Dime Community Bancshares Reports Earnings per Share of 26 Cents for the Second Quarter of 2008

BROOKLYN, NY, Jul 23 (MARKET WIRE) --
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 $8.4 million, or 26 cents per
diluted share, for the quarter ended June 30, 2008, compared to $6.0
million, or 18 cents per diluted share, for the quarter ended March 31,
2008 and $5.6 million, or 17 cents per diluted share, for the quarter
ended June 30, 2007.

During the quarter ended June 30, 2008, the Company recorded a
non-recurring adjustment to income tax expense, which added $590,000 to
net income during the period. Excluding this item, net income was $7.8
million, or 24 cents per diluted share, during the period. Core earnings
approximated reported earnings during the three months ended both March
31, 2008 and June 30, 2007.

According to Vincent F. Palagiano, Chairman and Chief Executive Officer of
the Company, "As we indicated would likely occur in our last quarter's
release, earnings grew significantly during the June 2008 quarter due
primarily to the repricing of deposits and borrowings at far more
favorable costs." Average funding costs declined 50 basis points, to
3.30%, during the quarter ended June 30, 2008 compared to the quarter
ended March 31, 2008.

Mr. Palagiano continued, "In addition, loan originations during the June
2008 quarter were over twice the level experienced in the March 2008
quarter, as the supply of commercial real estate credit by conduits and
banks to Dime's traditional multifamily lending niche appeared to decline,
to the benefit of traditional portfolio lenders like Dime. These
conditions continue to hold currently, and Dime, therefore, anticipates an
elevated level of loan closings in the third quarter of 2008 similar to
that experienced in the June 2008 quarter. As for loan pricing, spreads
between multifamily loan and Treasury rates continue to run in the 225 to
275 basis point range on the Bank's generic 5 plus 5 year loan product."

Mr. Palagiano stated, "This quarter we experienced some modest
deterioration in credit quality as non-performing loans as a percentage of
total loans rose from 0.11% to 0.22%. We continue to watch the credit
performance of the loan portfolio carefully in light of current conditions
nationally. So far, we see nothing systemic. Vacancy rates in our lending
market, especially residential vacancies, continue to be low. Rents do not
appear to be declining, although there also does not appear to be a
continuing trend toward significant market rent increases. In total, we
are satisfied that the loan portfolio is performing as expected at this
point in the credit cycle."

"The outlook continues to appear favorable for earnings growth during the
upcoming quarter, when factoring in the elements of low credit costs, wide
spreads between lending and funding, and some asset growth," concluded Mr.
Palagiano.

In April 2008, Dime opened its 22nd branch in the Borough Park community
of Brooklyn, New York, and anticipates opening its 23rd branch by the end
of 2008, located on Montague Street in Brooklyn Heights. At June 30, 2008,
the Borough Park branch had $56.6 million of deposits at an average cost
of 3.85%.

SECOND QUARTER 2008 HIGHLIGHTS

-- Net interest margin was 2.67%, up from 2.32% in the March 2008 quarter
and 2.27% in the June 2007 quarter.
-- Average cost of deposits decreased to 2.69% compared to 3.35% in the
March 2008 quarter and 3.62% in the June 2007 quarter.
-- Real estate loan originations were $341.0 million at an average rate
of 5.83%, compared to $163.2 million at an average interest rate of 6.03%
during the quarter ended March 31, 2008.
-- The annualized loan amortization rate was 17%, compared to 14% during
the previous quarter.
-- Assets increased by 11% annualized fueled by loan portfolio growth of
$200 million, as the Company took advantage of the positively sloped yield
curve to accelerate balance sheet growth.
-- The Company grew tangible capital by $7.2 million to provide for
balance sheet growth and strengthen its capital position.
-- The loan pipeline was $310.3 million at June 30, 2008.
-- The Company increased its loan loss provision by $250,000, reflecting
the increased volume of loan originations.
-- Prepayment and late charge fees were $828,000, compared to $1.1
million in the March 2008 quarter and $1.0 million in the June 2007
quarter.

BALANCE SHEET

Total assets grew in the second quarter by approximately $101.7 million,
representing an annualized rate of 11%. The loan portfolio rose by $200.4
million, and investments in mortgage-backed securities available for sale
increased by $64.3 million. Cash and due from banks declined by $100.5
million, and federal funds sold and other short-term investments declined
by $74.2 million.

The Company purchased approximately $83 million in mortgage-backed
securities during the June 2008 quarter, utilizing available liquidity
from deposit inflows that occurred late in the March 2008 quarter. The
securities purchased were short-term, fixed rate agency obligations, all
possessing the highest possible credit rating.

On the liability side, during the June 2008 quarter, management decided to
take advantage of the beneficial spreads between medium term FHLBNY
advances and new retail certificates of deposit. The $238.1 million in
wholesale funding added during the quarter, which was used to fund new
loan originations, possessed an average term to maturity of 2.9 years,
enabling management to extend the average duration of the Bank's
liabilities. The average cost on the new advances was 3.6%, significantly
lower than the cost of raising new, or retaining existing, retail deposit
funding of similar durations. As a result of the emphasis on new
wholesale funding, total deposits declined by $112.7 million during the
quarter ended June 30, 2008. The entire decrease was experienced in
certificates of deposit, which declined $122.2 million during the period.

OPERATING RESULTS

The Company's pre-tax income was $12.4 million for the quarter ended June
30, 2008, compared to $9.1 million earned in the linked-quarter March
2008, and $8.8 million earned during the same quarter last year, June
2007. The linked-quarter increase of $3.3 million resulted from higher
net interest income of $3.9 million that was partially offset by an
increased provision for loan losses of $250,000 and lower non-interest
income of $307,000.

Looking at the components of net interest income during the
linked-quarter, the Company earned $1.0 million more in gross interest
income on (1) a larger real estate loan portfolio (even though the
average yield on the real estate loan portfolio dropped by 7 basis points
to 5.88%), and (2) a larger investment portfolio. The Company earned
$828,000 in prepayment and late charge income during the June 2008
quarter compared to $1.1 million during the March 2008 quarter.

The Company paid $2.8 million less in gross interest expense in the June
2008 quarter than the March 2008 quarter. This decline was experienced in
interest expense on deposits, which declined by $3.5 million, due to a
reduction of 68 basis points in their average cost, and was partially
offset by an increase of $675,000 in interest expense on borrowings that
resulted from an increase of $113.0 million in their average balance
during the June 2008 quarter compared to the March 2008 quarter.

For the quarter ended June 30, 2008, non-interest income was $307,000
below the linked-quarter of March 2008. This decline resulted primarily
from a loss of $128,000 on the sale of other real estate owned and a
charge to mortgage banking income of $300,000 used to boost the book
reserve for losses on loans sold with limited recourse. The mortgage
banking charge reflects losses through June 30, 2008 on approximately
$4.2 million of non-performing loans sold to Fannie Mae with limited
recourse. These loans are not included in the Bank's $6.9 million of
non-performing loans, as the $6.9 million reflects only portfolio loans
owned by Dime. The $300,000 charge is included in the mortgage banking
income line item on the consolidated statements of operations. There are
currently no other non-performing loans serviced by the Bank for Fannie
Mae. From the inception of the Fannie Mae program through June 2008, the
Bank has sold approximately $660 million of multifamily loans to Fannie
Mae.

Total non-interest ("operating") expense for the quarter ended June 30,
2008 was $12.3 million, relatively unchanged from the previous quarter, as
increased deposit insurance and occupancy expenses were offset by a
decline in salaries and benefits expense. Operating expenses in the
September 2008 quarter are expected to approximate $12.4 million.

Comparing the current quarter to the same quarter last year, for the
quarter ended June 30, 2008, the Company's pre-tax income was $12.4
million, compared to $8.8 million earned during the quarter ended June 30,
2007. The $3.6 million quarter-over-quarter increase was primarily the net
result of three items: higher net interest income of $5.4 million,
partially offset by lower non-interest income of $527,000 plus higher
non-interest expense of $1.1 million.

Examining the components of net interest income quarter-over-quarter, the
Company earned $3.9 million more in gross interest income on significantly
larger loan and investment portfolios. The average yield on the total loan
portfolio was 5.88% during the June 2008 quarter compared to 5.92% during
the June 2007 quarter. The Company earned $828,000 in prepayment and late
charge income during the quarter ended June 2008 compared to $1.0 million
during the June 2007 quarter. The combined average yield on investments
and mortgage-backed securities rose by 47 basis points due to a
significant amount of higher-yielding mortgage-backed securities
purchased during the first six months of 2008.

Interest expense declined by $1.5 million during the June 2008 quarter
compared to the June 2007 quarter, despite an increase of $405.8 million
in average balance of interest bearing liabilities, as the average cost of
interest bearing liabilities declined from 4.01% in the June 2007 quarter
to 3.30% in the June 2008 quarter.

For the quarter ended June 30, 2008, non-interest income was $527,000
below the quarter ended June 30, 2007. The decline resulted primarily
from a loss of $128,000 on the sale of other real estate owned and a
charge to mortgage banking income of $300,000 to the book reserve for
losses on loans sold with limited recourse. The remaining decline
resulted from lower fees earned on monies advanced by the Bank for check
clearing currently processed by an outside party.

Finally, for the quarter ended June 30, 2008, non-interest expense was
$1.1 million higher than the same quarter last year. Salary and benefit
expense was the largest component of the variance, and included both
ongoing salary increases and an increase of $152,000 related to stock
benefit expenses, reflecting both three months of expense on equity
awards granted in May 2007 (compared to two months of expense recognized
during the June 2007 quarter) along with higher ESOP expense resulting
from an increase in the Company's stock price.

REAL ESTATE LENDING, LOAN SALES AND CREDIT QUALITY

Real estate loan originations totaled $341.0 million during the quarter
ended June 30, 2008. The average rate on real estate loan originations
during the quarter ended June 30, 2008 was 5.83%, compared to 6.59% during
the quarter ended June 30, 2007 and 6.03% during the quarter ended March
31, 2008.

Real estate loan amortization during the June 2008 quarter approximated
17% of the real estate loan portfolio on an annualized basis, compared to
10% during the June 2007 quarter and 14% during the March 2008 quarter.

The Company completed loan sales of $15.1 million, for a gain of $132,000,
during the June 2008 quarter. This compares with gains of $87,000 and
$223,000 on loan sales of $7.0 million and $17.0 million during the
quarters ended March 31, 2008 and June 30, 2007, respectively. Gains on
loan sales are included in the mortgage banking income line item in the
consolidated statements of operations.

Non-performing assets were $6.9 million at June 30, 2008, representing
only 0.18% of total assets. During the quarter ended June 30, 2008, the
Bank added six loans approximating $3.7 million to non-performing status.
The Bank does not expect to incur any significant losses on these loans.
In addition, during the quarter ended June 30, 2008, the Bank sold two
loans that were acquired into other real estate owned late in March 2008,
recognizing a loss of $128,000 on the sale, and recorded charge-offs of
$115,000 on problem loans that either were satisfied during the quarter
ended June 30, 2008, or for which the terms of satisfaction were
substantially determined during the quarter ended June 30, 2008.

In determining the timing and amount of any future loan loss provisions,
management's quarterly evaluation of the loan loss reserves takes into
account not only the performance of the current loan portfolio, but also
general credit conditions and volume of new business. The loan loss
provision was increased by $250,000 during the quarter ended June 30, 2008
compared to both the quarters ended March 31, 2008 and June 30, 2007. This
increase reflected the estimated losses related to the significant growth
in the real estate loan portfolio (including commitments to fund loans in
the September 2008 quarter) that occurred during the quarter ended June
30, 2008.

Total credit costs (i.e., net charge-offs plus the loss on sale of other
real estate owned) were $244,000 during the quarter ended June 30, 2008,
compared to $144,000 during the quarter ended March 31, 2008, and zero
during the quarter ended June 30, 2007.

In addition, the Bank increased the quarterly loan loss provision to
$310,000 for the quarter ended June 30, 2008, from $60,000 in the prior
quarter, reflecting the substantial increase in the 'owned' portfolio of
loans.

After charges and credits, the allowance (excluding the allowance for
commitments) for portfolio loan losses stood at 0.49% of total loans and
224.6% of non-performing loans at June 30, 2008.

INCOME TAX EXPENSE

During the quarter ended June 30, 2008, the Company recorded a
non-recurring reduction of $590,000 related to income tax expense
associated with the reduction in reserves for uncertain tax positions.
Excluding this item, the Company's effective tax rate was 36.8% during the
quarter and is expected to approximate 37% for the year ending December
31, 2008.

DEPOSITS

Deposits decreased $112.7 million from March 31, 2008 to June 30, 2008.
Certificates of deposit declined by $122.2 million, and were partially
offset by an increase of $9.4 million in core (non-certificate) deposits.
Within core deposits, interest-bearing checking accounts increased $36.9
million, or 47%, on a linked quarter basis, on the success of the "Prime
Dime" checking account program launched in the second half of 2007.
Savings accounts also increased $11.0 million due to adjustments in
deposit offering rates that made these accounts more attractive during
the most recent quarter. Money market balances decreased $42.6 million
during the quarter as the Bank elected to reduce its offering rate on
these accounts during the June 2008 quarter. The decline in certificates
of deposit also reflected declines in offering rates on new and repricing
balances during the June 2008 quarter. Early in the June 2008 quarter,
management elected to reduce deposit offering rates in response to the
decline in benchmark short-term interest rates that occurred during the
March 2008 quarter, and retained that pricing posture throughout the June
2008 quarter.

There was a very favorable, but brief, period of time near the end of the
first quarter and into the second quarter during which wholesale funding
was very attractive compared to funding with deposits. Wholesale funds
were obtained at far lower rates, and for longer terms, than achievable
with deposit funding. For that reason, the Bank capitalized on this
opportunity by adding $238.1 million in wholesale funding at an average
term to maturity of 2.9 years and an average cost of 3.6%. At the time,
funding with traditional CDs would have been costlier for shorter
durations. This advantage has disappeared as wholesale funding rates have
risen, therefore, the Bank has recently moved to raise its deposit rates
to more competitive levels.

The average deposit cost declined 66 basis points from 3.35% during the
quarter ended March 31, 2008 to 2.69% during the quarter ended June 30,
2008.

Mr. Palagiano noted, "Dime continues to strive to move its deposit base
toward checking accounts that management believes will be a more cost
effective and stable source of funding, as evidenced by the 47% increase
in our Prime Dime checking account."

Average deposits per branch approximated $95 million at June 30, 2008,
down from $104 million at March 31, 2008. The addition of the Borough Park
branch in April 2008 was the greatest contributor to the decline in the
average balance per branch. Core deposits comprised 56% of total deposits
at June 30, 2008, up from 53% at March 31, 2008 and 51% at June 30, 2007.
The loan-to-deposit ratio was 151% at June 30, 2008, compared to 126% at
June 30, 2007 and 134% at March 31, 2008.

STOCKHOLDERS' EQUITY AND SHARE REPURCHASE PROGRAM

The Company's total stockholders' equity at June 30, 2008 was $274.3
million, or 7.33% of total assets, compared to $270.0 million, or 7.42% of
total assets, at March 31, 2008. The decline in stockholders' equity as a
percentage of assets resulted from an increase of $101.7 million in
period-end assets, as the Company elected to grow its balance sheet while
interest rate spreads were more favorable.

The Company elected not to repurchase any of its common stock during the
second quarter of 2008. Loan demand is robust, and looks to remain so at
least through the third quarter. Given the possibility of capturing some
asset growth at favorable spreads, management chose to retain capital
during this period. This strategy will be reviewed as conditions change
through the remainder of the year. As of June 30, 2008, the Company had an
additional 1,124,549 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,
the Company's tangible stockholders' equity increased to $226.0 million
at June 30, 2008, compared to $218.8 million at March 31, 2008. The
quarterly cash dividend paid in May 2008 represented a payout ratio of
53.9% of second quarter 2008 earnings. At June 30, 2008, the consolidated
tangible stockholders' equity ratio was 6.11% of tangible assets and the
tangible book value per share was $6.63.

For the quarter ended June 30, 2008, the return on average stockholders'
equity was 12.44%, the return on average tangible equity was 15.24%, and
the cash return on average tangible equity was 16.34%.

OUTLOOK

Mr. Palagiano stated, "Core earnings per share are expected to increase
again in the third quarter, as the residual effects of significant
reductions in short-term interest rates during the March 2008 quarter
continue to help margin and earnings for another quarter."

The average cost of deposits decreased from 3.35% during the March 2008
quarter to 2.69% during the June 2008 quarter, as the Company began to
realize the full effects of the reductions in short-term rates resulting
from the actions of the Federal Open Market Committee during the March
2008 quarter. Approximately $227 million of certificates of deposit with
an average cost of 3.47% are scheduled to mature during the upcoming
quarter. However, rates on new and renewed certificates of deposit
currently range from 3.0% to 4.0%. As a result, the net interest margin
is expected to remain stable during the third quarter of 2008.

In addition, approximately $171 million in portfolio mortgage loans with a
weighted average coupon of 5.03% are scheduled to contractually reprice or
mature during the remainder of 2008. During the year ending December 31,
2009, an additional $333 million in mortgage loans with a weighted average
coupon of 5.41% are scheduled to reprice. Today's rates for similar
products are in the range of 5.875% to 6.25%.

Amortization rates (including prepayments), which approximated 17%
annualized during the second quarter of 2008 (inclusive of loan
refinancing activity), are expected to increase to the 20% to 25% range
during the remainder of 2008, due primarily to increased loan refinancing
activity as loans approach their contractual repricing. Prepayment fees
generally decline as loans move closer to contractual repricing.
Prepayment fee income is thus not expected to increase proportionally
with the overall increase in prepayment levels.

At June 30, 2008, the real estate loan commitment pipeline approximated
$310.3 million, including $12.4 million of commitments on loans intended
for sale. The real estate loan pipeline intended for portfolio retention
had a weighted average interest rate approximating 5.79% at June 30, 2008.

We expect continued balance sheet growth in the third quarter, as
committed loans in the pipeline are closed. However, unless deposit
funding becomes more favorable in the fourth quarter, asset growth will
likely be managed to neutral, as the Company expects to focus mainly on
retaining loans that are approaching their contractual interest rate
repricing.

We anticipate some continuing credit costs associated with serviced loans,
as well as another provision to the loan loss reserve. Credit costs and
provisions for each of the remaining quarters of 2008 are anticipated to
be at about the level experienced in the second quarter, barring any
unforeseen deterioration in credit quality.

Despite the volume of repricing loans over the next several quarters,
large gains in the net interest margin are likely behind us at this point
in the cycle, since deposit pricing remains competitive.

Operating expenses for the September 2008 quarter are expected to
approximate the $12.4 million level experienced during the June 2008
quarter. The Company expects to continue to repurchase its common stock,
and has sufficient capital to remain opportunistic, if conditions warrant.
The Company currently expects third quarter 2008 earnings per diluted
share to be in the range of $0.25 to $0.27.

ABOUT DIME COMMUNITY BANCSHARES

The Company (NASDAQ: DCOM) had $3.74 billion in consolidated assets as of
June 30, 2008, and is the parent company of the Bank. The Bank was founded
in 1864, is headquartered in Brooklyn, New York, and currently has
twenty-two 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.

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)

June 30, March 31,
2008 December 31, 2008
(Unaudited) 2007 (Unaudited)
----------- ----------- -----------
ASSETS:
Cash and due from banks $ 22,872 $ 101,708 $ 123,412
Investment securities held to
maturity - 80 80
Investment securities available for
sale 33,480 34,095 35,142
Mortgage-backed securities available
for sale 319,516 162,764 255,169
Federal funds sold and other
short-term investments 17,327 128,014 91,502
Real Estate Loans:
One-to-four family and
cooperative apartment 148,570 145,592 144,152
Multifamily and underlying
cooperative 2,151,071 1,949,025 2,000,153
Commercial real estate 778,572 728,129 741,072
Construction and land acquisition 48,036 49,387 42,694
Unearned discounts and net
deferred loan fees 2,883 1,833 2,461
----------- ----------- -----------
Total real estate loans 3,129,132 2,873,966 2,930,532
----------- ----------- -----------
Other loans 3,531 2,169 2,019
Allowance for loan losses (15,386) (15,387) (15,665)
----------- ----------- -----------
Total loans, net 3,117,277 2,860,748 2,916,886
----------- ----------- -----------
Loans held for sale 2,140 890 1,547
Premises and fixed assets, net 26,055 23,878 24,830
Federal Home Loan Bank of New York
capital stock 50,510 39,029 39,479
Other real estate owned - - 895
Goodwill 55,638 55,638 55,638
Other assets 97,189 94,331 95,721
----------- ----------- -----------
TOTAL ASSETS $ 3,742,004 $ 3,501,175 $ 3,640,301
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Deposits:
Non-interest bearing checking $ 91,603 $ 88,398 $ 87,510
Interest Bearing Checking 114,716 61,687 77,832
Savings 281,654 274,067 270,607
Money Market 680,446 678,759 723,061
----------- ----------- -----------
Sub-total $ 1,168,419 $ 1,102,911 $ 1,159,010
----------- ----------- -----------
Certificates of deposit 912,473 1,077,087 1,034,626
----------- ----------- -----------
Total Due to Depositors 2,080,892 2,179,998 2,193,636
----------- ----------- -----------
Escrow and other deposits 69,832 52,209 84,273
Securities sold under agreements to
repurchase 265,000 155,080 230,080
Federal Home Loan Bank of New York
advances 919,675 706,500 716,500
Subordinated Notes Sold 25,000 25,000 25,000
Trust Preferred Notes Payable 72,165 72,165 72,165
Other liabilities 35,188 41,371 48,636
----------- ----------- -----------
TOTAL LIABILITIES 3,467,752 3,232,323 3,370,290
----------- ----------- -----------
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par, 125,000,000
shares authorized, 51,121,069 shares,
50,920,141 shares and 50,906,278
shares issued at June 30, 2008,
March 31, 2008 and December 31, 2007,
respectively, and 34,085,693 shares,
33,872,765 shares and 33,909,902
shares outstanding at June 30, 2008
and December 31, 2007, respectively) 511 509 509
Additional paid-in capital 212,359 208,369 209,037
Retained earnings 293,371 288,112 289,499
Unallocated common stock of Employee
Stock Ownership Plan (4,048) (4,164) (4,106)
Unearned common stock of Restricted
Stock Awards (648) (634) (527)
Common stock held by the Benefit
Maintenance Plan (8,007) (7,941) (7,941)
Treasury stock (17,035,376 shares,
17,047,376 shares and 16,996,376
shares at June 30, 2008, March 31,
2008 and December 31, 2007,
respectively) (211,626) (211,121) (211,775)
Accumulated other comprehensive
loss, net (7,660) (4,278) (4,685)
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 274,252 268,852 270,011
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,742,004 $ 3,501,175 $ 3,640,301
=========== =========== ===========

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

For the Three Months Ended
----------------------------------
June 30, March 31, June 30,
2008 2008 2007
---------- ----------- -----------
Interest income:
Loans secured by real estate $ 44,147 $ 43,066 $ 40,697
Other loans 41 44 42
Mortgage-backed securities 3,370 2,216 1,435
Investment securities 364 708 377
Federal funds sold and other
short-term investments 1,346 2,196 2,793
---------- ----------- -----------
Total interest income 49,268 48,230 45,344
---------- ----------- -----------
Interest expense:
Deposits and escrow 14,452 17,968 19,576
Borrowed funds 11,706 11,031 8,099
---------- ----------- -----------
Total interest expense 26,158 28,999 27,675
---------- ----------- -----------
Net interest income 23,110 19,231 17,669
Provision for loan losses 310 60 60
---------- ----------- -----------
Net interest income after provision for
loan losses 22,800 19,171 17,609
---------- ----------- -----------

Non-interest income:
Service charges and other fees 1,140 1,049 1,090
Mortgage banking income 30 286 415
Loss on sale of securities and
other real estate owned (129) - -
Other 819 832 882
---------- ----------- -----------
Total non-interest income 1,860 2,167 2,387
---------- ----------- -----------
Non-interest expense:
Compensation and benefits 6,889 7,234 6,198
Occupancy and equipment 1,764 1,570 1,512
Other 3,605 3,476 3,489
---------- ----------- -----------
Total non-interest expense 12,258 12,280 11,199
---------- ----------- -----------

Income before taxes 12,402 9,058 8,797
Income tax expense 3,977 3,101 3,152
---------- ----------- -----------

Net Income $ 8,425 $ 5,957 $ 5,645
========== =========== ===========

Earnings per Share:
Basic $ 0.26 $ 0.18 $ 0.17
========== =========== ===========
Diluted $ 0.26 $ 0.18 $ 0.17
========== =========== ===========

Average common shares outstanding for
Diluted EPS 32,935,285 32,683,161 34,123,887

For the Six Months Ended
-----------------------
June 30, June 30,
2008 2007
---------- -----------
Interest income:
Loans secured by real estate $ 87,213 $ 80,947
Other loans 85 87
Mortgage-backed securities 5,586 2,947
Investment securities 1,072 819
Federal funds sold and other
short-term investments 3,542 5,262
---------- -----------
Total interest income 97,498 90,062
---------- -----------
Interest expense:
Deposits and escrow 32,420 37,737
Borrowed funds 22,737 16,770
---------- -----------
Total interest expense 55,157 54,507
---------- -----------
Net interest income 42,341 35,555
Provision for loan losses 370 120
---------- -----------
Net interest income after provision for
loan losses 41,971 35,435
---------- -----------

Non-interest income:
Service charges and other fees 2,189 2,257
Mortgage banking income 316 847
Loss on sale of securities and
other real estate owned (129) -
Other 1,651 1,773
---------- -----------
Total non-interest income 4,027 4,877
---------- -----------
Non-interest expense:
Compensation and benefits 14,122 12,648
Occupancy and equipment 3,335 3,007
Other 7,081 6,792
---------- -----------
Total non-interest expense 24,538 22,447
---------- -----------

Income before taxes 21,460 17,865
Income tax expense 7,078 6,403
---------- -----------

Net Income $ 14,382 $ 11,462
========== ===========

Earnings per Share:
Basic $ 0.44 $ 0.33
========== ===========
Diluted $ 0.44 $ 0.33
========== ===========

Average common shares outstanding for
Diluted EPS 32,773,631 34,373,520

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 during the period (exclusive of gains or
losses on sales of securities and other real estate owned and other
material non-recurring items).

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 stockholders'
equity (GAAP capital) and tangible stockholders' equity (regulatory
capital) can be found in the Company's Form 10-K for the year ended
December 31, 2007.

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
----------------------------
June 30, March 31, June 30,
2008 2008 2007
-------- -------- --------

Net income as reported $ 8,425 $ 5,957 $ 5,645
Loss on sale of securities and other real
estate owned 129 - -
Non-recurring adjustment to income taxes (590) - -
Tax effect of adjustments (58) - -
-------- -------- --------
Core Earnings $ 7,906 $ 5,957 $ 5,645
-------- -------- --------
Cash Earnings Additions :
Non-cash stock benefit plan expense 611 561 462
-------- -------- --------
Core Cash Earnings $ 8,517 $ 6,518 $ 6,107
-------- -------- --------
Performance Ratios (Based upon Core Cash
Earnings):
Core Cash EPS (Diluted) $ 0.26 $ 0.20 $ 0.18
Core Cash Return on Average Assets 0.93% 0.74% 0.75%
Core Cash Return on Average Tangible
Stockholders' Equity 15.40% 12.04% 10.57%

For the Six Months
Ended
------------------
June 30, June 30,
2008 2007
-------- --------

Net income as reported $ 14,382 $ 11,462
Loss on sale of securities and other real
estate owned 129 -
Non-recurring adjustment to income taxes (590) -
Tax effect of adjustments (58) -
-------- --------
Core Earnings $ 13,863 $ 11,462
-------- --------
Cash Earnings Additions :
Non-cash stock benefit plan expense 1,172 791
-------- --------
Core Cash Earnings $ 15,035 $ 12,253
-------- --------
Performance Ratios (Based upon Core Cash
Earnings):
Core Cash EPS (Diluted) $ 0.46 $ 0.36
Core Cash Return on Average Assets 0.84% 0.76%
Core Cash Return on Average Tangible
Stockholders' Equity 13.74% 10.46%

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,
2008 2008 2007
----------- ----------- -----------
Performance Ratios (Based upon
Reported Earnings):
Reported EPS (Diluted) $ 0.26 $ 0.18 $ 0.17
Return on Average Assets 0.92% 0.68% 0.69%
Return on Average Stockholders'
Equity 12.44% 8.87% 8.06%
Return on Average Tangible
Stockholders' Equity 15.24% 11.00% 9.77%
Net Interest Spread 2.39% 2.01% 1.81%
Net Interest Margin 2.67% 2.32% 2.27%
Non-interest Expense to Average Assets 1.34% 1.40% 1.37%
Efficiency Ratio (1) 49.10% 57.62% 56.47%
Effective Tax Rate 32.07% 34.23% 35.83%
Performance Ratios (Based upon Core
Earnings):
Core EPS (Diluted) $ 0.24 $ 0.18 $ 0.17
Core Return on Average Assets 0.86% 0.68% 0.69%
Core Return on Average Stockholders'
Equity 11.67% 8.87% 8.06%
Core Return on Average Tangible
Stockholders' Equity 14.30% 11.00% 9.77%

Book Value and Tangible Book Value
Per Share:
Stated Book Value Per Share $ 8.05 $ 7.97 $ 7.81
Tangible Book Value Per Share 6.63 6.46 6.42
Average Balance Data:
Average Assets $ 3,659,084 $ 3,512,724 $ 3,267,736
Average Interest Earning Assets 3,461,470 3,320,124 3,117,578
Average Stockholders' Equity 270,973 268,512 280,282
Average Tangible Stockholders'
Equity 221,171 216,623 231,127
Average Loans 3,006,571 2,896,081 2,752,200
Average Deposits 2,158,477 2,153,031 2,166,907
Asset Quality Summary:
Net charge-offs $ 116 $ 144 ($ 1)
Nonperforming Loans 6,852 3,090 2,937
Nonperforming Loans/ Total Loans 0.22% 0.11% 0.11%
Other real estate owned - $ 895 -
Nonperforming Assets $ 6,852 $ 3,985 $ 2,937
Nonperforming Assets/Total Assets 0.18% 0.11% 0.09%
Allowance for Loan Loss/Total Loans 0.49% 0.53% 0.56%
Allowance for Loan
Loss/Nonperforming Loans 224.55% 506.96% 524.51%
Regulatory Capital Ratios:
Consolidated Tangible Stockholders'
Equity to Tangible Assets at period
end 6.11% 6.09% 7.06%
Tangible Capital Ratio (Bank Only) 7.83% 7.77% 9.13%
Leverage Capital Ratio (Bank Only) 7.83% 7.77% 9.13%
Risk Based Capital Ratio (Bank Only) 11.46% 11.78% 12.83%

(1) The calculated ratio excludes the following gains on the sale of loans
that are included in the "Mortgage Banking Income" line item in the
consolidated statements of operations: $132,000 for the three months ended
June 30, 2008, $87,000 for the three months ended March 31, 2008, $223,000
for the three months ended June 30, 2007, $219,000 for the six months ended
June 30, 2008 and $467,000 for the six months ended June 30, 2007.

For the Six Months Ended
------------------------
June 30, June 30,
2008 2007
----------- -----------

Performance Ratios (Based upon
Reported Earnings):
Reported EPS (Diluted) $ 0.44 $ 0.33
Return on Average Assets 0.80% 0.71%
Return on Average Stockholders'
Equity 10.66% 8.09%
Return on Average Tangible
Stockholders' Equity 13.14% 9.79%
Net Interest Spread 2.20% 1.83%
Net Interest Margin 2.50% 2.30%
Non-interest Expense to Average
Assets 1.37% 1.39%
Efficiency Ratio (1) 53.02% 56.17%
Effective Tax Rate 32.98% 35.84%

Performance Ratios (Based upon Core
Earnings):
Core EPS (Diluted) $ 0.42 $ 0.33
Core Return on Average Assets 0.77% 0.71%
Core Return on Average Stockholders'
Equity 10.28% 8.09%
Core Return on Average Tangible
Stockholders' Equity 12.67% 9.79%

Book Value and Tangible Book Value
Per Share:
Stated Book Value Per Share $ 8.05 $ 7.81
Tangible Book Value Per Share 6.63 6.42

Average Balance Data:
Average Assets $ 3,585,904 $ 3,241,029
Average Interest Earning Assets 3,390,797 3,093,368
Average Stockholders' Equity 269,743 283,347
Average Tangible Stockholders'
Equity 218,909 234,265
Average Loans 2,951,326 2,730,479
Average Deposits 2,155,754 2,125,199

Asset Quality Summary:
Net charge-offs $ 260 ($ 3)
Nonperforming Loans 6,852 2,937
Nonperforming Loans/ Total Loans 0.22% 0.11%
Other real estate owned - -
Nonperforming Assets $ 6,852 $ 2,937
Nonperforming Assets/Total Assets 0.18% 0.09%
Allowance for Loan Loss/Total Loans 0.49% 0.56%
Allowance for Loan
Loss/Nonperforming Loans 224.55% 524.51%

Regulatory Capital Ratios:
Consolidated Tangible Stockholders'
Equity to Tangible Assets at period
end 6.11% 7.06%
Tangible Capital Ratio (Bank Only) 7.83% 9.13%
Leverage Capital Ratio (Bank Only) 7.83% 9.13%
Risk Based Capital Ratio (Bank Only) 11.46% 12.83%

(1) The calculated ratio excludes the following gains on the sale of loans
that are included in the "Mortgage Banking Income" line item in the
consolidated statements of operations: $132,000 for the three months ended
June 30, 2008, $87,000 for the three months ended March 31, 2008, $223,000
for the three months ended June 30, 2007, $219,000 for the six months ended
June 30, 2008 and $467,000 for the six months ended June 30, 2007.

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

For the Three Months Ended
----------------------------------
June 30, 2008
----------------------------------
Average Average
Balance Interest Yield/Cost
----------- ---------- ----------
Assets:
Interest-earning assets:
Real estate loans $ 3,004,756 $ 44,147 5.88%
Other loans 1,815 41 9.04
Mortgage-backed securities 303,581 3,370 4.44
Investment securities 34,540 364 4.22
Other short-term investments 116,778 1,346 4.61
----------- ---------- ----------
Total interest earning assets 3,461,470 $ 49,268 5.69%
----------- ----------
Non-interest earning assets 197,613
-----------
Total assets $ 3,659,084
===========

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking $ 96,174 $ 580 2.42%
Money Market accounts 712,160 4,443 2.50
Savings accounts 278,782 399 0.57
Certificates of deposit 978,975 9,030 3.70
----------- ---------- ----------
Total interest bearing
deposits 2,066,091 14,452 2.81
Borrowed Funds 1,108,931 11,706 4.23
----------- ---------- ----------
Total interest-bearing
liabilities 3,175,022 26,158 3.30%
----------- ----------
Non-interest bearing checking
accounts 92,386
Other non-interest-bearing
liabilities 120,703
-----------
Total liabilities 3,388,111
Stockholders' equity 270,973
-----------
Total liabilities and stockholders'
equity $ 3,659,084
===========
Net interest income $ 23,110
==========
Net interest spread 2.39%
==========
Net interest-earning assets $ 286,448
===========
Net interest margin 2.67%
==========
Ratio of interest-earning assets
to interest-bearing liabilities 109.02%
==========

Deposits (including non-interest
bearing checking accounts) $ 2,158,477 $ 14,452 2.69%

Interest earning assets (excluding
prepayment fees and late charges) 5.60%

For the Three Months Ended
----------------------------------
March 31, 2008
----------------------------------
Average Average
Balance Interest Yield/Cost
----------- ---------- ----------
Assets:
Interest-earning assets:
Real estate loans $ 2,894,264 $ 43,066 5.95%
Other loans 1,817 44 9.69
Mortgage-backed securities 192,771 2,216 4.60
Investment securities 35,655 708 7.94
Other short-term investments 195,616 2,196 4.49
----------- ---------- ----------
Total interest earning assets 3,320,124 $ 48,230 5.81%
----------- ----------
Non-interest earning assets 192,600
-----------
Total assets $ 3,512,724
===========

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking $ 63,834 $ 410 2.58%
Money Market accounts 670,662 5,956 3.56
Savings accounts 271,839 367 0.54
Certificates of deposit 1,057,803 11,235 4.26
----------- ---------- ----------
Total interest bearing
deposits 2,064,138 17,968 3.49
Borrowed Funds 995,888 11,031 4.44
----------- ---------- ----------
Total interest-bearing
liabilities 3,060,026 28,999 3.80%
----------- ----------
Non-interest bearing checking
accounts 88,893
Other non-interest-bearing
liabilities 95,293
-----------
Total liabilities 3,244,212
Stockholders' equity 268,512
-----------
Total liabilities and stockholders'
equity $ 3,512,724
===========
Net interest income $ 19,231
==========
Net interest spread 2.01%
==========
Net interest-earning assets $ 260,098
===========
Net interest margin 2.32%
==========
Ratio of interest-earning assets
to interest-bearing liabilities 108.50%
==========

Deposits (including non-interest
bearing checking accounts) $ 2,153,031 $ 17,968 3.35%

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

For the Three Months Ended
----------------------------------
June 30, 2007
----------------------------------
Average Average
Balance Interest Yield/Cost
----------- ---------- ----------
Assets:
Interest-earning assets:
Real estate loans $ 2,750,429 $ 40,697 5.92%
Other loans 1,771 42 9.49
Mortgage-backed securities 146,181 1,435 3.93
Investment securities 25,534 377 5.91
Other short-term investments 193,663 2,793 5.77
----------- ---------- ----------
Total interest earning assets 3,117,578 $ 45,344 5.82%
----------- ----------
Non-interest earning assets 150,158
-----------
Total assets $ 3,267,736
===========

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest Bearing Checking $ 42,705 $ 186 1.75%
Money Market accounts 636,893 6,103 3.84
Savings accounts 293,759 449 0.61
Certificates of deposit 1,097,137 12,838 4.69
----------- ---------- ----------
Total interest bearing
deposits 2,070,494 19,576 3.79
Borrowed Funds 698,765 8,099 4.65
----------- ---------- ----------
Total interest-bearing
liabilities 2,769,259 27,675 4.01%
----------- ----------
Non-interest bearing checking
accounts 96,413
Other non-interest-bearing
liabilities 121,782
-----------
Total liabilities 2,987,454
Stockholders' equity 280,282
-----------
Total liabilities and stockholders'
equity $ 3,267,736
===========
Net interest income $ 17,669
==========
Net interest spread 1.81%
==========
Net interest-earning assets $ 348,319
===========
Net interest margin 2.27%
==========
Ratio of interest-earning assets
to interest-bearing liabilities 112.58%
==========

Deposits (including non-interest
bearing checking accounts) $ 2,166,907 $ 19,576 3.62%

Interest earning assets (excluding
prepayment fees and late charges) 5.69%

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

Copyright 2008, Market Wire, All rights reserved.

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