Kroll Bond Rating Agency Maintains Dime’s Outlook at “Stable” and Affirms Ratings

Rhea-AI Summary

Dime Community Bancshares (NASDAQ: DCOM) announced that Kroll Bond Rating Agency (KBRA) has affirmed all its ratings, maintaining a 'Stable' outlook. The Bank's senior unsecured debt rating is 'BBB+', and the Company's senior unsecured debt rating is 'BBB'. KBRA supports these ratings due to Dime's consistent credit quality and conservative underwriting. Furthermore, Dime's funding base, driven by a growth in core deposits, is expected to expand, enhancing its funding and liquidity profile. The integration with Bridge Bancorp has reduced operating expenses, positioning Dime for stronger earnings in a normalized interest rate environment. The CET1 ratio has increased by 80 basis points since the end of 2022 and is projected to continue growing. Regulatory capital measures are not significantly impacted by negative AOCI due to a smaller, shorter-duration securities portfolio.

Positive

• KBRA affirmed Dime's senior unsecured debt rating of 'BBB+'.
• Outlook for all long-term ratings remains 'Stable'.
• Dime shows consistent credit quality with a cumulative NCO ratio below 15 bps since 2007.
• Growth in core deposits expected to enhance funding and liquidity profile.
• Effective integration with Bridge Bancorp has significantly reduced operating expenses.
• Dime is positioned for stronger earnings in a normalized interest rate environment.
• Risk based capital ratios have been growing, with CET1 ratio increasing 80 bps since YE 2022.
• Regulatory capital measures remain stable despite negative AOCI.

Negative

• None.

HAUPPAUGE, N.Y., June 17, 2024 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (the “Company” or “Dime”) (NASDAQ: DCOM), the parent company of Dime Community Bank (the “Bank”), announced that Kroll Bond Rating Agency (“KBRA”) has affirmed all ratings of Dime Community Bancshares, Inc. and Dime Community Bank. KBRA affirmed the Bank’s senior unsecured debt rating of “BBB+” and the Company’s senior unsecured debt rating of “BBB”.

The Outlook for all long-term ratings is “Stable”.

According to the KBRA report:

• The ratings are supported by Dime’s outperformance with regard to credit quality over a long period of time, including multiple economic cycles, with a cumulative NCO ratio of below 15 bps since 2007. KBRA noted Dime’s conservative underwriting and management’s knowledge of local markets and borrowers.
  
• KBRA also recognized Dime’s solid funding base, with a higher level of core deposits, which have grown steadily in recent quarters and should continue to expand considerably over the next few years due to the recent hiring of deposit-focused teams. Given the anticipated core deposit growth, Dime is expected to reflect an enhanced funding and liquidity profile that will position it well to execute its strategic shift in the loan portfolio.
  
• Over the longer-term, Dime should reflect a stronger earnings profile, in part, due to the effective integration with Bridge Bancorp, Inc., which significantly reduced operating expenses. As such, in a more normalized interest rate environment and from the build out of its C&I business, the company has the ability to produce stronger than peer returns.
  
• Risk based capital ratios have been growing over the past year, with the CET1 ratio increasing 80 bps since Year End 2022 (10.0% at 1Q24). Moreover, ratios are expected to continue to build prospectively. KBRA also recognized that regulatory capital measures are not materially impacted when adjusting for negative AOCI due to the smaller sized, and shorter duration, securities portfolio.

Stuart H. Lubow, President and Chief Executive Officer, stated, “We are pleased to receive an affirmation of our investment grade rating and a Stable outlook from KBRA.”

ABOUT DIME COMMUNITY BANCSHARES, INC.

Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company with over $13.5 billion in assets and the number one deposit market share among community banks on Greater Long Island ⁽¹⁾.

Dime Community Bancshares, Inc.
Investor Relations Contact:
Avinash Reddy
Senior Executive Vice President – Chief Financial Officer
Phone: 718-782-6200; Ext. 5909
Email: avinash.reddy@dime.com

____________________
¹ Aggregate deposit market share for Kings, Queens, Nassau & Suffolk counties for community banks with less than $20 billion in assets.

FAQ

What rating did KBRA affirm for Dime Community Bancshares' senior unsecured debt?

KBRA affirmed Dime Community Bancshares' senior unsecured debt rating at 'BBB'.

What is the current outlook for Dime Community Bancshares according to KBRA?

The outlook for Dime Community Bancshares is 'Stable'.

How has Dime Community Bancshares performed in terms of credit quality?

Dime Community Bancshares has shown consistent credit quality, with a cumulative NCO ratio below 15 bps since 2007.

What factors support the KBRA ratings for Dime Community Bancshares?

The ratings are supported by Dime's consistent credit quality, conservative underwriting, and solid funding base.

What impact did the integration with Bridge Bancorp have on Dime Community Bancshares?

The integration with Bridge Bancorp significantly reduced Dime's operating expenses.

What is the expected trend for Dime Community Bancshares' core deposits?

Dime's core deposits are expected to grow steadily over the next few years.

How has Dime Community Bancshares' CET1 ratio changed since the end of 2022?

Dime's CET1 ratio has increased by 80 basis points since the end of 2022.