[Management View]
Dime Community Bancshares reported robust growth in core pretax pre-provision income, reaching $49 million in Q2 2025 compared to $28 million in Q2 2024. Core ROA improved to 0.85%, and core EPS increased by 12% QoQ to $0.64 per share. Management emphasized strategic priorities, including expanding business loans, reducing CRE exposure, and leveraging new lending verticals. Liquidity and capital positions were highlighted as competitive advantages, with a common equity tier one ratio of 11.25% and total capital ratio of 15.8%.

[Outlook]
Management provided guidance for Q3 2025, projecting core cash non-interest expenses of $61.5 million and non-interest income of approximately $10.5 million. Net interest margin (NIM) is expected to show gradual improvement in Q3, with more pronounced expansion in Q4 as loan repricing accelerates. Long-term NIM targets include milestones of 3.25% and 3.50%. Balance sheet growth is anticipated to remain in the low single digits for the remainder of 2025, driven by business loan expansion and deposit growth.

[Financial Performance]
- Core EPS: $0.64 (+12% QoQ, +49% YoY)
- Net Interest Margin (NIM): 2.98% (2.95% excluding prepayment fees)
- Core Deposits: Increased by $1.2 billion YoY
- Business Loans: Grew $110 million QoQ, $370 million YoY (+15%)
- Loan Origination Volume: $450 million in Q2 2025
- Credit Loss Provision: $9.2 million
- Core Cash Operating Expenses: $59.9 million (+QoQ due to hiring)

[Q&A Highlights]
Question 1: Was the increase in DDA balances driven by one-time factors, and can this trajectory continue?
Answer: The increase was not driven by one-time factors. Strength in the retail network and private banking groups contributed to growth, with 1,500 new accounts opened in private banking and $350-$400 million in QoQ growth. Positive trends are expected to continue.

Question 2: Why has the weighted average rate on the loan pipeline decreased, and is competition affecting spreads?
Answer: The decrease is attributed to mix shifts and floating rate loans, with origination rates at 7.10% and pipeline rates at 6.85%. Competition has not significantly impacted spreads, which remain in the high sixes to seven percent range.

Question 3: What is the guidance for Q3 operating expenses, and how do rate cuts impact NIM?
Answer: Operating expenses are projected at $61.5 million excluding intangible amortization. Historically, a 25 basis point rate cut results in approximately five basis points of NIM expansion, assuming consistent deposit and loan behavior.

Question 4: Is hiring expected to flatten out, and what is the outlook for expense growth?
Answer: Major hiring efforts for lending verticals were concentrated in Q2 2025. While some incremental hiring may occur, substantial additions are unlikely until 2026. Management aims to balance expense growth with efficiency improvements.

Question 5: Is Dime considering M&A opportunities, and how does the NYC multifamily rent-regulated portfolio perform under potential political changes?
Answer: Management is open to M&A opportunities but remains focused on organic growth. The NYC multifamily portfolio is performing well, with no non-performing loans and granular loan sizes averaging $2.8 million. Rent-regulated loans have repriced and are current.

Question 6: Can deposit costs be reduced further, and what are the pricing dynamics for new lending verticals?
Answer: Deposit costs are stable at 2.09%, with new deposits coming in at low-to-mid 2% rates. Lending verticals, such as fund finance and healthcare, are priced at SOFR plus 250-300 basis points, with minimal historical loss content.

Question 7: What is the reserve ratio outlook, and where does management aim to position it?
Answer: The reserve ratio stands at 0.86%, with a medium-term goal of reaching 0.90%-1% as the loan portfolio shifts toward business lending.

Question 8: How will excess liquidity be deployed, and what is the timeline for deployment?
Answer: Excess liquidity will primarily fund new lending verticals, with a loan-to-deposit ratio target of 90%-95%. Deployment is expected over the next six to nine months, supporting NIM improvement.

[Sentiment Analysis]
Analysts expressed optimism about Dime's deposit growth, business loan expansion, and strategic hiring. Management maintained a confident tone, emphasizing strong pipelines, competitive advantages, and a clear path to higher NIM.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | Q2 2024 |
|----------------------------|-----------------|-----------------|-----------------|
| Core EPS | $0.64 (+12% QoQ)| $0.57 | $0.43 (+49% YoY)|
| Net Interest Margin (NIM) | 2.98% | 2.91% | 2.75% |
| Core Deposits | +$1.2B YoY | +$210M QoQ | N/A |
| Business Loans Growth | +$110M QoQ | N/A | +$370M YoY (+15%)|

[Risks and Concerns]
1. Potential political changes in NYC could impact the rent-regulated multifamily portfolio.
2. Competition in loan pricing may pressure spreads.
3. Expense growth from hiring could weigh on near-term profitability.
4. Uncertainty around Federal Reserve rate cuts and their timing.

[Final Takeaway]
Dime Community Bancshares delivered strong Q2 2025 results, driven by deposit growth and business loan expansion. Management's strategic focus on new lending verticals and asset repricing positions the bank for sustained NIM improvement and earnings growth. While risks such as political changes and competitive pressures exist, Dime's robust capital ratios and liquidity provide a solid foundation for future opportunities. Investors should monitor progress in loan repricing and the impact of new hires on profitability.