<PAGE>
Rule 424(b)(4)
Registration No. 333-3372
PROSPECTUS
8,407,500 SHARES
DIME BANCORP, INC.
COMMON STOCK
----------------
The shares of common stock, par value $0.01 per share ("Common Stock"), of
Dime Bancorp, Inc., a Delaware corporation (the "Company"), offered by this
Prospectus are being offered for the account of the Federal Deposit Insurance
Corporation (the "FDIC") as the manager of the FSLIC Resolution Fund (the
"FRF"; the FDIC in its capacity as manager of the FRF is referred to herein as
the "Selling Stockholder"). The Common Stock is listed on the New York Stock
Exchange, Inc. under the symbol "DME." On May 16, 1996, the last sale price
for the Common Stock as reported on the New York Stock Exchange was $11 3/4
per share.
The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange, Inc., subject to official notice of issuance.
PROSPECTIVE INVESTORS SHOULD CAREFULLY READ THIS PROSPECTUS, INCLUDING THE
MATERIAL INCORPORATED BY REFERENCE HEREIN AND THE MATERIAL UNDER THE HEADING
"INVESTMENT CONSIDERATIONS" BEGINNING ON PAGE 11 OF THIS PROSPECTUS.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE FDIC, THE OFFICE OF THRIFT SUPERVISION OR ANY
STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COM-
MISSION, THE FDIC, THE OFFICE OF THRIFT SUPERVISION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIM-
INAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION, AND ARE
NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROCEEDS TO PROCEEDS TO
PRICE TO UNDERWRITING THE SELLING THE
PUBLIC DISCOUNT (1) STOCKHOLDER (2) COMPANY (2)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.............. $11.75 $.35 $11.39 $.01
- --------------------------------------------------------------------------------
Total.................. $98,788,125 $2,942,625 $95,761,425 $84,075
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Each of the Company and the Selling Stockholder has agreed to indemnify
the Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, or to contribute to payments the Underwriters
may be required to make in respect thereof.
(2) Prior to completion of the sale of the Common Stock in the offering to
which this Prospectus relates, the Selling Stockholder will have acquired
such shares of Common Stock from the Company at a price of $0.01 per
share, pursuant to the terms of a Warrant held by the Selling Stockholder.
See "Selling Stockholder."
(3) Before deducting expenses payable by the Company estimated to be $361,000
(including reimbursement of certain expenses of the Selling Stockholder).
In addition, the Company has agreed to reimburse the Selling Stockholder
for one-half of the underwriters' discount in connection with this
offering, subject to a maximum. See "Selling Stockholder."
----------------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected
that delivery of the shares of Common Stock will be made in New York, New York
on or about May 22, 1996.
----------------
MERRILL LYNCH & CO.
----------------
The date of this Prospectus is May 16, 1996.
<PAGE>
DIME BRANCH NETWORK
[ART APPEARS HERE]
DIME MORTGAGE OPERATIONS
[ART APPEARS HERE]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's Regional Offices in New York
(Seven World Trade Center, 13th Floor, New York, New York 10048) and Chicago
(Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661), and copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Common Stock is listed on the New York Stock
Exchange, Inc. (the "NYSE"). Copies of reports, proxy statements and other
information should be available for inspection at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
The Company became the holding company of The Dime Savings Bank of New York,
FSB (the "Bank"; and, together with the Company, "Dime") pursuant to a
reorganization effected on May 25, 1994; until that time, such reports, proxy
statements and other information were filed with the Office of Thrift
Supervision (the "OTS"). Reports, proxy statements and other information filed
prior to May 25, 1994 should be available for inspection and copying at the
public reference facilities maintained by the OTS at the Office of Public
Information, Office of Thrift Supervision, 1700 G Street, N.W., Washington,
D.C. 20552, and also can be obtained by written request from such office at
prescribed rates.
This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3 of which this Prospectus is a part
(together with all amendments and exhibits thereto, the "Registration
Statement") and which the Company has filed with the Commission under the
Securities Act of 1933 (the "Securities Act"), certain portions of which have
been omitted pursuant to the rules and regulations of the Commission, and to
which reference is hereby made for further information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-13094) under Section 13(a) or 15(d) of the Exchange Act are hereby
incorporated by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended by Amendment No. 1 thereto on Form 10-K/A
filed on May 15, 1996 (the "Form 10-K") (provided, however, that the
information referred to in Item 402(a)(8) of Regulation S-K of the
Commission shall not be deemed incorporated by reference herein);
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1996;
(c) The Company's Current Report on Form 8-K, filed April 26, 1996;
(d) The description of the Common Stock set forth in the Registration
Statement on Form 8-A filed pursuant to Section 12 of the Exchange Act and
any amendment to that description so filed with the Commission; and
(e) The description of the rights to purchase Participating Preferred
Stock issued pursuant to the Rights Agreement (as herein defined) set forth
in the Registration Statement on Form 8-A filed pursuant to Section 12 of
the Exchange Act and any amendment to that description so filed with the
Commission.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus, and to be a part hereof, from
the dates of filing of such documents. Any statement contained herein or in a
document all or a portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement
3
<PAGE>
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, including any beneficial owner, upon the written or
oral request of any such person, a copy of any and all of the foregoing
documents which are incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
reference in such documents). Written requests should be directed to Dime
Bancorp, Inc., 589 Fifth Avenue, New York, New York 10017, Attention: Investor
Relations Department. Telephone requests should be directed to (212) 326-6170.
4
<PAGE>
SUMMARY
This summary is qualified in its entirety by the detailed information,
definitions and financial statements appearing elsewhere herein or incorporated
herein by reference. Unless the context otherwise requires, references herein
to the Company include the Company and its consolidated subsidiaries;
references herein to the Bank include the Bank and its consolidated
subsidiaries.
THE COMPANY AND THE BANK
General
The Company is a Delaware corporation and the holding company for the Bank.
The Company is registered with the OTS, and is subject to regulation and
examination, as a savings and loan holding company.
Headquartered in New York City, Dime currently operates 85 branch offices in
the New York City metropolitan area and northern New Jersey and one in Florida.
At March 31, 1996, the Company had total assets of $19.4 billion, total
deposits of $12.7 billion and total stockholders' equity of $986.1 million. The
Bank provides services to approximately 725,000 households, including
approximately 435,000 (or one out of ten) households in its nine-county New
York City metropolitan market area, based upon data from PSI Inc. for January
1996. The Bank was organized in 1859 and then converted from a state charter to
a federal charter in 1983 and to stock ownership in 1986.
At March 31, 1996, approximately 60% of the Bank's deposits were subject to
assessments payable to the Bank Insurance Fund (the "BIF") of the FDIC, and
approximately 40% of the Bank's deposits were subject to assessments payable to
the Savings Association Insurance Fund (the "SAIF") of the FDIC.
Merger-of-Equals with Anchor
On January 13, 1995, the Company consummated a merger of equals (the
"Merger") with Anchor Bancorp, Inc. ("Anchor Bancorp"), which was the parent
company of Anchor Savings Bank FSB ("Anchor Savings" and, together with Anchor
Bancorp, "Anchor"). Based on total assets as of December 31, 1995, the Merger
created the largest savings association headquartered on the East Coast and the
fifth largest publicly traded thrift institution in the United States. On
August 12, 1994, Anchor had acquired The Lincoln Savings Bank, FSB ("Lincoln")
and immediately thereafter had merged Lincoln with and into Anchor Savings (the
"Lincoln Acquisition").
In 1995, Dime substantially completed the integration of operations following
the Merger and the Lincoln Acquisition and achieved a substantial portion of
the aggregate reduction in annual general and administrative ("G&A") expense of
approximately $68 million that had been anticipated as a result of the Merger
and the Lincoln Acquisition. These cost savings were attributed to the
consolidation of overlapping branch offices, the integration of data processing
and loan servicing operations and the elimination of redundant corporate
overhead and staff positions. At June 30, 1994, Dime, Anchor and Lincoln on a
pro forma combined basis had 3,475 full-time equivalent ("fte") employees and
99 branches, compared to a combined 2,697 fte employees and 86 branches at
December 31, 1995, excluding additions to staff as a result of certain
acquisitions consummated in the fourth quarter of 1995. Prior to, and for a
period of time following, the Merger and the Lincoln Acquisition, the
operations then attributable to each of Dime, Anchor and Lincoln relied upon
distinct data processing systems, including systems covering retail banking,
accounting, loan origination and servicing, among other functions. By the first
quarter of 1996, these systems were integrated, and generally have enhanced
capabilities.
Consumer Banking
The Bank is one of the largest consumer banking organizations headquartered
in New York City. Currently, the Bank operates 37 branches in New York City, 23
branches in Long Island, 7 branches in Westchester and Rockland counties in New
York, 18 branches in New Jersey and one branch in Florida. Based on data from
SNL
5
<PAGE>
Securities, at June 30, 1995 after giving effect to completed and pending
acquisitions at the date hereof, the Company had the second largest market
share (approximately 16.2%) of deposits in Brooklyn and the fourth largest
market share of deposits (approximately 8.5%) in Nassau County and ranked among
the top ten in terms of deposit market share in five other metropolitan New
York area counties. The Bank seeks to maintain the high-quality, personalized
services traditionally offered by smaller banking organizations, while offering
a variety of consumer financial products and services comparable to those
offered by large commercial banks. Through this strategy, the Bank seeks to
distinguish itself from both its larger competitors, based upon its position as
a community-oriented institution emphasizing personalized service, and its
smaller competitors, based upon the greater breadth of its product and service
lines.
The Bank delivers its banking services through a variety of delivery
channels. As of December 31, 1995, the Bank's 85 branches in the greater New
York metropolitan area had average deposits per branch of over $140 million,
substantially in excess of the $83 million average for commercial banks and
thrift institutions in the counties in which the Bank's branches are located
(based on information from SNL Securities at June 30, 1995). In addition to
receiving banking services through its branches, the Bank's customers may
conduct their banking activities through the Bank's 24-hour telephone banking
system, through over 100 proprietary automated teller machines ("ATMs") or
through over 200,000 ATMs worldwide belonging to the six ATM networks in which
the Bank participates.
In addition to its traditional deposit and loan products, Dime offers a
variety of securities brokerage and insurance services. Dime Securities of New
York, Inc., a securities brokerage subsidiary of the Bank, generates fee income
through the sale of stocks, bonds, mutual funds and annuities. Dime also offers
savings bank life insurance ("SBLI") through its customer service
representatives and its direct mail marketing programs. At December 31, 1995,
Dime serviced approximately 75,000 policies with over $3 billion of insurance
in force. Dime also offers a variety of products that supplement its SBLI
program, including credit insurance, term- and whole-life insurance and single-
premium life insurance.
Mortgage Banking
Dime's mortgage banking business consists principally of originating and
acquiring loans secured by residential properties (one-to-four family
properties and cooperative apartments), both for sale in the secondary market
and for Dime's own portfolio, and servicing residential property loans both for
itself and for others. In recent years, Dime has focused on increasing its
residential loan origination capabilities in its core lending area of New York,
New Jersey and Connecticut, while also pursuing a strategy of controlled growth
in markets that the Company finds attractive outside that core lending area. In
the fourth quarter of 1995, Dime acquired certain assets related to the
residential property loan origination businesses of National Mortgage
Investments Co., Inc., a Georgia-based mortgage banking company ("National
Mortgage"), and James Madison Mortgage Company, a Virginia-based lender
("Madison Mortgage"), each of which was an established lender in its respective
market. At the time of the acquisition of National Mortgage, it operated 24
retail offices in Georgia, Virginia, South Carolina and Maryland; and Madison
Mortgage at the time of its acquisition operated through seven offices in
Virginia, Maryland and South Carolina. These acquisitions are expected to
provide Dime with both greater geographic diversification and enhanced Federal
Housing Administration ("FHA") insured and Veterans Administration ("VA")
guaranteed lending capability. For the year ended December 31, 1995, the
Company believes that National Mortgage and Madison Mortgage were among the
leading residential mortgage originators in the Atlanta and Washington, D.C.
metropolitan areas, respectively.
As a result of these acquisitions and other efforts, Dime's residential
mortgage production (which includes both originations and purchases) has
increased steadily from $180.1 million in the first quarter of 1995 to $747.9
million in the fourth quarter of 1995 to $904.9 million in the first quarter of
1996.
Dime's portfolio of loans serviced for others was approximately $9.4 billion
at March 31, 1996.
6
<PAGE>
Commercial Real Estate Lending
Dime originates loans secured by multifamily and commercial properties
located primarily within the greater New York metropolitan area. Dime
originated $232.6 million and $31.0 million of such loans for the year ended
December 31, 1995 and the quarter ended March 31, 1996, respectively, and had a
total of $1.9 billion of such loans outstanding at March 31, 1996.
Consumer Lending and Small-Business Banking
Dime's recent retail banking strategy has been to refocus its consumer
lending capabilities through its branch system, including training of branch
employees regarding both product knowledge and sales techniques and upgrading
its marketing efforts. These marketing efforts include the development of
telemarketing capabilities that are intended to identify prospective customers,
facilitate timely responses to customer inquiries and promote effective loan
processing. In 1994, Dime began its small-business banking program, through
which it intends to expand its deposit-taking and lending programs for entities
with annual revenues of less than $10 million, although no assurance can be
made that such efforts will be successful. At March 31, 1996, the Company had
consumer and business loans of $727.9 million and $32.9 million, respectively.
1995 Balance Sheet Restructuring Plan and Stock Buy-Back Program
Dime's current operating strategies focus on improving net interest income by
reducing its reliance on mortgage-backed securities ("MBS"), which, in general,
provide lower yields than Dime's loans, and by reducing its reliance on
borrowings, which generally are more volatile than Dime's retail funding
sources. In connection with a decision by the Financial Accounting Standards
Board in October 1995 to allow entities a one-time opportunity to reassess
their security classifications made pursuant to Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," in the fourth quarter of 1995, the Company transferred
securities with an amortized cost of $3.6 billion (including $3.5 billion of
MBS), from its held-to-maturity portfolio to its available-for-sale portfolio;
of such transferred MBS, $1.1 billion were designated for sale at December 31,
1995. These MBS were sold in the first quarter of 1996, and the proceeds were
used to reduce its outstanding borrowings and, accordingly, the size of the
Company's consolidated balance sheet (the "1995 Balance Sheet Restructuring
Plan"). The Company's management believes that the 1995 Balance Sheet
Restructuring Plan, in addition to reducing Dime's reliance on MBS and
borrowings, should: (a) enable Dime to improve its net interest margin by
eliminating from the MBS portfolio certain lower yielding securities; (b)
provide Dime with greater flexibility in adjusting to varying interest rate
environments (see "Certain Investment Considerations--Interest Rate Risks");
and (c) provide Dime with the opportunity to further reduce its asset size,
should that be deemed appropriate. No assurances can be given, however, that
the Company will be successful in such efforts. As a result of the decision to
sell these securities, the Company recognized a pre-tax loss of $23.6 million
in December 1995, reflecting the write-down of those securities with unrealized
losses to estimated fair value.
In January 1996, the Company announced its intention to repurchase, in
connection with the Company's stock-based employee benefit plans, approximately
2% of the outstanding Common Stock, or approximately 2,000,000 shares, at
prevailing prices in the open market or in privately-negotiated transactions.
No time limit has been established to complete the repurchase program, and
there can be no assurances that such repurchases will be completed or as to the
prices at which any shares may be repurchased. During the first quarter of
1996, the Company repurchased 1,000,000 of such shares.
Claim Regarding Supervisory Goodwill
As is the case with a number of thrift institutions, Dime, as successor to
Anchor Savings, has filed a claim against the United States for the loss of its
ability to include supervisory goodwill in the calculation of regulatory
capital that resulted from the passage of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"). The direct effect of the
passage of FIRREA was to cause Anchor Savings to go from an
7
<PAGE>
institution that substantially exceeded its regulatory capital requirements to
one that was critically undercapitalized upon the effectiveness of FIRREA-
mandated requirements. The elimination of the supervisory goodwill resulted in
severe limitations on Anchor Savings' activities and required the disposition
of valuable assets under liquidation-like circumstances. No assurances can be
given as to the results of this claim or the timing of any proceeding in
relation thereto. For a discussion of the factual background of this claim, see
"Investment Considerations--Legal Proceedings--Claim Related to Supervisory
Goodwill."
THE OFFERING
The 8,407,500 shares of Common Stock offered by this Prospectus are being
offered for the account of the Selling Stockholder.
Prior to the completion of the sale of the Common Stock in this offering, the
Selling Stockholder will have acquired such shares of Common Stock from the
Company at a price of $0.01 per share, pursuant to the terms of a Warrant,
dated July 9, 1993 (the "Warrant"), issued by the Company (as successor to
Anchor Bancorp) to the Selling Stockholder. See "Selling Stockholder."
RECENT DEVELOPMENTS--FIRST QUARTER RESULTS
The Company reported net income of $27.1 million, or $0.25 per common share,
for the three months ended March 31, 1996, compared with $22.4 million, or
$0.20 per common share, for the three months ended March 31, 1995. (Per share
calculations were based upon the fully diluted average number of shares
outstanding during the period.) The quarter ended March 31, 1995 included net
pre-tax gains on sales activities, primarily related to sales of branches and
facilities, of $9.7 million. The return on average total assets was 0.54% and
the return on average equity was 10.93% for the three months ended March 31,
1996, as compared with a return on average total assets of 0.44% and a return
on average equity of 9.86% for the three months ended March 31, 1995.
The Company's net interest income increased to $114.3 million for the three
months ended March 31, 1996 from $107.4 million for the three months ended
March 31, 1995. The net interest margin increased to 2.35% for the three months
ended March 31, 1996 from 2.16% for the three months ended March 31, 1995.
These increases were primarily attributable to the 1995 Balance Sheet
Restructuring Plan (see "--The Company and the Bank--1995 Balance Sheet
Restructuring and Stock Buy-Back Program") and the upward repricing of
adjustable-rate loans and securities. The provision for loan losses was $10.5
million for the three months ended March 31, 1996, compared with $10.0 million
for the three months ended March 31, 1995.
Non-interest income, excluding net gains on sale activities, for the three
months ended March 31, 1996 was $20.9 million, up from $19.9 million for the
three months ended March 31, 1995. The increase was the result of growth in
banking service fees and the sale of securities and insurance products.
G&A expense for the three months ended March 31, 1996 was $70.2 million, or
1.39% of average assets, compared with $78.9 million, or 1.55% of average
assets, for the three months ended March 31, 1995. The Company's efficiency
ratio (generally defined as G&A expense, other than amortization of goodwill,
divided by the sum of net interest income and recurring non-interest income)
decreased to 51.0% for the three months ended March 31, 1996 from 61.9% for the
three months ended March 31, 1995. This improvement in operating efficiency was
largely attributable to an increase in net interest income and to cost savings
related to the Merger.
As a result of the 1995 Balance Sheet Restructuring Plan, at March 31, 1996,
the Company's total assets were $19.4 billion, compared with $20.3 billion at
December 31, 1995. Total deposits increased to $12.7 billion at March 31, 1996
from $12.6 billion at December 31, 1995. Non-performing assets were reduced to
$313.4 million at March 31, 1996 from $315.8 million at December 31, 1995.
The Bank's regulatory leverage capital was 5.60% of adjusted assets at March
31, 1996, compared with 5.16% at December 31, 1995. Risk-based regulatory
capital was 12.55% of risk-weighted assets at March 31, 1996, compared with
12.01% at December 31, 1995. As a result, at March 31, 1996, the Bank continued
to satisfy the published standards for a "well capitalized" institution under
OTS regulations. See "Description of Capital Stock--Certain Regulatory
Restrictions on Capital Distributions."
8
<PAGE>
DIME BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth, in summary form, certain financial data for
each of the years in the five-year period ended December 31, 1995 and for each
of the three-month periods ended March 31, 1996 and 1995. These selected
consolidated financial data are qualified in their entirety by the detailed
information and the consolidated financial statements of the Company and notes
thereto included in documents incorporated by reference in this Prospectus and
should be read in conjunction therewith. See "Incorporation of Certain
Documents By Reference." The consolidated financial statements for each of the
years in the five-year period ended December 31, 1995 have been audited by KPMG
Peat Marwick LLP, independent certified public accountants, and the related
auditor's report for the three-year period ended December 31, 1995 refers to
changes in accounting principles for post-retirement benefits other than
pensions, certain investments in debt and equity securities and goodwill. The
selected consolidated financial data at or for the three-month periods ended
March 31, 1996 and 1995 are derived from unaudited financial statements that,
in the opinion of Dime's management, include all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
consolidated financial position and results of operations for such periods.
Results for the three-month period ended March 31, 1996 are not necessarily
indicative of the results expected for the full year ending December 31, 1996.
For purposes of this presentation, the results provided for each of the years
ended December 31, 1993, 1992 and 1991 include Anchor's results at or for its
fiscal year ended June 30th of the subsequent calendar year.
<TABLE>
<CAPTION>
AT OR FOR THE
THREE MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED DECEMBER 31,
----------------- --------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- ---------- ---------- -------- ---------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
DATA:
Interest income......... $343,528 $332,549 $1,357,131 $1,136,862 $980,111 $1,243,664 $1,535,669
Interest expense........ 229,193 225,158 947,505 707,785 589,939 753,288 1,101,592
-------- -------- ---------- ---------- -------- ---------- ----------
Net interest income..... 114,335 107,391 409,626 429,077 390,172 490,376 434,077
Provision for loan
losses................. 10,500 9,950 39,650 55,799 95,489 103,684 343,427
-------- -------- ---------- ---------- -------- ---------- ----------
Net interest income
after provision for
loan losses............ 103,835 97,441 369,976 373,278 294,683 386,692 90,650
-------- -------- ---------- ---------- -------- ---------- ----------
Non-interest income:
Loan servicing fees,
net................... 7,663 8,274 30,452 28,213 30,001 32,270 26,427
Securities and
insurance brokerage
fees.................. 4,674 3,440 15,532 16,885 22,336 22,111 13,898
Net (losses) gains on
sales activities...... 461 9,675 (12,415) 2,925 36,606 28,544 55,356
Banking service fees
and other............. 8,539 8,206 32,598 31,244 33,582 35,789 32,195
-------- -------- ---------- ---------- -------- ---------- ----------
Total non-interest
income................. 21,337 29,595 66,167 79,267 122,525 118,714 127,876
-------- -------- ---------- ---------- -------- ---------- ----------
Non-interest expense:
General and
administrative
expense............... 70,194 78,893 285,901 294,474 294,755 323,122 323,165
Other real estate owned
expense, net.......... 2,493 3,676 12,892 11,013 77,393 50,204 40,961
Amortization of
mortgage servicing
rights................ 3,194 2,764 12,107 9,664 19,884 26,650 7,871
Restructuring and
merger-related
expense............... 3,504 1,725 15,331 58,258 4,000 3,000 9,718
-------- -------- ---------- ---------- -------- ---------- ----------
Total non-interest
expense................ 79,385 87,058 326,231 373,409 396,032 402,976 381,715
-------- -------- ---------- ---------- -------- ---------- ----------
Minority interest-
preferred stock
dividend of
subsidiary............. -- -- -- 11,433 1,312 -- --
-------- -------- ---------- ---------- -------- ---------- ----------
Income (loss) before
income tax expense
(benefit),
extraordinary item and
cumulative effect of a
change in accounting
principle.............. 45,787 39,978 109,912 67,703 19,864 102,430 (163,189)
Income tax expense
(benefit).............. 18,732 17,556 47,727 (53,138) (68,959) 41,642 9,437
-------- -------- ---------- ---------- -------- ---------- ----------
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle.............. 27,055 22,422 62,185 120,841 88,823 60,788 (172,626)
Extraordinary item-loss
on early extinguishment
of debt................ -- -- -- -- -- (2,760) --
Cumulative effect of a
change in accounting
principle for goodwill,
securities available
for sale and mortgage
servicing rights,
respectively........... -- -- -- (92,887) (1,187) (7,066) --
-------- -------- ---------- ---------- -------- ---------- ----------
Net income (loss)....... $ 27,055 $ 22,422 $ 62,185 $ 27,954 $ 87,636 $ 50,962 $ (172,626)
======== ======== ========== ========== ======== ========== ==========
Net income (loss)
attributable to common
stock.................. $ 27,055 $ 22,422 $ 62,185 $ 27,954 $ 87,636 $ 39,403 $ (185,304)
======== ======== ========== ========== ======== ========== ==========
Primary and fully
diluted earnings (loss)
per common share:
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle............. $ 0.25 $ 0.20 $ 0.57 $ 1.12 $ 0.91 $ 0.89 $ (3.43)
Extraordinary item..... -- -- -- -- -- (0.05) --
Cumulative effect of a
change in accounting
principle............. -- -- -- (0.86) (0.01) (0.13) --
-------- -------- ---------- ---------- -------- ---------- ----------
Net income (loss)....... $ 0.25 $ 0.20 $ 0.57 $ 0.26 $ 0.90 $ 0.71 $ (3.43)
======== ======== ========== ========== ======== ========== ==========
</TABLE>
9
<PAGE>
DIME BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
AT OR FOR THE
THREE MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED DECEMBER 31,
------------------------ ---------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
DATA (CONTINUED):
Pro forma amounts
assuming the changes in
accounting principles
for goodwill and
mortgage servicing
rights were applied
retroactively:
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle............. $ 120,841 $ 90,133 $ 52,120 $ (196,961)
Extraordinary item..... -- -- (2,760) --
Cumulative effect of a
change in accounting
principle for
securities available
for sale, net of
income tax benefit.... -- (1,187) -- --
----------- ----------- ----------- -----------
Net income (loss)...... $ 120,841 $ 88,946 $ 49,360 $ (196,961)
=========== =========== =========== ===========
Primary and fully
diluted earnings
(loss) per share:
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle............. $ 1.12 $ 0.93 $ 0.73 $ (3.88)
Extraordinary item..... -- -- (0.05) --
Cumulative effect of a
change in accounting
principle for
securities available
for sale, net of
income tax benefit.... -- (0.01) -- --
----------- ----------- ----------- -----------
Net income (loss)...... $ 1.12 $ 0.92 $ 0.68 $ (3.88)
=========== =========== =========== ===========
Primary average common
shares outstanding..... 110,020 109,510 109,742 107,668 97,153 55,344 54,046
Fully diluted average
common shares
outstanding............ 110,196 109,590 109,862 107,700 97,367 55,386 54,046
FINANCIAL CONDITION
DATA:
Total assets............ $19,413,115 $19,737,160 $20,326,620 $19,647,937 $18,098,984 $16,680,405 $17,835,764
Securities available for
sale................... 3,252,807 516,928 4,070,865 530,714 658,204 898,279 233,131
Securities held to
maturity............... 4,809,976 8,863,765 5,085,736 8,609,897 8,159,747 6,678,036 6,804,023
Federal Home Loan Bank
of New York stock...... 318,690 213,836 318,690 265,586 273,551 187,075 144,402
Total loans receivable.. 10,007,633 9,356,776 9,830,313 9,351,622 7,906,573 7,629,100 9,101,959
Allowance for loan
losses................. (127,193) (164,669) (128,295) (170,383) (157,515) (248,429) (329,899)
Deposits................ 12,664,315 12,543,460 12,572,203 12,811,269 11,091,362 13,039,885 14,569,605
Total borrowed funds.... 5,624,228 6,106,377 6,614,552 5,758,734 5,850,575 2,888,269 2,486,194
Total stockholders'
equity................. 986,141 930,247 976,530 905,125 904,982 635,843 584,441
OTHER DATA:(1)
Book value per common
share(2)............... $ 9.19 $ 8.64 $ 9.03 $ 8.43 $ 8.48 $ 8.79 $ 7.90
Interest rate spread.... 2.26% 2.08% 1.98% 2.26% 2.40% 2.93% 2.43%
Net interest margin..... 2.35 2.16 2.07 2.36 2.47 2.91 2.44
General and
administrative expense
as a percentage of
average total assets... 1.39 1.55 1.39 1.56 1.79 1.83 1.74
Efficiency ratio........ 50.99 61.87 58.11 58.49 60.11 53.70 60.89
Return on average
assets................. 0.54 0.44 0.30 0.15 0.53 0.29 (0.93)
Return on average common
stockholders' equity... 10.93 9.86 6.56 3.25 11.07 10.99 (28.96)
Common stockholders'
equity as a percentage
of total assets........ 5.08 4.71 4.80 4.61 5.00 2.87 2.40
Total non-performing
assets................. $ 313,379 $ 389,349 $ 315,800 $ 415,866 $ 641,743 $ 1,010,877 $ 1,184,840
Total non-performing
assets as a percentage
of total assets........ 1.61% 1.97% 1.55% 2.12% 3.55% 6.06% 6.64%
Allowance for loan
losses as a percentage
of:
Loans receivable....... 1.27 1.76 1.31 1.82 1.99 3.26 3.62
Non-accrual loans...... 49.93 50.56 50.29 49.84 54.14 31.97 33.71
Loans serviced for
others................. $ 9,376,735 $ 9,042,758 $ 9,514,560 $ 8,713,047 $ 8,265,354 $ 9,039,183 $ 7,718,000
</TABLE>
- -------
Notes:
(1) Ratios for the three months ended March 31, 1996 and 1995 have been
annualized.
(2) The book value computations for the years ended December 31, 1995, 1994 and
1993 and the three months ended March 31, 1996 and 1995 assume that the
Warrant had been exercised by the Selling Stockholder.
10
<PAGE>
INVESTMENT CONSIDERATIONS
Investment in the Common Stock involves certain risks. Prospective
purchasers should carefully consider the following risk factors, in addition
to the other information included in this Prospectus, when evaluating the
Company and its business in making an investment decision.
Except for the historical information included or incorporated by reference
in this Prospectus, the discussion in this Prospectus contains certain
forward-looking statements that involve risks and uncertainties, such as
statements of Dime's plans, objectives, expectations and intentions. The
cautionary statements made in this Prospectus should be read as being
applicable to all related forward-looking statements wherever they appear in
this Prospectus or in the documents incorporated by reference herein. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include those
discussed below, as well as those discussed elsewhere herein or in the
documents incorporated by reference herein.
GENERAL BUSINESS RISKS
Dime's business is subject to various material business risks. For example,
changes in prevailing interest rates can have significant effects on Dime's
business. Some of the risks to which Dime's business is subject may become
more acute in periods of economic slowdown or recession. During such periods,
foreclosures generally increase and could result in an increased incidence of
claims and legal actions against Dime. In addition, such conditions could lead
to a potential decline in demand for Dime's loan origination services.
INTEREST RATE RISK
Dime realizes its income primarily from the differential or "spread" between
the interest earned on loans and investments and the interest paid on deposits
and borrowings. Net interest spreads are affected by the difference between
the maturities and the repricing characteristics of interest-earning assets
and interest-bearing liabilities. As is typical of most thrift institutions,
Dime's interest-bearing liabilities reprice or mature, on the average, sooner
than its interest-earning assets. Additionally, the characteristics of many of
Dime's interest-earning assets (such as pre-payment options, interest rate
caps and similar features) are sensitive to changes in the level of interest
rates. Although Dime utilizes a variety of techniques in an effort to manage
its interest rate risk, Dime remains subject to a significant level of
interest rate risk. In addition, changes in the relationship between long-term
and short-term interest rates (the "yield curve") can have a significant
impact on Dime's net interest income.
COMPETITION
Dime experiences substantial competition both in attracting and retaining
deposits and in making loans. Its most direct competition for deposits
historically has come from other thrift institutions and commercial banks
doing business in the greater New York metropolitan area. However, as with all
banking organizations, Dime has experienced increasing competition from
nonbanking sources. For example, Dime also competes for funds with mutual
funds, corporate and governmental debt securities and other investment
alternatives. Dime's competition for loans comes principally from other thrift
institutions, commercial banks, mortgage banking companies, consumer finance
companies, insurance companies and other institutional lenders. A number of
institutions with which Dime competes for deposits and loans have
significantly greater assets and capital than Dime.
REGULATION
Each of the Company, as a savings and loan holding company, and the Bank, as
a federal savings bank, is subject to significant regulation, which has
materially affected their businesses as well as the businesses of other
banking organizations in the past and is likely to do so in the future.
Statutes and regulations now affecting the Company and the Bank may be changed
at any time, and the interpretation of these statutes and regulations by
examining authorities is also subject to change. There can be no assurance
that future changes in the regulations or in their interpretation will not
adversely affect the business of Dime. As a savings and loan holding company,
the Company is subject to regulation and examination by the OTS. As a federal
savings association, the Bank is
11
<PAGE>
subject to examination from time to time by the OTS, its primary regulator,
and the FDIC, as administrator of the BIF and the SAIF. There can be no
assurance that the OTS or the FDIC may not, as a result of such examinations
or otherwise, impose various requirements or regulatory sanctions upon the
Bank or the Company.
BIF-SAIF PREMIUM DISPARITY AND POSSIBLE RECAPITALIZATION OF THE SAIF
The Bank is a member of the BIF, to which the Bank pays FDIC deposit
insurance assessments for approximately 60% of its deposits. As a result of
its merger with Anchor, approximately 40% of the Bank's deposits are subject
to FDIC deposit insurance assessments payable to the SAIF. Until mid-1995, the
FDIC assessed both BIF-insured deposits and SAIF-insured deposits at rates
ranging between 0.23% and 0.31% of insured deposits, depending on the capital
level and risk category assigned to the institution. However, because the BIF
has attained its required reserve ratio of 1.25%, the FDIC was able to reduce
the premium schedule for BIF deposits to a range of 0.0% to 0.27% effective in
the first quarter of 1996. Because the SAIF has not reached (and, in fact, may
never reach) its 1.25% statutory reserve ratio, the FDIC has not reduced
premiums payable on SAIF deposits. As a result, the Bank pays higher premiums
on its SAIF-assessed deposits than on its BIF-assessed deposits, and suffers a
competitive disadvantage with respect to commercial banks and other
institutions that are wholly BIF-assessed.
Without legislative action, this assessment imbalance is expected to
continue for at least the next several years. The Department of the Treasury,
the federal banking regulatory agencies and members of Congress have offered
various proposals to address this imbalance. These proposals have variously
called for one or more of the following: a one-time special assessment of all
SAIF-assessed deposits to recapitalize the SAIF; the merger of the BIF and the
SAIF; the elimination of the OTS; and the elimination of the federal savings
association charter (see "--Elimination of the Thrift Charter"). In addition,
certain of these proposals would address to some extent the federal income tax
consequences of the elimination of the federal savings association charter.
The Administration and certain members of Congress have continued to
advocate the adoption of legislation to address the assessment imbalance, and
a number of proposals are still pending in Congress, including proposals
providing for a one-time assessment in connection with a merger of the BIF and
the SAIF. No assurance can be given as to whether, when or in what form
legislation on the SAIF recapitalization ultimately will be enacted, or the
effect of any such legislation on Dime. A special assessment, however, would
have an adverse effect on Dime's financial condition and earnings.
ELIMINATION OF THE THRIFT CHARTER
Members of Congress have expressed their intention to consider legislation
in 1996 that generally would require federal savings associations, such as the
Bank, to convert to a national bank charter (or a state charter); and
legislation has been proposed in Congress that envisions such action as part
of a BIF-SAIF recapitalization package. It is uncertain to what extent, if at
all, the existing branch and investment powers of federal savings
associations, such as the Bank, that are impermissible for national banks,
would be grandfathered. In addition, the proposals express the intent that
savings and loan holding companies, such as the Company, should convert to
bank holding companies. It is also uncertain to what extent, if at all, the
existing powers of savings and loan holding companies that are impermissible
for national banks, would be grandfathered. In addition, unless such
legislation provided grandfathering or other remedial provisions, a charter
conversion could result in recapture of deductions for bad debts previously
taken by a savings association for tax purposes. Consequently, it is
impossible at this time to evaluate the ultimate form any legislation might
take or what the effect upon Dime might be.
PROPOSED TAX LEGISLATION
Legislation proposed both by Congress and by President Clinton would, among
other things, raise questions concerning recapture of income tax deductions
arising from commonly utilized methods of calculating bad debt reserves.
Unless clarifying legislation is adopted, affected institutions could be
required to record, immediately for financial accounting purposes, a deferred
tax liability for the amount of recaptured taxes for which liabilities have
not been recorded. Dime currently estimates that its federal tax liability in
the event of such a recapture might range from $60 million to $65 million,
although other pending legislation would virtually eliminate Dime's exposure
to this tax liability. There can be no assurance as to the outcome of these
various legislative proposals, the effect of which could be material to Dime's
financial condition and earnings.
12
<PAGE>
LIMITATIONS ON USE OF TAX LOSSES; RESTRICTIONS ON TRANSFER OF STOCK
As of December 31, 1995, the Company had net deferred tax assets of $223.5
million reflected on its consolidated balance sheet. The tax deductions
associated with these deferred tax assets may be reviewed and potentially
disallowed by the Internal Revenue Service (the "IRS"). In addition, such tax
deductions would be subject to significant limitation under Section 382 of the
Internal Revenue Code of 1986, as amended (the "Code"), if the Company
undergoes an "ownership change" (as defined below). In the event of an
ownership change, Section 382 imposes an annual limitation on the amount of
taxable income a corporation may offset with net operating loss carryforwards
and certain recognized built-in losses. The limitation equals the product of
(i) the fair market value of the corporation's equity on the date of an
ownership change (the "Change Date") (with certain adjustments, including an
adjustment excluding certain capital contributions made in the two years
preceding the Change Date) and (ii) a long-term tax-exempt bond rate as
defined by the Code.
The Company would undergo an "ownership change" if the stockholders who own
or have owned, directly or indirectly, 5% or more of the Common Stock or are
otherwise treated as 5% stockholders under Section 382 of the Code ("5%
stockholders"), increase their aggregate percentage ownership of such stock by
more than 50 percentage points over the lowest percentage of such stock owned
by such stockholders at any time during the testing period (generally the
preceding three years). In applying Section 382, under a special rule, at
least a portion of newly issued stock is considered to be acquired by a new 5%
stockholder even if no person acquiring the stock in fact owns as much as five
percent of the issuer's stock. Under this rule, the Company believes that all
of the Common Stock that was issued to former Anchor stockholders in the
Merger probably would be considered by the IRS to have been acquired by a new
5% stockholder. The sale of shares of Common Stock by the Selling Stockholder
under this Prospectus is not expected to increase materially the likelihood
that an ownership change will occur.
Based on the information currently available to the Company, it does not
currently believe that the issuance of shares of Common Stock in the Merger
resulted in an ownership change. However, the application of Section 382 is
highly complex and uncertain in some respects. In addition, the Merger
resulted in a substantial increase in the percentage of ownership of capital
stock of the Company by 5% stockholders. Accordingly, although the Company
does not believe that the Merger caused an ownership change, the Merger may
have increased significantly the likelihood that an ownership change could
occur in the three years after the effective date of the Merger. The
acquisition of stock by a 5% stockholder during this three-year period could
cause an ownership change.
The Company's Restated Certificate of Incorporation, as amended (the
"Charter"), limits transfers of shares of Common Stock and other interests in
the Company that would be treated as stock under the Code or applicable IRS
regulations and certain options that would either cause a person or entity to
become a 5% stockholder or increase a 5% stockholder's percentage ownership
interest, in an effort to prevent transfers of Common Stock from triggering an
ownership change. These restrictions would not prevent settlement of any
transaction through the NYSE and the directors of the Company retain the
discretion to waive these limitations or to take certain other actions that
could trigger an ownership change should it appear advantageous for the
Company to allow an ownership change to take place. A regular trade in Common
Stock through the NYSE by a person or entity that does not, and will not, own
directly or indirectly 5% or more of the capital stock of the Company before
or after the trade generally will not be limited by the Charter. See
"Description of Capital Stock--Restrictions on Transfer of Stock."
GOVERNMENTAL IMMUNITY OF THE SELLING STOCKHOLDER
The doctrine of sovereign immunity, as limited by the Federal Tort Claims
Act, 28 U.S.C. (S)(S) 1346(b) and 2671 et seq., as amended, provides that
claims may not be brought against the United States of America or any agency
or instrumentality thereof unless specifically permitted by act of Congress.
The Federal Tort Claims Act bars claims for fraud or misrepresentation, and
courts have held, in cases involving the FDIC as well as other federal
agencies and instrumentalities, that the United States may assert its
sovereign immunity to claims brought under the federal securities laws. Thus,
any attempt to assert a claim against the Selling Stockholder alleging a
13
<PAGE>
violation of the federal securities laws, including the Securities Act and the
Exchange Act, resulting from an alleged material misstatement in or material
omission from the Registration Statement or this Prospectus, or any other act
or omission in connection with the offering to which this Prospectus relates,
probably would be barred. In addition, Section 2(f)(1) of the Federal Deposit
Insurance Act (the "FDI Act"), 12 U.S.C. (S) 1812(f)(1), specifically provides
that directors, members, officers and employees of the FDIC have no liability
under the Securities Act with respect to any claim arising out of or resulting
from any alleged act or omission by such person within the scope of such
person's employment in connection with any transaction involving the
disposition of assets (or any interests in assets or any obligations backed by
any assets) by the FDIC. Moreover, the Selling Stockholder has advised the
Company that the FDIC and its directors, officers, agents, and employees are
exempt from liability for any violation or alleged violation of the anti-fraud
provisions of Section 10(b) of the Exchange Act by virtue of Section 3(c)
thereof. Accordingly, any attempt to assert such a claim against the
directors, members, officers or employees of the FDIC for a violation of the
Securities Act or the Exchange Act resulting from an alleged material
misstatement in or material omission from the Registration Statement or this
Prospectus or any other act or omission in connection with the offering of
Common Stock hereunder probably would be barred.
CERTAIN LEGAL PROCEEDINGS
On January 13, 1995, Anchor Savings filed suit in the United States Court of
Federal Claims against the United States for breach of contract and taking of
property without compensation in contravention of the Fifth Amendment of the
United States Constitution. The action arose because the passage of FIRREA and
the regulations adopted by the OTS pursuant to FIRREA deprived Anchor of the
ability to include supervisory goodwill and certain other assets for purposes
of computing its regulatory capital as the Federal Savings and Loan Insurance
Corporation ("FSLIC") had previously agreed it could. The direct effect was to
cause Anchor Savings to go from an institution that substantially exceeded its
regulatory capital requirements to one that was critically undercapitalized
upon the effectiveness of the FIRREA-mandated requirements.
From 1982 to 1985, Anchor Savings acquired eight FSLIC-insured institutions
that were in danger of failing or causing a loss to the FSLIC. Four
institutions were acquired with some financial assistance from the FSLIC and
four were unassisted "supervisory" cases. In acquiring the institutions,
Anchor Savings assumed liabilities determined to exceed the assets it acquired
by over $600 million at the dates of the respective acquisitions. The
difference between the fair values of the assets acquired and the liabilities
assumed in the transactions was recorded on Anchor Savings' books as goodwill.
The FSLIC agreed that this supervisory goodwill was to be amortized over
periods of up to 40 years. Without that agreement, Anchor Savings would not
have made the acquisitions. When the capital regulations imposed under FIRREA
became effective, Anchor Savings still had over $470 million of supervisory
goodwill on its books and approximately 20 years remaining to amortize it
under the agreements with FSLIC. The FIRREA capital requirements excluded all
but approximately $124 million of Anchor Savings' supervisory goodwill and
also excluded $157 million associated with preferred stock issued to the FSLIC
as a result of one of the acquisitions. The remaining supervisory goodwill was
required to be eliminated by December 31, 1994, rather than over more than 20
years, as had been agreed. The elimination of the supervisory goodwill
resulted in severe limitations on Anchor Savings' activities and required the
disposition of valuable assets under liquidation-like circumstances. The
complaint asks the government to make Anchor Savings whole for the effects of
the loss, which are estimated to exceed substantially the goodwill remaining
at the time FIRREA was enacted.
There are over 100 similar cases pending in the United Stated Court of
Federal Claims, which has entered summary judgment for the plaintiffs as to
liability, but not damages, in three of the cases. These three cases (the
"Winstar cases") were appealed to the United States Court of Appeals for the
Federal Circuit, which affirmed the judgment for the plaintiffs following a
hearing en banc after a three-judge panel had found for the government. The
United States Supreme Court has agreed to review the decision in the Winstar
cases; oral argument occurred on April 24, 1996, and the Supreme Court is
expected to issue a decision during 1996. The Anchor Savings claim has been
stayed, pending the decisions of the Supreme Court in the Winstar cases. There
have been no decisions determining damages in any of the supervisory goodwill
cases. The Company is unable
14
<PAGE>
to predict the outcome of its claim against the United States and the amount
of any damages that may be awarded to Dime, if any, in the event that judgment
is made in favor of Dime. Consequently, no assurances can be given as to the
results of this claim or the timing of any proceeding in relation thereto.
USE OF PROCEEDS
The sale of the shares of the Common Stock offered hereby is for the account
of the Selling Stockholder. Accordingly, the Company will not receive any
proceeds from the sale to the public of the shares of Common Stock offered
hereby. Pursuant to the Warrant, at the time of completion of this offering,
the Selling Stockholder will have acquired all such shares of Common Stock
from the Company at a price of $0.01 per share. See "Selling Stockholder."
SELLING STOCKHOLDER
The FDIC is a government-controlled corporation and an instrumentality of
the United States of America. Under the provisions of FIRREA, all the assets
and liabilities of the FSLIC were transferred to the FRF, which is managed by
the FDIC. Shares of preferred stock, which originally had been issued by
Anchor to FSLIC, were among the assets transferred from FSLIC to the FRF.
These shares were subsequently exchanged for $71,000,000 of 8.9375% Senior
Notes due July 9, 2003 (the "8.9375% Senior Notes"), which were sold by the
Selling Stockholder as part of a public offering in October 1993, and the
Warrant, which entitled the Selling Stockholder to purchase 4,750,000 shares
of Anchor Bancorp common stock, at a price of $0.01 per share.
Upon consummation of the Merger, the Warrant was converted into the right to
acquire 8,407,500 shares of Common Stock at a price of $0.01 per share.
Additionally, the Company assumed the obligations of Anchor to file up to two
registration statements under the Securities Act with respect to the offering
and sale of the shares of Common Stock issuable upon the exercise of the
Warrant. The Company is required to pay expenses of such registration and to
reimburse the Selling Stockholder for one-half of the underwriters' fees,
discounts and commissions in connection with the offering and sale of such
shares, subject to a maximum reimbursement of 1.75% of the proceeds thereof.
Under the terms of the registration rights agreement between the Selling
Stockholder and the Company, as successor to the obligations of Anchor
Bancorp, the Company has agreed to indemnify the Selling Stockholder against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments that the Selling Stockholder may be required to make in
respect thereof.
The shares of Common Stock offered by this Prospectus constitute all the
shares owned by the Selling Stockholder as well as all the shares issuable
under the Warrant.
In its capacity as manager of the FRF or otherwise, the FDIC has not held
any position, office or other material relationship with the Company or any of
its predecessors or affiliates within the past three years. At the time of
completion of the offering to which this Prospectus relates, the FDIC will not
own, in any capacity, any other securities of the Company and will not then
have any contractual right to acquire any such securities.
As a government-controlled corporation and an instrumentality of the United
States of America, the Selling Stockholder benefits from certain governmental
immunities from actions under the federal securities laws. See "Certain
Investment Considerations--Governmental Immunity of the Selling Stockholder."
A primary purpose of the FDIC's regulatory powers is to safeguard the BIF
and the SAIF. All depository institutions which are insured by the BIF or the
SAIF are also subject to regulation by the FDIC. The FDIC is authorized to set
standards for the operations of insured depository institutions, examine such
institutions to ensure compliance with the standards, take action to prevent
troubled institutions from failing and to pay depositors, in accordance with
the FDI Act and applicable regulations, if any institution fails. The FDIC has
substantial enforcement authority with respect to insured depository
institutions and, under certain circumstances, is authorized to appoint a
conservator or receiver for an insured depository institution. The FDIC may
terminate the deposit insurance of an insured depository institution if it
determines that the institution is engaging in unsafe or unsound practices,
has violated any applicable law, regulation, order or any condition imposed in
writing by the FDIC, or if the institution does not have any tangible capital.
15
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed on the NYSE under the symbol "DME." The following
table sets forth, for the periods indicated, the high and low sale prices per
share of the Common Stock, as reported by the Wall Street Journal.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
1994:
First Quarter............................................. $ 9 1/8 $ 7 5/8
Second Quarter............................................ 10 1/8 7 7/8
Third Quarter............................................. 10 3/4 8 7/8
Fourth Quarter............................................ 9 1/2 7 3/8
1995:
First Quarter............................................. 9 7 1/2
Second Quarter............................................ 10 3/8 8 3/4
Third Quarter............................................. 13 3/8 10
Fourth Quarter............................................ 12 10 1/4
1996:
First Quarter............................................. 12 3/8 10 3/4
Second Quarter (through May 15, 1996)..................... 12 5/8 11 3/8
</TABLE>
For a recent sale price of the Common Stock, see the cover page of this
Prospectus.
As indicated above, in January 1996, the Company announced its intention to
repurchase up to 2% of the outstanding Common Stock, or approximately
2,000,000 shares, of which 1,000,000 were repurchased during the first quarter
of 1996. See "Summary--The Company and the Bank--1995 Balance Sheet
Restructuring Plan and Stock Buy-Back Program."
Holders of Common Stock are entitled to receive dividends when, as and if
declared by the Company's Board of Directors out of funds legally available
therefor. The Company (including the Bank prior to the formation of the
Company) has not paid dividends on the Common Stock since the third quarter of
1990. The Company has no present plans to pay a dividend. However, the Board
of Directors of the Company periodically will consider the payment of
dividends on the Common Stock when it deems it appropriate, taking into
account federal regulatory restrictions, the Company's level of net income and
financial condition, its future prospects, economic conditions, industry
practices and other factors. The ability of the Company to pay dividends on
Common Stock will be subject to a number of legal and contractual
restrictions, including regulatory restrictions on capital distributions from
the Bank to the Company. See "Description of Capital Stock--Common Stock--
Dividends" and "--Certain Regulatory Restrictions on Capital Distributions."
16
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of the Company's Charter and By-
laws and of the Rights Agreement (as defined below) are not intended to be
complete and are qualified in their entirety by reference to such instruments,
each of which is an exhibit to the Registration Statement of which this
Prospectus is a part.
AUTHORIZED STOCK
The Charter authorizes 200 million shares of Common Stock and 40 million
shares of preferred stock, par value $0.01 per share (the "Preferred Stock").
COMMON STOCK
The shares of Common Stock entitle the holders thereof (a) to dividends
when, as and if declared by the Company's Board of Directors, subject to any
rights of any holders of preferred stock that may be outstanding, (b) to one
vote per share on each matter properly submitted to stockholders for their
vote and (c) to participate ratably in the net assets of the Company in the
event of liquidation, dissolution or winding up, subject to the prior rights
of creditors and of holders of any preferred stock of the Company that may be
outstanding. Holders of Common Stock are not entitled to preemptive rights.
Restrictions on Transfer of Stock. The Charter limits transfers of shares of
Common Stock and other interests that would be treated as stock of the Company
under the Code or applicable IRS regulations and certain options that would
cause either a person or an entity to become a 5% stockholder or increase a 5%
stockholder's percentage ownership interest in the Company. This limitation is
intended to prevent transfers of stock of the Company from triggering an
"ownership change," which would result in the limitation of certain potential
tax benefits available to the Company. This limitation would not prevent the
settlement of any transaction entered into through the facilities of the NYSE.
See "Certain Investment Considerations--Limitations on Use of Tax Losses;
Restrictions on Transfer of Common Stock."
Dividends. The Company's ability to pay dividends is limited by certain
restrictions generally imposed on Delaware corporations. Under these
restrictions, dividends may be paid only out of a Delaware corporation's
surplus, as defined by Delaware law, or if there should be no surplus, its net
profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year.
The principal source of income of the Company consists of dividends and
other capital distributions, if any, from the Bank, which will be subject to
regulatory restrictions. See "Certain Regulatory Restrictions on Capital
Distributions."
The Company is also subject to a limitation under the terms of its 10.50%
Senior Notes due November 2005 (the "10.50% Senior Notes") on the payment of
dividends or other distributions on the Common Stock, as well as purchases,
redemptions and acquisitions of Common Stock and payments in respect of
subordinated debt of the Company (collectively, "Restricted Distributions"),
until such time as the 10.50% Senior Notes have been rated "investment grade"
for a period of three calendar months. In general, the Company is not
permitted to make Restricted Distributions if, at such time or after giving
effect thereto, (a) the Company is in default with respect to the 10.50%
Senior Notes; (b) the Bank would fail to meet any of its OTS capital
requirements (as described below); or (c) the aggregate amount of dividends or
other distributions on the Common Stock subsequent to December 17, 1994 would
exceed the sum of (i) $5 million, plus (ii) 50% of the Company's consolidated
net income from that date (but, if there should be a net loss from such date,
minus 100% of such net loss), plus (iii) 100% of the net proceeds received by
the Company from any capital stock issued by the Company after December 17,
1994.
The payment of dividends or other distributions by the Company is also
subject to restrictions imposed by the indenture governing the 8.9375% Senior
Notes. Under the terms of that indenture, the Company is prohibited from
declaring or paying any dividends on, or purchasing, redeeming or otherwise
acquiring or retiring for value any of its capital stock now or hereafter
outstanding, or returning any capital to holders of its capital stock (each,
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a "Distribution"), except that the Company may declare and pay dividends in
capital stock of the Company and make Distributions in cash or property (other
than the Company's capital stock) if the amount of such Distribution, together
with the amount of all previous Distributions subsequent to June 30, 1993,
does not exceed in the aggregate the sum of $10 million, plus 75% of Dime's
consolidated net income based on Dime's financial statements contained in
periodic public filings with the Commission for each fiscal quarter after June
30, 1993 (but reduced by 100% of the net losses incurred in any quarter), plus
100% of the net proceeds received by the Company in respect of capital stock
issued subsequent to September 1, 1993.
The repurchase of shares of Common Stock by the Company involves Restricted
Distributions and Distributions for purposes of these provisions. See
"Summary--The Company and the Bank--1995 Balance Sheet Restructuring Plan and
Stock Buy-Back Program."
PREFERRED STOCK
Shares of Preferred Stock will be issuable from time to time in one or more
series as may be determined from time to time by the Board of Directors of the
Company. The powers, designations, preferences and relative, participating,
optional or other rights, if any, and the qualifications, limitations or
restrictions thereof, including, but not limited to, the number of shares
constituting any series of Preferred Stock, the dividend rights, redemption
rights, liquidation preferences, voting rights and conversion rights of any
such series, shall be as fixed by resolution of the Board of Directors of the
Company.
STOCKHOLDER PROTECTION RIGHTS PLAN
Each share of Common Stock has attached to it one right (a "Right") issued
pursuant to a Stockholder Protection Rights Agreement, dated as of October 20,
1995 (the "Rights Agreement"), between the Company and the First National Bank
of Boston, as Rights Agent. Each Right entitles its registered holder to
purchase one-hundredth of a share of Participating Preferred Stock, par value
$0.01 per share, for $50 (the "Exercise Price"), subject to adjustment, after
the close of business on the earlier of (i) the tenth day after commencement
of a tender or exchange offer which, if consummated, would result in a Person
(as defined in the Rights Agreement) becoming the Beneficial Owner (as defined
in the Rights Agreement) of 20% or more of the outstanding shares of Common
Stock (an "Acquiring Person") and (ii) the tenth day after the first date (the
"Flip-in Date") of public announcement that a Person has become an Acquiring
Person. In any case, the time described in the foregoing sentence is referred
to as the "Separation Time."
The Rights will not be exercisable until the business day following the
Separation Time. The Rights will expire on the earlier of (i) the close of
business on November 6, 2005; (ii) the Redemption Time (as defined below);
(iii) the Exchange Time (as defined below); or (iv) the merger of the Company
into another corporation pursuant to an agreement entered into prior to a
Flip-in Date (such time when the Rights expire being the "Expiration Time").
The Board of Directors of the Company may, at its option, at any time prior to
occurrence of a Flip-in Date, redeem all the Rights at a price of $0.01 per
Right (the "Redemption Price," and such time when the Rights are redeemed
being the "Redemption Time").
If a Flip-in Date shall occur, the Company has agreed in the Rights
Agreement to ensure and provide that each Right (other than Rights
Beneficially Owned by the Acquiring Person or any Affiliate or Associate (each
as defined in the Rights Agreement) thereof or by any transferees, direct or
indirect, of any of the foregoing, which Rights shall become void) shall
constitute the right to purchase from the Company shares of Common Stock
having an aggregate market price (calculated in the manner set forth in the
Rights Agreement) equal to twice the Exercise Price for an amount in cash
equal to the then-current Exercise Price. In addition, the Board of Directors
of the Company may, at its option, at any time after a Flip-in Date and prior
to the time that an Acquiring Person becomes the beneficial owner of more than
50% of the outstanding shares of Common Stock, elect to exchange the Rights
for shares of Common Stock at an exchange ratio of one share of Common Stock
per Right (such time when the Rights are exchanged being the "Exchange Time").
The Company has agreed in the Rights Agreement not to consolidate or merge,
or engage in certain other transactions, with an Acquiring Person without
entering into a supplemental agreement with the Acquiring Person providing
that, upon consummation or occurrence of the transaction, each Right shall
thereafter constitute
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the right to purchase common stock of the Acquiring Person having an aggregate
market price equal to twice the Exercise Price for an amount in cash equal to
the then-current Exercise Price.
The Rights will not prevent a takeover of the Company. The Rights, however,
may have certain anti-takeover effects. The Rights may cause substantial
dilution to a person or group that acquires 20% or more of the outstanding
Common Stock unless the Rights are first redeemed by the Board of Directors of
the Company.
CERTAIN OTHER PROVISIONS
Board of Directors. The Charter provides that the number of directors shall
be fixed from time to time by the Company's Board of Directors. The directors
are divided into three classes of as nearly equal size as possible, with one
class elected annually to serve for a term of three years. The classification
of the Board of Directors of the Company could moderate the pace of any change
in control of the Company because a stockholder with a majority interest in
the Company would have to wait for at least two consecutive annual meetings of
stockholders to elect a majority of the members of the Company's Board of
Directors. The inability to change the composition of the Board of Directors
immediately, even if such change in composition were deemed by a majority of
the Company's stockholders to be in their best interests, may tend to
discourage a takeover of the Company.
Cumulative Voting. Under the Delaware General Corporation Law ("DGCL"), the
certificate of incorporation of a corporation may authorize cumulative voting.
The Charter does not authorize cumulative voting, and therefore, cumulative
voting is not available in the election of directors of the Company.
Stockholder Nominations. The Charter and By-laws provide that stockholder
nominations for election of directors at an annual meeting of stockholders
must be stated in writing and filed with the Secretary of the Company not less
than 60 days nor more than 90 days in advance of the anniversary of the date
of the notice mailed to the stockholders in connection with the previous
year's annual meeting. With respect to an election of directors to be held at
a special meeting of stockholders, notice of nomination must be delivered not
later than the close of business on the seventh day following the day on which
notice of such meeting is first given to stockholders. The Company's By-laws
also require that any notice of nomination by a stockholder set forth certain
information concerning such stockholder and his or her nominee, including,
among other things, such information regarding the nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Commission had the nominee been nominated by the Company's Board of
Directors, and the consent of the nominee to serve as a director of the
Company if elected. The presiding officer at the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedures.
The provisions regarding stockholder nominations for election of directors
contained in the Charter and By-laws do not give the Company's Board of
Directors any power to approve or disapprove stockholder nominations for
election of directors, and will not preclude a stockholder contest for the
election of directors, if the prescribed procedures are followed. They may,
however, have the effect of precluding a contest for the election of directors
if the prescribed procedures are not followed and may have the effect of
discouraging a third party from conducting a solicitation of proxies or
otherwise attempting to elect its own slate of directors.
Removal of Directors. The Charter and By-laws provide that directors may be
removed only for cause (defined as a felony conviction or a final adjudication
that a director is liable for gross negligence or misconduct in the
performance of his or her duties to the Company) and only with the affirmative
vote of at least two-thirds of the shares of capital stock of the Company
entitled to vote at an election of directors. In addition, the Charter and By-
laws give a majority of the directors the ability to remove a director if such
removal is directed by a federal banking agency.
The provisions of the Charter and the By-laws giving the Board of Directors
the power to fix the exact number of directors and to fill any vacancies or
newly created positions and allowing removal of directors only for cause upon
the vote of at least two-thirds of the shares entitled to vote at an election
of directors are intended to insure that the classified Board provisions are
not circumvented by the removal of incumbent directors.
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Furthermore, as discussed below, stockholders will not have the ability to
call special meetings of stockholders; as a result, a stockholder seeking to
have a director removed for cause generally will be able to do so only at an
annual meeting of stockholders. These provisions of the Charter and the By-
laws make the removal of any director more difficult, even if such removal is
believed by a majority of stockholders to be in their best interests. In
addition, these provisions of the Charter and the By-laws could make a
takeover of the Company more difficult under circumstances where the potential
acquiror seeks to do so through obtaining control of the Board of Directors of
the Company.
Special Meetings of Stockholders. As permitted by the DGCL, the Charter
provides that special meetings of stockholders may be called by the Chairman
of the Board (or, if there is none, the Chief Executive Officer) or a majority
of the Board of Directors. Special meetings may not be called by stockholders.
If the Board of Directors determines not to call a special meeting,
stockholder proposals cannot be presented to the stockholders for action until
the next annual meeting.
The provision of the Charter relating to special meetings of stockholders is
intended to enable the Board of Directors of the Company to determine if it is
appropriate for the Company to incur the expense of a special meeting in order
to present a proposal to its stockholders. If the Board of Directors
determines not to call a special meeting, stockholder proposals could not be
presented to the stockholders for action until the next annual meeting. In
addition, these provisions of the Charter could make a takeover of the Company
more difficult under circumstances where the potential acquiror seeks to do so
through obtaining control of the Board of Directors of the Company.
Action of Stockholders by Written Consent. The Charter permits any action
required to be taken at a meeting of its stockholders to be taken without a
meeting only if the written consent of 100% of stockholders is obtained.
The purpose of this provision of the Charter is to prevent any person or
persons holding the requisite percentage of the voting stock of the Company to
take corporate action without giving prior notice to other stockholders and
without the procedures of a stockholder meeting. In a publicly-held
corporation with many stockholders, the practical effect of requiring 100% of
the stockholders to consent to any action is tantamount to requiring
stockholders to act only at a duly held stockholder meeting.
Voting at a Meeting. The By-laws provide that when a quorum is present at
any meeting, the vote of the holders of a majority of the stock that has
voting power present in person or represented by proxy (for this purpose,
shares abstaining and "broker non-votes" are deemed to be present at such
meeting) shall decide any question properly brought before such meeting,
unless the question is one upon which by express provision of law, the
Charter, a certificate of designation of any series of Preferred Stock or the
By-laws a different vote is required, in which case such express provision
shall govern and control the decision of such question. Notwithstanding the
above, in the case of any proposal submitted to the stockholders for the
purpose, as determined by the Board of Directors, which is not required to be
the sole purpose, of satisfying any term or condition of the Exchange Act or
the Code, any successors to such statutes or any rules or regulations
promulgated thereunder or any other law or regulation applicable to the
Company, the vote (and the manner of calculating such vote) required for
purposes of the By-laws with respect to such proposal shall be the vote (and
the manner of calculating such vote) required to satisfy the applicable term
or condition.
Notice of Stockholder Proposals. The By-laws provide that proposals by
stockholders of business to be considered at an annual meeting must be stated
in writing and filed with the Secretary not less than 60 days nor more than 90
days in advance of the anniversary date of the notice of meeting mailed to
stockholders in connection with the previous year's annual meeting. The date
for the annual meeting of stockholders is fixed as the fourth Friday of April
or such earlier or later date as the Board of Directors may direct.
The By-laws also provide that the notice required to be delivered by a
stockholder who wishes to propose business at an annual meeting must set forth
certain information concerning such stockholder.
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The By-laws further provide that the number of proposals that may be
submitted by a stockholder is limited to two and set forth the reasons that a
proposal could be deemed out of order, which generally correspond to those
established by the rules of the Commission that govern when a corporation may
exclude stockholder proposals from its proxy materials. The types of proposals
that the Company does not have to consider if raised by a stockholder in
connection with an annual meeting include, among others, those that, if
adopted, would be violative of laws or regulations, would result in a breach
or violation of contract, would be impossible to effectuate, are not a proper
matter for stockholder action or relate to ordinary business operations.
The procedures set forth in the By-laws may have the effect of precluding a
stockholder proposal if the prescribed procedures are not followed or if a
proposal of the type described above is submitted.
Limitation of Liability and Indemnification of Directors and Officers. The
Charter contains provisions expressly permitted under the DGCL that limit
certain types of causes of action that can be maintained by a corporation (or
by stockholders on behalf of the corporation) against its directors.
Accordingly, in any action by the Company or its stockholders against the
directors of the Company, the directors will not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as directors, except for (a) any breach of the directors' duty of loyalty to
the Company or its stockholders, (b) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c)
improper dividends or distributions or (d) transactions involving improper
personal benefit.
The Charter provides indemnification rights to any person who is made or
threatened to be made a party to any action (other than an action by or in the
right of the Company) by reason of the fact that such person has served as a
director or officer of the Company (or of any other entity, including the
Bank, at the request of the Company) with respect to costs, expenses,
judgments, fines and amounts paid in settlement. Subject to applicable banking
laws and regulations, these indemnification provisions apply if such person
acted in good faith and in a manner he or she reasonably believed to be in (or
not opposed to) the best interests of the Company and, with respect to a
criminal action, if such person had no reasonable cause to believe that his or
her conduct was unlawful. The persons described in the preceding sentence are
entitled to indemnification rights in an action by or in the right of the
Company with respect to costs, expenses and amounts paid in settlement,
subject to the same standards, except where there is an adjudication of
liability (in which case indemnification is permitted only upon a court
determination that indemnification is, in view of all the circumstances, fair
and reasonable). The Charter also provides for the Company to advance expenses
of litigation described in this paragraph on an on-going basis.
Under the Charter, indemnification of the costs and expenses of defending
any action is required to be made to any director or officer who is successful
(on the merits or otherwise) in defending the action. Furthermore,
indemnification also is required to be made with respect to all amounts
referred to in the preceding paragraph, unless a determination is made by a
majority of disinterested directors (or if the disinterested directors so
request, or if a quorum of disinterested directors does not exist, by
independent counsel or by the stockholders) that indemnification is not proper
because the director or officer has not met the applicable standard of
conduct.
The Charter also permits (but does not require) the Company to indemnify and
advance expenses to its non-officer employees and agents in connection with
any civil, criminal, administrative or investigative actions, suits or
proceedings.
The Charter also provides that if the DGCL is amended to expand the
permitted indemnification of directors and officers, then the Company will
indemnify directors and officers to the fullest extent permitted by such
amendment.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, employees and agents of the Company
pursuant to Delaware law, or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such
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liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer, employee or agent of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, employee or agent in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The Company is not permitted to prepay (which would include the direct or
indirect transfer of any funds or assets and any segregation thereof for the
purpose of making, or pursuant to any agreement to make, any payment
thereafter) any legal expenses or amounts of, or costs incurred in connection
with, any settlement of, or judgment or penalty with respect to, any claim,
proceeding or action, if made in contemplation of, or after, any insolvency of
the Company or the Bank or with a view to, or having the result of, preventing
the proper application of the assets of the Bank to creditors or preferring
one creditor over another. Further, the FDIC is authorized by statute to
prohibit or limit, by regulation or order, both the Company and the Bank from
indemnifying officers, directors and employees for liability or legal expense
with regard to any administrative proceeding or civil action by any federal or
state banking agency which results in a final order pursuant to which such
person is assessed a civil money penalty, is removed or prohibited from
participating in the conduct of the affairs of the institution or is required
to cease and desist or take affirmative action ordered by the agency.
Amendment of Certificate of Incorporation. The Charter provides that
amendment of certain of its provisions requires, in addition to the approval
of the Board of Directors, the approval of stockholders holding two-thirds of
the total votes eligible to be cast at a meeting. The provisions subject to
the two-thirds stockholder approval requirement include amendments of the
provisions relating to (a) the Board of Directors (including, without
limitation, the size and classes of the Board, the lack of cumulative voting
in the election of directors and the removal of directors), (b) special
meetings of stockholders, (c) amendment of the By-laws by stockholders, (d)
written consents of stockholders, (e) stockholder proposals and (f) amendment
of the two-thirds stockholders approval requirement itself. Amendment of any
other provisions of the Charter requires, in addition to the approval of the
Board of Directors, approval only of a majority of the total votes eligible to
be cast at a meeting.
Amendment of By-Laws. The Charter and the By-laws provide that the By-laws
may be amended by either a resolution adopted by a majority of the Board of
Directors or the approval of two-thirds of the total votes eligible to be cast
at a meeting of stockholders.
The requirement of an increased stockholder vote for the amendment of the
By-laws is intended to prevent a stockholder controlling a majority of the
Common Stock from avoiding the requirements of important provisions of the By-
laws simply by amending or repealing them. Thus, the holders of a minority of
the shares of the Common Stock could block the future repeal or modification
of the By-laws even if such action were deemed beneficial by the holders of
more than a majority (although less than two-thirds) of the Common Stock.
Business Combinations. Except as described below, the Company may effect a
merger or consolidation or sell all or substantially all of its assets if
authorized by its Board of Directors and the holders of a majority of the
outstanding Common Stock in accordance with the relevant provisions of the
DGCL. The Company may, however, acquire another corporation or bank (including
through a merger with a subsidiary of the Company), for cash or stock, in a
transaction that does not require any stockholder approval (except that, under
NYSE listing requirements, the issuance in an acquisition of shares equal to
20% or more of the number of shares of Common Stock then outstanding will
generally require approval by the affirmative vote of a majority of those
shares of Common Stock voting at a meeting at which the matter is presented).
In 1988, Delaware enacted a statute designed to provide Delaware
corporations with limited protection against hostile takeovers. The statute,
which is codified in Section 203 of the DGCL ("Section 203"), is intended to
discourage certain takeover practices by impeding the ability of a hostile
acquiror to engage in certain transactions with the target company.
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In general, Section 203 provides that a person or entity that owns 15% or
more of the outstanding voting stock of a Delaware corporation (an "Interested
Stockholder") may not consummate a merger or other business combination
transaction with such corporation at any time during the three-year period
following the date such person or entity became an Interested Stockholder,
unless an exemption described below is applicable. The term "business
combination" is defined broadly to cover a wide range of corporate
transactions including mergers, sales of assets, issuances of stock,
transactions with subsidiaries and the receipt of disproportionate financial
benefits.
The statute exempts the following transactions from the requirements of
Section 203: (i) any business combination if, prior to the date a person
became an Interested Stockholder, the board of directors approved either the
business combination or the transaction which resulted in the stockholder
becoming an Interested Stockholder, (ii) any business combination involving a
person who acquired at least 85% of the outstanding voting stock in the
transaction in which he or she became an Interested Stockholder, with the
number of shares outstanding calculated without regard to those shares owned
by the corporation's directors who are also officers or by certain employee
stock plans, (iii) any business combination with an Interested Stockholder
that is approved by the board of directors and by a two-thirds vote of the
outstanding voting stock not owned by the Interested Stockholder, and (iv)
certain business combinations that are proposed after the corporation had
received other acquisition proposals and that are approved or not opposed by a
majority of certain continuing members of the board of directors. The Charter
does not contain an election, as permitted by the DGCL, to be exempt from the
requirements of Section 203.
Appraisal Rights. Under the DGCL, for as long as there are more than 2,000
holders of the Common Stock or the Common Stock is listed on the NYSE, the
Company stockholders will not be entitled to appraisal rights in connection
with mergers, consolidations and sales of assets unless such stockholders are
required to accept for their Common Stock consideration other than stock of
the resulting corporation or stock of another corporation that is held by more
than 2,000 holders or is listed or quoted on a national securities exchange or
the NASDAQ (or cash in lieu of fractional shares).
Other Factors Affecting Acquisitions of Control. The preceding discussion
has focused on certain provisions of the Charter and By-laws of the Company,
as well as certain provisions of Delaware law applicable to the Company. In
addition, as discussed above, the Charter authorizes the issuance of 200
million shares of Common Stock and 40 million shares of Preferred Stock. The
authorized but unissued shares of Common Stock and Preferred Stock provide the
Board of Directors of the Company with flexibility to effect, among other
transactions, financings, acquisitions, stock dividends, stock splits and
employee stock options without the need for a stockholder vote. The Board of
Directors of the Company, consistent with its fiduciary duties, could also
authorize the issuance of these shares, and could establish voting,
conversion, liquidation and other rights for the Preferred Stock being issued,
in an effort to deter attempts to gain control of the Company.
In addition, Dime is subject to federal statutes and regulations concerning
changes in control, or potential changes in control, of depository
institutions. In particular, under the Home Owners' Loan Act ("HOLA"), before
any company may acquire control (as defined in HOLA) of Dime, that company
must obtain OTS approval. Also, under the Change in Bank Control Act (the
"CIBCA"), before any person may acquire control (as defined under the CIBCA;
generally, ownership or control of 10% or more of the outstanding shares of
voting stock) of Dime, it must submit 60 days' prior written notice to the OTS
and such notice must not be disapproved.
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CERTAIN REGULATORY RESTRICTIONS ON CAPITAL DISTRIBUTIONS
The description of statutory provisions and regulations applicable to
savings associations and savings and loan holding companies set forth below
does not purport to be a complete description of the statutes and regulations
described or of all such statutes and regulations and their effects on the
Bank and the Company. The regulatory scheme has been established primarily for
the protection of depositors and the financial system generally and is not
intended for the protection of stockholders or other creditors.
As a holding company, the Company's ability to pay dividends and make other
distributions is dependent on its ability to receive dividends and other funds
from the Bank. In addition to the other limitations described above on the
Company's ability to pay dividends or other distributions on its capital stock
(see "--Common Stock--Dividends"), the Company is also affected by statutes
and regulations relating to the business of federal savings associations that
have the effect of limiting such transfer of funds from the Bank to the
Company. The nature and extent of such restrictions are dependent upon the
institution's level of regulatory capital and its income.
Regulatory Capital Requirements. Under federal statute and OTS regulations,
savings associations are generally required to comply with each of three
separate capital adequacy standards. Such institutions are required to have
"core ("leverage") capital" equal to at least 3% of adjusted total assets,
"tangible capital" equal to at least 1.5% of adjusted total assets and "total
risk-based capital" equal to at least 8% of risk-weighted assets.
"Core capital" includes common stockholders' equity (including common stock,
common stock surplus and retained earnings but excluding any net unrealized
gains or losses, net of related taxes, on certain securities available for
sale) and noncumulative perpetual preferred stock and any related surplus as
well as a limited amount of deferred tax assets as described below. Intangible
assets, other than mortgage servicing rights (both purchased and originated)
("MSRs") valued in accordance with applicable regulations and purchased credit
card relationships ("PCCRs"), generally must be deducted from core capital.
MSRs and PCCRs may comprise only up to 50% of core capital. In January 1993,
the OTS issued Thrift Bulletin 56 ("TB-56"), which advised savings
associations to adopt Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," regarding accounting for deferred tax assets
for regulatory reporting purposes. TB-56 permits savings associations to
include limited amounts of net deferred tax assets in regulatory capital;
i.e., to the extent that realization of deferred net assets depends on future
taxable income, the institution may include the lesser of the amount that can
be realized within one year of the quarter-end report date, or 10% of core
capital.
"Tangible capital" means core capital less any intangible assets (except for
MSRs includable in core capital) and less investments in "non-includable
subsidiaries."
For purposes of the risk-based capital requirement, "total risk-based
capital" means core capital plus supplementary capital, so long as the amount
of supplementary capital that is used to satisfy the requirement does not
exceed the amount of core capital. "Supplementary capital" includes, among
other things, general valuation loan and lease loss allowances up to a maximum
of 1.25% of risk-weighted assets. Risk-weighted assets are determined by
multiplying certain categories of the savings association's assets, including
off-balance sheet equivalents, by an assigned risk weight of 0% to 100% based
on the credit risk associated with those assets as specified in OTS
regulations.
As of March 31, 1996, the Bank had core capital and tangible capital of $1.1
billion, which was equal to 5.60% of adjusted total assets, and total risk-
based capital of $1.2 billion, which was equal to 12.55% of risk-weighted
assets, and exceeded the capital requirements imposed by the OTS.
In 1991, Congress enacted the so-called "prompt corrective action"
provisions of the FDI Act, which established five capital-based categories for
depository institutions insured by the FDIC: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically undercapitalized." The OTS is required to take certain mandatory
action and is authorized to take other
24
<PAGE>
discretionary action with respect to savings associations in the three
undercapitalized categories. Under OTS regulations, an institution is treated
as well capitalized if its ratio of total risk-based capital to risk-weighted
assets is 10% or more, its ratio of core capital to risk-weighted assets is 6%
or more, its ratio of core capital to adjusted total assets is 5% or more and
it is not subject to any order or directive by the OTS to meet a specific
capital level. At March 31, 1996, the Bank continued to satisfy the published
standards for a well-capitalized institution.
Limitations on Capital Distributions. A savings association such as the Bank
may not make a capital distribution if, following such distribution, the
association will be "undercapitalized" under the prompt corrective action
provisions described above. In addition, OTS regulations limit the ability of
savings associations to pay dividends and make other capital distributions
according to the institution's level of capital and income, with the greatest
flexibility afforded to institutions that meet or exceed their OTS capital
requirements. For this purpose, "capital distributions" include cash
dividends, payments to repurchase, redeem, retire or otherwise acquire a
savings association's shares, payments to stockholders of another institution
in a cash-out merger, other distributions charged against capital and any
other transaction that the OTS determines to entail a payout of capital. To
the extent that the OTS regulations described below and the prompt corrective
action provisions are inconsistent, the prompt corrective action provisions
control.
Under current OTS regulations, a savings association's ability to pay
dividends depends on its level of regulatory capital as well as its earnings.
A savings association that exceeds its OTS regulatory capital requirements
both before and after a proposed dividend (or other distribution of capital)
(a "Tier 1 Institution") and has not been advised by the OTS that it is in
need of more than normal supervision may, after prior notice to but without
the approval of the OTS, make capital distributions during a calendar year up
to the higher of (a) 100% of its net income to date during the calendar year
plus the amount that would reduce by one-half its "surplus capital ratio" (the
institution's excess capital over its capital requirements) at the beginning
of the calendar year or (b) 75% of its net income over the most recent four-
quarter period. In addition, a Tier 1 Institution may make capital
distributions in excess of the foregoing limits if the OTS does not object
within a 30-day period following notice by the institution. Under OTS
regulations, a Tier 3 Institution (i.e., an institution that does not meet its
OTS capital requirements) generally cannot make any capital distribution
without the prior written approval of the OTS. A Tier 1 Institution that has
been notified by the OTS that it is in need of "more than normal supervision"
must, under OTS regulations, be treated as a Tier 2 or a Tier 3 Institution.
Under OTS regulations, a Tier 2 Institution may, after prior notice but
without the approval of the OTS, make capital distributions in an amount up to
75% of its net income during the most recent four-quarter period. The Bank is
currently a Tier 1 Institution. The OTS also may prohibit a proposed capital
distribution that would otherwise be permitted by the regulation if the OTS
determines that the distribution would constitute an unsafe or unsound
practice. In addition, a savings association that has converted from mutual to
stock form (such as the Bank) may not declare or pay a dividend on, or
repurchase, any of its capital stock if the effect of such action would be to
reduce the regulatory capital of the institution below the amount required for
its liquidation account.
Transactions with Affiliates. Under federal law and regulation, transactions
between a savings association and its "affiliates," which term includes its
holding company and other companies controlled by its holding company, are
subject to quantitative and qualitative restrictions. Savings associations are
restricted in their ability to engage in certain types of transactions with
their affiliates, including transactions that could provide funds to a holding
company for the payment of capital distributions. These "covered transactions"
include (a) purchasing or investing in securities issued by an affiliate, (b)
lending or extending credit to, or guaranteeing credit of, an affiliate, (c)
purchasing assets from an affiliate, and (d) accepting securities issued by an
affiliate as collateral for a loan or extension of credit. Covered
transactions are permitted between a savings association and a single
affiliate up to 10% of the capital stock and surplus of the association, and
between a savings association and all of its affiliates up to 20% of the
capital stock and surplus of the institution. The purchase of low-quality
assets by a savings association from an affiliate is not permitted. Each loan
or extension of credit to an affiliate by a savings association must be
secured by collateral with a market value ranging from 100% to 130% (depending
on the type of collateral) of the amount of credit extended. Notwithstanding
the foregoing, a savings association is not permitted to make a loan or
extension of credit to any affiliate unless the affiliate is engaged only in
activities that the Federal Reserve Board has determined to be permissible for
bank holding companies. Savings
25
<PAGE>
associations also are prohibited from purchasing or investing in securities
issued by an affiliate, other than shares of a subsidiary. Covered
transactions between a savings association and an affiliate, and certain other
transactions with or benefiting an affiliate, must be on terms and conditions
at least as favorable to the institution as those prevailing at the time for
comparable transactions with non-affiliated companies. This arm's-length
requirement applies to all covered transactions, as well as to (a) the sale of
securities or other assets to an affiliate, (b) the payment of money or the
furnishing of services to an affiliate, (c) any transaction in which an
affiliate acts as agent or broker or receives a fee for its services to the
savings association or to any other person, or (d) any transaction or series
of transactions with a third party if any affiliate has a financial interest
in the third party or is a participant in the transaction or series of
transactions.
CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a person that, for United States federal income tax purposes, is a
non-resident alien individual, a foreign corporation, a foreign partnership or
an estate or trust, in each case not subject to United States federal income
tax on a net income basis in respect of income or gain from the Common Stock
(a "non-U.S. holder"). This discussion does not consider the specific facts
and circumstances that may be relevant to particular holders and does not
address the treatment of non-U.S. holders of Common Stock under the laws of
any state, local or foreign taxing jurisdiction. Further, the discussion is
based on provisions of the Code, Treasury regulations thereunder, and
administrative and judicial interpretations thereof, all as in effect on the
date hereof and all of which are subject to change, possibly on a retroactive
basis. Each prospective holder is urged to consult a tax advisor with respect
to the United States federal tax consequences of acquiring, holding and
disposing of Common Stock, as well as any tax consequences that may arise
under the laws of any state, local or foreign taxing jurisdiction.
DIVIDENDS
Dividends paid to a non-U.S. holder of Common Stock will be subject to
withholding of United States federal income tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty, unless the
dividends are effectively connected with the conduct of a trade or business
within the United States (and are attributable to a United States permanent
establishment of such holder, if an applicable income tax treaty so requires
as a condition for the non-U.S. holder to be subject to United States income
tax on a net income basis in respect of such dividends). Such "effectively
connected" dividends are subject to tax at rates applicable to United States
citizens, resident aliens and domestic United States corporations, and are not
generally subject to withholding. Any such effectively connected dividends
received by a non-United States corporation may also, under certain
circumstances, be subject to an additional "branch profits tax" at a 30% rate
or such lower rate as may be specified by an applicable income tax treaty.
Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of United
States Treasury regulations, for purposes of determining the applicability of
a tax treaty rate. Under United States Treasury regulations that are proposed
to be effective for distributions after 1997 (the "Proposed Regulations"),
however, a non-U.S. holder of Common Stock who wishes to claim the benefit of
an applicable treaty rate would be required to satisfy applicable
certification requirements. In addition, under the Proposed Regulations, in
the case of Common Stock held by a foreign partnership, (x) the certification
requirement would generally be applied to the partners of the partnership and
(y) the partnership would be required to provide certain information,
including a United States taxpayer identification number. The Proposed
Regulations also provide look-through rules for tiered partnerships. It is not
certain whether, or in what form, the Proposed Regulations will be adopted as
final regulations.
A non-U.S. holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for
refund with the United States Internal Revenue Service.
26
<PAGE>
GAIN ON DISPOSITION OF COMMON STOCK
A non-U.S. holder generally will not be subject to United States federal
income tax in respect of gain recognized on a disposition of Common Stock
except in the following circumstances: (i) the gain is effectively connected
with a trade or business conducted by the non-U.S. holder in the United
States; (ii) in the case of a non-U.S. holder who is an individual and holds
the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the sale and certain other
conditions exist; or (iii) the Company is or has been a "United States real
property holding corporation" for federal income tax purposes and the non-U.S.
holder held, directly or indirectly at any time during the five-year period
ending on the date of disposition, more than 5% of the Common Stock (and is
not eligible for any treaty exemption). Effectively connected gains realized
by a corporate non-U.S. Holder may also, under certain circumstances, be
subject to an additional "branch profits tax" at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty.
The Company has not been, is not, and does not currently anticipate becoming
a "United States real property holding corporation" for federal income tax
purposes.
FEDERAL ESTATE TAXES
Common Stock held by a non-U.S. holder at the time of death will be included
in such holder's gross estate for United States federal estate tax purposes,
unless an applicable estate tax treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under current law, United States information reporting requirements (other
than reporting of dividend payments for purposes of the withholding tax noted
above) and backup withholding tax generally will not apply to dividends paid
to non-U.S. holders that are either subject to the 30% withholding discussed
above or that are not so subject because an applicable tax treaty reduces such
withholding. Otherwise, backup withholding of United States federal income tax
at a rate of 31% may apply to dividends paid with respect to Common Stock to
holders that are not "exempt recipients" and that fail to provide certain
information (including the holder's United States taxpayer identification
number). Generally, unless the payor of dividends has definite knowledge that
the payee is a United States person, the payor may treat dividend payments to
a payee with a foreign address as exempt from information reporting and backup
withholding. However, under the Proposed Regulations, dividend payments
generally will be subject to information reporting and backup withholding
unless applicable certification requirements are satisfied. See the discussion
above with respect to the rules applicable to foreign partnerships under the
Proposed Regulations.
In general, United States information reporting and backup withholding
requirements also will not apply to a payment made outside the United States
of the proceeds of a sale of Common Stock through an office outside the United
States of a non-United States broker. However, United States information
reporting (but not backup withholding) requirements will apply to a payment
made outside the United States of the proceeds of a sale of Common Stock
through an office outside the United States of a broker that is a United
States person, that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States, or that
is a "controlled foreign corporation" as to the United States, unless the
broker has documentary evidence in its records that the holder or beneficial
owner is a non-United States person or the holder or beneficial owner
otherwise establishes an exemption. Payment of the proceeds of the sale of
Common Stock to or through a United States office of a broker is currently
subject to both United States backup withholding and information reporting
unless the holder certifies its non-United States status under penalties of
perjury or otherwise establishes an exemption.
A non-United States holder generally may obtain a refund of any excess
amounts withheld under the backup withholding rules by filing the appropriate
claim for a refund with the IRS.
27
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Selling Stockholder has agreed to sell to each of the Underwriters named
below, and each of the Underwriters, for whom Merrill Lynch, Pierce, Fenner &
Smith Incorporated is acting as Representative (the "Representative"), has
severally agreed to purchase the number of shares of Common Stock set forth
opposite its name below. The Underwriters are committed to purchase all of
such shares if any are purchased. Under certain circumstances, the commitments
of non-defaulting Underwriters may be increased as set forth in the
Underwriting Agreement.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................. 4,707,500
Bear, Stearns & Co. Inc. ......................................... 200,000
CS First Boston Corporation....................................... 200,000
Dean Witter Reynolds Inc. ........................................ 200,000
Goldman, Sachs & Co. ............................................. 200,000
Keefe, Bruyette & Woods, Inc...................................... 200,000
Lehman Brothers Inc............................................... 200,000
Montgomery Securities............................................. 200,000
Oppenheimer & Co., Inc. .......................................... 200,000
PaineWebber Incorporated.......................................... 200,000
Prudential Securities Incorporated................................ 200,000
Smith Barney Inc. ................................................ 200,000
Utendahl Capital Partners, L.P. .................................. 200,000
Advest, Inc. ..................................................... 100,000
M.R. Beal & Company............................................... 100,000
Dominick & Dominick, Incorporated................................. 100,000
Fahnestock & Co. Inc. ............................................ 100,000
First Albany Corporation.......................................... 100,000
First Manhattan Co. .............................................. 100,000
Fox-Pitt, Kelton Inc. ............................................ 100,000
Friedman, Billings, Ramsey & Co., Inc. ........................... 100,000
Janney Montgomery Scott Inc. ..................................... 100,000
Johnston, Lemon & Co. Incorporated................................ 100,000
Legg Mason Wood Walker, Incorporated.............................. 100,000
Muriel Siebert & Co., Inc. ....................................... 100,000
H.C. Wainwright & Co., Inc. ...................................... 100,000
---------
Total........................................................ 8,407,500
=========
</TABLE>
The Representative has advised the Company that the Underwriters propose
initially to offer the shares of Common Stock to the public at the public
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less a concession not in excess of $.21 per share. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $.10 per share on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
Each of the Company and the Selling Stockholder has agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the Underwriters may be required
to make in respect thereof.
The Company has agreed that it will not, with certain exceptions, offer,
sell or otherwise dispose of any shares of Common Stock for a period of 45
days from the date of this Prospectus without the prior written consent of the
Underwriters. This prohibition will not affect shares of Common Stock issued
by the Company pursuant to employee or director benefit plans, any dividend
reinvestment plan, an acquisition, or the conversion or exercise of securities
convertible into or exercisable for Common Stock.
28
<PAGE>
Merrill Lynch, Pierce, Fenner & Smith Incorporated renders various financial
advisory services to Dime from time to time.
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered by this Prospectus will
be passed upon for the Company by Sullivan & Cromwell, New York, New York, and
for the Underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New
York.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by KPMG Peat Marwick LLP, independent
certified public accountants, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
29
<PAGE>
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY UNDERWRITER.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN
THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AU-
THORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUAL-
IFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Map...................................................................... 2
Available Information.................................................... 3
Incorporation of Certain Documents by Reference.......................... 3
Summary.................................................................. 5
Investment Considerations................................................ 11
Use of Proceeds.......................................................... 15
Selling Stockholder...................................................... 15
Price Range of Common Stock and Dividends................................ 16
Description of Capital Stock............................................. 17
Certain United States Tax Consequences to Non-U.S. Holders of Common
Stock................................................................... 26
Underwriting............................................................. 28
Validity of Common Stock................................................. 29
Experts.................................................................. 29
</TABLE>
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8,407,500 SHARES
[LOGO]
DIME BANCORP, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
MERRILL LYNCH & CO.
MAY 16, 1996
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