Dime Community Bancshares Reports Earnings

BROOKLYN, NY--(Marketwired - Jul 25, 2013) - Dime Community Bancshares, Inc. (NASDAQ: DCOM) (the "Company" or "Dime"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank"), today reported financial results for the quarter ended June 30, 2013. Consolidated net income for the quarter ended June 30, 2013 was $12.0 million, or $0.34 per diluted share, compared to $10.6 million, or $0.30 per diluted share, for the quarter ended March 31, 2013, and $11.5 million, or $0.34 per diluted share, for the quarter ended June 30, 2012.

Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "Second quarter earnings benefitted from both higher prepayment fees and lower credit costs. Core net interest margin, which excludes prepayment fees, declined only slightly, to 3.06%, and we just completed one of the highest quarterly periods of loan originations in our history, closing $325.6 million of loans during the June 2013 quarter. The loan pipeline at June 30, 2013 remained strong at $222.1 million. The annualized growth rate in the real estate loan portfolio was approximately 6% during the first six months of 2013, putting the Company on track to meet its 2013 goal."

"More importantly," continued Mr. Palagiano, "the yield curve is steepening, and interest rate offerings in the multifamily sector have now turned up from their historic lows in this cycle. Although margin may continue to soften in the short term, the new higher rates on loans should be beneficial to spread lenders like Dime thereafter."

Loan amortization and satisfactions, including refinances of existing loans, increased from a 23% annualized rate during the March 2013 quarter to 33.2% during the June 2013 quarter. Prepayment fee income, which is generally proportional to amortization levels, also grew from $2.3 million (or $0.04 per diluted share after-tax) during the March 2013 quarter to $4.6 million (or $0.08 per diluted share after tax) during the June 2013 quarter.

Mr. Palagiano concluded, "At the end of the previous quarter, the Bank had a surplus liquidity position which was causing a slight drag on net interest margin. In the most recent quarter, cash was reduced by approximately $80 million and redeployed into mortgages, which helped optimize the quarterly core net interest margin. As stated at the outset of the calendar year, we anticipate that balance sheet growth, now combined with a steeper yield curve, will partially offset the earnings contraction that might be expected from a declining net interest margin."

OPERATING RESULTS FOR THE QUARTER ENDED JUNE 30, 2013

Net Interest Margin
Net interest margin ("NIM") was 3.55% during the quarter ended June 30, 2013 compared to 3.44% during the March 2013 quarter. For forecasting purposes, the "core" NIM, excluding the effect of loan prepayment fees, decreased from 3.19% during the March 2013 quarter to 3.06% during the June 2013 quarter, reflecting a reduction of 15 basis points in the average yield on interest earning assets (primarily caused by a reduction of 21 basis points in the average yield on real estate loans exclusive of the effects of prepayment fee income), that was partially offset by a reduction of 4 basis points in the average cost of interest bearing liabilities.

A 3 basis point decline in the average cost of deposits helped to reduce the average cost of all interest bearing liabilities, as bank deposit rates (mainly short term) remained low in the Bank's market area.

As previously mentioned, NIM benefitted from the re-deployment of $80.4 million of cash into loans, at a positive spread of approximately 300 basis points. The 21 basis point decline in the average yield on real estate loans (excluding the effects of prepayment fee income) on a linked quarter basis resulted from the cumulative effect of increased portfolio refinance and amortization activities experienced during the period July 2012 through June 2013, as U.S. Treasury yields hovered at historically low levels, and loans repriced at lower rates. During the June 2013 quarter, these yields began to rise from their cyclical lows. Rates offered on prime (low loan-to-value) 5-year repricing multifamily loans are now in the range of 3.50% to 3.75%.

Net Interest Income
Net interest income was $33.8 million in the quarter ended June 30, 2013, up $1.4 million from the March 2013 quarter and down $746,000 from the $34.5 million reported in the June 2012 quarter. Prepayment fee income on loans totaled $4.6 million during the June 2013 quarter, compared to $2.3 million recognized in the March 2013 quarter and $3.5 million during the June 2012 quarter. Absent the impact of loan prepayment fee income, net interest income was $29.1 million during the June 30, 2013 quarter, down $894,000 from the March 31, 2013 quarter and $2.0 million from the June 30, 2012 quarter. The decline in net interest income (excluding loan prepayment fee income) from the March 2013 quarter resulted primarily from a decline of 15 basis points in the average yield earned on the Company's interest earning assets, reflecting the ongoing loan refinancing activity.

Provision/Allowance For Loan Losses
The Company recognized net charge-offs of $57,000 and provisioned $28,000 for loan losses during the June 2013 quarter. This led to a net reduction of $28,000 in the allowance for loan losses from March 31, 2013 to June 30, 2013. The quarterly loan loss provision dropped from $157,000 in the March 2013 quarter to $28,000 in the June 2013 quarter.

At June 30, 2013, the allowance for loan losses as a percentage of total loans stood at 0.57%, down slightly from 0.58% at the close of the prior quarter, primarily attributable to growth in the loan portfolio and the small reduction in the allowance for loan losses during the June 2013 quarter. The reduction in both the period end allowance and the quarterly provision for loan losses reflected the improvement in the overall credit quality of the loan portfolio from December 31, 2012 to June 30, 2013.

Non-Interest Income
Non-interest income was $1.7 million for the quarter ended June 30, 2013, a reduction of $176,000 from the previous quarter. Net gains on the sale of securities and other assets fell $110,000 from the March 2013 quarter, resulting from a gain related to mutual fund investments during the March 2013 quarter. Mortgage banking income decreased $49,000 from the March 2013 quarter to the June 2013 quarter, due primarily to a reduction of $46,000 in loan servicing fee income, reflecting an ongoing reduction in the portfolio of serviced loans.

Non-Interest Expense
Non-interest expense was $15.3 million in the quarter ended June 30, 2013, down $1.0 million from the prior quarter, and generally in line with the forecasted level of $15.5 million. Absent unforeseen items or events, non-interest expense is anticipated to approximate the $15.5 million average quarterly level forecasted for the year ending December 31, 2013.

Non-interest expense was 1.53% of average assets during the most recent quarter. The efficiency ratio approximated 43.2% during the same period.

Income Tax Expense
The effective tax rate approximated 40.1% during the most recent quarter, generally in line with the 40.0% forecasted level.

BALANCE SHEET
Total assets were $3.95 billion at June 30, 2013, down $31.1 million from March 31, 2013. Cash balances decreased by $80.4 million, partially offset by an increase of $59.9 million in real estate loans.

Retail deposits remained relatively flat during the most recent quarter, and the Company elected to not replace $10.0 million of Federal Home Loan Bank of New York ("FHLBNY") advances that matured during the June 2013 quarter, instead utilizing the additional liquidity generated during the March 2013 quarter to meet funding obligations. While this led to a slight decline in total assets during the most recent quarter, assets have grown by approximately 2.5% on an annualized basis during the first six months of 2013, and remain forecasted to grow approximately 5% during the year ending December 31, 2013.

Real Estate Loans
Real estate loan originations were $325.6 million during the June 2013 quarter, at a weighted average interest rate of 3.30%. Of this amount, $136.7 million represented loan refinances from the existing portfolio. Loan amortization and satisfactions, including the $136.7 million of refinances of existing loans, totaled $296.4 million during the quarter, or 33.2% of the average portfolio balance on an annualized basis. The average rate on amortized and satisfied loan balances during the most recent quarter was 5.35%. Total loan commitments stood at $222.1 million at June 30, 2013, with a weighted average rate of 3.28%. The average yield on the loan portfolio (excluding prepayment fee income) during the quarter ended June 30, 2013 was 4.44%, compared to 4.65% during the March 2013 quarter and 5.16% during the June 2012 quarter.

Credit Summary
Non-performing loans (excluding loans held for sale) were $9.5 million, or 0.26% of total loans, at June 30, 2013, up from $8.2 million, or 0.23% of total loans, at March 31, 2013. Loans delinquent between 30 and 89 days and accruing interest fell to $159,000, or approximately 0.004% of total loans, at June 30, 2013, compared to $2.0 million, or 0.06% of total loans, at March 31, 2013.

At June 30, 2013, non-performing assets represented 2.9% of the sum of tangible capital plus the allowance for loan losses (this statistic is otherwise known as the "Texas Ratio"). This number compares very favorably to both industry and regional averages.

Within the pool of serviced loans previously sold to Fannie Mae with recourse exposure, total loans delinquent 30 days or more approximated $700,000 at June 30, 2013, relatively unchanged from March 31, 2013. The remaining pool of loans serviced for Fannie Mae totaled $229.2 million as of June 30, 2013, down from $244.2 million as of March 31, 2013. Due to both ongoing amortization and stabilization of problem loans within the Fannie Mae portfolio, the Company determined that its liability for the first loss position could be reduced by $102,000, which was recognized during the quarter ended June 30, 2013.

Deposits and Borrowed Funds
Retail deposits increased $6.3 million from March 31, 2013 to June 30, 2013, due primarily to net inflows of $14.9 million in money market deposits. The Bank did not implement any significant promotional deposit activities during the June 2013 quarter, and enacted slight reductions in rates that resulted in a reduction of 3 basis points in the average cost of deposits during the June 2013 quarter. At June 30, 2013, average deposit balances approximated $100.3 million per branch. The Bank remains selective in the products, rates and terms on which it competes for deposits, focusing on products that encourage long-term customer retention, and discouraging renewals of promotional deposits in cases where customer relationships have not proved durable.

As previously discussed, as a result of successful deposit gathering efforts, the Company did not elect to replace $10.0 million of FHLBNY borrowings that matured during the quarter ended June 30, 2013. The Company intends to use FHLBNY advances to supplement deposit funding when deemed appropriate.

Capital
The Company's consolidated tangible common equity ratio (Tier 1 core leverage) grew during the most recent quarter as a result of increased retained earnings. Consolidated tangible capital was 9.31% of tangible assets at June 30, 2013, an increase of 29 basis points from March 31, 2013. The Company also had approximately $70.7 million of trust preferred debt securities outstanding at June 30, 2013, which, when added to Tier 1 (tangible) capital, increased its consolidated Tier 1 (tangible) capital ratio to approximately 11.1%.

The Bank's tangible capital ratio was 10.27% at June 30, 2013, up from 9.97% at March 31, 2013. The Bank's Total Risk-Based Capital Ratio was 13.95% at June 30, 2013, compared to 13.76% at March 31, 2013.

Reported EPS exceeded the quarterly cash dividend rate per share by 143%, equating to a 41% payout ratio. Additions to capital from earnings and stock option exercises during the most recent quarterly period caused tangible book value per share to increase $0.19 sequentially during the most recent quarter, to $10.06 at June 30, 2013.

OUTLOOK FOR THE QUARTER ENDING SEPTEMBER 30, 2013
At June 30, 2013, Dime had outstanding loan commitments totaling $222.1 million (of which $77 million related to loan refinances from the existing portfolio), all of which are likely to close during the quarter ending September 30, 2013, at an average expected interest rate approximating 3.3%.

As discussed earlier in the release, the Company has transitioned into a period of measured loan portfolio and balance sheet growth, in part to utilize capital efficiently and in part to mitigate the effects of a contracting margin. For the year ending December 31, 2013, balance sheet growth is targeted to approximate 5.0%, subject to change to reflect market conditions. Loan prepayments and amortization remained elevated during the most recent quarter, however, are currently anticipated to fall below their recent levels for the remainder of 2013, and are expected to approximate 20% - 25% on an annualized basis during the September 2013 quarter.

On the liability side, deposit funding costs are expected to remain near current historically low levels through the third quarter of 2013. The Bank has $138.4 million of certificates of deposit ("CDs") maturing at an average cost of 1.14% during the quarter ending September 30, 2013. Offering rates on 12-month term CDs currently approximate 50 basis points. The Company has $25.0 million of borrowings due to mature during the quarter ending September 30, 2013 at an average cost of 2.80%. FHLBNY advance rates for 3-year and 4-year borrowings were 1.00% and 1.50% respectively, as of July 17, 2013. In the coming quarter, management expects to utilize advances rather than deposits to fund growth as a long-term interest rate hedge against future higher rates.

Loan loss provisioning will likely continue to be a function of loan portfolio growth, incurred losses and the overall credit quality of the loan portfolio.

Absent any unforeseen items, non-interest expense is expected to approximate $15.5 million during the September 2013 quarter.

The Company projects that the consolidated effective tax rate will approximate 40.0% in the September 2013 quarter.

ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company (NASDAQ: DCOM) had $3.95 billion in consolidated assets as of June 30, 2013, and is the parent company of the Bank. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-six 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)
			June 30,				March 31,				December 31,
			2013				2013				2012
ASSETS:
Cash and due from banks			$	61,291			$	141,656			$	79,076
Investment securities held to maturity				5,617				5,746				5,927
Investment securities available for sale				18,309				18,330				32,950
Trading securities				5,127				4,978				4,874
Mortgage-backed securities available for sale				38,193				43,383				49,021
Real Estate Loans:
	One-to-four family and cooperative apartment			81,110				86,012				91,876
	Multifamily and loans underlying cooperatives (1)			2,780,897				2,706,854				2,670,973
	Commercial real estate (1)			737,593				747,035				735,224
	Construction and land acquisition			338				416				476
	Unearned discounts and net deferred loan fees			4,309				4,070				4,836
	Total real estate loans			3,604,247				3,544,387				3,503,385
	Other loans			2,517				1,967				2,423
	Allowance for loan losses			(20,502	)			(20,530	)			(20,550	)
Total loans, net				3,586,262				3,525,824				3,485,258
Loans held for sale				232				469				560
Premises and fixed assets, net				29,894				30,065				30,518
Federal Home Loan Bank of New York capital stock				40,288				40,736				45,011
Goodwill				55,638				55,638				55,638
Other assets				110,392				115,500				116,566
TOTAL ASSETS			$	3,951,243			$	3,982,325			$	3,905,399
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Non-interest bearing checking			$	170,432			$	172,254			$	159,144
Interest Bearing Checking				90,496				92,981				95,159
Savings				379,367				379,341				371,792
Money Market				1,092,281				1,077,409				961,359
	Sub-total			1,732,576				1,721,985				1,587,454
Certificates of deposit				875,083				879,330				891,975
Total Due to Depositors				2,607,659				2,601,315				2,479,429
Escrow and other deposits				86,028				119,452				82,753
Federal Home Loan Bank of New York advances				737,500				747,500				842,500
Trust Preferred Notes Payable				70,680				70,680				70,680
Other liabilities				40,471				42,878				38,463
TOTAL LIABILITIES				3,542,338				3,581,825				3,513,825
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par, 125,000,000 shares authorized, 52,198,771 shares, 52,178,819 shares and 52,021,149 shares issued at June 30, 2013, March 31, 2013 and December 31, 2012,respectively, and 36,054,813 shares, 35,871,939 shares, and 35,714,269 shares outstanding at June 30, 2013, March 31, 2013 and December 31, 2012, respectively)				522				522				520
Additional paid-in capital				242,605				241,464				239,041
Retained earnings				391,989				384,855				379,166
Unallocated common stock of Employee Stock Ownership Plan				(2,892	)			(2,950	)			(3,007	)
Unearned Restricted Stock Award common stock				(4,192	)			(2,596	)			(3,122	)
Common stock held by the Benefit Maintenance Plan				(9,013	)			(8,800	)			(8,800	)
Treasury stock (16,143,958 shares, 16,306,880 shares and 16,306,880 shares at June 30, 2013, March 31, 2013 and December 31, 2012, respectively)				(200,550	)			(202,574	)			(202,584	)
Accumulated other comprehensive loss, net of deferred taxes				(9,564	)			(9,421	)			(9,640	)
TOTAL STOCKHOLDERS' EQUITY				408,905				400,500				391,574
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	3,951,243			$	3,982,325			$	3,905,399

(1)

While the loans within both of these categories are often considered "commercial real estate" in nature, multifamily and loans underlying cooperatives are here reported separately from commercial real estate loans in order to emphasize the residential nature of the collateral underlying a significant component of the total loan portfolio.

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In thousands except share and per share amounts)
						For the Three Months Ended
						June 30,				March 31,				June 30,
						2013				2013				2012
Interest income:
		Loans secured by real estate				$	44,692			$	43,148			$	47,259
		Other loans					25				25				28
		Mortgage-backed securities					354				459				832
		Investment securities					103				129				505
		Federal funds sold and other short-term investments					462				544				639
			Total interest income				45,636				44,305				49,263
Interest expense:
		Deposits and escrow					5,132				5,201				5,422
		Borrowed funds					6,752				6,790				9,343
			Total interest expense				11,884				11,991				14,765
				Net interest income			33,752				32,314				34,498
Provision for loan losses							28				157				2,275
Net interest income after provision for loan losses							33,724				32,157				32,223
Non-interest income:
		Service charges and other fees					827				712				802
		Mortgage banking income, net					112				161				1,095
		Other than temporary impairment ("OTTI") charge on securities (1)					-				-				-
		Gain on sale of securities and other assets					-				110				44
		Gain (loss) on trading securities					(17	)			100				(36	)
		Other					799				815				1,083
			Total non-interest income				1,721				1,898				2,988
Non-interest expense:
		Compensation and benefits					9,298				9,951				9,477
		Occupancy and equipment					2,506				2,532				2,434
		Federal deposit insurance premiums					445				511				457
		Other					3,098				3,315				3,308
			Total non-interest expense				15,347				16,309				15,676
			Income before taxes				20,098				17,746				19,535
Income tax expense							8,059				7,176				8,004
Net Income						$	12,039			$	10,570			$	11,531
Earnings per Share ("EPS"):
	Basic					$	0.34			$	0.30			$	0.34
	Diluted					$	0.34			$	0.30			$	0.34
Average common shares outstanding for Diluted EPS							35,048,063				34,879,239				34,229,202
(1) Total OTTI charges on securities are summarized as follows for the periods presented:
Credit component (shown above)						$	-			$	-			$	-
Non-credit component not included in earnings							-				-				-
Total OTTI charges						$	-			$	-			$	-
							For the Six Months Ended
							June 30,				June 30,
							2013				2012
Interest income:
		Loans secured by real estate				$	87,840			$	97,772
		Other loans					50				48
		Mortgage-backed securities					813				1,779
		Investment securities					232				820
		Federal funds sold and other short-term investments					1,006				1,313
			Total interest income				89,941				101,732
Interest expense:
		Deposits and escrow					10,332				11,148
		Borrowed funds					13,542				22,692
			Total interest expense				23,874				33,840
				Net interest income			66,067				67,892
Provision for loan losses							185				3,732
Net interest income after provision for loan losses							65,882				64,160
Non-interest income:
		Service charges and other fees					1,539				1,596
		Mortgage banking income, net					273				1,216
		Other than temporary impairment ("OTTI") charge on securities (1)					-				(181	)
		Gain on sale of securities and other assets					110				44
		Gain (loss) on trading securities					83				70
		Other					1,614				2,033
			Total non-interest income				3,619				4,778
Non-interest expense:
		Compensation and benefits					19,249				19,416
		Occupancy and equipment					5,038				4,905
		Federal deposit insurance premiums					956				1,055
		Other					6,413				6,708
			Total non-interest expense				31,656				32,084
			Income before taxes				37,844				36,854
Income tax expense							15,235				15,076
Net Income						$	22,609			$	21,778
Earnings per Share ("EPS"):
	Basic					$	0.65			$	0.64
	Diluted					$	0.65			$	0.64
Average common shares outstanding
for Diluted EPS							34,964,249				34,180,096
(1) Total OTTI charges on securities are summarized as follows for the periods presented:
Credit component (shown above)						$	-			$	181
Non-credit component not included in earnings							-				6
Total OTTI charges						$	-			$	187

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS
(Dollars In thousands except per share amounts)
		For the Three Months Ended
		June 30,				March 31,				June 30,
		2013				2013				2012
Performance Ratios:
Reported EPS (Diluted)		$	0.34			$	0.30			$	0.34
Return on Average Assets			1.20	%			1.07	%			1.17	%
Return on Average Stockholders' Equity			11.93	%			10.63	%			12.39	%
Return on Average Tangible Stockholders' Equity			13.53	%			12.07	%			14.17	%
Net Interest Spread			3.34	%			3.21	%			3.37	%
Net Interest Margin			3.55	%			3.44	%			3.63	%
Non-interest Expense to Average Assets			1.53	%			1.65	%			1.59	%
Efficiency Ratio			43.24	%			47.97	%			41.83	%
Effective Tax Rate			40.10	%			40.44	%			40.97	%
Book Value and Tangible Book Value Per Share:
Stated Book Value Per Share		$	11.34			$	11.16			$	10.65
Tangible Book Value Per Share			10.06				9.87				9.33
Average Balance Data:
Average Assets		$	4,009,237			$	3,945,321			$	3,944,607
Average Interest Earning Assets			3,803,526				3,759,778				3,801,149
Average Stockholders' Equity			403,604				397,594				372,283
Average Tangible Stockholders' Equity			355,823				350,277				325,523
Average Loans			3,602,249				3,507,830				3,394,100
Average Deposits			2,615,213				2,571,771				2,377,079
Asset Quality Summary:
Net charge-offs		$	57			$	177			$	1,562
Non-performing Loans (1)			9,507				8,172				13,318
Non-performing Loans/ Total Loans			0.26	%			0.23	%			0.40	%
Nonperforming Assets (2)		$	10,987			$	9,651			$	14,233
Nonperforming Assets/Total Assets			0.28	%			0.24	%			0.37	%
Allowance for Loan Loss/Total Loans			0.57	%			0.58	%			0.60	%
Allowance for Loan Loss/Non-performing Loans			215.65	%			251.22	%			152.00	%
Loans Delinquent 30 to 89 Days at period end		$	159			$	1,985			$	7,536
Consolidated Tangible Stockholders' Equity to Tangible Assets at period end			9.31	%			9.02	%			8.63	%
Regulatory Capital Ratios (Bank Only):
Leverage Capital Ratio			10.27	%			9.97	%			9.93	%
Tier One Risk Based Capital Ratio			13.22	%			13.02	%			13.10	%
Total Risk Based Capital Ratio			13.95	%			13.76	%			13.83	%
			For the Six Months Ended
			June 30,				June 30,
			2013				2012
Performance Ratios:
Reported EPS (Diluted)		$	0.65			$	0.64
Return on Average Assets			1.14	%			1.09	%
Return on Average Stockholders' Equity			11.29	%			11.81	%
Return on Average Tangible Stockholders' Equity			12.81	%			13.51	%
Net Interest Spread			3.28	%			3.29	%
Net Interest Margin			3.49	%			3.55	%
Non-interest Expense to Average Assets			1.59	%			1.60	%
Efficiency Ratio			45.55	%			44.11	%
Effective Tax Rate			40.26	%			40.91	%
Book Value and Tangible Book Value Per Share:
Stated Book Value Per Share		$	11.34			$	10.65
Tangible Book Value Per Share			10.06				9.33
Average Balance Data:
Average Assets		$	3,977,279			$	3,998,861
Average Interest Earning Assets			3,781,652				3,822,816
Average Stockholders' Equity			400,599				368,822
Average Tangible Stockholders' Equity			352,888				322,431
Average Loans			3,555,040				3,417,899
Average Deposits			2,593,492				2,367,640
Asset Quality Summary:
Net charge-offs		$	233			$	3,825
Non-performing Loans (1)			9,507				13,318
Non-performing Loans/ Total Loans			0.26	%			0.40	%
Nonperforming Assets (2)		$	10,987			$	14,233
Nonperforming Assets/Total Assets			0.28	%			0.37	%
Allowance for Loan Loss/Total Loans			0.57	%			0.60	%
Allowance for Loan Loss/Non-performing Loans			215.65	%			152.00	%
Loans Delinquent 30 to 89 Days at period end		$	159			$	7,536
Consolidated Tangible Stockholders' Equity to Tangible Assets at period end			9.31	%			8.63	%
Regulatory Capital Ratios (Bank Only):
Leverage Capital Ratio			9.93	%			9.93	%
Tier One Risk Based Capital Ratio			13.22	%			13.10	%
Total Risk Based Capital Ratio			13.95	%			13.83	%

(1)		Amount excludes $270 of loans held for sale that were on non-accrual status at March 31, 2013.
(2)		Amount comprised of total non-accrual loans and the recorded balance of pooled bank trust preferred security investments forwhich the Bank had 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
					June 30, 2013
												Average
					Average							Yield/
					Balance			Interest				Cost
Assets:
	Interest-earning assets:
		Real estate loans			$	3,600,154		$	44,692			4.97	%
		Other loans				2,095			25			4.77
		Mortgage-backed securities				39,669			353			3.56
		Investment securities				29,101			104			1.43
		Other short-term investments				132,507			462			1.39
			Total interest earning assets			3,803,526		$	45,636			4.80	%
	Non-interest earning assets					205,711
Total assets					$	4,009,237
Liabilities and Stockholders' Equity:
	Interest-bearing liabilities:
		Interest Bearing Checking accounts			$	92,502		$	70			0.30	%
		Money Market accounts				1,082,789			1,406			0.52
		Savings accounts				381,137			64			0.07
		Certificates of deposit				883,881			3,592			1.63
			Total interest bearing deposits			2,440,309			5,132			0.84
	Borrowed Funds					813,565			6,752			3.33
		Total interest-bearing liabilities				3,253,874		$	11,884			1.46	%
	Non-interest bearing checking accounts					174,904
	Other non-interest-bearing liabilities					176,855
		Total liabilities				3,605,633
	Stockholders' equity					403,604
Total liabilities and stockholders' equity					$	4,009,237
Net interest income								$	33,752
Net interest spread												3.34	%
Net interest-earning assets					$	549,652
Net interest margin												3.55	%
Ratio of interest-earning assets to interest-bearing liabilities									116.89	%
Deposits (including non-interest bearing checking accounts)					$	2,615,213		$	5,132			0.79	%
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee income								$	4,692
Borrowing prepayment costs									-
Real estate loans (excluding prepayment and late payment fees)												4.44	%
Interest earning assets (excluding prepayment and late payment fees)												4.31	%
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)								$	29,060
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)												3.06	%

					For the Three Months Ended
					March 31, 2013
												Average
					Average							Yield/
					Balance			Interest				Cost
Assets:
	Interest-earning assets:
		Real estate loans			$	3,505,646		$	43,148			4.92	%
		Other loans				2,184			25			4.58
		Mortgage-backed securities				45,477			459			4.04
		Investment securities				42,807			129			1.21
		Other short-term investments				163,664			544			1.33
			Total interest earning assets			3,759,778		$	44,305			4.71	%
	Non-interest earning assets					185,543
Total assets					$	3,945,321
Liabilities and Stockholders' Equity:
	Interest-bearing liabilities:
		Interest Bearing Checking accounts			$	93,219		$	70			0.30	%
		Money Market accounts				1,059,236			1,490			0.57
		Savings accounts				375,374			101			0.11
		Certificates of deposit				881,883			3,540			1.63
			Total interest bearing deposits			2,409,712			5,201			0.88
	Borrowed Funds					837,402			6,790			3.29
		Total interest-bearing liabilities				3,247,114		$	11,991			1.50	%
	Non-interest bearing checking accounts					162,059
	Other non-interest-bearing liabilities					138,554
		Total liabilities				3,547,727
	Stockholders' equity					397,594
Total liabilities and stockholders' equity					$	3,945,321
Net interest income								$	32,314
Net interest spread												3.21	%
Net interest-earning assets					$	512,664
Net interest margin												3.44	%
Ratio of interest-earning assets to interest-bearing liabilities									115.79	%
Deposits (including non-interest bearing checking accounts)					$	2,571,771		$	5,201			0.82	%
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee income								$	2,360
Borrowing prepayment costs									-
Real estate loans (excluding prepayment and late payment fees)												4.65	%
Interest earning assets (excluding prepayment and late payment fees)												4.46	%
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)								$	29,954
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)												3.19	%

					For the Three Months Ended
					June 30, 2012
												Average
					Average							Yield/
					Balance			Interest				Cost
Assets:
	Interest-earning assets:
		Real estate loans			$	3,391,986		$	47,259			5.57	%
		Other loans				2,114			28			5.30
		Mortgage-backed securities				97,719			832			3.41
		Investment securities				108,939			505			1.85
		Other short-term investments				200,391			639			1.28
			Total interest earning assets			3,801,149		$	49,263			5.18	%
	Non-interest earning assets					143,458
Total assets					$	3,944,607
Liabilities and Stockholders' Equity:
	Interest-bearing liabilities:
		Interest Bearing Checking accounts			$	96,453		$	43			0.18	%
		Money Market accounts				797,802			1,046			0.53
		Savings accounts				363,941			139			0.15
		Certificates of deposit				967,503			4,194			1.74
			Total interest bearing deposits			2,225,699			5,422			0.98
	Borrowed Funds					1,058,271			9,343			3.55
		Total interest-bearing liabilities				3,283,970		$	14,765			1.81	%
	Non-interest bearing checking accounts					151,380
	Other non-interest-bearing liabilities					136,974
		Total liabilities				3,572,324
	Stockholders' equity					372,283
Total liabilities and stockholders' equity					$	3,944,607
Net interest income								$	34,498
Net interest spread												3.37	%
Net interest-earning assets					$	517,179
Net interest margin												3.63	%
Ratio of interest-earning assets to interest-bearing liabilities									115.75	%
Deposits (including non-interest bearing checking accounts)					$	2,377,079		$	5,422			0.92	%
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee income								$	3,488
Borrowing prepayment costs									-
Real estate loans (excluding prepayment and late payment fees)												5.16	%
Interest earning assets (excluding prepayment and late payment fees)												4.82	%
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)								$	31,010
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)												3.26	%

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS
(Dollars In thousands)
				At June 30,			At March 31,			At June 30,
Non-Performing Loans				2013			2013			2012
	One- to four-family and cooperative apartment			$	1,164		$	697		$	1,161
	Multifamily residential and mixed use residential real estate (1)				1,688			809			3,622
	Mixed use commercial real estate (1)				1,150			1,159			720
	Commercial real estate				5,500			5,500			7,813
	Construction				-			-			-
	Other				5			7			2
Total Non-Performing Loans (2)				$	9,507		$	8,172		$	13,318
Other Non-Performing Assets (3)
	Other real estate owned				585			585			-
	Pooled bank trust preferred securities				895			894			915
	Non-performing loans held for sale:
		Mixed use commercial real estate			-			270			-
		Multifamily residential and mixed use residential real estate			-			-			-
Total Non-Performing Assets				$	10,987		$	9,921		$	14,233
Troubled Debt Restructurings ("TDRs") not included in non-performing loans (2)
	One- to four-family and cooperative apartment				941			944			623
	Multifamily residential and mixed use residential real estate (1)				1,524			1,538			2,434
	Mixed use commercial real estate (1)				718			724			741
	Commercial real estate				35,516			38,238			39,924
Total Performing TDRs				$	38,699		$	41,444		$	43,722

(1)	Includes loans underlying cooperatives. While the loans within these categories are often considered "commercial real estate" in nature, they are classified separately in the statement above to provide further emphasis of the discrete composition of their underlying real estate collateral.
(2)	Total non-performing loans include some loans that were modified in a manner that met the criteria for a TDR. These non-accruing TDRs, which totaled $5,893 at June 30, 2013, $5,895 at March 31, 2013 and $7,813 at June 30, 2012, are included in the non-performing loan table, but excluded from the TDR amount shown above.
(3)	These assets were deemed non-performing since the Company had, as of the dates indicated, not received any payments of principal or interest on them for a period of at least 90 days.

PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES
			At June 30,				At March 31,				At June 30,
			2013				2013				2012
Total Non-Performing Assets			$	10,987			$	9,921			$	14,233
Loans 90 days or more past due on accrual status (4)				974				186				2,634
	TOTAL PROBLEM ASSETS		$	11,961			$	10,107			$	16,867
Tier One Capital - The Dime Savings Bank of Williamsburgh			$	398,710			$	390,129			$	378,191
Allowance for loan losses				20,502				20,530				20,243
	TANGIBLE CAPITAL PLUS RESERVES		$	419,212			$	410,659			$	398,434
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES				2.9	%			2.5	%			4.2	%

(4)	These loans were, as of the respective dates indicated, expected to be either satisfied, made current or re-financed within the following twelve months, and were not expected to result in any loss of contractual principal or interest. These loans are not included in non-performing loans.