Dime Community Bancshares Q2 2025 Earnings Report

Dime Community Bancshares EPS Results

• Actual EPS: $0.64
• Consensus EPS: $0.63
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.37

Dime Community Bancshares Revenue Results

• Actual Revenue: $109.54 million
• Expected Revenue: $107.08 million
• Beat/Miss: Beat by +$2.46 million
• YoY Revenue Growth: N/A

Dime Community Bancshares Announcement Details

• Quarter: Q2 2025
• Date: 7/24/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 24, 2025
• Conference Call Time: 8:30AM ET

Dime Community Bancshares (NASDAQ:DCOM) operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.

Dime Community Bancshares Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Our core pretax pre‐provision income rose to $49 million in Q2, up from $28 million a year ago, driving a core ROA of 85 bps.
• Positive Sentiment: Core deposits grew by $1.2 billion YoY, enabling the paydown of most brokered deposits and leaving ample liquidity.
• Positive Sentiment: The bank’s net interest margin improved for the fifth consecutive quarter to 2.98 percent, with a back‐book repricing opportunity set to add around 30 bps over 2025–26.
• Neutral Sentiment: Core cash operating expenses are guided to $61.5 million in Q3, reflecting recent production hires to support growth.
• Positive Sentiment: Business loans increased by $110 million in Q2 (15 percent YoY) and the pipeline remains robust at $1.2 billion with a ~6.85 percent weighted average rate.

Presentation

[Operator]

Day and thank you for standing by. Welcome to the Dime Community Bancshares Inc. Q2 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session.

[Operator]

To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. Before we begin, the company would like to remind you that discussions during this call contain forward looking statements made under the Safe Harbor provisions of The U.

[Operator]

S. Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those contained in any such statements, including as set forth in today's press release and the company's filings with the U. S. Securities and Exchange Commission to which we refer you.

[Operator]

During this call, references will be made to non GAAP financial measures as supplemental measures to review and assess operating performance. These non GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with The U. S. GAAP. For information about these non GAAP measures and for reconciliation to to GAAP, please refer to today's earnings release.

[Operator]

I would now like to hand the conference over to your first speaker today, Stuart LeBeau, President and CEO. Please go ahead.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Good morning. Thank you, Stephen, and thank you all for joining us this morning for our quarterly earnings call. With me this morning is Avi Reddy, our CFO. In my prepared remarks, I will touch upon key highlights for the second quarter of twenty twenty five. Avi will then provide some details on the quarter and thoughts on the remainder of the year.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Our core earnings power has increased significantly over the past year. Core pretax pre provision income was $49,000,000 in the 2025 compared to $28,000,000 a year ago. This translated into a core ROA of 85 basis points for the second quarter. Core deposits were up $1,200,000,000 on a year over year basis. The deposit teams hired since 2023 have grown their deposit portfolios to approximately $2,200,000,000 This has allowed us to continue to pay down our brokered deposits to a fairly minimal level.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

We have made significant progress in creating a core deposit funded balance sheet with ample liquidity to take advantage of lending opportunities as they arise. Our cost of total deposits was 2.09% in the second quarter. By maintaining a strong focus on cost of funds management, our NIM has now increased for the fifth consecutive quarter and is approaching the 3% mark. We continue to have several catalysts to continue to grow our NIM over the medium to long term, including a significant back book repricing opportunity. Avi will get back to get into that in more details in his remarks.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

On the loan front, we continue to execute on our stated plan of growing business loans and managing our CRE ratio lower. Business loans grew over $110,000,000 in the second quarter and over $370,000,000 or 15% on a year over year basis. We are starting to see the benefit of the new hires we've made over the past couple of years. Loan origination, including new lines of credit, increased to $450,000,000 for the quarter. The weighted average rate on the new originations was approximately 7%.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Our loan pipelines continue to be strong and currently stand at $1,200,000,000 compared to approximately $1,100,000,000 at quarter end in March and $750,000,000 when we reported earnings in January. The weighted average rate on the pipeline is approximately 6.85%. On our recruiting efforts, disruption in the local market remains very high. And in the second quarter, we executed on our commercial lending diversification strategy. After hiring Tom Geisel in the first quarter, we identified several verticals that are complementary to our existing businesses and made a number of senior hires.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Once they settle in, we expect these verticals to contribute to our growth in the fourth quarter and beyond. While hiring does cause an increase in near term operating expenses, we expect all these verticals to meaningfully contribute to the execution of our strategic goals. In addition to the new lending verticals, we made progress on getting regulatory approvals to open a new location in Lakewood, New Jersey. Additionally, we expect to open a new branch in Manhattan in the fourth quarter. In conclusion, the momentum in our business is extremely strong and we continue to execute on our business plan of growing business loans and core deposits.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

We have clearly differentiated our franchise from our local competitors as it relates to our growth trajectory and the ability to attract talented bankers. We have an outstanding deposit franchise, a strong liquidity position and a robust capital base. It is important to note that our full earnings power, which is underpinned by a 30% non interest bearing deposit base, is not yet shining through as the asset side of the balance sheet has not yet repriced. Ongoing NIM improvement is supported by loan repricing opportunities and coupled with organic growth across deposits and business loans. That will aid in unlocking the inherent earnings of the dime.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

I'm looking forward to the remainder of 2025 and want to again thank all our dedicated employees for their efforts in positioning Dime as the best business bank in New York. With that, I will turn the call over to Avi.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Thank you, Stu. Core EPS was $0.64 per share. This represents increases of 12% on a linked quarter basis and 49% on a year over year basis. The reported NIM increased to 2.98 We had around three basis points of prepayment fees in the second quarter NIM. Excluding prepayment fees and purchase accounting, the second quarter NIM would have been $2.95.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

As a reminder, the first quarter NIM excluding prepayment fees and purchase accounting was $291,000,000 Non brokered deposits were up approximately $210,000,000 at June 30 versus the prior quarter. As we continue to see strong inflows across our branch network and across the private and commercial bank, we proactively reduced a higher cost municipal relationship by approximately $125,000,000 in the second quarter. Said differently, had we not proactively reduced this municipal relationship, we would have grown non brokered deposits approximately $335,000,000 in the second quarter. Core cash operating expenses, excluding intangible amortization and severance expense, was $59,900,000 The linked quarter increase in expenses was primarily due to the hiring of production staff. Non interest income of $11,600,000 reflected increased loan swap income.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

We had a $9,200,000 credit loss provision for the quarter and the allowance to loans increased to 86 basis points. Capital levels continue to grow and our common equity Tier one ratio increased to 11.25%, and our total capital ratio grew to 15.8%. Having best in class capital ratios versus our local peer group is a competitive advantage and will allow us to take advantage of opportunities as they arise and speaks to our strength and ability to service our growing customer base. Next, I'll provide some thoughts on guidance for the remainder of 2025. As I mentioned previously, excluding prepayment fees, the NIM for the second quarter would have been $2.95.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

We would use this as a starting point for modeling purposes going forward, as we don't expect the prepayment fees to repeat in that size in the upcoming quarters. In the near term, we expect a gradual upward bias in the NIM for the third quarter with more pronounced expansion in the fourth quarter as the asset repricing story will start to unfold with more vigor towards the end of the year. To give you a sense of the significant back book repricing opportunity in our adjustable and fixed rate loan portfolios, in the 2025 and the full year 2026, we have approximately $1,950,000,000 of adjustable fixed rate loans across the loan portfolio at a weighted average rate of approximately 4.1% that either reprice or mature in that time frame. Assuming a two twenty five basis point spread on those loans over the forward five year treasury, we could see a 30 basis points increase in NIM from the repricing of these loans. As we look into the back book for 2027, we have another $1,700,000,000 of loans at a weighted average rate of 4.25 that will lead to continued NIM expansion in 2027.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Moving to the short end of the curve, should the Federal Reserve cut rates, we expect our previous trend of approximately five basis points of NIM expansion for every 25 basis point rate cut to repeat, assuming the behavior in deposits and loans hold for each subsequent rate cut and competition remains rational. In summary, assuming the market consensus forward curve plays out, we have a path to a structurally higher NIM and enhanced earnings power over time. As we approach a 3% margin, the next marker in front of us is 3.25%, and after that, point 50%. It's important to note that while the destination to us is clear, the near to medium term NIM is going to be a function of business loan growth. We believe we have the people and verticals in place to drive strong medium to long term business loan growth.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Along the journey, if there's a quarter of subdued growth and less remixing, it does not change the ending NIM destination in our mind. With respect to balance sheet growth, we expect low single digit growth for the remainder of the year with the planned attrition in transactional CRE and multifamily masked by growth in our business loan portfolio. As we've typically done, we will only provide guidance for 2026 once we get into the new year. Next, I'll turn to expenses. As outlined in the press release, we have organically built out several new lending verticals.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

As a result, we are updating our core cash non interest expense guidance, which excludes intangible amortization, to approximately 61,500,000 for the third quarter of twenty twenty five. This updated guidance is based on our existing employee base as of the time of the earnings release. For the third quarter, we anticipate swap fee income to be approximately $05,000,000 and total noninterest income to be in the $10,500,000 area. Finally, on the tax rate, we expect the effective tax rate to be between 2727.5% for the third quarter. With that, I'll turn the call back to the operator, and we'll be happy to take your questions.

[Operator]

Thank you. At this time, we will conduct the question and answer session. Our first question comes from the line of Thomas Reid of Raymond James. Your line is now open.

[Thomas Reid, Equity Analyst at Raymond James]

Hey, guys.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Hi, Thomas. How are

[Thomas Reid, Equity Analyst at Raymond James]

Thomas on for Steve. Thanks for taking my question. So I wanna start it off. So pretty pretty healthy bump in in DDA balances here based relative to the prior trend. Was there anything one time in nature? Can we expect a similar trajectory there going forward?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yes. Nothing one time, Thomas.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Yes. No, we've had a nice continued strength in our retail network as well as our private banking groups. I mean, if you look at quarter over quarter, we're still seeing a significant amount of new accounts opened. There are about 1,500 new accounts opened in our Private Banking Group quarter over quarter and obviously three fifty million to $400,000,000 in growth quarter over quarter. We're still seeing significant positive trends in both the retail group as well as our private banking group.

[Thomas Reid, Equity Analyst at Raymond James]

Okay, good. That's good to hear. And then it looks like the weighted average rate on the loan pipeline is down about 40 basis points. Is that largely driven by rate movements? Or are you maybe seeing a little bit more competition in tightening of spreads there?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

No. So the origination rate this quarter was around seven ten, and Stu mentioned in his prepared remarks that the new pipeline was around six eighty five. So it's probably around 20 to 25 basis points. Some of it is just we're doing floating rate loans, we're getting a good spread over it. It's a little bit of mix shift, things like that.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

So nothing substantial in there, but we're still pretty much there, very high sixes to close to seven, basically.

[Thomas Reid, Equity Analyst at Raymond James]

Okay. Okay, that's great. I'll step back in the queue. Thank you for taking my question.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Thanks. Thank

[Operator]

next question comes from the line of Mark Fitzgibbon of Piper Sandler. Your line is now open.

[Mark Fitzgibbon, MD & Head - FSG Research at Piper Sandler Companies]

Hey, guys. Good morning. First question, Avi, just to clarify, you did say $61,500,000 for operating expenses for the third quarter. Is that correct?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yes. So but excluding the intangible amortization, Mark, so 61.5 plus the $200 $250,000 odd for the intangible amortization. So all in, it's probably 61.8.

[Mark Fitzgibbon, MD & Head - FSG Research at Piper Sandler Companies]

Okay, great. And then secondly, I wonder if you could remind us what the impact of a 25 basis point rate cut means to NII or the margin? Any color on that?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yes. Sure. It's historically been around five basis points, Mark. So we'd expect that to continue. I mean, obviously, if we get a bunch of gradual 25 basis point rate cuts with some time lag in between them, that's the most favorable environment for us to realize the full five basis points. So I would use around five basis points.

[Mark Fitzgibbon, MD & Head - FSG Research at Piper Sandler Companies]

Okay, great. And then sort of at a high level, I guess I'm curious how you all are thinking about sort of the hiring. You've done a lot of hiring, had some really good success in the deposit front and growing business. Are we getting to the point, do you think, where expense growth and hiring start to flatten out a little bit here? Or is there still a steep trajectory there?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yes. So I'd say, Mark, we put the verticals in place on the lending side. The second quarter was a big hiring quarter for us in terms of who we put in place and the infrastructure behind it. I would say as we get closer to the end of the year, it's harder to move people basically. I mean, there could be some singles and doubles where we add some people on.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

But I think any substantial hiring, as you get into August and September, you then start getting into next year at that point. So I think using the Q3 run rate ish plus or minus for the fourth quarter is not unreasonable. I mean, maybe up a little bit. And then once again, next year, we're going to have to reevaluate. I mean, we're still in touch with some substantial deposit teams and some substantial people on the lending side, but it takes time to move some of these.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

And we're also trying to stage these where we keep OpEx in check and we can show that we're driving the efficiency ratio down every quarter.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Yes. I'd say that generally, we're where we want to be. We had concentrated on bringing deposit teams on for the last eighteen months, and then we really focused on building out the remainder of these verticals in the first part of this year. And I think we're pretty comfortable where we are today in meeting our goals and strategic goals in terms of the verticals we're looking at. And the pipelines are starting to really build in those verticals.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

So we're very pleased. I think those new hires are going to be at breakeven or profitable very quickly based on the pipeline we're seeing.

[Mark Fitzgibbon, MD & Head - FSG Research at Piper Sandler Companies]

Okay. And then, Stu, I'm curious at a high level, it feels like M and A is starting to pick back up. You see that as an opportunity for Dime? Or are you still more internally focused right now? Any comments around M and A?

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Look, there are if there are opportunities out there, we're certainly interested. And as you know, the market is not a target rich environment. So we are looking at options and are certainly interested. But just as important or more importantly, we've been able to significantly grow the balance sheet and think we can continue to do that organically. But if opportunities present themselves, we will certainly take a look.

[Mark Fitzgibbon, MD & Head - FSG Research at Piper Sandler Companies]

Okay. And then lastly, I guess I'm curious your thoughts on how Mamdani Merrill win might impact your New York City multifamily rent regulated book. And obviously, I know you're deemphasizing that business, but any thoughts on sort of how you might handle that?

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Well, look, there's no guarantee he's going to win. Obviously, the Rent Guidelines Board has just announced new rent increases that go into effect in October. The near there's not a lot of near term concern, but obviously, if you were to be elected and were to affect the Rent Guidelines Board in such a way that rent freezes were put in place. We're taking a look at that. Look, we've been through this before.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

We've had several years of rent freezes in New York City before. Our portfolio remains very strong. As you can see and as we reported, we still have no nonperforming multifamily. The other thing is our rent regulated portfolio is very granular. The average loan size is about 2,800,000 And also important, all the pre-twenty nineteen portfolio that were subject to the changes in the law regarding passing on capital expenses and increasing rents.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

All those homes, what remains of them, which is in the $400,000,000 range, are all have all repriced at this point and are current. So we're monitoring it. We've looked at what it might mean to the portfolio, but we think we have a pretty strong portfolio, good debt service coverage and good borrowers, a very granular portfolio with generational owners. So we're going to continue to monitor it. We'll see what happens in the election, and we'll manage through it as the market has managed through it in the past.

[Mark Fitzgibbon, MD & Head - FSG Research at Piper Sandler Companies]

Thank you.

[Operator]

Our next question comes from the line of Matt DeBries of Stephens Inc. Your line is now open.

[Matthew Breese, Managing Director at Stephens Inc]

Hey, good morning. I was hoping you could touch a little bit on cost of deposits. It was obviously demand deposit growth this quarter was really solid and you continue to make gains there, but the overall cost deposits was flat. Can you just talk about, in the absence of rate cuts, is there room to reduce costs or are we about done?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yeah, Matt, same answer as last quarter. We're bringing in new deposits probably in the low to mid 2% area. We don't have a very large CD base at the bank. There's probably around 300 to three fifty million of CDs that are maturing in the third quarter. The rate on that is probably three sixty five to three seventy.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

We're probably retaining 90% of that at 3%. The CD book probably gives us a basis point or two. There's probably a basis point or two that we can shave off, but that'll probably be offset by new deposits coming in. So I think growing deposits is important for us. I think absent rate cuts, I think this is a reasonable level for us on deposit costs.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

And more of the NIM expansion story for us is on the asset repricing side going forward.

[Matthew Breese, Managing Director at Stephens Inc]

Great. And then on the new verticals, I think in the press release and just quickly, it was corporate slash specialty finance, lender finance, fund finance. Could you just give us some flavor for how those how loans are priced on those verticals, spreads over SOFR and some sense for historical loss content?

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Yeah, go ahead.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

No, think these are primarily floating rate assets, Matt, for us. So it's going to help with the asset liability management profile. I would say on the I'll start with healthcare, which you didn't ask about, but which we've been in the business. I mean, that's probably a SOFR plus 300 ish business on the healthcare side. I think some of these other verticals are anywhere between two fifty to 300 over SOFR, basically.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

I'd say fund finance historically has really not had any asset quality issues over time. We're really just doing subscription lines, basically, which is the safest part of that business. And I think in some of the other verticals as well, we're not really seeing a lot of historical lost content and we're going to do it carefully and appropriately like we did with the build out of healthcare over time. We don't expect lost content. We're getting to see new transactions coming in.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

We've built a number of different businesses, right? So that's going to give us flexibility over time to pace loan growth over time.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Yes. So I'd say generally, spreads are $225,000,000 to 300,000,000 in all the verticals. And we're seeing, as I said, some pretty strong pipeline activity. So we're excited about that. All of it's basically floating rate.

[Matthew Breese, Managing Director at Stephens Inc]

And then in terms of balances, if everything goes according to plan or if you want to reference you know, the folks who've hired their prior books, you know, twelve or twenty four months from now, to what extent do you think this might impact loan growth? What could what could be the potential kind of loan balances here?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yes, I think we'd use healthcare as a template, Matt, for this. So we started that business probably two, two and a half years back. At this point, we're probably at around 300 to $350,000,000 of balances on the healthcare side. So I think that's a good template for a twenty four month ish period. I think over the slightly longer term of that, if you think about thirty six to forty eight months, we'd like each of these businesses to be a half a billion dollar vertical for us basically. That's how we think about it.

[Matthew Breese, Managing Director at Stephens Inc]

Appreciate that. Last one is just, Avi, could you update us on kind of reserve plans? I think the loan loss reserve is up to 86 basis points. I think there's a push to get it higher. Could you just kind of update us on where you want to be by year end?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yeah, so when we, you know, I think we started talking about this probably a year back this time, Matt, or maybe nine months back. And I think the goal was over the medium to longer term, getting to 90 basis points to 1% plus or minus. It's hard to every quarter know what the next quarter is going to do, because it depends on the CECL model, depends on stuff coming in and out. I think going forward, as we transition the balance sheet and do more C and I, naturally, the ratio's going to go up. It's not a hard and fast number we need to get to by any circumstances, but just as we run our models internally and look at doing more in some of these verticals over time, I think you're going to get to that 90 basis points to 1% area.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

We're at 86 basis points right now. So we're happy it's trended up. We're getting more in line with a local peer group, national peer group type, given the risk profile of our assets. So I would say hard to predict every quarter if it's going to go up from here on out, but it's definitely directionally, we'd like it to be in the 91% area.

[Matthew Breese, Managing Director at Stephens Inc]

That's all I had. Thanks for taking my questions.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Thanks, Matt. Appreciate it.

[Operator]

Thank you. Our next question comes from the line of Manuel Navas of D. A. Davidson and Company. Please go ahead.

[Manuel Navas, MD & Senior Research Analyst at D.A. Davidson]

Hey, appreciate the color on the loan repricing outlook. Do you have the balances just in the second half of the year?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yeah. Yeah. So we have, in the third quarter, Manuel, that's probably around $400,000,000 at a rate of around 4%. And then in the fourth quarter, there's around $200,000,000 at a rate of around four thirty. But it's important, even that $400,000,000 right, a lot of them are towards the end of the quarter, is why when we gave our NIM guidance, it was, look, we're probably going to see more pronounced NIM expansion in the fourth quarter because we won't have to actually reprice for you to get the benefit of it.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

So the total quantum is around 600 and split April and February fourth quarter.

[Manuel Navas, MD & Senior Research Analyst at D.A. Davidson]

That's great. That's really helpful. Where do you know, Stu discussed that the private banking group has, like, 1,500 accounts. Where do balances stand right now there?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

2,200,000,000.0.

[Manuel Navas, MD & Senior Research Analyst at D.A. Davidson]

And our pipelines as strong as ever. Mean, with those new accounts, just kind of you're going to be doing some remix of the balance sheet that keeps the balance sheet in the low single digits growth. But this deposit group still has plenty of runway to go forward. Correct?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yeah, we think so. I mean, look, same thing we've said historically that we think each of these groups, it's going take three to four years for them to reach a steadier state. And Stu said in his remarks, account openings are very strong, similar to the pace of prior quarters, basically. And so, in an individual quarter here or there, it may be up or down, but we really track it from an account opening and customer opening perspective, and that's not slowed down yet.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Yes. And on top of that, the verticals that we brought on and the pipeline that's out there, we're seeing significant deposit balance opportunity as well. So it's just not one-sided balance sheet on these new verticals. So we're pretty bullish on continued growth there.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yes. Just one other thing I would add is, our branch network has had a really, really solid first six months of the year. It's made up a lot of balances, especially from stuff that was lost in 2023. So really seeing three different avenues for deposit growth of the private banking groups we hired, the new lending verticals, as well as the branch network.

[Manuel Navas, MD & Senior Research Analyst at D.A. Davidson]

That's great. As you're getting more and more funding and more opportunities, where could loan growth get to especially with all the verticals like in '26 and '27? You do have some of the repricing come at the same time, but like where could loan growth get longer term?

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yeah, if this is an indirect way of asking us for guidance for '26, we're going to stay away from that. Look, think Matt asked the question, where do we think these verticals could be over time, And each of these, in the medium to long run, we'd want them to be 300,000,000 to $500,000,000 verticals. We're going to see some attrition on the transactional CRE side, but there's no reason we should not be a mid to high single digits growth bank once the CRE ratio gets to a level that we want it to be at. The near term, as we said earlier, we're managing the CRE ratio to get down to around 400% by year end, and we're pretty much there at this point, right? So it's really a tale of two balance sheets with the CRE that we're reducing, but then medium to longer term, I think mid to high single digits is a good number for the bank.

[Manuel Navas, MD & Senior Research Analyst at D.A. Davidson]

Okay. I appreciate that. Thank you very much.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Thanks, Manuel.

[Operator]

Thank you. Our next question comes from the line of David Conrad of KBW. Your line is now open.

[David Konrad, Managing Director at Keefe, Bruyette & Woods (KBW)]

Yes, good morning. Thanks for all the detailed guidance. Just want to talk a little bit about capital, really strong here north of 11% CET1. You got an improving profitability coming next year, but I guess it still sounds like the number one priority is the organic growth of the business rather than anything near term in terms of capital deployment or return to shareholders.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yeah, David, that's fair. On our last earnings call, we got a similar question and responses pretty similar right now. I mean, obviously still a little bit of uncertainty with tariffs. We've hired a lot of productive teams right now. What we said is, when we get to the end of the year, early twenty twenty six, we're going to reevaluate the buyback, things like that.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

I mean, from a pure corporate finance perspective, we feel our stock is very undervalued at this point. But at the same time, we do think having capital ratios higher than pretty much everybody in our local peer group is a big competitive advantage as we go after new verticals. So I'd say in near term, we're happy to be accreting capital. I think in the medium to longer term, as we've shown in the past, we've distributed capital to shareholders when we can.

[David Konrad, Managing Director at Keefe, Bruyette & Woods (KBW)]

Great, thank you.

[Operator]

All right. I'm showing no further questions at this time. Actually, we do have one more in the queue here. Alright. We have Matthew Breeze returning from Stephens Inc. Please go ahead.

[Matthew Breese, Managing Director at Stephens Inc]

Hey, guys. I just one more. Avi, could you help me out with cash, cash equivalents, liquidity, deployment strategy? You're sitting on just a lot of cash here. Curious where you feel comfortable bringing it down to and some sense for timing? Thanks.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Yeah, I think in the near term, we were not focused on buying securities, Matt. If we did decide to do so, there certainly would be a boost to NIM and a boost to net interest income. But we're trying to run the balance sheet for the more medium to longer term. I think over the medium to longer term, a lot of the cash would probably be redeployed into some of the new lending verticals that we're in. Our loan to deposit ratio is 91% to 92%.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

We're very comfortable between that 90% to 95%. So I'd say in the medium to longer term, we'd like a lot of that to go into some of the C items that we're focused on, which are floating rate assets. But I'd in the near term, we're not out there buying securities and changing the ALM profile to something different than what we want to do. So we are giving up some earnings in the near term, but I think we're creating a balance sheet that will have a structurally higher NIM over time and set us up for different rate environments by keeping the cash position where it is.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Yes. And what we're seeing in the pipeline with the existing verticals and the teams we brought on plus with the new verticals, we think that we can quickly deploy over the next six to nine months excess liquidity, so at meaningful NIM improvement. That's our view as to our current cash position.

[Matthew Breese, Managing Director at Stephens Inc]

Great. I appreciate it. Thanks for taking all my questions.

[Avinash Reddy, Senior EVP & CFO at Dime Community Bancshares]

Thanks, Matt.

[Operator]

Thank you. I am showing no further questions at this time. I would now like to turn it back to Stuart LeBeau for closing remarks.

[Stuart Lubow, President & CEO at Dime Community Bancshares]

Thank you, Stephen, and thank you all to our dedicated employees, our shareholders for their continued support, and we look forward to speaking with you after our third quarter.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Stuart Lubow, President & CEO
• Avinash Reddy, Senior EVP & CFO

Analysts

• Thomas Reid, Equity Analyst at Raymond James
• Mark Fitzgibbon, MD & Head - FSG Research at Piper Sandler Companies
• Matthew Breese, Managing Director at Stephens Inc
• Manuel Navas, MD & Senior Research Analyst at D.A. Davidson
• David Konrad, Managing Director at Keefe, Bruyette & Woods (KBW)