Dime Community Bancshares Reports Earnings for the Quarter Ended March 31, 2009

Market Wire, April, 2009

Deposits

Deposits increased $75.5 million from December 31, 2008 to March 31, 2009. Core deposits rose $114.3 million, or 10%, during the quarter ended March 31, 2009, and were offset by a decline of $38.8 million in certificates of deposit. Within core deposits, money markets increased by $100.8 million, checking accounts increased $3.8 million, and passbook savings accounts increased $9.6 million.

During the March 2009 quarter, there were far fewer bank competitors offering premium deposit pricing, therefore the spread narrowed between deposit rates and Treasury rates across all maturities. A portion of the deposit inflows and deposit retention can also be attributed to the fact that savers sought the safety and security of FDIC-insured deposits. Dime gained both money market and checking accounts through its promotional marketing efforts, notwithstanding that the Bank's offering rate declined. For example money market offering rates declined from 2.8% at January 1, 2009 to 1.5% at March 31, 2009. Dime took the opportunity to compete for IRA plans as the first calendar quarter provided unique opportunities to increase IRA households. IRA deposits increased from $131.6 million at December 31, 2008 to $153.7 million at March 31, 2009. As compared to non-IRA households, current Dime IRA households maintain 132% higher average total deposit balances, 18% higher average checking balances, and 78% of these customers have been depositors at Dime for more than 5 years. Promotional interest pricing at Dime has been suspended until the retail deposit market normalizes. There are approximately $150.5 million of promotional rate CDs with a weighted average rate of 4.62% maturing during the second and third quarters of 2009, which will have a positive impact on net interest margin in the second half of 2009. One- and two-year offering rates on new and renewing CDs are approximately 1.25% and 2.25%, respectively. The Bank is also maintaining a pool of liquidity to fund potential outflows of deposits.

Dime's primary deposit strategy continues to be gathering checking accounts (interest bearing or non-interest bearing) in order to establish a more cost effective and stable component of deposit funding and build core retail customer relationships.

In December 2008, Dime opened its 23rd retail branch office, located in Brooklyn Heights, New York. This branch had $17.1 million in aggregate deposits as of March 31, 2009, of which $2.5 million, or 15%, were checking based product.

Including this relatively new branch, average deposits per branch still exceeded $100 million at March 31, 2009, the approximate level at March 31, 2008. Core deposits (deposits exclusive of CDs) comprised 52% of total deposits at March 31, 2009, up from 49% at December 31, 2008 and down slightly from 53% at March 31, 2008. The loan-to-deposit ratio was 141% at March 31, 2009, compared to 146% at December 31, 2008 and 134% at March 31, 2008.

Stockholders' Equity

The Company's reported total stockholders' equity at March 31, 2009 was $279.7 million, or 6.92% of total assets, compared to $277.0 million, or 6.83% of total assets, at December 31, 2008.