In their third quarter earnings call, Dime Community Bancshares (NASDAQ:DCOM) reported positive performance across several areas of their business, including a growth in core deposits and a decrease in non-performing assets. The bank also announced a new partnership with the New York Jets, marking its entry as their official private bank.
Key takeaways from the call include:
- A growth in core deposits of approximately $200 million.
- A 16% decrease in non-performing assets.
- A strong multi-family loan portfolio, representing 38% of the bank's overall loan portfolio with no delinquent loans greater than 60 days.
- A focus on expense management and attracting new customers and talented bankers.
- An expectation for loans to remain relatively stable, with growth in business loans offsetting planned declines in investor CRE and multi-family portfolios.
- A new partnership with the New York Jets, marking Dime's entry as their official private bank.
The bank also reported a decline in consumer DDA to around $30 million, but expects stability or growth in DDA going forward. The new private banking groups have added significant deposits, and overall business DDA is up. The bank is focused on keeping expenses low and beating the full-year expense guidance.
On the lending side, Dime stated that their loan pipelines are heavily weighted towards business loans, with a weighted average rate of 7.9%. The bank is seeing traction in the C&I side and expects $100-150 million of C&I business to close in the quarter. The bank aims to reach a NIM of 3-3.25% in the medium to long term.
Dime has hired private client teams that have opened about 2,000 accounts, bringing in around $250 million in deposits. The bank is not currently considering restructuring the available-for-sale securities book and is holding onto capital for now. Share buybacks are not a priority at the moment.
Avi Reddy reported that they have opened around 2,000 accounts and acquired approximately 1,000 customers, with $250 million brought in, half of which is demand deposit account (DDA). The pipeline team is seeing steady growth in accounts every week.
The bank is looking for opportunities to drive efficiencies and reduce expenses while also taking advantage of growth opportunities. They expect the loan to deposit ratio to continue to decrease, and they are making progress in rolling out technology enhancements, such as online banking and digital account opening processes for retail and commercial customers.
In terms of expense management, the company plans to focus on managing expenses in a granular manner. The loan to deposit ratio was at 102% but they aim to bring it down to 100% and continue reducing it as deposits increase. The company also highlighted the successful rollout of their online banking and digital account opening processes for retail and commercial customers, as well as the positive reception of their new escrow management system. They expressed gratitude to employees and shareholders and indicated plans to provide an update at the end of January.
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