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Dime Community Bancshares, Inc. Reports Record Quarterly Business Banking Originations of $200 Million, Representing a 1,325% Year-Over-Year Increase in Business Banking Originations

Completes Commercial Bank Charter Conversion

BROOKLYN, N.Y., April 25, 2019 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (DCOM) (the “Company” or “Dime” or “its”), the parent company of Dime Community Bank (the “Bank”), today reported net income of $11.5 million for the quarter ended March 31, 2019, or $0.32 per diluted common share, compared with net income of $12.4 million for the quarter ended December 31, 2018, or $0.34 per diluted common share, and net income of $14.7 million for the quarter ended March 31, 2018, or $0.39 per diluted common share.

Kenneth J. Mahon, President and CEO of the Company, stated, “The linked quarter decline in EPS was primarily attributable to a $2.4 million decrease in prepayment fee income. Excluding the impact of prepayment fee income, pre-tax income for the quarter ended March 31, 2019 would have been $14.5 million, or 17% higher than the linked quarter pre-tax income of $12.4 million excluding prepayment fee income, on a comparative basis. Our Business Banking division continues to experience strong growth, as evidenced by record quarterly originations of $200 million. The Business Banking division’s loan portfolio reached $824 million (or 15% of total loans) at March 31, 2019, versus $648 million (or 12% of total loans) at December 31, 2018. As the Business Banking portfolio increasingly becomes a larger percentage of our overall balance sheet, we expect our overall loan yields to continue trending upwards. New Business Banking loan originations continue to be at significantly higher rates (weighted average rate (“WAR”) on new Business Banking originations was 5.19% for the first quarter of 2019) than the overall portfolio. In addition, Business Banking deposits grew to $227 million at the end of the first quarter of 2019. As we continue to grow relationship-based loans and deposits, the quality of our balance sheet and franchise value are expected to improve.”

Charter Conversion

On January 24, 2019, the Bank filed an application with the New York Department of Financial Services (“NYSDFS”) seeking approval to convert from a New York stock form savings bank to a New York commercial bank (the “Charter Conversion”).  Simultaneous with the Charter Conversion application to NYSDFS, the Company filed an application with the Federal Reserve Bank of Philadelphia to delist as a savings and loan holding company and elect to become a bank holding company.  Having received all applicable regulatory approvals, on April 25, 2019 the Bank completed the Charter Conversion, and will henceforth operate as a New York commercial bank. The Company will henceforth operate as a bank holding company.

Mr. Mahon commented, “We are into our third full year of re-engineering Dime’s monoline multifamily focused thrift model into a full service, relationship based community commercial bank. The Charter Conversion demonstrates that management and our Board of Directors are fully committed to our new relationship-based operating model. We are grateful to the NYSDFS for being supportive of our business model transformation and accepting our application to operate as a New York commercial bank.”

Mr. Mahon continued, “Under our prior savings bank charter, the Bank was not allowed to accept deposits from municipalities due to Section 237 of the Banking Law.  New York commercial banks have no such limitation. As such, converting to a commercial bank charter has provided the Bank with the additional business opportunity of accepting municipal deposits and we will be able to compete more effectively with New York and national commercial banks located in our markets. The ability to gather municipal deposits provides us another important avenue to help lower our loan-to-deposit ratio over the medium-to-long term.”

Mr. Mahon concluded, “Notably, Dime’s executive team has only two members who have been with us longer than three years. We have new executives in Business Banking, Residential Lending, Retail Banking, Finance, Marketing, Human Resources and Training, Technology, Information Security, Legal and Compliance, Risk, and Corporate Development among other functions. The over-arching takeaway is that there has been a virtual re-make of the entire management structure and these leaders have brought new thinking, energy, and a sense of urgency to our organization and the business model transformation. I am confident that we are on track to transform our business model from a monoline thrift into the pre-eminent Metro New York community commercial bank.”

Highlights for the first quarter of 2019 included:

  • Continued the build out of the Business Banking division via the hires of Jeff Barber, Senior Vice President of Business Banking and Long Island Group Leader, and Tom Braunstein, Senior Vice President of Business Banking and Manhattan Group Leader. Mr. Barber will be responsible for managing multiple teams in the Long Island market and Mr. Braunstein will be responsible for managing multiple teams in the Manhattan and Brooklyn market;
  • Record Business Banking originations of $200.4 million in the first quarter of 2019, a 1,324.9% increase versus the first quarter of 2018;
  • Business Banking loan originations for the first quarter of 2019 were at significantly higher rates than the overall portfolio; the WAR on Business Banking real estate originations was 5.02% and the WAR on C&I originations was 5.66% for the quarter ended March 31, 2019, compared to the total real estate and C&I loan portfolio WAR of 3.90% for the quarter ended March 31, 2019;
  • Strong growth in checking account balances. Compared to the first quarter of 2018, the sum of average non-interest bearing checking account balances and average interest-bearing checking account balances for the first quarter of 2019 increased by 18% to $513.2 million;
  • Consolidated Company commercial real estate (“CRE”) concentration ratio of 707% at March 31, 2019, versus 749% at March 31, 2018; and
  • Reported book value per share and tangible book value per share (which consists of common equity less goodwill, divided by number of shares outstanding) grew to $16.83 and $15.29, respectively, at March 31, 2019 (see “Non-GAAP Reconciliation” tables at the end of this news release).

Management’s Discussion of Quarterly Operating Results

Net Interest Income

Net interest income in the first quarter of 2019 was $35.3 million, a decrease of $1.8 million (4.9%) from the fourth quarter of 2018 and a decrease of $2.7 million (7.1%) from the first quarter of 2018. The decline in net interest income was primarily due to a reduction in prepayment fee income. Prepayment fee income for the first quarter of 2019 was $0.8 million, compared to $3.2 million for the fourth quarter of 2018 and $2.3 million for the first quarter of 2018.

Mr. Mahon commented, “In the fourth quarter of 2018, we had elevated prepayment fee income of $3.2 million as many of our borrowers prepaid early in anticipation of the Federal Reserve continuing its interest rate tightening policy into 2019. Over the last few months, there has been a significant shift in market sentiment vis-à-vis the direction of interest rates and many existing borrowers, especially those with low coupon loans, now appear to be waiting to get close to the contractual reset date on their loans before refinancing (rather than prepaying early). As a result, prepayment fee income declined to $0.8 million in the first quarter of 2019.”

Net interest margin (“NIM”) was 2.31% during the first quarter of 2019, compared to 2.46% in the fourth quarter of 2018, and 2.47% during the first quarter of 2018.  The linked quarter decrease in NIM was primarily due to the aforementioned reduction in prepayment fee income. Net interest margin excluding income related to prepayment activity during the first quarter of 2019 was 2.26%, compared to 2.25% in the fourth quarter of 2018 and 2.33% during the first quarter of 2018.

Mr. Mahon commented, “The consecutive linked quarter increases in our NIM (excluding the impact of prepayment fees) has been driven by the growing contribution of our Business Banking division. We are pleased that our business model transformation is producing the desired results on core NIM.”

Average interest-earning assets were $6.11 billion for the first quarter of 2019, a 5.3% (annualized) increase from $6.03 billion for the fourth quarter of 2018, and a 0.6% decrease from $6.15 billion for the first quarter of 2018. The linked quarter increase in average interest-earning assets was primarily driven by an increase in the loan portfolio, as the Company had strong loan originations in its Business Banking division along with reduced payoffs in the multifamily loan portfolio.

For the first quarter of 2019, the average yield on interest-earning assets was 3.78%, a decrease of 7 basis points compared with the fourth quarter of 2018, and an increase of 20 basis points compared to the first quarter of 2018.  The linked quarter decrease in the yield on average interest-earning assets was primarily due to the previously mentioned reduction in prepayment fee income.

The ending WAR on the total loan portfolio was 3.90% at March 31, 2019, which represents an 8 basis points increase versus the ending WAR on the total loan portfolio at December 31, 2018, and a 33 basis points increase versus the ending WAR on the total loan portfolio at March 31, 2018.

The average cost of borrowed funds (which primarily consists of Federal Home Loan Bank advances) was 2.43% for the first quarter of 2019, an increase of 9 basis points versus the fourth quarter of 2018, and an increase of 38 basis points versus the first quarter of 2018.

Loans

The real estate loan portfolio increased by $75.8 million (5.8% annualized) during the first quarter of 2019.  Total real estate loan originations were $233.9 million during the first quarter of 2019, at a weighted average interest rate of 5.01%. Real estate loan amortization and satisfactions totaled $150.5 million, or 11.6% (annualized) of the portfolio balance, at an average rate of 3.89%. The annualized real estate loan payoff rate of 11.6% for the first quarter of 2019 was lower than the fourth quarter of 2018 (20.7% annualized) and the first quarter of 2018 (13.6% annualized). Average real estate loans were $5.20 billion in the first quarter of 2019, an increase of $16.1 million (1.3% annualized) from the fourth quarter of 2018, and a decrease of $239.4 million (-4.4%) from the first quarter of 2018.

Outlined below are the loan originations for the current quarter, linked quarter and year-ago quarter.

($s in millions) Originations/ Weighted Average Rate
Real Estate Originations Q1 2019 Q4 2018 Q1 2018
Non-Business Banking $86.1/4.99% $131.6/4.74% $53.8/4.14%
Business Banking $147.8/5.02% $101.2/5.08% $21.2/4.21%
Total Real Estate $233.9/5.01% $232.8/4.89% $75.0/4.17%
C&I Originations $52.6/5.66% $41.2/6.12% $25.3/4.81%

Deposits and Borrowed Funds

The Company continues to focus on growing relationship-based business deposits sourced from its retail branches and its Business Banking division.  The Business Banking division ended the first quarter of 2019 with approximately $122.2 million of low-cost relationship-based checking and leasehold deposits at an average rate of approximately one basis point and total deposits of $227.4 million at an average rate of 57 basis points, compared to approximately $61.7 million of checking and leasehold deposits at an average rate of approximately one basis point and total deposits of $89.0 million at an average rate of 22 basis points, respectively, for the year-ago period.

The cost of total deposits increased 10 basis points on a linked quarter basis, compared to a 9 basis points increase when comparing the fourth quarter of 2018 to the third quarter of 2018, and a 12 basis points increase when comparing the third quarter of 2018 to the second quarter of 2018. Mr. Mahon commented, “Importantly, we improved the quality of our deposit base, as evidenced by the non-interest bearing deposits to total deposits ratio increasing to 9.5% at March 31, 2019 compared to 9.1% at December 31, 2018. We continue to manage our deposit pricing to remain competitive with the market while keeping our loan-to-deposit ratio range at approximately 125%.”

Total deposits increased by $50.9 million (4.7% annualized) on a linked quarter basis to $4.41 billion at March 31, 2019. The DimeDirect internet channel deposit portfolio was approximately $234.0 million at the end of the first quarter of 2019 compared to $290.8 million at year-end 2018.  Mr. Mahon commented, “In fiscal year 2018, our DimeDirect deposit portfolio declined by approximately $415 million, as we did not raise our posted rates beyond 1.35%. In the first quarter of 2019, net outflows in DimeDirect slowed to approximately $57 million. We expect the magnitude of dollar outflows from DimeDirect to decline over time, resulting in less of a headwind to grow overall deposits in the future.”

The loan-to-deposit ratio was 124.9% at March 31, 2019, compared to 123.8% at December 31, 2018 and 124.3% at March 31, 2018.

Total borrowings, excluding subordinated debt, was $1.13 billion at March 31, 2019, consistent with the fourth quarter of 2018, and $1.01 billion at the first quarter of 2018. At March 31, 2019, 38.0% of the borrowings portfolio, excluding subordinated debt, consisted of Federal Home Loan Bank bullet advances and overnight unsecured borrowings, that have a remaining term of less than a year, compared to 26.1% for the prior year period.

Non-Interest Income

Non-interest income was $2.4 million during the first quarter of 2019, $1.8 million during the fourth quarter of 2018, and $3.2 million during the first quarter of 2018. In the first quarter of 2018, non-interest income of $3.2 million included $1.4 million of gains from the sale of securities that the Bank had retained from its Freddie Mac sponsored Q-deal securitization completed in December of 2017.

Non-Interest Expense

Total non-interest expense was $22.1 million during the first quarter of 2019, $22.7 million during the fourth quarter of 2018, and $21.7 million during the first quarter of 2018. In the fourth quarter of 2018, non-interest expense of $22.7 million included $0.7 million of severance related expenses related to a workforce reduction.  On a linked quarter basis, excluding the severance expense from the fourth quarter of 2018, salaries and employee benefits expenses increased by $0.6 million as the Company added relationship bankers and support staff as part of its Business Banking division buildout.

The ratio of non-interest expense to average assets was 1.39% during the first quarter of 2019, 1.46% during the fourth quarter of 2018, and 1.36% during the first quarter of 2018.

The efficiency ratio was 59.2% during the first quarter of 2019, 58.0% during the fourth quarter of 2018, and 54.6% during the first quarter of 2018.

Income Tax Expense

The reported effective tax rate for the first quarter of 2019 was 24.9% versus 20.4% for the fourth quarter of 2018. As disclosed previously, in the fourth quarter of 2018, the Company recognized a one-time tax rate benefit in conjunction with the filing of the prior year tax return.

Credit Quality

Non-performing loans at March 31, 2019 were $5.4 million, or 0.10% of total loans, an increase from $2.3 million, or 0.04% of total loans, at December 31, 2018.  The allowance for loan losses was 0.40% of total loans at both March 31, 2019 and December 31, 2018. At March 31, 2019, non-performing assets represented 2.2% 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"), which is higher than the ratio of 0.4% at December 31, 2018 (see “Problem Assets as a Percentage of Tangible Capital and Reserves” table and “Non-GAAP Reconciliation” table at the end of this news release).  A loan loss provision of $0.3 million was recorded during the first quarter of 2019, compared to a loan loss provision of $0.6 million during the fourth quarter of 2018, and a loan loss provision of $0.2 million during the first quarter of 2018.

Capital Management

The Company’s consolidated Tier 1 capital to average assets (“leverage ratio”), which was 8.81% at March 31, 2019, was in excess of all applicable regulatory requirements.

The Bank’s regulatory capital ratios continued to be in excess of all applicable regulatory requirements.  At March 31, 2019, the Bank’s leverage ratio was 9.77%, while Tier 1 capital to risk-weighted assets and Total capital to risk-weighted assets ratios were 12.39% and 12.84%, respectively.

Mr. Mahon commented, “During the first quarter of 2019, we repurchased 199,254 shares at a weighted average price of $19.14. Pro forma for the repurchases, and the asset growth we experienced in the first quarter of 2019, our tangible common equity to tangible assets ratio was 8.58% at March 31, 2019.”

Diluted earnings per common share of $0.32 exceeded the quarterly $0.14 cash dividend per share by 129% during the first quarter of 2019, equating to a 43.75% dividend payout ratio.

Book value per share was $16.83 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 $15.29 at March 31, 2019.

Outlook for the Quarter Ending June 30, 2019

The Company continues to prioritize NIM growth, and improving the quality of its balance sheet, over earning asset growth at lower margins.

The Company’s posted rack rates on multifamily loans continue to be above the rates offered by many competitors, thereby affecting the level of multifamily originations. As such, the multifamily portfolio is expected to continue trending lower over the course of the year. The pace of payoffs could pick up in the second half of the year. The Company has approximately $54 million of multifamily loans that are scheduled to reach their contractual repricing dates in the second quarter of 2019, and approximately $238 million of multifamily loans that are scheduled to reach their contractual repricing dates during the second half of 2019.

Declines in the multifamily portfolio are expected to be offset by growth in the Business Banking portfolio and the Residential Lending portfolio.

The Business Banking division is projected to achieve its full year 2019 net portfolio growth target of at least $650 million to $700 million. As mentioned previously, net portfolio growth for the Business Banking division in the first quarter of 2019 was $176.4 million.

Non‐interest expense for fiscal year 2019 is currently expected to be approximately between $88 million to $90 million. This estimate includes the cost of hiring new relationship bankers to meet the aforementioned portfolio growth target for the Business Banking division.

The Company projects that the consolidated effective tax rate will be approximately 25% for fiscal year 2019.

ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company had $6.48 billion in consolidated assets as of March 31, 2019. The bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-nine retail 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 may negatively affect the Company’s financial condition or results of operations; 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
Executive Vice President – Chief Financial Officer
718-782-6200 extension 5909

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share amounts)
         
   March 31,     December 31,  
   2019   2018  
ASSETS:        
Cash and due from banks $ 143,473     $ 147,256    
Mortgage-backed securities available for sale   457,217       466,605    
Investment securities available for sale   54,406       36,280    
Marketable equity securities, at fair value   5,912       5,667    
Real Estate Loans:        
One-to-four family and cooperative/condominium apartment   107,709       96,847    
Multifamily residential and residential mixed-use (1)(2)   3,831,145       3,866,788    
Commercial real estate and commercial mixed-use   1,245,806       1,170,085    
Acquisition, development, and construction ("ADC")   54,222       29,402    
Total real estate loans   5,238,882       5,163,122    
Commercial and industrial ("C&I")   266,415       229,504    
Other loans   1,139       1,192    
Allowance for loan losses   (21,941 )     (21,782 )  
Total loans, net   5,484,495       5,372,036    
Premises and fixed assets, net   23,708       24,713    
Loans held for sale   682       1,097    
Federal Home Loan Bank of New York capital stock   55,840       57,551    
Bank Owned Life Insurance ("BOLI")   112,121       111,427    
Goodwill   55,638       55,638    
Operating lease assets   40,401       -    
Other assets   41,408       42,308    
TOTAL ASSETS $ 6,475,301     $ 6,320,578    
LIABILITIES AND STOCKHOLDERS' EQUITY:        
Deposits:        
Non-interest bearing checking $ 417,475     $ 395,477    
Interest-bearing checking   116,562       115,972    
Savings   328,853       336,669    
Money Market   1,963,954       2,098,599    
Sub-total   2,826,844       2,946,717    
Certificates of deposit   1,580,778       1,410,037    
Total Due to Depositors   4,407,622       4,356,754    
Escrow and other deposits   137,116       85,234    
Federal Home Loan Bank of New York advances   1,087,325       1,125,350    
Subordinated Notes Payable, net   113,796       113,759    
Other Borrowings   45,000       -    
Operating lease liabilities   46,868       -    
Other liabilities   31,300       37,400    
TOTAL LIABILITIES   5,869,027       5,718,497    
STOCKHOLDERS' EQUITY:        
Common stock ($0.01 par, 125,000,000 shares authorized, 53,690,825 shares and 53,690,825 shares        
issued at March 31, 2019 and December 31, 2018, respectively, and 36,020,112 shares        
and 36,092,952 shares outstanding at March 31, 2019 and December 31, 2018, respectively)   537       537    
Additional paid-in capital   278,358       277,512    
Retained earnings   572,175       565,713    
Accumulated other comprehensive loss, net of deferred taxes   (5,232 )     (6,500 )  
Unearned equity award common stock   (6,068 )     (3,623 )  
Common stock held by the Benefit Maintenance Plan   (1,509 )     (1,509 )  
Treasury stock (17,670,713 shares and 17,597,873 shares at March 31, 2019 and December 31, 2018, respectively)   (231,987 )     (230,049 )  
TOTAL STOCKHOLDERS' EQUITY   606,274       602,081    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,475,301     $ 6,320,578    
         
(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
  March 31,   December 31,   March 31,
  2019   2018   2018
Interest income:          
Loans secured by real estate $ 49,177     $ 49,953     $ 49,575  
Commercial and industrial ("C&I") loans   3,436       3,200       1,656  
Other loans   18       19       20  
Mortgage-backed securities   3,197       3,279       2,257  
Investment securities   420       240       15  
Other short-term investments   1,447       1,359       1,511  
Total interest  income   57,695       58,050       55,034  
Interest expense:          
Deposits and escrow   15,017       14,289       10,751  
Borrowed funds   7,354       6,611       6,267  
Total interest expense   22,371       20,900       17,018  
Net interest income   35,324       37,150       38,016  
Provision for loan losses    321       603       193  
Net interest income after  provision          
for loan losses   35,003       36,547       37,823  
           
Non-interest income:          
Service charges and other fees   1,099       1,199       911  
Mortgage banking income, net   68       75       111  
Gain (loss) on equity securities   268       (416 )     (4 )
Gain (loss) on sale of securities and other assets   (76 )     -       1,370  
Gain on sale of loans   255       159       90  
Income from BOLI   694       721       712  
Other   52       83       54  
Total non-interest income   2,360       1,821       3,244  
Non-interest expense:          
Salaries and employee benefits   11,884       12,042       11,177  
Stock benefit plan compensation expense   284       326       388  
Occupancy and equipment   3,869       3,836       3,872  
Data processing costs   2,066       1,635       1,754  
Marketing   466       1,030       1,047  
Federal deposit insurance premiums   454       448       665  
Other   3,029       3,428       2,831  
Total non-interest expense   22,052       22,745       21,734  
           
Income before taxes   15,311       15,623       19,333  
Income tax expense   3,810       3,183       4,587  
           
Net Income $ 11,501     $ 12,440     $ 14,746  
           
Earnings per Share ("EPS"):          
Basic $ 0.32     $ 0.34     $ 0.39  
Diluted $ 0.32     $ 0.34     $ 0.39  
           
Average common shares outstanding          
for Diluted EPS     35,976,915         36,296,298         37,464,725  


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES  
 UNAUDITED SELECTED FINANCIAL HIGHLIGHTS  
(Dollars in thousands except per share amounts)  
               
  At or For the Three Months Ended    
  March 31,   December 31,   March 31,    
   2019    2018    2018    
Per Share Data:              
Reported EPS (Diluted) $ 0.32     $ 0.34     $ 0.39      
Cash dividends paid per share     0.14         0.14         0.14      
Book value per share     16.83         16.69         16.22      
Tangible book value per share (1)     15.29         15.14         14.73      
Dividend payout ratio   43.75 %     41.18 %     35.90 %    
               
Performance Ratios (Based upon Reported Net Income):              
Return on average assets   0.72 %     0.80 %     0.93 %    
Return on average common equity   7.62 %     8.25 %     9.77 %    
Return on average tangible common equity (1)   8.39 %     9.08 %     10.76 %    
Net interest spread   2.02 %     2.22 %     2.28 %    
Net interest margin   2.31 %     2.46 %     2.47 %    
Average interest-earning assets to average interest-bearing liabilities   118.14 %     118.71 %     115.84 %    
Non-interest expense to average assets   1.39 %     1.46 %     1.36 %    
Efficiency ratio   59.22 %     57.98 %     54.60 %    
Loan-to-deposit ratio at end of period   124.93 %     123.24 %     122.68 %    
CRE consolidated concentration ratio (2)   706.7 %     702.7 %     748.6 %    
Effective tax rate   24.88 %     20.37 %     23.73 %    
               
Average Balance Data:              
Average assets $ 6,364,098     $ 6,251,691     $ 6,369,310      
Average interest-earning assets     6,111,293         6,031,823         6,145,013      
Average loans     5,445,301         5,400,166         5,577,309      
Average deposits     4,341,045         4,349,419         4,378,117      
Average common equity     604,074         603,358         603,555      
Average tangible common equity (1)     548,436         547,721         547,917      
               
Asset Quality Summary:              
Non-performing loans (excluding loans held for sale) $ 5,425     $ 2,345     $ 1,719      
Non-performing assets     5,425         2,345         1,719      
Net charge-offs     162         151         22      
Non-performing loans/ Total loans   0.10 %     0.04 %     0.03 %    
Non-performing assets/ Total assets   0.08 %     0.04 %     0.03 %    
Allowance for loan loss/ Total loans   0.40 %     0.40 %     0.39 %    
Allowance for loan loss/ Non-performing loans   404.44 %     928.87 %     1,233.51 %    
Loans delinquent 30 to 89 days at period end $ 338     $ 424     $ 2,947      
               
Capital Ratios - Consolidated:              
Tangible common equity to tangible assets (1)   8.58 %     8.72 %     8.81 %    
Tier 1 common equity ratio   11.04       11.50       11.87      
Tier 1 risk-based capital ratio   11.04       11.50       11.87      
Total risk-based capital ratio   13.77       14.35       14.79      
Tier 1 leverage ratio   8.81       8.92       8.79      
               
Capital Ratios - Bank Only:              
Tier 1 common equity ratio   12.39 %     13.34 %     12.97 %    
Tier 1 risk-based capital ratio   12.39       13.34       12.97      
Total risk-based capital ratio   12.84       13.80       13.43      
Tier 1 leverage ratio   9.77       10.31       9.59      
               
(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)  The CRE concentration ratio is calculated using the sum of commercial real estate, excluding owner occupied commercial real estate, multifamily, and ADC, divided by consolidated capital.      
                   


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars in thousands)
                       
  For the Three Months Ended
    March 31, 2019       December 31, 2018       March 31, 2018  
      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 $ 5,195,951 $ 49,177   3.79 %   $ 5,179,805 $ 49,953   3.86 %   $ 5,435,400 $ 49,575   3.65 %
Commercial and industrial loans   248,267   3,436   5.54 %     219,295   3,200   5.84       140,720   1,656   4.71  
Other loans   1,083   18   6.65 %     1,066   19   7.13       1,189   19   6.39  
Mortgage-backed securities   464,303   3,197   2.75 %     472,965   3,279   2.77       351,196   2,257   2.57  
Investment securities   47,177   420   3.56 %     19,728   240   4.87       6,492   15   0.92  
Other short-term investments   154,512   1,447   3.75 %     138,964   1,359   3.91       210,016   1,511   2.88  
Total interest-earning assets   6,111,293   57,695   3.78 %     6,031,823   58,050   3.85 %     6,145,013   55,033   3.58 %
Non-interest-earning assets   252,805         219,868         224,297    
Total assets $ 6,364,098       $ 6,251,691       $ 6,369,310    
                       
Liabilities and Stockholders' Equity:                      
Interest-bearing liabilities:                      
Interest-bearing checking accounts $ 115,243 $ 22   0.08 %   $ 114,563 $ 60   0.21 %   $ 124,440 $ 54   0.18 %
Money market accounts   2,029,794   7,640   1.53 %     2,131,276   7,630   1.42       2,432,242   6,318   1.05  
Savings accounts   331,662   45   0.06 %     338,837   47   0.06       359,638   59   0.07  
Certificates of deposit   1,466,439   7,310   2.02 %     1,377,207   6,552   1.89       1,151,146   4,320   1.52  
  Total interest-bearing deposits   3,943,138   15,017   1.54 %     3,961,883   14,289   1.43       4,067,466   10,751   1.07  
Borrowed Funds   1,229,607   7,353   2.43 %     1,119,225   6,611   2.34       1,237,094   6,267   2.05  
Total interest-bearing liabilities   5,172,745   22,370   1.75 %     5,081,108   20,900   1.63 %     5,304,560   17,018   1.30 %
Non-interest-bearing checking accounts   397,907         387,536         310,651    
Other non-interest-bearing liabilities   189,372         179,689         150,544    
Total liabilities   5,760,024         5,648,333         5,765,755    
Stockholders' equity   604,074         603,358         603,555    
Total liabilities and stockholders' equity $ 6,364,098       $ 6,251,691       $ 6,369,310    
Net interest income   $ 35,325         $ 37,150         $ 38,015    
Net interest spread     2.02 %       2.22 %       2.28 %
Net interest-earning assets $ 938,548       $ 950,715       $ 840,453    
Net interest margin     2.31 %       2.46 %       2.47 %
Ratio of interest-earning assets to interest-bearing liabilities     118.14 %         118.71 %         115.84 %  
                       
Deposits (including non-interest bearing checking accounts) $ 4,341,045 $ 15,017   1.40 %   $ 4,349,419 $ 14,289   1.30 %   $ 4,378,117 $ 10,751   1.00 %
                       


DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF LOAN COMPOSITION AND WEIGHTED AVERAGE RATES ("WAR") (1)
(Dollars in thousands)
   
                 
  At March 31, 2019   At December 31, 2018   At March 31, 2018
  Balance WAR   Balance WAR   Balance WAR
Loan balances at period end:                
One-to-four family residential, including condominium and cooperative apartment $ 107,709 4.58 %   $ 96,847 4.59 %   $ 62,596 4.36 %
Multifamily residential and residential mixed-use (2)(3)   3,831,145 3.61       3,866,788 3.56       4,280,951 3.42  
Commercial real estate and commercial mixed-use   1,245,806 4.23       1,170,085 4.17       1,007,595 3.95  
Acquisition, development, and construction ("ADC")   54,222 6.61       29,402 6.64       9,413 5.84  
Total real estate loans   5,238,882 3.81       5,163,122 3.74       5,360,555 3.53  
Commercial and industrial ("C&I")   266,415 5.72       229,504 5.76       145,818 4.99  
Total $ 5,505,297 3.90 %   $ 5,392,626 3.82 %   $ 5,506,373 3.57 %
                 
(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 March 31,   At December 31,   At March 31,
  2019   2018   2018
Non-Performing Loans          
One-to-four family residential, including condominium and cooperative apartment $ 706   $ 712   $ 449
Multifamily residential and residential mixed-use (1)(2)   276     280     -
Commercial real estate and commercial mixed-use real estate (2)   4,205     1,041     90
C&I   232     309     1,179
Other   6     3     1
Total Non-Performing Loans (3) $ 5,425   $ 2,345   $ 1,719
Total Non-Performing Assets $ 5,425   $ 2,345   $ 1,719
           
Performing TDR Loans          
One-to-four -family and cooperative/condominium apartment $ 12   $ 14   $ 20
Multifamily residential and mixed-use residential real estate (1)(2)   261     271     604
Commercial real estate and commercial mixed-use real estate (2)   4,061     4,084     7,431
Total Performing TDRs $ 4,334   $ 4,369   $ 8,055
           
(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 March 31,   At December 31,   At March 31,
   2019    2018    2018
Total Non-Performing Assets $ 5,425     $ 2,345     $ 1,719  
Loans 90 days or more past due on accrual status (5)     6,955         100         13,816  
  TOTAL PROBLEM ASSETS $ 12,380     $ 2,445     $ 15,535  
           
Tangible common equity  (6) $ 550,636     $ 546,443     $ 552,319  
Allowance for loan losses and reserves for contingent liabilities     21,966         21,807         21,229  
  TANGIBLE COMMON EQUITY PLUS RESERVES $ 572,602     $ 568,250     $ 573,548  
           
  TEXAS RATIO (PROBLEM ASSETS AS A PERCENTAGE OF          
  TANGIBLE COMMON EQUITY AND RESERVES)   2.2 %     0.4 %     2.7 %
           
(5) These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed in the near future, 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  
  March 31,   December 31,   March 31,  
   2019    2018    2018  
Reconciliation of Reported and Adjusted ("non-GAAP") Net Income:            
Reported net income $   11,501     $   12,440     $   14,745    
Adjustments to Net Income (1):            
Add: Severance payment     -          496         -     
Less: Loss (Gain) on sale of securities     52         -          (930 )  
Tax adjustment     -          (716 )       (92 )  
Adjusted ("non-GAAP") net income $   11,553     $   12,220     $   13,723    
             
Adjusted Ratios (Based upon "non-GAAP Net Income" as calculated above):            
Adjusted EPS (Diluted) $ 0.32     $ 0.34     $ 0.36    
Adjusted return on average assets   0.73 %     0.78 %     0.86 %  
Adjusted return on average common equity     7.65         8.10         9.09    
Adjusted return on average tangible common equity     8.43         8.92         10.02    
Adjusted non-interest expense to average assets     1.39         1.41         1.36    
Adjusted efficiency ratio     59.22         56.12         54.60    
             
  March 31,   December 31,   March 31,  
   2019    2018    2018  
Reconciliation of Tangible Assets:            
Total assets $   6,475,301     $   6,320,578     $   6,325,917    
Less:            
Goodwill     55,638         55,638         55,638    
Tangible assets $   6,419,663     $   6,264,940     $   6,270,279    
             
Reconciliation of Tangible Common Equity - Consolidated:            
Total common equity $   606,274     $   602,081     $   607,957    
Less:            
Goodwill     55,638         55,638         55,638    
Tangible common equity $   550,636     $   546,443     $   552,319    
             
             
(1)  Adjustments to net income are taxed at the Company's statutory tax rate of approximately 32% unless otherwise noted.