Core deposit growth: Increased by more than $300 million.
Business loan growth: Increased by more than $200 million.
Net Interest Margin (NIM): Increased 20 basis points in the quarter.
Total equity ratio: 14.5% as of the end of the second quarter.
Non-performing assets (NPAs): down 29% on a consolidated quarterly basis.
Confidential Assets: Expected to decline approximately 14% on a consolidated quarterly basis.
Reported EPS: $0.43 per share, up 5% compared to the linked quarter.
Noninterest income: $11.8 million in the second quarter.
Core cash operating expenses: $55.4 million in the second quarter.
Allowance for loan losses: $5.6 million in the quarter.
Loan provisions: increased to 72 basis points.
CET1 ratio: 10% or more.
Subordinated debt financing: $75 million.
Release date: July 23, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
good points
Dime Community Bancshares Inc (NASDAQ:DCOM) reported a 5% increase in EPS to $0.43 per share compared to the related quarter.
The company achieved 20 basis points expansion in net interest margin (NIM) due to growth in core deposits and business loans.
In the second quarter, core deposits increased by more than $300 million and business loans increased by more than $200 million.
Asset quality remained strong, with non-performing assets down 29% on a consolidated quarterly basis.
Dime Community Bancshares Inc (NASDAQ:DCOM) successfully raised $75 million in subordinated debt, improving its capital position to 14.5% total capital.
Minus points
The issuance of supplementary bonds is expected to have a 3 basis point downward impact on NIM going forward.
The company has a $5.6 million loan loss reserve, indicating potential concerns about its future loan performance.
Operating expenses are expected to increase to approximately $57 million in the third quarter, with nominal growth expected in 2025.
The company still has $750 million in brokered deposits, which have higher costs compared to core deposits.
The impact of a potential rate cut on the company’s financial performance remains unclear and could impact future NIM expansion.
Q&A highlights
Q: What was the spot net interest margin (NIM) for Dime Community Bancshares in June? A: CFO Avinash Reddy said the June spot NIM was around 236-237 basis points excluding the impact of accrued loan repayments. I explained that this is the point. The supplementary bond issuance at the end of June will impact future NIM calculations.
Q: Is the $5.5 million allowance for loan losses a good estimate for the remainder of this year? A: Avinash Reddy said the allowance is assessed quarterly based on economic conditions and Moody’s forecasts. I pointed out. Stuart LeBow, president and chief operating officer, added that as new C&I and business loans are booked, reserves may be adjusted accordingly.
story continues
Q: What are Dime Community Bancshares’ expansion plans in Westchester? A: Stuart LeBow said they have two teams in Westchester and have regulatory approval for a branch. The company is focused on business-related growth rather than opening more retail stores, and will likely grow its team further over time.
Q: What is the outlook for operating costs and employment? A: Avinash Reddy said operating expenses in the third quarter were approximately $57 million, with nominal growth expected in 2025. The company is currently developing a budget and expects to announce details in early 2025. Stuart Lubow added that hiring is ongoing and there are opportunities. both on the deposit side and on the lending side.
Q: What impact will a possible rate cut have on NIM in the short term? A: Avinash Reddy acknowledged that a rate cut could accelerate NIM growth. Stuart Lebow added that loan yields are rising and deposit yields are stable to declining, which is supporting NIM’s growth. Interest rate cuts will likely further strengthen this trend.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
