Dime Commercial Expands Margin as Loan Growth Accelerates
Net interest income rose to $115.2 million in the second quarter as the bank expanded its net interest margin to 3.28%.
Net interest income rose to $115.2 million in the second quarter, up from $112.3 million in the first quarter and $98.1 million a year earlier. The New York-based commercial lender (DCOM) saw its net interest margin expand 7 bps sequentially to 3.28%, representing a 30 bps increase over the 2.98% reported in the second quarter of 2024.
Loan growth drove the top-line expansion, with business loans increasing by $280.8 million on a linked quarter basis and $743.0 million year-over-year. The bank also improved the yield on its assets, as the ending weighted average rate on the total loan portfolio rose 8 bps to 5.36%.
Funding costs were offset by a shift in the deposit mix. Total deposits increased by $937.0 million year-over-year, while core deposits—excluding brokered and time deposits—rose by $948.3 million over the same period. Non-interest-bearing deposits as a share of average total deposits increased to 31.0% from 30.0% in the first quarter.
Capital levels strengthened as the Tier 1 Common Equity Ratio rose to 11.99% at the end of the second quarter, compared to 11.87% in the first quarter and 11.66% in the fourth quarter of 2024. Management announced plans to resume share buybacks in the third quarter of 2026, citing a strong capital position and a reduction in commercial real estate concentration.
Credit quality metrics showed divergent trends. Non-performing assets declined 28% sequentially to $69.0 million, or 0.46% of total assets, down from $95.6 million in the first quarter. However, the provision for credit losses increased to $13.9 million, up from $12.3 million in the first quarter and $9.2 million a year ago.
The bank continued to reduce its exposure to commercial real estate. The consolidated CRE concentration ratio fell to 352% in the second quarter, down from 371% in the first quarter and 387% in the fourth quarter of 2024.
Operating leverage improved as the efficiency ratio fell to 51.2% from 55.0% a year earlier. On an adjusted basis, the efficiency ratio decreased to 49.9% from 54.7% year-over-year.