Dime Community Bancshares (DCOM) AI Stock Analysis

272 Followers

Top Page

Dime Community Bancshares

(NASDAQ:DCOM)

69Neutral

Dime Community Bancshares shows strong revenue growth and operational efficiency, enhanced by a significant reduction in leverage. However, challenges in maintaining net profit margin and ROE, coupled with weak technical indicators and a high P/E ratio, weigh down the score. The positive earnings call, highlighting strategic growth and deposit expansion, provides some optimism for future performance.

Positive Factors

Analyst Recommendation

Shares of DCOM were upgraded to Overweight following the recent $144 million common equity raise.

Earnings Potential

Analysts have increased the price target for DCOM shares to $39.00, reflecting confidence in the improved earnings profile and lower CRE concentration.

Financial Performance

The reported net interest margin of 2.79% increased 24 bps from the linked quarter.

Negative Factors

Market Risks

Risks include, but are not necessarily limited to, a deterioration in asset quality, a precipitous rise in interest rates, and general weakness in bank stock valuations.

Dime Community Bancshares (DCOM) vs. S&P 500 (SPY)

Market Cap

$1.11B

Dividend Yield3.97%

Average Volume (3M)339.25K

Price to Earnings (P/E)46.1

Beta (1Y)1.18

Revenue Growth0.87%

EPS Growth-74.06%

CountryUS

Employees887

SectorFinancial

Sector Strength79

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.59

Shares Outstanding43,657,135

10 Day Avg. Volume446,513

30 Day Avg. Volume339,253

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)4.18

Price to Cash Flow (P/CF)3.40

P/FCF Ratio1.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$38.50

Price Target Upside52.72% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Dime Community Bancshares Business Overview & Revenue Model

Company DescriptionDime Community Bancshares, Inc. is a publicly traded bank holding company headquartered in Hauppauge, New York. It operates through its wholly owned subsidiary, Dime Community Bank, which offers a comprehensive range of financial services. The bank serves commercial and retail customers primarily in the New York metropolitan area, providing services such as personal and business banking, commercial lending, and insurance products.

How the Company Makes MoneyDime Community Bancshares generates revenue primarily through interest income from its lending activities, including commercial and residential loans. The company also earns non-interest income from fees and service charges related to its banking operations, such as account maintenance fees, transaction fees, and investment services. Additionally, Dime Community Bank benefits from strategic partnerships and community-focused initiatives that help expand its customer base and product offerings, contributing to its overall earnings.

Dime Community Bancshares Financial Statement Overview

Summary

Dime Community Bancshares exhibits strong revenue growth and operational efficiency, supported by effective cost management and cash flow generation. However, the decline in net profit margin and ROE highlights challenges in translating revenue gains into net income. The significant reduction in leverage enhances financial stability.

Income Statement

Positive

Dime Community Bancshares has demonstrated strong revenue growth, with a substantial increase from $352.8 million in 2023 to $650.1 million in 2024, representing a revenue growth rate of 84.3%. The gross profit margin remains robust at 100%, reflecting effective cost management. However, the net profit margin has seen a decline, dropping from 27.2% in 2023 to 4.5% in 2024, indicating challenges in maintaining profitability. EBIT margin has improved significantly, rising from 41.4% to 99.0%, showcasing strong operational efficiency.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved markedly, dropping from 1.28 in 2023 to 0.04 in 2024, indicating reduced leverage and increased financial stability. Return on equity (ROE) has decreased from 7.8% to 2.1%, suggesting lower profitability relative to equity. The equity ratio remains stable at approximately 9.7%, indicating a consistent capital structure.

Cash Flow

Positive

Free cash flow has grown from $85.2 million in 2023 to $92.8 million in 2024, reflecting a healthy free cash flow growth rate of 8.9%. The operating cash flow to net income ratio is high at 3.40, indicating strong cash generation relative to earnings. Free cash flow to net income ratio is also strong at 3.19, showcasing efficient cash flow management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
650.15M	352.78M	418.02M	399.68M	180.48M
	Gross Profit
650.15M	350.01M	418.02M	354.85M	180.48M
	EBIT
643.49M	145.97M	279.59M	148.17M	55.73M
	EBITDA
0.00	0.00	222.11M	158.59M	60.05M
	Net Income Common Stockholders
29.08M	96.09M	152.56M	104.00M	42.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.97B	1.34B	1.12B	1.96B	1.33B
	Total Assets
14.35B	13.64B	13.19B	12.07B	6.43B
	Total Debt
50.00M	1.57B	1.39B	290.06M	340.77M
	Net Debt
-1.23B	1.11B	1.22B	-103.66M	-536.06M
	Total Liabilities
12.96B	12.41B	12.02B	10.87B	340.77M
	Stockholders Equity
1.40B	1.23B	1.17B	1.19B	517.83M
Cash Flow		Free Cash Flow
92.80M	85.15M	291.43M	1.10B	42.26M
	Operating Cash Flow
99.06M	90.87M	295.17M	146.33M	47.39M
	Investing Cash Flow
64.13M	-214.05M	-1.33B	1.10B	-716.84M
	Financing Cash Flow
662.84M	411.42M	812.59M	-1.10B	1.43B

Dime Community Bancshares Technical Analysis

Technical Analysis Sentiment

Negative

Last Price25.21

Price Trends

50DMA

28.29

Negative

100DMA

30.26

Negative

200DMA

28.20

Negative

Market Momentum

MACD

-1.05

Negative

RSI

41.12

Neutral

STOCH

50.39

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DCOM, the sentiment is Negative. The current price of 25.21 is below the 20-day moving average (MA) of 26.16, below the 50-day MA of 28.29, and below the 200-day MA of 28.20, indicating a bearish trend. The MACD of -1.05 indicates Negative momentum. The RSI at 41.12 is Neutral, neither overbought nor oversold. The STOCH value of 50.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DCOM.

Dime Community Bancshares Risk Analysis

Dime Community Bancshares disclosed 24 risk factors in its most recent earnings report. Dime Community Bancshares reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Dime Community Bancshares Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BY	70 Outperform	$1.07B	8.70	11.60%	1.54%	16.41%	3.09%
DCOM	69 Neutral	$1.11B	46.11	2.19%	3.97%	0.87%	-74.06%
BHLB	68 Neutral	$1.07B	16.23	5.60%	3.07%	4.29%	-9.78%
LOB	66 Neutral	$1.10B	14.32	8.15%	0.49%	16.48%	3.59%
Sector *	63 Neutral	$12.75B	9.36	8.64%	84.32%	13.82%	-3.89%
QCRH	63 Neutral	$1.13B	9.97	12.09%	0.36%	9.56%	-0.32%

* Financial Sector Average

Performance Comparison

DCOM

Dime Community Bancshares

25.21

7.19

39.90%

BHLB

Berkshire Hills

23.63

2.50

11.83%

QCRH

QCR Holdings

66.93

9.76

17.07%

LOB

Live Oak Bancshares

24.22

-13.56

-35.89%

Byline Bancorp

24.18

3.75

18.36%

Dime Community Bancshares Earnings Call Summary

Earnings Call Date: Jan 23, 2025 | % Change Since: -19.82% | Next Earnings Date: Apr 22, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements in deposit growth, capital strength, and net interest margin expansion. However, concerns around increased loan loss provisions and charge-offs presented challenges. Overall, the positive aspects outweighed the negative, demonstrating strong performance and potential for future growth.

Highlights

Strong Deposit Growth

Raised approximately $1.8 billion in core deposits with 40% in noninterest-bearing deposits. Opened over 11,000 accounts and 7,000 individual customer relationships.

Reduction in Wholesale Borrowings

Reduced wholesale borrowings and brokered deposits by approximately $1.2 billion over the past year.

Loan Growth in Business Segments

Business loans increased by over $70 million in Q4 and $400 million for the year, driven by C&I and healthcare verticals.

Capital Ratios and Equity Offering

Raised approximately $136 million from a common equity offering, leading to a common equity Tier 1 ratio in excess of 11% and a total capital ratio over 15.5%.

Net Interest Margin Expansion

NIM increased to 2.79% in Q4 with a pathway to exceed 3% in future quarters.

Outstanding CRA Rating

Received second consecutive outstanding CRA rating, with perfect scores on lending, investment, and service tests.

Lowlights

High Loan Loss Provisions

Loan loss provision increased to $13.7 million in Q4, with allowance to loans rising to 82 basis points.

Charge-offs and Credit Concerns

Charge-offs for 2024 were 17-18 basis points, with no large credits but spread across C&I, commercial real estate, and multifamily.

Pension Plan Termination Costs

Incurred $1.2 million in termination expenses for a legacy pension plan, with an additional $4.5 million expected in Q1 2025.

Company Guidance

During the earnings call for Dime Community Bancshares, guidance for 2025 highlighted several key metrics. The company expects its net interest margin (NIM) to increase, with a projected rise to approximately 2.90% in the first quarter, aiming for a 3% NIM over the year, due to factors such as core deposit growth and loan repricing. The bank plans to maintain its CRE concentration in the low 400s and grow period-end loan balances in the low single-digit range. Noninterest income is anticipated to be between $40 million and $42 million, while core cash noninterest expenses are projected at $234 million to $235 million. The bank also expects a tax rate between 27% and 28% and aims to achieve a charge-off range of 20 to 30 basis points. These projections underscore Dime's strategy to increase profitability while managing expenses and capital.

Dime Community Bancshares Corporate Events

Executive/Board Changes

Dime Community Bancshares Announces Board Member Retirement

Neutral

Jan 14, 2025

On January 8, 2025, Michael P. Devine announced his retirement from the Board of Directors of Dime Community Bancshares, Inc. and its subsidiary, Dime Community Bank, effective April 24, 2025. This announcement follows an earlier filing on December 23, 2024, further solidifying the upcoming leadership transition.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.