Dime Community Bancshares steps into healthcare lending as part of its commercial banking expansion

Dime Community Bancshares steps into healthcare lending as part of its commercial banking expansion

After Santander, Dime makes a move into the healthcare sector to offer financing solutions and support capital-intensive projects.

by SARA KHAIRI

Some banks are venturing into healthcare financing for a broader scope of lending, based on increasing demand in the sector catalyzed by the COVID-19 era.

The most recent FI to go down this route is Dime Community Bank, which provides financial services and loans primarily for multifamily housing. The NY-based firm is launching a healthcare banking unit to offer equipment financing and related loans for health systems as part of its commercial banking expansion.

The firm has signed on Daniel Shaya Csillag to spearhead this effort. Csillag comes from an extensive background of building and maintaining a portfolio of healthcare clientele at Valley Bank and earlier, managing lending relationships with acute care hospitals and nursing facilities at TD Bank.

Dime is moving into this new direction under the leadership of the newly appointed president and CEO, Stuart H. Lubow, who succeeded the firm's CEO of 16 years, Kevin M. O'Connor. Lubow took charge of the company on August 31, after the firm reported its better-than-expected second-quarter financial results. The firm grew average deposits by $150 million and loans by 6% on an annualized basis, with EPS of $1.01, beating expectations of $0.60. Lubow's focus has been on implementing strategies to foster the expansion and growth of the firm.

"We had the opportunity to capitalize on the disruption in the marketplace caused by the failure of Signature Bank and First Republic Bank by adding seven deposit focus groups. Of note, none of our local community bank competitors, both bigger and smaller, have been able to add the level and depth of deposit-focused talent that we’re able to add," said Lubow at the earnings conference.

In terms of loans, Dime's business loans stood at about 21% of the company's $10.8 billion loan portfolio on June 30. The expansion into the healthcare vertical may set the stage for Lubow's current expectation to grow loans by approximately $200 million in the second half of this year.

Dime's stock closed at $21.69 on September 5 -- $0.58 lower than its previous close -- after it unveiled its expansion plans with Csillag on board. While investors are forward-looking given the recent activities in the IPO market, they are cognizant of the fact that they aren't entirely out of the woods yet. This probably means they want to see some practical results around a viable market first and whether Dime's narrative can hold together over the course of time.

Market recap

The stock market saw some prominent gains this week

Affirm (AFRM) - up 8% to $22.48 per share

• Affirm's shares surged this week on the back of its third-quarter financial results.
• Affirm saw growth in repeat transactions per active customer. Q3 revenue came in at $380.98 million, surpassing the consensus estimate of $371.96 million.

Marqeta (MQ) - up 5% to $6.44 per share

• Marqeta has acquired new customers Giftbit, Vivian, and Whistle, which drove the stock higher. Marqeta will integrate embedded banking and payment solutions into their products.
• Embedded finance customers were responsible for over half of Marqeta’s bookings in the first half of 2023, according to the company.

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1. PayPal dominates payments market share

Source: HelpLama

2. Mastercard or Visa?

Source: The Motley Fool

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