Dime Community Bancshares: Consider Shifting From Baby Bonds To Preferred Shares

Summary

• Dime Community Bancshares has seen significant improvements in net interest income due to 6% year-over-year deposit growth.
• DCOM's loan to deposit ratio has moderated to 95%, reducing external borrowing and lowering future borrowing costs.
• Risks include high loan concentration in multifamily lending and non-owner-occupied commercial real estate, with an inadequate allowance for credit losses.
• Preferred shares offer better capital appreciation and income potential compared to baby bonds, which are trading at a premium and face uncertain future yields.

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Introduction

Dime Community Bancshares (NASDAQ:DCOM) is a regional bank located in New York. The bank has battled interest rate volatility over the last five years along with attracting and retaining deposits. Back in August, I wrote about

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