SOURCE: Dime Community Bancshares, Inc.

Dime Community Bancshares, Inc.

October 25, 2010 16:05 ET

Dime Community Bancshares Reports Earnings for the Quarter Ended September 30, 2010

Diluted EPS of $0.34; Net Interest Margin of 3.60%

BROOKLYN, NY--(Marketwire - October 25, 2010) - Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the "Company" or "Dime"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank"), today reported consolidated net income of $11.4 million, or 34 cents per diluted share, for the quarter ended September 30, 2010, up from $10.0 million, or 30 cents per diluted share, for the quarter ended June 30, 2010, and up from $8.3 million, or 25 cents per diluted share for the quarter ended September 30, 2009.

Vincent F. Palagiano, Chairman and CEO of Dime, commented, "The Company again posted a solid gain in EPS this quarter, the result of two main factors: higher net interest margin and lower credit costs. Earnings would have been higher but for a permanent change to the New York State and City Savings Bank tax law resulting in a higher effective tax rate, and an 'other than temporary impairment' ('OTTI') charge for pooled trust preferred securities. All of the traditional credit metrics remain outstanding, with manageable levels of non-performing loans and assets, as well as 30 to 89 day delinquent loans."

Significant Unusual or Non-Recurring Items Impacting Earnings for the Most Recent Quarter

The Company's earnings for the quarter ended September 30, 2010 reflected an after-tax OTTI charge of approximately $899,000 on its investment in bank pooled trust preferred securities ("TRUPs"). As of September 30, 2010, the Bank had taken OTTI charges on six of its eight owned TRUPs, which had a $3.9 million book balance on that date. At September 30, 2010, these six bonds had been charged down to 32% of their original book value through earnings (with an additional 22% of their original book value written down through stockholders' equity). The remaining two TRUPs (with a book value of $7.5 million at September 30, 2010) continue to perform and the Bank currently expects to receive all principal and interest payments due under their contractual terms.

Also last quarter, the New York State legislature passed a rather significant change to New York State and City Savings Bank tax law by eliminating the long-standing "percentage of taxable income" as a method for determining bad debt deductions. Since this change was made retroactive to January 1, 2010, the Company recognized approximately $700,000 of additional tax expense in the September 2010 quarter to reconcile the first two quarters of 2010, and, commencing in the September 2010 quarter, saw a permanent rise in its New York State and City income taxes. As a result, the new consolidated tax rate for the Company (Federal, New York State and New York City) is now expected to approximate 40%.

OPERATING RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2010

Net Interest Income

Dime's net interest margin grew 25 basis points to 3.60% during the quarter ended September 30, 2010. The yield on interest earning assets increased 15 basis points due primarily to the redeployment of approximately $112 million in low-yielding short term investments into real estate loans and agency securities. As a result, a greater percentage of the interest earning asset group became comprised of real estate loans and federal agency securities, with average yields of 5.89% and 1.38%, respectively, during the most recent quarter. Although the rates on new loans are at a cyclical low, the spread to 5- and 10-year Treasury bonds (and Federal Home Loan Bank advances) is very favorable. It typically takes several quarters for changes in new loan origination rates (either higher or lower) to have an impact on the portfolio rate. For that reason, in spite of lower loan rates on newly-originated loans, the average yield on the existing loan portfolio was 5.89% during the September 2010 quarter compared to 5.87% in the trailing quarter and 5.93% a year earlier. The direction and magnitude of the change in the loan portfolio yield over the next several quarters should be determined by the volume of loan refinancing from within the existing portfolio, and/or significant loan portfolio growth at these interest rate levels.

On the funding side, the average cost of interest bearing liabilities declined by 13 basis points quarter-over-quarter, due primarily to a reduction of 11 basis points in average deposit costs. Rates on money market deposits declined slightly, and the average rate on the CD portfolio also fell as higher-rate maturing CDs priced down to today's levels. Repricing rates on 1-year CDs at the end of September 2010 were 75 basis points compared to a runoff rate approximating 2.0%. Despite the decline in rates, total deposit balances declined only 2% during the most recent quarter, mostly through the loss of promotional rate deposits.

During the September 2010 quarter, the Bank repaid $140 million of FHLB advances with a weighted average cost of 3.74%. Dime replaced $24.0 million of these borrowings with a new 5-year fixed rate Federal Home Loan Bank of New York ("FHLBNY") advance carrying an average cost of 1.70%. The repayment of these higher rate borrowings favorably impacted net interest margin.

The net result of these changes is that although average interest earning assets declined by $155.2 million during the quarter, net interest income rose by $1.1 million.

Provision/Allowance For Loan Losses

At September 30th, the allowance for loan losses ("ALL") as a percentage of total loans stood at 0.49%, a decline of 18 basis points from 0.67% at the end of the prior quarter. At June 30, 2010, approximately 25% of the Bank's ALL balance (or 0.17% of the 0.67% ratio to total loans) was comprised of allocated reserves for losses deemed probable to occur on impaired loans. During the most recent quarter, the Bank established the likely realizable value of these impaired loans, and reduced their book value and the ALL by that amount. This resulted in $5.6 million of the $6.8 million total charge-offs recognized against the ALL during the quarter. Following the regular quarterly analysis of the loan portfolio, the Bank provided $667,000 to the ALL. As indicated on page 12 of this release, problem assets as a percentage of tangible capital plus the ALL was 6.1% at September 30, 2010.

Non-Interest Income

Non-interest income was $1.1 million for the quarter ended September 30, 2010, a decline of $1.4 million from the previous quarter, due primarily to an increase in pre-tax OTTI charges of $1.1 million recognized on the Bank's previously discussed portfolio of TRUPs. There was also a decline in the gain on the sale of securities of $263,000 from the prior quarter, and a decline in lease income from the prior quarter (the Company having recognized in June a favorable adjustment to lease income related to the transition from a cash basis to accrual basis recognition of such income). Offsetting these declines was an increase of $312,000 in mortgage servicing portfolio revenue recognized during the September 2010 quarter.

Non-Interest Expense

Non-interest expense was 1.46% of average assets during the most recent quarter, resulting in an efficiency ratio of 40.4%. In the aggregate, non-interest expenses declined $899,000 from the previous quarter primarily as a result of: 1) a decline of $604,000 in lease operating expense that reflected an accounting change charged in the June 2010 quarter to transition from a strictly cash basis to a straight line accrual basis; and 2) a reduction of approximately $450,000 in marketing expenses, reflecting lower deposit promotional activities during the current quarter.

Income Tax Expense

The Company's customary consolidated effective tax rate previously approximated 37%. As discussed above, during the most recent quarter, New York State enacted a change in tax law associated with bad debt deductions permissible by savings banks effective retroactively to January 1, 2010. As a result, Dime was required to recognize an adjustment during the most recent quarter for the difference between the previous and new rules for the first six months of 2010. Dime's consolidated effective tax rate thus increased to 42.6% during the most recent quarter. The catch-up charge approximated $700,000, or 2 cents per diluted share. Looking forward, the consolidated effective tax rate is expected to approximate 40%.

BALANCE SHEET

Total assets declined $151.5 million, to $4.00 billion at September 30, 2010. The decline in assets was experienced primarily in cash and due from banks that were utilized to reduce outstanding FHLBNY advances.

Real Estate Loans

Real estate loans declined by $36.1 million during the most recent quarter. Real estate loan originations were $81.4 million during the most recent quarter at an average rate of 5.42%. Loan amortization, exclusive of the disposition of problem loans, totaled $100.7 million, or 11.8% of the average portfolio balance. The average rate on amortized or satisfied loan balances was 6.15%.

The loan pipeline stood at $175.5 million at September 30, 2010, with a weighted average rate of 4.73%. Yields on new loan commitments are again reaching historic lows due to current Federal Reserve monetary policy, which also is resulting in low Treasury yields. During the past quarter, Dime did not aggressively seek loan growth at these yield levels. As a result, total assets and the total loan portfolio have mildly contracted.

Non Performing/Problem Loans

Non performing loans increased $907,000 during the most recent quarter, approximating 0.57% of total loans at September 30, 2010. During the most recent quarter, management reclassified eight loans approximating $6.0 million as non-accrual due to concerns surrounding the likelihood of repayment under their original contractual terms. These borrowers were making monthly payments as of September 30, 2010.

Loans delinquent between 30 and 89 days remained range bound at $15.7 million, or 0.46% of loans at September 30, 2010, compared to $11.1 million at June 30, 2010.

Within the $392.6 million pool of loans sold to Fannie Mae with recourse exposure, $1.4 million were delinquent between 30 and 89 days, and $2.2 million were delinquent 90 days or more at September 30, 2010.

Deposits

Deposits declined $59.2 million during the most recent quarter, led by reductions of $23.0 million and $43.1 million in promotional CDs and money market accounts, respectively. Non-interest bearing checking accounts increased $10 million during the most recent quarter, attributable to growth in commercial checking accounts.

During the most recent quarter, Dime opened its 25th retail banking office, located in Garden City Park, New York. Average deposits in branches open in excess of one year approximated $97.8 million at September 30, 2010, and core deposits comprised 54% of the total. Dime continues a measured de novo strategy, with its next new branch, to be located on 86th Street in Bay Ridge, Brooklyn, scheduled to open in early 2011.

While management continues to view deposits as its preferred funding source, the current interest rate environment provides a unique opportunity to acquire historically low-cost, long duration wholesale FHLBNY advances, and thus management will continue to assess these funding opportunities in order to help maintain pricing discipline on deposits and manage interest rate risk.

Tangible Capital

Dime continues to grow its tangible capital through retained earnings, as its reported earnings exceeded its quarterly cash dividend by 140% during the most recent quarter. Tangible book value per share increased $0.21 during the most recent quarter to $7.86 at September 30, 2010. This growth was fueled by a return of approximately 17% on average tangible equity during the most recent quarter.

Dime's consolidated tangible capital approximated 6.90% of tangible assets at September 30, 2010, up 44 basis points from June 30, 2010. The Bank's tangible capital ratio approximated 8.01% at September 30, 2010.

OUTLOOK FOR THE QUARTER ENDING DECEMBER 31, 2010

The average cost of deposits decreased to 1.22% during the September 2010 quarter from 1.33% during the June 2010 quarter, as Dime continued to take advantage of its balance sheet liquidity and historically low short-term interest rates. Deposit funding costs should remain near their historically low level for the remainder of 2010.

Amortization rates (including prepayments and loan refinancing activity), which approximated 12% on an annualized basis during the most recent quarter, are expected to remain in the 10% to 15% range during the final quarter of 2010, with the potential for prepayment speeds to increase again given the current low Treasury benchmark rates.

At September 30, 2010, the loan commitment pipeline was approximately $175.5 million, comprised primarily of multifamily residential loans, with an approximate weighted average rate of 4.73%. Most of the funding is expected to come from the balance sheet, with total assets remaining unchanged.

Operating expenses for the December 2010 quarter are expected to approximate $15.5 million.

Quarterly loan loss provisions were $667,000 during the September 2010 quarter, $3.8 million during the June 2010 quarter, and $3.4 million during the March 2010 quarter. Management expects loan loss provisioning to remain range-bound.

ABOUT DIME COMMUNITY BANCSHARES

The Company (NASDAQ: DCOM) had $4.00 billion in consolidated assets as of September 30, 2010, and is the parent company of Dime. Dime was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-five branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Dime can be found on the Dime's Internet website at www.dime.com.

This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.

Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company's control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of Dime; changes in accounting principles, policies or guidelines may cause the Company's financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company's business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates.




            DIME COMMUNITY BANCSHARES,  INC. AND SUBSIDIARIES
         UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                    (In thousands except share amounts)


                                September 30,   December 31,    June 30,
                                    2010           2009          2010
                               -------------  -------------  -------------
ASSETS:
Cash and due from banks        $      70,761  $      39,338  $     164,655
Investment securities held to
 maturity                              6,639          7,240          7,165
Investment securities
 available for sale                   64,675         43,162         40,956
Trading securities                     1,420              -          1,329
Mortgage-backed securities
 available for sale                  165,221        224,773        184,723
Federal funds sold and other
 short-term investments               23,848          3,785         45,455
Real Estate Loans:
   One-to-four family and
    cooperative apartment            119,991        131,475        123,434
   Multifamily and underlying
    cooperative (1)                2,460,882      2,377,278      2,469,271
   Commercial real estate (1)        823,018        834,724        837,523
   Construction and land
    acquisition                       16,348         44,544         26,127
   Unearned discounts and net
    deferred loan fees                 4,526          4,017          4,476
                               -------------  -------------  -------------
   Total real estate loans         3,424,765      3,392,038      3,460,831
                               -------------  -------------  -------------
   Other loans                         2,327          3,221          4,211
   Allowance for loan losses         (16,942)       (21,505)       (23,350)
                               -------------  -------------  -------------
Total loans, net                   3,410,150      3,373,754      3,441,692
                               -------------  -------------  -------------
Loans held for sale                      345            416            692
Premises and fixed assets, net        31,224         29,841         30,491
Federal Home Loan Bank of New
 York capital stock                   47,848         54,083         53,068
Other real estate owned, net              85            755            350
Goodwill                              55,638         55,638         55,638
Other assets                         118,914        119,489        122,081
                               -------------  -------------  -------------
TOTAL ASSETS                   $   3,996,768  $   3,952,274  $   4,148,295
                               =============  =============  =============
LIABILITIES AND STOCKHOLDERS'
 EQUITY:
Deposits:
Non-interest bearing checking  $     119,966  $     106,449  $     109,985
Interest Bearing Checking            104,705        114,416        106,226
Savings                              318,239        302,340        314,747
Money Market                         743,305        708,578        791,413
                               -------------  -------------  -------------
    Sub-total                      1,286,215      1,231,783      1,322,371
                               -------------  -------------  -------------
Certificates of deposit            1,094,451        985,053      1,117,444
                               -------------  -------------  -------------
Total Due to Depositors            2,380,666      2,216,836      2,439,815
                               -------------  -------------  -------------
Escrow and other deposits             91,965         65,895         77,699
Securities sold under
 agreements to repurchase            195,000        230,000        195,000
Federal Home Loan Bank of New
 York advances                       904,525      1,009,675      1,020,525
Subordinated Notes Sold                    -         25,000              -
Trust Preferred Notes Payable         70,680         70,680         70,680
Other liabilities                     31,470         39,415         29,849
                               -------------  -------------  -------------
TOTAL LIABILITIES                  3,674,306      3,657,501      3,833,568
                               -------------  -------------  -------------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par,
 125,000,000 shares authorized,
 51,151,115 shares and
 51,131,784 shares issued at
 September 30, 2010 and December
 31, 2009, respectively and
 34,547,769 shares and 34,395,531
 shares outstanding at September
 30, 2010 and December 31, 2009,
 respectively)                           511            511            511
Additional paid-in capital           224,239        214,654        223,802
Retained earnings                    323,777        306,787        317,088
Unallocated common stock of
 Employee Stock Ownership Plan        (3,528)        (3,701)        (3,586)
Unearned common stock of
 Restricted Stock Awards              (3,226)        (2,505)        (3,573)
Common stock held by the
 Benefit Maintenance Plan             (7,979)        (8,007)        (7,979)
Treasury stock (16,603,346
 shares and 16,736,253 shares
 at September 30, 2010,
 and December 31, 2009,
 respectively)                      (206,259)      (207,884)      (206,259)
Accumulated other
 comprehensive loss, net              (5,073)        (5,082)        (5,277)
                               -------------  -------------  -------------
TOTAL STOCKHOLDERS' EQUITY           322,462        294,773        314,727
                               -------------  -------------  -------------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY          $   3,996,768  $   3,952,274  $   4,148,295
                               =============  =============  =============

(1) While the loans within both of these categories are often considered
    "commercial real estate" in nature, they are classified separately in
    the statement above to provide further emphasis upon the discrete
    composition of their underlying real estate collateral.







             DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
              UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollars In thousands except per share amounts)


                                      For the Three Months  Ended
                               -------------------------------------------
                               September 30,    June 30,     September 30,
                                   2010           2010           2009
                               -------------  -------------  -------------
Interest income:
  Loans secured by real estate $      50,648  $      51,068  $      48,422
  Other loans                             28             30             35
  Mortgage-backed securities           1,846          2,082          2,748
  Investment securities                  290            312             76
  Federal funds sold and other
   short-term investments                702            681            809
                               -------------  -------------  -------------
    Total interest income             53,514         54,173         52,090
                               -------------  -------------  -------------
Interest expense:
  Deposits  and escrow                 7,383          8,010          9,156
  Borrowed funds                      11,855         12,958         13,965
                               -------------  -------------  -------------
    Total interest expense            19,238         20,968         23,121
                               -------------  -------------  -------------
       Net interest income            34,276         33,205         28,969
Provision for loan losses                667          3,834          3,769
                               -------------  -------------  -------------
Net interest income after
 provision for loan losses            33,609         29,371         25,200
                               -------------  -------------  -------------

Non-interest income:
  Service charges and other
   fees                                1,284            945          1,376
  Mortgage banking income
   (loss), net                           316            303            246
  Other than temporary
   impairment ("OTTI")charge
   on securities(1)                   (1,639)          (508)          (556)
  Gain (loss) on sale of other
   real estate owned and other
   assets                                (10)           282              -
  Gain (loss) on trading
   securities                             86            (66)             -
  Other                                1,031          1,501          1,038
                               -------------  -------------  -------------
    Total non-interest
     income (loss)                     1,068          2,457          2,104
                               -------------  -------------  -------------
Non-interest expense:
  Compensation and benefits            8,514          8,522          7,941
  Occupancy and equipment              2,190          2,648          1,926
  Other                                4,188          4,621          3,774
                               -------------  -------------  -------------
    Total non-interest
     expense                          14,892         15,791         13,641
                               -------------  -------------  -------------

    Income before taxes               19,785         16,037         13,663
Income tax expense                     8,430          6,033          5,337
                               -------------  -------------  -------------

Net Income                     $      11,355  $      10,004  $       8,326
                               =============  =============  =============

Earnings per Share:
  Basic                        $        0.34  $        0.30  $        0.25
                               =============  =============  =============
  Diluted                      $        0.34  $        0.30  $        0.25
                               =============  =============  =============

Average common shares
 outstanding for Diluted EPS      33,394,522     33,341,885     33,126,941


                                For the Nine Months  Ended
                               ----------------------------
                                September 30, September 30,
                                    2010          2009
                               -------------  -------------
Interest income:
  Loans secured by real
   estate                      $     151,839  $     144,412
  Other loans                             97            110
  Mortgage-backed securities           6,199          8,997
  Investment securities                1,009            515
  Federal funds sold and
   other short-term
   investments                         2,125          2,170
                               -------------  -------------
    Total interest income            161,269        156,204
                               -------------  -------------
Interest expense:
  Deposits  and escrow                22,986         35,086
  Borrowed funds                      38,036         41,720
                               -------------  -------------
    Total interest expense            61,022         76,806
                               -------------  -------------
      Net interest income            100,247         79,398
Provision for loan losses              7,948          8,661
                               -------------  -------------
Net interest income after
 provision for loan losses            92,299         70,737
                               -------------  -------------

Non-interest income:
  Service charges and other
   fees                                3,165          3,118
  Mortgage banking income
   (loss), net                           829            (66)
  Other than temporary
   impairment ("OTTI")
   charge on securities(1)            (2,312)        (6,482)
  Gain (loss) on sale of other
   real estate owned and other
   assets                                618            339
  Gain (loss) on trading
   securities                            243
  Other                                3,492          3,006
                               -------------  -------------
    Total non-interest
     income (loss)                     6,035            (85)
                               -------------  -------------
Non-interest expense:
  Compensation and benefits           25,923         23,358
  Occupancy and equipment              7,096          5,894
  Other                               13,355         13,321
                               -------------  -------------
    Total non-interest
     expense                          46,374         42,573
                               -------------  -------------

    Income before taxes               51,960         28,079
Income tax expense                    21,131          9,987
                               -------------  -------------

Net Income                     $      30,829  $      18,092
                               =============  =============

Earnings per Share:
  Basic                        $        0.93  $        0.55
                               =============  =============
  Diluted                      $        0.93  $        0.55
                               =============  =============

Average common shares
 outstanding for Diluted EPS      33,328,574     33,005,549

(1) Total OTTI charges on securities were $1,858, $521 and $675 during the
    three months ended September 30, 2010, June 30, 2010 and September 30,
    2009, respectively, and $736 and $7,939 during the nine months ended
    September 30, 2010 and 2009, respectively.  The non-credit component of
    OTTI recognized in accumulated other comprehensive loss was $219, $13
    and $119 during the three months ended September 30, 2010, June 30,
    2010 and September 30, 2009, respectively, and $313 and $1,457 during
    the nine months ended September 30, 2010 and 2009, respectively.








             DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
                  UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
              (Dollars In thousands except per share amounts)


                                      For the Three Months  Ended
                               -------------------------------------------
                               September 30,    June 30,     September 30,
                                   2010           2010           2009
                               -------------  -------------  -------------
Performance Ratios (Based upon
 Reported Earnings):
Reported EPS (Diluted)         $        0.34  $        0.30  $        0.25
Return on Average Assets                1.11%          0.95%          0.85%
Return on Average
 Stockholders' Equity                  14.23%         12.80%         11.66%
Return on Average Tangible
 Stockholders' Equity                  16.92%         15.29%         14.07%
Net Interest Spread                     3.44%          3.16%          2.91%
Net Interest Margin                     3.60%          3.35%          3.11%
Non-interest Expense to
 Average Assets                         1.46%          1.50%          1.39%
Efficiency Ratio                       40.35%         43.92%         43.13%
Effective Tax Rate                     42.61%         37.62%         39.06%
Book Value and Tangible Book
 Value Per Share:
Stated Book Value Per Share    $        9.33  $        9.11  $        8.42
Tangible Book Value Per Share           7.86           7.65           6.97
Average Balance Data:
Average Assets                 $   4,090,033  $   4,211,629  $   3,912,313
Average Interest Earning
 Assets                            3,806,510      3,961,750      3,721,680
Average Stockholders' Equity         319,090        312,634        285,688
Average Tangible Stockholders'
 Equity                              268,477        261,736        236,680
Average Loans                      3,440,764      3,479,613      3,267,984
Average Deposits                   2,406,853      2,419,758      2,255,479
Asset Quality Summary:
Net charge-offs                $       6,817  $       5,024  $       3,619
Nonperforming Loans                   19,598         18,691         14,162
Nonperforming Loans/ Total
 Loans                                  0.57%          0.54%          0.43%
Nonperforming Assets (1)              20,242         19,634         16,090
Nonperforming Assets/Total
 Assets                                 0.51%          0.47%          0.41%
Allowance for Loan Loss/Total
 Loans                                  0.49%          0.67%          0.61%
Allowance for Loan
 Loss/Nonperforming Loans              86.45%        124.93%        143.07%
Loans Delinquent 30 to 89 Days
 at period end                 $      15,729  $      11,133  $      11,340
Regulatory Capital Ratios:
Consolidated Tangible
 Stockholders' Equity to
 Tangible Assets at period
 end                                    6.90%          6.46%          6.23%
Tangible Capital Ratio (Bank
 Only)                                  8.01%          7.70%          8.03%
Leverage Capital Ratio (Bank
 Only)                                  8.01%          7.70%          8.03%
Risk Based Capital Ratio (Bank
 Only)                                 11.07%         11.91%         11.73%

                                 For the Nine Months Ended
                               ----------------------------
                                September 30, September 30,
                                    2010          2009
                               -------------  -------------

Performance Ratios (Based upon
 Reported Earnings):
Reported EPS (Diluted)         $        0.93  $        0.55
Return on Average Assets                1.00%          0.60%
Return on Average
 Stockholders' Equity                  13.22%          8.55%
Return on Average Tangible
 Stockholders' Equity                  15.82%         10.29%
Net Interest Spread                     3.28%          2.55%
Net Interest Margin                     3.47%          2.80%
Non-interest Expense to
 Average Assets                         1.51%          1.42%
Efficiency Ratio                       43.05%         49.82%
Effective Tax Rate                     40.67%         35.57%

Book Value and Tangible Book
 Value Per Share:
Stated Book Value Per Share    $        9.33  $        8.42
Tangible Book Value Per Share           7.86           6.97

Average Balance Data:
Average Assets                 $   4,105,697  $   3,987,849
Average Interest Earning
 Assets                            3,852,759      3,787,316
Average Stockholders' Equity         310,856        281,987
Average Tangible Stockholders'
 Equity                              259,821        234,538
Average Loans                      3,455,969      3,272,472
Average Deposits                   2,242,875      2,292,019

Asset Quality Summary:
Net charge-offs                $      12,610  $       6,023
Nonperforming Loans                   19,598         14,162
Nonperforming Loans/ Total
 Loans                                  0.57%          0.43%
Nonperforming Assets (1)              20,242         16,090
Nonperforming Assets/Total
 Assets                                 0.51%          0.41%
Allowance for Loan Loss/Total
 Loans                                  0.49%          0.61%
Allowance for Loan
 Loss/Nonperforming Loans              86.45%        143.07%
Loans Delinquent 30 to 89 Days
 at period end                 $      15,729  $      11,340

Regulatory Capital Ratios:
Consolidated Tangible
 Stockholders' Equity to
 Tangible Assets at period
 end                                    6.90%          6.23%
Tangible Capital Ratio (Bank
 Only)                                  8.01%          8.03%
Leverage Capital Ratio (Bank
 Only)                                  8.01%          8.03%
Risk Based Capital Ratio (Bank
 Only)                                 11.07%         11.73%


(1) Amount comprised of total nonperforming loans, other real estate owned
    and the recorded balance of two pooled bank trust preferred security
    investments for which the Bank has not received any contractual
    payments of interest or principal in over 90 days.








             DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
            UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
                          (Dollars In thousands)


                                       For the Three Months Ended
                               -------------------------------------------
                                              September 30,
                                                  2010
                               -------------------------------------------
                                                                Average
                                  Average                        Yield/
                                  Balance       Interest          Cost
                               -------------- -------------  -------------
Assets:
  Interest-earning assets:
    Real estate loans          $    3,439,448 $      50,648           5.89%
    Other loans                         1,316            28           8.51
    Mortgage-backed securities        166,672         1,846           4.43
    Investment securities              64,325           290           1.80
    Other short-term
     investments                      134,749           702           2.08
                               -------------- -------------  -------------
      Total interest earning
       assets                  $    3,806,510 $      53,514           5.62%
                               -------------- -------------
  Non-interest earning assets         283,523
                               --------------
Total assets                   $    4,090,033
                               ==============

Liabilities and Stockholders'
 Equity:
  Interest-bearing liabilities:
    Interest Bearing Checking  $       98,588 $          99           0.40%
    Money Market accounts             760,509         1,221           0.64
    Savings accounts                  317,243           202           0.25
    Certificates of deposit         1,107,791         5,861           2.10
                               -------------- -------------  -------------
      Total interest
       bearing deposits             2,284,131         7,383           1.28
  Borrowed Funds                    1,213,607        11,855           3.88
                               -------------- -------------  -------------
      Total interest-bearing
       liabilities             $    3,497,738 $      19,238           2.18%
                               -------------- -------------  -------------
  Non-interest bearing
   checking accounts                  122,722
  Other non-interest-bearing
   liabilities                        150,483
                               --------------
      Total liabilities             3,770,943
  Stockholders' equity                319,090
                               --------------
Total liabilities and
 stockholders' equity          $    4,090,033
                               ==============
Net interest income                           $      34,276
                                              =============
Net interest spread                                                   3.44%
                                                             =============
Net interest-earning assets    $      308,772
                               ==============
Net interest margin                                                   3.60%
                                                             =============
Ratio of interest-earning
 assets to interest-bearing
 liabilities                                         108.83%
                                              =============

Deposits (including
 non-interest bearing
   checking accounts)          $    2,406,853 $       7,383           1.22%

Interest earning assets
 (excluding prepayment and
 other fees)                                                          5.54%


                                       For the Three Months Ended
                               -------------------------------------------
                                              June 30, 2010
                               -------------------------------------------
                                                                Average
                                  Average                        Yield/
                                  Balance       Interest          Cost
                               -------------- -------------  -------------
Assets:
  Interest-earning assets:
    Real estate loans          $    3,478,236 $      51,068           5.87%
    Other loans                         1,377            30           8.71
    Mortgage-backed securities        184,613         2,082           4.51
    Investment securities              50,709           312           2.46
    Other short-term
     investments                      246,815           681           1.10
                               -------------- -------------  -------------
      Total interest earning
       assets                  $    3,961,750 $      54,173           5.47%
                               -------------- -------------
  Non-interest earning assets         249,879
                               --------------
Total assets                   $    4,211,629
                               ==============

Liabilities and Stockholders'
 Equity:
  Interest-bearing
   liabilities:
    Interest Bearing Checking  $      102,711 $         191           0.75%
    Money Market accounts             785,323         1,647           0.84
    Savings accounts                  311,201           200           0.26
    Certificates of deposit         1,106,346         5,972           2.17
                               -------------- -------------  -------------
          Total interest
           bearing deposits         2,305,581         8,010           1.39
  Borrowed Funds                    1,336,282        12,958           3.89
                               -------------- -------------  -------------
      Total interest-bearing
       liabilities             $    3,641,863 $      20,968           2.31%
                               -------------- -------------  -------------
  Non-interest bearing
   checking accounts                  114,177
  Other non-interest-bearing
   liabilities                        142,955
                               --------------
      Total liabilities             3,898,995
  Stockholders' equity                312,634
                               --------------
Total liabilities and
 stockholders' equity          $    4,211,629
                               ==============
Net interest income                           $      33,205
                                              =============
Net interest spread                                                   3.16%
                                                             =============
Net interest-earning assets    $      319,887
                               ==============
Net interest margin                                                   3.35%
                                                             =============
Ratio of interest-earning
 assets to interest-bearing
 liabilities                                         108.78%
                                              =============

Deposits (including
 non-interest bearing
 checking accounts)            $    2,419,758 $       8,010           1.33%

Interest earning assets
 (excluding prepayment and
 other fees)                                                          5.40%



                                       For the Three Months Ended
                               --------------------------------------------
                                            September 30, 2009
                               --------------------------------------------
                                                                Average
                                  Average                        Yield/
                                  Balance       Interest          Cost
                               -------------- -------------  -------------
Assets:
  Interest-earning assets:
    Real estate loans          $    3,266,416 $      48,422           5.93%
    Other loans                         1,568            35           8.93
    Mortgage-backed securities        246,354         2,748           4.46
    Investment securities              26,039            76           1.17
    Other short-term
     investments                      181,303           809           1.78
                               -------------- -------------  -------------
      Total interest earning
       assets                  $    3,721,680 $      52,090           5.60%
                               -------------- -------------
  Non-interest earning assets         190,633
                               --------------
Total assets                   $    3,912,313
                               ==============

Liabilities and Stockholders'
 Equity:
  Interest-bearing
   liabilities:
    Interest Bearing Checking  $      105,938 $         179           0.67%
    Money Market accounts             730,634         1,738           0.94
    Savings accounts                  297,450           201           0.27
    Certificates of deposit         1,016,246         7,038           2.75
                               -------------- -------------  -------------
          Total interest
           bearing deposits         2,150,268         9,156           1.69
  Borrowed Funds                    1,265,644        13,965           4.38
                               -------------- -------------  -------------
      Total interest-bearing
       liabilities             $    3,415,912 $      23,121           2.69%
                               -------------- -------------  ------------- 
  Non-interest bearing
   checking accounts                  105,211
  Other non-interest-bearing
   liabilities                        105,502
                               --------------
      Total liabilities             3,626,625
  Stockholders' equity                285,688
                               --------------
Total liabilities and
 stockholders' equity          $    3,912,313
                               ==============
Net interest income                           $      28,969
                                              =============
Net interest spread                                                   2.91%
                                                             =============
Net interest-earning assets    $      305,768
                               ==============
Net interest margin                                                   3.11%
                                                             =============
Ratio of interest-earning
 assets to interest-bearing
 liabilities                                         108.95%
                                              =============

Deposits (including
 non-interest bearing
 checking accounts)            $    2,255,479 $       9,156           1.61%

Interest earning assets
 (excluding prepayment and
 other fees)                                                          5.53%








             DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
      UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT
                              RESTRUCTURINGS
                          (Dollars In thousands)


                             At September 30,  At June 30, At September 30,
                                   2010           2010           2009
                               -------------  -------------  --------------
Non-Performing Loans
   One- to four-family         $         224  $         634  $          371
   Multifamily residential and
    mixed use (1)                     12,934         13,739          11,020
   Commercial real estate (1)          6,396          4,277           2,739
   Cooperative apartment                  25             25              26
   Other                                  19             16               6
                               -------------  -------------  --------------
Total Non-Performing Loans
 (2)                           $      19,598  $      18,691  $       14,162
                               -------------  -------------  --------------
Other Non-Performing Assets
   Other real estate owned (3)            85            350             168
   Pooled bank trust preferred
     securities                          559            593           1,760
                               -------------  -------------  --------------
Total Non-Performing Assets    $      20,242  $      19,634  $       16,090
                               -------------  -------------  --------------

Troubled Debt Restructurings
 not included in
 non-performing loans
   Multifamily residential                 -              -               -
   Commercial real estate              6,600              -               -
   Mixed Use                           1,040          1,040           1,040
   Other                                   -              -               -
                               -------------  -------------  --------------
Total Troubled Debt
 Restructurings ("TDRs") (1)   $       7,640  $       1,040  $        1,040
                               -------------  -------------  --------------

(1) While the loans within both of these categories are often considered
    "commercial real estate" in nature, they are classified separately in
    the statement above to provide further emphasis upon the discrete
    composition of their underlying real estate collateral.

(2) Total non-performing loans include loans that have been modified in a
    manner that would meet the criteria for a TDR should the loans return
    to accrual status.  These loans, which are included in the
    non-performing loan table, but excluded from the TDR amount shown
    above, totaled $3.6 million at September 30, 2010, $4.6 million at
    June 30, 2010 and $4.6 million at September 30,2009, respectively.

(3) Amount was fully comprised of multifamily residential loans at
    September 30, 2010 and June 30, 2010.

PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES

                               At September 30,  At June 30,
                                   2010             2010
                               -------------  -------------
Total Non-Performing Assets    $      20,242  $      19,634
Loans over 90 days past due on
 accrual status                            -              -
                               -------------  -------------
    PROBLEM ASSETS             $      20,242  $      19,634
                               -------------  -------------

Tier 1 Capital - Dime Savings
 Bank of Williamsburgh         $     314,587  $     313,882
Allowance for loan losses             16,942         23,350
                               -------------  -------------
   TANGIBLE CAPITAL PLUS
    RESERVES                   $     331,529  $     337,232
                               -------------  -------------

PROBLEM ASSETS AS A PERCENTAGE
 OF TANGIBLE CAPITAL AND
 RESERVES                                6.1%           5.8%

Contact Information

  • Contact:
    Kenneth Ceonzo
    Director of Investor Relations
    718-782-6200 extension 8279