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Dime Community Bancshares Inc. Reports Operating Results (10-Q)

August 10, 2009 | About:

Dime Community Bancshares Inc. (DCOM) filed Quarterly Report for the period ended 2009-06-30.

Dime Community Bancshares Inc. is the holding company The Dime Savings Bank of Williamsburgh. Dime Community Bancshares Inc. has a market cap of $424.68 million; its shares were traded at around $12.35 with a P/E ratio of 14.36 and P/S ratio of 2.07. The dividend yield of Dime Community Bancshares Inc. stocks is 4.53%. Dime Community Bancshares Inc. had an annual average earning growth of 27.4% over the past 10 years. GuruFocus rated Dime Community Bancshares Inc. the business predictability rank of 2-star.

Highlight of Business Operations:

General. Net income was $6.9 million during the three months ended June 30, 2009, a decline of $1.5 million from net income of $8.4 million during the three months ended June 30, 2008. During the comparative period, the provision for loan losses increased $1.9 million and non-interest expense increased $3.1 million, while net interest income increased $3.2

Interest Income. Interest income was $51.7 million during the three months ended June 30, 2009, an increase of $2.4 million from $49.3 million during the three months ended June 30, 2008. This resulted primarily from an increase in interest income of $3.5 million on real estate loans, which was partially offset by declines in interest income of $401,000 on MBS and $488,000 on federal funds sold and other short-term investments.

Interest Expense. Interest expense decreased $727,000, to $25.4 million, during the three months ended June 30, 2009, from $26.2 million during the three months ended June 30, 2008. The decline resulted primarily from reductions in interest expense of $1.9 million on money market accounts, $425,000 on CDs, and $324,000 on interest bearing checking accounts, which were partially offset by increased interest expense of $2.0 million on borrowed funds.

Non-Interest Income. Total non-interest income remained relatively unchanged from the three months ended June 30, 2008 to the three months ended June 30, 2009. Within non-interest income, an increase of $826,000 in mortgage banking income was offset by the recognition of $886,000 of credit-related OTTI on trust preferred investment securities during the three months ended June 30, 2009. (See Note 10 to the Condensed Consolidated Financial Statements for a further discussion of the OTTI charge). The increase in mortgage banking income resulted primarily from a gain of $635,000 recognized on the sale of an 80% participation in $125.0 million of multifamily loans from portfolio to a third-party financial institution during the three months ended June 30, 2009. In addition, the Bank recorded a charge to mortgage banking income of $300,000 during the three months ended June 30, 2008 for an increase to the liability for the First Loss Position on loans sold with recourse to FNMA.

Salaries and employee benefits increased $656,000 during the comparative period as a result of higher expenses associated with the Employee Retirement Plan (as a result of a reduction in the projected future earnings of the plan assets due to a decline in their value during the recent economic downturn), as well as a smaller offset to salaries for capitalized loan origination salary costs of $435,000 during the three months ended June 30, 2009 compared to the three months ended June 30, 2008 (reflecting lower loan origination levels during the comparative period). Occupancy and equipment expense increased by $118,000 during the comparative period, reflecting the opening of the Brooklyn Heights branch in late 2008 and the acquisition of a building in late 2008 for future operational use. Federal deposit insurance costs increased $2.6 million during the comparative period as a result of a special insurance assessment of $1.8 million incurred as of June 30, 2009, as well as ongoing increases in such costs resulting from the recent FDIC Bank Insurance Fund re-capitalization plan. Other operating expenses declined $324,000 primarily as a result of reduced professional fees.

General. Net income was $9.8 million during the six months ended June 30, 2009, a decline of $4.6 million from net income of $14.4 million during the six months ended June 30, 2008. During the comparative period, the provision for loan losses increased $4.5 million, non-interest income declined $6.2 million and non-interest expense increased $4.4 million, while net interest income increased $8.1 million, resulting in a reduction in pre-tax income of $7.0 million. Income tax expense decreased $2.4 million during the comparative period due to the decline in pre-tax earnings.

Read the The complete ReportDCOM is in the portfolios of Irving Kahn of Kahn Brothers & Company Inc..

Rating: 4.2/5 (6 votes)

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