DCOM Shorts Hold Firm as Earnings Loom Thursday

DCOM heads into its October 23 Q3 print with short sellers sitting at a meaningful position, even as the stock surges to its highest level in months.

Short interest is the clearest tension in the setup. Nearly 9.7% of the free float is sold short, a level that has grown roughly 9% over the past month. That build has not shaken the bulls: DCOM closed at $41.01 on Tuesday, up 5.97% in a single session and nearly 7% on the week. The borrow market, however, shows no sign of squeeze pressure. Availability is extremely loose at around 573%, meaning there are roughly six shares available to lend for every one already borrowed, and the cost to borrow has drifted lower to just 0.40%. The ORTEX short score of 64.5 flags a moderately elevated short posture, but the lending dynamics do not support a forced-covering narrative.

Options positioning has turned slightly more cautious alongside the short interest build. The put/call ratio is running at 1.10, above its 20-day average of 0.99, though just over one standard deviation above the mean. That is a mild tilt toward protection rather than an outright defensive stance. It is also worth noting that DCOM's strong price action is broadly consistent with its peer group this week: FULT gained 3.1% on the week, FNB added 3.6%, and UCB rose 6.3%, so the move is sector-wide rather than stock-specific, which slightly dilutes its signal value for the individual print.

Bulls point to NIM expansion, declining funding costs, and growing core deposits. The FDIC call report data, published by the Federal Deposit Insurance Corporation, showed record Q2 total assets of $15.0 billion and record Q2 total deposits of $12.7 billion. That FDIC dataset has not yet been tested as a leading indicator for the company's reported figures, so those balance-sheet records are colour rather than a forecast. The bear case centres on falling noninterest income, a rising allowance for credit losses, and the risk that commercial real estate concentration repricing runs slower than expected. Analyst targets, last updated in April when DA Davidson and Keefe, Bruyette & Woods both raised targets to $43, now sit below the current price of $41.01, though the consensus mean of $46 implies some residual upside. T. Rowe Price is notable among the top holders, having added over 1.1 million shares as of June 30, making it the second-largest institutional holder at 7.3% of shares.

Thursday's print is therefore less a referendum on DCOM's balance-sheet strength, which the deposit and asset records affirm, and more a test of whether fee income and credit costs have moved far enough to justify a stock that has now outrun both analyst targets and its own short sellers' resolve.