Dime Community Bancshares Reports Earnings

BROOKLYN, NY--(Marketwired - Oct 28, 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 September 30, 2013. Consolidated net income for the quarter was $10.6 million, or $0.30 per diluted share, compared to $12.0 million, or $0.34 per diluted share, for the quarter ended June 30, 2013, and $11.8 million, or $0.34 per diluted share, for the quarter ended September 30, 2012. 

Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "We were pleased to post another solid quarter of earnings, as we continue to be impacted by the heavy refinancing activities in our lending marketplace. We closed $289.6 million of loans during the September 2013 quarter, and the annualized growth rate in the real estate loan portfolio has approximated 6% during the first nine months of 2013, putting the Company on track to meet its 2013 goal. Prepayment fees were $1.2 million lower in the third quarter compared to the second quarter, adversely impacting diluted earnings per share by $0.02. Net interest margin excluding prepayment fees declined 8 basis points to 2.98%, providing the bulk of the remaining decline in diluted earnings per share from the June 2013 quarter."

"More importantly," continued Mr. Palagiano, "interest rate offerings in the multifamily sector have turned up from their historic lows in this cycle, as the yield curve continues to steepen, albeit modestly. Should the present conditions persist, we anticipate net interest margin and the average loan portfolio yield hitting their cyclical bottom in the upcoming quarters."

Loan amortization and satisfactions, including refinances of existing loans, declined from a 33.2% annualized rate during the June 2013 quarter to 25.7% during the September 2013 quarter. Prepayment fee income, which is generally proportional to amortization levels, also fell from $4.6 million (or $0.08 per diluted share after-tax) during the June 2013 quarter to $3.4 million (or $0.06 per diluted share after tax) during the September 2013 quarter. 

OPERATING RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2013

Net Interest Margin
Net interest margin ("NIM") was 3.35% during the quarter ended September 30, 2013 compared to 3.55% during the June 2013 quarter. For forecasting purposes, the "core" NIM, which excludes the effect of loan prepayment fees, decreased from 3.06% during the June 2013 quarter to 2.98% during the September 2013 quarter, reflecting a reduction of 10 basis points in the average yield on interest earning assets (primarily caused by a reduction of 16 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 5 basis points in the average cost of interest bearing liabilities.

A 5 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.

The 16 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 during the period October 2012 through September 2013, as U.S. Treasury yields hovered at historically low levels, and loans repriced at lower rates. Throughout the summer, there was a slight uptick in the offering rate on new multifamily originations, so that the range of rates for a prime, low-loan-to-value 5 year repricing loan was in the 3.50 - 3.75% range. 

Net Interest Income
Net interest income was $31.7 million in the quarter ended September 30, 2013, down $2.1 million from $33.8 million reported in the June 2013 quarter, and down $1.7 million from $33.4 million reported in the September 2012 quarter. Prepayment fee income on loans totaled $3.4 million during the September 2013 quarter, compared to $4.6 million recognized in the June 2013 quarter and $3.1 million during the September 2012 quarter. Absent the impact of loan prepayment fee income, net interest income was $28.2 million during the September 30, 2013 quarter, down $874,000 from the June 30, 2013 quarter and $1.9 million from the September 30, 2012 quarter. The decline in net interest income (excluding loan prepayment fee income) from the June 2013 quarter resulted primarily from a decline of 10 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 $202,000 and provisioned $240,000 for loan losses during the September 2013 quarter. This led to a net increase of $38,000 in the allowance for loan losses from June 30, 2013 to September 30, 2013. The quarterly loan loss provision, while increasing from $28,000 in the June 2013 quarter, remained relatively low during the September 2013 quarter, reflecting the continued stability of the Bank's credit quality.

At September 30, 2013, the allowance for loan losses as a percentage of total loans stood at 0.56%, down slightly from 0.57% at the close of the prior quarter, as a result of growth in the loan portfolio during the September 2013 quarter. 

Non-Interest Income
Non-interest income was $2.0 million for the quarter ended September 30, 2013, an increase of $287,000 from the previous quarter. The valuation of equity mutual funds designated as trading for accounting purposes increased $121,000 from the June 2013 quarter. The remaining increase in non-interest income from the previous quarter resulted primarily from higher fees collected on portfolio loans. 

Non-Interest Expense
Non-interest expense was $15.6 million in the quarter ended September 30, 2013, up $228,000 from the prior quarter, and slightly above the forecasted level of $15.5 million. The largest portion of the variance from forecast was due to a variable component of compensation and benefit expense which is linked to the performance of the equity markets, and the smaller portion due to occupancy costs, which are running just slightly above our budget.

Non-interest expense was 1.56% of average assets during the most recent quarter. The efficiency ratio approximated 46.4% during the same period. 

Income Tax Expense
The effective tax rate approximated 40.4% during the most recent quarter, generally in line with the 40.0% forecasted level.

BALANCE SHEET
Total assets were $4.02 billion at September 30, 2013, up $64.1 million from June 30, 2013. Net loans increased by $62.2 million, comprising most of the asset growth during the period. 

The Company added $35.0 million of Federal Home Loan Bank of New York ("FHLBNY") advances on a net basis during the September 2013 quarter to fund a portion of the asset growth during the period. The remaining asset growth was funded primarily through growth in both mortgagor escrow and money market deposits. Assets grew by approximately 3.8% on an annualized basis during the first nine 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 $289.6 million during the September 2013 quarter, at a weighted average interest rate of 3.39%. Of this amount, $108.7 million represented loan refinances from the existing portfolio. Loan amortization and satisfactions, including the $108.7 million of refinances of existing loans, totaled $233.2 million during the quarter, or 25.7% of the average portfolio balance on an annualized basis. The average rate on amortized and satisfied loan balances during the most recent quarter was 5.30%. Total loan commitments stood at $146.9 million at September 30, 2013, with a weighted average rate of 3.75%. The average yield on the loan portfolio (excluding prepayment fee income) during the quarter ended September 30, 2013 was 4.28%, compared to 4.44% during the June 2013 quarter and 5.12% during the September 2012 quarter. 

Credit Summary
Non-performing loans (excluding loans held for sale) were $8.8 million, or 0.24% of total loans, at September 30, 2013, down from $9.5 million, or 0.26% of total loans, at June 30, 2013. Loans delinquent between 30 and 89 days and accruing interest increased to $3.8 million, or approximately 0.10% of total loans, at September 30, 2013, compared to $159,000, or 0.004% of total loans, at June 30, 2013. There tends to be variability in the category "loans delinquent between 30 and 89 days," and this quarter's increase, while still very low as an absolute percentage of the portfolio, does not appear to reflect a negative credit quality trend.

At September 30, 2013, non-performing assets represented 2.6% of the sum of tangible capital plus the allowance for loan losses (this statistic is otherwise known as the "Texas Ratio") (see table on page 12). 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 $400,000 at September 30, 2013, down from approximately $700,000 at June 30, 2013. The remaining pool of loans serviced for Fannie Mae totaled $216.1 million as of September 30, 2013, down from $229.2 million as of June 30, 2013. Due to both ongoing amortization and the near absence of problem loans within the Fannie Mae portfolio, the Company determined that its liability for the first loss position could be reduced by $50,000, which was recognized during the quarter ended September 30, 2013.

Deposits and Borrowed Funds
Retail deposits increased $1.5 million from June 30, 2013 to September 30, 2013, with net inflows of $24.0 million in core deposits offset by net outflows of $22.5 million in certificates of deposit during the period. The Bank did not implement any significant promotional deposit activities during the September 2013 quarter, and enacted slight reductions in rates that resulted in a reduction of 5 basis points in the average cost of deposits during the September 2013 quarter. At September 30, 2013, average deposit balances approximated $100.4 million per branch.

The Company transacted $60.0 million of new fixed-rate FHLBNY borrowings during the quarter ended September 30, 2013, of which $25.0 million were utilized to replace borrowings that matured during the period. The $60.0 million of new borrowings had an average maturity of 3.75 years and an average cost of 1.31%, providing an element of NIM protection to offset the fixed rate loan portfolio, in the event of rising open market rates over the next four years. 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 both increased retained earnings and stock option exercise activity. Consolidated tangible capital was 9.51% of tangible assets at September 30, 2013, an increase of 20 basis points from June 30, 2013. The Company also had approximately $70.7 million of trust preferred debt securities outstanding at September 30, 2013, which, when added to Tier 1 (tangible) capital, increased its consolidated Tier 1 (tangible) capital ratio to approximately 11.2%. 

The Bank's tangible capital ratio was 10.24% at September 30, 2013, down slightly from 10.27% at June 30, 2013, due to asset growth during the September 2013 quarter. The Bank's Total Risk-Based Capital Ratio was 14.07% at September 30, 2013, compared to 13.93% at June 30, 2013. 

Reported diluted EPS exceeded the quarterly cash dividend rate per share by 114%, equating to a 47% 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 $0.24 sequentially during the most recent quarter, to $10.30 at September 30, 2013.

OUTLOOK FOR THE QUARTER ENDING DECEMBER 31, 2013
At September 30, 2013, Dime had outstanding loan commitments totaling $146.9 million (of which $38 million related to loan refinances from the existing portfolio), all of which are likely to close during the quarter ending December 31, 2013, at an average interest rate approximating 3.75%.

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 are currently anticipated to approximate 20% - 25% on an annualized basis during the December 2013 quarter. 

On the liability side, deposit funding costs are expected to remain near current historically low levels through the final quarter of 2013. The Bank has $134.6 million of certificates of deposit ("CDs") maturing at an average cost of 0.92% during the quarter ending December 31, 2013. Offering rates on 12-month term CDs currently approximate 50 basis points. The Company has $88.5 million of borrowings due to mature during the quarter ending December 31, 2013 at an average cost of 2.46%. FHLBNY advance rates for 3-year, 4-year and 5-year borrowings were 1.06% and 1.55% and 1.94% respectively, as of October 22, 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 and anticipated losses and the overall credit quality of the loan portfolio.

Absent any unforeseen items, non-interest expense is expected to approximate $15.7 million during the December 2013 quarter.

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

ABOUT DIME COMMUNITY BANCSHARES, INC.
The Company (NASDAQ: DCOM) had $4.02 billion in consolidated assets as of September 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)
			September 30,				June 30,				December 31,
			2013				2013				2012
ASSETS:
Cash and due from banks			$	65,713			$	61,291			$	79,076
Investment securities held to maturity				5,622				5,617				5,927
Investment securities available for sale				18,468				18,309				32,950
Trading securities				5,262				5,127				4,874
Mortgage-backed securities available for sale				34,226				38,193				49,021
Real Estate Loans:
	One-to-four family and cooperative apartment			78,504				81,110				91,876
	Multifamily and loans underlying cooperatives (1)			2,859,729				2,780,897				2,670,973
	Commercial real estate (1)			723,312				737,593				735,224
	Construction and land acquisition			299				338				476
	Unearned discounts and net deferred loan fees			5,095				4,309				4,836
	Total real estate loans			3,666,939				3,604,247				3,503,385
	Other loans			2,109				2,517				2,423
	Allowance for loan losses			(20,540	)			(20,502	)			(20,550	)
Total loans, net				3,648,508				3,586,262				3,485,258
Loans held for sale				-				232				560
Premises and fixed assets, net				29,850				29,894				30,518
Federal Home Loan Bank of New York capital stock				41,863				40,288				45,011
Goodwill				55,638				55,638				55,638
Other assets				110,175				110,392				116,566
TOTAL ASSETS			$	4,015,325			$	3,951,243			$	3,905,399
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Non-interest bearing checking			$	170,250			$	170,432			$	159,144
Interest Bearing Checking				87,995				90,496				95,159
Savings				379,114				379,367				371,792
Money Market				1,119,212				1,092,281				961,359
	Sub-total			1,756,570				1,732,576				1,587,454
Certificates of deposit				852,594				875,083				891,975
Total Due to Depositors				2,609,164				2,607,659				2,479,429
Escrow and other deposits				98,160				86,028				82,753
Federal Home Loan Bank of New York advances				772,500				737,500				842,500
Trust Preferred Notes Payable				70,680				70,680				70,680
Other liabilities				42,076				40,471				38,463
TOTAL LIABILITIES				3,592,580				3,542,338				3,513,825
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par, 125,000,000 shares authorized, 52,692,461 shares, 52,198,771 shares and 52,021,149 shares issued at September 30, 2013, June 30, 2013 and December 31, 2012, respectively, and 36,548,503 shares, 36,054,813 shares, and 35,714,269 shares outstanding at September 30, 2013, June 30, 2013 and December 31, 2012, respectively)				526				522				520
Additional paid-in capital				250,105				242,605				239,041
Retained earnings				397,664				391,989				379,166
Unallocated common stock of Employee Stock Ownership Plan				(2,834	)			(2,892	)			(3,007	)
Unearned Restricted Stock Award common stock				(3,693	)			(4,192	)			(3,122	)
Common stock held by the Benefit Maintenance Plan				(9,013	)			(9,013	)			(8,800	)
Treasury stock (16,143,958 shares, 16,143,958 shares and 16,306,880 shares at September 30, 2013, June 30, 2013 and December 31, 2012, respectively)				(200,550	)			(200,550	)			(202,584	)
Accumulated other comprehensive loss, net of deferred taxes				(9,460	)			(9,564	)			(9,640	)
TOTAL STOCKHOLDERS' EQUITY				422,745				408,905				391,574
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	4,015,325			$	3,951,243			$	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
					September 30,				June 30,				September 30,
					2013				2013				2012
Interest income:
	Loans secured by real estate				$	42,451			$	44,692			$	45,963
	Other loans					25				25				28
	Mortgage-backed securities					310				354				677
	Investment securities					84				103				223
	Federal funds sold and other short-term investments					416				462				582
		Total interest income				43,286				45,636				47,473
Interest expense:
	Deposits and escrow					4,908				5,132				5,302
	Borrowed funds					6,725				6,752				8,773
		Total interest expense				11,633				11,884				14,075
			Net interest income			31,653				33,752				33,398
Provision for loan losses						240				28				126
Net interest income after provision for loan losses						31,413				33,724				33,272
Non-interest income:
	Service charges and other fees					1,015				827				1,244
	Mortgage banking income, net					76				112				259
	Other than temporary impairment ("OTTI") charge on securities (1)					-				-				-
	Gain (loss) on sale of securities and other assets					(21	)			-				-
	Gain (loss) on trading securities					104				(17	)			67
	Other					834				799				1,004
		Total non-interest income				2,008				1,721				2,574
Non-interest expense:
	Compensation and benefits					9,466				9,298				9,220
	Occupancy and equipment					2,697				2,506				2,527
	Federal deposit insurance premiums					515				445				502
	Other					2,897				3,098				3,522
		Total non-interest expense				15,575				15,347				15,771
		Income before taxes				17,846				20,098				20,075
Income tax expense						7,215				8,059				8,280
Net Income					$	10,631			$	12,039			$	11,795
Earnings per Share ("EPS"):
	Basic				$	0.30			$	0.34			$	0.34
	Diluted				$	0.30			$	0.34			$	0.34
Average common shares outstanding
for Diluted EPS						35,527,503				35,048,063				34,497,817
(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 Nine Months Ended
					September 30,			September 30,
					2013			2012
Interest income:
	Loans secured by real estate				$	130,291		$	143,735
	Other loans					74			76
	Mortgage-backed securities					1,123			2,456
	Investment securities					316			1,043
	Federal funds sold and other short-term investments					1,423			1,895
		Total interest income				133,227			149,205
Interest expense:
	Deposits and escrow					15,240			16,449
	Borrowed funds					20,267			31,465
		Total interest expense				35,507			47,914
			Net interest income			97,720			101,291
Provision for loan losses						425			3,858
Net interest income after provision for loan losses						97,295			97,433
Non-interest income:
	Service charges and other fees					2,554			2,840
	Mortgage banking income, net					350			1,475
	Other than temporary impairment ("OTTI") charge on securities (1)					-			(181	)
	Gain (loss) on sale of securities and other assets					89			44
	Gain (loss) on trading securities					187			136
	Other					2,446			3,037
		Total non-interest income				5,626			7,351
Non-interest expense:
	Compensation and benefits					28,715			28,635
	Occupancy and equipment					7,735			7,431
	Federal deposit insurance premiums					1,470			1,557
	Other					9,311			10,232
		Total non-interest expense				47,231			47,855
		Income before taxes				55,690			56,929
Income tax expense						22,450			23,356
Net Income					$	33,240		$	33,573
Earnings per Share ("EPS"):
	Basic				$	0.95		$	0.98
	Diluted				$	0.95		$	0.98
Average common shares outstanding for Diluted EPS						35,157,647			34,287,779
(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
		September 30,				June 30,				September 30,
		2013				2013				2012
Performance Ratios:
Reported EPS (Diluted)		$	0.30			$	0.34			$	0.34
Return on Average Assets			1.07	%			1.20	%			1.21	%
Return on Average Stockholders' Equity			10.19	%			11.93	%			12.32	%
Return on Average Tangible Stockholders' Equity			11.49				13.53				14.05
Net Interest Spread			3.17				3.34				3.38
Net Interest Margin			3.35				3.55				3.59
Non-interest Expense to Average Assets			1.56				1.53				1.62
Efficiency Ratio			46.38				43.24				43.92
Effective Tax Rate			40.43				40.10				41.25
Book Value and Tangible Book Value Per Share:
Stated Book Value Per Share		$	11.57			$	11.34			$	10.89
Tangible Book Value Per Share			10.30				10.06				9.58
Average Balance Data:
Average Assets		$	3,980,840			$	4,009,237			$	3,900,029
Average Interest Earning Assets			3,782,043				3,803,526				3,716,268
Average Stockholders' Equity			417,459				403,604				383,032
Average Tangible Stockholders' Equity			369,982				355,823				335,709
Average Loans			3,646,845				3,602,249				3,332,417
Average Deposits			2,623,840				2,615,213				2,395,680
Asset Quality Summary:
Net charge-offs (recoveries)		$	202			$	57			$	( 325	)
Non-performing Loans			8,838				9,507				10,690
Non-performing Loans/ Total Loans			0.24	%			0.26	%			0.32	%
Nonperforming Assets (1)		$	9,735			$	10,987			$	11,580
Nonperforming Assets/Total Assets			0.24	%			0.28	%			0.29	%
Allowance for Loan Loss/Total Loans			0.56				0.57				0.62
Allowance for Loan Loss/Non-performing Loans			232.41				215.65				193.59
Loans Delinquent 30 to 89 Days at period end		$	3,763			$	159			$	4,322
Consolidated Tangible Stockholders' Equity to
Tangible Assets at period end			9.51	%			9.31	%			8.76	%
Regulatory Capital Ratios (Bank Only):
Leverage Capital Ratio			10.24	%			10.27	%			9.83	%
Tier One Risk Based Capital Ratio			13.35				13.20				13.56
Total Risk Based Capital Ratio			14.07				13.93				14.33
(1) Amount comprised of total non-accrual loans and the recorded balance of pooled bank trust preferred security investments for which the Bank had not received any contractual payments of interest or principal in over 90 days.
		For the Nine Months Ended
		September 30,				September 30,
		2013				2012
Performance Ratios:
Reported EPS (Diluted)		$	0.95			$	0.98
Return on Average Assets			1.11	%			1.13	%
Return on Average Stockholders' Equity			10.91	%			11.98	%
Return on Average Tangible Stockholders' Equity			12.35				13.69
Net Interest Spread			3.24				3.32
Net Interest Margin			3.45				3.57
Non-interest Expense to Average Assets			1.58				1.61
Efficiency Ratio			45.82				44.05
Effective Tax Rate			40.31				41.03
Book Value and Tangible Book Value Per Share:
Stated Book Value Per Share		$	11.57			$	10.89
Tangible Book Value Per Share			10.30				9.58
Average Balance Data:
Average Assets		$	3,978,466			$	3,965,917
Average Interest Earning Assets			3,781,782				3,787,299
Average Stockholders' Equity			406,219				373,559
Average Tangible Stockholders' Equity			358,740				326,992
Average Loans			3,585,641				3,389,404
Average Deposits			2,603,607				2,376,987
Asset Quality Summary:
Net charge-offs (recoveries)		$	435			$	3,500
Non-performing Loans			8,838				10,690
Non-performing Loans/ Total Loans			0.24	%			0.32	%
Nonperforming Assets (1)		$	9,735			$	11,580
Nonperforming Assets/Total Assets			0.24	%			0.29	%
Allowance for Loan Loss/Total Loans			0.56				0.62
Allowance for Loan Loss/Non-performing Loans			232.41				193.59
Loans Delinquent 30 to 89 Days at period end		$	3,763			$	4,322
Consolidated Tangible Stockholders' Equity to Tangible Assets at period end			9.51	%			8.76	%
Regulatory Capital Ratios (Bank Only):
Leverage Capital Ratio			10.24	%			9.83	%
Tier One Risk Based Capital Ratio			13.35				13.56
Total Risk Based Capital Ratio			14.07				14.33

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED AVERAGE BALANCES AND NET INTEREST INCOME
(Dollars In thousands)
					For the Three Months Ended
					September 30, 2013
												Average
					Average							Yield/
					Balance			Interest				Cost
Assets:
	Interest-earning assets:
		Real estate loans			$	3,644,557		$	42,451			4.66	%
		Other loans				2,288			25			4.37
		Mortgage-backed securities				35,219			310			3.52
		Investment securities				29,122			84			1.15
		Other short-term investments				70,857			416			2.35
			Total interest earning assets			3,782,043		$	43,286			4.58	%
	Non-interest earning assets					198,797
Total assets					$	3,980,840
Liabilities and Stockholders' Equity:
	Interest-bearing liabilities:
		Interest Bearing Checking accounts			$	88,471		$	49			0.22	%
		Money Market accounts				1,122,644			1,413			0.50
		Savings accounts				380,088			48			0.05
		Certificates of deposit				862,792			3,398			1.56
			Total interest bearing deposits			2,453,995			4,908			0.79
	Borrowed Funds					810,191			6,725			3.29
		Total interest-bearing liabilities				3,264,186		$	11,633			1.41	%
	Non-interest bearing checking accounts					169,845
	Other non-interest-bearing liabilities					129,350
		Total liabilities				3,563,381
	Stockholders' equity					417,459
Total liabilities and stockholders' equity					$	3,980,840
Net interest income								$	31,653
Net interest spread												3.17	%
Net interest-earning assets					$	517,857
Net interest margin												3.35	%
Ratio of interest-earning assets to interest-bearing liabilities									115.86	%
Deposits (including non-interest bearing checking accounts)					$	2,623,840		$	4,908			0.74	%
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee income								$	3,467
Real estate loans (excluding prepayment and late payment fees)												4.28	%
Interest earning assets (excluding prepayment and late payment fees)												4.21	%
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)								$	28,186
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)												2.98	%
					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			354			3.57
		Investment securities				29,101			103			1.42
		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
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
					September 30, 2012
												Average
					Average							Yield/
					Balance			Interest				Cost
Assets:
	Interest-earning assets:
		Real estate loans			$	3,329,996		$	45,963			5.52	%
		Other loans				2,421			28			4.63
		Mortgage-backed securities				86,037			677			3.15
		Investment securities				97,926			223			0.91
		Other short-term investments				199,888			582			1.16
			Total interest earning assets			3,716,268		$	47,473			5.11	%
	Non-interest earning assets					183,761
Total assets					$	3,900,029
Liabilities and Stockholders' Equity:
	Interest-bearing liabilities:
		Interest Bearing Checking accounts			$	93,132		$	48			0.21	%
		Money Market accounts				850,288			1,155			0.54
		Savings accounts				365,976			141			0.15
		Certificates of deposit				935,278			3,958			1.68
			Total interest bearing deposits			2,244,674			5,302			0.94
	Borrowed Funds					993,289			8,773			3.51
		Total interest-bearing liabilities				3,237,963		$	14,075			1.73	%
	Non-interest bearing checking accounts					151,006
	Other non-interest-bearing liabilities					128,028
		Total liabilities				3,516,997
Stockholders' equity						383,032
Total liabilities and stockholders' equity					$	3,900,029
Net interest income								$	33,398
Net interest spread												3.38	%
Net interest-earning assets					$	478,305
Net interest margin												3.59	%
Ratio of interest-earning assets to interest-bearing liabilities									114.77	%
Deposits (including non-interest bearing checking accounts)					$	2,395,680		$	5,302			0.88	%
SUPPLEMENTAL INFORMATION
Loan prepayment and late payment fee income								$	3,332
Real estate loans (excluding prepayment and late payment fees)												5.12	%
Interest earning assets (excluding prepayment and late payment fees)												4.75	%
Net Interest income (excluding loan prepayment and late payment fees and borrowing prepayment costs)								$	30,066
Net Interest margin (excluding loan prepayment and late payment fees and borrowing prepayment costs)												3.24	%

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED SCHEDULE OF NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS
(Dollars In thousands)
				At September 30,				At June 30,				At September 30,
Non-Performing Loans				2013				2013				2012
	One- to four-family and cooperative apartment			$	1,136			$	1,164			$	1,150
	Multifamily residential and mixed use residential real estate (1)				1,993				1,688				1,008
	Mixed use commercial real estate (1)				-				1,150				721
	Commercial real estate				5,707				5,500				7,805
	Construction				-				-				-
	Other				2				5				6
Total Non-Performing Loans (2)				$	8,838			$	9,507			$	10,690
Other Non-Performing Assets
	Other real estate owned				-				585				-
	Pooled bank trust preferred securities (3)				897				895				-
	Non-performing loans held for sale:												-
		Mixed use commercial real estate			-				-				-
		Multifamily residential and mixed use residential real estate			-				-				890
Total Non-Performing Assets				$	9,735			$	10,987			$	11,580
Troubled Debt Restructurings ("TDRs") not included in non-performing loans (2)
	One- to four-family and cooperative apartment				938				941				290
	Multifamily residential and mixed use residential real estate (1)				1,899				1,524				2,298
	Mixed use commercial real estate (1)				711				718				736
	Commercial real estate				29,570				35,516				39,782
Total Performing TDRs				$	33,118			$	38,699			$	43,106
(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 table 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 $5,707 at September 30, 2013, $5,893 at June 30, 2013 and $8,135 at September 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 September 30,				At June 30,				At September 30,
				2013				2013				2012
Total Non-Performing Assets				$	9,735			$	10,987			$	10,690
Loans 90 days or more past due on accrual status (4)					1,398				974				-
	TOTAL PROBLEM ASSETS			$	11,133			$	11,961			$	10,690
Tier One Capital - The Dime Savings Bank of Williamsburgh				$	404,022			$	398,710			$	381,700
Allowance for loan losses					20,540				20,502				20,694
	TANGIBLE CAPITAL PLUS RESERVES			$	424,562			$	419,212			$	402,394
PROBLEM ASSETS AS A PERCENTAGE OF TANGIBLE CAPITAL AND RESERVES					2.6	%			2.9	%			2.7	%
(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.