Dime Community Bancshares (DCOM)

Regional bank Dime Community Bancshares (NASDAQ:DCOM) reported revenue ahead of Wall Streets expectations in Q4 CY2025, with sales up 24.4% year on year to $123.8 million. Its non-GAAP profit of $0.79 per share was 10.6% above analysts’ consensus estimates.

Company Overview

With roots dating back to 1910 and a name that evokes the historic "dime savings banks" of America's past, Dime Community Bancshares (NASDAQ:DCOM) is a New York-based bank holding company that provides commercial banking and financial services to businesses and consumers throughout Greater Long Island.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

Dime Community Bancshares competes with other regional banks serving the New York metropolitan area, including New York Community Bancorp (NYSE:NYCB), Valley National Bancorp (NASDAQ:VLY), and M&T Bank (NYSE:MTB), as well as larger national banks with significant presence in the region.

Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Thankfully, Dime Community Bancshares’s 17.7% annualized revenue growth over the last five years was excellent. Its growth beat the average banking company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Dime Community Bancshares’s annualized revenue growth of 13.1% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Dime Community Bancshares reported robust year-on-year revenue growth of 24.4%, and its $123.8 million of revenue topped Wall Street estimates by 5.1%.

Net interest income made up 90.3% of the company’s total revenue during the last five years, meaning Dime Community Bancshares lives and dies by its lending activities because non-interest income barely moves the needle.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

Topline growth alone doesn't tell the complete story - the profitability of that growth shapes actual earnings impact. Banks track this dynamic through efficiency ratios, which compare non-interest expenses such as personnel, rent, IT, and marketing costs to total revenue streams.

Investors place greater emphasis on efficiency ratio movements than absolute values, understanding that expense structures reflect revenue mix variations. Lower ratios represent better operational performance since they show banks generating more revenue per dollar of expense.

Over the last five years, Dime Community Bancshares’s efficiency ratio has increased by 1.7 percentage points, going from 72.2% to 56.1%. Said differently, the company’s expenses have increased at a faster rate than revenue, which usually raises questions unless the company is in high-growth mode and reinvesting its profits into attractive ventures.

In Q4, Dime Community Bancshares’s efficiency ratio was 52.6%, beating analysts’ expectations by 80 basis points (100 basis points = 1 percentage point).

For the next 12 months, Wall Street expects Dime Community Bancshares to rein in some of its expenses as it anticipates an efficiency ratio of 50.9%.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Dime Community Bancshares’s EPS grew at a weak 1.9% compounded annual growth rate over the last five years, lower than its 17.7% annualized revenue growth. However, its efficiency ratio actually improved during this time, telling us that non-fundamental factors such as taxes affected its ultimate earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Dime Community Bancshares, EPS didn’t budge over the last two years, a regression from its five-year trend. We hope it can revert to earnings growth in the coming years.

In Q4, Dime Community Bancshares reported adjusted EPS of $0.79, up from $0.42 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Dime Community Bancshares’s full-year EPS of $2.61 to grow 32.1%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

Dime Community Bancshares’s TBVPS grew at a sluggish 1.9% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 5.8% annually over the last two years from $24.44 to $27.37 per share.

Over the next 12 months, Consensus estimates call for Dime Community Bancshares’s TBVPS to grow by 8.9% to $29.82, paltry growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, Dime Community Bancshares has averaged a Tier 1 capital ratio of 10.9%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Dime Community Bancshares has averaged an ROE of 7.9%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.

We were impressed by how significantly Dime Community Bancshares blew past analysts’ net interest income expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $30.12 immediately following the results.

Updated: January 21, 2026 at 7:05 AM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

Dime Community Bancshares isn’t a terrible business, but it doesn’t pass our bar. Although its revenue growth was impressive over the last five years, it’s expected to deteriorate over the next 12 months and its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders. And while the company’s expanding net interest margin shows its loan book is becoming more profitable, the downside is its net interest margin limits its operating profit potential compared to other banks that can earn more, all else equal..

Dime Community Bancshares’s P/B ratio based on the next 12 months is 0.9x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $36.20 on the company (compared to the current share price of $30.12).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.