Dime Bancshares Keeps the Cash Flow Coming with a Solid Preferred Dividend – Here’s Why Investors Should Take Note!

Dime Community Bancshares (NASDAQ: DCOM) just pulled off a move that should grab the attention of income-focused investors: a $0.34375-per-share quarterly dividend on its 5.50% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series A. This isn’t just a routine payout—it’s a sign of financial confidence from a regional banking powerhouse that’s quietly dominating its niche. Let’s break down why this dividend matters and what it says about Dime’s future.

The Dividend: Steady as She Goes

First, the numbers: A $0.34375 quarterly dividend translates to an annual yield of 5.50% for preferred shareholders. That’s a solid rate in a low-interest environment, and it’s consistent with Dime’s track record. The record date of May 8 means investors must own the stock by then to get the May 15 payment.

But here’s the catch: This preferred stock is non-cumulative. That means if Dime ever skips a dividend, shareholders have no legal right to claim the missed payment later. So, investors need to be sure they trust the bank’s financial health—and that’s where Dime’s fundamentals shine.

Why Dime Can Afford to Pay

Dime isn’t just throwing cash around. Let’s look at the facts:
- $14 billion in assets: The bank is a titan in its regional market, with the largest deposit share among community banks in Greater Long Island (excluding giants over $20 billion).
- Strong capital ratios: As of March 2025, its Common Equity Tier 1 (CET1) ratio was 11.12%, comfortably above regulatory minimums and a sign of resilience.
- Profitability: First-quarter 2025 net income hit $19.6 million, or $0.45 per diluted common share. Adjusted earnings excluded one-time costs, suggesting core operations are firing on all cylinders.

The bank is also focusing on net interest margin expansion, a key metric for profitability as rates shift. With deposit growth and a robust balance sheet, Dime has the cushion to keep preferred dividends flowing—even if the Fed’s rate path gets rocky.

The Risk? Non-Cumulative Means No Guarantees

Let’s not sugarcoat it: Non-cumulative preferred stock is riskier than cumulative. If Dime faces a liquidity crunch or decides to conserve capital, dividends could vanish without recourse. But here’s why that’s unlikely here:

1. Regulatory incentives: Banks with strong capital ratios like Dime’s CET1 of 11.12% are often encouraged to return capital to shareholders.
2. Market reputation: Skipping a preferred dividend could spook investors and hurt Dime’s ability to raise capital in the future.
3. Track record: Dime has maintained its preferred dividend schedule for years, suggesting management prioritizes these shareholders.

The Bottom Line: A Steady Bet for Income Seekers

Dime Community Bancshares is a buy for income investors looking for a reliable 5.50% yield on preferred stock. Its dominance in its regional market, solid capital ratios, and consistent earnings make it a safer bet than many peers.

However, don’t ignore the non-cumulative caveat. This isn’t a “set it and forget it” investment—monitor Dime’s CET1 ratio and net interest margin closely. If either weakens significantly, that dividend could be at risk.

For now, though? Dime is proof that even in a volatile banking sector, some institutions are built to deliver.

Final Take: Dime’s dividend declaration isn’t just a quarterly ritual—it’s a vote of confidence in its financial strength. Pair that with its Long Island market dominance and you’ve got a recipe for steady income. Just keep an eye on those capital metrics!

Invest Like a Mad Cramer!
This isn’t a “buy and forget” stock—stay engaged with its financials. But if you’re in for the long haul and want a bank with a history of delivering, Dime’s preferred stock could be your next cash cow.