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    DCOM
    Earnings call· Jun 2026(Q2 FY26)

    Dime Commercial Bancshares, Inc. /NY/ DCOM

    Jul 23, 2026 Source

    Executive summary

    Dime Commercial Bancshares Q2 FY26 — Record Revenue and NIM Expansion

    Dime Commercial Bancshares delivered a strong second quarter, achieving record revenues and continued NIM expansion driven by effective cost of funds management and business loan growth. The company successfully lowered its core efficiency ratio below 50% and announced the resumption of its share repurchase program, reflecting confidence in its capital position and long-term value. Management highlighted a significant loan repricing opportunity and a differentiated franchise in Metro New York.

    Highlights

    5

    • Record revenues of $126 million in Q2 FY26.

    • Core EPS up 23% versus prior year.

    • Net Interest Margin (NIM) increased for 9 consecutive quarters, up 7 basis points linked-quarter to 3.28%.

    • Core efficiency ratio driven below 50% (49.9%) in Q2 FY26.

    • Year-over-year business loan growth of $743 million, representing a 26% increase.

    Concerns

    1

    • Multifamily non-performing loans increased by $26 million-$27 million, leading to a $6 million specific provision in Q2 FY26.

    Guidance & targets

    12
    CategoryTargetConfidence
    Share repurchase program
    Expect to begin repurchasing shares
    high materiality
    High
    Common Equity Tier 1 (CET1) ratio
    Between 11.25% and 11.50%
    high materiality
    High
    Net Interest Margin (NIM) expansion
    Modest expansion
    high materiality
    High
    Net Interest Margin (NIM) expansion
    More pronounced expansion
    high materiality
    High
    Net Interest Margin (NIM) ultimate destination
    Over 3.50%
    high materiality
    High
    Investor CRE balances
    Reach an inflection point
    medium materiality
    High
    Multifamily portfolio as % of total loans
    Around 25%
    medium materiality
    High
    Business loans portfolio growth
    $200 million to $250 million per quarter
    medium materiality
    High
    Core cash operating expenses (ex-intangible amortization)
    Between $130 million and $131 million
    medium materiality
    High
    Tax rate
    Approximately 28.5%
    medium materiality
    High
    Loan growth
    Low-to-mid single-digit growth
    medium materiality
    Medium
    Expense growth rate
    3% to 4%
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Business Loans
    Significant growth driven by new teams hitting their stride and new equipment finance and franchise verticals starting to contribute. Expected to continue growing $200M-$250M per quarter.
    Year-over-year growth: $743 millionNet growth Q1: $125 millionNet growth Q2: $275 millionQuarterly growth target: $200 million to $250 million
    		—26%——
    Investor CRE
    Back in the market for relationship investor CRE and construction. Expects to reach an inflection point in H2 2026, then grow at 5% annually ($125 million to $150 million).
    Book size: $2.75 billion
    		————
    Multifamily Portfolio
    Proactively working to reduce this portfolio to 25% of total loans. Will continue strong relationship multifamily but avoid rent-regulated or majority rent-regulated. $26M-$27M near 90-day past due, with $6M specific provision.
    Total portfolio: $3.1 billionRent-regulated: $1 billionPre-2019 bucket: $300 million (down from $400 million last year)Percentage of total loans: ~28%Target percentage of total loans: 25%
    		————

    Operational metrics

    19
    Core EPS
    $0.79up 23% vs prior year
    Q2 FY26

    Core EPS for the second quarter.

    Core pre-tax, pre-provision net revenue
    $64 million
    Q2 FY26

    Represented 173 basis points of average assets.

    Average earning assets
    $14.1 billion
    Q2 FY26

    Average earning assets for the second quarter.

    Tangible equity ratio
    Over 9%
    Q2 FY26

    Tangible equity ratio crossed 9%.

    Total capital ratio
    16.3%
    Q2 FY26

    Total capital ratio at quarter end.

    CRE ratio
    350%
    Q2 FY26

    Reduced CRE ratio to approximately 350% at the end of the second quarter, setting Dime apart from local banks.

    Back book repricing opportunity
    $2.5 billion
    Next 18 months

    Volume of adjustable and fixed rate loans at 4.25% that either reprice or mature over the next 18 months.

    Cash on balance sheet
    $1.9 billion
    Q2 FY26

    Large cash position provides competitive advantage.

    Floating rate loans
    $3.8 billion
    Q2 FY26

    Will reprice if rates increase, offsetting deposit cost increases.

    Hedges
    $350 million
    Q2 FY26

    Will reprice if rates increase, offsetting deposit cost increases.

    Non-maturity interest-bearing deposits
    $7.5 billion
    Q2 FY26

    Deposit base that could see cost increases if rates rise.

    Multifamily non-performing loans (NPLs) near 90-day past due
    $26 million-$27 million
    Q2 FY26

    Loans close to the 90-day past due bucket.

    Specific provision for multifamily NPLs
    $6 million
    Q2 FY26

    Specific provision taken on multifamily loans near 90-day past due.

    Disposed held-for-sale NPLs
    $38 million
    Prior quarter

    Disposed of held-for-sale NPLs in the prior quarter, contributing to overall NPA reduction.

    Average cost of deposits
    1.64%
    Q2 FY26

    Average cost of funds for the quarter.

    Spot cost of deposits
    1.67% to 1.68%
    Q2 FY26 end

    Spot cost of deposits at quarter end.

    Noninterest-bearing deposits (DDA) as % of total deposits
    Over 31%
    Q2 FY26

    DDA represents a significant portion of the deposit base.

    Loan pipeline
    $1.4 billion
    Q2 FY26

    Strong loan pipeline with attractive weighted average rate.

    Headcount additions
    Over 20%
    Last 3 years

    Significant hiring over the past 3 years, representing over 20% of the bank's headcount.

    Industry KPIs

    10
    MetricValueDetails
    LoansRelatively flat
    DepositsOver 70%%
    Cet1 ratio12%%
    Capital returnsExpected to begin
    Allowance reserves98 bpsbps
    Net interest margin3.28%%
    Net charge offs nplsDown 28%%
    Total operating expenses$64 millionUSD
    Provision for credit losses$14 millionUSD
    Efficiency ratio operating leverageBelow 50%%

    Risks & headwinds

    3
    Multifamily credit quality deteriorationQ2 FY26

    $26 million-$27 million in multifamily loans near 90-day past due, leading to a $6 million specific provision in Q2 FY26.

    Mitigation: Working with operators on affected loans; proactively reducing multifamily portfolio to 25% of total loans; built specific reserves.

    Deposit pricing competitionOngoing

    Some 'irrational bankers' offering higher rates.

    Mitigation: Dime's business-focused deposit base with over 31% DDA provides isolation from consumer deposit swings, allowing management to maintain cost of funds.

    Loan pricing competitionOngoing

    Competition is tough, with some 'crazy things' being done by competitors.

    Mitigation: Sticking to core strategy and focusing on diversified growth across C&I and specialty finance groups.

    What to watch in Q3 FY26

    5

    Share Repurchase Program Initiation

    Q3 FY26
    CurrentExpected to begin in Q3 FY26
    TargetCommencement of share repurchases

    Why it matters

    Indicates management's confidence in capital position and commitment to shareholder returns, impacting EPS and valuation.

    Given the significant long-term value we see in our shares, we are pleased to announce that we expect to begin repurchasing our shares in the third quarter.

    Q&A highlights

    6

    Can you provide an update on the multifamily portfolio, specifically regarding the increase in multifamily NPLs this quarter?

    Avi Reddy explained that $26 million-$27 million in multifamily loans were close to 90-day past due, leading to a $6 million specific provision. However, overall NPAs were down due to the disposal of $38 million held for sale in the prior quarter. He detailed the $3.1 billion multifamily portfolio, with $1 billion being rent-regulated, and the pre-2019 bucket reduced to $300 million.

    “So we had around $26 million, $27 million, Peter, that was close to the 90-day past due bucket. At the end of the quarter, we took a $6 million specific provision on those loans.”

    asked by Peter Winter · answered by Avinash Reddy

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Transformation and Brand Evolution

    Dime has successfully differentiated its franchise through organic growth, attracting talented bankers, enhancing deposit quality, diversifying its balance sheet, and improving its Net Interest Margin (NIM). The company completed its rebrand to Dime Community Bank, a logical step reflecting its evolution from a legacy multifamily thrift model. Currently, over 70% of its deposit base is from commercial and municipal customers, and approximately 60% of its loan portfolio is comprised of business and commercial real estate.

    02

    Hiring Investments and Efficiency Gains

    Over the past three years, Dime has made significant investments in hiring, including adding over 15 deposit teams in private banking, 6 new lending verticals, and 3 new branch locations. These investments are now yielding results, contributing to improved profitability and driving the core efficiency ratio below 50% (49.9%) in Q2 FY26. Management believes these new hires have a long runway for continued contribution, with disruption in the local marketplace creating attractive organic growth opportunities.

    03

    Loan Portfolio Diversification and Growth

    The bank continues to execute its strategy of growing business loans, which saw a 26% year-over-year increase, adding $743 million. The loan pipeline remains strong at approximately $1.4 billion with a weighted average rate of 6.25%. Concurrently, Dime is proactively reducing its multifamily portfolio, aiming for it to represent around 25% of total loans, down from the current 28%. The bank is focused on relationship-based investor CRE and construction, expecting an inflection point in H2 2026 for investor CRE balances.

    04

    Capital Management and Share Repurchases

    Dime achieved a Common Equity Tier 1 (CET1) ratio of 12% and successfully reduced its Commercial Real Estate (CRE) ratio to approximately 350% by the end of Q2 FY26. This milestone enabled the announcement of resuming share repurchases in Q3 FY26. Management intends to operate with a CET1 ratio between 11.25% and 11.50% in the near to medium term, balancing organic growth and capital returns to shareholders.

    05

    NIM Trajectory and Rate Sensitivity

    The Net Interest Margin (NIM) has expanded for nine consecutive quarters, reaching 3.28% in Q2 FY26, driven by effective cost of funds management and improved loan yields. Management anticipates modest NIM expansion in Q3 FY26 and more pronounced expansion in Q4 FY26 and throughout 2027, targeting over 3.50% by Q4 FY27. The bank's large cash position ($1.9 billion) and floating-rate assets ($3.8 billion) are expected to provide a competitive advantage and mitigate deposit cost increases from $7.5 billion in non-maturity interest-bearing deposits.

    AI-generated summary of the company’s earnings call. Not investment advice.