Dime Community Bank Putting Tax Savings Back Into the Economy
January 05 2018 - 01:15PM
Kenneth J. Mahon, President and CEO of Dime Community Bancshares,
Inc. (NASDAQ:DCOM) (the "Company" or "Dime"), the parent company of
Dime Community Bank (the "bank"), today issued the following
statement:
Dime Community Bank, headquartered in Brooklyn, New York,
employs over 400 people and serves customers in the five boroughs
of New York City, and the surrounding metropolitan area in
twenty-eight individual communities and neighborhoods.
Beginning in 2018, like many corporations, the Company expects
to retain a larger share of corporate earnings thanks to the
recently enacted reductions in the federal corporate tax
rate. How will Dime employ this new capital?
The Board of Directors and executive officers will be guided by
one overriding principle: get the tax savings back into the economy
while acting in the best interests of all of Dime's stakeholders.
Stakeholders include our shareholders, our employees, the local
communities that we serve and the regulators who are charged with
the oversight of the safety and soundness of the banking
industry.
What We Will Do
The tax reduction represents an opportunity to build our
business and to stimulate economic growth, and that is what we
intend to do. Dime will:
- Create jobs, by accelerating the hiring of new associates,
particularly in technology, regulatory compliance, cybersecurity
and relationship banking, along with more rapid adoption of
technology to improve the customer experience and bring additional
products and services to our customers; absent the new tax law,
these business-building actions would normally have occurred over a
much longer time frame;
- Review our corporate policy and practices relating to common
stock dividends to determine the appropriate level of payout in
light of the improved earnings outlook over the near and
intermediate term. We believe that our long-term shareholders
should directly benefit from the reduced corporate tax rate, and we
wish to encourage them to keep their investment in DCOM;
- Pay a one-time $1,000 bonus to all non-executive employees
thereby enabling them to also share immediately in the benefits of
the tax cut. No increases in base compensation resulting
solely from the tax benefit are being considered, as Dime has long
maintained market competitive compensation throughout the
organization, and well in excess of statutory “minimum wage”
levels;
- Institute a Corporate Matching Gift program as a way to
encourage Dime's employees to give back to their communities and
leverage their commitment through a matching gift.
- In 2017, Dime made over $450,000 available to local charities
and disaster recovery organizations. We also launched our inaugural
grass-roots charitable giving platform through the
#dimegivesback social media campaign. Beginning in 2018, our
goal is to double the amount of our philanthropic and community
giving.
What We Won't Do
- Dime will not pay windfall bonuses to executive
management. We will scrupulously avoid paying increased
compensation to executives based solely upon this reduction in
Dime's taxes. Further, the internal profitability goals that
are the basis of executive management compensation will be adjusted
to reflect the new economics of Dime's operations and financial
results to assure that no such windfall is inadvertently paid;
- We will not sacrifice our traditional discipline around expense
management. Management remains steadfast in its commitment to
maintain its operating expenses-to-total revenue among the best in
class relative to its peers.
Even in light of these beneficial initiatives, a significant
portion of the additional retained earnings will help build capital
in order to enable Dime to remain the profitable and safe
banking institution that has long been our hallmark.
In closing, we at Dime will be responsible stewards of the
benefit that the tax cut brings. Dime's mission statement
says that each day, we strive to be “the bank of choice for
clients, the employer of choice for individuals, and
the company of choice for investors”. Today, for the
Board and management of Dime, that means prudently allocating the
proceeds from the tax cut toward helping to enrich the lives of our
communities and our constituents.
The Company is currently evaluating the financial impact of the
new tax law for the quarter ended December 31, 2017, and intends to
release information in the upcoming weeks.
ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company had $6.44 billion in consolidated assets as of
September 30, 2017, and is the parent company of the bank. The bank
was founded in 1864, is headquartered in Brooklyn, New York, and
currently has twenty-eight branches located throughout Brooklyn,
Queens, the Bronx, Nassau and Suffolk County, New York. More
information on the Company and the bank can be found on Dime's
website at www.dime.com.
This news release contains a number of forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). These statements may be
identified by use of words such as "anticipate," "believe,"
“continue,” "could," "estimate," "expect," "intend," “likely,”
"may," "outlook," "plan," "potential," "predict," "project,"
"should," "will," "would" and similar terms and phrases, including
references to assumptions.
Forward-looking statements are based upon various assumptions
and analyses made by the Company in light of management's
experience and its perception of historical trends, current
conditions and expected future developments, as well as other
factors it believes are appropriate under the circumstances. These
statements are not guarantees of future performance and are subject
to risks, uncertainties and other factors (many of which are beyond
the Company's control) that could cause actual results to differ
materially from future results expressed or implied by such
forward-looking statements. Accordingly, you should not place undue
reliance on such statements.
Contact: Leslie Veluswamy, Senior Vice President
and Director of Financial Reporting, 718-782-6200 extension
5204
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