Dime Community posts quarterly profit of $39.7 million, announces acquisition
Key Facts
Dime Community Bancshares reported net income available to common shareholders of $39.7 million in the third quarter of 2026, alongside an acquisition agreement to expand its banking business. The company, the parent of Dime Community Bank, said adjusted diluted earnings per share were $0.91 for the period. Adjusted earnings per share are a non-GAAP financial measure, as classified in the disclosure. The results came as net interest margin improved and core deposits and business loans grew, developments the chief executive linked to the bank's quarterly performance. The earnings announcement coincided with the signing of a definitive agreement to acquire ES Bancshares, the parent of Empire State Bank.
According to the quarterly earnings statement, net interest margin rose to 3.35% in the third quarter of 2026 from 3.28% in the second quarter of the same year. Net interest income totaled $121.2 million for the quarter as the bank continued to expand its business lending. In comments on the performance, the chief executive cited "continued expansion in net interest margin" among the factors supporting the results. The chief executive also linked the bank's performance to growth in its core deposit base and the increase in business loans during the period. Return on average assets was 1.10%, according to the company's third-quarter figures, alongside the improvement in net interest margin from the previous quarter.
On funding, Dime said core deposits increased by $1.18 billion year on year in the third quarter of 2026. That increase covers core deposits excluding brokered deposits and time deposits, according to the definition the company used in its earnings announcement. On lending, business loans rose by $346.6 million from the previous quarter, according to the same disclosure. Business loan growth came during a period of expansion in the core deposit base, although the two measures use different comparison periods: loan growth is quarterly and deposit growth is annual. On liquidity, the bank held $2.2 billion in cash liquidity at the end of September, according to its reported financial position as of September 30, 2026.
On asset quality, the bank's nonperforming assets totaled $99.5 million as of September 30, 2026, according to Dime Community Bancshares' statement. That balance covers assets classified as nonperforming at the end of the financial period for which the company reported results. On operations, the bank recorded an efficiency ratio of 48.4% in the third quarter, according to the quarterly disclosure. The company reported the ratio among its operating performance measures for the period through the end of September, alongside profitability and interest income results. The reported results thus covered nonperforming assets at quarter-end and the efficiency measure during the quarter, as well as the deposit and lending activity the chief executive discussed in comments on the bank's performance.
Alongside the results, Dime announced on October 20, 2026, that the acquisition agreement for ES Bancshares had an approximate value of $58 million. The deal aims to expand the bank's presence in Staten Island and Brooklyn, according to the company's acquisition statement. It also aims to add low-cost core deposits to Dime's business, extending management's focus on this source of funding. The deal statement described the target deposit base as a "granular, low-cost core deposit base" in outlining the rationale for acquiring Empire State Bank's parent. The announced expansion combines a stronger geographic presence in the two areas with the addition of the deposit base the company cited in explaining the agreement's objectives.
On the expected financial impact, Dime's management expects the acquisition to increase earnings per share by about 3.5%, according to its estimate announced on October 20, 2026. That estimate relates to the acquisition's expected effect on earnings per share, as set out in the company's agreement announcement. Completion of the deal remains subject to approval from the relevant regulators. Closing also requires approval from shareholders of Empire State Bank's parent, alongside regulatory approvals, under the terms Dime announced. Management expects the deal to close in the first quarter of 2027, with that timetable remaining conditional on securing those approvals.