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Dime's Earnings Slip a Penny

Stocks in this article: DCOM

Once these most recent quarterly results are finalized, they will be run through TheStreet.com Ratings' model and our ratings will be adjusted accordingly. To keep up to date on all of our ratings, visit TheStreet.com Ratings Screener.

On Jan. 23, 2009, Dime Community Bancshares (DCOM) posted a 2.6% drop in Q4 FY08 earnings due to impairment charges on securities. Net income declined to $5.29 million or $0.16 per share from $5.44 million or $0.17 per share in Q4 FY07. The quarterly earnings include an impairment charge of $3.21 million related to two pooled bank trust preferred securities. However, core earnings were up 30.4% to $7.09 million or $0.22 per share, which missed the consensus estimate of $0.25 per share.

Dime Community's interest income grew 11.5% to $52.65 million, led by a larger portfolio of real estate loans and mortgage-backed securities. Total interest expenses declined marginally to $28.82 million from $29.12 million, reflecting a 64 basis points reduction in average funding costs to 3.38%. Consequently, net interest income before provision for loan losses increased 31.8% to $23.83 million. Net interest margin improved 36 basis points to 2.63%, while net interest spread expanded 50 basis points to 2.42%. In addition, the company's noninterest loss was $2.89 million as against income of $2.41 million a year earlier, hurt by mortgage banking loss of $1.78 million and impairment charge of $3.21 million on securities. Total noninterest expenses rose 10.4% to $12.52 million on higher compensation and benefit costs. Subsequently, efficiency ratio improved to 51.85% from 55.89% a year ago.

During Q4 FY08, provision for credit losses increased several times to $1.04 million from $60,000 in the prior year's quarter. Non-performing loans was $7.40 million or 0.22% of total loans compared to $2.86 million or 0.10% of total loans in Q4 FY07. Meanwhile, risk-based capital ratio of the bank declined marginally to 11.43% from 11.92%.

For FY08, DCOM's interest income was up 11.3% to $202.65 million compared to the previous year, whereas non-interest income fell 73.0% to $2.81 million. Consequently, earnings for the year grew 24.9% to $28.03 million or $0.85 per share.

Looking forward to Q1 FY09, DCOM expects EPS of $0.20 to $0.22. In addition, the company anticipates its operating expenses to remain at $12.80 million.

A detailed report covering this quarterly release is now available. To purchase the report, click here .

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