Dime(DCOM) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Dime Community Bancshares, Inc. reported strong Q2 2025 results with significant growth in net income, core deposits, business loans, and capital ratios, leading to a positive outlook revision Overall Performance Dime Community Bancshares, Inc. reported strong second-quarter 2025 results, with net income available to common stockholders increasing significantly year-over-year and quarter-over-quarter. The company achieved solid growth in core deposits, business loans, net interest margin, and capital ratios, leading to a revised 'Positive' outlook from Kroll Bond Rating Agency | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YoY Change (Q2 2025 vs Q2 2024) | QoQ Change (Q2 2025 vs Q1 2025) | | :-------------------------------------- | :------------- | :------------- | :------------- | :------------------------------ | :------------------------------ | | Net Income Available to Common Stockholders | $27.9 million | $19.6 million | $16.7 million | +67.66% | +42.35% | | Diluted Common Share EPS | $0.64 | $0.45 | $0.43 | +48.84% | +42.22% | - Kroll Bond Rating Agency revised the Company's outlook from "Stable" to "Positive" in June, recognizing progress in creating a high-quality balance sheet[3] Strategic Initiatives & Growth The company actively pursued its growth plan through strategic hires and geographic expansion, strengthening its commercial lending capabilities and market presence - Hired Shawn Gines as Executive Vice President of Corporate and Specialty Finance[6] - Hired Jason Brenner and Zach Schwartz to lead the newly created Lender Finance vertical[6] - Hired Michael Watts to lead the newly created Fund Finance vertical[6] - Hired Raffaella Palazzo as Director of Business Banking[6] - Hired Solomon Ponniah as Group Leader to grow metro NYC lending presence[6] - Received regulatory approvals to open a branch location at 500 Boulevard of the Americas in Lakewood, New Jersey, planned for early 2026[6] - Expect to open a new branch location in Manhattan in the fourth quarter of 2025[6] Key Financial & Operational Highlights Key highlights for Q2 2025 include significant year-over-year growth in total and core deposits, robust business loan growth, an improved net interest margin, and a stronger Common Equity Tier 1 Ratio - Total deposits increased $711.7 million on a year-over-year basis[6] - Core deposits (excluding brokered and time deposits) increased $1.21 billion on a year-over-year basis[6] - The ratio of average non-interest-bearing deposits to average total deposits for the second quarter was 30%[6] - Business loans grew $113.3 million on a linked quarter basis and $371.3 million on a year-over-year basis[6] - The net interest margin increased to 2.98% for the second quarter of 2025 compared to 2.95% for the prior quarter[6] - The Company's Common Equity Tier 1 Ratio increased to 11.25% at the end of the second quarter[6] Management's Discussion of Quarterly Operating Results This section details the company's financial performance for Q2 2025, covering net interest income, loan portfolio, deposits, non-interest income, expenses, taxes, and credit quality Net Interest Income and Margin Net interest income and net interest margin (NIM) both improved in Q2 2025, driven by strategic loan repricing opportunities, anticipated reductions in deposit costs, and continued growth in core deposits and business loans | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | | :------------------ | :--------------------- | :--------------------- | :--------------------- | | Net Interest Income | $98,097 | $94,213 | $75,502 | | NIM | 2.98 % | 2.95 % | 2.41 % | | Adjusted NIM | 2.98 % | 2.94 % | 2.40 % | - Significant loan repricing opportunity expected from H2 2025 through 2027[13] - Anticipated reduction in deposit costs if the Federal Reserve cuts short-term rates in 2025[13] - Continued focus on core deposit growth and business loan growth to benefit NIM[13] Loan Portfolio Performance The total loan portfolio's weighted average rate (WAR) increased, with business loans showing strong growth both quarter-over-quarter and year-over-year, while overall originations significantly increased | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :------------ | | Ending WAR on Total Loan Portfolio | 5.33% | 5.25% | 5.39% | | Business Loans (Balance in thousands)| $2,902,170 | $2,788,848 | $2,530,896 | | Multifamily Residential (Balance in thousands)| $3,693,481 | $3,780,078 | $3,920,354 | | Non-owner-occupied CRE (Balance in thousands)| $3,128,453 | $3,191,536 | $3,315,100 | | Originations (Dollars in millions) | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------------------------- | :------ | :------ | :------ | | Excluding New Lines of Credit | $227.3 | $71.5 | $162.4 | | Including New Lines of Credit | $450.5 | $136.7 | $284.6 | Deposits and Borrowed Funds Total deposits increased year-over-year, with a notable reduction in brokered deposits, while Federal Home Loan Bank advances remained stable quarter-over-quarter | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------- | :------------ | :------------- | :------------ | | Total Deposits | $11.74 billion| $11.61 billion | $11.03 billion| | Brokered Deposits | $200.0 million| $285.6 million | $780.3 million| | FHLB Advances | $508.0 million| $508.0 million | $633.0 million| Non-Interest Income Non-interest income saw a quarter-over-quarter increase, primarily driven by higher loan level derivative income and BOLI income, despite a slight year-over-year decrease | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :----------------- | :-------------------- | :-------------------- | :-------------------- | | Non-Interest Income| $11.6 | $9.6 | $11.8 | - Loan level derivative income increased from $61 thousand in Q1 2025 to $942 thousand in Q2 2025[38] - BOLI income increased from $3,993 thousand in Q1 2025 to $4,186 thousand in Q2 2025[38] Non-Interest Expense and Efficiency Total non-interest expense decreased quarter-over-quarter, leading to an improved efficiency ratio. The year-over-year increase in expenses is attributed to strategic investments and hires supporting the company's growth plan | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Total Non-Interest Expense | $60.3 | $65.5 | $55.7 | | Adjusted Non-Interest Expense (non-GAAP)| $59.9 | $58.0 | $55.4 | | Efficiency Ratio | 55.0% | 63.1% | 63.8% | | Adjusted Efficiency Ratio (non-GAAP) | 54.7% | 55.8% | 65.9% | - The year-over-year increase in non-interest expense is due to significant investments and hires made to execute the growth plan, focusing on growing core deposits, diversifying the loan portfolio, and selectively adding new geographies[20] Income Tax Expense Income tax expense increased quarter-over-quarter, resulting in a higher effective tax rate for Q2 2025 compared to the prior quarter, but lower than the same period last year | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :----------------- | :-------------------- | :-------------------- | :-------------------- | | Income Tax Expense | $10.5 | $7.3 | $7.6 | | Effective Tax Rate | 26.1% | 25.3% | 29.0% | Credit Quality Non-performing loans decreased quarter-over-quarter, while the credit loss provision remained relatively stable. However, non-performing loans increased significantly year-over-year | Metric | June 30, 2025 (in millions) | March 31, 2025 (in millions) | June 30, 2024 (in millions) | | :---------------------- | :-------------------------- | :--------------------------- | :-------------------------- | | Non-Performing Loans | $53.2 | $58.0 | $24.8 | | Credit Loss Provision | $9.2 | $9.6 | $5.6 | Capital Management This section reviews the company's capital position, including stockholders' equity, regulatory capital ratios, and per-share metrics Stockholders' Equity and Regulatory Capital Stockholders' equity increased, and all regulatory capital ratios remained strong and improved in Q2 2025, exceeding all applicable regulatory requirements | Metric | June 30, 2025 | March 31, 2025 | | :----------------------------------- | :------------ | :------------- | | Stockholders' Equity (in billions) | $1.43 | $1.41 | | Common Equity Tier 1 Ratio | 11.25% | 11.11% | | Tier 1 Risk-Based Capital Ratio | 12.34% | 12.21% | | Total Risk-Based Capital Ratio | 15.84% | 15.68% | | Tier 1 Leverage Ratio | 9.43% | 9.46% | - The Company's and the Bank's regulatory capital ratios continued to be in excess of all applicable regulatory requirements as of June 30, 2025, with all risk-based regulatory capital ratios increasing in the second quarter[25] Per Share Metrics and Dividends Book value and tangible common book value per share increased quarter-over-quarter, while dividends per common share remained consistent | Metric | June 30, 2025 | March 31, 2025 | | :------------------------------- | :------------ | :------------- | | Dividends per Common Share | $0.25 | $0.25 | | Book Value per Common Share | $29.95 | $29.58 | | Tangible Common Book Value per Share | $26.32 | $25.94 | Company Information This section provides details on the Q2 2025 earnings call, an overview of Dime Community Bancshares, Inc., and a disclaimer regarding forward-looking statements Earnings Call Details Details for the Q2 2025 earnings conference call, including webcast and telephone access information, and replay availability - A conference call was scheduled for 8:30 a.m. (ET) on Thursday, July 24, 2025, with CEO Lubow discussing Q2 2025 financial performance[28] - Participants could access the call via webcast or telephone registration, with a replay available on-demand for 12 months[29][30] About Dime Community Bancshares, Inc. Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company with over $14 billion in assets and a leading deposit market share on Greater Long Island - Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company[31] - The Bank has over $14 billion in assets and holds the number one deposit market share among community banks on Greater Long Island (Kings, Queens, Nassau & Suffolk counties for community banks with less than $20 billion in assets)[31] Forward-Looking Statements This section provides a standard disclaimer regarding forward-looking statements, outlining various assumptions, risks, and uncertainties that could cause actual results to differ materially from projections - The news release contains forward-looking statements identified by terms such as "anticipate," "believe," "expect," and "outlook"[32] - These statements are based on management's assumptions and perceptions of historical trends and future developments but are not guarantees of future performance[33] - Factors that could affect results include competitive pressures, interest rate changes, government policies, deposit flows, loan demand, real estate values, credit quality, accounting changes, tax laws, socio-economic conditions, regulatory changes, technological changes, security breaches, and litigation[33] Financial Statements This section presents the company's consolidated financial statements, including the statements of financial condition, operations, selected highlights, average balances, and non-performing assets Consolidated Statements of Financial Condition The consolidated balance sheet shows an increase in total assets and stockholders' equity as of June 30, 2025, compared to March 31, 2025, with notable changes in cash, loans, and deposits | (In thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------- | :---------------- | | Total Assets | $14,207,935 | $14,097,682 | $14,353,258 | | Cash and due from banks | $1,156,754 | $1,030,702 | $1,283,571 | | Total Loans Held for Investment, Net | $10,777,683 | $10,778,280 | $10,783,192 | | Total Deposits | $11,740,095 | $11,615,924 | $11,686,141 | | Total Liabilities | $12,776,929 | $12,685,669 | $12,956,741 | | Total Stockholders' Equity | $1,431,006 | $1,412,013 | $1,396,517 | Consolidated Statements of Operations The consolidated income statement reflects increased net interest income and net income available to common stockholders for Q2 2025 compared to both the prior quarter and the same period last year, driven by higher interest income and improved efficiency | (Dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :-------------------------------- | :------------------------------- | | Total Interest Income | $167,550 | $161,865 | $159,418 | | Total Interest Expense | $69,453 | $67,652 | $83,916 | | Net Interest Income | $98,097 | $94,213 | $75,502 | | Provision for Credit Losses | $9,221 | $9,626 | $5,585 | | Total Non-Interest Income | $11,595 | $9,633 | $11,808 | | Total Non-Interest Expense | $60,299 | $65,511 | $55,694 | | Income Before Taxes | $40,172 | $28,709 | $26,031 | | Net Income Available to Common Stockholders | $27,876 | $19,636 | $16,657 | | Diluted EPS | $0.64 | $0.45 | $0.43 | Selected Financial Highlights Key performance ratios for Q2 2025 show improvements in return on average assets, return on average equity, and efficiency ratio, alongside stable dividend payouts and increased book values per share | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------------------- | :------- | :------- | :------- | | Reported EPS (Diluted) | $0.64 | $0.45 | $0.43 | | Cash Dividends Paid per Common Share | $0.25 | $0.25 | $0.25 | | Book Value per Common Share | $29.95 | $29.58 | $28.97 | | Return on Average Assets | 0.85 % | 0.62 % | 0.55 % | | Return on Average Equity | 8.28 % | 6.04 % | 5.88 % | | Net Interest Margin | 2.98 % | 2.95 % | 2.41 % | | Efficiency Ratio | 55.0 % | 63.1 % | 63.8 % | | Common Shares Outstanding (in thousands) | 43,889 | 43,799 | 39,148 | Average Balances and Interest Rates/Yields Average interest-earning assets increased, contributing to higher total interest income. The net interest rate spread and net interest margin both improved quarter-over-quarter, reflecting effective asset and liability management | (Dollars in thousands) | Q2 2025 Average Balance | Q2 2025 Interest | Q2 2025 Yield/Cost | | :--------------------------------- | :---------------------- | :--------------- | :----------------- | | Total Interest Earning Assets | $13,195,116 | $167,550 | 5.09 % | | Total Interest Bearing Liabilities | $8,978,936 | $69,453 | 3.10 % | | Net Interest Rate Spread | | | 1.99 % | | Net Interest Margin | | | 2.98 % | - Average business loans increased from $2,748,142 thousand in Q1 2025 to $2,798,899 thousand in Q2 2025[43] - Average money market deposits increased from $4,076,612 thousand in Q1 2025 to $4,174,694 thousand in Q2 2025[43] Schedule of Non-Performing Assets Non-performing loans (NPLs) and non-performing assets (NPAs) decreased quarter-over-quarter but remained significantly higher year-over-year. Net charge-offs also decreased quarter-over-quarter | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------------- | :--------------------------- | :---------------------------- | :--------------------------- | | Total Non-Accrual Loans | $53,214 | $58,041 | $24,843 | | Total Non-Performing Assets (NPAs) | $53,214 | $58,041 | $24,843 | | NPAs and 90+ Delinquent / Total Assets | 0.37% | 0.41% | 0.18% | | Net Charge-Offs (NCOs) | $5,405 | $7,058 | $3,640 | | NCOs / Average Loans | 0.20% | 0.26% | 0.14% | Non-GAAP Reconciliation This section reconciles non-GAAP financial measures to their most directly comparable GAAP measures, providing adjusted insights into the company's performance Adjusted Net Income and Ratios The company provides non-GAAP adjusted financial measures to offer a clearer view of operating results by excluding certain non-recurring or non-operational items. Adjusted net income and related ratios show improved performance for Q2 2025 - Non-GAAP financial measures exclude pre-tax income and expenses associated with fair value changes in equity securities and loans held for sale, net gain on sale of securities and other assets, severance, loss on extinguishment of debt, and loss due to pension settlement[50] | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Reported Net Income Available to Common Stockholders | $27.876 | $19.636 | $16.657 | | Adjusted Net Income Available to Common Stockholders (non-GAAP) | $27.863 | $24.688 | $14.421 | | Adjusted EPS (Diluted) | $0.64 | $0.57 | $0.37 | | Adjusted Return on Average Assets | 0.85 % | 0.77 % | 0.48 % | | Adjusted Return on Average Equity | 8.28 % | 7.46 % | 5.17 % | Adjusted Operating Expense Adjusted operating expense as a percentage of average assets improved quarter-over-quarter, reflecting better cost management when excluding specific non-recurring items | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------------- | :------- | :------- | :------- | | Operating Expense as a % of Average Assets - as reported | 1.72 % | 1.90 % | 1.66 % | | Adjusted Operating Expense as a % of Average Assets (non-GAAP) | 1.71 % | 1.68 % | 1.65 % | Adjusted Efficiency Ratio The adjusted efficiency ratio significantly improved both quarter-over-quarter and year-over-year, indicating enhanced operational efficiency when accounting for specific non-recurring expenses and income adjustments | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------------- | :------- | :------- | :------- | | Efficiency Ratio - as reported (non-GAAP) | 55.0 % | 63.1 % | 63.8 % | | Adjusted Efficiency Ratio (non-GAAP) | 54.7 % | 55.8 % | 65.9 % | Tangible Equity Reconciliations Reconciliations for tangible assets, tangible equity, and tangible common equity demonstrate an increase in tangible common equity to tangible assets and tangible common book value per share, reflecting a stronger tangible capital base | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------------- | :--------------------------- | :---------------------------- | :--------------------------- | | Total Assets | $14,207,935 | $14,097,682 | $13,548,763 | | Tangible Assets (non-GAAP) | $14,048,729 | $13,938,241 | $13,388,499 | | Total Stockholders' Equity | $1,431,006 | $1,412,013 | $1,250,596 | | Tangible Equity (non-GAAP) | $1,271,800 | $1,252,572 | $1,090,332 | | Tangible Common Equity (non-GAAP) | $1,155,231 | $1,136,003 | $973,763 | | Tangible Common Equity to Tangible Assets (non-GAAP) | 8.22 % | 8.15 % | 7.27 % | | Tangible Common Book Value per Share (non-GAAP) | $26.32 | $25.94 | $24.87 |