Dime's Earnings Slip a Penny

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On Jan. 23, 2009, Dime Community Bancshares (DCOM Quote) 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. ...