SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED JUNE 30, 1998
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transaction period from to
Commission file Number 0-27782
THE EMPLOYEE STOCK OWNERSHIP PLAN OF DIME COMMUNITY BANCSHARES, INC. AND
CERTAIN AFFILIATES
(Full Title of the Plan)
DIME COMMUNITY BANCORP, INC.
209 Havemeyer Street, Brooklyn, NY 11211
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office.)
Registrant's telephone number, including area code: (718) 782-6200
<PAGE>
THE EMPLOYEE STOCK OWNERSHIP PLAN OF DIME COMMUNITY BANCSHARES, INC. AND
CERTAIN AFFILIATES
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TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS FOR THE YEARS ENDED
JUNE 30, 1998 AND 1997:
Statements of Net Assets Available for Plan Benefits 4
Statements of Changes in Net Assets Available for Plan Benefits
for the Years Ended June 30, 1998 and 1997 5-6
Notes to Financial Statements 7-10
SUPPLEMENTAL INFORMATION:
Item 27(a) - Schedule of Assets Held for Investment Purposes at
June 30, 1998 11
SIGNATURES 12
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<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Dime Community Bancshares, Inc. & Subsidiary
We have audited the accompanying statements of net assets available for plan
benefits of The Employee Stock Ownership Plan of Dime Community Bancshares,
Inc. And Certain Affiliates (the "Plan") as of June 30, 1998 and 1997, and the
related statements of changes in net assets available for plan benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the Plan's net assets available for plan benefits as of June 30, 1998
and 1997, and its changes in net assets available for plan benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule of assets held for investment
purposes is the responsibility of the Plan's management, and has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects, when
considered in relation to the 1998 basic financial statements taken as a whole.
December 17, 1998
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<PAGE>
THE EMPLOYEE STOCK OWNERSHIP PLAN OF DIME COMMUNITY BANCSHARES, INC. AND
CERTAIN AFFILIATES
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STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF JUNE 30, 1998 AND
1997
<TABLE>
<CAPTION>
June 30, 1998 June 30, 1997
-------------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLOCATED UNALLOCATED TOTAL Allocated Unallocated Total
--------- ------------ ---------- ---------- ------------ ----------
ASSETS:
Investment in Marine Midland Bank
short-term investment fund $31,074 $1,141 $32,215 $435 $51,936 $52,371
Investments in shares of Dime Community
Bancshares, Inc. Common Stock, at fair
value 6,823,945 25,459,655 32,283,600 2,628,000 20,648,000 23,276,000
--------- ------------ ---------- ---------- ------------ ----------
Total investments 6,855,019 25,460,796 32,315,815 2,628,435 20,699,936 23,328,371
--------- ------------ ---------- ---------- ------------ ----------
Accrued income receivable 140 354 494 - - -
--------- ------------ ---------- ---------- ------------ ----------
TOTAL ASSETS 6,855,159 25,461,150 32,316,309 2,628,435 20,699,936 23,328,371
--------- ------------ ---------- ---------- ------------ ----------
LIABILITIES:
Borrowing from Dime Community Bancshares,
Inc. - 9,174,647 9,174,647 - 10,323,997 10,323,997
--------- ------------ ---------- ---------- ------------ ----------
TOTAL LIABILITIES - 9,174,647 9,174,647 - 10,323,997 10,323,997
--------- ------------ ---------- ---------- ------------ ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $6,855,159 $16,286,503 $23,141,662 $2,628,435 $10,375,939 $13,004,374
========= ============ ========== ========== ============ ==========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
THE EMPLOYEE STOCK OWNERSHIP PLAN OF DIME COMMUNITY BANCSHARES, INC. AND
CERTAIN AFFILIATES
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STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR
ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Allocated Unallocated Total
--------- ---------- ----------
ADDITIONS:
Investment Activities:
Dividend income $30,739 $238,948 $269,687
Appreciation in market value of Dime Community
Bancshares, Inc. Common Stock 1,014,857 8,001,100 9,015,957
--------- ---------- ----------
Total investment activities 1,045,596 8,240,048 9,285,644
--------- ---------- ----------
Other Additions:
Contributions from Dime Savings Bank of
Williamsburgh, net - 1,685,883 1,685,883
Allocation of 114,935 shares of Dime Community
Bancshares, Inc. Common Stock to
participant accounts 3,189,446 - 3,189,446
--------- ---------- ----------
Total other additions 3,189,446 1,685,883 4,875,329
--------- ---------- ----------
TOTAL ADDITIONS 4,235,042 9,925,931 14,160,973
--------- ---------- ----------
SUBTRACTIONS:
Allocation of 114,935 shares of Dime Community
Bancshares, Inc. Common Stock to
participant accounts - 3,189,446 3,189,446
Benefit payments 8,318 - 8,318
Interest expense on Borrowing from Dime
Community Bancshares, Inc. - 825,921 825,921
--------- ---------- ----------
TOTAL SUBTRACTIONS 8,318 4,015,367 4,023,685
--------- ---------- ----------
CHANGE IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS DURING THE YEAR 4,226,724 5,910,564 10,137,288
--------- ---------- ----------
NET ASSETS AVALABLE FOR PLAN BENEFITS:
Beginning of year 2,628,435 10,375,939 13,004,374
--------- ---------- ----------
End of year $6,855,159 $16,286,503 $23,141,662
========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
THE EMPLOYEE STOCK OWNERSHIP PLAN OF DIME COMMUNITY BANCSHARES, INC. AND
CERTAIN AFFILIATES
- -----------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR
ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Allocated Unallocated Total
--------- ---------- ----------
ADDITIONS:
Investment Activities:
Dividend income $435 $51,936 $52,371
Appreciation in market value of Dime Community
Bancshares, Inc. Common Stock 80,009 9,521,341 9,601,350
--------- ---------- ----------
Total investment activities 80,444 9,573,277 9,653,721
--------- ---------- ----------
Other Additions:
Contributions from Dime Savings Bank of
Williamsburgh - 2,145,360 2,145,360
Allocation of 121,702 shares of Dime Community
Bancshares, Inc. Common Stock to
participant accounts 2,434,039 - 2,434,039
--------- ---------- ----------
Total other additions 2,434,039 2,145,360 4,579,399
--------- ---------- ----------
TOTAL ADDITIONS 2,514,483 11,718,637 14,233,120
--------- ---------- ----------
SUBTRACTIONS:
Allocation of 121,702 shares of Dime Community
Bancshares, Inc. Common Stock to
participant accounts - 2,434,039 2,434,039
Interest expense on Borrowing from Dime
Community Bancshares, Inc. - 928,340 928,340
--------- ---------- ----------
TOTAL SUBTRACTIONS - 3,362,379 3,362,379
--------- ---------- ----------
CHANGE IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS DURING THE YEAR 2,514,483 8,356,258 10,870,741
--------- ---------- ----------
NET ASSETS AVALABLE FOR PLAN BENEFITS:
Beginning of year 113,952 2,019,681 2,133,633
End of year $2,628,435 $10,375,939 $13,004,374
========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
THE EMPLOYEE STOCK OWNERSHIP PLAN OF DIME COMMUNITY BANCSHARES,
INC. AND CERTAIN AFFILIATES
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NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998 AND 1997
1. SUMMARY DESCRIPTION OF PLAN
The following is a brief description of The Employee Stock Ownership Plan
Of Dime Community Bancshares, Inc. And Certain Affiliates (the "ESOP").
This description of the ESOP is provided for general information purposes
only. Participants should refer to the ESOP document for a more complete
description of the ESOP's provisions.
a. GENERAL - The ESOP was adopted by the Board of Directors of the Dime
Savings Bank of Williamsburgh (the "Bank") on February 8, 1996, with
an effective date of July 1, 1995.
On June 26, 1996, the Bank converted from a federally chartered mutual
savings bank to a federally chartered stock savings bank and all of
its outstanding capital stock was acquired by Dime Community
Bancshares, Inc. (the "Company"). Simultaneously, the Company issued
14,547,500 shares of common stock in a Subscription and Community
offering to eligible investors in the following order of priority: (1)
depositors whose deposits in qualifying accounts in the Bank totaled
$50 or more on October 31, 1994; (2) the Employee plans of the Bank;
including the ESOP, up to a maximum of 10% of the total shares issued,
(3) depositors whose deposits in qualifying accounts in the Bank
totaled $50 or more on March 31, 1996; and (4) members of the Bank,
consisting of depositors of the Bank as of May 9, 1996, the voting
record date for the special meeting of members to vote on the
Conversion, other than those members who otherwise qualified as
Eligible Account Holders or Supplemental Eligible Account Holders.
The ESOP purchased 1,163,800, or 8%, of the shares issued by the
Company in its community offering at the initial issuance price of
$10.00 per share.
The ESOP is designed to comply with Section 4975(e)(7) and the
regulations thereunder of the Internal Revenue Code of 1986, as
amended (the "Code"), and is subject to the applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The ESOP is administered by the Compensation Committee
appointed by the Company's Board of Directors. The trust services
department of Marine Midland Bank ("Trustee") acts as the trustee for
the ESOP.
In order to purchase the shares of the Company's common stock, the
ESOP obtained a borrowing from the Company of $11,638,000, which is to
be repaid over a ten year period at a fixed interest rate of 8.0%.
The borrowing agreement establishes a repayment period of ten years
with an option to make prepayments subject to certain terms
established by the agreement. Repayments of the borrowing are made
from fully deductible contributions from the Bank to the ESOP. As the
ESOP makes each payment of principal on the borrowing, an appropriate
percentage of stock will be allocated to eligible participants
accounts in accordance with applicable regulations under the Code.
Shares fully vest upon allocation.
The borrowing is collateralized by the unallocated shares of stock
held by the ESOP. The Company, as lender, has no rights against
shares once they are allocated under the ESOP. Accordingly, the
financial statements of the ESOP for the years ended June 30, 1998 and
1997, present separately the assets and liabilities and changes
therein pertaining to:
(1) the accounts of employees with vested rights in allocated stock
(Allocated) and
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<PAGE>
(2) stock not yet allocated to employees (Unallocated)
b. ELIGIBILITY AND PARTICIPATION -All Eligible Employees, defined as
salaried, common law employees of the Company or the Bank and its
subsidiaries, who have completed a period of service of at least one
year, automatically participate in the ESOP. An employee is not an
eligible employee if he or she is compensated principally on an
hourly, daily, commission fee or retainer basis, or has waived any
claim to membership in the Plan.
c. CONTRIBUTIONS AND DISTRIBUTIONS- The Company or the Bank shall
contribute to the ESOP an amount which, at minimum, shall serve to
finance the ESOP's obligation under its outstanding borrowing from the
Company. The Company or the Bank may contribute additional amounts,
if designated by the ESOP Committee, to the ESOP, which shall be
applied as a prepayment of principal or interest for the outstanding
borrowing from the Company. Any additional contributions approved by
the Committee shall be treated as an ESOP contribution and shall be
allocated among the accounts of Eligible Participants in accordance
with a pre-established formula. Participant contributions are not
permitted.
No distributions from the ESOP will be made until a participant
retires, dies (in which case, payment shall be made to his or her
beneficiary or, if none, his or her legal representatives), or
otherwise terminates employment with the Company or the Bank and its
subsidiaries. Distributions are made in cash or, if participant
elects, in the form of shares of common stock of the Company plus cash
for fractional shares.
d. VESTING - The balance credited to each Participant's account shall
become vested in accordance with the following schedule:
NUMBER OF YEARS OF SERVICE VESTED PERCENTAGE
Less than 2 years 0%
Less than 3 years 25
Less than 4 years 50
Less than 5 years 75
5 or more years 100
Under the provisions of the ESOP, participants were granted credit,
for purposes of vesting, for years of service at the Bank prior to the
establishment of the ESOP. Any previously unvested portion shall
become fully vested to participants upon attainment of age 65, or, if
earlier, upon the termination of his or her participation by reason of
death, disability, retirement or upon occurrence of change in control
of the Employer.
e. INVESTMENTS - As of June 30, 1998 and 1997, the ESOP's investments
consists solely of investments in common stock of the Company. The
ESOP is permitted, under the Plan Document, to invest in any commingled
or group trust fund, or common trust fund that are exempt from taxes
under Section 501(a) of the Internal Revenue Code.
f. ALLOCATION OF SHARES TO PARTICIPANT ACCOUNTS - As of the last day of
each plan year during which a borrowing is outstanding, a portion of
the financed shares purchased with the proceeds of the borrowing shall
be released in accordance with a predetermined formula. The released
shares are allocated to Eligible Participant accounts in the proportion
that each such Eligible Participant's compensation, as measured under
the terms of the Plan Document, for the portion of the immediately
preceding calendar year during which he or she was a participant, bears
to the aggregate compensation of all Eligible
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<PAGE>
Participants, as measured under the terms of the Plan Document.
Released shares allocated to participant accounts totaled 114,935 and
121,702 during the years ended June 30, 1998 and 1997, respectively.
Each participant's account reflects an allocation of the Bank's
contributions, ESOP earnings and the forfeiture of terminated
participant non-vested accounts.
Each participant is entitled to exercise voting rights attributable to
the shares allocated to his or her account and is notified by the
Trustee prior to the time that such rights are to be exercised. The
Trustee is permitted, upon grant of authority by the Plan
Administrator, to vote shares for which instructions have not been
given by a participant within the stated time period. Such vote is
made in direct proportion to the votes received from participants.
g. FORFEITURES - Upon the termination of employment of a participant or
former participant for reason other than death, disability, or
retirement, that portion of the balance credited to his or her account
which is not vested at the date of termination shall be forfeited as of
the last Valuation Date, defined as the last business day of March,
June, September, or December. The proceeds of such forfeitures shall
be treated as loan repayments and ESOP contributions as designated by
the ESOP committee.
h. ESOP TERMINATION - The Company reserves the right to terminate the
ESOP at any time, subject to the provisions of ERISA. Upon such
termination of the ESOP, the interest of each participant in the ESOP
will be distributed to such participant or his or her beneficiary at
the time prescribed by the ESOP provisions and the Code. Upon
termination of the ESOP, the Compensation Committee shall direct the
Trustee to pay all liabilities and expenses of the trust fund and to
sell the shares of financed stock held in the loan suspense account to
the extent it determines such sale to be necessary in order to repay
the borrowing.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements of the ESOP are
maintained on the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION - The shares of Dime
Community Bancshares, Inc. common stock are valued at fair value based
upon the closing price stated in the Wall Street Journal. The closing
price of the common stock was $27.75 and $20.00 per share, respectively,
as of June 30, 1998 and 1997.
Dividend income is accrued on the ex-dividend date for all dividends
declared. During the years ended June 30, 1998 and 1997, cash dividends
of $0.23 and $.045 per share were declared and paid, respectively, on
Dime Community Bancshares, Inc. common stock.
Purchases and sales of securities are recorded on a trade date basis.
Realized gains and losses from security transactions are reported on the
average cost method.
USE OF ESTIMATES - The preparation of the financial statements in
accordance with Generally Accepted Accounting Principles requires
management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could
differ from these estimates.
3. FEDERAL INCOME TAXES
The Company has not yet received a determination letter from the Internal
Revenue Service stating that the ESOP and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (the
"Code"). However, the Plan Administrator believes that the ESOP and
related trust are
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<PAGE>
currently being operated in compliance with the applicable requirements of
the Code. Therefore, no provision for income taxes has been included in
the ESOP's financial statements.
4. ADMINSTRATION OF PLAN ASSETS
The assets of the ESOP, which consist of investment in shares of Dime
Community Bancshares, Inc. common stock, investments in the Marine Midland
Bank short-term investment fund and accrued interest and dividends
receivable, are held in safekeeping as designated by the Trustee.
Contributions to the ESOP are held and managed by the Trustee. All
contributions received during the years ended June 30, 1998 and 1997, were
utilized to service the principal and interest on the borrowing.
Certain administrative functions are performed by officers or employees of
the Company or Bank. No such officer or employee receives compensation
from the ESOP for the administrative functions they perform. All
administrative expenses of the ESOP are paid by the Company or the Bank.
5. INVESTMENTS
The investments, at June 30, 1998 and 1997, are presented in the following
table:
<TABLE>
<CAPTION>
JUNE 30, 1998 JUNE 30, 1997
-------------------------- -------------------------
<S> <C> <C> <C> <C>
ALLOCATED UNALLOCATED ALLOCATED UNALLOCATED
---------- ----------- ---------- -----------
Investment in Marine
Midland Bank Short-
Term Investment Fund $31,074 $1,141 $435 $51,936
========== =========== ========== ===========
Shares of Dime
Community Bancshares,
Inc. Common Stock:
Number of shares 245,908 917,465 131,400 1,032,400
========== =========== ========== ===========
Cost $2,459,080 $9,174,650 $1,314,000 $10,324,000
========== =========== ========== ===========
Market $6,823,945 $25,459,655 $2,628,000 $20,648,000
========== =========== ========== ===========
</TABLE>
* * * * * *
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<PAGE>
SCHEDULE 1
THE EMPLOYEE STOCK OWNERSHIP PLAN OF DIME COMMUNITY
BANCSHARES, INC. AND CERTAIN AFFILIATES
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ITEM 27(a) SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT JUNE 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(A) (B) ( C ) (D) (E)
PARTIES IN INTEREST IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST MARKET
------------------- ------------------ ------------------------- ------------ ----------
Dime Community
Yes Bancshares, Inc. Shares of common stock $11,633,730 $32,283,600
Yes Marine Midland Bank Short-term investment fund 32,215 32,215
------------ ----------
Total $11,665,945 $32,315,815
============ ==========
</TABLE>
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Dime
Community Bancshares, Inc. and Certain Affiliates (the Plan Administrator) duly
caused this report to be signed on their behalf by the undersigned thereunder
duly authorized.
Dated: December 23, 1998
/s/ VINCENT F. PALAGIANO
----------------------------------
Vincent F. Palagiano
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Dated: December 23, 1998
/s/ KENNETH J. MAHON
----------------------------------
Kenneth J. Mahon
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
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