Dime Community Bancshares, Inc. · NYSE:DCOM
Dime Community Bancshares — Investor Presentation (March 2017)
25 slides from Dime Community Bancshares's investor presentation, Mar 20, 2017
Slide 1: Investor Presentation March 2017
Investor PresentationMarch 2017 DIME COMMUNITY BANCSHARES, INC(NASDAQ: DCOM)
Slide 2: Profile
PROFILE 2 Business model: DIME COMMUNITY BANK specializes in lending on New York City multifamily properties (mainly pre-WWII, rent-regulated buildings) since 1970.Each quarter, Dime can usually be found among the five major bank lenders on New York City multifamily properties.Founded as The Dime Sa
Slide 3: 2016 Financial Performance
2016 Financial Performance 3 $1.26 …. EPS (diluted); $1.97 EPS non-core ($1.18 core 2015 EPS)15.2% … Increase in tangible book value (from $11.96 to $13.78)1.31% … Non-interest expense to average assets (1.41% in 2015)Core efficiency ratio = 48% 0.24% … NPAs (incl TDRs) to Assets 9.39% … Core return
Slide 4: Management Team
MANAGEMENT TEAM 4 Kenneth J Mahon, President & CEO (37 years)Stuart Lubow, Senior EVP Business Banking (2017)(1) Rob Volino, Senior EVP Chief Operating Officer (19 years)Chief Technology Officer: Timothy Lenhoff (2014) Chief Retail Officer: William Brown (2016)Chief Risk Officer: Timothy King (35 ye
Slide 5: Strengths
- STRENGTHS – 5 An asset-generation machine in NYC multifamily market.Legacy relationships with NYC brokers and borrowers.Experienced and knowledgeable executives and directors, and core team members.Historically low operating expenses, a hallmark of the company.Historically low credit cost due to p
Slide 6: Challenges identified in January 2014 situational review
- CHALLENGES –identified in January 2014 situational review 6 Bring small business focus to the brick-and-mortar channel.Reduce the high level of loans-to-deposits (150%+ as of Jan 2014), and decrease reliance on FHLB borrowings.Improve the level of non-spread revenue.Increase the percentage of qual
Slide 7: Opportunities identified in January 2014 situational review
- OPPORTUNITIES – identified in January 2014 situational review 7 $50 million capital gains to be available from sale of Williamsburg, Brooklyn, properties in 2016 and 2017, representing the equivalent of an 11% capital raise, without diluting shareholders.Executive retirements freeing up salary cap
Slide 8: Threats
- THREATS – 8 Regulatory risk to Dime’s traditional multifamily model from regulatory focus on “concentration risk”.Dime has a CRE concentration, mainly in NYC multifamily residential loans, generally rent-regulated or moderate rent apartments which, for concentration purposes, are aggregated just l
Slide 9: What has been accomplished to date?
What has been accomplished to date? 9 Leveraged new capital.Scaled up the IT talent pool and adopted new technologies, while still exploring best-in-class technology to bring to our customers.Embarked on a business banking buildout.Added two new branches in 2017, including (1) in our native Williams
Slide 10: Vision
VISIONWhere is the company headed? 10 Our vision is to be a highly profitable, cost efficient, technology-driven community commercial bank with diverse, reliable sources of income;to be an aggregator of additional financial service companies;to be the company of choice for clients, an employer of ch
Slide 11: Mission
MISSIONWhat is it that we do, day-in and day-out? 11 Our mission is to provide choice, control and ease of use (i.e., a great customer experience through technology plus informed and engaged employees) of financial products and services, that enable our business and retail customers to manage their
Slide 12: Growing Organically: Assets and Capital
GROWING ORGANICALLYAssets and Capital 12 3-year growth rate $000’s, except for per share data DEC 2013 DEC 2014 DEC 2015 DEC 2016 Total Assets $ 4,028,190 $ 4,497,107 $ 5,032,872 $ 6,005,430 49% growth 12% 12% 19% Tangible Equity $ 384,564 $ 412,600 $ 447,111 $ 516,170 34% growth 7% 8% 15% Tangible
Slide 13: Growing Organically: Deposits and Loans
GROWING ORGANICALLYDeposits and Loans 13 3-year growth rate $000’s DEC 2013 DEC 2014 DEC 2015 DEC 2016 Deposits $2,507,146 $2,659,792 $3,184,310 $4,395,426 75% growth 6% 20% 38% Core Deposits $1,678,737 $1,733,474 $2,325,465 $3,346,960 99% growth 3% 34% 44% Loans $3,699,519 $4,119,240 $4,696,776 $5,
Slide 14: Revenue and Operating Efficiency
14 $000’S 3-year growth rate Includes prepayment fee income: DEC 2013 DEC 2014 DEC 2015 DEC 2016 Gross Revenue $182,565 $180,390 $182,134 $203,255 11% growth -1% 1% 12% Net (Operating) Revenue $135,595 $131,974 $135,907 $151,114 11% growth -3% 3% 11% Core Operating Expenses $62,692 $61,076 $65,887 $
Slide 15: Evolution to a community commercial bank
Evolution to a community commercial bank 15 In January 2017, members of the former team of Community National Bank, Great Neck, LI, joined DIME along with former CEO Stu Lubow.Dime adds “direct lending/relationship banking” to its powerful “indirect/broker driven” lending platform.Small business loa
Slide 16: The Market & Dime's Foray into Digital: DimeDirect Digital Banking
The Market & Dime’s Foray into Digital:DimeDirect Digital Banking Personal banking revenues in the U.S. rose 3% to ~$600B between 2010 and 2015, and are expected to grow at 5% through 2020.Investments in digital, or pure-play direct banks and lenders are growing at a rate 2x that of traditional / hy
Slide 17: Dime's Deposit Growth Far Exceeded Other Banks
Dime’s Deposit Growth Far Exceeded Other Banks While traditional banks’ deposit growth has been 6% on average over the last 5 years, Dime’s deposit growth in 2016 exceeded 38% Traditional Banks ($B) Dime Deposit Growth Direct Banks ($B) +38% 17 Source: Company reports.
Slide 18: DimeDirect as the First Phase of Growth
We See DimeDirect as the First Phase of Growth Revenue Incremental benefits Dime Direct Access to lower “all-in cost” depositsAddresses LTD ratio concernsEnables access to HV customers not currently reached by branch networkLimited investment required for growth Small & MediumEnterprises (SMEs) Weal
Slide 19: Key Challenges & Opportunities
Key Challenges & Opportunities No other products offered online, so low-cost cross-sell via online is unavailable.Online account opening and enrollment for transfer capabilities are separate processes requiring multiple verification steps, making funding and transfers a clunky experience.Retention d
Slide 20: Retention
Retention Attrition has been relatively low. At 1.10%, Dime’s rate is near the national leaders. However, the top tier competitors have so far shown little appetite to raise rates with this early move upward by the Federal Reserve. 20 Jan Mar Apr Feb May Jun Jul Aug Sep Oct Nov Dec Note: Percentages
Slide 21: Loan Portfolio Yields among selected local peers
21 Loan Portfolio Yieldsamong selected local peers Institution Name Period Ended Loan Yield (%) Texas Ratio Bridge Bancorp, Inc. 9/30/2016 4.75% 1.89 Sterling Bancorp 9/30/2016 4.57% 10.15 OceanFirst Financial Corp. 9/30/2016 4.46% 14.34 ConnectOne Bancorp, Inc. 9/30/2016 4.44% 31.61 TrustCo Bank Co
Slide 22: Quality Deposits among selected local peers
22 Quality Depositsamong selected local peers $000’s Non-Interest Bearing Interest Bearing Total Deposits Non-Int. Bearing Institution Name 13(a)(1) 13(a)(2) 13(a) % Sterling Bancorp 3,364,610 6,861,541 10,226,151 32.9% Sandy Spring Bancorp, Inc. 1,154,231 2,391,293 3,545,524 32.6% Eagle Bancorp, In
Slide 23: Repricing Loans
23 Repricing Loans $000’s *Includes $83 million and $286 million of 5 Year Step-up loans at December 15 and December 16, respectively.# Includes $37 million of 5 Year Step-Up loans originated in 2017.
Slide 24: DCOM Trading Performance relative to selected local peers
* Reflects inclusion in Core Peers; group includes Peapack Gladstone, Bridge Bancorp, First of Long Island, OceanFirst Financial, ConnectOne Bancorp, Flushing Financial, TrustCo Bank Corp, and Lakeland Bancorp.Highlighting on TCE/TA reflects those peers that recently raised capital. Prices as of 3/3
Slide 25: Forward-Looking Statements
25 Forward-Looking Statements This presentation 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 u
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