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DC

Dime Community Bancshares, Inc. /NY/ (DCOM)·Q2 2025 Earnings Summary

Executive Summary

  • EPS of $0.64, up from $0.45 in Q1 and $0.43 in Q2 last year; modest beat vs S&P Global consensus EPS of $0.624 as reported by SPGI estimates* .
  • Adjusted total revenues reached $109.5M vs $103.8M in Q1 and $84.0M in Q2 last year, while SPGI “Revenue” came in at $100.5M vs $106.5M consensus (a miss)* .
  • Net interest margin rose to 2.98% (from 2.95% in Q1); management guided a “gradual upward bias” for Q3 and more pronounced expansion in Q4 as ~$600M reprices in 2H25 and ~$1.95B reprices through 2026 .
  • Capital and funding improved: CET1 at 11.25%, core deposits up $1.21B YoY, brokered deposits cut to $200M; catalysts include new lending verticals and Lakewood/Manhattan branch expansion .

What Went Well and What Went Wrong

What Went Well

  • Core deposit and business loan growth: core deposits +$1.21B YoY; business loans +$113.3M QoQ and +$371.3M YoY, supporting NIM expansion .
  • Efficiency improved: efficiency ratio fell to 55.0% (adjusted 54.7%) vs 63.1% in Q1 and 63.8% in Q2 last year; CEO: “we have made significant progress in creating a core deposit-funded balance sheet” .
  • Strategic hiring and diversification: new corporate/specialty finance, lender finance, fund finance leaders strengthen growth pipeline; Kroll outlook revised to “Positive” .

What Went Wrong

  • Asset quality mixed: NPLs rose to $53.2M vs $24.8M last year; credit loss provision elevated at $9.2M (vs $5.6M in Q2’24) .
  • Deposit costs broadly flat absent rate cuts; CFO expects only small CD cost tailwinds absent Fed easing (limits near-term NIM gains on funding side) .
  • SPGI revenue miss vs consensus despite strong company-reported adjusted revenues, highlighting definitional differences and the need to reconcile investor data sources* .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
EPS (Diluted) ($)$0.43 $0.45 $0.64
Net Income to Common ($M)$16.657 $19.636 $27.876
Net Interest Income ($M)$75.502 $94.213 $98.097
Non-Interest Income ($M)$11.808 $9.633 $11.595
Adjusted Total Revenues ($M)$84.031 $103.828 $109.537
Net Interest Margin (%)2.41 2.95 2.98
Efficiency Ratio (%)63.8 63.1 55.0
Provision for Credit Losses ($M)$5.585 $9.626 $9.221
Effective Tax Rate (%)29.01 25.26 26.08

Segment loan portfolio detail

CategoryQ2 2024 Balance ($M)Q2 2024 WAR (%)Q1 2025 Balance ($M)Q1 2025 WAR (%)Q2 2025 Balance ($M)Q2 2025 WAR (%)
Business Loans$2,530.896 6.92 $2,788.848 6.55 $2,902.170 6.65
1–4 Family & Condo/Coop$906.949 4.55 $961.562 4.77 $998.677 4.85
Multifamily & Res. Mixed-Use$3,920.354 4.59 $3,780.078 4.46 $3,693.481 4.48
Non-Owner-Occ. CRE$3,315.100 5.25 $3,191.536 5.07 $3,128.453 5.12
ADC$144.860 8.96 $140.309 7.96 $141.755 8.28
Other$6.699 3.39 $6.402 10.39 $6.336 11.08
Loans HFI Total$10,824.858 5.39 $10,868.735 5.25 $10,870.872 5.33

Key KPIs

KPIQ2 2024Q1 2025Q2 2025
Period-End Total Deposits incl Escrow ($B)$11.03 $11.61 $11.74
Brokered Deposits ($M)$780.3 $285.6 $200.0
Loan Originations excl Lines ($M)$162.4 $71.5 $227.3
Loan Originations incl Lines ($M)$284.6 $136.7 $450.5
CET1 Ratio (%)10.06 11.12 11.25
Loan-to-Deposit (%)98.2 93.6 92.6
NPLs ($M)$24.843 $58.041 $53.214
ACL / Total Loans (%)0.72 0.83 0.86
Common Dividend ($/sh)$0.25 $0.25 $0.25

Results vs S&P Global consensus

MetricConsensusActualSurprise
EPS ($)0.624*0.64 +$0.016 (beat)*
Revenue ($M)106.5*100.5*-$6.0 (miss)*

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NIM trajectory (ex-prepayment fees starting point)Modeling basis from Q2, outlook for Q3–Q4 2025Not previously quantifiedUse 2.95% as starting point; “gradual upward bias” in Q3; “more pronounced expansion” in Q4 Raised trajectory
Loan repricing “back book”2H 2025 & FY 2026Not previously quantified~$1.95B at ~4.1% WAC reprices/matures; potential ~30 bps NIM uplift over time New detail
Additional repricing2027Not previously quantified~$1.7B at ~4.25% WAC reprices/matures New detail
Core cash non-interest expense (ex intangibles)Q3 2025Prior run-rate ~$58.0M in Q1 (adjusted) ~$61.5M (plus ~$0.25M intangible) Raised
Non-interest income & swap feesQ3 2025Not previously quantified~$10.5M total non-interest income; ~$0.5M swap fee income New detail
Effective tax rateQ3 2025Not previously quantified27%–27.5% New detail
Balance-sheet growthRemainder of 2025Not previously quantifiedLow single-digit; transactional CRE/multifamily attrition masked by business loan growth New detail
CRE concentration ratioYE 2025~442% in Q1 Target ~400% by year-end (management) Lowered
Common dividendOngoing$0.25/sh (Q1, Q2) Maintained $0.25/sh Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
NIM trajectoryNIM expanded to 2.79% in Q4; to 2.95% in Q1; deposit cost down 37bps QoQ in Q4; 19bps in Q1 NIM 2.98%; ex-prepayments NIM 2.95%; upward bias Q3, more expansion in Q4 Improving
Core deposits mixAvg non-interest-bearing 30% in Q4; 29.5% in Q1 30% in Q2; non-brokered deposits +$210M QoQ (would be +$335M excluding municipal runoff) Strengthening
Business loan growth+$268.8M deposits QoQ; +$513.4M core deposits QoQ (Q4) Business loans +$113.3M QoQ; pipeline ~$1.2B, WAC ~6.85% Accelerating
CRE ratio managementConsolidated CRE concentration 447% (Q4); 442% (Q1) Target ~400% by YE; continued attrition in transactional CRE/multifamily De-risking
Asset repricingNot quantified (directional) ~$600M reprices in Q3/Q4; ~$1.95B through 2026; another ~$1.7B in 2027 Building
Capital returnsRaised $136M equity in Q4; capital ratios “best-in-class” CET1 11.25%; buyback to be revisited end-2025/early-2026 Optionality later
Hiring/verticalsAdded deposit leaders; senior exec hire (Geisel) New lender/fund finance verticals; multiple senior hires Scaling
Multifamily regulation—No NPLs in multifamily; granular portfolio; monitoring NYC rent policies Stable/monitored

Management Commentary

  • CEO: “Our core earnings power has increased significantly over the past year… Core deposits were up $1.2 billion YoY… NIM has now increased for the fifth consecutive quarter and is approaching the 3% mark.”
  • CFO: “Excluding prepayment fees, the NIM for the second quarter would have been 2.95%. We expect a gradual upward bias in the NIM for the third quarter, with more pronounced expansion in the fourth quarter.”
  • CFO on repricing: “In 2H25 and FY26, we have ~$1.95B of loans at ~4.1% that either reprice or mature… could see a ~30 bps increase in NIM from repricing; another ~$1.7B at ~4.25% in 2027.”
  • CEO: “We have clearly differentiated our franchise… outstanding deposit franchise, strong liquidity position, and robust capital base.”
  • Press release: “Kroll Bond Rating Agency revised our outlook from ‘Stable’ to ‘Positive’ in June.”

Q&A Highlights

  • Deposit dynamics: DDA growth and 1,500 new accounts in private banking were not one-time; non-brokered deposits +$210M QoQ (would be +$335M excluding proactive municipal runoff) .
  • Pricing/competition: Pipeline WAC ~6.85% with origination ~7.10%; modest shift to floating-rate loans, spreads broadly intact .
  • Funding costs: CD renewals expected near ~3%; absent rate cuts, deposit costs largely flat with small CD tailwind; broader NIM story driven by asset repricing .
  • New verticals: Primarily floating-rate (SOFR +250–300 bps); fund finance focused on subscription lines with low historical loss content; each vertical targeted to reach ~$0.5B balances over 36–48 months .
  • Reserves: ACL/Loans at 86 bps; medium-to-longer-term target 90–100 bps as mix shifts to C&I .
  • Liquidity deployment: Comfortable L/D ~90–95%; near-term preference to redeploy cash into C&I vs securities to support structurally higher NIM .

Estimates Context

  • EPS: Reported $0.64 vs S&P Global consensus $0.624; number of EPS estimates: 5* .
  • Revenue: SPGI “Revenue actual” $100.5M vs $106.5M consensus (miss); number of revenue estimates: 3*.

Forward consensus snapshot (SPGI):

  • Q3 2025e EPS $0.69; Revenue $112.8M; # EPS est 4; # Rev est 3*.
  • Q4 2025e EPS $0.712; Revenue $118.0M; # EPS est 5; # Rev est 4*.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • DCOM delivered an EPS beat and continued NIM expansion; trend supports upside into Q4 as asset repricing accelerates .
  • SPGI “Revenue” missed consensus despite company-reported strength in adjusted total revenues; reconcile definitions when modeling and monitor non-interest income volatility* .
  • Deposit franchise remains a differentiator (30% non-interest-bearing; brokered deposits reduced to $200M), underpinning funding stability and NIM resilience .
  • Efficiency ratio improvement to 55% and pipeline growth from new verticals are positive for pre-provision profitability and revenue diversification .
  • Asset quality mixed: NPLs elevated vs last year; reserve build toward 90–100 bps aligned with shift toward C&I; watch CRE trend and NYC multifamily regulatory backdrop .
  • Near-term setup: modest Q3 upward NIM bias; more pronounced Q4 expansion; Q3 OpEx step-up to ~$61.5M (ex intangibles) partially offsets margin gains; model tax rate 27–27.5% .
  • Medium-term optionality: best-in-class capital ratios and organic growth trajectory; buybacks to be revisited around end-2025/early-2026, creating potential capital return catalysts .