Dime Community Bancshares’ third quarter results were met with a significant negative market reaction, as non-GAAP earnings per share fell short of Wall Street expectations despite strong revenue growth. Management attributed the mixed performance to increased loan loss provisions tied to real estate charge-offs and elevated expenses from recent banker hires. CEO Stuart Lubow highlighted declining criticized loans and improved past-due metrics, stating, “Our core earnings power continues its significant upward trajectory,” while acknowledging that loan losses were concentrated in nonowner-occupied real estate and not multifamily segments.
Is now the time to buy DCOM? Find out in our full research report (it’s free for active Edge members).
Dime Community Bancshares (DCOM) Q3 CY2025 Highlights:
- Revenue: $115.6 million vs analyst estimates of $112.9 million (32% year-on-year growth, 2.4% beat)
- Adjusted EPS: $0.61 vs analyst expectations of $0.69 (11.6% miss)
- Adjusted Operating Income: $40.65 million vs analyst estimates of $50.04 million (35.2% margin, 18.8% miss)
- Market Capitalization: $1.15 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Dime Community Bancshares’s Q3 Earnings Call
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Stephen Moss (Raymond James) asked about the composition and outlook for credit provisions, especially regarding nonperforming assets. CFO Avinash Reddy clarified that recent charge-offs were mainly in owner-occupied and nonowner-occupied real estate, with no multifamily exposure, and projected a stable level of NPAs in the near term.
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Stephen Moss (Raymond James) also inquired about accelerated multifamily loan payoffs and whether this pace would persist. CEO Stuart Lubow responded that recent prepayments were unusually high and expected future levels to normalize, with continued maturities leading to elevated refinancing activity.
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Matthew Breese (Stephens Inc.) pressed on normalization of charge-offs as the bank expands C&I lending. Reddy stated that while reserves for new business lending would be higher, actual charge-offs should revert toward historical averages as portfolios mature.
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Matthew Breese (Stephens Inc.) questioned the impact of further Federal Reserve rate cuts on deposit betas. Reddy explained that gradual rate reductions would enable the bank to pass on cost savings to depositors and benefit NIM, leveraging strong deposit growth and a competitive funding position.
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Mark Fitzgibbon (Piper Sandler) asked about the timing and rationale for potential stock repurchases. Reddy indicated that with capital ratios now above historical levels and CRE concentration down, the company is considering resuming repurchases as a use for excess capital, pending continued progress on business loan deployment.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be closely monitoring (1) the impact of loan repricing on net interest margin expansion, (2) the rate of business loan origination and the contribution of recently recruited commercial bankers, and (3) the ability to maintain deposit growth and manage funding costs amid expected further Federal Reserve rate cuts. We will also track whether expense discipline is sustained as new hires are integrated.
Dime Community Bancshares currently trades at $26.17, down from $29.53 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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