23,146
                   
Earnings per Share ("EPS"):                  
  Basic $ 0.33   $ 0.39     $ 0.32   $ 0.72   $ 0.62
  Diluted $ 0.33   $ 0.39     $ 0.32   $ 0.72   $ 0.61
                   
Average common shares outstanding                  
  for Diluted EPS     37,515,373       37,464,725         37,635,798       37,496,982       37,590,198


 
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,   March 31,   June 30,   June 30,   June 30,
    2018       2018       2017       2018       2017  
Per Share Data:                  
Reported EPS (Diluted) $0.33     $0.39     $0.32     $0.72     $0.61  
Cash dividends paid per share     0.14         0.14         0.14         0.28         0.28  
Book value per share     16.37         16.22         15.41         16.37         15.41  
Tangible book value per share (1)     14.89         14.73         13.93         14.89         13.93  
Dividend payout ratio   42.42%       35.90%       43.75%       38.89%       45.90%  
                   
Performance Ratios (Based upon Reported Net Income):                  
Return on average assets   0.79%       0.93%       0.78%       0.86%       0.76%  
Return on average common equity   8.06%       9.77%       8.32%       8.91%       8.08%  
Return on average tangible common equity (1)   8.87%       10.76%       9.20%       9.81%       8.94%  
Net interest spread   2.17%       2.28%       2.40%       2.23%       2.40%  
Net interest margin   2.39%       2.47%       2.57%       2.43%       2.57%  
Average interest-earning assets to average interest-bearing liabilities   117.93%       115.84%       117.18%       116.87%       116.77%  
Non-interest expense to average assets   1.33%       1.36%       1.27%       1.35%       1.32%  
Efficiency ratio   54.35%       54.60%       48.99%       54.48%       50.98%  
Loan-to-deposit ratio at end of period   123.97%       124.31%       133.01%       123.97%       133.01%  
Effective tax rate   25.01%       23.73%       37.83%       24.32%       38.00%  
                   
Average Balance Data:                  
Average assets $6,265,128     $6,369,310     $6,128,378     $6,317,219     $6,077,646  
Average interest-earning assets     6,047,600         6,145,013         5,918,173         6,096,307         5,871,241  
Average loans     5,450,973         5,577,309         5,802,417         5,514,141         5,746,758  
Average deposits     4,395,589         4,378,117         4,476,004         4,386,853         4,480,757  
Average common equity     611,477         603,555         576,689         607,516         573,206  
Average tangible common equity (1)     555,840         547,917         521,051         551,879         517,568  
                   
Asset Quality Summary:                  
Non-performing loans (excluding loans held for sale) $1,554     $1,719     $3,374     $1,554     $3,374  
Non-performing assets (2)     1,554         1,719         4,661         1,554     $4,661  
Net charge-offs     1,333         22         16         1,355         48  
Non-performing loans/ Total loans   0.03%       0.03%       0.06%       0.03%       0.06%  
Non-performing assets/ Total assets   0.02%       0.03%       0.07%       0.02%       0.07%  
Allowance for loan loss/ Total loans   0.39%       0.39%       0.37%       0.39%       0.37%  
Allowance for loan loss/ Non-performing loans   1350.32%       1233.51%       651.60%       1350.32%       651.60%  
Loans delinquent 30 to 89 days at period end $745     $2,947     $1,872     $745     $1,872  
                   
Capital Ratios - Consolidated:                  
Tangible common equity to tangible assets (1)   9.03%       8.81%       8.46%       9.03%       8.46%  
Tier 1 common equity ratio   11.96       11.87       10.78       11.96       10.78  
Tier 1 risk-based capital ratio   11.96       11.87       12.17       11.96       12.17  
Total risk-based capital ratio   14.85       14.79       14.96       14.85       14.96  
Tier 1 leverage ratio   9.09       8.79       9.86       9.09       9.86  
                   
Capital Ratios - Bank Only:                  
Tier 1 common equity ratio   13.09%       12.97%       11.44%       13.09%       11.44%  
Tier 1 risk-based capital ratio   13.09       12.97       11.44       13.09       11.44  
Total risk-based capital ratio   13.55       13.43       11.88       13.55       11.88  
Tier 1 leverage ratio   9.94       9.59       9.25       9.94       9.25  
                   
(1)  See "Non-GAAP Reconciliation" table for reconciliation of tangible common equity and tangible assets. Average balances are calculated using the ending balance for months during the period indicated.
(2)  Amount comprised of total non-accrual loans and the recorded balance of pooled bank trust preferred security investments that were deemed to meet the criteria of a non-performing asset, if applicable.


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)
                       
  For the Three Months Ended
    June 30, 2018       March 31, 2018       June 30, 2017  
      Average       Average       Average
  Average   Yield/   Average   Yield/   Average   Yield/
  Balance Interest Cost   Balance Interest Cost   Balance Interest Cost
Assets:                      
Interest-earning assets:                      
Real estate loans $5,307,712 $47,828   3.60%     $5,435,400 $49,575   3.65%     $5,759,565 $51,137   3.55%  
Commercial and industrial loans   142,224   2,156   6.06       140,720   1,656   4.71       41,776   474   4.54  
Other loans   1,037   18   6.94       1,189   19   6.39       1,076   18   6.69  
Mortgage-backed securities   389,373   2,406   2.47       351,196   2,257   2.57       3,460   14   1.62  
Investment securities   10,243   49   1.91       6,492   15   0.92       16,970   164   3.87  
Other short-term investments   197,011   1,547   3.14       210,016   1,511   2.88       95,326   611   2.56  
Total interest-earning assets   6,047,600   54,004   3.57%       6,145,013   55,033   3.58%       5,918,173 $52,418   3.54%  
Non-interest-earning assets   217,528         224,297         210,205    
Total assets $6,265,128       $6,369,310       $6,128,378    
                       
Liabilities and Stockholders' Equity:                      
Interest-bearing liabilities:                      
Interest-bearing checking accounts $126,507 $57   0.18%     $124,440 $54   0.18%     $114,257 $65   0.23%  
Money market accounts   2,351,935   6,893   1.18       2,432,242   6,318   1.05       2,767,455   6,139   0.89  
Savings accounts   354,441   55   0.06       359,638   59   0.07       367,995   46   0.05  
Certificates of deposit   1,226,812   4,983   1.63       1,151,146   4,320   1.52       925,535   3,259   1.41  
Total interest-bearing deposits   4,059,695   11,988   1.18       4,067,466   10,751   1.07       4,175,242   9,509   0.91  
Borrowed Funds   1,068,583   5,882   2.21       1,237,094   6,267   2.05       875,057   4,856   2.23  
Total interest-bearing liabilities   5,128,278   17,870   1.40%       5,304,560   17,018   1.30%       5,050,299 $14,365   1.14%  
Non-interest-bearing checking accounts   335,894         310,651         300,762    
Other non-interest-bearing liabilities   189,479         150,544         200,628    
Total liabilities   5,653,651         5,765,755         5,551,689    
Stockholders' equity   611,477         603,555         576,689    
Total liabilities and stockholders' equity $6,265,128       $6,369,310       $6,128,378    
Net interest income   $36,134         $38,015         $38,053    
Net interest spread     2.17%         2.28%         2.40%  
Net interest-earning assets $919,322       $840,453       $867,874    
Net interest margin     2.39%         2.47%         2.57%  
Ratio of interest-earning assets to interest-bearing liabilities     117.93%           115.84%           117.18%    
                       
Deposits (including non-interest bearing checking accounts) $4,395,589 $11,988   1.09%     $4,378,117 $10,751   1.00%     $4,476,004 $9,509   0.85%  


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF LOAN COMPOSITION AND WEIGHTED AVERAGE RATES ("WAR") (1)
  (Dollars in thousands)
   
                 
  At June 30, 2018   At March 31, 2018   At December 31, 2017
  Balance WAR   Balance WAR   Balance WAR
Loan balances at period end:                
One-to-four family residential, including condominium and cooperative apartment $60,159 4.42%     $62,596 4.36%     $63,095 4.33%  
Multifamily residential and residential mixed use (2)(3)   4,106,094 3.49       4,280,951 3.42       4,381,180 3.40  
Commercial and commercial mixed use real estate   1,053,582 3.85       1,007,595 3.95       1,010,603 3.95  
Acquisition, development, and construction ("ADC")   10,526 6.02       9,413 5.84       9,189 5.59  
Total real estate loans   5,230,361 3.61       5,360,555 3.53       5,464,067 3.51  
                 
Commercial and industrial ("C&I")   172,522 5.30%       145,818 4.99%     $136,671 4.82%  
                 
(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.


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS ("TDRs")
  (Dollars in thousands)
   
   
  At June 30,   At March 31,   At December 31,
    2018       2018       2017  
Non-Performing Loans          
One-to-four family residential, including condominium and cooperative apartment $306     $449     $436  
Commercial real estate   1,158       -       93  
Commercial mixed use real estate (2)   89       90       -  
C&I   -       1,179       -  
Other   1       1       4  
Total Non-Performing Loans (3) $ 1,554     $ 1,719     $ 533  
           
Total Non-Performing Assets $ 1,554     $ 1,719     $ 533  
           
Performing Loans          
One- to four-family and cooperative/condominium apartment $18     $20     $22  
Multifamily residential and mixed use residential real estate (1)(2)   597       604       619  
Mixed use commercial real estate (2)   4,130       4,152       4,174  
Commercial real estate   -       3,279       3,296  
Total Performing TDRs $ 4,745     $ 8,055     $ 8,111  
           
(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.          
           
           
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES (TEXAS RATIO)
  (Dollars in thousands)
           
  At June 30,   At March 31,   At December 31,
    2018       2018       2017  
Total Non-Performing Assets $1,554     $1,719     $533  
Loans 90 days or more past due on accrual status (5)   4,873       13,816       19,935  
TOTAL PROBLEM ASSETS $6,427     $15,535     $20,468  
           
Tangible common equity  (6) $559,894     $552,319     $542,929  
Allowance for loan losses and reserves for contingent liabilities   21,009       21,229       21,058  
TANGIBLE COMMON EQUITY PLUS RESERVES $580,903     $573,548     $608,680  
           
TEXAS RATIO (PROBLEM ASSETS AS A PERCENTAGE OF          
TANGIBLE COMMON EQUITY AND RESERVES)   1.1%       2.7%       3.4%  
           
(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.


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(Dollars in thousands except per share amounts)
                   
  For the Three Months  Ended   For the Six Months  Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
    2018       2018       2017       2018       2017  
Reconciliation of Reported and Adjusted ("non-GAAP") Net Income:                  
Reported net income $   12,321     $   14,745     $   11,989     $   27,066     $   23,146  
Adjustments to Net Income (1):             -          -          -   
Less: Gain on sale of securities     -          (930 )       -          (930 )       -   
Tax adjustment     -          (92 )       -          (92 )       -   
Adjusted ("non-GAAP") net income $   12,321     $   13,723     $   11,989     $   26,044     $   23,146  
                   
Adjusted Ratios (Based upon "non-GAAP Net Income" as calculated above):                  
Adjusted EPS (Diluted) $ 0.33     $ 0.36     $ 0.32     $ 0.69     $ 0.61  
Adjusted return on average assets   0.79%       0.86%       0.78%       0.82%       0.76%  
Adjusted return on average common equity   8.06%       9.09%       8.32%       8.57%       8.08%  
Adjusted return on average tangible common equity   8.87%       10.02%       9.20%       9.44%       8.94%  
                   
  June 30,   March 31,   December 31,        
    2018       2018       2017          
Reconciliation of Tangible Assets:                  
Total assets $   6,253,175     $   6,325,917     $   6,403,460          
Less:                  
Goodwill     55,638         55,638         55,638          
Tangible assets $   6,197,537     $   6,270,279     $   6,347,822          
                   
Reconciliation of Tangible Common Equity - Consolidated:                  
Total common equity $   615,532     $   607,957     $   598,567          
Less:                  
Goodwill     55,638         55,638         55,638          
Tangible common equity $   559,894     $   552,319     $   542,929          
                   
                   
(1)  Adjustments to net income are taxed at the company's statutory tax rate of approximately 32% for 2018 and 45% for 2017, unless otherwise noted.        

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