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Dime Community Bancshares, Inc. /NY/ (DCOM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered continued margin expansion (NIM 3.01%) and operating efficiency improvement (efficiency ratio 53.8%), with adjusted EPS of $0.61; GAAP diluted EPS was $0.59 .
  • EPS missed S&P Global consensus ($0.69*) while “Revenue” (S&P-defined) also missed ($102.3M* actual vs $112.8M* consensus), driven by higher credit loss provision and elevated operating expenses from strategic hiring; total GAAP net interest income rose to $103.4M and non-interest income to $12.2M .
  • Management guided to more pronounced NIM expansion in Q4, set a higher modeling baseline NIM of ~2.98% ex prepayment fees, and raised Q4 core cash OpEx guidance to ~$63M; non-interest income run-rate guided at $10.0–$10.5M .
  • Strategic progress: business loans +$160.5M linked quarter and +$409.1M YoY, core deposits +$971.9M YoY, loan-to-deposit ratio improved to 88.9%; CET1 increased to 11.53% .
  • Potential catalysts: explicit Q4 NIM expansion commentary, strong loan repricing tailwinds into 2026–2027, and management discussing buybacks as CRE concentration falls toward/below 400% .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded for the sixth consecutive quarter to 3.01%; management expects further NIM expansion in Q4 given ~10 bp spread improvement post the September Fed cut and ongoing repricing opportunities through 2027 .
  • Strong core deposit and business loan growth: core deposits +$971.9M YoY; business loans +$160.5M QoQ and +$409.1M YoY; loan-to-deposit ratio declined to 88.9% enhancing liquidity .
  • Efficiency ratio improved to 53.8% (adjusted 53.1%) driven by higher NII and disciplined expense management amid strategic hiring; CET1 rose to 11.53% and total risk-based capital to 16.18% .
  • Quote: “We expect more meaningful NIM expansion in the fourth quarter… and significant opportunities in 2026 based on loan repricing… organic growth across deposits and loans.” — CEO Stuart Lubow .

What Went Wrong

  • Credit costs elevated: provision for credit losses increased to $13.3M (from $9.2M in Q2); non-performing loans rose to $72.1M (from $53.2M in Q2), primarily in non-owner-occupied CRE; net charge-offs annualized at 0.47% of average loans .
  • EPS miss vs S&P consensus amid higher provision and increased operating expense from recruiting; GAAP diluted EPS $0.59 vs adjusted $0.61 and consensus $0.69* .
  • Management noted Q3 multifamily payoffs were outsized and expects normalization, but maturities are seeing high refinancing away rates; deposit betas on cuts favorable, yet higher cash levels may dampen some NIM benefit near term .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Net Interest Income ($USD Millions)$79.9 $98.1 $103.4
Non-Interest Income ($USD Millions)$7.6 $11.6 $12.2
Diluted EPS (GAAP) ($)$0.29 $0.64 $0.59
Adjusted EPS (non-GAAP) ($)$0.29 $0.64 $0.61
Net Interest Margin (%)2.50% 2.98% 3.01%
Efficiency Ratio (%)65.9% 55.0% 53.8%
Provision for Credit Losses ($USD Millions)$11.6 $9.2 $13.3
Non-Performing Loans ($USD Millions)$49.5 $53.2 $72.1
CET1 Ratio (%)10.16% 11.25% 11.53%
Loan-to-Deposit Ratio (%)95.4% 92.6% 88.9%

Estimates vs Actuals (S&P Global)

MetricConsensusActual
EPS ($)$0.69*$0.61*
Revenue ($USD)$112.8M*$102.3M*

Values retrieved from S&P Global. Note: Company-reported GAAP diluted EPS was $0.59 and adjusted EPS $0.61; company-reported net interest income was $103.4M and non-interest income $12.2M .

Segment Loan Balances and WAR

Loan CategoryQ3 2024 Balance ($000)Q3 2024 WARQ2 2025 Balance ($000)Q2 2025 WARQ3 2025 Balance ($000)Q3 2025 WAR
Business Loans$2,653,624 6.82% $2,902,170 6.65% $3,062,674 6.60%
1–4 Family & Coop/Condo$934,209 4.65% $998,677 4.85% $1,030,949 4.92%
Multifamily & Mixed-Use$3,866,931 4.60% $3,693,481 4.48% $3,509,811 4.52%
Non-Owner-Occupied CRE$3,281,923 5.25% $3,128,453 5.12% $2,975,474 5.13%
ADC$149,299 8.46% $141,755 8.28% $139,145 8.04%
Other Loans$6,058 10.71% $6,336 11.08% $7,621 11.14%
Total HFI Loans$10,892,044 5.40% $10,870,872 5.33% $10,725,674 5.37%

KPIs

KPIQ3 2024Q2 2025Q3 2025
Total Deposits (period-end, incl. escrow) ($B)$11.42 $11.74 $12.06
Brokered Deposits ($M)$662.2 $200.0 $200.0
Average Non-Interest-Bearing Deposits / Avg Total Deposits (%)—30.0% 29.9%
Business Loans Growth ($M)+$409.1 YoY +$113.3 QoQ +$160.5 QoQ
Loan Originations ex New Lines ($M)$119.0 $227.3 $170.6
Loan Originations incl New Lines ($M)$314.5 $450.5 $535.6
Efficiency Ratio (%)65.9 55.0 53.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NIM baseline (ex prepayment fees & purchase accounting)Model basis entering Q3 → Q4 2025Use ~2.95% as starting point (Q2 call) Use ~2.98% as starting point; “more pronounced” Q4 NIM expansion Raised baseline; stronger Q4 expansion expected
Core cash OpEx ($M)Q3 2025 → Q4 2025~$61.5 for Q3 (ex intangibles) ~ $63 for Q4 Raised
Non-Interest Income ($M)Q3 2025 → Q4 2025~$10.5 Q3 ~$10.0–$10.5 Q4 (no repeat of fraud recovery) Maintained to slightly lower midpoint
Deposit Cost (%)Q3 2025 → Q4 2025~2.09% in Q2 (stable) Cut ~19 bps post-September Fed cut; targeting pass-through on further cuts Lowered (favorable betas)
Dividend (Common) ($/sh)Quarterly$0.25 maintained $0.25 maintained Maintained
Capital Return (Buybacks)2025 → Early 2026Reevaluate early 2026 Active discussions; more feasible as CRE concentration falls <400 More explicit consideration

Earnings Call Themes & Trends

TopicQ1 2025 (prior two)Q2 2025 (prior one)Q3 2025 (current)Trend
NIM trajectoryNIM expanded to 2.95%; levers: repricing, potential rate cuts, core deposit growth NIM 2.98%; modeled baseline 2.95; 5 bps per 25 bp cut NIM 3.01; baseline now 2.98; more pronounced Q4 expansion; markers 3.25% then 3.50% Improving
Deposit franchise & betasCore deposits +$1.35B YoY; cost of deposits down 19 bps QoQ Non-brokered deposits +$210M QoQ; 30% DDA Ability to pass full cut; new deposits coming in low-2%; aiming to pass future cuts Favorable
Loan growth & diversificationPipeline ~$0.75B; focus on business loans Pipeline ~$1.2B; new verticals (fund, lender, corporate/specialty) with floating-rate assets Pipeline ~$1.2B; weighted avg new originations ~6.95%; multiple SVP hires; new branch opened Building
Credit qualityNPLs $58.0M; provision $9.6M; NCOs annualized 0.26% NPLs $53.2M; provision $9.2M; allowance 0.86% NPLs $72.1M; provision $13.3M; criticized loans down ~$30M; 30–89 dpd down ~33% Mixed (formation up, remediation progressing)
Capital & buybacksCET1 11.12%; evaluating capital return later CET1 11.25%; revisit buybacks early 2026 CET1 11.53%; active buyback discussions as CRE concentration ~401 Strengthening
Geographic expansionAnnounced Lakewood NJ, Manhattan plans Approvals, Manhattan opening planned Q4 Manhattan branch opened; Lakewood & North Shore LI targeted early 2026 Executing

Management Commentary

  • “Our earnings power continues to increase… pre-tax pre-provision net revenue of $53.4 million, an increase of 8% vs prior quarter and 79% vs Q3 2024.” — CEO Stuart Lubow (press release) .
  • “We expect more meaningful NIM expansion in the fourth quarter… significant opportunities in 2026 based on loan repricing opportunities… pipelines strong at ~$1.2B.” — CEO prepared remarks .
  • “Core EPS for the third quarter was $0.61… excluding prepayment fees and purchase accounting, the third quarter NIM would have been 2.98%… use this as a starting point for modeling purposes going forward.” — CFO Avi Reddy .
  • “We expect fourth quarter core cash operating expenses to be around $63 million… non-interest income run rate ~$10–$10.5 million absent the fraud recovery.” — CFO .
  • “Assuming a 250 bp spread… repricing ~$1.35B of loans in 2026 could add ~20 bps to NIM by end of 2026; another $1.7B reprices in 2027.” — CFO .

Q&A Highlights

  • Credit dynamics: Q3 charge-offs were ~80% non-owner-occupied CRE and ~20% owner-occupied; no multifamily-related charge-offs; management sees resolution of legacy NPAs ~$15–$17M in Q4 and expects NPLs to be ~range-bound near 50 bps of assets near-term .
  • Multifamily: Q3 payoffs were outsized; maturities see high refinancing away; repricing may retain more rent-regulated loans vs maturities; expect normalization of payoffs .
  • Deposit betas: Successfully passed through the 25 bp Fed cut (cost down ~19 bps); aiming to pass future cuts aggressively, supported by robust new deposit inflows across businesses .
  • Capital return: Active buyback discussions; readiness improves as CRE concentration ratio dips below ~400; stock viewed undervalued given forward NIM trajectory .
  • One-time item: ~$1.5M fraud recovery in other non-interest income tied to legacy matter; not expected to repeat in Q4 .

Estimates Context

  • EPS: S&P Global consensus $0.69*; S&P shows actual $0.61*; company-reported GAAP diluted EPS $0.59 and adjusted EPS $0.61 .
  • Revenue: S&P Global consensus $112.8M*; S&P shows actual $102.3M*; company reported net interest income $103.4M and non-interest income $12.2M .
  • Implications: Consensus likely needs to reflect higher ongoing provision, modestly higher OpEx run-rate (~$63M in Q4), lower non-interest income (ex fraud), and stronger Q4 NIM trajectory guidance .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin story intact and strengthening: NIM at 3.01% with management guiding to more pronounced Q4 expansion and a structurally higher NIM path into 2026–2027 via significant backbook repricing .
  • Operating leverage improving: efficiency ratio down to 53.8% (adjusted 53.1%), supported by deposit growth and loan mix shift; watch OpEx at ~$63M in Q4 as hiring investments season .
  • Credit watchlist: elevated provision ($13.3M) and NPLs ($72.1M) centered in non-owner-occupied CRE; management signals near-term resolutions and criticized loans down linked quarter .
  • Funding advantage: core deposits and DDA share (~30%) underpin favorable deposit betas; brokered deposits reduced to $200M; liquidity supports business lending growth .
  • Capital optionality: CET1 11.53% and total risk-based 16.18% enable growth and potential buybacks as CRE concentration ratio continues to decline .
  • Near-term modeling: start Q4 NIM at ~2.98% ex prepayments/purchase accounting; OpEx ~$63M; non-interest income ~$10–$10.5M; elevated but improving credit metrics .
  • Actionable: focus on Q4 NIM print, credit resolution cadence, sustained deposit inflows, and any capital return actions; monitor multifamily paydown normalization and business loan pipeline conversion .

Additional Notes and Cross-Checks:

  • Pre-tax pre-provision net revenue referenced as $53.4M in the press release vs $54.4M in CEO call remarks; difference likely reflects definitional timing or rounding; both indicate strong sequential and YoY growth .
  • Dividend maintained at $0.25 per common share; preferred dividend declared $0.34375 per Series A; tangible common book value per share increased to $26.81 .