SOURCE: Dime Community Bancshares, Inc.

January 25, 2008 08:00 ET

Dime Community Bancshares Reports Earnings

Diluted Earnings per Share of 17 Cents in Fourth Quarter and 67 Cents for 2007 Fiscal Year

BROOKLYN, NY--(Marketwire - January 25, 2008) - Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the "Company"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank" or "Dime"), today reported net income of $5.4 million, or 17 cents per diluted share, for the quarter ended December 31, 2007, compared to $6.0 million, or 17 cents per diluted share, for the quarter ended December 31, 2006 and $5.5 million, or 17 cents per diluted share, for the quarter ended September 30, 2007.

At $0.17 per share, core earnings equaled reported earnings during the quarters ended December 31, 2007 and 2006. Core earnings were $5.0 million, or $0.15 per diluted share, for the quarter ended September 30, 2007. Reported earnings exceeded core earnings during the quarter ended September 30, 2007 due to $546,000 of non-recurring income related to a Bank Owned Life Insurance ("BOLI") benefit payment.

For the year ended December 31, 2007, reported earnings totaled $22.4 million, or $0.67 per diluted share, compared to $30.6 million, or $0.87 per diluted share, during the year ended December 31, 2006. Core earnings were $21.9 million, or $0.65 per diluted share, during the year ended December 31, 2007, compared to $29.1 million, or $0.83 per diluted share, during the year ended December 31, 2006. During the year ended December 31, 2007, reported earnings exceeded core earnings due to the aforementioned non-recurring income related to a BOLI benefit payment. During the year ended December 31, 2006, reported earnings exceeded core earnings due to both non-recurring gains on the sale of securities and non-recurring income received on prepaid borrowings, which added after-tax income of $1.5 million during 2006.

According to Vincent F. Palagiano, Chairman and Chief Executive Officer of the Company, "The fourth quarter 2007 earnings were on the high end of our expectations, due primarily to an increase in prepayment fee income. Otherwise, our overall business environment for much of the fourth quarter of 2007 remained the same from the previous quarters of 2007, characterized by stubbornly higher deposit funding costs."

Mr. Palagiano continued, "As for the 2007 year, despite difficulty in maintaining our historical levels of earnings, we still had much to feel pleased with. First, since we have no direct exposure to the subprime loan market on our balance sheet, we have not experienced any of the credit-related issues that have been featured so prominently in the news media recently. In addition, by remaining steadfast and patient, we were able to take advantage of favorable market conditions in recent months in order to lock in wholesale (i.e. non-deposit) funding at beneficial long-term interest rates and prepare our balance sheet for profitable growth in 2008 and beyond. With a substantial portion of our mortgage portfolio anticipated to reprice during the next 24 to 36 months at more favorable funding spreads, we believe that conditions are present to support earnings growth from net interest income for our Company beginning next quarter."

Dime will also soon announce details of the opening of two new branches in its core Brooklyn market in the first half of 2008. The branches will be located in Borough Park and on Montague Street in downtown Brooklyn. Both markets are among the strongest deposit markets in Brooklyn and represent traditional banking markets where the 'Dime' brand resonates.

Mr. Palagiano noted, "As the retail deposit markets return to equilibrium, these new branches will significantly enhance Dime's position as the largest community bank headquartered in Brooklyn."

Fiscal Year Highlights

--  Total assets increased by $327.8 million, or 10.3%.
--  Total deposits increased by $171.5 million, or 8.5%.
--  Net interest margin declined 31 basis points.
--  Real estate loan originations totaled $574.5 million, with an average
    interest rate of 6.38%.
--  The real estate loan portfolio grew 6.4%.
--  Loans sold in the secondary market totaled $77.6 million, with a
    weighted average term to the earlier of maturity or next repricing of 9.1
    years.
--  The Bank's credit profile remained outstanding, with non-performing
    loans approximating 0.10% of total loans.
--  The Company repurchased 2,298,726 shares into treasury during the
    year, or 6.3% of beginning shares outstanding, at an average price of
    $12.90 per share.
--  The Company remained well capitalized, with the tangible equity ratio
    standing at 6.29% at year-end.
    

Fourth Quarter 2007 Highlights

--  Real estate loan originations were $175.3 million at an average rate
    of 6.10%, compared to $164.9 million at an average interest rate of 6.56%
    during the quarter ended September 30, 2007.
--  The annualized loan amortization rate was 15%, compared to 11% during
    the previous quarter.  Prepayment fee income was $1.2 million, compared to
    $727,000 in the September 2007 quarter and $561,000 in the December 2006
    quarter.
--  Linked quarter average cost of deposits increased slightly from 3.52%
    to 3.55%.
--  Net interest margin was 2.27%, a slight decline from the previous
    quarter.
--  The Company repurchased 311,102 shares of its common stock, compared
    to 742,640 shares repurchased in the September 2007 quarter.
--  Quarterly non-interest expense decreased 3% sequentially on
    compensation expense; 3rd quarter compensation expense was slightly higher
    due to a seasonal adjustment.
    

OPERATING RESULTS

For the quarter ended December 31, 2007, the Company's pre-tax income, excluding gains and losses on the sale of assets, was $8.9 million, compared to $9.4 million in the same quarter of the previous year. The $460,000 decrease was due to an increase of $958,000 in non-interest expense and a decline of $110,000 in non-interest income, which were partially offset by an increase of $608,000 in net interest income.

Excluding the effects of prepayment and late fee income, net interest income would have remained constant from the December 2006 quarter and the net interest margin would have decreased 14 basis points during the quarter ended December 31, 2007 compared to the quarter ended December 31, 2006 due primarily to an increase of 20 basis points in the average cost of deposits. The increase in deposit costs reflected both growth in deposit balances related to the volume of promotional activities during 2007, as well as increased competition experienced from lending conduits that sought bank deposits for funding when their sources of short-term wholesale financing became unavailable.

Pre-tax income, excluding gains and losses on the sale of loans, was $8.7 million during the September 2007 quarter. The $237,000 increase from the September 2007 quarter to the December 2007 quarter resulted from an increase of $702,000 in net interest income and a decline of $379,000 in non-interest expense, which were partially offset by a decline of $844,000 in non-interest income (excluding gains or losses on the sale of assets).

The majority of the increase in net interest income from the September 2007 quarter to the December 2007 quarter resulted from increased prepayment fee and late charge income. Excluding the effects of prepayment fee and late charge income, net interest income would have increased $184,000 and the net interest margin would have declined 7 basis points from the September 2007 quarter to the December 2007 quarter. This decline resulted from an increase of 6 basis points in the average cost of interest bearing liabilities, reflecting increases in both higher-cost borrowing and promotional deposit balances, coupled with a decline in the yield on interest earning assets reflecting reductions in interest rates during the last six months of 2007.

The average yield on portfolio real estate loans, excluding the effects of prepayment and late fee income, was 5.82% during the quarter ended December 31, 2007, compared to 5.72% during the quarter ended December 31, 2006 and 5.84% during the quarter ended September 30, 2007. Interest rates on newly originated real estate loans averaged 6.10% during the fourth quarter of 2007, compared to a weighted average rate on loans repaid of 5.75% during the period.

Non-interest income, excluding gains or losses on the sale of loans, totaled $2.2 million during the quarter ended December 31, 2007, down $844,000 from the September 2007 quarter, and $110,000 from the December 2006 quarter. The reduction in non-interest income from the September 2007 quarter resulted primarily from a non-recurring $546,000 BOLI benefit payment received during the September 2007 quarter, along with a $212,000 reduction in a loan administration fees, due to seasonality. The net decline of $110,000 from the December 2006 quarter resulted from minor decreases in several loan and deposit fee categories.

The Company executed third-party loan sales totaling $30.4 million, $10.1 million and $5.0 million, recording gains of $204,000, $79,000 and $84,000, during the quarters ended December 31, 2007, September 30, 2007 and December 31, 2006, respectively. The loans sold during the quarter ended December 31, 2007 had a weighted average term to the earlier of maturity or next repricing of 6.6 years.

Non-interest expense totaled $11.3 million during the quarter ended December 31, 2007, up $958,000 from the December 2006 quarter and down $379,000 from the September 2007 quarter. The growth in non-interest expense from the December 2006 quarter resulted from several items, including a $239,000 charge for the early termination of leased equipment and $236,000 in expense associated with equity awards granted during 2007. The decline in non-interest expense from the September 2007 quarter reflected a reduction of $566,000 in salaries and benefits. Non-interest expense to average assets was 1.36% in the December 2007 quarter, compared to 1.32% for the quarter ended December 31, 2006 and 1.45% for the quarter ended September 30, 2007.

The effective tax rate was 40.2% for the quarter ended December 31, 2007 and 37.1% for the year ended December 31, 2007. The effective tax rate is expected to approximate 37% for the year ending December 31, 2008. The increase in effective tax rate during the fourth quarter of 2007 related to the dissolution of a subsidiary.

REAL ESTATE LENDING AND CREDIT QUALITY

Real estate loan originations totaled $175.3 million during the quarter ended December 31, 2007. The average rate on real estate loan originations during the quarter ended December 31, 2007 was 6.10%, compared to 6.50% during the quarter ended December 31, 2006 and 6.56% during the quarter ended September 30, 2007. Offering rates on multifamily loans closed during the quarter ended December 31, 2007 declined from the previous quarter, however, this decline was less than the decline in their benchmark treasury rates during the same period, as origination spreads to their benchmark rates widened during the period.

Real estate loan prepayments and amortization during the December 2007 quarter approximated 15% of the real estate loan portfolio on an annualized basis, compared to 9% during the December 2006 quarter and 11% during the September 2007 quarter.

Non-performing loans were $2.8 million at December 31, 2007, representing only 0.10% of total loans.

DEPOSITS

Deposits increased $106.0 million from September 30, 2007 to December 31, 2007 as a result of seasonal promotional marketing. Core (non-certificate) deposits increased $55.4 million and certificates of deposit increased by $50.6 million. Demand deposits increased by $11.7 million, or 8.4%, to $150.1 million from September 30, 2007 to December 31, 2007, and by $19.4 million, or 14.8%, during the year ended December 31, 2007. This increase was driven by the growth in Prime Dime, an interest-bearing checking account, coupled with an increase in Dime's Professional Banking commercial deposit gathering program.

Mr. Palagiano noted, "We are pleased that deposit growth was concentrated in core money market and checking accounts. Unless rate relief comes in the form of lower deposit rates, it is likely that we will see significant reductions to our promotional deposits during the first quarter of 2008. In the meantime, we will avail ourselves of the wholesale funding market where it presents more advantageous funding opportunities."

Despite the challenging deposit market, average deposit cost for the quarter ended December 31, 2007 was 3.55%, an increase of just 3 basis points as compared to the quarter ended September 30, 2007.

Average deposits per branch approximated $104 million at December 31, 2007, up from $96 million at December 31, 2006 and $99 million at September 30, 2007. Core deposits comprised 51% of total deposits at December 31, 2007, relatively unchanged from September 30, 2007 and up from 47% at December 31, 2006 (reflecting growth of $164.2 million in money market accounts during the year ended December 31, 2007). The loan-to-deposit ratio was 132% at December 31, 2007, compared to 135% at December 31, 2006 and 137% at September 30, 2007.

STOCKHOLDERS' EQUITY AND SHARE REPURCHASE PROGRAM

The Company's total stockholders' equity at December 31, 2007 was $268.9 million, or 7.68% of total assets, compared to $270.0 million, or 8.18% of total assets, at September 30, 2007. The decline in stockholders' equity as a percentage of assets resulted from an increase of $199.7 million in period-end assets coupled with $4.1 million in treasury stock repurchases during the period.

During the fourth quarter of 2007, the Company repurchased into treasury 311,102 shares, or nearly 1% of its common stock outstanding at September 30, 2007. As of December 31, 2007, the Company had an additional 1,175,549 shares remaining eligible for repurchase under its twelfth stock repurchase program, approved in June 2007.

After outlays for dividends paid to shareholders and share repurchases, by the end of 2007 the Company's tangible stockholders' equity had declined to $217.2 million, compared to $219.9 million at September 30, 2007. The quarterly cash dividend paid in November 2007 represented a payout ratio of 82.4% of fourth quarter 2007 earnings. At December 31, 2007, the consolidated tangible stockholders' equity ratio was 6.29% of tangible assets and the tangible book value per share was $6.41.

For the quarter ended December 31, 2007, the return on average stockholders' equity was 8.11%, the return on average tangible equity was 10.00%, and the cash return on average tangible equity was 10.83%.

OUTLOOK

Mr. Palagiano stated, "For the first time in many quarters we are in a position to expect earnings per share to trend upward. While there are significant future uncertainties about economic and credit conditions, our Company remains a liability-sensitive institution, and any downward movement in short-term interest rates should be helpful to net interest income over time."

The decline in both short- and medium-term interest rates during the last six months of 2007 resulted in a decline in the average yield on the Company's interest-earning assets (exclusive of the effects of prepayment and late fee income) from 5.78% during the September 2007 quarter to 5.73% during the December 2007 quarter. However, approximately $308 million in portfolio mortgage loans with a below current market weighted average coupon of 5.28% contractually reprice or mature during 2008. During the year ending December 31, 2009, an additional $360 million in mortgage loans with a weighted average coupon of 5.38% are scheduled to reprice.

The average cost of deposits increased from 3.52% during the September 2007 quarter to 3.55% during the December 2007 quarter. During the first quarter of 2008, average deposit costs are expected to lower, as maturing accounts are anticipated to re-price at lower rates and balance sheet growth is expected to be funded primarily through wholesale borrowings or non-promotional deposits. Recent and any future actions by the Federal Open Market Committee resulting in lower short-term rates should help to reduce the average cost of deposits, and, would likely provide more attractive wholesale borrowings rates.

Prepayment and amortization rates, which approximated 11.6% during 2007 (inclusive of loan refinancing activity), are expected to increase to the 20% to 25% range during 2008, due primarily to increased loan refinancing activity. At December 31, 2007, the real estate loan commitment pipeline approximated $152.8 million, including $9.4 million of loan commitments intended for sale to Fannie Mae. The real estate loan pipeline had a weighted average interest rate approximating 6.14% at December 31, 2007, relatively unchanged from the loan origination rate of 6.10% experienced during the fourth quarter.

Absent growth in assets, we would expect to see some improvement in the net interest margin during 2008. However, during the fourth quarter of 2007, the Company elected to commence balance sheet growth and expects to continue to grow its balance sheet during the first quarter of 2008. This growth may come at interest rate spreads below the Bank's embedded margin of 2.27%, but should contribute favorably to earnings.

Operating expenses are expected to approximate $11.6 million in the first quarter of 2008. The Company will continue to repurchase its common stock, and has sufficient capital to remain opportunistic, if conditions warrant. The Company currently expects first quarter 2008 earnings per diluted share to again be in the range of $0.17 to $0.19.

ABOUT DIME COMMUNITY BANCSHARES

The Company (NASDAQ: DCOM) had $3.50 billion in consolidated assets as of December 31, 2007, and is the parent company of the Bank. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-one branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Bank can be found on the Bank's Internet website at www.dimewill.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 the Bank; 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
              CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                    (In thousands except share amounts)

                                                December 31,
                                                    2007      December 31,
                                                (Unaudited)       2006
                                                ------------  ------------
ASSETS:
Cash and due from banks                         $    101,708  $     26,264
Investment securities held to maturity                    80           235
Investment securities available for sale              34,095        29,548
Mortgage-backed securities available for sale        162,764       154,437
Federal funds sold and other short-term
 investments                                         128,014        78,752
Real Estate Loans:
   One-to-four family and cooperative apartment      145,592       153,847
   Multifamily and underlying cooperative          1,949,025     1,855,106
   Commercial real estate                            728,129       666,927
   Construction and land acquisition                  49,387        23,340
   Unearned discounts and net deferred loan fees       1,833         1,048
                                                ------------  ------------
   Total real estate loans                         2,873,966     2,700,268
                                                ------------  ------------
   Other loans                                         2,169         2,205
   Allowance for loan losses                         (15,387)      (15,514)
                                                ------------  ------------
Total loans, net                                   2,860,748     2,686,959
                                                ------------  ------------
Loans held for sale                                      890         1,200
Premises and fixed assets, net                        23,878        22,886
Federal Home Loan Bank of New York capital stock      39,029        31,295
Goodwill                                              55,638        55,638
Other assets                                          94,331        86,163
                                                ------------  ------------
TOTAL ASSETS                                    $  3,501,175  $  3,173,377
                                                ============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Non-interest bearing checking                   $     91,671  $     95,215
NOW, Super NOW and Interest Bearing Checking          58,414        35,519
Savings                                              274,067       298,522
Money Market                                         678,759       514,607
                                                ------------  ------------
    Sub-total                                   $  1,102,911  $    943,863
                                                ------------  ------------
Certificates of deposit                            1,077,087     1,064,669
                                                ------------  ------------
Total Due to Depositors                            2,179,998     2,008,532
                                                ------------  ------------
Escrow and other deposits                             52,209        46,373
Securities sold under agreements to repurchase       155,080       120,235
Federal Home Loan Bank of New York advances          706,500       571,500
Subordinated Notes Sold                               25,000        25,000
Trust Preferred Notes Payable                         72,165        72,165
Other liabilities                                     41,371        38,941
                                                ------------  ------------
TOTAL LIABILITIES                                  3,232,323     2,882,746
                                                ------------  ------------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par, 125,000,000 shares
 authorized, 50,906,278 shares and 50,862,867
 shares issued at December 31, 2007 and December
 31, 2006, respectively, and 33,909,902 shares
 and 36,456,354 shares outstanding at December
 31, 2007 and December 31, 2006, respectively)           509           509
Additional paid-in capital                           208,369       206,601
Retained earnings                                    288,112       285,420
Unallocated common stock of Employee Stock
 Ownership Plan                                       (4,164)       (4,395)
Unearned common stock of Recognition and
 Retention Plan                                         (634)       (3,452)
Common stock held by the Benefit Maintenance
 Plan                                                 (7,941)       (7,941)
Treasury stock (16,996,376 shares and 14,406,513
 shares at December 31, 2007 and December 31, 2006,
 respectively)                                      (211,121)     (179,011)
Accumulated other comprehensive loss, net             (4,278)       (7,100)
                                                ------------  ------------
TOTAL STOCKHOLDERS' EQUITY                           268,852       290,631
                                                ------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $  3,501,175  $  3,173,377
                                                ============  ============




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

                                          For the Three Months Ended
                                    ---------------------------------------
                                    December 31, September 30, December 31,
                                        2007         2007          2006
                                    (Unaudited)  (Unaudited)   (Unaudited)
                                    ------------ ------------- ------------
Interest income:
     Loans secured by real estate   $     42,854 $      41,420 $     38,705
     Other loans                              46            45           49
     Mortgage-backed securities            1,809         1,588        1,586
     Investment securities                   818           374          872
     Federal funds sold and other
        short-term investments             1,670         1,474        1,921
                                    ------------ ------------- ------------
          Total interest income           47,197        44,901       43,133
                                    ------------ ------------- ------------
Interest expense:
     Deposits and escrow                  19,105        18,919       16,590
     Borrowed funds                       10,012         8,604        9,071
                                    ------------ ------------- ------------
         Total interest expense           29,117        27,523       25,661
                                    ------------ ------------- ------------
              Net interest income         18,080        17,378       17,472
Provision for loan losses                     60            60           60
                                    ------------ ------------- ------------
Net interest income after
 provision for loan losses                18,020        17,318       17,412
                                    ------------ ------------- ------------

Non-interest income:
     Service charges and other fees        1,295         1,609        1,525
     Net gain on sales of assets             204            79           84
     Other                                   913         1,443          793
                                    ------------ ------------- ------------
          Total non-interest income        2,412         3,131        2,402
                                    ------------ ------------- ------------
Non-interest expense:
     Compensation and benefits             6,101         6,667        5,753
     Occupancy and equipment               1,859         1,566        1,466
     Other                                 3,378         3,484        3,161
                                    ------------ ------------- ------------
          Total non-interest expense      11,338        11,717       10,380
                                    ------------ ------------- ------------

          Income before taxes              9,094         8,732        9,434
Income tax expense                         3,657         3,188        3,469
                                    ------------ ------------- ------------

Net Income                          $      5,437 $       5,544 $      5,965
                                    ============ ============= ============

Earnings per Share:
  Basic                             $       0.17 $        0.17 $       0.17
                                    ============ ============= ============
  Diluted                           $       0.17 $        0.17 $       0.17
                                    ============ ============= ============

Average common shares outstanding
 for Diluted EPS                      32,737,939    33,106,224   34,873,327


                                       For the Year Ended
                                    --------------------------
                                    December 31,
                                         2007     December 31,
                                     (Unaudited)     2006
                                    ------------ -------------
Interest income:
     Loans secured by real estate   $    165,221 $     155,510
     Other loans                             178           190
     Mortgage-backed securities            6,344         6,850
     Investment securities                 2,011         2,277
     Federal funds sold and other
      short-term investments               8,406         5,983
                                    ------------ -------------
          Total interest  income         182,160       170,810
                                    ------------ -------------
Interest expense:
     Deposits  and escrow                 75,761        56,659
     Borrowed funds                       35,386        36,681
                                    ------------ -------------
         Total interest expense          111,147        93,340
                                    ------------ -------------
              Net interest income         71,013        77,470
Provision for loan losses                    240           240
                                    ------------ -------------
Net interest income after provision
 for loan losses                          70,773        77,230
                                    ------------ -------------

Non-interest income:
     Service charges and other fees        5,542         5,985
     Net gain on sales of assets             750         3,057
     Other                                 4,128         3,348
                                    ------------ -------------
          Total non-interest income       10,420        12,390
                                    ------------ -------------
Non-interest expense:
     Compensation and benefits            25,416        23,432
     Occupancy and equipment               6,431         5,762
     Other                                13,655        12,782
                                    ------------ -------------
          Total non-interest
           expense                        45,502        41,976
                                    ------------ -------------

          Income before taxes             35,691        47,644
Income tax expense                        13,248        17,052
                                    ------------ -------------

Net Income                          $     22,443 $      30,592
                                    ============ =============

Earnings per Share:
  Basic                             $       0.67 $        0.88
                                    ============ =============
  Diluted                           $       0.67 $        0.87
                                    ============ =============

Average common shares
   outstanding for Diluted EPS        33,641,875    35,118,128




             DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
      Unaudited Core Earnings and Core Cash Earnings Reconciliations
              (Dollars In thousands except per share amounts)

   Core earnings and related data are "Non-GAAP Disclosures."  These
disclosures present information which management considers useful to the
readers of this report since they present a measure of the results of the
Company's ongoing operations (exclusive of significant non-recurring items
such as gains or losses on sales of investment or mortgage-backed
securities) during the period.

   Core cash earnings and related data are also "Non-GAAP Disclosures."
These disclosures present information which management considers useful to
the readers of this report since they present a measure of the tangible
equity generated from operations during each period presented.  Tangible
stockholders' equity is derived from stockholders' equity, with various
adjustment items that are based upon standards of the Company's primary
regulator, the Office of Thrift Supervision.   Tangible stockholders'
equity generation is a significant financial measure since banks are
subject to regulatory requirements involving the maintenance of minimum
tangible capital levels.  A reconciliation between GAAP and tangible
stockholders' equity can be found in the Company's audited financial
statements for the year ended December 31, 2006.

   The following tables present a reconciliation of GAAP net income and
both core earnings and core cash earnings, as well as financial performance
ratios determined based upon core earnings and core cash earnings, for each
of the periods presented:

                                          For the Three Months Ended
                                  ----------------------------------------
                                  December 31,  September 30, December 31,
                                      2007          2007          2006
                                  ------------  ------------  ------------

Net income as reported            $      5,437  $      5,544  $      5,965
Pre-tax net gain on sale of
 securities and other assets                 -             -
Pre-tax income from BOLI benefit
 payment                                                (546)            -
Pre-tax income from borrowings
 restructuring                               -             -             -
Tax effect of adjustments                    -             -
                                  ------------  ------------  ------------
Core Earnings                     $      5,437  $      4,998  $      5,965
                                  ------------  ------------  ------------
Cash Earnings Additions :
Non-cash stock benefit plan
 expense                                   453           528           183
                                  ------------  ------------  ------------
Core Cash Earnings                $      5,890  $      5,526  $      6,148
                                  ------------  ------------  ------------
Performance Ratios (Based upon
 Core Cash Earnings):
Core Cash EPS (Diluted)           $       0.18  $       0.17  $       0.18
Core Cash Return on Average
 Assets                                   0.70%         0.69%         0.78%
Core Cash Return on Average
 Tangible Stockholders' Equity           10.83%        10.01%        10.13%


                                      For the Year Ended
                                  --------------------------
                                  December 31,  December 31,
                                      2007          2006
                                  ------------  ------------

Net income as reported            $     22,443  $     30,592
Pre-tax net gain on sale of
 securities and other assets                 -        (1,542)
Pre-tax income from BOLI benefit
 payment                                  (546)            -
Pre-tax income from borrowings
 restructuring                               -          (807)
Tax effect of adjustments                    -           839
                                  ------------  ------------
Core Earnings                     $     21,897  $     29,082
                                  ------------  ------------
Cash Earnings Additions :                                  0
Non-cash stock benefit plan
 expense                                 1,768         1,250
                                  ------------  ------------
Core Cash Earnings                $     23,665  $     30,332
                                  ------------  ------------
Performance Ratios (Based upon
 Core Cash Earnings):
Core Cash EPS (Diluted)           $       0.70  $       0.86
Core Cash Return on Average
 Assets                                   0.73%         0.97%
Core Cash Return on Average
 Tangible Stockholders' Equity           10.43%        12.57%




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


                                          For the Three Months Ended
                                  ----------------------------------------
                                  December 31,  September 30, December 31,
                                      2007          2007          2006
                                  ------------  ------------  ------------
Performance Ratios (Based upon
 Reported Earnings):
Reported EPS (Diluted)            $       0.17  $       0.17  $       0.17
Return on Average Assets                  0.65%         0.69%         0.76%
Return on Average Stockholders'
 Equity                                   8.11%         8.20%         8.11%
Return on Average Tangible
 Stockholders' Equity                    10.00%        10.04%         9.83%
Net Interest Spread                       1.92%         1.92%         1.91%
Net Interest Margin                       2.27%         2.28%         2.34%
Non-interest Expense to Average
 Assets                                   1.36%         1.45%         1.32%
Efficiency Ratio                         55.89%        57.35%        52.45%
Effective Tax Rate                       40.21%        36.51%        36.77%
Performance Ratios (Based upon
 Core Earnings):
Core EPS (Diluted)                $       0.17  $       0.15  $       0.17
Core Return on Average Assets             0.65%         0.62%         0.76%
Core Return on Average
 Stockholders' Equity                     8.11%         7.39%         8.11%
Core Return on Average Tangible
 Stockholders' Equity                    10.00%         9.05%         9.83%
Book Value and Tangible Book
 Value Per Share:
Stated Book Value Per Share       $       7.93  $       7.89  $       7.97
Tangible Book Value Per Share             6.41          6.43          6.63
Average Balance Data:
Average Assets                    $  3,345,437  $  3,224,578  $  3,145,446
Average Interest Earning Assets      3,180,603     3,054,499     2,992,771
Average Stockholders' Equity           268,177       270,350       294,385
Average Tangible Stockholders'
 Equity                                217,501       220,915       242,652
Average Loans                        2,861,060     2,786,862     2,662,497
Average Deposits                     2,132,528     2,130,472     1,963,369
Asset Quality Summary:
Net charge-offs                   $          5  $          7  $          8
Nonperforming Loans                      2,856         1,792         3,606
Nonperforming Loans/ Total Loans          0.10%         0.06%         0.13%
Nonperforming Assets/Total Assets         0.08%         0.05%         0.11%
Allowance for Loan Loss/Total
 Loans                                    0.53%         0.54%         0.57%
Allowance for Loan
 Loss/Nonperforming Loans               538.76%       857.92%       430.23%
Regulatory Capital Ratios:
Consolidated Tangible
 Stockholders' Equity to Tangible
  Assets at period end                    6.29%         6.75%         7.74%
Tangible Capital Ratio (Bank Only)        7.88%         8.75%         9.05%
Leverage Capital Ratio (Bank Only)        7.88%         8.75%         9.05%
Risk Based Capital Ratio (Bank Only)     11.92%        12.65%        12.61%


                                      For the Year Ended
                                  --------------------------
                                  December 31,  December 31,
                                      2007          2006
                                  ------------  ------------
Performance Ratios (Based upon
 Reported Earnings):
Reported EPS (Diluted)            $       0.67  $       0.87
Return on Average Assets                  0.69%         0.98%
Return on Average Stockholders'
 Equity                                   8.11%        10.43%
Return on Average Tangible
 Stockholders' Equity                     9.89%        12.68%
Net Interest Spread                       1.88%         2.19%
Net Interest Margin                       2.29%         2.60%
Non-interest Expense to Average
 Assets                                   1.39%         1.34%
Efficiency Ratio                         56.40%        48.36%
Effective Tax Rate                       37.12%        35.79%

Performance Ratios (Based upon
 Core Earnings):
Core EPS (Diluted)                $       0.65  $       0.83
Core Return on Average Assets             0.67%         0.93%
Core Return on Average
 Stockholders' Equity                     7.92%         9.92%
Core Return on Average Tangible
 Stockholders' Equity                     9.65%        12.05%


Book Value and Tangible Book
 Value Per Share:
Stated Book Value Per Share       $       7.93  $       7.97
Tangible Book Value Per Share             6.41          6.63

Average Balance Data:
Average Assets                    $  3,263,018  $  3,126,640
Average Interest Earning Assets      3,105,459     2,978,147
Average Stockholders' Equity           276,582       293,199
Average Tangible Stockholders'
 Equity                                226,977       241,301
Average Loans                        2,777,220     2,651,601
Average Deposits                     2,128,350     1,931,561

Asset Quality Summary:
Net charge-offs                   $          9  $         27
Nonperforming Loans                      2,856         3,606
Nonperforming Loans/ Total Loans          0.10%         0.13%
Nonperforming Assets/Total Assets         0.08%         0.11%
Allowance for Loan Loss/Total
 Loans                                    0.53%         0.57%
Allowance for Loan
 Loss/Nonperforming Loans               538.76%       430.23%

Regulatory Capital Ratios:
Consolidated Tangible Stockholders'
 Equity to Tangible Assets at period
 end                                      6.29%         7.74%
Tangible Capital Ratio (Bank Only)        7.88%         9.05%
Leverage Capital Ratio (Bank Only)        7.88%         9.05%
Risk Based Capital Ratio (Bank Only)     11.92%        12.61%




             DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
            UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME

                                           For the Three Months Ended
                                       -----------------------------------
                                                December 31, 2007
                                       -----------------------------------
                                                                  Average
                                         Average                  Yield/
                                         Balance     Interest      Cost
                                       ----------- -----------  ----------
                                             (Dollars In Thousands)
Assets:
  Interest-earning assets:
    Real estate loans                  $ 2,859,240 $    42,854        6.00%
    Other loans                              1,820          46       10.11
    Mortgage-backed securities             167,273       1,809        4.33
    Investment securities                   28,217         818       11.60
    Other short-term investments           124,052       1,670        5.38
                                       ----------- -----------  ----------
      Total interest earning assets      3,180,602 $    47,197        5.94%
                                       ----------- -----------
  Non-interest earning assets              164,835
                                       -----------
Total assets                           $ 3,345,437
                                       ===========

Liabilities and Stockholders' Equity:
  Interest-bearing liabilities:
    NOW, Super NOW and Interest
     Bearing Checking                  $    53,231 $       306        2.28%
    Money Market accounts                  663,395       6,663        3.98
    Savings accounts                       275,606         372        0.54
    Certificates of deposit              1,049,843      11,764        4.45
                                       ----------- -----------  ----------
          Total interest bearing
           deposits                      2,042,075      19,105        3.71
   Borrowed Funds                          833,973      10,012        4.76
                                       ----------- -----------  ----------
      Total interest-bearing
       liabilities                       2,876,048      29,117        4.02%
                                       ----------- -----------
  Non-interest bearing checking
   accounts                                 90,453
  Other non-interest-bearing
   liabilities                             110,759
                                       -----------
      Total liabilities                  3,077,260
  Stockholders' equity                     268,177
                                       -----------
Total liabilities and stockholders'
 equity                                $ 3,345,437
                                       ===========
Net interest income                                $    18,080
                                                   ===========
Net interest spread                                                   1.92%
                                                                ==========
Net interest-earning assets            $   304,554
                                       ===========
Net interest margin                                                   2.27%
                                                                ==========
Ratio of interest-earning assets
 to interest-bearing liabilities                        110.59%
                                                   ===========

Deposits (including non-interest
 bearing checking accounts)            $ 2,132,528 $    19,105        3.55%

Interest earning assets (excluding
 prepayment fees and late charges)                                    5.73%


                                           For the Three Months Ended
                                       -----------------------------------
                                                September 30, 2007
                                       -----------------------------------
                                                                  Average
                                         Average                  Yield/
                                         Balance     Interest      Cost
                                       ----------- -----------  ----------
                                             (Dollars In Thousands)
Assets:
  Interest-earning assets:
    Real estate loans                  $ 2,785,057 $    41,420        5.95%
    Other loans                              1,805          45        9.97
    Mortgage-backed securities             153,738       1,588        4.13
    Investment securities                   22,921         374        6.53
    Other short-term investments            90,978       1,474        6.48
                                       ----------- -----------  ----------
      Total interest earning assets      3,054,499 $    44,901        5.88%
                                       ----------- -----------
  Non-interest earning assets              170,079
                                       -----------
Total assets                           $ 3,224,578
                                       ===========

Liabilities and Stockholders' Equity:
  Interest-bearing liabilities:
    NOW, Super NOW and Interest
     Bearing Checking                  $    45,609 $       220        1.91%
    Money Market accounts                  654,192       6,348        3.85
    Savings accounts                       284,366         388        0.54
    Certificates of deposit              1,053,972      11,963        4.50
                                       ----------- -----------  ----------
          Total interest bearing
           deposits                      2,038,139      18,919        3.68
   Borrowed Funds                          717,926       8,604        4.75
                                       ----------- -----------  ----------
      Total interest-bearing
       liabilities                       2,756,065      27,523        3.96%
                                       ----------- -----------
  Non-interest bearing checking
   accounts                                 92,333
  Other non-interest-bearing
   liabilities                             105,830
                                       -----------
      Total liabilities                  2,954,228
  Stockholders' equity                     270,350
                                       -----------
Total liabilities and stockholders'
 equity                                $ 3,224,578
                                       ===========
Net interest income                                $    17,378
                                                   ===========
Net interest spread                                                   1.92%
                                                                ==========
Net interest-earning assets            $   298,434
                                       ===========
Net interest margin                                                   2.28%
                                                                ==========
Ratio of interest-earning assets
 to interest-bearing liabilities                        110.83%
                                                   ===========

Deposits (including non-interest
 bearing checking accounts)            $ 2,130,472 $    18,919        3.52%

Interest earning assets (excluding
 prepayment fees and late charges)                                    5.78%



                                           For the Three Months Ended
                                       -----------------------------------
                                                December 31, 2006
                                       -----------------------------------
                                                                  Average
                                         Average                  Yield/
                                         Balance     Interest      Cost
                                       ----------- -----------  ----------
                                             (Dollars In Thousands)
Assets:
  Interest-earning assets:
    Real estate loans                  $ 2,660,517 $    38,705        5.82%
    Other loans                              1,980          49        9.90
    Mortgage-backed securities             163,072       1,586        3.89
    Investment securities                   29,678         872       11.75
    Other short-term investments           137,524       1,921        5.59
                                       ----------- -----------  ----------
      Total interest earning assets      2,992,771 $    43,133        5.76%
                                       ----------- -----------
  Non-interest earning assets              152,675
                                       -----------
Total assets                           $ 3,145,446
                                       ===========

Liabilities and Stockholders' Equity:
  Interest-bearing liabilities:
    NOW, Super NOW and Interest
     Bearing Checking                  $    34,069 $        92        1.07%
    Money Market accounts                  491,946       4,152        3.35
    Savings accounts                       301,348         442        0.58
    Certificates of deposit              1,042,809      11,904        4.53
                                       ----------- -----------  ----------
          Total interest bearing
           deposits                      1,870,172      16,590        3.52
   Borrowed Funds                          771,152       9,071        4.67
                                       ----------- -----------  ----------
      Total interest-bearing
       liabilities                       2,641,324      25,661        3.85%
                                       ----------- -----------
  Non-interest bearing checking
   accounts                                 93,197
  Other non-interest-bearing
   liabilities                             116,540
                                       -----------
      Total liabilities                  2,851,061
  Stockholders' equity                     294,385
                                       -----------
Total liabilities and stockholders'
 equity                                $ 3,145,446
                                       ===========
Net interest income                                $    17,472
                                                   ===========
Net interest spread                                                   1.91%
                                                                ==========
Net interest-earning assets            $   351,447
                                       ===========
Net interest margin                                                   2.34%
                                                                ==========
Ratio of interest-earning assets
 to interest-bearing liabilities                                    113.31%
                                                                ==========

Deposits (including non-interest
 bearing checking accounts)            $ 1,963,369 $    16,590        3.35%

Interest earning assets (excluding
 prepayment fees and late charges)                                    5.68%

Contact Information

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