UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 22, 2003
DIME COMMUNITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware | 0-27782 | 11-3297463 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
209 Havemeyer Street, Brooklyn, New York 11211
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code:
(718) 782-6200
None
(Former name or former address, if changed since last report)
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Items 1 through 6, and 8, 10 and 11
Not Applicable.
Item 7. Financial Statements and Exhibits.
Exhibit No.
Description
99
Earnings release for the quarterly period ended March 31, 2003 issued on April 22, 2003
Items 9 and 12. Regulation FD Disclosure.
This information, furnished under Item 9. Regulation FD Disclosure, is also intended to be furnished under Item 12. Results of Operations and Financial Condition, in accordance with SEC Release No. 33-8216.
On April 22, 2003, Dime Community Bancshares, Inc. issued a press release reporting its results of operations for the first quarter ended March 31, 2003.
A copy of this presentation is attached as Exhibit 99.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DIME COMMUNITY BANCSHARES, INC.
/s/ KENNETH J. MAHON
By: ___________________________________________
Kenneth J. Mahon
Executive Vice President and Chief Financial Officer
Dated: April 22, 2003
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EXHIBIT INDEX
Exhibit
Description
99
Earnings release for the quarterly period ended
March 31, 2003 issued on April 22, 2003
- # -
Exhibit 99
Contact:
Kenneth J. Mahon
Exec. VP and Chief Financial Officer
718-782-6200 extension 8265
Stephanie Prince/Julie Prozeller
FD Morgen-Walke
Press: Abby Aylman
212-850-5600
DIME COMMUNITY BANCSHARES REPORTS 38% INCREASE
IN QUARTERLY EARNINGS PER DILUTED SHARE
Annualized Deposit Growth of 24% During Quarter
Brooklyn, NY – April 22, 2003 - Dime Community Bancshares, Inc. (NASDAQ: DCOM), the parent company of The Dime Savings Bank of Williamsburgh, today announced results for the quarter ended March 31, 2003.
FINANCIAL HIGHLIGHTS
Highlights for the quarter ended March 31, 2003 are summarized as follows:
* 34% increase in net income over same quarter of prior year
* Diluted EPS of $0.55, a 38% increase over the same quarter of the prior year
* Real estate loan originations of $257.7 million, a 76% increase over the
same quarter of the prior year
* 24% annualized growth in deposits for the quarter
* Stable adjusted net interest margin of 3.68%.
* 291,000 shares repurchased into treasury
FINANCIAL RESULTS
For the quarter ended March 31, 2003, the Company’s net income increased 34% to $13.6 million, compared to $10.2 million in the same quarter of the previous fiscal year. Earnings per diluted share increased 38% to $0.55 for the most recent quarter compared to $0.40 per diluted share during the same quarter of the previous fiscal year.
Net interest income increased $4.2 million from the March 2002 quarter to $26.3 million in the most recent quarter. This represents an increase of 19% on a quarter-over-quarter basis. In the March 2002 quarter, net interest income was reduced by $1.0 million of prepayment costs on borrowings. Excluding such cost from the calculations, net interest income rose by $3.2 million, or 14% from the March 2002 quarter to the most recent quarter. There were no prepayment costs incurred during the March 2003 quarter.
Net interest income increased $3.3 million from the December 2002 quarter to $26.3 million in the March 2003 quarter. This represents an increase of 14% on a linked quarter basis. In the December 2002 quarter, net interest income was reduced by $3.1 million of prepayment cost on borrowings. Excluding such cost from the calculations, net interest income rose by $239,000, or 3.6% annualized, on a linked quarter basis.
Net interest margin increased 34 basis points to 3.68% during the March 2003 quarter, from 3.34% in the same quarter of the previous year. Excluding prepayment cost on borrowings from the March 2002 quarterly calculation, net interest margin rose by 19 basis points, from 3.49% a year ago.
Net interest margin increased 43 basis points to 3.68%, from 3.25% on a linked quarter basis. Excluding prepayment costs on borrowings from the December 2002 quarterly calculation, net interest margin remained unchanged at 3.68%.
Non-interest income, excluding gains on sales of assets, increased $1.5 million from the March 2002 quarter, to $4.7 million in the March 2003 quarter. This represents an increase of 49%. Loan prepayment fee income increased $1.3 million during this period to $2.4 million in the March 2003 quarter. The remaining growth resulted from retail fee income associated with new account growth.
There were $656,000 of gains on sales of assets recorded in the March 2003 quarter, due primarily to the sales of loans to Fannie Mae. These gains added approximately one cent per share for the quarter.
Non-interest income, excluding gains and losses on sales of assets, decreased $561,000 from the December 2002 quarter to $4.7 million in the March 2003 quarter. Loan prepayment fee income decreased $544,000 during this period to $2.4 million in the most recent quarter. Linked quarter retail fee income rose by 10% on an annualized basis.
Non-interest expense totaled $9.7 million during the quarter ended March 31, 2003, an increase of 9% over the prior year quarter. This rise reflects staffing increases during the year, increased benefit plan expenses, and increased costs associated with growth in both the branch network and the number of deposit customers due to the success of the Company’s retail banking strategy.
Non-interest expenses remained relatively constant with the December 2002 quarter, when excluding $697,000 of expenses incurred during the December 2002 quarter related to the Company's recent change in fiscal year-end. The Company's efficiency ratio and ratio of non-interest expense to average assets were 31% and 1.29%, respectively, during the March 2003 quarter.
"This quarter we reaped the benefits of many of the initiatives we have put in place," commented Vincent F. Palagiano, Chairman and Chief Executive Officer. "Our cost of funds continued to fall allowing Dime to realize stable margins in spite of the ongoing high level of loan refinancings. We also originated $258 million of new loans, which includes the sale of over $21 million to Fannie Mae, with servicing rights retained. Our credit quality remains very strong as does our efficiency ratio, resulting in the generation of new tangible capital of approximately 28% and return on equity of 20.4%."
"Perhaps the most positive surprise of this quarter was experiencing the power of our direct mail deposit gathering capabilities. Early in the quarter we did a mailing for six-month CD’s that resulted in the generation of $138 million in this product, over half of which was new money to the Company. Total deposits increased by 24% on an annualized basis, while core (non-certificate) deposits comprised 54% of our total deposits, the first sequential mix decline in over two years, although the dollar value remained essentially level.”
REAL ESTATE LENDING AND CREDIT QUALITY
The continuation of the historic low interest rate environment resulted in heightened origination, refinancing and prepayment volume during the most recent quarter. During the quarter ended March 31, 2003, the Bank originated $257.7 million in real estate loans, up 76% from the prior year period, including $209.1 million that are secured by multi-family buildings. However, while originations far exceeded last year's levels, loan amortization, inclusive of prepayment and refinancing activity, also increased substantially during the most recent quarter. Loan amortization approximated 42% of the loan portfolio on an annualized basis, up from 19% during the March 2002 quarter, and 33% during the December 2002 quarter. The weighted average interest rate on real estate loans originated during the most recent quarter was approximately 5.80% and their weighted average term to next repricing was 5.8 years at their respective origination dates. The current loan pipeline now exceeds $230 million dollars.
As mentioned previously, the Company sold $21.6 million of loans to Fannie Mae during the quarter ended March 31, 2003, with an average term to repricing of 8.1 years. Due to the sale of loans and the high level of prepayments, the real estate loan portfolio growth was minimal during the most recent quarter.
The Company has continued to maintain its long record of outstanding credit quality during the most recent quarter. Non-performing loans totaled $1.3 million at March 31, 2003, approximating the level at March 31, 2002 and $852,000 below the level at December 31, 2002. Non-performing assets represented 0.04% of total assets at March 31, 2003, and have remained below 10 basis points of total assets for the last 5 quarters.
SHARE REPURCHASE PROGRAM AND CASH DIVIDEND DECLARATION
In the March 2003 quarter, the Company repurchased 291,000 shares of its common stock into treasury. As of March 31, 2003, the Company had 539,500 shares remaining eligible for future repurchase under its current stock repurchase program, which was authorized in September 2001.
The Company also recently declared its 24th consecutive quarterly cash dividend, which will be paid on May 6, 2003, to all holders of record on April 30, 2003.
OUTLOOK
Calendar 2003 earnings per share are currently forecasted to be in a range of $2.00 to $2.04. The forecast assumes that rates remain stable through the calendar year, and loan amortization rates remain high. We also expect to complete our $200 million loan sale commitment to Fannie Mae during calendar year 2003, and modest net interest margin compression resulting from reduced yield on assets.
“As we look ahead during these continuing uncertain economic times, we remain very comfortable with Dime’s positioning,” concluded Mr. Palagiano. “Our efficiency ratio is among the best in our peer group while our balance sheet retains maximum flexibility for several reasons: a large base of core deposits; low average years to repricing and stellar credit quality in our loan portfolio due to our multi-family lending focus; and excess capital that provides the ability to accelerate asset growth if necessary. This, combined with our newly established partnership with Fannie Mae which we expect will attract new customers to the bank and increase our ability to offer additional services to existing customers, supports our optimism and confidence for the years ahead.”
CONFERENCE CALL
Management will conduct a conference call at 10 A.M. Eastern Time, on Tuesday, April 22, 2003, to discuss DCOM's operating performance for the quarter ended March 31, 2003. The direct dial number for the call is 785-832-1077. For those unable to participate in the conference call, a replay will be available. To access the replay, dial 402-220-1142 from one hour after the end of the call until midnight (Eastern Standard Time) on Friday, April 25, 2003.
The conference call will also be available via the Internet by accessing the following Web address: www.dsbwdirect.com or www.vcall.com. Web users should go to the site at least fifteen minutes prior to the call to register, download and install any necessary audio software. The webcast will be available until May 22, 2003.
ABOUT DIME COMMUNITY BANCSHARES
Dime Community Bancshares, Inc., a unitary thrift holding company, is the parent company of The Dime Savings Bank of Williamsburgh, Brooklyn, New York, founded in 1864. With $3.09 billion in assets, the Bank has twenty branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Bank can be found on the Bank's Internet website at www.dsbwdirect.com.
Statements made herein that are forward looking in nature within the meaning of the Private Securities Litigation Reform Act of 1995 are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to, those related to overall business conditions and market interest rates, particularly in the markets in which the Company operates, fiscal and monetary policy, changes in regulations affecting financial institutions and other risks and uncertainties discussed in the Company's Securities and Exchange Commission filings. The Company disclaims any obligation to publicly announce future events or developments which may affect the forward-looking statements herein.
-tables to follow-
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands except share amounts)
March 31, | ||
2003 | December 31, | |
ASSETS: | (Unaudited) | 2002 |
Cash and due from banks | $37,104 | $21,487 |
Investment securities held to maturity | 825 | 825 |
Investment securities available for sale | 77,002 | 104,564 |
Mortgage-backed securities held to maturity | 1,881 | 2,249 |
Mortgage-backed securities available for sale | 528,805 | 360,703 |
Federal funds sold and other short-term assets | 108,636 | 114,291 |
Real estate Loans: | ||
One-to-four family and cooperative apartment | 156,542 | 162,620 |
Multi-family and underlying cooperative | 1,725,188 | 1,730,370 |
Commercial real estate | 285,332 | 265,485 |
Construction | 2,776 | 1,931 |
Unearned discounts and net deferred loan fees | (772) | 332 |
Total real estate loans | 2,169,066 | 2,160,738 |
Other loans | 4,178 | 4,753 |
Allowance for loan losses | (15,516) | (15,458) |
Total loans, net | 2,157,728 | 2,150,033 |
Loans held for sale | 142 | 4,586 |
Premises and fixed assets, net | 16,277 | 15,862 |
Federal Home Loan Bank of New York capital stock | 31,150 | 34,890 |
Other real estate owned, net | - | 134 |
Goodwill | 55,638 | 55,638 |
Other assets | 79,336 | 81,112 |
TOTAL ASSETS | $3,094,524 | $2,946,374 |
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||
Deposits: | ||
Checking and NOW | $118,472 | $117,873 |
Savings | 363,115 | 362,400 |
Money Market | 614,269 | 616,762 |
Sub-total | 1,095,856 | 1,097,035 |
Certificates of deposit | 947,367 | 830,140 |
Total Due to depositors | 2,043,223 | 1,927,175 |
Escrow and other deposits | 54,796 | 36,678 |
Securities sold under agreements to repurchase | 85,978 | 95,541 |
Federal Home Loan Bank of New York advances | 555,000 | 555,000 |
Subordinated Notes Sold | 25,000 | 25,000 |
Other liabilities | 60,343 | 41,243 |
TOTAL LIABILITIES | 2,824,340 | 2,680,637 |
STOCKHOLDERS' EQUITY: | ||
Common stock ($0.01 par, 125,000,000 shares authorized, | ||
32,003,149 shares, and 31,935,399 shares issued at | ||
March 31, 2003 and December 31, 2002, respectively, and | ||
25,423,452 shares and 25,646,702 shares outstanding at | ||
March 31, 2003, and December 31, 2002, respectively | 320 | 319 |
Additional paid-in capital | 173,228 | 172,460 |
Retained earnings | 206,363 | 196,309 |
Unallocated common stock of Employee Stock Ownership Plan | (5,547) | (5,661) |
Unearned common stock of Recognition and Retention Plan | (2,614) | (2,641) |
Common stock held by the Benefit Maintenance Plan | (4,187) | (3,867) |
Treasury stock (6,579,697 shares and 6,288,697 shares | ||
at March 31, 2003 and December 31, 2002, respectively | (99,222) | (93,258) |
Accumulated other comprehensive income, net | 1,843 | 2,076 |
TOTAL STOCKHOLDERS' EQUITY | 270,184 | 265,737 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,094,524 | $2,946,374 |
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share amounts)
For the Three Months Ended | |||
March 31, | December 31, | March 31, | |
2003 | 2002 | 2002 | |
Interest income: | |||
Loans secured by real estate | $37,873 | $39,456 | $38,922 |
Other loans | 68 | 67 | 68 |
Mortgage-backed securities | 4,069 | 3,967 | 4,716 |
Investment securities | 907 | 1,177 | 1,161 |
Other | 983 | 882 | 883 |
Total interest income | 43,900 | 45,549 | 45,750 |
Interest expense: | |||
Deposits and escrow | 10,221 | 10,671 | 11,294 |
Borrowed funds | 7,410 | 11,910 | 12,406 |
Total interest expense | 17,631 | 22,581 | 23,700 |
Net interest income | 26,269 | 22,968 | 22,050 |
Provision for loan losses | 60 | 60 | 60 |
Net interest income after | |||
provision for loan losses | 26,209 | 22,908 | 21,990 |
Non-interest income: | |||
Service charges and other fees | 1,413 | 1,377 | 1,215 |
Net gain on sales and redemptions of assets | 656 | 2,005 | 44 |
Other | 3,296 | 3,893 | 1,953 |
Total non-interest income | 5,365 | 7,275 | 3,212 |
Non-interest expense: | |||
Compensation and benefits | 5,166 | 5,812 | 5,074 |
Occupancy and equipment | 1,236 | 1,132 | 988 |
Core deposit intangible amortization | 206 | 206 | 206 |
Other | 3,061 | 3,091 | 2,618 |
Total non-interest expense | 9,669 | 10,241 | 8,886 |
Income before taxes | 21,905 | 19,942 | 16,316 |
Income tax expense | 8,268 | 7,410 | 6,161 |
Net Income | $13,637 | $12,532 | $10,155 |
Earnings per Share: | |||
Basic | $0.57 | $0.52 | $0.42 |
Diluted | $0.55 | $0.50 | $0.40 |
Average common shares | |||
outstanding for Diluted EPS | 24,931,630 | 25,088,347 | 25,397,845 |
DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except per share amounts)
For the Three Months Ended | |||
March 31, | December 31, | March 31, | |
2003 | 2002 | 2002 | |
Performance and Other Selected Ratios: | |||
Return on Average Assets | 1.82% | 1.70% | 1.46% |
Return on Average Stockholders' Equity | 20.44% | 19.10% | 16.55% |
Return on Average Tangible Stockholders' Equity | 26.28% | 24.79% | 22.24% |
Average Interest Rate Spread (1) | 3.36% | 3.36% | 3.06% |
Net Interest Margin (1) | 3.68% | 3.68% | 3.49% |
Non-interest Expense to Average Assets (2) | 1.29% | 1.39% | 1.28% |
Efficiency Ratio (2) | 31.21% | 36.27% | 35.24% |
Effective Tax Rate | 37.74% | 37.16% | 37.76% |
Per Share Data: | |||
Reported EPS (Diluted) | $0.55 | $0.50 | $ 0.40 |
Stated Book Value | 10.63 | 10.36 | 9.55 |
Tangible Book Value | 8.31 | 8.04 | 7.16 |
Average Balance Data: | |||
Average Assets | $ 3,000,597 | $ 2,952,998 | $ 2,778,578 |
Average Interest Earning Assets | 2,857,554 | 2,830,933 | 2,641,972 |
Average Interest Bearing Liabilities | 2,566,672 | 2,519,492 | 2,381,576 |
Average Stockholders' Equity | 266,911 | 262,479 | 245,397 |
Average Tangible Stockholders' Equity | 207,526 | 202,206 | 182,665 |
Average Loans | 2,186,202 | 2,212,647 | 2,077,906 |
Average Deposits | 1,983,962 | 1,901,499 | 1,627,713 |
Asset Quality Summary: | |||
Net charge-offs (recoveries) | $ 2 | $ 36 | $ 72 |
Nonperforming Loans | 1,264 | 2,116 | 1,152 |
Nonperforming Loans/ Total Loans | 0.06% | 0.10% | 0.05% |
Nonperforming Assets/Total Assets | 0.04% | 0.08% | 0.05% |
Allowance for Loan Loss/Total Loans | 0.71% | 0.71% | 0.74% |
Allowance for Loan Loss/Nonperforming Loans | 1,227.53% | 730.53% | 1,343.75% |
Non-GAAP Disclosures – Cash Earnings Reconciliation and Ratios (3): | |||
Net Income | $13,637 | $12,532 | $10,155 |
Additions to Net Income: | |||
Core Deposit Intangible Amortization | 206 | 206 | 206 |
Non-cash stock benefit plan expense | 546 | 532 | 650 |
Cash Earnings | $14,389 | $13,270 | $11,011 |
Cash EPS (Diluted) | 0.58 | 0.53 | 0.43 |
Cash Return on Average Assets | 1.92% | 1.80% | 1.59% |
Cash Return on Average Tangible Stockholders' Equity | 27.73% | 26.25% | 24.11% |
(1) Ratios exclude prepayment expenses on borrowings of $3,062,000 and $1,014,000 recorded during the three months ended December 31, 2002 and March 31, 2002, respectively. Including these expenses, the net interest spread was 2.88% and the net interest margin was 3.25% during the three months ended December 31, 2002, and the net interest spread was 2.89% and the net interest margin was 3.34% during the three months ended March 31, 2002.
(2) Excluding expenses associated with the change in fiscal year totaling $697,000 during the three months ended December 31, 2002, the efficiency ratio and ratio of non-interest expense to average assets were 33.80% and 1.29%, respectively, during the three months ended December 31, 2002.
(3) Cash earnings and related data are "Non-GAAP Disclosures." These disclosures present information which management considers useful to the readers of this report since they present a measure of the tangible equity generated from operations during each period presented. Tangible equity generation is a significant financial measure since banks are under regulatory restrictions involving the maintenance of minimum tangible capital requirements.