Western Alliance Bancorporation, ServisFirst Bancshares, First Merchants, and Dime Community Bancshares Shares Are Soaring, What You Need To Know

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official boosted hopes for an interest rate cut. New York Fed President John Williams stated that he sees “room for a further adjustment” for interest rates in the near term. Following his speech, traders increased their bets on a rate cut, with the probability of a December reduction jumping from around 39% to over 70%, according to data from CME Group. The positive sentiment was also reflected in the bond market, where the yield on the 10-year Treasury, a benchmark for mortgage rates, eased following the comments.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Regional Banks company Western Alliance Bancorporation (NYSE:WAL) jumped 5.1%. Is now the time to buy Western Alliance Bancorporation? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company ServisFirst Bancshares (NYSE:SFBS) jumped 5%. Is now the time to buy ServisFirst Bancshares? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company First Merchants (NASDAQ:FRME) jumped 5%. Is now the time to buy First Merchants? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Dime Community Bancshares (NASDAQ:DCOM) jumped 5.1%. Is now the time to buy Dime Community Bancshares? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Dime Community Bancshares (DCOM)

Dime Community Bancshares’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 29 days ago when the stock dropped 7.2% on the news that the company reported third-quarter earnings that missed Wall Street's profit expectations. The regional lender posted adjusted earnings per share of $0.61, which fell short of analyst estimates of $0.69. While revenue for the quarter came in ahead of expectations at $115.6 million, up 32% from the previous year, and net interest income also topped forecasts, investors appeared to be more concerned with the bottom-line miss. The negative reaction suggests that the market weighed the earnings shortfall more heavily than the strong top-line performance, leading to a sell-off in the shares.

Dime Community Bancshares is down 10.2% since the beginning of the year, and at $27.25 per share, it is trading 25.5% below its 52-week high of $36.59 from December 2024. Investors who bought $1,000 worth of Dime Community Bancshares’s shares 5 years ago would now be looking at an investment worth $1,223.

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